Case reference: Stuart v. Stuart, 2001 CanLII 28261 (ON SC)
This historical case summary discusses the decision identified above. Later decisions and legislative changes may affect how it applies today. Obtain legal advice about your circumstances.
Rogers J.:
[1] The applicant wife in this proceeding seeks an order pursuant to Rule 24(12) of the Family Law Rules. She requests interim disbursements to pay for a review of a valuation of items on the husband’s net family property statement and for legal fees.
The Family Law Rules
[2] Rule 24(12) reads as follows:
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.
[3] In order to interpret the meaning of a rule the court must look to the primary objective as found in rule 2 (2), (3), (4) and (5). Among the several obligations of the court in carrying out its mandate to actively manage cases is the responsibility to ensure that the procedure is fair to all parties, to identify the issues and set timetables to control the progress of the case.
[4] Family law is no longer a guessing game where facts are concerned. The rules provide for full and complete disclosure. The parties are to know the facts and use this knowledge to settle or proceed to litigation. Cases should proceed expeditiously through the disclosure stage.
[5] The duty in the court to ensure a fair procedure means that both parties should be able to request and give disclosure and to tackle complex valuation issues equally. One party should not be disadvantaged in the litigation by being unable to test the evidence of the other party.
[6] Fairness in process also means that both parties should be equally wary about the potential of a cost order against them. The new regime of cost awards throughout the case should impact on both parties similarly.
[7] Rule 24(12) is discretionary. The discretion must be applied to further the primary objective of fairness.
Former Case Law
[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), 1988 CanLII 4710 (ON SC), 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), 1988 CanLII 4710 (ON SC), 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), 1999 ABQB 954 (CanLII), 3 R.F.L. (5th) 139 (Alta. Q.B.).
5) The exercise of discretion should be limited to exceptional cases: Organ v. Barnett (1992), 1992 CanLII 7433 (ON SC), 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), 1999 ABQB 954 (CanLII), 3 R.F.L. (5th) 139 (Alta. Q.B.).
7) Monies might be advanced against an equalisation payment: Zagdanski v. Zagdanski, 2001 CanLII 27981 (ON SC), 2001 CarswellOnt 2517 (Ont. S.C.J.).
Rule 24(12)
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 equalisation payment.
Application to this Case
15) In the case at bar the above criteria are met. Ms Stuart has a reasonable claim for an equalisation payment. Because of the complexity of her husband’s assets, she cannot test the valuations of such assets without an expert. Any prudent litigant would hire a valuator to review the report of the husband’s expert. In addition she would be severely disadvantaged were she to have to carry on the case without the assistance of counsel. The monies requested are reasonable for the tasks at hand and are in keeping with the money available in the case.
16) Ms Stuart does not have an income stream that allows the expenditure of the monies needed. After the consent child and spousal support orders, Mr. Stuart has more net disposable income to care for himself than Ms Stuart has to care for the two children and herself. Nor does Ms Stuart have liquid assets. If she does not have an order for interim disbursements, she cannot continue the case.
17) Ms Stuart should expend any sums ordered with the prudence of someone spending their own money and of a litigant paying heed to cost orders under rule 24. This can be accomplished by a loan from Mr. Stuart to Ms Stuart.
18) Mr. Stuart shall loan to Ms Stuart the sum of $10,000 by December 15, 2001, a further $10,000 by December 30, 2001 and a further $5,000 by January 15, 2002. The interest rate shall be that in effect from time to time for interest on awards under the Courts of Justice Act. The terms of repayment shall be as agreed upon or ordered by the trial judge.
Application granted.
*source: Canlii
