In a recent Superior Court of Justice decision, the court heard arguments as to whether a party should be granted interim disbursements to cover the expense of hiring a lawyer and an expert for their divorce trial.
The couple met in Belgium and later married in Toronto in August 2009. They had two children, both of whom were born in Belgium in January 2010 and June 2011. The mother and children established their residence in Toronto in August 2011 with the father. The couple separated sometime between September 2016 and February 2017, although neither of them could agree on the date of separation.
The Application for divorce was made by the father in May of 2017, and the mother issued an Answer in June. The trial for their divorce was scheduled for May 2018. There were some issues with the mother obtaining counsel, but eventually, she did. The mother then brought a motion for interim disbursements to help cover the costs of a lawyer and an expert.
The Legal Principles
Pursuant to rule 24(12) of the Family Law Rules, the court may order a party to pay an amount of money to another party to cover part or all of the expenses of carrying out the case. This rule is discretionary and should be applied with the objective of fairness.
The court must address two questions: should interim disbursements be ordered, and if so, how much? In the case of Stuart v Stuart , the court outlined the factors that the court must consider when determining whether there is an entitlement to interim disbursements:
- The order of interim disbursements is discretionary;
- A claimant must demonstrate that absent the advance funds for interim disbursements, the claimant cannot present or analyze settlement offers or pursue entitlement;
- It must be shown that the particular expenses are necessary;
- Is the claim advanced meritorious?
- The exercise of discretion should be limited to exceptional cases;
- Interim costs in matrimonial cases may be granted to level the playing field;
- Monies might be advanced against an equalization payment;
In this case, the counsel for the father conceded that the mother was entitled to an order for interim disbursements. Due to the concession of entitlement, the court did not have to go through an analysis of the factors from Stuart and only had to determine how much the disbursements should be.
The court proceeded by evaluating the circumstances of the mother and father, as well as what they were seeking in the divorce judgment to determine how much to award for disbursements.
The father was seeking sole custody, and if that was not granted, then joint custody with the primary residence with him. He was also seeking an order for child support and an order to have permanent exclusive possession of the matrimonial home (which also happened to be in his name). Finally, he asked for equalization of the net family property.
The mother was also seeking sole custody, and if that was not granted, then joint custody with the primary residence with her. She was seeking child support, spousal support, and an order for the equalization of net family property. She was also going to seek an order permitting her to move and change the children’s residence to Brussels.
His reported net family property was $415,353 and hers was $62,475. Based on this assessment, he owed her an equalization payment of approximately $207,000. Due to the concession that an order should be made and the issue is how much the order should be the court did not need to go through some of the arguments the father’s counsel made. The court could make an assessment based on their financial statements.
The mother’s lawyer proposed a total of $140,660.00 (without GST) for the following:
- Questioning for two days (and 4 days of preparation time) for $23,760;
- Trial preparation for 2 lawyers, a law clerk, and an associate lawyer for $66,400;
- Attendance at trial for 10 days, 10 hours per day, for 2 lawyers for $50,000; and
- Disbursements for $5,000.
During their submissions, counsel agreed that there had not been an order for questions, and neither party was seeking it at the time the motion was being heard. Therefore. the amount of $23,760 was to be deducted. Aside from the questioning costs, the father’s counsel agreed that the litigation budget was reasonable, although he did not provide a litigation budget for the father as a comparison.
While not necessarily relevant, the court did note that the lawyers for the mother had greatly reduced their hourly rates in order for the mother to access their legal services, and the court commended the lawyers for doing so.
The Ranot report (a report that contains the valuation of assets) had not yet been completed, even though the rules state that it must be submitted 90 days before trial. The court decided not to make a judgment on an amount for valuation services and chose to leave the option for the mother to pursue that request later.
The court then looked into whether the mother could contribute to her own costs and whether the father had the ability to contribute.
The mother insisted that she did not have the ability to contribute any more to her costs. She had already borrowed money from her own mother, some of which had gone towards paying for the lawyer for the motion.
However, despite the mother’s assertions, the court was not satisfied that she could not further contribute to her costs for the following reasons:
- She has a rental property in Poland, and while she will lose rental income if she sells it, selling it is an option;
- She makes a modest income from consulting services;
- She has a Doctorate in Economics and a Masters in International Economics; this education and related skills should be able to help her in the preparation of this case and, therefore, reduce her costs.
The father owns the matrimonial home and has a significant income. He has been paying the mother $3,000 a month without an order (which means that it is not tax deductible) and he pays rent for her apartment. He also pays for all the expenses of the matrimonial home and all the children’s expenses.
The court ultimately ordered that given her modest income, the father had to pay the mother the amount of $100,000, which would then be used as an advance against the equalization payment. While the father is not of modest means, he does not have unlimited means, and the mother does have the ability to pay for some of her costs.
What We Learned
If there is a motion for an order for interim disbursements, the court must evaluate whether an order should be issued, and if so, how much for. The circumstances of the parties will be taken into account and will be used to determine whether the order should be granted and how much the disbursement should be, and whether it can be an advance against an equalization payment.
Sometimes, during a case, parties may run into financial difficulties. In the name of fairness, lawyers can bring motions for the other party to pay some of the costs. If you think you may be disadvantaged financially in your family law case, the experienced and compassionate team at Borden Family Law is ready to help. Our focused area of practice means our clients benefit from our in-depth knowledge. We serve clients in Oshawa, Brooklin, and the surrounding areas. To see how we can help you resolve your issue, call us at 905-576-6090 or contact us online. Ask us about flat fees and our bundled services.