Interim Cost Awards
Welcome to my week of blogs.
An issue that can crop up in estate litigation is whether a party is entitled to interim payment of costs payable out of the estate. The reason for such an order is to fund litigation, such as a will challenge, out of the largesse of the estate.
The court has the discretion to order the interim payment of costs pursuant to Section 131 of the Courts of Justice Act. A number of cases have addressed the interim payment of costs, including Waese v. Bojman as well as Zhao v. Ismail Estate (Trustee of) (link not available). Both decisions recognize the court’s inherent jurisdiction to award interim costs in a proceeding, including estate actions.
However, the exercise of the court’s discretion is limited to exceptional cases and the court has generally held that it ought to be narrowly applied. This is especially true when the court is being asked to essentially pre-determine an issue in addition to being asked to provide funding for anticipated legal costs. The question to be posed by the court is whether a party can establish that a case of sufficient merit is being presented to the court and whether the party is genuinely in financial circumstances which, but for interim payment of costs, would preclude the party from pursuing or defending litigation.
As with any exercise of judicial discretion, the facts are crucial and how those facts are marshalled and presented to the court may carry the day. Proper evidence and complete and financial disclosure is required. However, even where an interim payment of costs is allowed, the court is likely to impose terms and require costs to be paid out in stages based on the progress of the litigation.
Thanks for reading. A demain.
Justin
