Get Over It, Part One: Why It Pays to Let Bygones Be Bygones in Family Law Disputes

Difference is a necessary part of the human condition, without which we'd be an awfully dull lot. Although difference is what gives us creativity and invention, it's also the cause of intolerance and war, and it's what keeps family law lawyers in business. As Martin Gore famously put it,

People are people so why should it be
You and I should get along so awfully?

There are an infinite number of reasons why committed, long-term relationships breakdown. Some people get bored. Some grow apart as they get older. Others just turn into assholes.

Once upon a time, thanks largely to Catholic dogma, marriage was presumed to be a permanent enterprise that would end only upon the death of one or both spouses. That was probably a reasonable arrangement when life expectancy topped out at 30 or 35, but people nowadays generally live into their 80s, and a life-long commitment to one person is an awfully, awfully long commitment.

However, when we of the commonwealth let our hair down in 1857 and agreed that people could get divorced, we weren't prepared to simply walk away from a centuries-old dedication to permanent misery. As a result, you couldn't just say talaq, talaq, talaq and be done with it, you had to get a judge to make a divorce order and that meant proving that you met the legal test to qualify for divorce.

If you had the good fortune to be male, you could ask for a divorce under s. 27 of the Divorce and Matrimonial Causes Act on the basis that your wife had committed adultery at some point during your marriage. If you happened to be female, simple adultery was a no-go. Instead, you could ask for a for a divorce on the basis that your husband had committed:

• incestuous adultery;
• bigamy with adultery;
• rape, sodomy or bestiality;
• adultery coupled with cruelty; or,
• adultery coupled with — my favourite — "desertion without reasonable excuse" for at least two years.

We in Canada are so awesomely progressive that our first legislation on divorce, the 1968 Divorce Act, abolished the distinction between sexes. Regardless of gender, you could ask for a divorce on the basis that you had been separated for at least three years, or, under ss. 4 and 5, that your spouse had:

• committed adultery;
• been guilty of sodomy, bestiality, rape or a "homosexual act" (exquisite interior design, perhaps?);
• gone through a form of marriage to someone other than yourself;
• treated you with such cruelty that you could no longer live together;
• been imprisoned for at least three of the last five years;
• been recently sentenced to death or imprisonment for at least ten years;
• been "grossly addicted" to alcohol or drugs for the last three years; or,
• disappeared for the last three years or deserted you for the last five years.

Ahead of our time we truly were.

The Divorce Act didn't stop there. You could also ask the court to make orders for spousal support and child support, and for the custody of your children. However, the court, in addition to considering your "condition, means and other circumstances," also had to think about "the conduct of the parties." Ouch. You can imagine the havoc wrought when success or failure hung on proof of your misconduct during your marriage, or that of your spouse.

Things got much better with the 1985 Divorce Act, which introduced a "no-fault" version of divorce. Although you could still get divorced because of your spouse's adultery or cruelty, misconduct was removed as a consideration in making orders for child support, and the court was expressly forbidden from considering the conduct of a spouse during the marriage when making orders for spousal support and custody.

Now the thing about people is that you can say that misconduct isn't a factor, but it doesn't stop them from thinking that it should be a factor, especially when they're still full of the fraught and inflated emotions that accompany the breakdown of a long relationship. (Terrible lawyers who fail to steer their clients away from this line of thinking certainly don't help.) This brings me to the point of this particular post: it is both idiotic and expensive to take positions in family law disputes because of your hurt feelings or desire for revenge. Let me give you a couple of examples and explain.

"He knew that full well that doing drugs was a deal-breaker — that was why my first marriage broke up! — and he did cocaine anyway. Is this grounds for me getting more than half the family property?" 

"She's the one who had the affair. I'm not going to pay her a penny of support, even if I have to quit my job." 

"I told him when we got married that pornography was an issue for me. He promised me that he would never use it. When we got an internet connection, I asked him again if he would be able to avoid looking at pornography, and he promised he could. I just saw his web browser history and I am completely disgusted. I feel that he's broken a fundamental trust. I want sole custody!"

All of these statements come from people I've spoken with in the last few months, and, regardless of my personal views on the probity of such behaviour, they were all pretty wound up about the situations they found themselves in and were genuinely upset about their spouse's behaviour.

I get that. I understand. I've had thousands of clients in the years I practiced family law, and I totally appreciate how hot emotions run when a long-term relationship comes crashing to the ground. No worries. A problem, however, arises when these emotions are allowed to drive the train rather than the rational side of your brain. The simple truth is that if you walk into court with positions like these, you will lose. None of these positions are supported by the law or the legislation. Not only will you most certainly lose, but:

• your legal fees will be much higher than they would otherwise have been;
• you may be ordered to pay your spouse's costs of the application, the trial or the whole of the court proceeding;
• the enmity you feel toward your spouse now will last far longer than it normally would, and your spouse is certainly going to share the sentiment; and,
• you will likely lose the respect of your children and, I hope, of your friends and family as well.

The thing is, we no longer think about fault, misconduct, narcissistic injury and the priggish sensibilities of a spouse when we deal with family law problems. Yes, doing illegal drugs is a problem, but it's got nothing to do with how property is divided. Nothing. If you have kids, and he's high when he looks after them, then I have a problem, not because I have a moral issue with his choices but because it reflects poorly on his priorities and parenting capacity. Yes, having an affair is bad, but it's got nothing to do with whether your spouse is entitled to spousal support. Nothing at all. And if you quit your job, I'm going to ask the court to impute income to you and ask for your spouse's costs of the application because of your petty, irresponsible behaviour. Likewise I have no issue with someone's use of pornography, unless the pornography involves children or he watches pornography in front of the kids. You might object to behaviour you consider sinful, but your views of his corruption and general naughtiness have nothing to do with his relationship with the children and capacity to care for them. 

Now consider, for a moment, how your spouse is likely to respond to claims involving his or her weak morals, drug and alcohol use, abusiveness, quick temper, masturbatory habits and so forth. People don't generally take kindly to seeing claims like that in court papers, whether they're true or not, and tend to fight fire with fire. I guarantee that your spouse is not going to write an affidavit admitting to everything. Instead, your spouse will file a stern response that not only denies the truth or extent of the claims you've made but asks for costs, and will then write an affidavit talking about all of your peccadilloes and indiscretions! I once had a case, very early on in my career, which went something like this:

Her: "You drink all the time. You're always drunk and there are empties all over the house. You even drive when you've been drinking." 

Him: "I only drink socially, one or two beers at most, and I never ever drive when I've been drinking. You smoke pot. You even smoked pot while you were breastfeeding our daughter."

She thought she was seizing the moral high ground by pointing out his weaknesses. He replied by trivializing the severity of his drinking, as I would have expected, and came back with a spicy counterargument about her drug use. I still very much regret this case. 

But what do you think the court does in circumstances like this? Each person is behaving like a child, busy throwing shit at each other, and the job of the judge is reduced to deciding which parent is the least shitty. Is this how decisions about the care of children should be made? With the greatest of respect, I think not.

The court, you see, does not want to deal with people who come to court with problems, complaints, grievances and bizarre claims that have no reasonable prospect of success. The court does want to deal with calm, rational people who come to court with solutions, and whose preferred results are well within both the law and the range of likely outcomes. Among other things, this means:

• dropping arguments and claims that are based on your own feelings of woundedness or your spouse's purportedly immoral behaviour;
• avoiding mention of historical events that are not genuinely relevant to the claims before the court, no matter how much those events upset you and continue to upset you;
• keeping your complaints about minutiae and the mundane to yourself;
• writing affidavits that are maximally factual, avoid invective and use a minimum number of adjectives and adverbs;
• agreeing to obligations that you cannot avoid;
• making claims that are minimally controversial, like asking for a divorce based on separation even though you could also ask for a divorce because of your spouse's infidelity; and,
• proposing rational solutions that look to the future, that work for everyone and that are likely to promote the best interests of your children.

Put more simply, you must grow up and let bygones be bygones. Trust me; this will redound to your benefit, that of your spouse and those of your children.

Provincial Court Releases Important Decision: Party can be ordered to pay legal fees resulting from party's misconduct

Just in time for the holidays, the Provincial Court of British Columbia has released a decision that is sure to bring much good cheer to those frustrated by a party's failure to make proper financial disclose. In T.J.B. v B.A.F., the Honourable Judge Challenger was asked to consider the father's application to retroactively reduce the amount of child support he was required to pay and to reduce or cancel his arrears of child support, as well as the mother's application for an order that the father be penalized for failing to provide proper disclosure.

Background

To give some background to the decision, the parents separated in the spring of 2009 and signed a separation agreement in the summer. The agreement required the father to pay child support for their two children. The father must have run into trouble in fairly short order as in 2012 he applied to retroactively change the amount of child support he was required to pay and to reduce or cancel arrears of child support that had accumulated. That application was dismissed in 2013 as a result of the father's failure to provide "complete and accurate financial disclosure," and the father was additionally prohibited from making further applications without the court's permission. The father accordingly applied for permission to bring the current application in 2014, and was ordered to provide a Financial Statement by the judge. This is how Judge Challenger described the Financial Statement subsequently filed by the father:

"[11] ... [In his Financial Statement, the father] attests to having been unemployed since November of 2013. He refers on the cover page to the potential for [the Family Maintenance Enforcement Program] to garnish his Employment Insurance benefits. The annual income page is blank save for '0.00' as total income and total benefits. He sets out expenses of $30,424.00 annually. He estimated that his additional expenses related to his parenting time with the children are $500.00 per month however no details were provided as to the basis for this estimate. 

"[12] He did not attach his 2013 income tax return or any income information for that year or up to that date in 2014. His 2012 Notice of Assessment was attached which reflected a line 150 income of $415.00 which was the net of business income of $11,000.00. His 2011 Notice of Assessment showed a line 150 income of $27,474.00 which was comprised of $27,075.00 in employment income and $225.00 in other employment income. His 2010 Notice of Assessment showed a line 150 income of $55,098.00."

Yes, the father did produce some documentation concerning his income, but the documentation provided was inadequate — Notices of Assessment, for example, don't tell you nearly enough about the tax payor's sources of income to property determine the payor's income — and not nearly sufficient to satisfy his obligations under the Child Support Guidelines. Under s. 21(1) of the Guidelines, by the way, someone who is applying for a support order must produce the following documents when his or her income is relevant to the application:

(a) a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years; 

(b) a copy of every notice of assessment and reassessment issued to the spouse for each of the three most recent taxation years; 

(c) where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse's employer setting out that information including the spouse's rate of annual salary or remuneration; 

(d) where the spouse is self-employed, for the three most recent taxation years

(i) the financial statements of the spouse's business or professional practice, other than a partnership, and 

(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm's length;

  (e) where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years; 

(f) where the spouse controls a corporation, for its three most recent taxation years

(i) the financial statements of the corporation and its subsidiaries, and 

(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length;

  (g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements; and 

(h) in addition to any income information that must be included under paragraphs (c) to (g), where the spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year, or if such a statement is not provided, a letter from the appropriate authority stating the required information.

To drive the point home, at a Family Case Conference held prior to the hearing before Judge Challenger, the father was fined $500 for failing to disclose his financial documents in this Financial Statement and was ordered to produce "all relevant financial documents." The father filed a new Financial Statement pursuant to that order, however it too was found wanting by Judge Challenger:

"[26] The Financial Statement filed September 30th reflects a 2014 income to date of $13,662.75 comprised of approximately equal amounts of employment income and EI benefits. He also included a letter that shows that as of February of 2014 he was working ... in exchange for shares. The value of those shares at present and as of February was $9000.00 but his understanding is that they could be worth up to $30,000 to $45,000.00 or even as high as $75,000.00. He claims expenses of $32,188.88. ... 

"[28] He did not disclose any financial documentation or information with respect to the companies he has operated or any freelance work done in his personal capacity for 2011 and 2012 either in these proceedings or in the course of his earlier application. He uses a software accounting program for these purposes and did not disclose those records either. He did not disclose the statements for his savings account. He was unable to account for $50,000.00 of the payout monies from the family home, an amount over and above the down payment and renovations done to his home and the $72,000.00 in savings he said he has used for living expenses. ... 

"[32] [The father] did not provide any financial documentation other than his tax returns for the years 2011, 2012 or 2013."

Disclosure in Family Law Disputes

Financial disclosure is a cornerstone of family law, whether a problem is being resolved through adversarial or non-adversarial means. Without adequate disclosure, which goes far beyond the minimum standard set by s. 21 of the Child Support Guidelines, it can be impossible to determine a fair amount of child support and spousal support, a fair sharing of children's special expenses or a fair distribution of family property and family debt. In fact, in a famous 1994 case from the Supreme Court of British Columbia, Cunha v da Cunha, Mr. Justice Fraser wrote that:

"Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably‑based suspicion that justice was not done. Non‑disclosure also has a tendency to deprive children of proper support."

The new Family Law Act was drafted with this problem in mind. Section 5 imposes a duty to make "full and true disclosure" on the parties to a family law dispute, whether the parties are in court or not, s. 212 allows the court to make orders for disclosure "at any stage of a proceeding," and s. 213 provides a toothy means for enforcing inadequate disclosure. 

Section 213 has been well used by the court, as you'll see in my summary of the case law on that section. When a party has failed to comply with an order for disclosure or a disclosure requirement of the rules of court, or has made disclosure that is incomplete, false or misleading, under s-s. (2) the court may:

(a) make [a further order for disclosure]; 

(b) draw an inference that is adverse to the person, including attributing income to that person in an amount that the court considers appropriate, and make an order based on the inference; 

(c) require a party to give security in any form that the court directs; 

(d) make an order requiring the person described in subsection (1) to pay

(i) a party for all or part of the expenses reasonably and necessarily incurred as a result of the non-disclosure of information or the incomplete, false or misleading disclosure, including fees and expenses related to family dispute resolution, 

(ii) an amount not exceeding $5,000 to or for the benefit of a party, or a spouse or child whose interests were affected by the non-disclosure of information or the incomplete, false or misleading disclosure, or 

(iii) a fine not exceeding $5,000;

  (e) make any other order the court considers appropriate.

From my point of view, the enforcement provisions of the Family Law Act are among its more significant innovations. Too often the Provincial Court was unable to impose meaningful consequences for a party's disobedience of a court order, or failure to comply with a disclosure obligation, as a result of its limited powers to punish for contempt of court and the limited remedies provided by the old Family Relations Act. The courts have since leapt on s. 213 and the act's other enforcement measures, as well they should. The cases on s. 213 to date have focussed on fines under s-s. (2)(d)(ii) and (iii), however, and few have looked at the court's power to make orders for the payment of a party's expenses under s-s. (2)(d)(i). Not so in T.J.B.

Decision

Citing the principle established by the Honourable Judge Merrick in J.C.P. v J.P., a recent Provincial Court case from 2013, 

"[54] If a party is required to apply to the court for an order for financial disclosure, then the party making the application should be compensated. The greater the effort, the greater the compensation",

Judge Challenger ultimately decided to require the father to pay the mother's legal fees incurred as a result of his non-disclosure, holding as follows (important bits in bold, as always):

"[67] [The father] has continually provided the Court with incomplete and misleading disclosure. The disclosure required was not onerous or complex. 

"[68] None of his Financial Statements have been complete or accurate. The figures he reports in the Financial Statement filed in late September in respect to the value of his property, his debts and a strata levy are irreconcilable with those in the Financial Statement filed in March and materially inconsistent with his evidence at the hearing. His earlier Financial Statements also do not accord with his evidence. ... 

"[70] I find that the financial materials he filed in support of his motion to be permitted to file a further application were incomplete, inaccurate and mislead the Court. This is a highly aggravating factor. ... 

"[71] He substantially failed to comply with the order for disclosure made by [the Family Case Conference judge] by not providing all his bank records and by again failing to file a complete Financial Statement. 

"[72] He has never made complete disclosure of the financial or banking documents related to his self-employment. 

"[73] I find [the father's] conduct has satisfied all of the grounds set out in s 213(1) of the FLA — failure to make timely disclosure when required to do so by a court order or as required by the Family Law Rules and the disclosure of incomplete, false, and misleading information.

"[74] In order to determine the severity of this penalty, the circumstances of the present case, the degree of non-disclosure, and any reasons for late disclosure must be considered as well as any reasons provided for late or non-disclosure which have an evidentiary basis. 

"[75] In the circumstances of the present case there has been an ongoing lack of complete disclosure. Some of the information that has been disclosed has been shown to be materially misleading. The incomplete and misleading disclosure provided by [the father] was particularly aggravating in that it resulted in the court falling into error in granting his motion to file this application. 

"[76] As much of the information required for the proper hearing of this application was never disclosed and no attempts were made to disclose it, the Court cannot consider the issue of late disclosure or of any reasons provided for late disclosure. 

"[77] With respect to reasons for non-disclosure, no legitimate reasons were ever provided by [the father] for his insufficient disclosure beyond his claim that he did not have the ability to fill out financial statements properly. I do not accept his evidence in this regard for the reasons stated above.

"[78] I find that [the father] must be penalized for his abuse of the court process and wasting of court time and [the mother]'s resources. The penalty imposed should also communicate to other litigants the consequences of impeding the court process or wasting valuable court resources by disclosing incomplete, false, and misleading information. The conduct of [the father] is something that needs to be denounced in order to prevent similar conduct on the part of other litigants and, as a result, facilitate access by those litigants who need court time for legitimate purposes. A 'robust application' of s. 213(2) is required to facilitate this goal.

"[79] Finally the Court must look to compensate [the mother] in these circumstances. Due to a proceeding wrongfully brought and improperly prosecuted by [the father] she has been required to engage a lawyer to represent her, for the second time, at great financial cost. For this proceeding alone she has incurred legal bills that amount to $13,617.00. ... 

"[80] I find that in order to sufficiently penalize [the father], discourage other litigants from providing incomplete, false, and misleading disclosure; and properly compensate [the mother] for legal bills incurred as a direct result of [the father]'s incomplete disclosure, an order pursuant to FLA, s. 213(2)(d)(i) requiring [the father] to pay the legal fees incurred by [the mother] is an appropriate penalty in the circumstances."

This is an amazing result, particularly as it emanates from a court that had been hamstrung for so long by the inadequacies of the Family Relations Act. The decision is a logical extension of the caselaw accumulating to date under s. 213(2)(d)(ii) and (iii), and is a worthy successor to Cunha as a caution to litigants thinking of making anything other than full and complete disclosure.

A number of principles can be drawn from Judge Challenger's analysis.

1. The court will not consider the reasons for a party's non-disclosure if disclosure is not ultimately made and the party has not even attempted to make disclosure.

2. Aggravating factors in the court's consideration of an appropriate penalty for non-disclosure include providing disclosure that is incomplete and misleading and: 

a. is used for the purposes of a leave application; 

b. is used for the purposes the purpose of one's own substantive application; 

c. leads the court into error; and, 

d. amounts to an abuse of process.

3. Denunciation, the punishment of one person to discourage others from similar behaviour and normally a consideration in sentencing in criminal justice matters, may be a factor in the court's consideration of an appropriate penalty for non-disclosure.

4. Where, considering these factors, a party's behaviour is found to be sufficiently deserving of sanction, the court may order that the party pay for the legal costs of the other party, as an expense "reasonably and necessarily incurred as a result of the non-disclosure of information or ... incomplete, false or misleading disclosure" under s. 213(2)(d)(i).

Lest the gravity of this potential consequence be lost to those contemplating partial- or non-disclosure,  I should point out that in the Supreme Court an order that one party pay "costs" to another is not an order that the party pay for the other side's legal bill, but pay a sum calculated using fixed amounts that usually totals one-third to one-half of his or her legal bill.

The father's application to vary his child support obligation and to reduce or cancel his arrears of support was dismissed. The fine for the mother's legal fees was made payable immediately, and enforceable by the Family Maintenance Enforcement Program.

My thanks to my friend and colleague, Agnes Huang, for bringing this important case to my attention.

Paying the Fees of Child Advocates

A "child advocate" is a lawyer hired to represent the interests of a child in a family law dispute between the child's parents. (Once upon a time, the court could have appointed a "family advocate" under s. 2 of the Family Relations Act, however the provincial government defunded this program years ago.) I have been retained as a child advocate and it is a challenging but very rewarding role.

My friend Agnes Huang has pointed me to a very interesting case from the Supreme Court in 2010, C.L.M. v. D.J.M., on the issues of whether and how the cost of a child advocate should be paid by the parties.

In this unsual case, a master had given permission for the child advocate to appear on behalf of the child prior to the court hearing. The lawyer was paid by the wife. The wife was successful at the hearing and received an order that she have her costs of the application. The wife then, and this is the important part, said that the husband should have to pay for the cost of the child advocate as part of her costs.

The court said this about the child advocate:

[9] I find that the appointment of a child advocate was necessary in this case. In Dormer v. Thomas, Martinson J. noted that in family cases with complex and contentious circumstances, one of the ways the court can carry out its legal obligation to determine the best interests of the children is to have representation for the children. The appointment of a child advocate is one of the ways this can be accomplished. 

[10] Here, the situation was complex and contentious. There were claims of inappropriate sexual touching of children other than the children of the marriage, which D.J.M. denied. There were also allegations of alienation which C.L.M. denied. A report had been prepared regarding the views of the children, but it did not comment on the maturity of the children or the question of whether the children were influenced by their mother. In addition, there was no opinion evidence before the court in the form of a Family Relations Act s. 15 report commenting on the best interests of the children. In these difficult circumstances, there was a tremendous benefit to the court in having [the child advocate] present the children’s position. I found [the advocate's] submissions to be carefully considered and extremely helpful.

Having established that the child advocate served a useful role and that his retainer was not an unnecessary frivolity, the court then considered whether the expense was an expense that should be recovered by the person awarded costs as a normal disbursement, like the expense of an expert, incurred to advance the case. The court set out seven considerations that should be taken into account in this analysis:

1. previous court approval: whether the presence of the child advocate received prior court approval;
2. neutrality of appointment or funding: whether the child advocate was chosen and/or funded by one of the parties;
3. consent: whether both parties consented to the appointment of the child advocate;
4. impartiality of content: whether, as between the parties, the child advocate was neutral, impartial and objective;
5. helpfulness of content: whether the child advocate presented evidence or argument before the court that would not otherwise have been available;
6. ability to pay: if one party has a substantially lower ability to pay, fairness may require that the cost be shared proportionally, or that the party with greater ability to pay incur the expense; and,
7. success: was one party substantially successful?

Considering these factors, the court held that the wife should be entitled to recover half of her expenses for the child advocate:

[16] Balancing these factors in this case, I have determined that C.L.M. is entitled to recover, as a disbursement from D.J.M., one-half of Mr. W.’s fee as advocate for the children. While C.L.M. was successful, the question of access was not finally resolved by the application. The other factors set out above are of some significance in this case. D.J.M. never consented to Mr. W.’s appointment. At the time of hearing of the application, he did not anticipate that at the end of the day he might be asked to pay Mr. W.’s fees. The application before Master Taylor did not settle that issue in a definitive way. Mr. W. carried out his duties in an impartial and appropriate way. His contribution to the proceeding was of assistance to both parties. In this case, both parties do have some ability to pay. In these circumstances, I am of the view that it is appropriate for the parties to share the expense equally.

[This is, I am surprised to see, my two hundredth post. My thanks to the law nerds and others following my blog for their continuing attention and for making this blog as popular as it has become.]

New Administrative Notice for Chambers Applications

The Chief Justice of the Supreme Court has published a new administrative notice, AN-10 (PDF), about how late application records are to be handled. Under Rule 10-6(14), the applicant is required to file an application record, a binder containing all of the documents for the application, by 4:00pm two business days before the date set for the hearing.

Under the new administrative notice, when an application record is not filed in time, the application will be struck from the list and will not be heard.

The applicant may apply for leave to have the application put back on the list using a special form of requisition in Form F17. (The form appears at Appendix A of the administrative notice.)

Where an application respondent shows up ready to go on the day of the hearing only to discover that the application has been struck from the list, the application respondent may apply for his or her costs of the appearance using another special form of the F17 requisition. (The form appears at Appendix B of the administrative notice.)

Late filers, beware!

Supreme Court Decision Summarizes Law on Costs

In the recent case of Schuller v. Roback, the court has been called upon the explain the thorny, vexing and generally irksome area of the law known as "costs." Costs has a special legal meaning; it's not the bill of the client's lawyer and it's not the client's out-of-pocket expenses for photocopying, court fees and so forth. Costs are a way of compensating someone for the overall expense and hassle they've been put to as a result of having to go to court, and costs are only available in the Supreme Court.

Costs are usually awarded to the person who is mostly successful in a law suit or an application, and in a way they function like an idiot tax. It the person making the application wins, the respondent shouldn't have fought the application and has to pay the applicant's costs; if the person making the application loses, the application shouldn't have been brought in the first place and the applicant has to pay the respondent's costs.

The rule on costs is Rule 16-1 and says that the court can award costs as ordinary costs or "special costs." Ordinary costs are calculated under Appendix B to the rules; special costs are awarded only in those rare cases where someone's conduct has been utterly unreasonable or frustratingly obstructive and amount to the whole of the lawyer's total bill plus disbursements. Under Appendix B, ordinary costs are calculated according to a schedule of fixed rates for particular activities, like drafting pleadings, arguing an application or writing letters, that are common to all law suits and the rates vary depending on whether the case was less difficult than usual, usual, or more difficult than usual. Ordinary costs assessed at the scale for usual difficulty might amount to 40 to 50% of a lawyer's bill.

Anyhow, the reason why I'm writing about Schuller v. Roback is because the law on costs in family law is all over the place. In the past there seemed to be two kinds of cases on costs in family law, one which said that family law is special and awards of costs can upset the delicate balance the trial judge has achieved making orders for support and division of assets, and other which said that family law is like any other kind of civil law and the party who is mostly successful should get his or her costs. Although the costs-are-costs cases seem to have won the battle, you still see an awful lot of cases where no costs order is made or the judge orders each party to bear their own costs... even when the result looks an awful lot like one party was more successful than the other.

In Schuller, after judgment had been given, the applicant sought an order that each party bear their own costs while the respondent asked for an order that he have "double costs" of the application, assessed at the rate for cases of more than usual difficulty.

First, the court discussed the basic idea about which party should have his or her costs, beginning with the leading case under the old rules.

"[15] Under the former Rule 57(9), costs normally followed the event, and went to the party who enjoyed 'substantial success.' This Court's discretion to depart from awarding costs to the successful party must be exercised judicially: Gold v. Gold."

The rule about costs under the new rules of court is Rule 16-1(7) and says that "costs of a family law case must be awarded to the successful party unless the court otherwise orders."

"[16] The new Rule does not incorporate the same reference to 'substantial success' but the Court retains the discretion to refuse an award for costs despite the success of the party making application for costs: Gain v. Gain.

"[17] In Gold the Court described the considerations that should instruct the Court in evaluating a claim for costs:

The question, then, is: when should the Court order otherwise? ... when the court should order otherwise is a matter of discretion, to be exercised judicially by the trial judge, as directed by the Rules of Court. To lay down any strict guidelines or even to attempt to give exhaustive examples is not, I think, helpful because the facts and issues in each family law case vary so greatly. Factors such as hardship, earning capacity, the purpose of the particular award, the conduct of the parties in the litigation, and the importance of not upsetting the balance achieved by the award itself are all matters which a trial judge, quite properly, may be asked to take into account. Assessing the importance of such factors within the context of a particular case, however, is a matter best left for determination by the trial judge."

Costs, then, continue to be discretionary under the new rules as they were under the old, but the starting point is set out in Rule 16-1(7): costs go to the successful party. But who is responsible for proving that costs should be awarded in any other manner?

"[18] The onus of persuading the court that it should depart from the usual rule that the successful party is entitled to costs rests on the unsuccessful litigant: Rattenbury v. Rattenbury."

And what happens when there is divided success, when each party is partially successful?

"[24] In cases where one party has achieved substantial success, the court may nonetheless award only a portion of the substantially successful party’s costs: Cohen v. Cohen, Newstone v. Newstone and Rolls v. Rolls."

Next, the court discussed the rules about when someone should have "double costs" under Rule 11-1(5). This rule says that when someone makes an offer to settle — a written proposal of terms on which an application or a law suit could be resolved — the court can deprive someone of costs even if they've won or give an offeror double costs whether they've won or lost, taking into account the factors set out a subrule (6):

In making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;

(b) the relationship between the terms of settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the parties;

(d) any other factor the court considers appropriate.

Essentially, said the court, an award of double costs is intended to punish a party who rejects a reasonable offer:

"[31] The issue of awarding double costs was recently reviewed in Hartshorne v. Hartshorne. The rationale for the Rules ... emphasizes that an award of double costs is a 'punitive measure against a litigant for that party's failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted'."

The court then looked at the circumstances of the parties, the application and the offer to settle, considering the 11-1(6) factors and the decision in Hartshorne:

"[35] In my view [the respondent's] offer was delivered in a timely way. However it was a lengthy proposal and not easily evaluated. The offer included a readjustment of the division of family assets which was a claim not properly before the Court at this time. ...

"[36] In my view this offer was overbroad and while it was open for acceptance it would not have been reasonable for [the applicant] to accept the terms. I also note that some terms were simply 'nuisance' terms that [the applicant] could not accept.

"[37] Subrule (6)(b) also refers to the relationship between the offer and the final judgment of the court. Again, the offer addressed many issues on which [the respondent] did not succeed ... [the respondent] failed to achieve a result equal to or better than his offer on [a number of points] ...

"[39] ... In view of the results of the ... applications, [the applicant's] failure to accept the offer from [the respondent] was not unreasonable and she should not suffer the punishment contemplated in Hartshorne.

[40] Subrule (6)(c) invites the court to consider the relative financial circumstances of the parties. Although I have considered that [the applicant's] financial circumstances do not rise to the level of hardship for the purposes of refusing [the respondent's] claim for costs, I am mindful that her obligations and means are limited. In my view, the state of [the applicant's] financial circumstances also militates against an order for double costs.

[41] In view of [the applicant's] circumstances, the fact that the offer to settle was not one that could reasonably have been accepted and that [the respondent's] measure of success was divided leads me to conclude that this is not a case warranting an award to [the respondent] of double costs.

Summarizing these factors, in rejecting the respondent's claim for double costs as a result of his offer to settle under Rule 11-1(5), the court took into account:

• whether the offer was delivered in a timely manner relative to the application;
• the complexity of the offer;
• whether the offer dealt with issues not before the court on the application;
• the presence of terms unacceptable on their face;
• the number of issues on which the result was as good as or better than the offer; and,
• the applicant's financial circumstances.

Finally, the court considered the respondent's claim for costs assessed at more than usual difficulty.

[45] ... Bouck J. described the test of what is necessary to succeed in a claim for costs at the higher scale in Bradshaw Construction Ltd v. Bank of Nova Scotia:

To get an assessment out of the category of 'ordinary' difficulty under Scale 3, into the categories of 'more than ordinary difficulty'; Scale 4, or to 'matters of unusual difficulty'; Scale 5, it is necessary to show a higher degree of difficulty. Scale 5 uses the word 'unusual'. Its dictionary meaning is 'not often occurring or observed, different from what is usual; out of the common, remarkable, exceptional.' Therefore, the question is whether the collection and proof of the difficult facts were uncommon, remarkable or exceptional events? I do not believe they were.

"[46] The evidence did not rise to the level of more than ordinary difficulty. The affidavits recounted each parties' understanding of the facts and there was little conflict or difficulty in explaining the facts ... this application did not engage uncommon, remarkable or exceptional events or circumstances ... nothing in the applications engaged a difficult issue of law or fact. [The respondent's] efforts were not uncommon, remarkable or exceptional."

At the end of the day, the respondent failed to receive double costs or have his costs assessed at more than the usual level of difficulty. Because success was divided, the ordinary costs awarded to the respondent were offset by the ordinary costs awarded to the applicant. And as for the costs of the application on costs?

"[58] The parties will each bear their own costs of this application."

This case is perhaps unremarkable in its result, however it deserves to be noted for its extremely helpful digest of the case law on costs and its application of the cases determined under the old rules to the new rules.