Montesano v. Montesano, 2026 ONSC 4160

CITATION: Montesano v. Montesano, 2026 ONSC 4160

COURT FILE NO.: FS-23-00034603-0000

DATE: 20260717

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JOANNA MONTESANO, Applicant

AND:

VITO MONTESANO, Respondent

BEFORE: S. VELLA J.

COUNSEL: Rahool Agarwal, Jesse Rosenberg, Philip Underwood, and Amethyst Haighton Counsel, for the Applicant

Goeffrey Wells, Counsel, for the Respondent

HEARD: In Writing

COSTS ENDORSEMENT

[1] By Reasons dated December 12, 2025 (the “Reasons”) I granted an interlocutory Mareva injunction in favour of the Applicant Wife, inter alia, freezing the Respondent Husband’s assets in the sum of twenty million dollars ($20,000,000.00).

[2] The Wife now seeks costs on a full recovery basis in the sum of $184,450 inclusive of expert fees and HST.

[3] The Husband concedes that the Wife was successful, though not entirely so as she sought the amount of thirty million dollars ($30,000,000.00) as the cap. Furthermore, and in any event, full recovery is not justified, and the amount sought is exorbitant. His own costs on a full recovery basis are only $21,653.00.

General Principles on Costs

[4] Costs are in the discretion of the court (section 131(1), Courts of Justice Act).

[5] The four main objectives of costs are to:

(a) Partially indemnity successful litigants;

(b) Encourage settlement;

(c) Discourage and sanction inappropriate behaviour by litigants; and

(d) Ensure that cases are dealt with justly (Mattina v Mattina, 2018 ONCA 867, at para. 10; R. 2(2) of the Family Law Rules).

[6] Rule 24(14) sets out the factors relevant to setting the quantum of costs. However, the rule specifically emphasizes “reasonableness and proportionality” in fixing a costs award (R. 24(14)(a), Mattina, at para. 10; Beaver v. Hill, 2018 ONCA 840, at para. 4).

[7] The successful party is presumptively entitled to their costs (r. 24(3), FLRs). The presumption is rebuttable, and success is a relative concept.

Level of Recovery of Costs

[8] The Applicant Wife achieved overall success. She sought a significant Mareva injunction and she was granted one. The fact that the Mareva injunction was capped at $20,000,000.00 rather than $30,000,000.00 does not detract from her overall success, particularly in light of the fact that the Respondent Husband sought an order dismissing her motion in its entirety. She is presumptively entitled to costs, and there is no reason to displace that presumption.

[9] Full recovery costs are only awarded in three specific circumstances under the Family Law Rules:

(a) Where the successful party has behaved unreasonably (r. 24(7));

(b) Where a party has behaved in bad faith (r. 24(10)); or

(c) Where a party has beat an offer to settle under r. 18(14); r. 24(12) (Berta v Berta, 2015 ONCA 918, at para. 94).

[10] Rule 24(8) addresses the reasonableness of behaviour as follows:

In deciding whether a party has behaved reasonably or unreasonably the court shall examine:

(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 failed to accept.

[11] Under r. 24(10), a party who has acted in bad faith “shall be ordered to pay costs on a full recovery basis and shall order the party to pay them immediately”.

[12] Neither party made any offer to settle. However, the Wife relies on the Husband’s misconduct alleged during the course of the marriage and this litigation, obscuring his true net wealth, in support of her claim that he acted not only unreasonably, but in bad faith. She relies on findings of fact made in the course of the Reasons on this motion that the Husband:

(a) Has fabricated net worth and income statements;

(b) Forged the Wife’s signature to deprive her of property and subject her to liabilities without her consent;

(c) Breached prior preservation and financial disclosure orders; and

(d) Engaged in a “pattern of fraudulent conduct that directly reflects his propensity to misrepresent his financial assets and net worth in order to gain the result he desires, and has shown a flagrant disregard of the temporary preservation order already issued against him by Kraft J. to prevent the very dissipation of assets that are at risk” (Reasons, at paras. 96, 124).

[13] In Bullock v Bullock, 2018 ONSC 6841, at paras. 21 – 24, Price J. awarded costs on a full recovery basis due to the applicant father’s bad faith arising from his breach of multiple financial disclosure orders which had delayed the respondent mother’s ability to respond to his motion to vary his child support obligations. At para. 23, Price J. quotes from Trudel v Trudel 2010 ONSC 55177 and references the “catch-me-if-you-can approach to financial disclosure” as demonstrating bad faith behaviour attracting mandatory full recovery costs.

[14] In Avesh v Zeidan, 2018 ONSC 6995, at paras. 43-49, the court also found that the “failure or refusal of a party to make accurate financial disclosure and reveal their true income may constitute bad faith for costs purposes”. The court awarded costs on a full recovery basis on the basis of the failure to make full financial disclosure and added that at the very least that behaviour was unreasonable also warranting full recovery of costs.

[15] In Tesfamariam v. Drar, 2010 ONSC 2152, Blishen J. held that a mother’s removal of the child from the jurisdiction in the face of the father’s parenting rights was an intentional breach of court order (albeit due to her genuinely held belief that the father had sexually abused the daughter) and this intentional breach of court order amounted to bad faith. However, the court declined to order full recovery costs based on the mother’s inability to pay and how that would affect her ability to exercise her parenting rights which would require her to travel to another city.

[16] The Husband responds that the fact he paid $450,000 to the Wife in advance equalizations payments, on consent, demonstrates that he has not been acting in bad faith.

[17] There is no doubt, in my view, that the Husband acted in bad faith within the meaning of r. 24(10) and that therefore he must pay costs on a full recovery basis and immediately. The bad faith relates not only to his failure to make full and fair disclosure in a “catch me if you can” vein, but the fact that his dishonesty was underlying that failure. In addition, the Husband breached Kraft J.’s preservation order relating to the same assets that were, in part, the subject of the Mareva injunction and constitute part of the net family property assets subject to equalization (Reasons, paras. 105, 107).

[18] Indeed, in addition to my findings at paras. 96, 105, 107 and 124, referenced above, I found:

(a) the Husband failed to produce all of the financial documents required by Justice Kraft’s order which were necessary to allow the Wife’s valuation expert, Mr. Parsons, “to prepare a comprehensive, higher standard, valuation report, as evidenced by the affidavit of Mr. Parsons who made a focussed request on April 22, 2024.” (para. 106)

(b) this breach of the preservation order was a badge of fraud (Reasons, at para. 113);

(c) the Husband acknowledged that the Wife’s signature had been forged as a guarantor of obligations to Tarion in support of his funding application, and that the Wife continues to be bound by this financial commitment in the sum of 2 million dollars to Tarion underlying the home building and real estate development enterprise (para. 119);

(d) the Husband acknowledged that he forged the Wife’s signature on a Ministry of Transport car ownership form regarding two luxury cars transferring ownership to him. He then sold these luxury cars without notice to the Wife (Reasons, para. 120); and

(e) the Husband appears to be playing a shell game with the Wife to hide his financial net worth as at the relevant valuation dates (Reasons, para. 123).

[19] Therefore, pursuant to r. 24(10) of the Family Law Rules (or, the FLRs) the Applicant Wife shall have her costs on a full recovery basis, payable immediately.

Fixing the Quantum of Costs

[20] The quantum of costs may include a consideration of the non-exhaustive factors set out in r. 24(14).

[21] As stated, neither party submitted any offers to settle.

[22] I have already found that the Respondent Husband engaged in bad faith. This behaviour is also captured under rule 24(a)(i) of the FLRs.

[23] The key issues here are the time spent by each party, the legal fees including the number of licensed representatives and their rates, and Mr. Parson’s expert fees. As well the reasonable expectations of the Respondent Husband, as informed by his own Bill of Costs, is also a relevant consideration, together with the proportionality and reasonableness of the factors under r. 24(14) as they relate to the importance and complexity of the issues in the motion.

[24] The issues were very important to the Applicant. Without the Mareva injunction there was a real risk that the Respondent would (continue to) dissipate his assets to the detriment of her claim for equalization based, inter alia, on joint family venture.

[25] The issues were very complex, in large part because of the Respondent’s failure to make timely, full and frank financial disclosure in the face of disclosure orders. To the contrary, I found that the Respondent was hiding his true financial net worth and playing a “shell game” with the Applicant. The issues were factually complex due, in part, to the number of properties and real estate development projects, together with their individual complex financing arrangements underlying them and complicating a valuation of the properties and businesses for the purpose of the injunction motion.

[26] The fees must be proportionate in relation to the value of the Mareva injunction which, at $20,000,000, is substantial.

[27] The expert fees of Mr. Ranot were in fact necessary to a determination of this motion. While his report was originally prepared for an earlier scheduled long motion by the Applicant. That motion was adjourned at the request of the Respondent, and this motion was then scheduled. Mr. Ranot’s expert valuation report was the only admissible expert evidence provided to the court on the key issue of the valuation of the underlying properties and business interests of the Respondent for purposes of fixing the cap. However, Mr. Ranot’s report is likely to be superseded once the Husband has complied with his disclosure order. Furthermore, the Respondent’s agreement to provide an advance on equalization of $450,000 was a negotiated term of his requested adjournment of the long motion and cannot be said to be a sign of good faith.

[28] Accordingly, I find that Mr. Ranot’s expert fees are properly recoverable on a full recovery basis. I also find that his fees are fair and reasonable.

[29] There is obviously a great disparity in the respective bills of costs. The number of hours rendered by the Respondent’s lawyer appear to me to be understated. For example, there is no docket specifically referencing counsel’s review of the extensive evidence filed by the Applicant or the Applicant’s factum. Rather, there is a docket for an 8-hour meeting with the Respondent to “review evidence on motion”. Furthermore, there is no docket relating to the respective cross examinations of the Wife and the Husband.

[30] On the other hand, the Wife’s bill of costs reflects approximately 200 hours of preparation, review and argument, and reflects work done by four different lawyers, two of whom are senior lawyers. Jesse Rosenberg was the lead family lawyer, with approximately 20 years of experience, while Rahool Agarwal was the lead civil litigation lawyer (who took the lead in this motion) and has about 18 years experience. They had two relatively “junior” commercial lawyers assisting with approximately 8 years and 2 years’ experience, respectively. This is contrasted with the Husband’s legal team which consisted of Geoffrey Wells, as senior counsel with 22 years of experience, and his law clerk. Mr. Wells’ hourly rate is $495 whereas Mr. Agarwal’s hourly rate is $895 per hour. Mr. Rosenberg’s hourly rate is $626.

[31] The Wife’s legal team docketed a total of approximately 202.1 hours, while the Husband’s legal team docketed at total of 44.60 hours. The Wife’s bill of costs includes expert fees of their valuation expert, Steve Ranot of Marmer Penner, in the sum of $28,791.30. Mr. Ranot’s fees are fully recoverable in this amount. The total disbursements sought amount to $34,825.37.

[32] The Husband relies on Khan v Yakuk, 2008 CanLII 55141 (ON SC) in support of his position that the Wife’s fees are exorbitant and should be slashed:

It is now commonplace for counsel to ask for what I consider to be excessive fees when costs are fixed at all stages of litigation. In my view the courts have an obligation to reject such claims. To award costs in extravagant amounts will only encourage counsel and experts to charge excessive fees. This will not only ruin clients but will also make litigation even more inaccessible to the average litigant.

[33] While a party is entitled to retain the number of lawyers she deems necessary and appropriate, and to incur fees accordingly, that does not mean that the losing party must pay the fees as claimed.

[34] I agree with the Husband that the global fees claimed are too high, though not as excessive as he claims.

[35] My concern is the fact that the senior family lawyer docketed significant time to this motion, even though carriage of the motion was clearly (and appropriately) delegated to senior commercial counsel. While some of that time is warranted by way of providing background from the family proceedings, not all of Jesse Rosenberg’s time is warranted.

[36] Furthermore, in my view, assigning one senior commercial lawyer, a mid range commercial lawyer and a junior commercial lawyer was overkill. While I am satisfied that the hourly rates for the commercial lawyers are appropriate, notwithstanding Mr. Wells’ lower hourly rate, I am reducing their collective time.

[37] I also find that the time relating to the case conferences docketed under that Fee Item to be unrecoverable in this motion. This amounts to approximately $18,000. This exclusion is without prejudice to either party claiming these costs at trial, if appropriate.

[38] On the other hand, there was a voluminous amount of documents, affidavit evidence, and expert evidence that was required to be reviewed and prepared by the Applicant. There were also cross examinations conducted of the Applicant and the Respondent.

[39] Of course, the fixing of the quantum of costs is not a pure mathematical exercise. Rather it must be fair, reasonable, and proportionate. As stated, the issues were complex and extremely important to the Applicant in order to ensure that there will be some assets remaining to satisfy her equalization claim once determined.[1]

[40] I am also taking into account the Respondent’s reasonable expectations, including his lawyer’s far lower bill of costs. However, while the Applicant cannot reasonably expect that the Respondent will pay for a “Cadillac” job, the Respondent cannot reasonably expect that the Applicant will be limited to a “bare bones” job in this type of complex, important motion, which was made all the more complex due to his dishonesty in his persistent failure to make full and fair financial disclosure, notwithstanding court orders, and his efforts to hide his true financial net worth through his various machinations, both of which are amply demonstrated in the Reasons. I am reducing the global legal fees of the lawyers by an additional roughly 30% (in addition to the exclusion of the case conferences services rendered) to reflect a fair and reasonable amount of costs.

[41] Having considered all of the circumstances and the factors in r. 24, I am fixing costs on a full recovery basis in the sum of $125,000, all inclusive of Mr. Ranot’s full expert fees, plus the reduced claimed legal fees, disbursements, and HST. This sum is fair and reasonable in the circumstances of this case. These costs are to be paid immediately, in accordance with r. 24(10) of the Family Law Rules.

S. VELLA J.

DATE RELEASED: July 17, 2026

1The Respondent conceded that he would owe some amount of equalization to the Applicant, though a far smaller amount than she is asserting.