Husband’s Bad Behaviour Prompts Order to Pay $1 Million in Wife’s Legal Costs
Recently, I wrote about an Ontario Court of Appeal called Stevens v. Stevens that dealt with a number of issues, among them the question of whether the trial judge’s opinion of the husband had been tainted by the fact that the husband had had an extra-marital affair. Reference “Did Fact of Extra-Marital Affair Taint Trial Judge Against Husband?”
One of the other interesting points that were addressed in the appeal was the question of whether the husband – who lost his appeal bid – should be saddled with paying almost $1 million in legal costs incurred by the wife. (And to his credit, the husband conceded that the wife was entitled to her costs; he just took issue with their amount.)
The case had involved numerous issues to be determined, including the validity of the marriage contract, the status of the matrimonial home and a cottage, and what amount of spousal support and arrears the husband owed. The wife had been successful on every one of them.
In deciding the costs question, the court began by pointing out that under the Family Law Rules, there is a presumption that as the successful party the wife was entitled to her costs in the case. There is also a rule that states that if a party has acted in bad faith, the court must decide costs on a “full recovery basis” and order him or her to pay those costs immediately.
The court reviewed the husband’s conduct throughout the course of the litigation, and decided he had acted unreasonably. Among other things the husband:
• Caused a one-year delay in having the matter brought to trial, despite repeated requests from the wife to set a trial date. (And the court noted this delay caused significant financial repercussions to the wife, since she had to draw on the capital in order to meet her living expenses and those of her children).
• Refused to admit to 30 specific facts up-front. In reality, these facts were uncontested and the wife was needlessly forced to incur the cost and time to marshal evidence to prove those facts at trial.
• Asked the court to enforce a marriage contract signed by the wife that he knew contained an important legal and factual mistake.
• Engaged in bad faith conduct which included not making full, complete and timely disclosure of certain information; other information validly requested by the wife was never provided at all.
• Was untruthful about what his income was.
• Came to court to ask to be relieved of child support payments that he was legally required to make.
• Wrote to the trial judge directly, to ask that his child support payments be reduced because he claimed he had no income. (And not only did the husband not copy the wife on this very ill-advised letter – which was returned by the court – but he was also represented by a lawyer at the time, making his direct request to the judge doubly inappropriate).
• Improperly used funds from a company in which he had shares to pay some of his legal fees.
In the course of categorizing the husband’s condemnable behaviour, the court wrote simply:
“It is hard to prioritize the bad conduct on the part of Joel during this whole process as there are so many egregious incidents of Joel taking advantage of Pamela.”
After applying the various established factors that must be considered in awarding costs (including the importance and complexity of the issues, and the unreasonableness of each spouse’s behavior in the case), and after considering additional factors including any possible financial hardship that might be endured by the husband, the court concluded that $950,000 in legal costs incurred by the wife should be paid by the him, plus pre-judgment interest of another $55,000. (This trial court ruling was later upheld on appeal).
For the full text of the decisions, see:
Stevens v. Stevens, 2013 ONCA 267 (CanLII) http://canlii.ca/t/fx7g0
Stevens v. Stevens, 2012 ONSC 6881 (CanLII) http://canlii.ca/t/fv2c9
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