COURT FILE NO.: FS-22- 30156 DATE: 20241021

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MARIAN ELIZABETH BREUKELMAN, Applicant AND: DARIO ANTONIO MIRET, R. AVIS SURVEYING, ROGER AND ELISE AVIS, Respondents

BEFORE: M.D. Faieta J.

COUNSEL: Gavin MacKenzie, for the Applicant Jeffrey Radnoff, for the Respondent Dario Antonio Miret

HEARD: In writing

COSTS ENDORSEMENT

[1] The respondent’s motion for an order removing Tanya Road and Rahul Shastri as the applicant’s lawyers of record in this family law proceeding as well as in two related civil actions was dismissed: See Breukelman v. Miret, 2024 ONSC 2999 (“the Endorsement”).

[2] The applicant seeks her costs, on a partial indemnity basis, of $74,907.59 inclusive of disbursements and HST. The respondent submits that each party should be ordered to bear their own cost, or alternatively, the respondent should be ordered to pay $20,000.00.

[3] The underlying litigation related to this motion was described in the Endorsement, at paragraphs 2-3, as follows:

The parties separated in May 2021 following a marriage of almost thirty years. They have two children that attend university. The parties worked for a land surveying business, R. Avis Surveying Inc. ("RAS"), owned by the Respondent husband’s parents (51%) with the balance owned by the Respondent husband. The Respondent’s parents are retired. The Respondent husband was the primary surveyor, and the Applicant wife was the chief financial officer. In 2021, the Respondent earned $1,135,000 and the Applicant earned $238,000. [See Endorsement, Shore J, August 9, 2022] Three proceedings have been commenced:

(1) RAS commenced an action (Court File No. CV-22-00675720) in January 2022 against the Applicant wife and her sister, Tanya Basso, who also worked for RAS, for, amongst other things, the return of property that they had allegedly stolen from RAS. In this action, Radnoff Haworth LLP acts for RAS and the Respondent husband, Matthew Valittuti acts for the respondent husband’s parents and Rahul Shastri acts for the Applicant wife.

(2) The applicant wife commenced an action (Court File No. CV-22-00679352) against RAS and the Respondent husband for wrongful dismissal. In turn, RAS and the Respondent husband added Tanya Basso as a defendant to the Counterclaim and advanced against her and the Applicant wife the claims that RAS made in the January 2022 action. In this action, Rahul Shastri acts for the Applicant wife, Radnoff Haworth LLP acts for RAS and the respondent husband.

(3) The applicant wife commenced a family law proceeding (FS-00030156-000) against the Respondent husband raising various issues, including a claim that the respondent’s 49% equity stake in RAS is a joint family venture, or alternatively that he holds half of those shares in trust for the applicant wife. In this family law proceeding, Tanya Road represents the applicant wife and Evelyn Rayson represented the respondent husband until April 2023.

[4] The respondent was ordered to make interim spousal and child support payments of $41,683 per month however as the date of the hearing of this motion, was in arrears of that Order by the sum of $341,000.00. The respondent states that his income dropped and that his court ordered monthly support payments exceed his take home salary.

ANALYSIS

[5] I adopt the principles related to the award of costs in a family law proceeding that were outlined by Monahan J., as he then was, in Sonia v. Ratan, 2023 ONSC 982, at paras. 25-33, and by Madsen J., as she then was, in Grujicic and Grujicic v. Trovao, 2023 ONSC 1518, at paras. 5 - 33.

Entitlement to Costs

[6] There is no question that the applicant was the successful party on the motion and thus presumptively entitled to her costs of the motion.

[7] However, the respondent submits that courts are reluctant to order costs when an unsuccessful motion was brought in good faith and in the interests of justice, and in particular, courts are reluctant to order costs on a motion that where a conflict of interest is asserted: Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2010 ONCA 788, para. 38; Gracie v. Wang, 2010 ONSC 6592. Those two cases do not stand for that principle and are readily distinguishable as in each of those cases the motion for the removal of the impugned lawyer was successful and the court ordered that no costs be paid by the resisting party. Further, those two cases appear to stand alone on this point and do not represent the general practice in respect of the award of costs following a motion for the removal of a lawyer for a conflict of interest irrespective of whether the motion is successful or not. In the circumstances of this case, I am not persuaded that each party should bear their own costs.

Complexity of the Proceeding

[8] The applicant notes that the respondent: (a) the delivered two affidavits encompassing 1,213 pages and conducted cross-examinations of Ms. Valente, Ms. Road and Mr. Shastri; (b) undertook a rule 39.01 examination of Eli Antel, the lawyer appointed as the administrator of Ms. Rayson’s practice. The applicant’s materials were 104 pages in total. The applicant cross-examined Eli Antel and the respondent on the two affidavit that he delivered. The respondent submits that the motion was of low factual complexity and moderate legal complexity. I find that the motion was complex.

Importance of the Issues

[9] The applicant submits that it was important to her that she not be deprived of her family law counsel and her commercial litigation counsel who had been immersed in this highly contentious proceeding. The respondent submits that the motion was of high importance to the parties and to the administration of justice. I find that the issues were of high importance to the parties.

Unreasonable Behaviour

[10] The applicant submits that the motion was brought for tactical reasons:

The applicant has previously been successful in multiple prior motions in the various proceedings (now consolidated into the Family Law Proceeding). The motion, while brought under the cloak of conflict, appears to have been an attempt by the Respondent to:

(a) Strangle the applicant financially through a very expensive motion, in circumstances where the respondent was substantially in arrears of his spousal and child support obligations, despite himself having an annual salary (2022) of $1.135 MM; and

(b) Deprive the applicant of counsel of choice, on whom she had relied, with substantial success, for over two years.

[11] Motions brought for tactical reasons should be discouraged by the court. In Moffat v. Wetstein (1996), 29 O.R. (3d) 371 (Ont. Gen. Div.) Granger J. stated, at para. 131:

Although it may appear obvious, where a motion is brought which appeals to the court's equitable discretion to remove a solicitor of record, the relief should only be granted where the motion has proceeded on the basis of a genuine concern with respect to the merits of the alleged conflict. In other words, where a motion to remove a solicitor of record is brought for the purpose of frustrating or delaying one's opponent or to otherwise secure a tactical advantage in the course of litigation, the motion should be dismissed.

[12] The respondent submits that the motion was not brought for tactical reasons. He states that the motion was brought as soon as applicant’s counsel, Ms. Road, stated that she had hired Ms. Rayson’s former law clerk, Ms. Valente. The respondent further submits that his counsel had a duty to bring the question of the alleged conflict of interest before the court.

[13] While I acknowledge the impact that this motion has had on the applicant, and the fact that this matter did not involve a lawyer who had switched firms and started to work on the opposing side, but rather a junior clerk whose duties were administrative, I find that the motion was not brought for tactical reasons largely because this issue was raised very shortly after the respondent learned that Ms. Valente had been hired.

[14] The respondent submits that Ms. Road failed to be forthright about hiring Ms. Road and thus this motion could have been avoided had Ms. Road asked in advance if this motion would be brought if she hired Ms. Valente. The Endorsement makes no finding of impropriety on the part of Ms. Road nor am I prepared to make such a serious finding. As such, there is no basis for reliance on Celanese Canada Inc. v. Murray Demolition Corp. nor for the position of the respondent that costs be significantly reduced for that reason.

Offer to Settle

[15] The applicant states that on September 1, 2023, Mr. Shastri and his firm delivered an Offer to Settle, made in accordance with r.18 (14), pursuant to which the motion against him and his firm be withdrawn without costs through to that date and thereafter, costs would be payable by the Respondent on a partial indemnity scale less the sum of $500.00.

[16] The respondent states the motion “… could not be settled as it involved serious concerns as to the administration of justice and the respondent’s right to a fair adjudicative process.”.

[17] In Serra v. Serra, 2009 ONCA 395, at para. 6, the Ontario Court of Appeal adopted the view that a party must make all reasonable efforts to settle. It stated:

As Justice R.J. Spence noted in Husein v. Chatoor (2006), 2005 ONCJ 487, 24 R.F.L. (6th) 274 (Ont. C.J.), at para. 30:

[P]arties have an obligation to begin to assess their respective cases at the outset of the litigation — even before the litigation commences — and to make all reasonable efforts to settle. Legal fees can create enormous financial burdens for litigants and it behooves neither party simply to sit back and to roll the dice while those fees continue to mount.

[18] By failing to make an offer to settle, the respondent failed to meet this obligation. In hindsight, the respondent’s concerns, particularly as it relates to Mr. Shastri, were clearly overstated and the applicant’s offer should have been accepted.

Amount of Costs Claimed by the Applicant and the Amount an Unsuccessful Party Could Reasonably Expect to Pay

[19] The respondent’s cost outline totaling $23,363.32 on a partial indemnity basis whereas the applicant claims $74,907.59. Both figures are inclusive of disbursements and HST.

[20] The respondent submits that costs should not be recoverable for three counsel and that the time claimed for cross-examination, research and preparation of factums is excessive.

Three Counsel

[21] The applicant states:

The applicant was required to retain new counsel to argue the motion because her family law and civil commercial counsel, Tanya Road and Rahul Shastri, respectively, were witnesses. Both Ms. Road and Mr. Shastri delivered affidavits in opposition to the motion. The applicant retained senior counsel (called to the Bar in 1977) who is experienced in arguing motions and appeals in the relevant field. His hourly rate is similar to other of other senior counsel with his qualifications and experience, and the applicant seeks cots on only a partial indemnity scale in any event. Simlarly, Ms. Road and Mr. Shastri were involved with the review and preparation of all motion material and facta.

[22] In response, the respondent states:

Retaining new counsel did not cause the applicant to incur any additional costs as new counsel was retained only for this motion, which was self-contained and did not deal with merits of the underlying action. Ms. Road and Mr. Shastri’s involvement as counsel would be improper given they were witnesses in the motion. Ms. Road and Mr. Shastri were called as witnesses and could not act as counsel. The applicant can only be awarded disbursements with respect to Ms. Road and Mr. Shastri as witnesses. Since the applicants were necessary fact witnesses, to allow their costs would amount to an error in principle.

[23] In reply, the applicant states:

The respondent relies on the decisions in OPSEU Pension Trust Fund (Trustee of) v. Clark, [2005] O.J. No. 3515 (costs decision) and The City of Winnipeg v. 3177751 Manitoba Ltd, 2023 MBCA 100, for the proposition that it would be an error in principle to award costs to a party who was not only counsel but also a witness at the hearing. In the Winnipeg case, the court denied Mr. Williams his costs as he was noted as counsel in the decision. In OPSEU, the court denied costs claimed by Alan Gold (a noted criminal lawyer, presumably for (expert) evidence provided on the mechanism for the granting of letters rogatory). Mr. Gold was not underlying counsel, but presumably provided evidence on the mechanism for letters rogatory.

Neither Ms. Road nor Mr. Shastri appeared before the court as counsel at the hearing. They, however, undertook substantial work which would have otherwise been performed by Mr. MacKenzie, a far more senior lawyer at higher rates. The inclusion of their costs is proper and appropriate.

[24] Typically, costs of multiple counsel cannot be claimed. In S. v. A., 2023 ONSC 5579, McGee J. stated at para. 14:

The reasonableness of including the costs of multiple counsel is a matter of discretion. As set out in a trio of 2020 decisions, the court will start with the general premise that costs for a second counsel are not recoverable. In Diamond v. Berman, 2020 ONSC 4301, I expressed a view that the costs of multiple counsel cannot be claimed against another party absent compelling circumstances.

[25] The assistance of Ms. Road, and to a much lesser extent, Mr. Shastri, was reasonable given that it served to reduce the work that would have had to been performed by Mr. MacKenzie at almost double the hourly rate.

Time Claimed

[26] The respondent raises concerns regarding the time spent by counsel in preparing for and attending cross-examinations, the preparation of, reviewing the factum, preparing a responding factum and reviewing a reply factum, as well the time spent by junior counsel (billed at $350 per hour) for research.

[27] In Margarita Castillo v. Xela Enterprises Ltd. et al, 2015 ONSC 7978, Newbould J. stated at para. 10:

It is not the court’s function when fixing costs to second guess successful counsel of the amount of time spent unless the time spent was obviously too much.

[28] The applicant’s bill of costs totals 151.5 hours. Mr. MacKenzie claims 77.1 hours, Ms. Roads claims 47.6 hours, Mr. Shastri claims 9.2 hours and Ms. Vandergrift claims 17.6 hours. The respondent’s bill of costs totals 62.3 hours comprised mainly of 38.7 hours claimed by Mr. Radnoff and 13.8 hours claimed by an articling student. In my view, the amount of time spent was “obviously too much” and it shall be adjusted downward.

Decision

[29] In the circumstances and having regard to the relevant considerations such as the objectives of a costs order as well as considerations of proportionality and reasonableness, I find that it is just to order that the respondent shall pay costs of $50,000.00, inclusive of disbursements and HST, to the applicant within 30 days.

Mr. Justice M.D. Faieta Date: October 21, 2024