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Posts from the ‘Appeals’ Category

When Does a Lawyer’s Courtroom Incivility Amount to Professional Misconduct

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Supreme Court Rules For When a Lawyer’s Courtroom Incivility Will Amount to Professional Misconduct

In the recent case of Groia v. Law Society of Upper Canada, the Supreme Court has overturned the decision of the Law Society of Ontario’s  finding that Mr. Groia was guilty of professional misconduct due to his incivility during the proceedings of R v. Felderhof. 

The issue was to determine the ‘reasonableness’ of a lawyer’s incivility to be that which will amount to professional misconduct. Thus, when determining incivility, the courts have shown willingness to impose a multi-factored and context-specific inquiry, opposed to a rigid and precise definition.

The court indicated that:

 It sets a reasonably precise benchmark that instructs lawyers as to the    permissible bounds of ethical courtroom behaviour by articulating a        series of contextual factors — what the lawyer said, the manner and      frequency in which it was said, and the presiding judge’s reaction to        the lawyer’s behaviour — that ought generally to be considered when    evaluating a lawyer’s conduct, and by describing how those factors          operate when assessing a lawyer’s behaviour.

 The approach, with which I take no issue, targets the type of conduct that can compromise trial fairness and diminish public confidence in the administration of justice. It allows for a proportionate balancing of the Law Society’s mandate to set and enforce standards of civility in the legal profession with a lawyer’s right to free speech. It is also sensitive to the lawyer’s duty of resolute advocacy and the client’s constitutional right to make full answer and defence.

The court also stressed that counsel holds the responsibility to not only advocate for their client, but to also uphold ‘constitutional imperatives’ to criticize state actors:

  …for criminal defence lawyers, fearless advocacy extends beyond ethical obligations into the realm of constitutional imperatives

  Defence lawyers must have sufficient latitude to advance their clients’ right to make full answer and defence by raising arguments about the propriety of state actors’ conduct without fear of reprisal

Mr. Groia has since commented on the ruling stating:

civility does have an important role to play in the legal system and in the judicial system, but where there is a conflict between civility and our duties to defend our clients’ interests, the Supreme Court has made it very clear that it’s going to require very serious misconduct before a defence lawyer can be criticized for doing his or her job.

The three dissenting judges viewed the majority had incorrectly applied the standard for breach of civility. Yet, despite the courts decision to follow a context-specific approach in determining incivility, this has been a 10-year ordeal for Mr. Groia and has been outspoken that the process has been stressful and one which no lawyer wishes to go through.

For the full text of the decision, see:

Groia v. Law Society of Upper Canada 

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 us at RussellAlexander.com

 

Can a Wife’s Contribution to the Welfare of the Family be Worth $1 billion dollars?

Can a Wife’s Contribution to the Welfare of the Family be Worth $1 billion dollars?

This could be one of Britain’s biggest divorce cases exceeding $1 billion Canadian dollars.

The Guardian reports that Tatiana Akhmedova is seeking a claim against her former husband, a Russian billionaire.

The paper reported that she has not received “a penny” and the case is under appeal. The Guardian also reported on the trial decision.

Akhmedov argues “she was due almost half of their £1bn fortune due to her “equal contributions to the welfare of the family” during their marriage”.

The case has similar overtones to the British case Antonio v. Rokos, [2016] EWHC 520 (Fam); Case No. ZCI5P04051, February 15, 2016, High Court of Justice Family Division that considered a mother’s child care budget that included £10,555 a year for wine.

So, what do you think? Does Akhmedov’s argument that her contributions to welfare of the family is worth up to $500 million dollars?

“Property” or “Income”? Appeal Court Rules on Structured Settlement Annuities

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“Property” or “Income”? Appeal Court Rules on Structured Settlement Annuities

Recently the Ontario Court of Appeal delivered a ruling on a very narrow, but important, issue:  Whether structured settlement annuity payments are considered “property” or “income” under Ontario family law legislation dealing with property-division by spouses on separation.

In Hunks v. Hunks, the wife had been injured while shopping at a supermarket.  She was hit by either a shopping cart or a pallet, and sued the store for damages.  When her claim was later settled, about $300,000 from the proceeds of her settlement were used to create a structured settlement annuity.  This paid out funds to her on a regular, pre-determined basis since she was no longer able to work.

At the point when she and the husband separated, the wife was still entitled to receive about 13 years’ worth of payments from the annuity.

In the context of determining their respective Net Family Property amounts for the purposes of equalization, a legal question arose as to whether the wife’s annuity payment entitlement should be counted as “property” or as “income” as those terms are used in the Ontario Family Law Act.

This was an important distinction:  If they were “income”, then they would be taken into account when calculating spousal support obligations.  If they were “property”, then their treatment would depend on other provisions of the Act that might allow for their exclusion.

The Court of Appeal concluded that such structured settlement annuities are properly considered “income” under the Act.

The key was that the annuity arose from a structured settlement, which is created when some or all of a personal injury settlement is deposited with a life insurance company in exchange for guaranteed, tax-free payments for the recipient’s lifetime, or for a specific number of years.  The court noted that annuities arising from personal injury settlements are very specialized contracts, and are subject to certain legal contingencies and stipulations.

The net result is that the casualty insurer is actually the legal owner and beneficiary of the contract.  Using the wife’s case as an example, it was the casualty insurer that purchased the annuity, and made an irrevocable direction to the issuer of the annuity contract to make all payments directly to the wife.  The court noted that an individual, such as the wife, is not entitled to purchase a structured settlement him or herself.

With that vantage-point, it could not be said that during the marriage the wife “received” the $300,000 used for the structured settlement.   The court also noted that payments received pursuant to a structured settlement annuity were analogous to disability benefits, which was another reason they should be treated as income.  Like disability benefits – which prior courts have concluded are “income” for these purposes – structured settlement annuity payments are meant to replace employment income that the wife would have earned if she had been able to work.  Since they provide her with financial support because she cannot work, they are “of the same nature as the income she would have earned had she not been injured.”

For the full text of the decision, see:

Hunks v. Hunks

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 us at RussellAlexander.com

 

With Joint and Shared Custody, Can There Still be a “Primary Caregiver”?

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With Joint and Shared Custody, Can There Still be a “Primary Caregiver”?

In 2015, the parents of a 5-year-old boy separated, and agreed to an arrangement involving joint custody, as well as shared parenting.  This agreement was brought before the court for its endorsement in a court order.

In the context of the mother’s bid to relocate the boy to another city (which was the subject of a prior blog a narrow legal question arose:  If there is “joint custody”, together with “shared parenting”, can there still be a “primary caregiver”?

The question is important because under the family law principles relating to mobility – meaning the ability of a parent to move elsewhere with the child – the decisions of the “primary caregiver” are given added weight by a court in evaluating the plan to relocate.  (This principle will be the subject of an upcoming Blog).  But the question is arguably muddy when, as in this case, the parents have agreed to a joint custody and shared parenting model.

The Ontario Court of Appeal cleared up any doubt:  In rejecting the motion judge’s conclusion that in such cases there can no “primary caregiver” in law, the three-member panel of the Court wrote:

We do not agree that the legal status of joint and shared custody forecloses the possibility that one parent can be, for the purposes of a mobility motion, the primary caregiver. On the record before us, it is evident that although the parties have joint and shared custody, the mother is nevertheless the primary caregiver. This conclusion is not only supported by the mother’s evidence, but from the father’s admission on his …affidavit, his answers in cross-examination, and affidavits from two of the father’s aunts.

Accordingly, with the mother designated as having the primary caregiver role, the court gave her reasons for moving the child special consideration, relative to other factors including the father’s objection to the plan.

For the full text of the decision, see:

Porter v. Bryan

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 us at RussellAlexander.com

Were Negotiations Contingent on the Husband Ending His Affair?

Were Negotiations Contingent on the Husband Ending His Affair?

In an case I had reported on a few weeks ago, the marriage contract between the husband and wife – drafted by the wife’s lawyer – had contained an inadvertent drafting error, giving the husband the full value of the matrimonial home, when the actual intent was to give him only half. The relationship irrevocably broke down shortly after the agreement was signed. In examining whether the flawed agreement should nonetheless be enforced, the court concluded that the proper solution was to overturn the part containing the error; all the more so because the husband was aware of the drafting mistake and was trying to take advantage of it. This conclusion was confirmed on appeal.

One of the many issues that had to be examined in the case, was the effect on the husband’s extramarital affair on the negotiation process. An earlier judge at trial had been accused of placing undue emphasis on the husband’s cheating, when deciding some of the other issues in the wife’s favour.

That same judge had addressed the impact of the wife’s insistence that if they were to reconcile, he would have to end the affair and get tested for sexually-transmitted diseases. It was against this background, over a brief 3-week period, that the defective marriage contract had been negotiated. As the trial judge explained:

[The wife] had three preconditions to reconciliation. The centrepiece of these conditions was that [the husband] stop his affair immediately and commit to the reconciliation process. [The husband] represented to [the wife] that he terminated his affair. He told her that he was in the wrong and that the most important thing to him was the survival of their marriage and family. On that representation, [the wife] went out of town to consider reconciling with [the husband].

The problem was, that the husband had not actually ended his contact with the woman, even though he told the wife otherwise. Even as one of the last drafts of the marriage contract was being exchanged between the lawyers, he had seen his affair partner only days earlier, while on a business trip to California.

The trial judge had to examine the effect of this revelation on the validity of the contract.

The husband’s promise that he would be committed to reconciliation, and his devoting to making the marriage work, imposed a heightened obligation of good faith on him, the judge found.   Marriage contracts, unlike separation agreements, are subject to an utmost duty of good faith and fair dealing between the spouses. The judge disagreed with prior rulings that suggested that an extramarital affair need not be disclosed because the Family Law Act and the Family Law Rules deal only with financial disclosure by spouses. Instead, the judge found that an affair could be relevant particularly if the couple was negotiating a marriage contract in circumstances of attempted reconciliation.

With that said, the trial judge applied the principles to these facts:

In this case, [the husband] told [the wife] that he had ended the affair and that his total dedication was to seeing the marriage work. This fact alone was a prerequisite for [the wife] to entertain the idea of entering into a process of reconciliation and, eventually, give this process priority over her involvement in the negotiation process of the Marriage Contract, which dealt with her most substantial assets.

I find that the perception created in [the wife’s] mind that [the husband] was committed to the marriage due to the termination of his affair renders evidence that he continued to see this woman during the negotiation process of the Marriage Contract relevant.

However, the trial judge went on to make an important distinction on these facts: The husband had admitted to continuing to see his affair partner in California, but he did not admit that he was actually continuing the affair with her. As he explained:

Having said that, I cannot find on the evidence in this case that [the husband] continued to have an affair with this other woman during the negotiation process. In this regard, I find the following:

(1) [The husband] admitted to [the wife] that he was having an affair and that he wanted out of the marriage at the end of March 2006.

(2) Although he stated in his evidence that he ended the affair when he committed to reconciliation, he admitted that he continued to see this same woman during the negotiation period. The woman with whom [the husband] was having an affair lived in California and he admitted to travelling through California in July 2006 in the midst of the Marriage Contract negotiations. Admitting to continuing to see her does not allow me to conclude that he was continuing the affair.

I do not find that [the husband’s] affair with this other woman impacted on the negotiation process. Although [the husband’s] resumption of his affair, at the time that his wife was in the extreme vulnerable state that she was, is reprehensible, such conduct cannot be connected to the issue of whether this Marriage Contract should be set aside.

The matter went on to later appeal, with the court focusing on other grounds. But it was an interesting, and rather thinly-sliced, legal issue and conclusion.

What are your thoughts on the trial judge’s reasoning?

For the full text of the decisions, see:

Stevens v. Stevens, 2012 ONSC 706 (CanLII)

Related Appeal and Costs decisions:

Stevens v. Stevens, 2013 ONCA 267 (CanLII)

Stevens v. Stevens, 2012 ONSC 6881 (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 us at RussellAlexander.com

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Separation Agreement Drafting Error: Can a Spouse Take Advantage?


Separation Agreement Drafting Error: Can a Spouse Take Advantage?

In Stevens v. Stevens, the couple had been married for 16 years when the wife discovered that the husband had been having an affair. As part of their attempts to reconcile, they crafted a marriage contract, freely negotiated with the help of separate lawyers.

Because the matrimonial home had been purchased using a significant amount of the wife’s own funds (which she had received through gifts and an inheritance), she was keenly interested in having those funds recouped in the event of divorce. To this end the terms of the marriage contract stipulated that the husband should have one-half of the value of the matrimonial home if the marriage broke down completely … which it did shortly after the agreement was signed.

Unfortunately, the draft contract prepared by the wife’s lawyer contained a significant error: it stated that the husband was to receive the whole value of the matrimonial home, not merely half.   The cover letter accompanying the draft adverted to the intended one-half value, so the two documents were inconsistent. Still, the husband and his lawyer did not ask for clarification on the discrepancy; both were well aware that the draft contained a mistake.

After the split, the husband wanted to have the contract enforced as-written, which meant that he would get $2.5 million in the divorce rather than $500,000. The wife applied to have it set aside.

The court found in the wife’s favour.

From a legal standpoint, there had been no “meeting of the minds” between the spouses as to the portion of the home’s value that was to be given to the husband; the evidence was clear that – regardless of what the contract actually said, the wife intended to give only half. Her own lawyer did not realize the mistake until after the couple had separated.

The husband was well aware that there was an error in the draft and he took advantage of it, which was condemnable. The court had harsh criticism for the husband’s lawyer, whose evidence as to her understanding of the cover letter and draft was “concerning”. The court rejected the lawyer’s evidence, having concluded that she was “attempting to hide behind a selective memory by testifying in this vague and uncertain manner.”

In short: The mistake in the marriage contract was not intended by the wife, but was known to the husband and his lawyer, neither of whom obtained clarification. The court said,

A simple phone call followed by a confirmation in writing is all that was necessary. I find that without that simple clarifying act, [the husband’s lawyer] and her client took advantage of the mistake and allowed the process to conclude, while knowing that there was no meeting of the minds on this very material issue.

The court accordingly found that the marriage contract was void and unenforceable.

Incidentally, the husband later appealed that ruling, and in doing so he took a new approach: He asked that, rather than declare the contract void from the outset, the Appeal Court should merely rectify it, so that it was worded in accord with what the parties intended in the first place.

The court rejected this also, pointing out that the husband was trying to advance a fundamentally new argument on appeal, i.e. one that he had not bothered to raise at the trial and which was completely inconsistent with the position he took at trial. This was unfair to the wife, and was not permitted under family trial procedure.

For the full text of the decision, see:

Stevens v. Stevens, 2012 ONSC 706 (CanLII)

Appeal:

Stevens v. Stevens, 2013 ONCA 267 (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 us at RussellAlexander.com

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Busted! Court Relies on Sworn Financial Statements from First Divorce to Value Assets During Second One

Busted! Court Relies on Sworn Financial Statements from First Divorce to Value Assets During Second One

The husband was a 46-year-old, recently-separated businessman who met the 26-year-old wife when she was a junior at the law firm he used for his business matters and litigation. After they moved in together and he got a divorce from his first marriage, the wife left her job at the law firm to take care of the husband’s litigation and related corporate affairs.

They were married for 14 years before they separated, and had three children.

When they split up, the husband forwarded a newly-prepared separation agreement for the wife’s signature. She signed without obtaining independent legal representation.  She was comfortable doing so because she believed that the husband had provided full disclosure, and she trusted his assessment since he had considerable experience valuing businesses.

Using the business valuation information provided by the husband, the separation agreement would have called for the wife to pay the husband just under $1 million as an equalization payment; however, it also provided that the husband would agree to forgo her having to pay that amount.

Sounds like a good deal, right?

However, the wife slowly realized afterwards that the husband had misled her. Rather than her owe him money in equalization (which he waived), the proper calculation was entirely different because he had greatly overstated the value of the corporate assets that he brought into the relationship, most notably the value of his company at the date of marriage. This would inflate the amount she was adjudged to owe him way of an equalization.

She successfully applied to the court to set aside the separation agreement, on the basis that the husband had not given full financial disclosure.  The trial judge adjusted the calculation accordingly.

The husband appealed.  In support of his business valuation figures, he put forth the evidence of an expert, who attested to the fact that the value of the business on the marriage date was over $7 million.  However, the Appeal Court concluded that the expert was partial to the husband and lacked independence, and had given an inflated figure that could not be trusted.

Instead, the court relied on some “smoking gun” evidence:  the sworn financial statements the husband had filed in his first divorce, which showed that he had essentially brought no assets of value into this second marriage to the wife.  The trial judge had relied on this evidence as well in setting the separation agreement aside, and the Appeal Court confirmed that there was nothing improper about the trial judge having done so, even if it was to the husband’s detriment.

In the end, the husband was found to have intentionally misrepresented the value of his corporate assets, by claiming that they were worth $6 million more than their actual (court-determined) value.

The Appeal Court upheld the trial judge’s decision to set aside the separation agreement, and went on to calculate the proper equalization amounts using the true valuation of the husband’s assets.

For the full text of the decision, see:

       Virc v. Blair

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 us at RussellAlexander.com

Even Judges Get it Wrong Sometimes

Even Judges Get it Wrong Sometimes

A few weeks ago, I wrote about a case called Butty v. Butty. This was a decision by Justice Pazaratz in which he considered how the parties’ separation agreement, which was intended to exempt the husband’s farm property from the normal property-equalization regime, should be interpreted after it came to light that the husband owned two separate parcels of land, rather than one as originally thought.

At trial, Justice Pazaratz had declared the separation agreement invalid, and set it aside for what he concluded was the husband’s failure – and the failure of his lawyer – to disclose the existence of the two properties. The husband’s property was then divided in keeping with the usual Family Law Act rules, notwithstanding what the parties’ separation agreement may have intended.

The husband appealed, successfully. The Court of Appeal disagreed with Justice Pazaratz’s assessment of the facts as to the alleged lack of disclosure, and reversed his ruling. For one thing, it found that the judge had been highly critical of the husband’s trial lawyer, Mr. Jaskot, accusing him of suppressing facts and deliberately misleading the court and opposing counsel. The Appeal Court found these accusations unwarranted, writing:

As we have mentioned, the trial judge believed that Mr. Jaskot tried to hide the fact that there were two separate properties. In his reasons for decision, he describes Mr. Jaskot as having purposely suppressed information in an attempt to mislead opposing counsel and the court into believing that the farm property was a single parcel of land.

In light of the foregoing evidence, this characterization of Mr. Jaskot is completely unfounded. Opposing counsel and the court had documents clearly showing that the farm property consisted of two separate properties.

As a result of the reasons for judgment, Mr. Jaskot has suffered unwarranted personal and professional embarrassment.

And rather than lay blame on the husband’s lawyer for hiding the information, the Appeal Court found that the parties actually shared in the mistaken initial belief that the there was only one piece of property at stake.   After noting that Justice Pazaratz could have easily remedied the procedural fallout from the parties’ mutual misapprehension at the trial itself, the Appeal Court said:

This court cannot truly repair the damage that Mr. Jaskot has suffered. Having said that, its comments are intended to serve as an unequivocal statement that there was nothing improper in his conduct in this matter. We regret what appears, on this record, to be unwarranted judicial criticism levied against him.

Next, the Appeal Court found that the parties’ mutual misapprehension did not detract from a key fact: The wife was aware that the separation agreement was designed to circumvent the normal property-division scheme under the Family Law Act, and that she was giving up all her claims to the entire tract of property, whether consisting of one lot or two. The Appeal Court also observed that the wife had not been under duress when she signed the agreement, and had received independent legal advice (which she did not heed) before doing so.

Based on this and other errors by Justice Pazaratz, the Appeal Court restored the parties’ separation agreement, and proceeded to divide their property in accord with its express terms.

For the full text of the decision, see:

Butty v. Butty, 2009 ONCA 852 (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 us at RussellAlexander.com