October 1, 2023


Parenting News

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

4 min read

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 mentioned, due to the husband’s unhealthy religion conduct all through the events’ 6-year litigation.

What’s extra, his bid for permission to attraction that award has just lately been rejected by the Court docket of Enchantment.

The previous couple began their divorce and custody litigation in 2015.  Within the time since, it burgeoned into 35 journeys to courtroom, 23 motions, 22 provides to settle, and 40 totally 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 centered primarily on pinning down the very rich husband’s true earnings for youngster and spousal assist 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 (generally known as “full indemnity” prices).   In assist of this request, she claimed the husband demonstrated unhealthy 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 urged he ought to pay her about $350,000 as a substitute.  Amongst different issues, he argued that to grant the spouse over $1 million in authorized prices would set a really destructive precedent for Household regulation litigants. 

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

The Ontario regulation on prices in Household regulation was clear; it required a courtroom to think about a bunch of things.  Amongst them have been whether or not any affordable written provides 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 towards 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 finally awarded on the trial. However even taking a look at solely the final one – which the husband additionally rejected – she was entitled to her full prices from the date of that provide onward.  

After scrutinizing among the spouse’s varied attorneys’ and specialists’ charges, and adjusting the entire barely downward, the trial choose subsequent thought of whether or not this was “a type of uncommon instances the place full-indemnity prices are justified due to the [husband’s] unreasonable conduct or unhealthy 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 courtroom awarding full-indemnity prices.” 

Noting that in Household regulation the idea of “unhealthy religion” requires a component of acutely aware wrongdoing, the choose catalogued among 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 not less than six prior courtroom orders
  • Making false representations to the courtroom and being usually misleading about his true conduct  
  • Deceptive the courtroom into granting an adjournment on the premise the husband’s knowledgeable had resigned from the case – when in actuality the husband had orchestrated his personal knowledgeable’s resignation by actively deceptive him, withholding info, and being uncooperative
  • Partaking in fraud by counting on paperwork he knew have been cast 
  • Mendacity about his right e-mail deal with, merely to keep away from being linked via correspondence to having obtained hundreds of 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 rather tough to belief the [husband]”. 

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

On the husband’s later bid to attraction, the Ontario Court docket of Enchantment 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 Enchantment Court docket defined: 

[10]       The prices awarded on this case are certainly excessive. Nevertheless, this was sophisticated litigation carried out 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 courtroom and engaged in fraudulent exercise and unhealthy religion and unreasonable conduct over a interval of years. We don’t settle for that it might be applicable to parse the small print of the [husband’s] conduct on the premise that not all of it was motivated by unhealthy religion. 

For Household regulation litigants in every single place:  This can be a good lesson that unhealthy religion behaviour can value you! 

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

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

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