This Decision addressed the Costs from a previous decision, LY v RY, 2024 ABKB 209. The dispute arose between the parents because of the mother’s wrongful retention of their six children in Calgary, contrary to the Convention on the Civil Aspects of International Child Abduction, 1343 UNTS 89, Can TS 1983 No 35, 19 ILM 1501 (“Hague Convention”). The Applicant father successfully applied for the return of the six children to Texas.

The Applicant sought full indemnity costs including 100% of Canadian and U.S. legal fees, travel and accommodation expenses, or in the alternative, costs according to the Court’s discretion. The Applicant also alleged misconduct by the Respondent. The Respondent requested that each party bear their own costs, arguing against full indemnity costs due to her financially disadvantaged position. The Respondent also alleged misconduct by the Applicant.

The starting point for awarding costs in a Hague Convention proceeding is Article 26. Justice Thompson noted that Canadian courts, consistent with the objectives of the Hague Convention and the policy objectives of the modern approach to costs, have held that the objectives of Article 26 include (i) to compensate the left behind parent for costs incurred in locating and recovering the abducted child, (ii) to sanction an abducting parent, and (iii) to deter other parents from abducting their children.

The Court noted that the amount of costs claimed, the steps taken, and the issues involved in a Hague Convention proceeding must be proportionate and reasonable and that the guardrails established in the Rules apply to achieve this objective. Thompson J. acknowledged that the Court has considerable discretion in setting reasonable and proper costs under Rules 10.29, 10.31 and 10.33, exercised judicially, on the facts of the case. The Court referred to Rule 10.29 for the principle that the successful party is presumptively entitled to costs and to Rules 10.31 and 10.33 for the framework used to assess and award costs, including the factors that may guide the Court’s discretion. The Court also referred to Rule 10.2 for factors relevant in assessing solicitor fees.

Thompson J. noted that enhanced costs may be awarded where a party has engaged in misconduct and that such awards apply in family law matters. The Court referred to double costs rules and noted Rule 4.29 regarding a defendant offeror’s entitlement to double costs for all steps taken in an action after service of a formal offer to settle, if the action is dismissed. Additionally, Thompson J. noted that liability for the costs of litigation does not depend on a party’s ability to pay, however, it may be a relevant consideration to determine the amount of a costs award.

The Court awarded the Applicant 60% of his Canadian solicitor-client Costs, and a portion of the travel expenses related to returning the children to Texas. The Applicant was not entitled to Costs on a full indemnity basis or solicitor-client basis because of misconduct. Further, the significant imbalance between the parties, in power and means, warranted a Costs award that would achieve a more equitable result. The Court also noted that the Applicant and Respondent’s misconduct offset each other from any enhanced Costs. The Applicant’s Settlement Offer was considered but the Court found It did not trigger the double costs rule. Lastly, the Court found that the Respondent’s limited finances did not immunize her from costs liability; however, it considered in structuring a just and equitable costs award, including a payment plan.