Ruling finds double costs unwarranted under Supreme Court Family Rules
The Supreme Court of British Columbia refused to award special or double costs in a dispute over family assets that arose after a couple separated in January 2023.
The claimant in this case was the ex-wife. In May 2023, she successfully sought an order to restrain the assets of her ex-husband and his father – the respondents in this case – without notice under BC’s Family Law Act, 2011. She alleged that the order was necessary due to a risk of dissipation of family assets.
Last June, the court set aside the order based on concerns about material non-disclosure and a lack of an undertaking for damages. The court invited the parties to provide submissions on costs.
The ex-husband and his father wanted the court to award them special costs or double costs based on the ex-wife’s allegedly reprehensible conduct and the ex parte nature of the initial order.
They alleged that the ex-wife knowingly withheld crucial information in her affidavit, including that the father funded the purchase of the family home and beneficially owned almost all of the ex-couple’s assets.
They argued that the ex-wife proceeded with the ex parte application despite a request from the ex-husband’s counsel to delay proceedings until he had filed a response. They also claimed that the ex-wife failed to provide an undertaking as to damages, which should have been disclosed at the ex parte hearing.
The ex-wife opposed the request for special costs. She alleged that she did not intentionally mislead the court. Her affidavit disclosed relevant information, including that the funds for the family home came from the ex-husband’s parents, she said. She only found out later that the ex-husband’s shares in a company had been acquired before the marriage, she added.
On the lack of an undertaking for damages, she pointed out that her counsel included in her application materials case law indicating that an undertaking might be unnecessary. While this issue was not orally discussed during the ex parte hearing, this was due to an error by her counsel and was not an attempt to mislead the court, she said.
She then contested the request for double costs on the basis that r. 11-1 of the Supreme Court Family Rules, BC Reg 169/2009 did not apply to interim applications.
Special and double costs denied
In Son v Kim, 2024 BCSC 1454, the British Columbia Supreme Court issued a decision awarding costs to the ex-husband and his father but refusing their requests for special or double costs.
The court found no evidence of the ex-wife’s reprehensible conduct to justify special costs. While the court acknowledged issues with the affidavit and the lack of full disclosure, it disagreed that the ex-wife intentionally withheld information or acted scandalously or outrageously.
On the issue of the undertaking for damages, while there were inaccuracies in the affidavit and inconsistencies in the submissions made by the ex-wife's counsel, these did not rise to the level of reprehensible conduct, the court said.
The court addressed the argument that the ex-wife should not have proceeded without notice since the family home was already subject to a certificate of pending litigation. The court decided that proceeding ex parte was not reprehensible in this context even if notice would have been preferable.
Finally, the court rejected the request for double costs and agreed with the ex-wife that the Supreme Court Family Rules did not provide for double costs in interlocutory applications.
