Income Discrepancy and Impacts on the Fairness of Court Proceedings

Turk v. Turk 2016 ONSC 4210

A recurring issue in family law, particularly in cases where one party earns significantly more than the other, is how income discrepancy impacts the fairness of court proceedings. In this recent Ontario Superior Court of Justice decision, the Court awards $140,000.00 in interim disbursement fees to “level the playing field” of costly litigation.

Background

Pursuant to Rule 24(12) of the Family Law Rules, the court may make an order that a party pay an amount of money to another party to cover party or all of the expenses of carrying on the case, including a lawyer’s fees.

The parties entered into a separation agreement in April of 2010. Claiming duress and lack of financial disclosure, the wife sought a declaration from the court that the separation agreement should be set aside. In the alternative, the wife sought an order for the support provisions of the Agreement to be set aside, and replaced with an order for the appropriate amount of child and spousal support, retroactive to the date of separation. She also sought an order for the equalization of net family property, financial disclosure, and interim disbursements.

The husband rejected the wife’s position, and brought a motion to dismiss her claims.

The motion before the Court in this case was brought by the wife, who was seeking an Order that the husband pay interim disbursements of $500,000.00 to cover her costs in the ongoing litigation. In her evidence as to expenses incurred and to be incurred, the wife claims that she already owed professional fees of $140,000.00, plus the costs of preparing the materials for the current motion, and the cost for the upcoming trial, which was scheduled for 20 days. The largest piece of the $500,000.00 the wife claimed was to cover the costs of her forensic accountant to prepare a report for the court, which she claimed was going to cost her at minimum $100,000.00.

The husband opposed such an order, and insisted that the wife’s estimates as to her expenses were excessive and unsupported. Further, the husband noted that he had already paid $156,000.00 of the wife’s legal costs to date, as well as a lump sum of $63,150.00 pursuant to a Court Order.

Analysis

As the Court notes in its analysis, the threshold for making an Order pursuant to Rule 14(12) is whether the claims have merit. The Court found that though the husband was able to prove that the wife’s claims to set aside the separation agreement did have weaknesses, her claims for retroactive child support and retroactive and ongoing spousal support did have merit.

The Court was not satisfied with the wife’s explanation of her costs, and held that she had failed to provide sufficient detail for substantiating the amount she sought. Despite this, the Court found that the wife was entitled to receive some contribution towards her costs, as the financial information provided by the husband was of a complex nature, the wife did require expert evidence.

Though the Court accepted the husband’s evidence that the wife had not taken all reasonable steps to finance her own case, the Court found that the fact that she should have done more does not preclude an interim disbursements award, but it will reduce the amount ordered.

In total, the Court ordered the husband to pay the wife $140,000.00 in interim disbursements, but subject to allocation; $70,000.00 for expert fees, and $70,000.00 for legal fees. Though this amount is considerably less than the wife was seeking on the motion, it is still a very sizable interim disbursements award.

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