This article relates to the issue of reduced income and cost consequences in the context of COVID-19.
The Role of Costs in Family Law – Reduced Income and Cost Consequences
The rules related to costs in family law matters are primarily governed by the Family Law Rules, particularly Rule 18(14) which sets out when a court will make an order for costs, and Rule 24(12) which sets out what the court shall consider when determining the amount of costs for an order. Together, these rules form the basis for costs orders within Ontario, which overall are in place in order to encourage the settlement of cases between parties, discourage any inappropriate or wrongful behavior by litigants, indemnify successful parties (i.e. reimburse them for legal fees), and finally to make sure that family law cases are dealt with in a just and fair manner. This overall role of costs in family law matters is set out within Mattina v. Mattina, 2018 ONCA 867. When specifically considering the quantum or amount of costs under Rule 24(12), the courts have importantly relied upon the immense flexibility of clause 24(12)(b), which allows a judge to consider “any other relevant matter” when determining the amount of costs within an order. The real question is just how flexible is this provision, and what sort of factors could it apply to within the current reality of COVID-19? Within the present day, many people who were previously employed have now found themselves either without work or working at reduced capacity due to the safety needs of the community, which are ensured through the provincial health and safety regulations related to the pandemic. In this entry, I will be discussing what impact the courts have found a reduced income from COVID-19 may have in relation to orders for costs.
COVID-19, Reduced Employment and Impecuniosity
The courts have firmly established a broad line of case law in relation to the concept of Impecuniosity, which can be best understood as either an inability to pay or an extreme difficulty in paying something, which may be the result of numerous factors. Within the seminal case of M. (C.A.) v. M. (D.),  O.J. No. 3707 (Ont. C.A.), the courts importantly highlight that impecuniosity is recognized as falling under clause 24(12)(b) of the Family Law Rules, which means that a judge can consider this as a factor in determining the amount of costs to be ordered. It is important to note however that one’s ability or inability to pay for costs can be considered by a judge only in relation to the amount of costs under 24(12)(b) and not whether or not an order of costs should be made in the first place, as firmly established in LeVan v. LeVan (2006), 32 R.F.L. (6th) 359 (Ont. S.C.J.). All of these factors come together within the recent case of Jean-Paul Hage v. Amanda Skaff El-Hage 2020 ONSC 4162, which dealt with the unique situation of determining the amount of a cost order to be paid by an Applicant who importantly had been working at a reduced income as a result of the current COVID-19 pandemic. Master Kaufman made an order for costs in accordance with the objectives of costs within family law, but importantly ensured that the order took into account “the Applicant’s reduced income during the pandemic”, which resulted in costs being set at $900.00, inclusive of HST and disbursements, for an urgent motion brought by the Applicant/Father to see his daughter, which was determined not urgent. Such a ruling effectively shows the adaptability of the Family Law Rules, and the willingness of the courts to uphold the principles of costs while still addressing the new challenges faced by parties living within the context of COVID-19.
At the present time, our firm is working with both existing and potential new clients to ensure that litigants are able to defend their parental rights and the wellbeing of their children, while also protecting themselves financially during this current period of economic hardship and uncertainty that we all face as part of the ongoing climate of COVID-19. Our firm is here to assist you in regards to all of your needs, and can assist you in any negotiations you may need to resolve within your custody and family law disputes. Please call one of our Child Custody Lawyers Toronto for a consultation related to your matters.
Written by Adam Jaffer, Associate Lawyer at Separy Law P.C