HomeFamily LawJustice Rules Solicitor-Client Costs for Non-Disclosure

Justice Rules Solicitor-Client Costs for Non-Disclosure

Solicitor-client costs are a rare remedy in litigation. They are, in essence, a financial punishment for egregious conduct on the part of one of the parties that can be described as “reprehensible, scandalous or outrageous” (Walsh v Mobil Oil Canada, 2008 ABCA 268 at paragraph 112).

The test for solicitor-client costs in the family context is no different than in any other form of litigation and is laid out in JWS v CJS, 2021 ABQB 411 at paragraph 12, stating, “solicitor-client costs should only occur in rare and exceptional circumstances.”

Some examples of exceptional circumstances can be found in the decision of Jackson v Trimac Industries Ltd, 1994 ABCA 199 at paragraph 28. The listed examples involved instances of delaying court proceedings, deceiving the court, prolonging trial, failing to produce documents in a timely fashion, misconduct requiring deterrence from the court, and fraud.

In the recent decision, Foley v Leavitt, 2021 ABQB 875, Justice R.E. Nation awarded solicitor-client costs payable by the husband for his non-disclosure of income information.

Interestingly, in this case neither party was completely blameless, and indeed, neither was entirely successful in the application. For several years neither party complied with the court order to disclose annual tax information. The wife was successful in attaining child support arrears. The husband was successful in lowering the arrears amount applied for by the wife and was successful in terminating spousal support.

However, during the course of the litigation, the wife was fully compliant and provided all necessary disclosure in a timely manner. The husband did not reciprocate and refused to provide income disclosure. Accordingly, the wife was granted solicitor client costs for “all steps taken, either in correspondence by her solicitor, or in court to force disclosure” (paragraph 5) after she provided her income information until the time the husband provided his.

Justice Nation stated that the action of non-disclosure “is egregious conduct by [the husband] and made this application much more expensive” (paragraph 7). Justice Nation does not explain exactly why non-disclosure was viewed as egregious although the examples listed above might provide some insight. Not providing court-ordered disclosure lengthened the proceedings unnecessarily, was untimely, and was misconduct. Taken together the husband’s non-disclosure made the “application much more expensive” (Foley paragraph 7) than it otherwise would be. While the awarding of solicitor-client costs is circumstantial and dependant upon individual facts of each case, and Justice Nation does not provide expansive reasoning, it is clear that disregarding the direction of the Court may be sufficient for that award.

It is also noted at paragraphs 7-8 that the mixed success may have militated towards mixed-costs for the non-solicitor-client portion of the costs in a typical application. However, because the husband’s non-disclosure created confusion and hampered the resolution of the court, the wife was also awarded costs for the remainder of the matters.

This decision reaffirms that the best course of action is the one directed by the court.

2021-12-14T20:06:53+00:00December 28, 2021|Family Law|
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