It is very important that a party in a proceeding who is owed costs by the opposing party is able to recoup and enforce the full amount owed. Litigation can be a long and expensive process, and a cost award made by the court is a way of rewarding the successful party in the litigation or during the proceeding. The party to whom costs are owed will, most likely, want assurance that they will be paid by the other party at the end of the litigation or before further steps are taken in a proceeding or appeal. In family law cases, where many parties/clients try to avoid incurring significant legal fees, knowing how they can recoup their costs—if an order is made that all or a portion of their costs be paid—is vital; this is especially the case if one party is making reasonable efforts to settle the case, early on, but the other party insists on litigating, without taking reasonable steps to settle. Accordingly, knowing what rules and strategies can be considered to seek security for costs during a proceeding or pending an appeal, and what options are available to enforce payment of a cost order, is essential.

Security for Costs Pending an appeal and in a Proceeding

Pending an appeal, a party may seek security for costs. In the recent case of Gill v. MacIver, 2023 ONCA 776, a single judge of the appellate court, on a motion, set out the legal test for obtaining security for costs pending an appeal. Essentially, the onus is on the moving party to show that: 1) there is good reason to believe that the appeal is both frivolous and vexatious and that the appellant has insufficient assets to satisfy the costs of the appeal; or, 2) that there is good reason to order security for costs.

The motions judge specifically noted that while the meaning of “frivolous and vexatious” under Rule 60.06 (1) (a) of the Rules of Civil Procedure, R.R.O Reg. 194 is not defined under the Rules, it has been explored under the caselaw. Specifically, after considering a number of cases, Her Honour noted that a “frivolous” appeal includes an appeal “readily recognizable as devoid of merit,” as one having little prospect of success. A “vexatious” appeal includes one taken to “annoy or embarrass the opposite party” or conducted “in a less than diligent” or vexatious manner, such as a failure to comply with court orders or the rules.”[1]

Similarly, the motions judge noted that the alternate criteria under Rule 61.06 c), namely whether “there is good reason to order security for costs,” is not specified under the Rules, but it too has been explored in the caselaw.  Specifically, as set out in Heidari v. Naghshbandi, 2020 ONCA 757, 153 O.R. (3d) 756, at para. 23, “[a]lthough the list of reasons justifying security under this residual category is not closed, the ‘other good reason’ must be: (1) consistent with the purpose for ordering security – namely, that the respondent is entitled to a measure of protection for costs; and (2) fairly compelling, because the residual category is only engaged where the respondent cannot meet the requirements of rules 61.06(1)(a) or (b).” Ultimately, the motions judge rejected the respondent/ moving party’s request for security as she did not find the legal test for security for costs was met. [2]

By contrast, in another recent case of Bank of Nevis International Ltd. v. Kucher, 2023 ONCA 793 (CanLII), on a motion, a single judge of the appellate court made an order for security for costs, against the appellant, in the amount of $25,000 for the appeal and $50,000 for the underlying motion, payable within 30 days. The motions judge was convinced that the appeal was frivolous and there were other good reasons to order security.

Security for Costs in Family Law Proceedings

Under Rule 24(13) of the Family Law Rules, O. Reg. 114/99, a party can seek an order that requires the payor spouse to pay a sum of money into court that will cover their legal costs, should they be successful in the action of application. The test under Rule 24 (13) requires that one or more of the following factors be present:

1. A party habitually resides outside of Ontario;
2. A party has an order against the other party for costs that remain unpaid, in the same case or another case;
3. A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs;
4. There is good reason to believe that the case is a waste of time or a nuisance and that the party does not have enough assets in Ontario to pay costs;
5. A statute entitles the party to security for costs.

In the case of Sparr v. Downing, 2024 ONSC 872 (CanLII), among other concerns for the court, there were a number of unpaid costs orders as of the date of the motion and the respondent had ignored orders from the Superior Court of Justice and the Court of Appeal, arising from a family law proceeding. As a result, the motions judge found that he had jurisdiction to make an order for security for costs based on one or more of the following factors cited in Rule 24 (13).

In the matrimonial case of Hevey v. Hevey, 2023 ONSC 4864 (CanLII), the Divisional Court granted the responding party to an appeal an order for security for costs. In doing so, the court considered the Family Law Rules and the Rules of Civil Procedure in support of the responding party’s – the wife’s—request for security for costs. In particular, the court considered Rule 38 (26) of the Family Law Rules, dealing with security for costs on appeal. Rule 38(1) deals with appeals to the Divisional Court and the Court of Appeal, and provides that Rules 61, 62 and 63 of the Rules of Civil Procedure apply; Rule 38 (26) refers to the specific factors in Rule 24 (13) of the Family Law Rules in making an order for security for costs on appeal.  

Enforcement of Cost Orders

If you have not obtained an order for security for costs, and/or a cost order is unpaid, remedies for enforcement of monetary payments are available. These remedies include garnishment; registering a charge on the payor’s property for the amount owed [3]; or obtaining an order that the amount(s) owed in costs be paid by way of a transfer of an amount under a pension plan or an RRSP (grossed up for the recipient’s average tax rate) or enforcement proceedings from the payor’s other assets. 

In Abu-Saud v. Abu-Saud, 2020 ONCA 824, the appellate court ordered that its costs order be secured against any of the former husband-payor’s assets given his flagrant lack of regard of prior support orders by the trial judge.  At the time of the order, there were no funds remaining from the earlier payment the husband was ordered to make into court from the wife’s prior motion for security for costs. In the case of Van Delst v. Hronowsky, after the former husband had appealed (twice) and failed to pay on outstanding cost orders and the equalization payment owed in cash (despite court orders), the trial judge ultimately made an order that the unpaid costs orders, together with the residual balance due to the wife for an equalization payment, could be paid from the former husband’s pension, by way of an application under the Pension Benefits Division Act (PBDA) (grossing up the amounts owed to the former wife by her average tax rate.)[4]

Specifically using a combination of Rules 1 (8), 2 and 26 of the Family Law Rules, the court has broad discretion in terms of remedies for enforcement if there is a default in cost orders. That is:

1. Rule 1(8) of the Family Law Rules gives the court discretion to make “…any Order that it considers necessary as a just determination of the matter…”  A party’s non-compliance with court orders will trigger Rule 1(8);
2. Rule 2 sets out that the primary objective of the Rules is to enable the court to deal with cases justly.  Some of the criteria for dealing with cases justly are set out in Rule 2 (3); and
3. Rule 26 (2) states that an order that has not been obeyed may, in addition to any other method or enforcement provided by law, be enforced as provided under subrules (3) and (4).  Subsections (3) and (4) set out various specific options for enforcement, including a financial examination (Rule 27 (11); seizure and sale (Rule 28); garnishment (Rule 29); and a default hearing if the order is a support order (Rule 30).

Keeping this summary of cases, and the applicable Rules, in mind should be helpful to anyone trying to enforce and/or secure a cost award.

About the author

Katherine Shadbolt has practiced exclusively in the area of family law for over 35 years. From 1988 to June 30, 2023, she practiced with a mid-sized firm in Ottawa, providing a full range of services in family law from initial consultations to advice, negotiations, and appearances at all levels of court proceedings. A trained mediator and arbitrator, she has completed training in collaborative family law, as well as intensive courses in dispute resolution, focusing on advanced mediation and negotiation. She has contributed to family law and dispute resolution seminars at the University of Ottawa Law School and has acted as a coach in mediation/negotiation courses offered by the Stitt Feld Handy Group. Katherine was included in the 2024 Edition of The Best Lawyers in Canada for Family Law, marking over a decade that Katherine has received this recognition as one of Canada’s Best Lawyers. Currently, she is also an advisor with the Law Society of Ontario’s Coach and Advisor Network and a mentor with the Advocates’ Society. She continues to contribute articles on family law subjects of topical interest to the OBA, and is a member-at-large on its ADR Executive Committee.