1.Who is awarded costs?
A successful litigant.
2.Why are they made?
A court can make an Order for costs to deter frivolous actions or defenses; encourage conduct that reduces the duration and expense of litigation; to encourage settlement as much as possible; encourage the parties to narrow the issues so they can determine the strength of their case; and to discourage the continuance of doubtful cases (Giles v Westminster Savings and Credit Union, 2010 BCCA 282 at para 74).
In S.A.M v J.A.M, 2017 BCSC 2348 at para 7, the court summarized the governing principles for costs:
(a) The costs of a family law case must be awarded to the successful party, unless the court otherwise orders (Rule 16-1(7)) of the Supreme Court Family Rules [Rules];
(b) The “successful party” is the party who has achieved substantial success at the trial/hearing (Fotheringham v. Fotheringham, 2001 BCSC 1321; Marquez v. Zapiola, 2014 BCCA 35);
(c) The court’s discretion to “order otherwise” must be exercised judicially, bearing in mind a non-exhaustive list of factors that includes hardship, earning capacity, the purpose of the particular award, the conduct of the parties in relation to the litigation, and the importance of not upsetting the balance achieved by the court in relation to the substantive issues (Gold v. Gold (1993), 1993 CanLII 1248 (BC CA), 106 D.L.R. (4th) 452 (B.C.C.A.));
(d) The party who asks the court to “order otherwise” bears the onus to persuade the court why it should do so (S.D.W. v. C.W.W., 2006 BCSC 162);
(e) Financial hardship, without more, is not a sufficient basis for the court to exercise its discretion to depart from the usual rule that successful parties are entitled to their costs (S.D.W. v. C.W.W., supra.; K.D.P. v. A.R.K aka R.K., 2012 BCSC 1025; Brown v. Kucher, 2016 BCSC 194);
(f) Where an offer to settle a family case has been made, the court may award double costs for all or some of the steps taken after the date of delivery or service of the offer (Rule 11-1(5) of the Rules);
(g) As a general rule, an award of double costs should be made against a party who did not accept an offer to settle that should, in all the circumstances, have been accepted (Hartshorne v. Hartshorne, 2011 BCCA 29); and,
(h) In determining whether a double costs order should be made, the court may consider any factor the court considers appropriate, including whether the offer was one that ought reasonably to have been accepted upon receipt or at any later date, the relationship between the offer and the judgment, and the relative financial circumstances of the parties (Rule 11-1(6) of the Rules).
3. Does the Provincial Court of British Columbia have jurisdiction to award costs?
The Provincial Court of British Columbia does not have jurisdiction to award costs. However, where a party does not comply with the Provincial Court Family Rules or an Order, the court may order a party to pay all or part of the expenses that are reasonably or necessarily incurred as a result of non-compliance; or a fine not exceeding $5000 (Provincial Court Family Rule 147).
4. Can the court deviate from making an order for costs?
Yes. The court may consider:
- Financial hardship: the financial hardship need to be “extreme” or “severe” in which it would be significantly unfair when considering the context of the successful party to recover costs (O’Connor v Mills, 2024 BCSC 804, at paras 49 to 52).
- The Balance achieved by an Order: in Beese v Beese, 2008 BCCA 525 at para 4, Mr. Breeze was not granted costs even though he was successful at appeal. The Court stated that the parties were at limited means and it was important not to allow an award of costs to strip one party of the entire benefit of his or her award.
- Conduct of the case: this can include for a party knowingly giving false evidence at any stage of the proceedings (Browne v Lowe, 2002 BCCA 7, at paras. 144 to 151); failure to make full document disclosure (Karmina v Nasser, 2023 BCSC 1954); misleading the court (Forzley v Forzley, 1997 CanLII 1830 (BC SC).
- Offers to Settle: this is considered after the court has decided which party has achieved substantial success (A.N.R. v D.J.S., 2019 BCSC 240, at para 26). Pursuant to Supreme Court Family Rule 11-1(5)(a), the court may deprive a party of costs for some or all steps taken in the family law case after the date of delivery or service of the offer to settle.
5. What are double costs?
Double costs follow an award of costs made in the substantial success analysis (Paul v Pumple, 2013 BCSC 1844, at para 27). They are the rule rather than the exception (I.J.G.P.G. v K.M., 2017 BCSC 261, at para 87). It is awarded against a litigant for failure of accepting an offer to settle that should have been accepted (Hartshorne v Hartshorne, 2011 BCCA 29 at para 25).
6. What are special costs?
Special costs are to deter and punish reprehensible conduct in the course of litigation (Smithies Holding Inc. v RCV Holdings Ltd., 2017 BCCA 177 at paras. 128 to 134). They are discretionary and they can be awarded to only certain aspects of a proceeding (R.L. v M.L, 2024 BCSC 374 at para 49). Some examples of reprehensible conduct are allegations of fraud, attempting to mislead the court, and using delay tactics to frustrate court procedures.