Ontario Superior Court of Justice

Court File No.: FC-21-119
Date: 2025/01/22

Parties

B E T W E E N:
Yang Zhou (Applicant)
– and –
Chen Zhao, Huanwei Zhao, Yuanhong Chen (Respondents)

Applicant Counsel: Angela Daniels
Respondent Counsel: Haiyan Zhang
Heard: In writing

Amended Costs Decision

Justice Julie Audet

Background

[1] Following the release of my trial decision in this matter (Zhou v. Zhao et al, 2024 ONSC 6663), I advised the parties that I would accept brief written submissions on costs if the parties were unable to resolve that issue.

Costs Award

[2] Having received the parties’ submissions, I order the Applicant to pay to the Respondents costs in the amount of $50,000, for the following main reasons.

[3] This trial focussed on the sole issue of the ownership of two real estate properties and a vehicle. My trial decision, in which I found that the Respondents Huanwei Zhao and Yuanhong Chen (the Respondent Chen Zhao’s parents) were the beneficial owners of all three assets, does not end this court application as between the ex-spouses (the Applicant and the Respondent Chen Zhao). It puts an end to the Respondent parents’ claims in this family law proceeding, but the parties’ respective claims for spousal support, equalization and restraining orders are still outstanding before the Court.

[4] The Respondents seek full recovery costs in the amount of approximately $110,000 for the entire proceeding (including prior court appearances for which costs were not assessed). However, the cost award that I am making today only relates to the issues before me during this focussed hearing, not all issues. For that reason, I am not prepared to make a cost award in relation to all court hearings in this litigation from its inception, as sought by the Respondents.

[5] The Respondents were entirely successful in this focussed trial. As such, they are presumed entitled to their costs on a partial indemnity basis.

[6] I am of the view that the Applicant’s claims of ownership of these assets had very little merit, if any. Her position in this trial that she was the rightful owner of these assets, towards which she admittedly had made absolutely no contribution – financial or otherwise – and considering the parties’ unusually short marriage, was unreasonable.

[7] Furthermore, the Respondents made many formal offers to settle in this matter including, notably, one dated July 2, 2021, shortly after the initial pleadings were closed, and all of which were far more favourable to the Applicant than the outcome she achieved in this focussed trial. For that reason alone, the Respondents are entitled to costs on a full recovery basis from the date of that first formal offer for all the work related to the issues that were tried before me.

[8] I am also of the view that the Applicant’s litigation conduct in relation to these issues was unreasonable and unduly increased the overall costs of this litigation. For instance, the Applicant failed to admit material and undisputed facts which significantly increased the Respondents’ costs in this proceeding (they had to collect, organize and translate hundreds of pages of documents from China showing that these assets were paid exclusively by them; they had to spend significant time collecting, analyzing and computing bank documents to show the tracing of the funds used to pay for these assets; etc.). The Applicant (through her father) surreptitiously removed the vehicle that was at the heart of this litigation from the Respondents’ residence and disposed of it without notice to or the consent of the Respondents. They kept the proceeds.

[9] All the above, in my view, support an award of costs on a substantial indemnity basis if not on a full recovery basis in relation to the issues that were determined by me.

[10] There were several conferences held in this matter before this focussed hearing was heard (at least five conferences), but the Respondent’s parents were only added to this family court application in December 2023. Awarding costs in these circumstances is not a precise exercise. The issues before me were complex, from an evidentiary perspective, and the Applicant appears to have incurred legal fees which closely resemble those incurred by the Respondents. Considering this, I conclude that the legal fees incurred by the Respondents for this trial (and related conferences) were reasonable.

Disposition

Based on all the above, I find that costs in the amount of $50,000 is payable by the Applicant to the Respondents forthwith.

___________________________________
Madam Justice Julie Audet
Released: January 22, 2025