I previously wrote about a husband who took steps to hide income in an effort to avoid spousal support and child support payments. His actions cost him nearly $700,000 in support payments. You can read my comments about the trial here. Earlier this summer, these two were back in court for a decision on what costs, if any, were to be awarded. The issue to be resolved was whether or not an order for costs can be enforced by the Family Responsibility Office in Ontario.
Costs Awarded After Divorce Trial
Typically after a divorce trial, the losing party must pay the successful party their costs. This rule encourages negotiation and resolution without taking up precious public resources at the courthouse. When determining whether or not an order for costs should be awarded, the Judge will look closely at the effort each side gave in the negotiation. Or put another way, how reasonable each side was being.
Rule 24 of the Family Law Rules is the legislation that governs this issue. This rule says there is a presumption that the successful party will be awarded order for costs. The amount of the order for costs is dependent on these factors:
- each party’s behaviour;
- the time spent by each party;
- any written offers to settle;
- amount of legal fees paid;
- expert witness fees; and
- any other relevant matter.
The Judge will determine the reasonableness of each party by looking at how they handled the issues for trial. This means whether or not the settlement offers were reasonable and how the issue was resolved at trial. The legislation also states that if a party has acted in bad faith, the other party will receive the full amount of their costs.
Divorce trials can be very expensive. If you are not reasonable throughout the negotiation, losing a divorce trial is even more expensive. And if you refuse to be reasonable throughout negotiation and then lose a divorce trial, a Judge will not be kind to you.
Bad Faith During a Divorce Proceeding
A party who acted in bad faith throughout a divorce proceeding will be punished through a order for costs award. Bad faith is not simply being unreasonable. Rather, bad faith requires active steps to harm the position of the opposing party.
In this case, the Judge found the father acted in bad faith. For instance, the father refused to provide financial disclosure, which the Court of Appeal characterized as “willful disobedience”. This refusal to provide financial disclosure meant the wife needed to obtain two experts to give evidence on the father’s financial situation. After this evidence came out at trial, the Judge found that the father was deliberately attempting to conceal assets from the wife.
While hiding assets and refusing to disclose financial information can be bad faith on its own, there was more. The father refused to concede on a single fact or issue. He did not narrow any legal issue prior to trial. This meant that the wife’s lawyer had to argue every single point.
The wife also provided a number of offers to settle and made every issue severable. This means that the husband could have cherry picked any issue to resolve or to negotiate. He refused to do either. By the time of the trial, the husband was not permitted to participate. In the end, the Judge ordered the husband immediately pay $217,000 to the wife to cover her legal fees.
Order for Costs can be Enforced by the Family Responsibility Office in Ontario
While receiving an order for costs award is very common, enforcing that award is more difficult. Often time, the order for costs award comes after a very expensive divorce proceeding. The unsuccessful party may simply have no money left after paying their own legal fees.
In this case the wife requested an Order for costs award be enforced by the Family Responsibility Office (FRO) in Ontario. That office is responsible for collecting support payments and they have broad powers to assist them in their duties. These powers include the ability to garnish wages, bank accounts and claim payments from the government.
The Judge reviewed the Family Responsibility and Support Arrears Enforcement Act. This legislation allows the FRO to use their powers to collect support payments or to collect on legal fees incurred in relation to support payments. In this case, the Judge agreed with the wife’s submission and with a few minor exceptions, the order for costs would be enforced by the FRO.
How to Be Reasonable in Divorce Proceedings
This ruling was very harsh against the husband. The reason for this was bad faith throughout the proceeding. If you are going through a divorce, it is in your best interest to act reasonably throughout and attempt to negotiate a reasonable resolution. This can be done by obtaining legal advice to have a thorough understanding of what your rights and obligations are.
Another aspect of being reasonable is to make offers to settle and respond to offers presented to you. Making issues severable in your offers will help you later. This can mean keeping custody and property matters separate.
Contact Hearty Law today to receive legal advice on your specific situation. Hearty Law can assist with hidden assets, concealed income, child support, spousal support, retroactive support, property division and other family law financial issues. Either fill out the contact form on this site or send an email to toronto@heartylaw.ca or ottawa@heartylaw.ca.
Hearty Law serves Toronto, Ottawa and surrounding communities.