More often than not, one party always has deeper pockets in family law litigation. Frankly, that is usually the case in all litigation. It is also a common occurrence that one party will hit an economic breaking point where they can no longer afford the litigation and give up. The recent case of Lakhoo v. Lakhoo shined light on an available option to litigants who are embroiled in expensive and protracted litigation.
In Lakhoo the parties had been litigating since 2010. The parties had been in and out of court a number of times and to the Alberta Court of Appeal as well. The wife sought a $400,000.00 advance to help fund the matrimonial litigation. In his thorough decision, Mr. Justice M.D. Gates of the Alberta Court of Queen’s Bench reviewed Rule 12.36 of the Alberta Rules of Court which deals with the advance payment of costs and he reviewed the leading cases in the area. Justice Gates particularly looked at the Supreme Court of Canada decision in Okanagan Indian Band and determined that a strict application of the legal test for an advance, as it is articulated in Okanagan is not appropriate in the family law context. Justice Gates held that even in Okanagan the Supreme Court noted that interim costs will be granted in family law cases where one party is at a severe financial disadvantage that may prevent his or her case from being put forward.
Justice Gates found that the husband in Lakhoo had approximately 100 times the financial resources that the wife had and that to date she had spent $376,000.00 in legal fees. Justice Gates went on to hold that the wife required an advance payment to level the playing field and protect her interests in the litigation until the matter was complete. The court made an order for the husband to pay a $400,000.00 costs advance to the wife. The interesting caveat to the award was the manner in which the $400,000.00 would be dispersed. The husband was to pay the $400,000.00 into his own lawyer’s trust account. Every three months the wife’s lawyer would submit a bill to the husband and the husband’s lawyer. The husband would then have 30 days to authorize his lawyer to release the funds or bring an application before Justice Gates to review the bill.
The $400,000.00 advance was above and beyond the $17,000.00 monthly interim spousal support award that was granted to the wife.