The Ontario Court of Appeal has upheld an award of $2.1 million in legal costs in a lengthy divorce battle - the largest such costs award in a family law case, according to one of the lawyers involved.
The case between Miriam Debora and David Debora was on appeal from a 2004 Ontario Superior Court judgment from Justice Nancy L. Backhouse, where Ms. Debora had been awarded over $11 million, including an equalization payment of $3.4 million, $2.25 million in legal costs, and an additional $23,000 a month in child support payments.
Court documents show that the couple married in a religious ceremony in 1987 and a civil ceremony in 1994. Each brought two children into the marriage and together had a fifth child. During that time, Mr. Debora started a diet products and nutraceuticals company and "amassed a considerable fortune."
According to Gerald Sadvari, a lawyer with McCarthy Tétrault LLP and co-counsel for Ms. Debora along with Stephen Grant and Jennifer McKendry, the costs award is the largest such award in family law.
"Part of it was just because it went on for so long and we had to be in court, in my experience, more often than any other file I've ever had to try to get the disclosure," he says Sadvari adds the trial was nearly six weeks long, "plus the forensic work that had to be done and that was quite costly as well."
While the Court of Appeal upheld the original judgment and the majority of the costs award in the case, the court did apply a recent Supreme Court of Canada decision in order to set aside a premium originally awarded to the petitioners' lawyers.
A $150,000 premium was awarded by the Superior Court in 2004 to "reflect the exceptional complexity and difficulty of the case, the large sums involved, the extraordinary skill and competence demonstrated and the exceptional result."
However, the appeal court set aside this premium based on the ruling of the Supreme Court in Walker v. Ritchie, released in October, which set out that unsuccessful defendants shouldn't be expected to pay premiums charged by counsel for a successful plaintiff.
"The rationale for the court's decision was that unsuccessful defendants should expect to pay similar amounts by way of costs across similar pieces of litigation. Since a defendant has no knowledge of the fee arrangement made by the plaintiff, the defendant would have no means of measuring the risk of engaging in litigation insofar as costs were concerned," noted Justice Karen Weiler.
This was also among the first cases to apply the Supreme Court's recent decision in the DBS v. SRG.; LJW v. TAR; Henry v. Henry; Hiemstra v. Hiemstra cases, which addressed the issue of retroactive child support. In Debora, the Court of Appeal upheld the Superior court's retroactive support award of over $951,000.
Backhouse, the trial judge in Debora, found that Mr. Debora had "made selective and limited financial disclosure. On many occasions, different and conflicting answers were given, suggestive of a deliberate attempt to mislead. I am satisfied and I find that he has not made adequate disclosure of his financial dealings, both before and after separation."
The Court of Appeal upheld the trial judge's ruling that "the husband misrepresented his income during the course of this action. As a result, the amount of child support that he paid was lower than it should have been.
I accept the wife's evidence that she exhausted her savings and went into debt to support the children and herself prior to the increase in child support ordered by Justice [Susan] Greer. I find that this is an appropriate case for an award of retroactive child support," wrote Justice Karen Weiler for a panel consisting also of justices Marc Rosenberg and Harry LaForme.
"It illustrates that even though some might argue that this is, in part, a windfall for the recipient, if it is not ordered, it is a windfall for the payor and where the payor intentionally understated his income and hid income, he's not going to be allowed to get away with it," says Sadvari.
Neither Melvyn L. Solmon or Nancy J. Tourgis, Mr. Debora's lawyers could be reached for comment.