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Posts from the ‘Court Cases’ Category

Father’s Income Cut By Half – Can Support Arrears of More Than $70,000 Be Wiped Out?

man with two children at lake and mountain

Father’s Income Cut By Half – Can Support Arrears of More Than $70,000 Be Wiped Out?

Under the terms of a settlement agreement that had been confirmed in a court order, the father had been dutifully paying about $1450 a month in child support, and $450 in monthly spousal support, based on his income at the time of about $100,000 per year.

However, within a few years he had amassed arrears to the tune of $47,000 in spousal support, and $25,000 in child support.  The court explained the reason:

In 2015, [the father] lost his job.  He was not able to find similar work.  His current income at his new employment is substantially less.  He has also taken on the responsibility of a new family.  He has two step children from the new marriage.  Since 2015, given the change in his employment, he has been having problems making the support payments.

The court heard that the father’s current income was considerably reduced from his former six-figure mark: he was now earning around $45,000 per year.

In light of those changed financial circumstances, the father asked the court to eliminate his outstanding arrears entirely.  In response, the mother claimed he actually owed another $40,000 more, over and above the arrears, to cover his unpaid share of one of their children’s university expenses.

The court confirmed that under the provincial Family Law legislation, it had the power to retroactively discharge or rescind child support arrears – but only if there has been a “change in circumstances” as that term is defined in the Child Support Guidelines.   That threshold is met if the amount of child support, calculated using the current circumstances and the Guidelines, would result in a different mathematical figure than the one arrived at initially.

But as the court explained:

The accumulation of arrears without evidence of a past inability to pay is not a change in circumstances.  As well, the present inability to pay does not by itself justify a change order.  Such an order should only be granted if the payor can also prove a future inability to pay. 

There remains a conceptual difference between situations where:

  • The father was asking for relief from paying arrears due to his current inability to pay; and
  • His arrears accumulated due to a change in circumstances that affected his ability to make the child support payments when they came due.

Although that distinction may seem esoteric, the court’s decision on whether to reduce or eliminate arrears was also to be influenced by various factors, including:

  • Whether the father’s support obligations arise under contract, by statute, or by court order;
  • The child’s ongoing support needs;
  • The father’s ongoing financial capacity to pay, including his ability to reduce the arrears; and
  • The father’s conduct, including any voluntary payments towards the arrears.

The court must also consider both the hardship endured by the father if he is ordered to pay the arrears, as well as the hardship to the mother if he is allowed not to.

In all cases, the paramount governing principles are firstly that the best interests of the couple’s children must be taken account, and secondly that the court should not provide either parent with incentive not to meet his or her child support obligations.

Here, the father was requesting a retroactive change to his support obligations based on his current income level.  That being the case, the court would not typically agree to rescind or reduce his arrears unless he could establish, on the balance of probabilities, that he cannot and will not ever be able to pay them. The father failed to fully satisfy the court on that fundamental point.

In the end, the court decided not to vary the $24,000 in outstanding child support, since the payments were properly owed by the father throughout, in light of his duty to help with their child’s educational expenses.  However, the court did agree to reduce some of the spousal support arrears, but only for only that period that the father was earning less than the mother. This still left him with $32,800 in outstanding arrears for spousal support and a total of almost $58,000 in arrears all-told.

For the full text of the decision, see:

Jackson v. Jackson, 2019

At Russell Alexander Collaborative 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

 

 

When Can You Vary a “Final” Spousal Support Order on an Interim Basis?

 

coins stacked in front of out of focus clock

When Can You Vary a “Final” Spousal Support Order on an Interim Basis?

The name itself suggests finality:  A Final Order for spousal support.  But under Canadian divorce law, even a Final Order can be changed by the court, if there are new facts that warrant it.  This typically takes place by one of the spouses bringing a Motion to Vary.

However, in some limited circumstances a Final Order can be changed on an interim basis – meaning even before a Motion to Vary can be heard.   The precise circumstances in which this can take place was the focus of a recent Ontario decision called Berta v. Berta.  The court introduced the background this way:

This has been an unhappily lengthy and contentious proceeding. It has been ongoing since 2010. The court file now comprises 21 volumes of the continuing record. That record is stored in seven banker’s boxes, requiring two large carts to haul it into court. There have been numerous motions and trips to the Ontario Court of Appeal in this and related proceedings.

The result of all that paperwork, as well as 9 days of trial time, was that the husband had ultimately been ordered by way of a Final Order for spousal support to pay his wife about $13,800 a month, based on his income which was imputed to be about $645,000 per year.  He had also been ordered to pay the wife $322,125 in costs.  However, he had paid only $73,000 toward that amount so far, and the support arrears alone totalled $480,000.

Instead of paying the rest, the husband applied to the court on an interim basis for an order requiring him to pay only $1,129 per month, until such time as a full Motion to Vary could be heard.  He based this request on numerous grounds amounting to a material change in circumstances, including a downturn in his business, health considerations, the loss of two key clients in his business, and what he called his wife’s “misconduct” in forcing him to buy out her shares in their jointly-owned business.

The wife countered by stating (among other things) that the husband’s business still earned enough net income to pay the full amount of monthly support – he just chose not to pay.  Plus, the husband had not come to court with “clean hands”:  He was currently in arrears, and had not complied with previous court-ordered disclosure, in one case taking 22 months to provide only partial documentation.

This factual background gave the court the opportunity to conclusively establish the proper legal test for varying a Final Order for support on an interim basis, under Canadian Family Law.   After reviewing the various thresholds that had been used by courts in the past – and while adding that the interim variation of Final Orders should not be routine – the court concluded that it could make such an order in this case if the wife makes out a “clear case for relief”.  The relevant factors include:

  1. A strong prima facie case;
  2. A clear case of hardship;
  3. Urgency;
  4. That the moving party (in this case, the husband) has come to court with “clean hands”.

Applying these tests, the court found the husband had simply not made out a case for an interim order.  In particular, he had not demonstrated even a prima facie case around his alleged decline in business earnings and other financial circumstances – let alone a “strong” one.  There was no evidence that the wife had engaged in any misconduct relation to the forced sale of shares, and the price he received was fair.  His claim to be suffering from various health problems was without proof. He also had not demonstrated any urgency, nor that he would suffer any hardship if he had to keep complying with the original Final Order.  The question of “clean hands” was unnecessary to decide, in light of the shortcomings in meeting the other parts of the test.

The court dismissed the husband’s motion.

For the full text of the decision, see:

Berta v. Berta, 2019

Related Article: The Finer Points on Court-Ordered Interim Support

At Russell Alexander Collaborative 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 Husband Be Forced to Obtain a Separate Home Appraisal?

beautiful house at sunset

Can Husband Be Forced to Obtain a Separate Home Appraisal?

In a recent case called Kraemer v. Kraemer, the court confirmed two important procedural points relating to property valuation:

  • The divorcing spouse who “owns” or controls an asset has the primary obligation to obtain an accurate valuation of it; and
  • In the event of a dispute as to an asset’s value, each spouse may be obliged to get a separate expert appraisal.

The couple had been married for almost 15 years and had three children.   In the course of their divorce proceedings, they ended up asking the court to help with their disagreement over the proper value of the matrimonial home they previously shared.

The wife had had it formally appraised at $735,000.   In contrast, the husband claimed it was worth $800,000, but offered no evidence to support that figure.  He resisted getting an expert appraisal of his own.

To this last point, the court replied:

Mr. Kraemer takes the position that he cannot be required to value the home and, essentially, the value will be decided when the house is sold. In my view, he is wrong in that position.

Indeed, the husband’s (incorrect) position overlooked the core principles that in Family Law proceedings:

  • Each party just take disclosure “very seriously”, and is duty-bound to provide meaningful disclosure of asset values.
  • Each spouse has an obligation to provide credible, realistic values, including independent valuations – not a “guess” or a “fictional amount”.
  • A failure to provide credible evidence to support a value may result in a less-advantageous value being assigned by the court.

On the issue of which spouse is responsible for obtaining an accurate valuation:  The primary responsibility for establishing an asset’s accurate value on the valuation date lies with the spouse who “owns” or controls it.  This is particularly true if that spouse makes an assertion in his or her filed affidavit about the asset’s value.  The spouse then has the burden of proving the stated value is correct;  this may require the input of an expert.  If the other spouse does not agree to the value proposed, then he or she can respond with a valuation from a different expert entirely.

Having reasoned this way, the court found that the husband in this case was obliged by law to hire his own expert to provide a separate, accurate valuation of the matrimonial home.   The court also declined the husband’s requires to treat the latest valuation as a shared expense;  it noted that the wife had already paid for her own valuation, so the overall fees for both appraisals would effectively be split between them.

For the full text of the decision, see:

Kraemer v. Kraemer, 2019 

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

 

New Supreme Court of Canada Ruling on What Constitutes a “Reasonable Expectation of Privacy”

grey security cameras

New Supreme Court of Canada Ruling on What Constitutes a “Reasonable Expectation of Privacy”

A few years ago we reported on an important development in Ontario privacy law in a case called Jones v. Tsige, where the Ontario Court of Appeal recognized a new cause of action called “intrusion upon seclusion”.  We discussed how this can tie into former spouses’ desires to snoop on each other in a Family Law dispute context.

Recently, another important case – this time from the Supreme Court of Canada – expands on the nature and scope of the privacy rights to which all Canadian citizens are entitled.

In a criminal law case called R. v. Jarvis, the background facts involved a high school English teacher who surreptitiously recorded videos of female students using a camera hidden in a pen.  The recordings were of the students engaging in ordinary, school-related activities, in the common areas of the school.  Most of the videos focused on the students’ faces, upper bodies and breasts.  The students had not consented to being recorded, and were unaware they were being filmed.

In the context of confirming the teacher’s conviction for the criminal offence of voyeurism, the court considered the question of whether the students had a “reasonable expectation of privacy” in this scenario. This was relevant because the offence of voyeurism is defined to be one where a person surreptitiously observes or makes a visual recording of another person for a sexual purpose, when that other person is in circumstances that give rise to such a reasonable privacy expectation.

The Supreme Court in Jarvis noted that “privacy”, as it is ordinarily understood, is not an all-or-nothing concept. The question of whether this teacher’s surreptitious recordings were a breach of the students’ privacy required a review of the entire context in which they were made, and on a number of factors. These included the location, the students’ level of awareness, their relationship with the teacher, the manner in which the recordings were made, their subject-matter, the activity the students were engaged in when the footage was filmed, and any rules, regulations or policies that impacted the use of recordings.

The Court added that the crime of voyeurism was defined to include reference to the “circumstances” that gave rise to a reasonable expectation of privacy.  This suggested that elements of the offence are not governed solely by location, and it can be committed in public spaces, not just private ones.  This definition also allowed courts to take broader account an offender’s use of evolving recording technology, when deciding whether the crime has been committed.

Importantly, the Court stated that in examining privacy expectations, it could reflect on and incorporate the huge body of prior case law under s. 8 of t he Canadian Charter of Rights and Freedoms, which enshrines citizens’ rights against unreasonable search and seizure.  The Court in Jarvis concluded that it:

 … opened the door for the expansive history of s. 8 jurisprudence to inform privacy disputes in all areas of the law…

With that vast body of case law to draw from, the Court concluded that societal perceptions of when privacy can be expected are “informed by our fundamental shared ideals about privacy as well as our everyday experiences.”

Using this framework, the Court concluded that in all the circumstances the teenaged high school students would have had a reasonable expectation that they would not be recorded in the manner they were.  It upheld the teacher’s conviction for voyeurism.

Although Jarvis is a criminal law decision, it will no doubt inform issues around the law of privacy as they arise in other legal contexts, including Family Law disputes.

For the full text of the decisions, see:

Jones v. Tsige, 2012

R v. Jarvis, 2019 

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

Divorce Law 101:  Which Former Spouse Gets the Half-Billion Dollar Yacht?

yacht on water

Divorce Law 101:  Which Former Spouse Gets the Half-Billion Dollar Yacht?

Upon deciding to split up, many couples have to squabble over things like who gets to keep the high-end coffee maker or toaster they received as a wedding gift.  But as divorcing spouses go, it is rare to have to argue over which of them gets the family’s CDN$584 million mega-yacht.

This was the plight of Russian billionaire Farkad Akhmedov and his former wife Tatiana.  As part of their 2016 divorce settlement – which is one of the costliest in the world – Farkad had been ordered by a U.K. court to pay over about 40 percent of his vast fortune to his ex-wife. But the ownership of the 115-metre mega-yacht called “Luna” was still under contention; when Farkad failed to pay Tatiana the CDN$795 million as ordered, she obtained a freezing order from a U.K. court in 2018 that purported to apply to Dubai, where the yacht was docked.  A Dubai court affirmed that the U.K. judgment declaring Tatiana the owner could be enforced.  Local Dubai authorities went ahead and impounded the vessel.

But recently, a Dubai Court of Appeal ruled in Farkad’s favour;  it agreed with his position that the yacht was part of a matrimonial dispute, not a maritime dispute, and that Shariah law should govern the ownership issue. Since the 2016 U.K. order relating to the yacht was ill-founded, the Dubai seizure was also improper.  The Appeal Court added that the Dubai ruling, purporting to find that the U.K. judgment was enforceable in that jurisdiction, was also in error.

It is unlikely that this will be the end of the matter: It is reported that Tatiana intends to resume pursuing her various marriage- and property-related claims in the U.K. courts.  It is also expected that the case will also be forwarded to another Dubai court for a further hearing.

Meanwhile, the mega-yacht is currently still docked in Dubai pending resolution of which of these former spouses is the owner, and under which jurisdiction’s laws.  The yacht is described as having nine decks, two helicopter landing pads, an on-board swimming pool, a mini-submarine, and space for 50 crew.

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

Should Court Trust the Expert Opinion of Asset Valuators?

Should Court Trust the Expert Opinion of Asset Valuators?

In the course of making its various determinations in your divorce proceeding, including how to divide up your former home and assets, the judge will usually have to put a dollar-figure on those items.

Naturally, this will not involve the presiding judge actually examining and putting a value that awful antique vase you inherited from Aunt Millie; instead, the judge will receive the input from independent expert valuators.

But how truly “neutral” and “independent” are these valuators, really?

Some Ontario courts have commented on the ostensible – and perhaps questionable – impartiality of such expert valuators.  In Plese v. Herjavec, for example, the court was faced with vastly-different figures offered by each of the valuators hired in a case where the high-net-worth former couple had many assets to divide.  In the course of determining their respective Net Family Property values, the court heard expert evidence on the value of husband’s business interests on valuation day.

The wife’s expert valuator put a mid-point value on the business at $52.5 million, while the husband’s own expert pegged it with a value of just over $24 million, but then discounted that figure further, claiming that the true value was only 90% of that, because of what were called “phantom options”.   There was a similarly large gap in the values given by each expert in connection with the former couple’s matrimonial home.

About the glaring disparity in the figures and the apparent partiality of these valuators, the court said:

The valuators disagreed on both the values of both [the matrimonial home at] High Point Road and [the husband’s business].  In each case, each valuator, supposedly acting entirely independently, suggested values that benefitted the position of the party who had hired him.   Similarly, when it came to expert opinion on [the husband’s] income, [the husband’s] expert, in particular, seemed particularly aligned with [the husband’s] position.   Sadly, this is often the case.

As an aside, the court added that it might be better if the spouses agreed to jointly hire a single trusted expert to provide the court with one conclusive set of valuation amounts:

I have always been tempted to ask valuators whether their opinions would have been the same had the other party retained them.  I have never given in to that temptation, but merely make the observation.   It seems to me that in order to provide the court with truly independent, unbiased and reliable opinions, it would be preferable to require the parties to jointly retain a single expert, or, perhaps, to require the parties to fund an expert who would be retained by the court, at the parties’ expense. 

Indeed, courts will take active steps in this direction, by ordering that the spouses to jointly retain a valuator of their mutual choosing. However, this does not solve the problem of a spouse being unwilling to cooperate with the expert even if he or she helped to choose them.

This was illustrated in recent case called Rezai v. Gibbons, where the court expressly ordered the couple to hire a joint valuator, only to learn that the husband refused to cooperate.  In particular, he failed or refused to provide the valuator with nine key documents that were needed to assess the husband’s income, and in the court’s words this rendered the valuator’s resulting report “virtually useless”.

The court responded by re-apportioning responsibility for valuator’s fees, and requiring the husband to pay the wife’s full share of the $32,000 in fees that the valuator charged for the services.

For the full text of the decisions, see:

Plese v. Herjavec, 2018 

Rezai v. Gibbons, 2019 

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

Divorce Act Changes:  Cutting Out the “Winners” and “Losers”

Divorce Act Changes:  Cutting Out the “Winners” and “Losers”

In a recent Blog we talked about an Ontario Court of Appeal case called M. v. F.,  where Justice Benotto made some observations about the “win/lose” mentality of provincial child custody laws.  Specifically, she noted that:

“For over twenty years, multi-disciplinary professionals have been urging the courts to move away from the highly charged terminology of “custody” and “access.” These words denote that there are winners and losers when it comes to children. They promote an adversarial approach to parenting and do little to benefit the child. The danger of this “winner/loser syndrome” in child custody battles has long been recognized.”

That call-to-arms by Justice Benotto has finally been heeded by the federal government, in the form of upcoming changes to the Divorce Act. Those amendments, which are found in Bill C-78 but are not yet in force, have an unwieldy title:  “An Act to amend the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act and the Garnishment, Attachment and Pension Diversion Act and to make consequential amendments to another Act”.

Although these Bill C-78 amendments implement a broad and ambitious range of changes to existing Family legislation, one of the more important ones is to replace the terms “custody” and “access” in the Divorce Act with more neutral terms like “parenting orders” and “contact orders”, respectively.  These newer concepts also give courts an embedded opportunity to give specific directions as to the care of children.

That revised Divorce Act wording also acknowledges the fact that family law academics – and judges like Justice Benotto in the M. v. F. case – have long encouraged this tweak to the terminology.  It eliminates the “winner/loser syndrome” she spoke of, as well as the unproductive mindset that the current custody regime fosters.  By allowing courts to grant orders for “parenting” and “contact” instead, the level of parental conflict will be reduced, and by extension the best interests of children will be promoted.

As yet, there is no specific date announced for the implementation of the Divorce Act changes, but they are expected to be rolled out at some point in 2019.

Is this a promising development in the legislation around custody? Will it work in helping to reduce parental conflict, as hoped?  What are your thoughts?

For a copy of the legislative amendments to the Divorce Act, see here.

M v. F., 2015 

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 You Get Child Support from Your Ex After 50 Years in Ontario?

us money bills

Can You Get Child Support from Your Ex After 50 Years in Ontario?

Multiple reports of a 74-year-old California mother getting $150,000 in child support owed to her from 50 years ago are hitting the headlines.

CNN reports:

“Toni Anderson married Don Lenhert in 1966, but the couple split two years later.

During the divorce proceeding in mid-1970, the judge ordered Lenhert to pay child support for their 3-year-old daughter Lane, consisting of monthly payments of $210 for the first 2½ years, and then dropping down to $160 per month until Lane turned 18.

The order commenced January 1, 1971.

But Lenhert never paid.

Those monthly payments comprise a principal of about $30,000, Anderson said, and with a 10% interest rate, he owes her $150,000.

“The first check bounced and then he went off to Canada with his girlfriend and had two more kids. He completely disappeared,” Anderson said.

Last year, Anderson realized there’s no statute of limitations for child support payments in California.

She Googled her ex-husband’s name and, she said, found photos of him living what appeared to be a financially sound life in Oregon, with a big house and a boat.

She filed a motion to ask for unpaid child support. Last month, she made her case in court. The judge granted her request.”

Does this sound fair to you?

Some would argue that the mother should have taken steps earlier to enforce support order and it is too prejudicial to require the father to pay now after 50 years. The child is an adult now so the $150,000 amounts to a windfall for the mother.

Others could properly point out that an Order is an Order, not a suggestion and the father should have complied 50 years ago, and any prejudice now is the result of his own misconduct.

Could this happen in Ontario?

As we have written previously the leading case in Canada for child support and retractive support awards is the Supreme Court of Canada’s decision in D.B.S.

If the claim for child support is made for the first time when the “child” is an independent adult, then the short answer is no. Child support is for children of the marriage, not adults who used to have that status.

If the basis of the retroactive claim is valid separation agreement or court order, then the answer would likely be yes. But each case is unique, and the court sets out several factors to consider in determining retroactive awards including, proper and timely financial disclosure, delay in seeking enforcement by the recipient and blameworthy conduct of the support payor.

At Russell Alexander Collaborative 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.