Ontario Trial Choose Awards Spouse Practically $1 Million in Authorized Prices

Right here’s one for the books:  In early 2023, an Ontario choose awarded the spouse a whopping $950,000 in authorized prices – payable by the husband – after presiding over their hotly-contested 12-day trial.  The award was justified, the choose stated, due to the husband’s dangerous religion conduct all through the events’ 6-year litigation.  

What’s extra, his bid for permission to enchantment that award has just lately been rejected by the Courtroom of Attraction. 

The previous couple began their divorce and custody litigation in 2015.  Within the time since, it burgeoned into 35 journeys to court docket, 23 motions, 22 gives to settle, and 40 completely different endorsements and orders.  All of that culminated in a 12-day trial, adopted by a 70-page resolution by the trial choose. The dispute targeted primarily on pinning down the very rich husband’s true earnings for baby and spousal help functions – a matter about which he had been actively misleading and evasive. 

On the trial’s finish, the spouse was the profitable get together.  She sought about $1,045,000 (plus HST) in prices from the husband, which was the total quantity she had been charged by her personal attorneys (often called “full indemnity” prices).   In help of this request, she claimed the husband demonstrated dangerous religion and unreasonable conduct all through the litigation and trial, and subsequently such an distinctive prices award was totally justified. 

The husband admitted he ought to pay some prices, however thought of the spouse’s tally exorbitant. He instructed he ought to pay her about $350,000 as an alternative.  Amongst different issues, he argued that to grant the spouse over $1 million in authorized prices would set a really destructive precedent for Household legislation litigants. 

The trial choose disagreed, and ordered the husband ought to pay $950,000 inside 21 days.   

The Ontario legislation on prices in Household legislation was clear; it required a court docket to contemplate a number of things.  Amongst them have been whether or not any cheap written gives to settlement have been made (and rejected), and likewise the behaviour of every of the events.  The reasonableness of every get together’s behaviour was additionally assessed in opposition to the background of everything of the litigation. 

Right here, the spouse had repeatedly provided to settle at an quantity a lot lower than what she was in the end awarded on the trial. However even solely the final one – which the husband additionally rejected – she was entitled to her full prices from the date of that supply onward.  

After scrutinizing a number of the spouse’s varied attorneys’ and specialists’ charges, and adjusting the full barely downward, the trial choose subsequent thought of whether or not this was “a kind of uncommon circumstances the place full-indemnity prices are justified due to the [husband’s] unreasonable conduct or dangerous religion”. 

The trial choose discovered that it was, writing: “I agree with the [wife] that the [husband] demonstrated bad-faith deserving of the best prices sanction by the court docket awarding full-indemnity prices.” 

Noting that in Household legislation the idea of “dangerous religion” requires a component of aware wrongdoing, the choose catalogued a number of the husband’s misbehaviour as together with: 

• Refusing to offer the majority of his monetary disclosure to evaluate his world earnings 
• Fraudulently transferring possession of his firm to the spouse  
• Breaching at the very least six prior court docket orders
• Making false representations to the court docket and being typically misleading about his true conduct  
• Deceptive the court docket into granting an adjournment on the premise the husband’s professional had resigned from the case – when in actuality the husband had orchestrated his personal professional’s resignation by actively deceptive him, withholding data, and being uncooperative
• Participating in fraud by counting on paperwork he knew have been solid 
• Mendacity about his right e-mail tackle, merely to keep away from being linked by correspondence to having acquired thousands and thousands of {dollars} in earnings from an organization he claimed his brother owned 
• Disavowing a slew of luxurious bills on his bank card, when all different indications have been that he was very rich 

The trial choose repeated one of many sentiments from a previous choose within the proceedings: “In brief, it is vitally troublesome to belief the [husband]”. 

Even at $950,000, the prices award was proportionate and cheap.  One measure of that, the choose stated, was to notice that earlier than trial the husband claimed his annual earnings – at most – was $430,000.  Nevertheless, the monetary professional provided convincing proof that the husband’s earnings was constantly $7 million per 12 months since 2015.  The spouse had additionally been compelled to endure lengthy, costly and hard-fought litigation spanning six years, and to untangle the husband’s earnings from 25 completely different firms, since he was not voluntarily forthcoming with the knowledge. 

On the husband’s later bid to enchantment, the Ontario Courtroom of Attraction rejected the husband’s request for permission to go ahead.  It famous {that a} Prices award is discretionary, and until the trial choose made an error in precept, it was entitled to deference.   The Attraction Courtroom defined: 

[10]       The prices awarded on this case are certainly excessive. Nevertheless, this was sophisticated litigation performed over a number of years, involving 23 motions, a number of household conferences and attendances, and roughly 40 judicial endorsements and orders. The trial choose awarded the respondent prices on a full indemnity foundation due to the [husband’s] misconduct all through the litigation, the small print of that are totally documented in his resolution. The [husband] misled the court docket and engaged in fraudulent exercise and dangerous religion and unreasonable conduct over a interval of years. We don’t settle for that it will be applicable to parse the small print of the [husband’s] conduct on the premise that not all of it was motivated by dangerous religion. 

For Household legislation litigants in every single place:  It is a good lesson that dangerous religion behaviour can price you! 

Full textual content of the Prices Order: Lakhtakia v. Mehra, 2023 ONSC 539 

Full textual content of the Attraction resolution: Lakhtakia v. Mehra, 2023 ONCA 88