Henderson Heinrichs LLP

The Costs of Withdrawing a Case

Kevin Heinrichs

Written by: Kevin Heinrichs (View All Posts • View Bio) Published: December 1, 2014

Categorized: Costs.

Almost everyone in Ontario has heard about Jian Ghomeshi’s recent $55 million law suit against the CBC. I’m not a labour and employment lawyer, but as soon as he filed the law suit, most of us who took even a basic employment law class in law school raised our eyebrows—it would be unheard of to get $55 million dollars in Canada for wrongful dismissal. Also, Ghomeshi was a union member, and union members can’t sue their employers. They have to file grievances through their unions. Again, I’m not a labour and employment lawyer, but this is basic stuff.

As many (actual, qualified) labour and employment lawyers quickly pointed out, Ghomeshi’s law suit was probably filed for reasons other than an expectation that he could win. Now the latest news that he has withdrawn his suit seems to confirm this.

But there is an interesting tidbit of information in the news about his withdrawal of his case that should give people struggling with separation or divorce in Ontario pause: in addition to withdrawing his law suit, Mr. Ghomeshi has agreed to pay $18,000 to the CBC for their “costs”.

Why is that?

To be clear, I have no personal knowledge of the law suit Ghomeshi brought against the CBC, or any negotiations that brought them to their recent result. But I do know that the Rules of Civil Procedure in Ontario state that:

COSTS OF DISCONTINUANCE, DEEMED DISMISSAL

23.05  (1)  If all or part of an action is discontinued, any party to the action may, within thirty days after the action is discontinued, make a motion respecting the costs of the action.

The CBC maintained from the beginning that Ghomeshi’s suit was frivolous (and the law seems to back them up on that). They would have spent significant amounts on legal fees, even in the short time that has passed since he sued them. It may be (again, I’m just speculating) that the CBC told Ghomeshi that he could either pay costs voluntarily, or they would ask the Court to order him to pay costs for bringing, then dropping a suit he knew he couldn’t win.

Why does this matter to my family law clients?

People who start family law actions in the Ontario Court of Justice or the Ontario Superior Court of Justice do not have to worry about the Rules of Civil Procedure. They have their own set of rules: the Family Law Rules.

There are many similarities, and some significant differences, between the two sets of rules. Rule 12(3) of the Family Law Rules is an important one here:

COSTS PAYABLE ON WITHDRAWAL

(3)  A party who withdraws all or part of an application, answer or reply shall pay the costs of every other party in relation to the withdrawn application, answer, reply or part, up to the date of the withdrawal, unless the court orders or the parties agree otherwise.

Notice that this is not the same as the rule governing civil cases where a party may ask the Court to order costs. In a family law case, if you withdraw a case, or an answer to a case, you shall pay the costs of the other party (unless the Court or the other party says you don’t have to).

A good family law lawyer always tries to settle his or her client’s issues without going to court because court is expensive, slow and unpredictable. Frequently though, in Toronto divorce cases, you just have no choice but to go to court, because the other party will not be reasonable.

When you do that, though, you have to be sure you are doing it for a good reason, because if you have to admit down the road that you really had no legal right to what you were asking for, you are obligated by default to pay your spouse’s costs up to that point. Those costs can easily run into the tens of thousands of dollars.

This is not to say that people should always avoid starting a court case—as I said, sometimes it is necessary. And if your spouse starts a case against you, you have little choice but to file an answer. As long as you only ask for reasonable things, you can safely start or answer a court proceeding, knowing that you can either follow it all the way through to trial (and hopefully not pay costs) or negotiate a settlement at some point before trial (and in the settlement, agree about who, if anyone, will pay costs).

But given the costs repercussions in Ontario family law courts, you can see that it is very important to talk to a family law lawyer who can advise you on what is reasonable and what you just have no hope of ever getting. Otherwise, you might end up like Ghomeshi, paying tens of thousands in costs.

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