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  • Writer's pictureJared Davies, Lawyer

Getting the opposing party to fund your family law case against them

Another tool that the Family Law Rules offers is the ability to force the other side to front your legal fees and disbursements, often as a loan, in advance of the actual case, provided certain criteria are met. This rule responds to a very obvious problem that arises in cases where there is a large financial disparity between the parties. For example, say one party was the primary breadwinner, with all the family assets listed in their name. And the other party was the stay-at-home parent in the relationship. In this case, the stay-at-home parent has no money to get legal representation or other disbursements (e.g. the cost of a business evaluation), to access their legal rights whereas the other party does. In awarding the claimant an advance on their legal fees, the court describes this rule as “levelling the playing field” (see example Tsilker v Tsilker, 2018 ONSC 4414 at paragraph 71). Subrule 12(18) of the Family Law Rules states:

24. (18) The court may make an order that a party pay 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.

One of the leading cases is Stuart v Stuart, [2001] OJ No 5172, 110 ACWS (3d) 1063, which listed several points on the issue:

8 The themes in the case law concerning interim disbursements in Canadian jurisprudence are as follows:

1) The ordering of interim disbursements is discretionary: Airst v. Airst, [1995] O.J. No. 3005 (Ont. Gen. Div.); Hill v. Hill (1988), 63 O.R. (2d) 618 (Ont. H.C.) and Lossing v. Dmuchowski, [2000] O.J. No. 837 (Ont. S.C.J.).

2) A claimant must demonstrate that absent the advance of funds for interim disbursements, the claimant cannot present or analyse settlement offers or pursue entitlement: Hill v. Hill (1988), 63 O.R. (2d) 618 (Ont. H.C.) and Airst v. Airst, [1995] O.J. No. 3005 (Ont. Gen. Div.).

3) It must be shown that the particular expenses are necessary: Lossing v. Dmuchowski, [2000] O.J. No. 837 (Ont. S.C.J.).

4) Is the claim being advanced meritorious? Lynch v. Lynch (1999), 1 R.F.L. (5th) 309 (Ont. S.C.J.) and Randle v. Randle (1999), 3 R.F.L. (5th) 139 (Alta. Q.B.).

5) The exercise of discretion should be limited to exceptional cases: Organ v. Barnett (1992), 11 O.R. (3d) 210 (Ont. Gen. Div.).

6) Interim costs in matrimonial cases may be granted to level the playing field: Randle v. Randle (1999), 3 R.F.L. (5th) 139 (Alta. Q.B.).

7) Monies might be advanced against an equalisation payment: Zagdanski v. Zagdanski, 2001 CarswellOnt 2517 (Ont. S.C.J.).

8) The court must consider which of these principles adhere to the primary objective of the Family Law Rules.

9) The court interprets the new Family Law Rules to require the exercise of the discretion in rule 24(12) on a less stringent basis than the cases that call for such only in exceptional cases. The discretion should be exercised to ensure all parties can equally provide or test disclosure, make or consider offers or possible go to trial. Simply described, the award should be made to level the playing field.

10) An order under section 24(12) should not immunise a party from costs awards. The order is to allow the case to proceed fairly and should not be such that a party feels a license to litigate.

11) Certainly the proof of the necessity of interim disbursements would be critical to the successful claim. The claimant must clearly demonstrate that the disbursements are necessary and reasonable given the needs of the case and the funds available. In particular, if an expert is the subject of a requested disbursement, the claimant must demonstrate there is a clear need for the services of said expert.

12) The claimant must demonstrate that he or she is incapable of funding the requested amounts.

13) The claim or claims being advanced in the case must be meritorious as far as can be determined on the balance of probabilities at the time of the request for disbursements.

14) The order for interim disbursements should not be limited to cases where it would be taken out of an equalisation payment. There are cases where there would not be an equalisation payment. The litigants could be a child suing a parent, an elderly parent suing an adult child or a family that has not acquired assets. It may be that a party with a minimal income stream and no liquid assets needs disbursements to test evidence that might lead to him or her resisting an equalisation order. The levelling of the playing field should not be limited to those with an expected equalization payment.

The relatively recent case of MMD v JAH, 2019 ONSC 2208 summarized the test, where the claimant has the burden to prove the following:

a. The disbursements are necessary and reasonable given the needs of the case and the funds available;

b. That the party requesting the disbursement is incapable of funding the amounts; and,

c. That the claim being advanced is meritorious as far as can be determined on the balance of probabilities at the time of the request.

Then the court ultimately decides:

d. Should the disbursements be awarded?

In MMD v JAH, the court ultimately found that the Applicant, who was seeking child support, was entitled to $35,000 in both legal fees and disbursements in advance of the case, rather than the +$80,000 she was seeking. The court found that the opposing party had just received three million dollars from a capital asset sale, and was thus able to fund the Applicant’s fees. The court summarized:

133 I find the Applicant has met the above criteria to permit me to award interim disbursements. She has a reasonable claim for child support. The Respondent's income situation is complicated and the Applicant will require an expert to review the income valuation. She will require the assistance of counsel to proceed with her claim. She does not have any income or sufficient assets to pay these costs.

134 That said, I am not convinced that the amount of legal fees requested is reasonable and necessary. The Applicant says she has incurred legal fees of $25,000 to date. I find a further $25,000 would be reasonable for the steps required to move the matter to a settlement conference. At that stage, disclosure and questioning will have been completed and the parties should be in a position to make meaningful offers to settle. There shall also be a payment of $10,000 for Mr. Pont's fees.

135 I note that, contrary to the Respondent's submissions, the Applicant does not need to prove that she has the ability to repay the interim fees and disbursements in order to receive them: Benzeroual v. Issa and Farag, 2017 ONSC 3655 (Ont. S.C.J.) at para. 94; Romanelli v. Romanelli, 2017 ONSC 1312 (Ont. S.C.J.) at para. 17.

136 The Respondent shall pay the Applicant interim disbursements of $35,000 as a loan to be credited against any payments found to be owing by the Respondent to the Applicant for child support or s. 7 expenses. If it is found at trial that the Respondent does not owe the Applicant any child support or s. 7 expenses, the trial judge shall determine the terms of repayment of this amount by the Applicant to the Respondent.

The money advanced was to be treated as a loan. However, had the Applicant succeeded at trial, she would have been awarded a sum of legal fees from the Respondent which would have served to pay off or reduce that loan.

Obvious takeaways? A claimant can get interim fees and disbursements from the opposing party to fund their case. To do this, the claimant must demonstrate that they do not have the ability to fund their own case, the fees are necessary and reasonable, the opposing party has the ability to pay, and the claim has merit. The court ultimately has the discretion to examine these factors and decide whether the award is just.


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