Supreme Court Decision Summarizes Law on Costs

In the recent case of Schuller v. Roback, the court has been called upon the explain the thorny, vexing and generally irksome area of the law known as "costs." Costs has a special legal meaning; it's not the bill of the client's lawyer and it's not the client's out-of-pocket expenses for photocopying, court fees and so forth. Costs are a way of compensating someone for the overall expense and hassle they've been put to as a result of having to go to court, and costs are only available in the Supreme Court.

Costs are usually awarded to the person who is mostly successful in a law suit or an application, and in a way they function like an idiot tax. It the person making the application wins, the respondent shouldn't have fought the application and has to pay the applicant's costs; if the person making the application loses, the application shouldn't have been brought in the first place and the applicant has to pay the respondent's costs.

The rule on costs is Rule 16-1 and says that the court can award costs as ordinary costs or "special costs." Ordinary costs are calculated under Appendix B to the rules; special costs are awarded only in those rare cases where someone's conduct has been utterly unreasonable or frustratingly obstructive and amount to the whole of the lawyer's total bill plus disbursements. Under Appendix B, ordinary costs are calculated according to a schedule of fixed rates for particular activities, like drafting pleadings, arguing an application or writing letters, that are common to all law suits and the rates vary depending on whether the case was less difficult than usual, usual, or more difficult than usual. Ordinary costs assessed at the scale for usual difficulty might amount to 40 to 50% of a lawyer's bill.

Anyhow, the reason why I'm writing about Schuller v. Roback is because the law on costs in family law is all over the place. In the past there seemed to be two kinds of cases on costs in family law, one which said that family law is special and awards of costs can upset the delicate balance the trial judge has achieved making orders for support and division of assets, and other which said that family law is like any other kind of civil law and the party who is mostly successful should get his or her costs. Although the costs-are-costs cases seem to have won the battle, you still see an awful lot of cases where no costs order is made or the judge orders each party to bear their own costs... even when the result looks an awful lot like one party was more successful than the other.

In Schuller, after judgment had been given, the applicant sought an order that each party bear their own costs while the respondent asked for an order that he have "double costs" of the application, assessed at the rate for cases of more than usual difficulty.

First, the court discussed the basic idea about which party should have his or her costs, beginning with the leading case under the old rules.

"[15] Under the former Rule 57(9), costs normally followed the event, and went to the party who enjoyed 'substantial success.' This Court's discretion to depart from awarding costs to the successful party must be exercised judicially: Gold v. Gold."

The rule about costs under the new rules of court is Rule 16-1(7) and says that "costs of a family law case must be awarded to the successful party unless the court otherwise orders."

"[16] The new Rule does not incorporate the same reference to 'substantial success' but the Court retains the discretion to refuse an award for costs despite the success of the party making application for costs: Gain v. Gain.

"[17] In Gold the Court described the considerations that should instruct the Court in evaluating a claim for costs:

The question, then, is: when should the Court order otherwise? ... when the court should order otherwise is a matter of discretion, to be exercised judicially by the trial judge, as directed by the Rules of Court. To lay down any strict guidelines or even to attempt to give exhaustive examples is not, I think, helpful because the facts and issues in each family law case vary so greatly. Factors such as hardship, earning capacity, the purpose of the particular award, the conduct of the parties in the litigation, and the importance of not upsetting the balance achieved by the award itself are all matters which a trial judge, quite properly, may be asked to take into account. Assessing the importance of such factors within the context of a particular case, however, is a matter best left for determination by the trial judge."

Costs, then, continue to be discretionary under the new rules as they were under the old, but the starting point is set out in Rule 16-1(7): costs go to the successful party. But who is responsible for proving that costs should be awarded in any other manner?

"[18] The onus of persuading the court that it should depart from the usual rule that the successful party is entitled to costs rests on the unsuccessful litigant: Rattenbury v. Rattenbury."

And what happens when there is divided success, when each party is partially successful?

"[24] In cases where one party has achieved substantial success, the court may nonetheless award only a portion of the substantially successful party’s costs: Cohen v. Cohen, Newstone v. Newstone and Rolls v. Rolls."

Next, the court discussed the rules about when someone should have "double costs" under Rule 11-1(5). This rule says that when someone makes an offer to settle — a written proposal of terms on which an application or a law suit could be resolved — the court can deprive someone of costs even if they've won or give an offeror double costs whether they've won or lost, taking into account the factors set out a subrule (6):

In making an order under subrule (5), the court may consider the following:

(a) whether the offer to settle was one that ought reasonably to have been accepted, either on the date that the offer to settle was delivered or served or on any later date;

(b) the relationship between the terms of settlement offered and the final judgment of the court;

(c) the relative financial circumstances of the parties;

(d) any other factor the court considers appropriate.

Essentially, said the court, an award of double costs is intended to punish a party who rejects a reasonable offer:

"[31] The issue of awarding double costs was recently reviewed in Hartshorne v. Hartshorne. The rationale for the Rules ... emphasizes that an award of double costs is a 'punitive measure against a litigant for that party's failure, in all of the circumstances, to have accepted an offer to settle that should have been accepted'."

The court then looked at the circumstances of the parties, the application and the offer to settle, considering the 11-1(6) factors and the decision in Hartshorne:

"[35] In my view [the respondent's] offer was delivered in a timely way. However it was a lengthy proposal and not easily evaluated. The offer included a readjustment of the division of family assets which was a claim not properly before the Court at this time. ...

"[36] In my view this offer was overbroad and while it was open for acceptance it would not have been reasonable for [the applicant] to accept the terms. I also note that some terms were simply 'nuisance' terms that [the applicant] could not accept.

"[37] Subrule (6)(b) also refers to the relationship between the offer and the final judgment of the court. Again, the offer addressed many issues on which [the respondent] did not succeed ... [the respondent] failed to achieve a result equal to or better than his offer on [a number of points] ...

"[39] ... In view of the results of the ... applications, [the applicant's] failure to accept the offer from [the respondent] was not unreasonable and she should not suffer the punishment contemplated in Hartshorne.

[40] Subrule (6)(c) invites the court to consider the relative financial circumstances of the parties. Although I have considered that [the applicant's] financial circumstances do not rise to the level of hardship for the purposes of refusing [the respondent's] claim for costs, I am mindful that her obligations and means are limited. In my view, the state of [the applicant's] financial circumstances also militates against an order for double costs.

[41] In view of [the applicant's] circumstances, the fact that the offer to settle was not one that could reasonably have been accepted and that [the respondent's] measure of success was divided leads me to conclude that this is not a case warranting an award to [the respondent] of double costs.

Summarizing these factors, in rejecting the respondent's claim for double costs as a result of his offer to settle under Rule 11-1(5), the court took into account:

• whether the offer was delivered in a timely manner relative to the application;
• the complexity of the offer;
• whether the offer dealt with issues not before the court on the application;
• the presence of terms unacceptable on their face;
• the number of issues on which the result was as good as or better than the offer; and,
• the applicant's financial circumstances.

Finally, the court considered the respondent's claim for costs assessed at more than usual difficulty.

[45] ... Bouck J. described the test of what is necessary to succeed in a claim for costs at the higher scale in Bradshaw Construction Ltd v. Bank of Nova Scotia:

To get an assessment out of the category of 'ordinary' difficulty under Scale 3, into the categories of 'more than ordinary difficulty'; Scale 4, or to 'matters of unusual difficulty'; Scale 5, it is necessary to show a higher degree of difficulty. Scale 5 uses the word 'unusual'. Its dictionary meaning is 'not often occurring or observed, different from what is usual; out of the common, remarkable, exceptional.' Therefore, the question is whether the collection and proof of the difficult facts were uncommon, remarkable or exceptional events? I do not believe they were.

"[46] The evidence did not rise to the level of more than ordinary difficulty. The affidavits recounted each parties' understanding of the facts and there was little conflict or difficulty in explaining the facts ... this application did not engage uncommon, remarkable or exceptional events or circumstances ... nothing in the applications engaged a difficult issue of law or fact. [The respondent's] efforts were not uncommon, remarkable or exceptional."

At the end of the day, the respondent failed to receive double costs or have his costs assessed at more than the usual level of difficulty. Because success was divided, the ordinary costs awarded to the respondent were offset by the ordinary costs awarded to the applicant. And as for the costs of the application on costs?

"[58] The parties will each bear their own costs of this application."

This case is perhaps unremarkable in its result, however it deserves to be noted for its extremely helpful digest of the case law on costs and its application of the cases determined under the old rules to the new rules.

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Slight Increase in Funding for Legal Aid

The Attorney General has announced a slight increasing in funding for the Legal Services Society, the organization that provides legal aid in British Columbia. According to the press release, additional funds of $2.1 million, which I calculate to amount to 3% of the society's present budget, are meant to

"assist families with emergency family matters related to custody or access, as well as to provide for representation for parents with children in the custody of the Ministry of Children and Family Development."

Although I'm happy for any increasing in funding at all, the categories of service the funds are earmarked for are existing categories. In fact, they're all that's left of legal aid services for family law matters since the eviscerating budget cuts of 2001.

The Times Colonist has published an article on the Attorney General's announcement that talks about the underfunding of legal aid in a little more depth.

Update: 4 January 2012

The Trial Lawyers Association of BC is protesting the continued underfunding of legal by its members withdrawing from duty counsel services throughout the province for the week. Says the TLABC on its website:

"The Battle for Legal Aid in BC has entered a crucial new phase, as the first wave of Duty Counsel service withdrawals is now in effect. The service withdrawals will be conducted as a four-part escalating series, with counsel standing down for the first week of January, two weeks in February, three weeks in March and all of April. Further forms of so-called job action are already being evaluated."

Read the CBC's report on the TLABC's action, or visit the CBA British Columbia's We Need Legal Aid website.

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New Child Support Tables in Effect

Brand new child support tables came into effect today, just in time for the new year. As discussed in my post "New Child Support Tables for 2012," the new numbers aren't terribly different than the old and lots of payors will see their child support obligations actually decrease.

The new tables are available in the version of the Child Support Guidelines presently published by the Department of Justice. You can also use the Department's nifty child support calculator based on the new tables.

You can read the notice from the Department of Justice on the new tables; the regulation enacting the new tables is available from Canada Gazette website, and the tables for British Columbia can be found here.

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Supreme Court of Canada Releases Decisions on Spousal Support

The Supreme Court of Canada has just released a brace of decisions on the variation of spousal support orders in L.M.P. v. L.S. and R.P. v. R.C. L.M.P. is the primary decision, and R.P. applies the reasoning in L.M.P. in different circumstances.

In L.M.P., the wife was diagnosed with multiple sclerosis following the parties' marriage, stopped work and began to receive disability benefits. The parties separated after fourteen years of marriage and a year later, in 2003, signed a separation agreement under which the husband would pay spousal support to the wife, in an amount increasing with the cost of living and without an end date. The agreement was later incorporated into a court order. In 2007, the wife applied for an increase in child support thereby giving the husband the opportunity to apply to terminate his spousal support obligation.

At trial, the husband argued that the wife was capable of working and should work, and the issue was argued vigorously with expert evidence being led by both sides. The husband did not argue that the wife's ability to work was a change in circumstances from the separation agreement, however, nor did the trial judge make such a finding. At the end, the judge concluded that the wife was able to work and made an order reducing the wife's spousal support payments accordingly.

On appeal, the wife argued that the trial judge made a mistake in changing the amount of her support payments without find that there had been a change in circumstances. After s. 17(4.1) of the Divorce Act says this:

"Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration."

The Quebec Court of Appeal held that the although the trial judge didn't expressly mention the change in circumstances, her approach satisfied the requirements of s. 17. However, the court also said that held that the passage of time, accompanied by a failure to become self-sufficient can give rise to the required change of circumstances, and that the absence of a time limitation in the support agreement incorporated into the order could not relieve the payee of her obligation to become self-sufficient; I suspect that this is what lead the Supreme Court of Canada to want to hear the wife's further appeal.

The Supreme Court of Canada disagreed with both the trial judge and the Court of Appeal. Here are the highlights of the majority decision.

"[23] ... there are differences between what a court is directed to consider in making an initial support order and on a variation of that order.  Notably, unlike on an initial application for spousal support under s. 15.2(4)(c), which specifically directs that a court consider 'any order, agreement or arrangement relating to support of either spouse', s. 17(4.1) makes no reference to agreements and simply requires that a court be satisfied 'that a change in the condition, means, needs or other circumstances of either former spouse has occurred' since the making of the prior order or the last variation of that order.  Because of these differences in language, it is important to keep the s. 15.2 and s. 17 analyses distinct.

"[24] On an application under section 15.2, the court is expressly concerned with the extent to which the terms of an existing agreement should be incorporated into a first court order for support.  On an application under s. 17, on the other hand, the court must determine whether to vary or rescind that support order because of a change in the parties’ circumstances. ...

"[29] In determining whether the conditions for variation exist, the threshold that must be met before a court may vary a prior spousal support order is articulated in s. 17(4.1).  A court must consider whether there has been a change in the conditions, means, needs or other circumstances of either former spouse since the making of the spousal support order. ...

"[34] The decisions in Willick and G. (L.) also make it clear that what amounts to a material change will depend on the actual circumstances of the parties at the time of the order.

"[35] In general, a material change must have some degree of continuity, and not merely be a temporary set of circumstances ...  Certain other factors can assist a court in determining whether a particular change is material.  The subsequent conduct of the parties, for example, may provide indications as to whether they considered a particular change to be material ...

"[46] The examination of the change in circumstances is exactly the same for an order that does not incorporate a prior spousal support agreement as for one that does.  A general statement that the agreement must be accorded 'significant weight', even though its implications in a concrete case are unclear, in effect raises the threshold necessary to establish a 'material change' under s. 17 when there is an agreement, and emphasizes legal certainty and finality at the expense of the statutory requirements of s. 17. ..."

You can probably guess where this is going. Whether a spousal support obligation is set out in an order or an agreement, to vary the obligation you first must establish that a material change in circumstances has occurred since the order or agreement was made. The nature of the required change varies from couple to couple, but in general the change must be significant and long-lasting.

Applying this test to the facts, the court held that the order ought not have been changed:

"[56] ... instead of determining whether there had been a material change of circumstances, the trial judge conducted a de novo assessment of the wife’s ability to work as if this were an original application for support under s. 15.2. In relying on this assessment to infer a material change of circumstances, the Court of Appeal fell into the same error.

"[57] The husband argued that the wife had a duty to seek employment based on the factors in s. 15.2(6) of the Divorce Act which were included in the agreement incorporated in the order.  In particular, he relied on the objective that 'insofar as practical' there should be 'economic self-sufficiency of Plaintiff and Defendant'.  Her failure to seek employment, he therefore argued, was a material change of circumstances.

"[58] We do not accept the husband’s submissions.  There is nothing in the order suggesting that the wife was expected to seek employment.  The order recognized that the wife was in receipt of disability payments.  It provided for spousal support and included no term or provision for review.  Its terms indicate that spousal support was intended to be for an indeterminate period.  The order expressly acknowledged that the objectives of s. 15.2(6) of the Divorce Act were taken into consideration by the parties.

"[59] Neither does the Divorce Act impose a duty upon ex-spouses to become self-sufficient.  As this Court affirmed in Leskun, the '[f]ailure to achieve self-sufficiency is not breach of ‘a duty’ and is simply one factor amongst others to be taken into account' (para. 27).  Section 15.2(6)(d) of the Divorce Act simply states that the order should 'in so far as practicable, promote the economic self-sufficiency' of the parties."

Supreme Court judgments are rarely as clearly written. In essence, in the majority decision the court has digested the settled law on spousal support but clarified some lingering uncertainty as to whether the test on a variation under s. 17 is the same as the test for an original support order under s. 15.2, and emphasized the critical need to establish a material change when applying to vary an order. If a payor wishes to get out of a support obligation, he should ensure that the original agreement:

1. has a termination date or at least spells out the circumstances upon which the recipient's entitlement will end;
2. has a review date or at least sets the circumstances under which a review will be held; or,
3. requires the recipient to become financially independent.

Using its reasoning in L.M.P., the court concluded that the husband in R.P., another case from the Quebec Court of Appeal, had also failed to establish a change in circumstances justifying the termination of his spousal support obligation. In R.P., however, the change relied on was a change in the husband's financial circumstances.

Summarizing L.M.P., the majority said that:

"[25] Under s. 17(4.1) of the Divorce Act, the moving party must establish that there has been a material change of circumstances since the making of the prior order or variation.  The applicable framework for this case is the one elaborated in the companion decision, L.M.P. To be material, a change must be one which, if known at the time, would likely have resulted in different terms to the existing order.  On an application to vary, the court should consider the terms of the order and the circumstances of the parties at the time the order was made to determine whether a particular change is material.  The existing order is deemed to have been correct and only if the requirements of s. 17 of the Divorce Act are met will there be a variation."

Fair enough. Turning to the nature of the claimed change in circumstances:

"[30] Under s. 17(4.1) of the Divorce Act the husband, as the applicant, had the burden of establishing that there has been a material change in his circumstances since those existing at the time of the 1991 Order.  His argument that as of 2008 he was no longer able to pay support is an insufficient basis to support a finding of material change.

"[31] The record before this Court contains no evidence as to the husband’s financial circumstances at the time of the 1991 Order.  During those proceedings, he challenged the wife’s entitlement to support, not his capacity to pay the amounts she claimed.  Neither the reasons of the courts in those earlier proceedings, nor the record before this Court, contain information as to the husband’s then financial circumstances. ...

"[33] There are two crucial evidentiary gaps, however, in the husband’s financial circumstances. ... These gaps mean that we cannot assess how the husband’s economic circumstances compared to those in 1991. There is therefore no way of measuring whether there is any material change that would entitle him to a variation of spousal support."

Ouch. Without the evidence of the husband's financial circumstances then and now, there would be no way to measure whether the requisite change in circumstances had occurred or not, or if it had occurred, then to gauge the profundity of the change.

"[45] Here the husband could have led evidence capable of establishing his financial circumstances in 1991, but despite the clear requirements of the Divorce Act ... chose not to do so at trial, and failed to provide any explanation for his failure to do so. Absent some adequate explanation as to why no evidence has been adduced with respect to a party’s circumstances at the time of the order, no inference that a material change of circumstances has occurred is available."

At the end of the day, I'm not sure that either of these cases contribute much of any importance to the law on the variation of spousal support orders, at least not to the law as we know it in British Columbia. It may be that the courts of Quebec had lost their way somewhat — the Divorce Act is interpreted with a significant amount of regional variation across Canada — and needed to be put back on track.

Whether I'm right about the significance of these decisions or not, the judgment in L.M.P. is extremely helpful for its tidy synthesis and knitting-together of the important Supreme Court decisions on spousal support since 1994. Anyone who wishes to learn about the law on spousal support in Canada should start with Miglin v. Miglin and conclude with L.M.P.

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Cohabitation Agreements and the new Family Law Act:Why you probably want a cohabitation agreement

In a previous post, “Why you DON’T Want a Cohabitation Agreement,” I summarized the law on the division of property between unmarried couples and how s. 120.1 of the Family Relations Act usually made cohabitation agreements a very, very bad idea when the purpose of the agreement was to protect property brought into a relationship. 

That’s all changed as a result of the enactment of the Family Law Act on 24 November 2011. Let me explain.

Property, unmarried couples and the Family Relations Act

Under the Family Relations Act, married spouses are presumed to have a one-half interest in everything that qualifies as a “family asset.” The definition of family asset is so broad, however, that almost everything a married couple has is a family asset whether they bought it after the marriage or brought it into the marriage; most of the time, a married spouse is entitled to half of everything regardless of when and how an asset was acquired.

This isn’t the case for unmarried couples because unmarried couples are expressly excluded from the parts of the Family Relations Act that deal with the division of family assets.

Unmarried couples have no shared interest in any assets except those that they own together. When only one person owns an asset, like the family home, for example, it presumptively remains that person’s sole property, no matter how long the couple lives together.

Unmarried couples, trust claims and unjust enrichment

Of course, after a couple has lived together for five, ten or twenty years, it can seem somewhat unfair that only one of them has an entitlement to the family home, or the family car, or a business or whatever. In a case like this, the person who doesn’t own an asset tries to establish an entitlement by proving the existence of an express trust or a resulting trust, or, more commonly, by proving that the person who owns the asset was unjustly enriched by something the non-owner contributed during the relationship.

All of these claims are difficult to prove, and, even when successful, rarely result in a property interest any where close to the one-half interest the parties would have had if they had been married.

As a result, someone who didn’t want to share the assets being brought into a relationship would simply get some legal advice about how to avoid express and resulting trusts, and make sure that the contributions of the other spouse were always compensated in someway in order to duck an unjust enrichment claim.

Unmarried couples, cohabitation agreements and the Family Relations Act

Despite this rather favourable legal circumstance, people often wanted cohabitation agreements before entering into a long-term, live-in relationship, mostly to address the division of property in the event the relationship ended. Normally, this would be a sensible course of action; wouldn’t it be easier not to have to worry about unintentionally creating a trust relationship or being inadvertently enriched? 

Not so. The problem here lay in a nasty little section of the Family Relations Act, s. 120.1. Under this section, if an unmarried couple made an agreement that dealt with property, the parts of the act that apply to the division of assets between married spouses applied to the unmarried couple making the agreement, and the cohabitation agreement was considered to be a marriage agreement.

This was very bad, for two reasons. First, s. 65(1) of the Family Relations Act expressly allows the court to vary marriage agreements it finds to be unfair. Second, the definition of “fairness” was the presumption of equal entitlement set out in s. 56 of the act which would otherwise have only applied to married spouses.

In a nutshell, as a result of s. 120.1, the standard of property division for married spouses applied to unmarried couples with cohabitation agreements, including certain presumptions about the division of property that would be far worse in effect than what the principles of trust law and unjust enrichment would have yielded in the absence of the cohabitation agreement.

Unmarried couples and the Family Law Act

Under the Family Law Act, unmarried couples that have cohabited for more than two years will have the same property rights as married spouses.

Under the new act, assets brought into a relationship and certain assets acquired afterwards, like court awards and inheritances, will be excluded from division between spouses. The assets that will be divided, and the presumptive division is an equal division, are the assets acquired after the relationship began as well as any increase in the value of the excluded assets.

From the point of view of the person who owns an asset, this is better than the law for married spouses under the Family Relations Act and better than the law for unmarried couples with a cohabitation agreement. However, there can still be some very significant consequences in sharing in the increase in value of an excluded asset — think of what has happened to the value of real estate in the lower mainland over the past 10 years, or the values of stock in Apple, crude oil and your Gretzky rookie card over the same period.

Despite the coming changes in the law, some couples will still want a cohabitation agreement, specifically couples who are in long-term unmarried relationships right now and couples with assets who expect to be in long-term unmarried relationships.

Cohabitation agreements, the repeal of s. 120.1 and the coming-into-force of the Family Law Act

The Family Law Act became law on 24 November 2011. Although most of the act, including all the parts about property division, are not yet in force, other bits came into effect right away, including s. 258 which had the effect of repealing s. 120.1. Fantastic! Since the Attorney General has said that the rest of the Family Law Act isn’t going to come into force for another 12 to 18 months, this means that we’re in the middle of a legislative sweet spot for unmarried couples. 

Unmarried couples may now enter into cohabitation agreements without fear of the grim consequences of s. 120.1, and almost without regard to the property provisions of the Family Relations Act. 

On top of that, unmarried couples probably want to enter into cohabitation agreements if they wish to avoid some or all of the consequences of the property division regime of the new Family Law Act. In other words, if there’s anything about how property will be shared under the new act that browns you off, now is your opportunity to do something about it, and you’ve got 12 to 18 months within which to get it done. 

Get a cohabitation agreement and get it soon

For the next 12 to 18 months, couples across the province will be going through an unpleasant assessment of how their legal rights will fare under the new act. That’s okay, it’s a necessary consequence of change. However, if you are in a relationship of the sort that won’t require you to share your property, that’s going to change too, and if you want to do something about it and don’t want to end your relationship, the time is ripe to get a cohabitation agreement done up.

There will never be a better time to enter into a cohabitation agreement than right now, under the current law and between the repeal of s. 120.1 and the coming-into-force of the property provisions of the new Family Law Act.

Cohabitation agreements are somewhat complicated at the best of times; they’re somewhat more complicated now that we’re in the transition between one legal regime and another. You really must see a lawyer if you want to get a cohabitation agreement drawn up. If you don’t have someone to see, contact the CBA's excellent Lawyer Referral Service at 604-687-3221 or 800-663-1919.

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Leave Required to Appeal Interim Divorce Act Orders

My friend Agnes Huang, until very recently of the eminent Vancouver firm Schuman Daltrop Basran & Robin, has brought my attention to Elgner v. Elgner, a June 2011 decision of the Ontario Court of Appeal. Agnes and I have had some interesting discussions about the implications of the case in British Columbia which I think should be shared more widely, especially since the Supreme Court of Canada made the decision not to hear Mr. Elgner's appeal in November 2011.

The fundamental question raised in Elgner, and left somewhat hanging as a result of the decision of the Supreme Court of Canada, is whether leave is required to appeal an interim order under the Divorce Act.

"Leave" means the court's permission; an "interim order," also called an interlocutory order, is a short-term, temporary order made by a judge or and master between the start of a law suit and its conclusion by trial or settlement. If leave is required to appeal an interim order, someone unhappy with an interim order would have to make a preliminary application to the appeal court for permission to appeal an order before the appeal could be brought.

At present, and for the last several decades, we in British Columbia have proceeded on the basis that interim orders under the federal Divorce Act can be appealed as of right, without the necessity of leave, on the strength of s. 21(1) of the act:

"...an appeal lies to the appellate court from any judgment or order, whether final or interim, rendered or made by a court under this Act"

This was great, because s. 7(2) of the provincial Court of Appeal Act says that you cannot appeal an interim order without getting leave. Because of something called the doctrine of paramountcy, which has to do with how the constitution is interpreted, federal laws beat provincial laws on similar subjects, and if leave isn't required under the Divorce Act it can't be required by the Court of Appeal Act.

This was more or less the situation in Ontario when Mr. Elgner appealed an interim order without first seeking leave:

"[9] Mr. Elgner contends that s. 21(1) of the Divorce Act gives the right of appeal for all orders, interim and final, made under the Divorce Act. As the Divorce Act is federal legislation, he says that right is paramount over s. 19(1)(b) of the Courts of Justice Act [the equivalent of s. 7(2) of our Court of Appeal Act], which requires leave to appeal from interlocutory orders of judges of the Superior Court of Justice."

Unfortunately for Mr. Elgner, the Ontario Court of Appeal read s. 21(1) in light of other provisions of the Divorce Act, s. 21(6):

"Except as otherwise provided by this Act or the rules or regulations, an appeal under this section shall be asserted, heard and decided according to the ordinary procedure governing appeals to the appellate court from the court rendering the judgment or making the order being appealed."

and s. 25(2):

"Subject to subsection (3), [the provincial government] may make rules applicable to any proceedings under this Act in a court, or appellate court, in a province, including, without limiting the generality of the foregoing, rules

(a) regulating the practice and procedure in the court, including the addition of persons as parties to the proceedings ...

(g) prescribing and regulating any other matter considered expedient to attain the ends of justice and carry into effect the purposes and provisions of this Act."

In other words, although a plain reading of s. 21(1) suggests that leave isn't required, the Divorce Act expressly authorizes the provinces to make rules about appeals and says that Divorce Act appeals ought to proceed "according to the ordinary procedure governing appeals to the appellate court," and in British Columbia and Ontario leave is required to appeal interim order under the "ordinary procedure" spelled out in Ontario's Courts of Justice Act and BC's Court of Appeal Act.

Back to Elgner for a moment:

"[41] ... by spelling out in s. 21(6) that an appeal under s. 21(1) is to be 'asserted, heard and decided according to the ordinary procedure governing appeals', Parliament dictated that the provincial rules are to be followed when exercising the appeal right given by s. 21(1). As has been noted, s. 19(1) of the CJA was operative when s. 21(6) of the Divorce Act was enacted. It was the 'ordinary procedure' in Ontario for asserting an appeal from an interlocutory order. It can be assumed that Parliament, when enacting s. 21(6), was aware of the ordinary procedure in place in Ontario. It follows that Parliament could have inserted a provision that excluded the leave requirement. It did not. Instead, it chose to cede to the provinces the right to govern the procedure on appeal. ...

"[55] In conclusion, when ss. 21(1) and (6) of the Divorce Act are given their ordinary meaning and read in their entire context, harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament, it is clear that the right of appeal given by s. 21(1) is to be exercised in accordance with the ordinary procedures governing appeals of that nature. In Ontario, the ordinary procedure requires leave, if the matter to be appealed is an interlocutory order of a judge of the Superior Court of Justice."

Appeal decisions are rarely written with greater clarity and simplicity. Unfortunately, the reasoning in Elgner is directly applicable to s. 7(2) of our Court of Appeal Act, and the inescapable conclusion, should anyone choose to argue the point, is that leave is required to appeal interim Divorce Act orders in British Columbia. (In fact, I'm already aware of one case where the lawyer has decided to seek leave.)

On the one hand, this change in appeal practice will eliminate an uncomfortable distinction between interim orders made under the Divorce Act and those made under the Family Relations Act, for which leave is required. On the other hand, it raises a significant new barrier to Divorce Act appeals.

The general test for leave to appeal interim orders is set out in a 1992 decision of our Court of Appeal, Watson v. Imperial Financial Services Ltd. (I've put the important bits in bold):

"(a) The question to be decided on the appeal must be sufficiently important to the particular litigation or of such general importance that the court should hear it.

"(b) The court will consider the merits of the appeal and its prospect of succeeding, however, the mere fact that there may be some merit in the appeal, in that the Chambers judge may have erred in law or made a wrong assessment of the facts, is not necessarily determinative on an application for leave. The judge hearing the application may refuse it notwithstanding that he thinks there may be some error on the part of the Chambers judge who originally heard the application.

"(c) That the appeal is not vexatious, frivolous or simply a delaying tactic. In this respect the court will consider whether the appeal will incur needless expense and delays.

"(d) The court will consider whether the order being appealed decided any element in a final way and the effect of such interlocutory order on the parties to the action."

Watson was a civil case involving a bunch of corporations, but the key principles have been adopted in family law cases. This is how the test was put in Thorne v. Thorne, a Court of Appeal decision from 1997:

1. Whether the point on appeal is of significance to the general practice.

2. Whether the point raised is of significance to the action itself.

3. Whether the appeal is prima facie meritorious.

4. Whether the appeal would unduly hinder the progress of the action.

However, the court will impose a somewhat higher standard in family law cases than in general civil cases. For example, in Hyggen v. Hyggen, a 1986 Court of Appeal case, the court said:

"...in family matters it is only in the most extreme circumstances that leave to appeal will be granted in respect of interim matters."

and, to a similar effect in a 1998 case called Newson v. Newson:

"It is well settled that leave to appeal from interim orders in family matters should be granted only in extraordinary or, as it has sometimes been put, 'extreme' circumstances."

"Extreme" might be a bit extreme, but the point is that leave will be granted sparingly in family law cases as, I think, it should be. Interim orders are meant to give a measure of rough and ready justice by addressing issues that cannot wait until trial in a speedy, cost-effective manner; requiring a party to obtain leave will help to weed out meretricious appeals and avoid expensive delays.

My thanks, again, to Agnes for bringing Elgner to my attention. I have a sneaking suspicion that case is about to change how we practice family law in British Columbia.

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New Blog on Shari'a Law in America

I've just learned of an interesting new blog, Shari'a Index, which digests significant American court cases addressing Islamic law, features a collection of links to case law, and offers case commentaries on diverse subjects including Muslim finance and the enforceability of Muslim marriage contracts. Although the blog is just getting started, it's already worth a visit.

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Supreme Court Releases Decision on Agents Appearing in Court

The British Columbia Supreme Court has just released a decision, in the case of Ambrosi v. Duckworth, on the right of parties to have people other than lawyers appear in court on their behalf.

The problem arises from s. 15(1) of the Legal Profession Act which says that "no person, other than a practising lawyer, is permitted to engage in the practice of law;" s. 85 of the act makes it an offence, punishable under the Offence Act, to contravene s. 15. The Legal Profession Act offers a few exceptions to this general prohibition:

• a party to an action may represent him- or herself;
• any person who is entitled to vote in British Columbia may represent someone if the narrow criteria of the Court Agent Act apply (if there are fewer than two practising lawyers in town or if there are fewer than two lawyers with offices within 8km of the courthouse);
• a non-lawyer employed by the Legal Services Society may represent someone within the limits of s. 12 of the Legal Services Society Act; and,
• an articled student may represent someone to the extent permitted by the Law Society.

However, regardless of the Legal Profession Act, the court has the inherent right to control its own process and may, on a case by case basis, allow a non-lawyer to represent someone. That was the issue in Ambrosi when the applicant asked the court for leave for someone to speak on his behalf and present his application.

The judge began his analysis by looking at a 2002 case from the Court of Appeal, R. v. Dick (I've put the important bits in bold):

"[6] The Crown raised a preliminary objection ... and brought to our attention several reasons why [the proposed agent] should not be accorded the privilege of audience. We use the word 'privilege' advisedly, there being clear authority for the proposition that, subject to statutory provisions otherwise, it lies within a court's discretion to permit or not to permit a person who is not a lawyer, to represent a litigant in court. In particular we note the judgment of Lord Denning in Engineers' and Managers' Association v. Advisory, Conciliation and Arbitration Service et al. ... where it was said that the discretionary power to grant a privilege of audience to other persons should be exercised 'rarely and with caution' ...

"[7] There are strong public policy reasons for this general rule. Each court has the responsibility to ensure that persons appearing before it are properly represented and (in the case of criminal law) defended, and to maintain the rule of law and the integrity of the court generally. As was said by the Ontario Court of Appeal in R. v. Romanowicz ... :

'The power to refuse audience to an agent must be invoked whenever it is necessary to do so to protect the proper administration of justice. The proper administration of justice requires that the accused's constitutional rights, particularly the right to a fair trial, be protected. It also requires the fair treatment of other participants in the process (eg. witnesses) and that the proceedings be conducted in a manner that will command the respect of the community.

'It is impossible to catalogue all of the circumstances in which representation by a particular agent would imperil the administration of justice and properly call for an order disqualifying that agent. Obviously, representation by agents lacking the ability to competently represent an accused endangers all aspects of the proper administration of justice, particularly the accused's right to a fair trial. Other examples where the administration of justice would suffer irreparable harm if an agent were allowed to appear are found in the material filed on this appeal. ... [There may be] situations in which the agent's criminal record or other discreditable acts are such as to permit the conclusion that the agent cannot be relied on to conduct a trial ethically and honourably.'"

To summarize this somewhat:

1. The court has the discretion to allow an agent to represent a litigant.
2. This discretion should be exercised with restraint, and should be exercised in bearing in mind the need to ensure that the litigant is well-represented, the rule of law is maintained and the integrity of the court is preserved.
3. The court should refuse to allow an agent to act when necessary to protect the proper administration of justice. This might be the case where an agent is incompetent or is unlikely to conduct him- or herself in an ethical manner.

Although the applicant presented a number of good reasons why the agent should be allowed to represent him, including the prejudice to his right to a fair hearing, his constitutional right to freedom of expression, his entitlement to appear by an agent of his own choice, and his right to have access to justice, the respondent presented a lengthy body of court decisions reflecting poorly on the proposed agent's past conduct in court. Ultimately, the judge held that:

"[55] I have not been convinced that I should exercise my discretion to allow [the proposed agent] to appear as agent for Mr. Ambrosi. I am satisfied that it would not be in the interest of justice to allow [the proposed agent] to appear as agent. ... I am satisfied that Mr. Ambrosi can afford a lawyer if he wishes, or may even be able to find someone more appropriate to appear as his agent. ..."

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New Child Support Tables for 2012

The federal Department of Justice has announced new child support tables for the Child Support Guidelines which will take effect on 31 December 2011. The tables were last updated in 2006.

According to the Department's notice, the same formulas were used to determine the new amounts as were used in 2006, and any changes in the new tables are the result of changes in federal and provincial tax rules.

The changes are relatively minor. Some payors with incomes below $50,000 per year may see their child support obligations decrease:

$25,000 income
one child = $213 per month ($230 under 2006 tables)
three children = $533 per month ($525 under 2006 tables)
six children = $680 per month ($751 under 2006 tables)

$50,000 income
one child = $458 per month ($465 under 2006 tables)
three children = $998 per month ($994 under 2006 tables)
six children = $1496 per month ($1482 under 2006 tables)

Most payors, however, will see their child support obligations increase:

$75,000 income
one child = $701 per month ($698 under 2006 tables)
three children = $1483 per month ($1459 under 2006 tables)
six children = $2205 per month ($2162 under 2006 tables)

$100,000 income
one child = $921 per month ($906 under 2006 tables)
three children = $1923 per month ($1875 under 2006 tables)
six children = $2848 per month ($2770 under 2006 tables)

The Department has also published a great child support calculator for the new tables. Note that the old tables will remain in force until the new tables take effect at the end of December.

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Family Law Act Receives Royal Assent

Bill 16, the Family Law Act, passed third reading in the provincial legislature on 23 November 2011 seemingly without amendment and received Royal Assent yesterday, according to the legislature's excellent "Progress of Bills" webpage.

Although the act is now law, most of it — in fact, almost all of it — is not in force, and will not come into force except by order in council in, according to the Attorney General, 12 to 18 months.

Section 482 of the act sets out a table showing which parts of the act are in force now, and which will come into effect later on. Effective immediately:

• Family Relations Act, s. 90 (parental support) is repealed
• Family Relations Act, s. 120.1 (property agreements of unmarried parties) is repealed
• Land (Spouse Protection) Act, ss. 1, 3, 5 and 6 are amended to make the act apply to persons who have cohabited in marriage-like relationship for at least two years
• Property Transfer Tax Act, s. 1 is amended to make the act apply to persons who have cohabited in marriage-like relationship for at least two years
• Evidence Act, ss. 6, 7 and 8 are amended to make "spouses" competent witnesses, not just husbands and wives

In addition, references to "husband and wife" or "a man and a woman" are changed to "spouse" or "two people" in the Family Relations Act, the Industrial Roads Act, the Insurance (Vehicle) Act, the Law and Equity Act, the Marriage Act, the Members' Conflict of Interest Act, the Property Law Act, the School Act, the Wills Act, and the Workers Compensation Act,
References to "father" and "mother" are changed to "parent" in the Mental Health Act, the Property Transfer Tax Act, the School Act, and the Workers Compensation Act.
Other minor amendments less susceptible to generalization are made to the Adoption Act and the Name Act.
Update
The Attorney General's office has posted a new webpage with background to the new act, the past discussion papers including the white paper, and news releases.

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