Court File and Parties

Court File No.: FC-19-59358 Date: August 18, 2025 Ontario Superior Court of Justice

Between: Frances DiBlasi (c/o Litigation Guardian Antonella DiBlasi), Applicant And: Gaetano (aka Guy) DiBlasi, Respondent

Counsel:

• Andrew Feldstein, Counsel for the Applicant
• Shalaka Guhar and Gagan Sekhon, Counsel for the Respondent

Heard: In writing

Ruling on Costs

D.A. Jarvis, J.:

Introduction

[1] This ruling deals with costs arising from Reasons for Decision released on May 5, 2025. The principal trial issues involved determination of the valuation date and property ownership, including equalization of the spouses' net family properties. Neither party's choice of valuation date was accepted. The court determined a different valuation date for which there was insufficient evidence, among other concerns, to proceed with a trial of the property issues and so directions were given for a trial on those (and support) issues to proceed during the November 2025 trial sittings. The parties were encouraged to resolve costs, failing which directions were given for written submissions.

[2] Unsurprisingly, the parties were unable to agree on costs. The applicant ("the wife") seeks partial recovery costs in the minimum amount of $375,000. The respondent ("the husband") also seeks this amount or, in the alternative, that no costs be awarded to either party.

[3] In addition to written submissions, each party delivered Bills of Costs. There was a notable discrepancy between the parties in terms of the quality and content of the supporting billing information that, particularly in the case of the husband, made fairly assessing the comparative value of his claim problematic. The wife made five Offers to Settle compliant with s. 18 of the Family Law Rules (the "FLR"); the husband made none.

Wife's Position

[4] The wife seeks an order for a costs award not less than $375,000. She contends that, overall, she was the successful party because her choice of valuation date (somewhere between August 30, 2013, and June 1, 2015) was closer in time to the husband's date (August 3, 1999); the court determined that the valuation date was August 3, 2013. Based on the trial evidence, it is her submission that even when considering the August 3, 2013, date the husband would have inevitably owed her an equalization payment not less than $1,000,000, excluding spousal support. She was successful in her claim to extend the limitation period.

[5] Mr. Feldstein's offices were retained by the wife in December 2019 and have represented her throughout. Total costs were $500,092.24 comprising legal fees of $442,559.50 and HST of $57,532.74. A billing summary identified who worked on the wife's file, their hourly rates over a six-year period and years of call or statement of experience. The summary was supported by detailed accounts which recorded a service date, the service provider, a brief description of the work performed, time spent, the applicable rate and the charged amount. According to the wife, the costs were significant due to the complexity of the issues and the volume of Court attendances which included at least six conferences; three motions; five full days of questioning; an appeal; and a six day trial (and two further days directed by the court) which spanned a fourteen to sixteen year difference (at least) in valuation dates and involved a myriad of companies, properties and owners. The minimum amount of $375,000 costs sought by her for partial recovery is "proportional to the issues at hand, and the costs were incurred out of necessity, as the wife had no other way to receive compensation as a result of the breakdown of the marriage."

[6] The wife served five Offers to Settle dated March 6, 2020; March 30, 2020; January 13, 2023; April 20, 2023; and August 30, 2023. All the Offers contemplated a complete resolution of the parties' financial issues but differed in content and terms of acceptance. The first two Offers related to a Long Motion that never proceeded but which, if accepted, would have resolved the entirety of the proceedings between the parties. The Offers dated January 13, 2023, and August 30, 2023, were open for acceptance without cost consequences until one minute after the start of the trial and remained open thereafter if the husband paid the wife's partial recovery costs to the date of the Offer and full recovery costs afterward. The January Offer required, among other less pertinent terms, that the husband pay $1,800,000 net of tax to the wife and that the parties retain all realty owned by them. A Miglin-style release of spousal support would be signed. The August Offer was almost identical to the January 2023 Offer, but the net amount payable by the husband to the wife was reduced to $1,450,000. The April 2023 Offer proposed that the parties jointly retain an Estates lawyer to reallocate five properties (the most valuable four of which were owned by the husband) such that the properties would be registered in the parties' names as tenants in common (50%-50%) and that these properties would be bequeathed in equal shares to all the parties' children, including the child born to Ms. Nalayog and the husband. This Offer was open for acceptance on terms like the January 2023 and August 2023 Offers which bracketed it. The last three Offers remained open for acceptance when the trial started.

Husband's Position

[7] The husband submits that the wife was not as successful as she contends on the valuation date, equalization and support issues, that the wife did not achieve success equal to or greater than any of her Offers and that success was either divided or that neither party was successful such that neither was entitled to costs.

[8] At least four law firms serially represented the husband. A collated summary of the accounts rendered by four of the firms between September 2019 and May 5, 2025, accompanied his submissions. The husband's claims that on a full recovery basis his total costs (inclusive of HST but with a few exceptions) were $390,458.92, but he is only seeking (as already noted) partial recovery costs of $375,000 or that no costs be awarded to either party. Only the accounts of his first lawyers (Bortulussi Family Law, from September 28, 2019 to March 12, 2020) and his trial lawyers (Galbraith Family Law, from February 29, 2024 to May 5, 2025) provided acceptable billing-related information similar to that of the wife's lawyers; the accounts from the other two in-between law firms which represented the husband were conspicuous for their absence of relevant detail and of no assistance.

[9] The husband challenged the wife's reliance on her offers on the basis that they were all premised on property information and the tracing of sale proceeds for multiple property transactions which preceded the valuation date determined by the court and, by inference, were a waste of time and money. The wife submitted that the husband made offers that would have left her with nothing but no details about them were provided by her nor were any referenced by the husband in his submissions. It may be that offers were contained in the husband's conference briefs, but those do not qualify as a rule-compliant offer, nor can they be disclosed or considered even at a final costs stage of a case: Entwistle v. MacArthur.

Law/Guiding Principles

[10] Section 18 of the FLR deals with the technical requirements relating to Offers to Settle. Pursuant to rule 18(12.1) FLR 24 deals with the costs consequences of making, withdrawal, acceptance and rejection of offer. Sections 24(3), (4), (7), (8), (10) and (12) provide as follows:

Entitlement to costs, presumption

24(3) Except as otherwise provided in this rule, there is a presumption that a successful party is entitled to the costs of a step in a case.

Divided success

(4) If success in a step in a case is divided, the court may apportion costs as appropriate.

Unreasonable behaviour by successful party

(7) A successful party who has behaved unreasonably during a step in a case may be deprived of all or part of the party's own costs or ordered to pay all or part of the unsuccessful party's costs.

Same

(8) In deciding whether a successful party has behaved unreasonably, the court may consider,

(a) the party's behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

(b) the reasonableness of any offer the party made; and

(c) any offer the party withdrew or did not accept.

Bad faith

(10) If a party has acted in bad faith, the court shall decide costs on a full recovery basis and shall order the party to pay them immediately.

Failure to accept offer

(12) A party who makes an offer in relation to a step in a case is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date to the conclusion of the step, if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.
2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.
3. The offer does not expire and is not withdrawn before the hearing starts.
4. The offer is not accepted.
5. The party who made the offer obtains an order that is as good as or better than the offer.

[11] Rule 24(14) frames the exercise of the court's discretion:

Setting the amount of costs

(14) In setting the amount of costs in relation to a step in the case, the court may consider,

(a) the reasonableness and proportionality of each of the following factors, as applicable, as it relates to the importance and complexity of the issues in the step:

(i) Each party's behaviour.

(ii) The time spent by each party.

(iii) Any written offers to settle, including offers that do not meet the conditions set out in subrule 12 or the requirements of rule 18.

(iv) Any legal fees, including the number of licensed representatives and their rates.

(v) Any expert witness fees, including the number of experts and their rates.

(vi) Any other expenses properly paid or payable; and

(b) any other relevant matter.

[12] There are certain well-established principles guiding the court's exercise of its discretion pursuant to the FLR. The primary objective is to enable the court to deal with cases in a fair and timely manner. Four fundamental purposes are served: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants; and, (4) to ensure that cases are dealt with justly. Family law litigants must act in a reasonable and cost-effective way; they should, and will, be held accountable for the positions they take in their litigation. As observed by Spence J. in Heuss v. Surkos:

Parties to litigation must understand that court proceedings are expensive, time-consuming and stressful for all concerned. They are not designed to give individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and, perhaps most importantly for the purposes of this case, oblivious to the mounting costs of the litigation. Matrimonial litigation is an occasion for sober consideration and thoughtfulness rather than intemperate behaviour.

[13] This means that a party must realistically assess the merits of their claims throughout a case and consider (or reconsider) how best they can achieve their desired outcome and at what cost or risk. As this court observed in Gibbons v. Mulock:

Litigants are responsible for their litigation conduct and strategy. At each important step in a case a litigant, whether or not legally represented, must realistically assess the merits of their case, how best their desired outcome can be achieved and at what cost or risk.

[14] Finally, and as observed by the Court of Appeal in Beaver v. Hill, reasonableness and proportionality frame the exercise of the court's discretion. The amount to be awarded is what the "court views as a fair and reasonable amount that should be paid by the unsuccessful party": Boucher v. Public Accountants Council for the Province of Ontario.

[15] Offers to Settle are important. The failure to make an Offer to Settle amounts to unreasonable behaviour and may, but will not invariably, impact the quantum of costs. In F. (H.) v. H. (M.) Sherr J. observed:

4. …it should be a fundamental step in any family law case to serve at least one offer to settle…Offers to settle play an important role in saving time and expense in a case. They are an important vehicle in promoting settlements, focus the parties and often narrow the issues in dispute.

5. …When determining the reasonableness of a party's behaviour in the case, clauses 24(5)(b) and (c) of the rules direct the court to examine the reasonableness of any offer made, withdrawn or not accepted. This does not preclude the court from examining the failure of a party to make an offer to settle. (emphasis added)

[16] Even so in Beaver, the court accepted that while "the presence or absence of offers to settle can properly be taken into account in fixing costs, it remains the fact that [a party is] not under any obligation to proffer an offer to settle." Pivotal in that case was the court's consideration that the utility of an offer from the standpoint of representing an effort to compromise was, and it follows can be, premised on whether the issue(s) could have been settled in a practical way (they couldn't in Beaver because a constitutional claim was involved, an all or nothing outcome; consequently, it was unrealistic to expect offers to settle to be made). There was no effort to compromise demonstrated by the husband in this case, no evidence of a practical approach by him to resolving any issue (apart from the wife's capitulation) and while his limitation period argument might seem a singular case-ending outcome if successful, it would not have resolved the wife's extension of time claim.

Discussion

[17] The principal issues involving the valuation date and, if necessary, extension of the limitation period should have been resolved by either a summary judgment motion pursuant to FLR 16 through which the court could have ordered a mini-trial (rule 16(6.1)) or given directions for a trial on those issues (rule 16(9)). That would have avoided the extraordinary time and expense of questioning and trial time spent dealing with multiple properties and the tracing of sale proceeds arising from the 2005 sham trust (i.e., the Agreement) to whose terms the parties considered themselves (except for the husband) contractually bound. No final disposition of either party's claims was possible because the case proceeded on a faulty theory and the evidence led to an outcome which neither party anticipated and for which there was no reliable evidentiary record.

[18] In determining whether to order costs, and by whom, if an award is made, they should be paid, and their amount, the following considerations are relevant:

(a) The trial outcome was not as favourable or more favourable to the wife than any of her offers. In fact, none of them came close. FLR 24(12)(5) is unavailable to her.

(b) The wife was successful in having the valuation date determined but not the date that she proposed. She was successful in having the limitation period under s. 2(8) of the Family Law Act extended.

(c) The husband is not entitled to costs. He made no offer, which was unreasonable. His position that the valuation date was in 1999 was unreasonable. His persistence in claiming that date in the face of documentary, and sometimes his sworn, evidence that he and the wife were cohabiting as a married couple as late as early 2013 was unreasonable.

(d) This is not a case of divided success. This is a case where the wife achieved partial success and the husband none. It is also a case whose final, substantive property and support issues have not been determined.

(e) The husband acted in bad faith. He knowingly misrepresented his marital status to third parties, and shamelessly continued that behaviour throughout these proceedings not only prolonging them and increasing their cost, but also threatening those, including his family members, who disagreed with him (at least he was candid when he acknowledged his propensity for lying if that served his purpose). He was not exercising bad judgement or acting negligently; he knew exactly what he was doing. He acted in bad faith.

[19] The wife is entitled to costs but nowhere near the amount claimed. It should have been obvious that the Agreement was legally invalid. Pleadings frame a case and reliance on that document led to significant costs being incurred which, for the most part, could form part of a historical narrative in an abbreviated format for trial purposes but which, in this case, were not relevant to the substantive issues of who owned what and their value on the valuation date, whatever that might be determined to be. There were no valuation evidence contingencies if the valuation date was other than somewhere between August 30, 2013, and June 1, 2015.

[20] The summary of the wife's Bill of Costs disclosed that slightly over one-half of the time spent involved another, more junior lawyer (Nick Slinko, a 2012 call) than Mr Feldstein (a 1994 call) and that more than ten other members of the firm (which included five other lawyers, articling students and law clerks) worked on the file. About forty percent of the docketed time involved Mr. Feldstein. Mr. Slinko ably assisted at trial. I have no difficulty with the hourly rates charged. They are reasonable.

[21] In assessing the wife's claim, it must be discounted because most of the lawyers' time spent involved dealing with assets, their values, their disposition and tracing of their sale proceeds into other assets which, with the exception of five properties, no longer belonged to the parties and, for those properties which were still owned at trial, there were no reliable values for the valuation date determined by the court. Approaching this assessment from a summary judgment, mini-trial or directed trial perspective, a line-by-line review of the wife's dockets is inappropriate. And given the court's trial findings, it is impossible to undertake a comparative review of the lawyers' Bills of Costs. A global award is warranted. In my view the amount is $100,000 inclusive of disbursements but not HST. This captures the considerations noted above, reflects the challenges which the wife faced in moving forward with her claims and the husband unreasonable and bad faith behaviour.

Disposition

[22] The husband shall pay to the wife her costs of these proceedings to date in the amount of $100,000 plus HST, payment of which is deferred until disposition of the balance of the property and support issues in these proceedings.

Justice D.A. Jarvis

Date: August 18, 2025