Law Times

Law Times • OcTOber 1, 2018 Page 7 www.lawtimesnews.com Issue of interim costs important BY MARTA SIEMIARCZUK A n interesting case has emerged dealing with the issue of in- terim costs and disbursements. This seems to me to be one of those issues that is rarely considered by family lawyers. However, having your client's interim costs funded by the opposing party is something that we should all keep in the backs of our minds. In Peerenboom v. Peerenboom, 2018 ONSC 5118, the Divisional Court con- sidered just this issue and I am writing about it this month as a reminder to us all that this relief is out there and should be utilized more often than it is. How often is it that one of the parties to a piece of matrimonial litigation has very little ability to fund any legal fees? In my practice, it happens quite often. That's why rule 24(12) of the Family Law Rules is there — to assist the spouse who, as a result of the breakdown of the relationship, is left in an untenable finan- cial situation, lacking the ability to retain counsel to help them through one of the most trying events in their life. In Peerenboom, Nicole Peerenboom brought a motion against her former husband Robert Peerenboom for an or- der requiring him to advance to her the sum of $150,000 to allow her to fund her legal fees and disbursements through to trial. He contested the motion, arguing that he did not have the ability to fund her fees, that she had not proved that she would be left without an ability to pay her lawyers and, therefore, they would re- fuse to act for her, and that her claims lacked merit. The motions judge granted her the requested relief and he appealed the order to the Di- visional Court. The Divisional Court de- ferred to the motion judge's decision and dismissed his appeal. In the court's reasons for decision, Justice Wallan Low discussed and affirmed the test to be met by a party seeking an order for interim costs and disbursements. That four-part test requires the mov- ing party to: A. prove their anticipated fees and dis- bursements; B. show that they are unable to fund the litigation without such an order; C. show that the other party has the means to fund the interim costs and disbursements; and D. show that their claim is meritorious. In this case, the parties had entered into a marriage contract excluding cer- tain property from the calculation of the spouses' respective net family property upon marriage breakdown. One of the seemingly primary issues was treatment of the matrimonial home. In my reading of the case, the primary issue on the mo- tion was whether Robert Peerenboom had the resources to fund Nicole Peerenboom's interim costs and disburse- ments, making his financial situation a crucial element for this motion and appeal. As is common in cases where there is a pre-existing cohabitation agreement or marriage contract, disclosure is often hotly contested on the basis of relevance: Why do you need disclosure of values if the asset is excluded? This is debatable. In some cases, it is clear that the asset is not included and, therefore, its value is completely irrel- evant. But in other cases, including cases where support is an issue, even if not rele- vant for property division, it could still be relevant for a support analysis as a source of income. The Divisional Court highlighted a number of financial statements sworn by Robert, all of which had very divergent information, so clearly, disclosure (or lack thereof ) was an issue for the Divi- sional Court. I point out (as did the motions' judge) that, in Family Court, a sworn financial statement is required. Part of the sworn financial statement includes disclosure of values of excluded assets — it is simply required. Ultimately, the motions judge ordered Robert to pay to Nicole her anticipated interim costs and disbursements, based on a finding that he had sufficient as- sets within his corporation — which had more than $500,000 in retained earnings on its most recent financial statement — to pay for her interim costs and disburse- ments. The Divisional Court affirmed this finding. My reading of the decision suggests that there may have been some issues with this finding and conclusion both on the part of the motions' judge and the Divisional Court, but the evidentiary re- cord was spotty. What I think tipped the balance in her favour was the historical failure on his part to make full and frank financial disclosure, which in turn can increase the costs of litigation and/or prevent one party to meaningfully move forward with their case. I highlight this case to bring to mind that this relief is out there. The test to meet to get it is not very difficult if you are struggling financially. And, as the Divisional Court affirmed, this relief is meant to level the playing field in family law litigation. LT uMarta Siemiarczuk is a lawyer practis- ing family law litigation and collabora- tive family law at Nelligan O'Brien Payne LLP in Ottawa. She can be reached at marta.siemiarczuk@nelligan.ca. Law is a marathon, not a sprint BY RYAN HANDLARSKI L aw students often hear the same piece of ad- vice: Article at a Bay Street firm and work there for a year or two or three. Get experience under your belt and es- tablish pedigree. Make good money and pay off your debt. Once you have done that, you can do whatever you want. I believe this advice is f lawed and whether or not students should pursue articles on Bay Street must be looked at in a more nuanced way. Coming into law school and in my first year of law school, I wanted to become a criminal lawyer. When I began to get ready for my second year of law school and read the OCI materials, I realized that criminal law articles were less well paid than the Bay Street articles by approximately $30,000. I started to feel overwhelming pressure to compete with the students that were doing the Bay Street pro- cess. My thinking at the time was so short term and I was so enmeshed in the hyper-competitive atmosphere of law school that I think I decided to do the Bay Street process simply because I could not bear the perceived indignity of making less money while articling than my fellow students. Though this sounds funny to me now, I am quite certain this thought resonates with many law stu- dents given our disposition toward super type-A be- haviour. But my path in law ultimately showed me the silli- ness and wrongness of my decision-making based on my competitive nature and short-term thinking. I articled in 2008-2009 at a Bay Street firm and was called to the bar in 2009. I opened my own criminal law firm in 2011 and was lucky enough to go out on my own at the same time as a group of talented criminal lawyers, several of whom were called to the bar the same year as me. Focusing on the lawyers that were called the same year I was, it was obvious that their articling experi- ence in criminal law had helped them and that they were ahead of me on the curve of criminal practice. I had to build my practice more slowly than they did and, by the end of our first year as criminal lawyers, it seemed to me very likely that they had more than made up the $30,000 pay advantage that I had had over them during our articling year. In other words, my experience in law caused me to see the f law in my decision-making as a law student. Having seen the bigger picture, it is my contention that there are two categories of people that should work on Bay Street — those that want to work on Bay Street because they are interested in practice areas in which the Bay Street firms specialize and those that do not know what they want to do and articling on Bay Street gives them an articling experience that is uni- versally respected. But the advice to work on Bay Street is f lawed for people that have decided that they are interested in criminal, family, immigration, plaintiff-side personal injury, landlord-tenant or any of the other areas that are part of the vast domain that we refer to as "law" that are not, for the most part, practised on Bay Street by the firms that recruit during on-campus inter- views. The students that choose to work on Bay Street de- spite it not being their area of interest are depriving themselves of a valuable experience that should form part of the foundation for a career in their chosen field. There is another important reason to question the advice to work on Bay Street for a few years while pay- ing off debt: Areas of law such as criminal, family and immigration are the most conducive areas of law in which to become a sole practitioner or start a small law firm. The best time to learn the skills to become a sole practitioner or small-firm lawyer and be in a position to take the risk that such a lawyer takes is when you are young, have not developed a particular lifestyle that relies on a Bay Street salary and do not have children. I often wonder how many Bay Street lawyers there are that received the above advice intending to spend a short time on Bay Street but found themselves with children or with a particular lifestyle that made any sort of career change or risk-taking seem daunting or impossible and are still there many years later. My guess is that there are many, although this is not the sort of thing that one discusses in polite com- pany. If the combination of a hyper-competitive envi- ronment and crushing student debt causes students to article and work on Bay Street despite the firm not practising in their area of interest, it is a problem that the legal community should try to solve. Part of the solution is to encourage law students to make long-term decisions in the hyper-competitive cauldron of law school. I understand that this is not easy, but it is vital to making decisions that will ultimately make law stu- dents healthy and successful lawyers. Fast forward about 12 years from when I did the OCI process and I can say that I love practising crimi- nal defence. I want to go back and tell my 24-year-old self the following: Do not concern yourself with what other law students are doing and what they are earning while articling because it has nothing to do with you. You are best suited to practise criminal law and, because that is where you are best suited, that is what you will be most successful at and where you will, over time, make the most money. Snap out of your habit of making decisions based on short-term thinking and your competitive nature. You have a long career ahead of you. Law is a mara- thon, not a sprint. LT uRyan Handlarski is a criminal lawyer practising in Toronto and surrounding areas since 2009. He can be reached at ryan@rhcriminaldefence.com or 416-837- 4500. u SPEAKER'S CORNER COMMENT Family Law Marta Siemiarczuk

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