12.36: Advance payment of costs

Case Summary

The Applicant appealed a Judgment following a Trial arising out of a high conflict divorce. The issues on Appeal involved parenting, child support and interim Costs. Prior to the Trial, the Case Management Justice ordered that the Respondent make an advance payment of $10,000 toward the Appellant’s legal Costs on a “without prejudice basis, such Costs to be accounted for at the end of the trial”; however, the Respondent never made that payment. A Preliminary Costs Order under Rule 12.36 was presumptively an Interim Order designed to help the recipient finance the litigation. The Court of Appeal stated that these Orders differed from a Security for Costs Order, in that the latter did not assist in financing the litigation, and only provided that if Costs were eventually ordered, there would be an ability to collect them. As a general rule, Advance Costs Orders were subject to adjustment when the costs of the Trial were actually determined. In this case, the Order stated that the Costs were to be accounted for at the end of the Trial and, as such, the Order did not represent a guarantee that the Recipient would ultimately be awarded the Costs of the Trial, nor did it set a floor or a ceiling on those Costs.

Notwithstanding the Respondent’s ultimate success, the Trial Justice ordered that he pay Costs of $5,000 and directed that the unpaid amount of $10,000 be deleted from the Maintenance Enforcement records. The Appellant argued that the Trial Justice granted the Respondent “a reduction to the interim costs awarded”; however, the interim payment was never awarded to the appellant. Because it was specifically stated to be without prejudice, and was to be accounted for at Trial, the Court of Appeal upheld the Trial Justice’s award to the Appellant for $5,000 and stated that it logically followed that the original, unpaid $10,000 amount should be deleted from the calculations.

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