Can You Force The Opposing Party to Pay Interim Legal Expenses?
Updated: Oct 21, 2021
Fairly often, I have been faced with cases where my client tells me that he or she cannot afford to continue with the legal fight because the other side who is very rich keeps dragging on the matter or has the financial ability to continue with a matter whereas my client is unable to afford the same. What is the solution?
This was precisely the question dealt with in a recent case by Justice Bloom in 2021 ONSC 6536 (CanLII) | Gaetano v. McDadi
Family Law Rule 24(18) authorizes a motion for interim disbursements:
(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. Justice Bloom went into the previous case law on this matter as follows:
The principles that apply to the exercise of that power are set out by Justice S. B. Sherr of the Ontario Court of Justice in Samis (Guardian of) v. Samis, 2011 ONCJ 273 (CanLII),  O.J. No. 2381 at paragraph 100:
100 The principles that courts have been applying to determine whether to order interim disbursements pursuant to this subrule are set out in Stuart v. Stuart, 2001 CanLII 28261:
1) The ordering of interim disbursements is discretionary: Airst v. Airst,  O.J. No. 3005; Hill v. Hill (1988), 1988 CanLII 4710 (ON SC)
2) A claimant must demonstrate that, absent the advance of funds for interim disbursements, the claimant cannot present or analyze settlement offers or pursue entitlement: Hill v. Hill (1988), 1988 CanLII 4710 (ON SC).
3) It must be shown that the particular expenses are necessary: Lossing v. Dmuchowski,  O.J. No. 837.
4) Is the claim being advanced meritorious? Lynch v. Lynch (1999), 1 R.F.L. (5th) 309 and Randle v. Randle (1999), 1999 ABQB 954 (CanLII), 3 R.F.L. (5th) 139.
5) The exercise of discretion should be limited to exceptional cases: Organ v. Barnett (1992), 1992 CanLII 7433 (ON SC).
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.
7) Monies might be advanced against an equalisation payment: Zagdanski v. Zagdanski, 2001 CanLII 27981 (ON SC).
The court interpreted 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. The order is to allow the case to proceed fairly and should not be such that a party feels a licence to litigate.
So what is the test and how does a judge decide?:
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.
The claimant must demonstrate that he or she is incapable of funding the requested amounts.
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.
The order for interim disbursements should not be limited to cases where it would be taken out of an equalization payment. There are cases where there would not be an equalisation payment. 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.
The argument from the applicant:
The Applicant sought the amount of $200,000.00; she particularized the expenditures included in that sum as being outstanding and future amounts to be paid for her legal and expert professionals in this proceeding.
She pointed to the high conflict nature of this proceeding, and the need to level the playing field where the Respondent benefits from his wealth to be able to fund his side of the litigation.
She noted that a significant aspect of her claim in the proceeding is for relief based on a joint family venture. She contended that her claim in this proceeding, including that aspect of it, satisfies the merits element of the test for interim disbursements.
Justice Bloom agreed with the applicant. In particular, he found that those funds are demonstrably necessary for the funding of her claims against the Respondent in this high conflict proceeding. The Respondent has a great deal of wealth to fund his case. The playing field needs to be levelled so that the proceeding is fairly litigated.
The judge further found that the Applicant had demonstrated that the funds are needed to pay present or future costs of her legal representatives and expert witness.
Further, her claim for spousal support is admitted by the Respondent to satisfy the test of meritoriousness on the motion for interim disbursements.
Finally, the Judge found that on the record before him, her equitable claims also pass that test. The web of complex economic evidence relating to those claims justifies interim disbursements, so that the Applicant can put forward a comprehensible case to a trial court based on a general theory of joint family venture.
Analysis and conclusion:
The above case reflects an example of high income parties where one of them needed court support for interim dispersement for their legal matter. The applicant cited the importance of having a joint family venture as a claim for that. Obviously, not all cases would have such a claim. Each case is unique and different.
However, the above principles will help mapping out future claims from clients who would like the opposing party that may be much richer to pay their legal fees and disbursements on an interim basis.
At Shankar Law, we will carefully analyze and research case law and legislation to provide you with the best possible advice and guidance. You can be rest assured that we will do our utmost in protecting your interests. We work all over Ontario primarily through our three offices in Owen sound, Port Elgin and Wiarton.