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When Agreement Calls for $1 Payment, Does it Really Have to be Paid?

dollar

When Agreement Calls for $1 Payment, Does it Really Have to be Paid?

I ran across an older B.C. case recently that considered an interesting technical point: if a separation agreement between spouses calls for one party to pay the other a nominal $1 amount, is the agreement still legally valid if that dollar is not paid?

In Dryden v. Bischoff, the couple initially lived in a home for which the wife had provided the down-payment; however the husband had done significant renovations and reconstruction work before they had moved in. Together they eventually moved into a second home that the wife had initially co-owned with her mother, and they kept the first home in order to generate rental income and pay off their mortgage.

After they separated 6 years later, the husband ran into financial difficulties and eventually went bankrupt. In the two years after their separation he had paid no child support at all; he started paying $200 a month but after 3 months asked the wife for a reprieve and never really resumed making his contributions.

At one point the wife asked the husband to sign a short written document she had prepared, in which the husband agreed to transfer his interest in the first home in return for being absolved of liability for the mortgage on it. In return, the wife would pay him $1. The husband signed the agreement together with the necessary Land Transfer document, which was duly registered.

A few years later, when the couple’s divorce matter came before the court, the husband claimed that the wife had never paid the $1. He also added that he had been coerced into signing it by “emotional blackmail.” He therefore asked the court to declare the agreement legally invalid, and to award him a half-interest in the proceeds of the home’s sale. (He also wanted monetary credit for the value of the various carpentry work he had provided.)

In contrast, the wife simply asserted that she had paid the $1 at the time, as required, and that the agreement should be enforced.

On all the evidence, the court found there was no real evidence to support the husband’s claim that he had never been paid the $1. (And in this regard the court had numerous concerns over the husband’s credibility, lack of documentation, and poor memory.) The husband’s claim that he had been coerced into signing the agreement was also inconsistent with his other complaint about not having paid the stipulated $1 nominal sum – i.e. he couldn’t have it both ways. Finally, from a legal standpoint the agreement was valid because there was good “consideration” – if not in the form of the $1, then in the wife’s promise to save the husband harmless from liability on the outstanding mortgage.

(As an aside, the court speculated that the husband’s motives were vindictive: he had apparently told a friend that because the wife had gone after him for child support, he was going after her assets).

In the end, there was no legal basis upon which the agreement should be set aside.

While the court was able to side-step having to rule on the effect of the missing $1 payment in this particular case, I will talk more about these kinds of legal “technicalities” in a future blog.

For the full text of the decision, see:

Dryden v. Bischoff, 2006 BCSC 1297

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

Was Wife the “Target of a Campaign of Terror” at the Hands of Husband’s Mistress?

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Was Wife the “Target of a Campaign of Terror” at the Hands of Husband’s Mistress?

I ran across a case called Trinchi v. Trinchi recently, where I thought the judge – who called the facts “extreme and potentially explosive” – showed admirable restraint in not making a few rather tempting conclusions about the husband’s alleged infidelity and his choice of affair partner.

The couple had been married for 11 years, and had two children together. In the context of resolving their dispute over which of them should have primary care of the children, and who should remain in the matrimonial home, the judge wrote:

Since August, 2010, the mother has been the target of a campaign of terror which has involved hundreds of communications to her alleging that the father is having an extramarital affair with Donna Bardy. The mother deposes to having been terrorized by the receipt of haunting emails, texts, photographs and messages left on her car by an unknown person. She has involved the police. The person who is the source of the terror claims to be either a jilted former lover of the father or his current girlfriend. This is not a campaign from afar. One of the emails sent 13 days ago describes the matrimonial home in detail. It is clear that whoever sent the emails has been inside the home and has accessed the parties’ mail. Some of the emails have been left on the mother’s windshield at the Go Train parking lot. Many of the emails describe the father having sex with Ms. Bardy in graphic detail. Some of the emails threaten the mother with the loss of her children. One of the emails sent to the mother and the maternal grandmother attached naked pictures of the father. Other pictures sent to the mother include pictures of Donna Bardy, pictures of a tattoo on her arm stated to be the father’s dental impression, images of ropes that were allegedly used in the course of their sexual relationship, images of areas where their sexual liaison was allegedly conducted and images of various gifts that they have purchased for each other. For example, one of the emails sent to the mother stated:

“How long until she is sleeping in your bed, having dinner with your children, showering in your shower, acting like they all belong to her…she is staying with him. You will be out and she will be in and your children will be dependent on her. You will lose them all Julia.”

The mother deposes that in mid-December, 2010, she returned to the matrimonial home accompanied by her children and saw a woman unknown to her leaving her home. This woman identified herself as “Donna”. When the mother asked what she was doing there, the woman stated that the father had asked her to set up a camera at the front of the matrimonial home and to check the mailbox at the matrimonial home periodically to see if they could catch the stalker. The woman addressed the parties’ children by name. It is admitted by the father that Donna Bardy did place a camera at the front of the home. The camera was removed at the mother’s request. After the woman left, the mother, in the presence of the children, found a note attached to the door from “Donna” which stated that the father was having an affair with Donna Bardy. On Donna Bardy’s Facebook, she lists “stalking” as her hobby.

The judge observed that both husband and Donna Bardy had filed affidavits denying that they had an affair, and claiming that they were merely friends.

Nonetheless, having apparently concluded that it was not relevant to the determination of custody or exclusive possession of the matrimonial home, the judge said simply: “I refrain from expressing any conclusion on the credibility of the assertion by the father and Ms. Bardy that they are not having an affair or that they have no knowledge of who is harassing the mother.”

Personally, in view of these facts I might have had difficulty showing the same restraint. Your thoughts?

For the full text of the decision, see:

Trinchi v. Trinchi, 2011 ONSC 3855 (CanLII)

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

What Are The Child Support Guidelines? – video


 

Wednesday’s Video Clip: What Are The Child Support Guidelines?

In this law video Kiley discusses the child support guidelines.

In 1997, the federal government brought in a set of new rules and tables for calculating the amount of support a parent who does not have custody of his or her child must pay to the parent who has custody.

These rules and tables were later adopted by the Ontario government and are set out in the Child Support Guidelines.

A link to the Federal Child Support Guidelines is provided in the More Information, Courts and Statutes section of our web site www.russellalexander.com

Child Support Entitlement – How Does Social Assistance Factor In?

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Child Support Entitlement – How Does Social Assistance Factor In?

Ontario has two social assistance programs that help eligible residents who are in financial need. They are:

• The Ontario Disability Support Program (ODSP); and

• Ontario Works.

As the name suggests, the ODSP helps those with disabilities, while Ontario Works helps those with temporary financial need. Both programs can provide recipients with financial and employment assistance, and are often used by those who have experienced some sort of setback – and unexpected disability (in the case of ODSP) or a temporary decline in financial resources (in the case of Ontario Works).

The question sometimes arises as to how a parent’s entitlement to child support plays into the whole equation of receiving benefits under either of these two social assistance programs.

The answer is simple: Whether for new applicants and those already receiving benefits, both the ODSP and Ontario Works programs require that the person make reasonable efforts to get financial support from the child’s other parent. (This remains the case even if the two parents were never married, or if the other parent is not really the child’s biological or adoptive parent, but has merely demonstrated a settled intention to treat the chid as if it were his or her own).

A parent in receipt of ODSP or Ontario Works benefits who does not make reasonable efforts to pursue child support to which they are entitled may find that their benefits are reduced or cut off entirely.

Note that eligibility for social assistance does not depend on the actual receipt of the child support payments, but rather the efforts that are being made to obtain that support. These include attending court appointments and providing the ODSP or the Ontario Works office with current information, including information about the other parent. Also, in some situations the requirement for the recipient parent to actively pursue support may be waived, for example where the other parent is deceased where his or her whereabouts are unknown, or where the child’s paternity cannot be determined. There are also certain specified situations in which the pursuit of support can be temporarily waived or deferred.

In any case, the intention behind these policies is that the ODSP or Ontario Works benefit recipient continues to be eligible only as long as he or she is making efforts to obtain the child support payments to which they are entitled. That principle seems fair enough.

A little more contentious is the policy that child support payments, once received, are typically deducted from social assistance benefits (although there are exceptions). As this article illustrates, there have been calls from the public to have that approach changed.

What are your thoughts? Should receiving ODSP or Ontario Works benefits be contingent on pursuing child support? And should child support be deducted from social assistance benefits?

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

Enforcement of Child Support in Ontario – video

Wednesday’s Video Clip: Enforcement of Child Support in Ontario

In this legal video, we review enforcement in Ontario is done through a provincial government office called the Family Responsibility Office (FRO). The court automatically files all support orders made after July 1, 1987 with the FRO. Separation agreements can also be filed there if they have been filed with the court and then mailed to the FRO.

The parent who is to pay support is told to make all support payments to the FRO. When the FRO receives a payment, it sends a cheque to the parent with custody, or deposits the money directly into that parent’s bank account. It only does this after it has received the money from the paying parent.

The FRO uses different ways to get the payments that are owed. It can:

• get the payments directly from the parent who is supposed to pay support

• have the payments automatically deducted from the parent’s wages or other income (other income includes things like sales commissions, Employment Insurance, Workers’ Compensation, income tax refunds, severance pay, and pensions)

• register a charge (a lien) against the personal property or real estate of a parent who fails to pay the support that he or she owes

• garnish (take money from) the bank account of a parent who fails to pay support

• garnish up to 50% of a joint bank account that he or she has with someone else, or

• make an order against another person who is helping a parent hide or shelter income or assets that should go toward support

The FRO can put more pressure on parents who do not make their support payments by:

• suspending their driver’s licences

• reporting them to the credit bureau so that it will be difficult for them to get loans, or

• canceling their passports.

Once the order or agreement is filed with the FRO, then it is the FRO, not the other parent, that is responsible for any actions taken to enforce it.

Top 5 (or so) Little-Known Facts About the Family Responsibility Office

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Top 5 (or so) Little-Known Facts About the Family Responsibility Office

I have written before about the role and mandate of the Family Responsibility Office (FRO). While that blog piece outlined the general duties (which includes the collection, distribution and enforcement of child and spousal support payments), there are some aspects of the FRO’s role with which many people may not be familiar.

Here are some facts about the FRO that may surprise you:

1) The FRO is not just about support.

The FRO’s role is not limited to enforcement child and spousal support obligations: It also enforces private written domestic contracts such as separation agreements, marriage contracts, cohabitation agreements, paternity agreements and family arbitration agreements (provided these have been filed with the Ontario Court of Justice or the Superior Court of Justice (Family Court) beforehand.

2) But, there are some things the FRO will not touch.

There are certain support-related aspects that the FRO will not get involved with. These include:

a. bringing motions to the court to change the amount of support owing; and

b. getting involved with any issues relating to entitlement to support, or custody or access.

3) The FRO can actually reduce the support owed, sometimes.

Under the governing legislation, the FRO has the discretion to reduce or even terminate the amount of support that it will enforce in narrow circumstances, namely where:

a. one or more kids ceases to be eligible for support;

b. where the parents agree in writing that a “terminating event” has occurred with respect to their kid or kids; or

c. where the parent entitled to receive support fails to respond to the FRO within 20 days.

4) The FRO can cast a wide net.

Given that it has enforcement agreements with every Canadian province and territory, with every state in the United States of America, and with 31 countries, the FRO can enforce child and spousal support payments even in situations where one party lives outside Ontario. This is specifically authorized under the Interjurisdictional Support Orders Act, 2002.

5) It has some tricks up its sleeve.

Among the more usual enforcement actions that the FRO can take against you if you are in default of your payments (e.g. garnishing your wages), there are some perhaps-unexpected ones. These include:

a. suspending your Canadian passport;

b. suspending certain federal licenses (e.g. a pilot’s license or maritime or navigational license);

c. reporting you to your professional or occupational organization; and

d. even seizing your lottery winnings!

6) It has a “Most Wanted List” (sort of).

The FRO, through the Ministry of Community and Social Services website, maintains a public list of what it calls “missing, irresponsible parents who have defaulted on the payments owed to their kids”. Located at www.goodparents.pay, it can display a wide array of information about defaulting payors, including:

a. name

b. physical description (height, weight, hair and eye colour)

c. approximate age

d. last known address

e. usual occupation/trades, and

f. language(s) spoken.

7) Even bankruptcy doesn’t do it.

It may seem tempting to declare bankruptcy to avoid the long arm of the FRO; however, your support arrears merely become a claim that is made against your estate, with the FRO dealing directly with the bankruptcy trustee like any other creditor.

Do you have questions about how the FRO can help you get the support to which you are entitled?

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

 

Top 10 Tips on Drafting Domestic Contracts

contract

Top 10 Tips on Drafting Domestic Contracts

Any domestic agreement (which in Ontario can include a marriage contract, cohabitation agreement or separation agreement), must be drafted with great care and attention to detail. After all, it is a binding legal contract that – when done right – will govern the rights and responsibilities of the spouses or relationship partners who have entered into it.

 

At the risk of stating the obvious:   If you want a good, airtight domestic contract, you should see an experienced lawyer who specializes in Family Law.   Among other reasons, this is because the provincial Family Law Act that governs many of the matters that are purportedly covered by domestic contracts, and it is vital to understand the interplay between the legislation and any agreement you may reach with your spouse.

 

But before you consult a lawyer, here are some tips that we can provide in order to help formulate the types of issues you want to address in your own domestic contract, and to help you understand and navigate the agreement-drafting process:

Tip 1:Be Thorough

  •  Any good domestic contract must cover all the legal points, avoid inadvertent loopholes, and withstand the passage of time. It should also contemplate certain tangential implications (such as income tax consequences), and should provide for a mechanism by which any disputes are to be resolved.

Tip 2: Be Precise

  •  The agreement must also be in clear precise language that you and your spouse can easily understand and follow.   Legal jargon – or “legalese” as it is sometimes called – should be avoided; this includes old-fashioned terms such as “party of the first part”, “aforesaid” and “hereafter”.

Tip 3: Confirm the Facts

  •  Makes sure that the statements and pre-suppositions that form the basis of the agreement are factually correct. This includes obvious things such each spouse’s legal name and the address of any homes or recreational properties; but it also includes making sure that any dates or date-ranges, business addresses and bank account numbers referred to in the agreement are reflected with precision.

Tip 4:  Be Specific

  •  Individual or family assets should be itemized and described in great detail, to avoid uncertainty and confusion. This naturally includes physical tangible objects, but can also include more esoteric items such as corporate shares, interests in timeshare properties, etc.   It is wise to include long lists of items in a Schedule to the agreement rather than the main body, to avoid cluttering the main part of the agreement, and to allow for easier amendment of those lists if necessary.

Tip 5: Avoid the Kits

  •  There are some domestic agreement “kits” on the market, that purport to provide legal clauses that can be customized to suit.   However, these should be avoided, because One Size Usually Fits None.   Indeed, it is dangerous to use any precedent unless you fully understand its meaning and the legal implications; that’s what lawyers are for.

Tip 6: Avoid Boilerplate, Too

  •  Similarly, even if you avoid the pre-fabricated agreements, it’s important to beware of using standardized “boilerplate” clauses, that are drafted broadly and aimed at covering off a wide range of scenarios and contingencies. Only rarely will these provide the best coverage of your unique situation.

Tip 7: Try to Guess the Future

  •  The agreement should contemplate that there may be gradual changes over time, or that certain likely events may arise in the future.   These might include changes in custody, or the re-marriage of one or both spouses, for example. These kinds of potential scenarios should be discussed with your spouse and reflected in the agreement whenever possible.

Tip 8: Watch Out for Loose Ends

  • In tandem with the need to address future contingencies is the need to identify “loose ends” and “loopholes” in the drafted agreement. This is another area where the advice of a good Family Law lawyer is particularly helpful.

Tip 9: Be Realistic

  • Although the agreement should be comprehensive, it cannot possibly purport to govern every aspect of either spouse’s day-to-day living.   Terms or obligations that are unrealistic or too difficult to live by will be the first ones that get breached, with a dispute between spouses being the inevitable consequence.

Tip 10: Get it Reviewed

  • Most domestic agreements are drafted during a point in time when the two of you are in a positive, happy, pro-relationship headspace (e.g. in the case of pre-nuptial contracts or cohabitation agreements), and it’s precisely the time when many important matters can get overlooked, glossed over, or brushed aside as “unimportant”.   It’s therefore particularly important to have such agreements reviewed by a lawyer specializing in Family Law: Not only will that lawyer know the law and apply a trained eye to the wording of the document, but he or she will emphasize the need for each of you to get independent legal advice.

These tips are just a starting-point, but they go a long way toward making sure that any domestic contract that you draft will have the intended effect between you and your spouse.   This in turn will avoid disputes – or worse, having the agreement (or parts of it) be overturned by a court.

 

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

 

The Difference Between Separation and Divorce in Ontario – video

 

 

Wednesday’s Video Clip: The Difference Between Separation and Divorce in Ontario

A separation occurs when one or both spouses decide to live apart with the intention of not living together again. Once you are separated, you may need to discuss custody, access and child support with your spouse. You may also need to work out issues dealing with spousal support and property. In this video we examine how you can resolve these issues in different ways, including:

•  You can negotiate a separation agreement. A separation agreement is a legal document signed by both spouses which details the arrangements on which you have agreed. In some jurisdictions, independent legal advice is required to make the document legally binding.

•  You can make an application to the court to set up custody, access, support and property arrangements under the provincial or territorial laws that apply to you.

•  You can come to an informal agreement with your spouse. However, if one party decides not to honour the agreement, you will have no legal protection.

To legally end your marriage, you need a divorce, which is an order signed by a judge under the federal law called the Divorce Act.

Can One Spouse Foist Debt on the Other?

Businessman Touching Domino Pieces Arranged in a Line

Can One Spouse Foist Debt on the Other?

As we have written before , Ontario law has special rules about how a matrimonial home can be dealt with by spouses during marriage. But what about other assets? And who is ultimately responsible for any debts incurred while married?

Let’s tackle the easiest one first: Assets. From a technical legal perspective, each spouse is generally free to deal with his or her own assets during marriage. (This of course leaves aside the practical reality that in a successful marriage both spouses may have informal input on how assets are dealt with, regardless of true ownership).

The responsibility for debts, on the other hand, is a little more complex. Here are some points to know:

• Getting married does not automatically make you responsible for the existing, pre-marriage debts of your new spouse.

• During marriage, each spouse is only responsible for those (non-joint) debts that are incurred in his or her own name; the other spouse is not responsible unless they have guaranteed or co-signed the loan in writing. (And the Family Law Act provides for the deduction of these debts when the parties separate, for the purposes of calculating the Net Family Property, although exceptions are made if the debts are incurred recklessly or in bad faith.)

• Death does not change this: If one spouse dies leaving personal debts, the other is not personally responsible to repay them. However, creditors are entitled to be paid out of the deceased spouse’s estate prior to having those assets distributed to beneficiaries, including the surviving spouse.

• On the other hand, debts that are incurred jointly during marriage (e.g. a joint loan agreement, or where one spouse co-signs for the other), become an obligation that is shared by both spouses.

• Note that for such jointly-incurred debt, a separation agreement is ineffective to change or eliminate the respective obligations of the spouses to lender. Rather, any change as to who is responsible for the joint debt has to be re-negotiated with the original lender and reduced to writing in a new agreement.
With that said, credit card debts are in their own category: To determine which spouse is responsible for credit card debts, it is necessary to review what the written agreement with the credit-providing bank or organization says. Specifically:

• The agreement may provide that one spouse is the primary cardholder, but that the other spouse is also given access/authority to incur charges (usually through a second card). These kinds of agreements usually stipulate that the spouse who is the primary cardholder remains liable for all charges.

• On the other hand, if both spouses sign the cardholder agreement and commit to being jointly responsible, then they both remain liable for any charges.

• Note that in either case, this liability arises not through the fact of marriage, but because the written agreement with the credit-providing facility says so.

Do you have further questions on how debts during marriage are treated?

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

Canadian Judge: Real Life Imitates Art in Kramer v. Kramer Case

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Canadian Judge: Real Life Imitates Art in Kramer v. Kramer Case

Given the prevalence of divorce and related family litigation in Canada – and the inherent acrimony and emotionality of the process – sometimes one has to wonder about the view from the judicial bench. Watching the daily relentless parade of recalcitrant spouses, many of whom are intent on “having their day in court” and “sticking it” to their Exes, must sometimes take its toll on even the most hardened judges.

Needless to say, judges are chosen for their ability to be impartial in their decision-making, but that does not mean that they have no opinion on the utility or merits of the litigation process in any particular case, or that they can easily overlook the human costs of that process. In a case decided just a few weeks ago called Kramer v. Kramer, the court began the judgment with a lament:

The style of cause in this matter inevitably causes one to think of the film Kramer v. Kramer (1979) starring Dustin Hoffman and Meryl Streep. The film was essentially about the struggle of a separated couple with respect to the custody of their son. The film portrayed well the myriad emotions that two parents experience given their new status as separated parents and their anguish. It “ended” with the mother realizing that her son was best off with his father. Obviously the film was a dramatic recreation of a point in time in the lives of such parents and the child. As life goes on, the child and the parents grow up as it were.

The Kramers in [this] matter unlike their Hollywood counterparts did not evolve as well. Their separation (which is never “pretty”) revealed their basic natures. Dale Kramer (Dale) was an inventor with a passion for flight, probably ill-equipped to deal with intense emotional issues to the extent any of us are. Linda Kramer (Linda) was a worker bee, who became increasingly “strong” in the sense of “controlling” in the emotional issues the couple encountered. Her evolution in this regard for a significant period of time “gutted” Dale.

So now almost 15 years later we can see their route since separation, strewn, as it were, with the alienation of children and the dissipation of their economic base as a couple. The latter is all that is left for a court to pick over. On many occasions during the course of this litigation this judicial observer has, along with colleagues, had the sense that this exercise could make for “slim pickings.” There have been numerous exhortations by the court to try and resolve their differences, for the sake of avoidance and possibly to simply get on with their lives. Colleagues have attempted through pretrial mediations to achieve that end. All of these exhortions and efforts were regrettably for naught.

With this prelude, the court reluctantly went on to write almost 250 paragraphs of a judgment designed to determine all the issues between the parties; these included a retroactive claim by the wife for almost $500,000 to recoup amounts she had spent profligately on the children, which the court said – in light of the parties’ impoverished circumstances – had a “theatre of the absurd element. Or it is like the band who continued to play as the Titanic sank.”

What are your thoughts on cases like these?

For the full text of the decision, see:

Kramer v. Kramer, 2014 ONSC 5952 (CanLII)

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.