Family law — Practice — Judgments and orders — Custody dispute — Stays — Security for costs — Stay pending payment of costs and posting of security for costs — Whether order appropriate where nonpayment due to inability to pay.
Wife's appeal from an order preventing her from proceeding until she paid arrears in costs and posted a security for future costs. In the divorce the husband was granted custody of the daughter. The wife continued to bring actions to regain custody or expand access. The husband applied to strike the latest application or alternatively to stay proceedings until the wife paid arrears in costs and posted security for future costs. The proceedings were stayed. Security for costs of $2,000 was required.
HELD: Appeal allowed. The power to stay proceedings under section 38 of the Queen's Bench Act was to be exercised reasonably. Non-payment alone did not entitle the court to exercise its discretion to stay proceedings where costs were not a trifling sum and non-payment was due to an inability to pay. A stay order, coupled with a condition to pay arrears, was inappropriate in a domestic dispute where the focus was custody or access. The security for costs order was set aside. Its effect was to bar the wife from seeking variation of custody, access or maintenance, possibly making financial considerations paramount to the interest of the child.
STATUTES, REGULATIONS AND RULES CITED:
Manitoba Queen's Bench Rules, Rule 56.01(c). Queen's Bench Act, S.M. 1988-89, c. 4, s. 38.
|R. Winkler, on her own behalf.
L.R. Fishman, for the Respondent.
The judgment of the Court was delivered by
HUBAND J.A.:— In this case, an order was made preventing one of the parties from taking further steps in the litigation without first paying arrears in costs and posting security for future costs. The issue on appeal is whether that order is appropriate in the circumstances.
Marvin and Raymonde Winkler separated or May 24, 1984 and were divorced on December 28th of the same year after a 10-day trial. They disputed custody of their two children, Michelle, who is now 19, and Constance, who is 8 years of age. Maintenance was also in issue.
From the outset, the husband was awarded custody. Prior to the divorce and thereafter, there have been continual attempts on the part of the wife to gain custody of the younger child in particular, or alternatively, to obtain more liberal and unrestricted access (or indeed any access at all).
At the time of the divorce, the husband was ordered to pay maintenance of $400.00 per month to the wife until June of 1987 at which time his financial obligation towards the wife would cease.
The wife has initiated numerous proceedings, but almost all have ended with a decision favourable to the husband. The wife is undeterred. She says that her financial resources are now exhausted, but she continues to bring forward motions seeking to vary the previous orders made by the courts concerning custody, access and maintenance. At least in recent appearances, the wife has represented her own interests.
On the other hand, the husband is represented by legal counsel in defending against each new legal initiative. He complains that the litigation inspired by the wife is bleeding him of funds and I have no doubt this is true.
The latest motion by the wife, filed on February 8, 1990, seeks variations to prior court orders. Perhaps because it is a document drafted by a lay person, it asks for things that, on the face of it, seem inappropriate. But within the notice of motion there is a request for custody of the child Constance, alternatively an order permitting access, and an order for renewed maintenance for herself due to changed financial circumstances. No supporting affidavit was filed.
The response of the husband was to launch a motion of his own asking that the motion be struck out as "scandalous, vexatious and argumentative." Alternatively the husband asks that proceedings be stayed until the wife satisfies past orders of costs against her, and until she provides security for future costs.
It is the motion by the husband that was adjudicated by Davidson J. of the Court of Queen's Bench. It is clear from her reasons for decision that Davidson J. preferred not to deal with the motion to strike the whole or parts of the motion as being scandalous and vexatious. Her approach was to impose a stay until such time as the wife pays to the husband accumulated costs in his favour, and until the wife pays an additional $2,000.00 as security for future costs. Davidson J. adjourned all other aspects of the husband's motion. She did, however, make it clear that in her opinion the wife's pleading was inappropriate in some respects. She suggested that the wife's motion be amended, or better still that a new motion be substituted, once the requirements for the payment of costs and the posting of security have been met.
The wife appeals from what amounts to a stay order and the conditions imposed to have the stay removed.
The wife argues that she is without resources, and that the requirement to pay arrears in costs and to post security constitutes a bar to prevent her from seeking a variation as to custody, access or maintenance. Counsel for the husband conceded that for the purposes of argument this Court should proceed on the basis that the wife is indeed without means to pay arrears in costs and post security.
In her reasons for decision, the learned motions judge ordered security for costs, and then added these words concerning arrears of costs:
It goes without saying that if Ms. Winkler is being requested to put security into Court for the possibility of future costs, that she should clearly be expected to pay costs that are outstanding and unpaid. . . . there will be an order directing Ms. Winkler to pay the outstanding costs from prior proceedings prior to being allowed to proceed with her notice of motion.
In my opinion, a condition of this kind is not justified under the circumstances of this case.
Counsel for the husband relies upon s. 38 of The Queen's Bench Act, C.C.S.M. c. C280, which authorizes the court to ". . . stay a proceeding on terms as are considered just." However, this broad discretionary power must be exercised reasonably, and in keeping with guidelines that have been established by the cases.
There is judicial authority to support the exercise of the discretion to stay proceedings where the party wishing to proceed with the matter is in contempt of court for disobedience of a court order. The willful non-payment of costs by a party who has the means to pay might well constitute contempt. In the present case, however, it is conceded that the wife lacks the ability to pay. There has been no determination that she stands in contempt of court for non-payment of costs. I think the learned motions judge was too quick to assume that the mere fact of non-payment entitled the court to exercise a discretion to stay proceedings. The costs are not a trifling sum which could be paid even by a person of extremely limited means. Certain costs have been taxed in the sum of $1,425.23, and in addition there are taxable costs with respect to an unsuccessful application by the wife for leave to appeal to the Supreme Court of Canada.
The reasons for judgment in Gower v. Gower,  P. 106, indicate that where a stay is requested by one party because of the failure to pay costs by the other party, the ability to pay becomes a crucial factor in exercising discretion. In that case, Henn Collins J. in refusing a stay made this comment:
I cannot help thinking that his failure to pay the costs is on account of his inability to do so and is not contumacious. In those circumstances I exercise my discretion in his favour, . . .
So in the present case, since non-payment appears to be due to inability, the stay order, coupled with the condition to pay the arrears, is inappropriate.
I would also set aside the order requiring $2,000.00 security for costs to be posted. The effect of the order is to bar the wife from seeking a variation of previous orders with respect to custody, access or maintenance.
The order for security for costs was made under the authority of Queen's Bench Rule 56.01(c) which reads as follows:
56.01 The court, on motion in a proceeding may make such order for security for costs as in the particular circumstances of the case is just, including where the plaintiff or applicant,
is ordinarily resident outside Manitoba;
has another proceeding for the same relief pending;
has failed to pay costs as ordered in the same or another proceeding;
is a corporation, association or a nominal plaintiff, and there is good reason to believe that insufficient assets will be available in Manitoba to pay costs, if ordered to do so; or
a statute requires security for costs.
(Emphasis added) There can be no doubt that where a party has failed to pay costs as ordered, and where the circumstances are otherwise appropriate, the court, in the exercise of a discretionary authority, may require the posting of security for future costs. But in domestic disputes involving custody, access or maintenance, this discretion should not be exercised in favour of a stay order where the failure to pay costs as ordered is the result of impecuniosity.
Even where the failure to pay prior costs is wilful, the court should be slow to make an order which would make financial considerations paramount over the interest of a child. In Marcocchio v. Marcocchio (1981), 32 O.R. (2d) 536, Master Cork rejected an invitation to order security for costs because it would be inappropriate to do so in a custody or access case:
While it is clear that the husband does have sufficient affluence and potential to meet any order I might make requiring him to post security for costs, nevertheless I do not think that that aspect should be a necessary consideration at this time. Irrespective of his ability to pay, the order that I might make against him would necessarily create a block stopping the father, and I do not feel that such is proper. To conclude otherwise, I believe, would result in my making the assumption that the father could and would pay the security for costs under an order, and this assumption would be paramount to the issue directly relating to the welfare of the child of these litigants. I believe the law is clear that the welfare of the child or children in issue should be paramount to all other considerations. Security of costs in favour of the wife, I think, should be well subservient to the interests of the child.
Whether it relates to arrears in costs, or posting security for costs, caution should be exercised in the use of a stay order to bar further steps in litigation in domestic disputes where the focus is on custody, access or maintenance. A parent who has been denied access should not be barred from renewing an application and attempting to demonstrate afresh that circumstances have changed to the point where access would be in the child's best interests. A spouse should not be barred from presenting evidence of changed financial circumstances and seeking an order for maintenance, even though maintenance was previously denied. It would be a strange result if a spouse were prevented from proving her impecuniosity, and thus an entitlement to maintenance, because that very impecuniosity prevented either the payment of accumulated costs or the posting of security for future costs.
I would allow the appeal. There will be no award of costs with respect to this appeal.
TWADDLE J.A.:— I agree.
HELPER J.A.:— I agree.