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Costs, Family Law

“Reprehensible” Conduct in Family Law Case Draws Over $1.2 Million Costs Award

A wealthy businessman adopted a battle plan designed to punish his estranged wife on multiple fronts in protracted Vancouver family litigation. The BC court found that the husband’s conduct amounted to use of his superior resources in an attempt to wear down his wife. His “litigation war” strategy and the unsustainable positions he took throughout the proceedings unnecessarily lengthened the duration of the case—precisely the type of conduct that justifies a special costs order in Vancouver family litigation and estate litigation matters alike. To censure his misconduct, the husband was ordered to pay over $1.2 million in special costs to his wife, plus post-judgment interest.

High-conflict Vancouver family litigation

The family law claim in Negus v. Yehia, 2021 BCSC 254 began when Sally Negus and Sam Yehia’s marriage broke down in October 2014 after a 21 year relationship. Sally and Sam had significant assets. Sam owned a group of companies that owned and operated pubs, liquor stores, and hostels. Family property was valued at about $19,605,000. Sally filed a notice of family claim in November 2014 and the parties were involved in litigation almost continuously for the next four years. More than 20 interim orders were made before the case proceeded to trial in 2017. The trial judge issued reasons for judgment in December 2018. The wife’s approach on the valuation of family property prevailed and she was awarded half of that family property. The wife also obtained awards of child support and spousal support based on her position concerning Mr. Yehia’s income. The trial judge also found that Sally was entitled to special costs throughout as rebuke for Sam’s “reprehensible conduct” which unnecessarily lengthened the duration of the case.

Purpose of special costs in family law cases

Rule 16-1 of the Supreme Court Family Rules, B.C. Reg. 169/2009 (the “Rules”) governs costs in family law cases. Under Rule 16-1(1), costs must be assessed as party and party costs, in accordance with Appendix B of the Rules, unless specified circumstances exist. One of the excepted circumstances is when the court orders that costs be assessed as special costs (Rule 16-1(b)(i)).  Special costs provide a much greater degree of indemnity than party and party costs. Special costs are not compensatory; they are punitive. The purpose of special costs is to censure and deter litigation misconduct.

Assessment of special costs in family law cases

The factors in Rule 16-1(2)(b) must be considered on an assessment of special costs, which are as follows:

(i)         the complexity of the family law case and the difficulty or the novelty of the issues involved;

(ii)        the skill, specialized knowledge and responsibility required of the lawyer;

(iii)       the amount involved in the family law case;

(iv)       the time reasonably spent in conducting the family law case;

(v)        the conduct of any party that tended to shorten, or to unnecessarily lengthen, the duration of the family law case;

(vi)       the importance of the family law case to the party whose bill is being assessed, and the result obtained;

(vii)      the benefit to the party whose bill is being assessed of the services rendered by the lawyer;

(viii)     Rule 1-3.

Assessment of special costs in Negus v. Yehia

In this particular Vancouver family litigation matter, the key factors on the assessment of special costs which warranted an award of over $1.2 million included:

  • It was a complex family law case with a high degree of difficulty. The husband had a complicated corporate structure with a number of inter-related companies. There were significant issues with respect to the valuation of property and determination of the husband’s income for his support obligations. Many matters were contested during the litigation.
  • It was a very active file on which difficult issues often arose. The case required near constant attention. The wife’s lawyers often had to initiate proceedings to move the case forward. Steps had to be taken to overcome the husband’s resistance to orderly resolution of matters.
  • In these circumstances, it was appropriate for the wife to have a team of lawyers with differing ranges of experience, skill and availability assume responsibility for various tasks. The time spent by the wife’s lawyers over the period of over four years was reasonable, and included steps made necessary to move the matter forward given the husband’s misconduct.
  • The husband adopted unsustainable positions on several issues. His conduct unnecessarily lengthened the duration of the case, where there was no indication that the wife engaged in similar conduct.
  • The amount involved was significant (total value of family property assessed at approximately $19,605,000), and the outcome of the family law case was very important to the wife, who sought support for herself and her children and her share of the family property.

Take home point on special costs in family litigation

Special costs may be ordered against a party in a family law case to rebuke litigation misconduct. The award of special costs in the Negus v. Yehia matter was made, at least in part, because of the way the husband dealt with the litigation. The trial judge indicated that the husband’s conduct amounted to use of superior resources in an attempt to wear down his estranged wife and found his conduct throughout the pre-trial proceedings to be reprehensible.