In Ord v Ord, the court was tasked with determining whether to award the Applicant with interim costs and disbursements in the amount of $150,000 in anticipation of her legal fees moving forward.
The Applicant claimed impecuniosity and submitted a report for future legal costs in her case to the court where she asked for the Respondent to make an interim payment for costs. This motion was brought forward pursuant to r. 24(18) of the Family Law Rules, which allows the court to make an order that a party pays an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.
BACKGROUND
The parties were married on June 16, 2011. On the day before their wedding, they signed a marriage contract.
Both parties had legal advice and there was financial disclosure. That contract waived spousal support and also dealt to some degree with the division of property.
As the marriage progressed, the parties did not follow the terms of the marriage contract. As a result, they entered into an Amending Agreement.
The Amending Agreement barred any interest for the Applicant in the Matrimonial Home and contained support and property equalization releases. Unlike the first signed marriage contract, the Applicant claims that the Amending Agreement was signed under duress with no independent legal advice or financial disclosure, making it unenforceable as a domestic contract based on section 56(4) of the FLA.
Ms. Ord seeks to set aside the Amending Agreement. In order to be able to fund the rest of the litigation, she requires an award of interim cost disbursements (fees) from the Respondent.
ANALYSIS
A court will order interim cost disbursements for the sake of fairness between litigants of different economic means taking into account the primary purpose of the Family Law Rules which is to ensure that cases are tried justly, allowing an impoverished party to be able to proceed in their matter.
The seven "themes" with respect to the law of granting interim disbursements in a family law matter have been identified in a case called Stuart v. Stuart (2001) and are as follows:
- The ordering of interim disbursements is discretionary;
- The claimant must demonstrate that the interim disbursements are necessary to pursue their case, demonstrating that absent the advance of funds or interim disbursements, the claimant cannot present or analyze settlement offers or pursue entitlement."
- The interim disbursements must be shown to be necessary;
- The claim advanced must be meritorious;
- The exercise of discretion should be limited to exceptional cases;
- Interim costs are for the purpose of leveling the playing field;
- Monies may be advanced against an equalization payment.
It is important to note that a party does not have to prove his or her case to obtain an interim award of fees. The requirements are that the case be worthwhile to prosecute and whether it is reasonable based on the financial situation of the parties to expend legal fees on this particular case.
This determination is highly subjective and allows the court to exercise its discretion in making such a decision. The person seeking the advance must justify their impecuniosity and that they would not be able to proceed should they not receive the advance.
In making its determination about the validity of the case and the Applicant’s likelihood for success at trial, the court noted that the Amending Agreement left the Applicant in a worse position than when she entered the marriage, while the Respondent would be benefitting from an increase in the net worth of over $4,000,000. This result could easily be seen as unconscionable by the court.
Interestingly, the court took notice that the wife had to deplete her RRSP’s and essentially had been left bankrupt by this case while the husband’s position had flourished. The judge was highly critical of the husband’s proposition that it would be unfair to make him use his RRSP to fund the advance of fees to the Applicant, seeing as how the wife has already been forced to do the same.
The judge was not interested in supporting this double standard. The judge found the case to be sufficiently meritorious as to warrant an advance of fees due to the multiple problems leading up to the signing of the agreement. The Applicant submitted to the court a report on her anticipated fees along with her current monies available to her and ultimately the cost found that the advance for legal fees should be $40,000.
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