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Posts from the ‘Ontario Child Support’ Category

Court Rebukes Wealthy Couple for Reaping Canadian Rewards While Avoiding Taxes

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Court Rebukes Wealthy Couple for Reaping Canadian Rewards While Avoiding Taxes

The wealthy couple – who owned assets around the world estimated to be worth $50 million – were in the midst of a very high conflict matrimonial proceeding. They were scheduled for an upcoming trial to decide their property division and child support issues.

Although the case is unremarkable in terms of the legal issues under dispute, the court made some pointed comments about the couple’s historic penchant for maximizing their tax avoidance opportunities, while simultaneously exploiting the numerous advantages offered by Canadian society.

The court explained that over the years the couple has amassed a large real estate portfolio including: a large West Vancouver home; a downtown Vancouver condominium; a ski chalet at Big White Ski Resort near Kelowna; a ranch in Merritt; condominiums in Toronto, Florida, and Malaysia, and five properties in Singapore.  But the court explained that  husband’s business had been structured to shield them almost completely from tax liability:

This family is very wealthy and they have a lavish lifestyle. The financial engine for that wealth is the [husband’s] Singapore medical practice, which by all accounts, has been very successful. … The income derived from the medical practice has been the sole support for the family since the [wife] stopped working some time ago.

The court then described the couple’s decision to install the wife and child in Canada, while keeping the husband’s business interests and income sources elsewhere:

In 2003, the family decided to relocate to Vancouver. They applied for permanent residency under the “Immigrant Investor Program”.  In June 2004, the family purchased a large home in West Vancouver. Despite initial intentions of moving to Vancouver, the [husband] determined that it was more practical and lucrative for him to continue his medical practice in Singapore while the [wife] and the children remained in BC. He never did immigrate to Canada but did visit from time to time, while supporting his family here with income earned and taxed in Singapore.

In the context of hearing the bitter matrimonial dispute – which among other things involved Mareva injunction applications and a restraining order to keep the husband away from the former family home – the court registered its disapproval in these terms:

I accept the [wife’s] evidence that the accounts which are used to fund the mortgage on their joint asset – the West Vancouver home – was purposefully put into her name so as to avoid any suggestion that the [husband[was financially active here and therefore, subject to Canadian and BC income tax. Accordingly, but for a small amount of income earned on investments in BC in the [wife’s] name, the vast majority of the family income has been earned elsewhere and presumably taxed elsewhere (if at all) – while the [wife] and [their child] have enjoyed the many benefits of Canadian society, including [the child’s] attendance at the local public high school. Needless to say, this family has also now taken advantage of and sourced another valuable benefit in our society – our legal system – which is funded by Canadian and BC taxpayers.

It’s an interesting comment by the court, of the type that is not often directed at litigants in family law disputes. Maybe it should be, and more often.

For the full text of the decision, see:

Devathasan v Devathasan, 2017

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 Dad Be Forced to Cook Gluten-Free?

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Should Dad Be Forced to Cook Gluten-Free?

In the recent decision in Beaulieu v. Beaudoin, the court was asked to rule on several continuing disputes between now-divorced parents in relation to the custody, access and care of their four children, three of whom had special needs. Specifically, one child had been diagnosed with autism and ADHD, while two others had severe behavioral issues.

In the context of a hearing to resolve several ongoing and acrimonious issues, the mother asked the court for an order to force the father to follow children’s gluten-free diet when they are in his care.

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The court explained the mother’s position:

The [mother] says that she has invested significant time and energy into learning how to support the children’s needs and how to stabilize their symptoms through medication and diet. Her research has led her to believe that gluten free and casein free diets have been shown to have positive effects on children with autism and ADHD. She asks that the [father] be ordered to adhere to their dietary requirements.

The father resisted;  although he acknowledged that some of the children had special needs, he disputed the effect of gluten on their behaviour.  He had consulted the children’s doctors on his own about the role of gluten, and they advised that it was unlikely to have any impact.  The court added, “He goes on to list the [the mother’s] long list of dietary restrictions which he believes illustrates [her] own obsession with food and her need to correlate everything about the children’s behaviour on what they eat.”

The court considered evidence, in the form of a letter, from one of the children’s pediatricians.  While stopping short of prescribing a gluten-free lifestyle, it indicated “some evidence” that such a diet can be helpful for children on the autism spectrum, and that “Mom feels that she is doing much better.”

The court effectively discounted the pediatrician’s letter, noting:

He does not prescribe a gluten-free diet. Dr. James’ letter only reports what the [mother] has told him; this is double hearsay and has very little probative value. I am reluctant to make the [mother’s] dietary demands a term of any order without more persuasive evidence. To do so would expose the [father] to allegations of a breach of a court order. At the same time, the children are spending most of their time in their mother’s care and it is problematic if the [father] ignores her concerns altogether. This is a high conflict case. The parties do not need to be looking for new ways to antagonize each other.

In the end, the court resolved this narrow issue by ordering that the father must “respect the children’s dietary regime within reasonable limits.”  The court then went on to rule on a host of other contentious, equally-narrow issues between this warring former couple.  (These will be the subject of future Blogs.)

For the full text of the decision, see:

Beaulieu v. Beaudoin, 2018 

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

Court Declares Excuses “Ludicrous” and “Preposterous”

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Court Declares Excuses “Ludicrous” and “Preposterous”

Family Court judges hear cases all day long, and it’s likely fair to say that they’ve “heard it all.”

More to the point, they’ve likely heard a wide array of what are (at best) improbable excuses from litigants, who are called to task for non-compliance with court orders, especially those relating to a failure to provide full and frank disclosure.

In a case called Q.X. v. J.R.L., the court dealt with the property and support disputes between a former couple who were born and raised in China, met online, and then married in Vegas a little over a year later when they learned the woman was pregnant. The marriage lasted 18 months.  The court was left to untangle a complex, often-contradictory narrative from the husband in particular, about his Canadian and foreign income, investments, family businesses, and other financial information that was relevant to determining the issues between the parties.  The court described some of his evidence this way:

[The husband] J.R.L. has provided no mortgage application for any of the properties he owns in British Columbia. He claims that he came to Canada when banks lent money fairly freely and it was not necessary for him to complete a mortgage application form. He has produced “loan” documents from his father, mother, and sister, but gave no evidence relating to the loan documents, and I question the validity of the documents. He provided some documents relating to his immigration to Canada, but they do not appear to be his application form, and of the documents he did disclose, it is not possible to tell if there was a declaration of income, because J.R.L. blacked out portions of the document.

J.R.L. has failed to disclose his President’s Choice Financial chequing account statements from December 2011 to April 2012. He has failed to disclose or produce any bank statements for his bank accounts in China. In particular, he has failed to disclose his Bank of China term deposit statements from April 2011 to April 2013; his Bank of China savings account statement from April 2011 to April 2013; and his China Merchant Bank statements. He makes the preposterous claim that the banks in China do not provide bank statements. He is not telling the truth because Q.X. provided her Bank of China bank statements, showing that banks in China are able to, and do provide bank statements.

Likewise, in a recent case called Farrukh v Farrukh Amin the court’s credibility assessment of the husband was short and to-the-point:  It gave no credence to his proffered excuses for failing to comply with previous court orders, specifically in connection with producing documents and paying Costs previously awarded to the wife.  The court started its brief ruling this way:

On the evidence before me it appears that the [husband] does not think court orders apply to him when it comes to the payment of costs and the production of documents.

First, the court took issue with the husband’s contention that he had indeed filed the financial documentation required by the Family Law Rules:  It noted that the materials were simply not in the court file as they otherwise would be.

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Next, it outright disbelieved him on the reason for his failure to pay Costs under a prior order:

To submit to the court that he did not know where to pay the costs is simply a ludicrous answer to the question of why he did not pay them.

The court noted that the husband’s lack of cooperation and excuses put the wife at a disadvantage, and precluded both early settlement and the court’s full determination of the issues between them.

And, to add to the husband’s legal woes, the court hit him for an additional $16,000 in costs and disbursements, for the latest hearing that his past non-cooperation and non-compliance made necessary.

For the full text of the decisions, see:

Q.X. v. J.R.L., 2015 

Farrukh v Farrukh Amin, 2018

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

Wednesday’s Video Clip: The Path to a Successful Divorce

Wednesday’s Video Clip: The Path to a Successful Divorce

While the breakdown of a marriage is never an easy or happy time, the process can go smoothly or it can be a roller coaster. On top of all the emotional turmoil, it is time-consuming, costly and very confusing. That’s why Russell Alexander has written a book outlining the path to a successful divorce, taking readers step-by-step through the process from finding a lawyer to handling post-litigation issues. In 300+ pages, Alexander’s new book, readers will find a solid grounding on the key questions about family law that they’ll face as they go through a divorce, including whether they’ll need a separation agreement first, how courts view adultery and why representing yourself is a bad idea.

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

Taking the Kids to See Grandma This Holiday?  Read This First

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Taking the Kids to See Grandma This Holiday?  Read This First

With the upcoming season of holiday travel almost upon us, a recent Ontario case provides a good reminder:  Separated and divorced parents must strictly abide by the terms of any agreement or order in place for travelling with their children.

In Shapiro v. Feintuch the court was asked to resolve a dispute between two parents – who divorced nine years ago – but who continued to have conflict over many issues, especially the travel arrangements for their now-14-year-old son.

Earlier in the year, by way of an urgent motion, the father obtained an order forcing the mother to provide him with the son’s passport, and allowing him to keep it as his house.  This was to facilitate the father taking the son to Florida.  Less than a month later, the mother needed the passport back, so that she could take him to New York to attend two family events including a Bar Mitzvah.

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Initially, the mother did write to the father about taking the boy to New York, and asked for his consent.  But at first the father avoided answering directly, and raised other travel-related issues with her instead.  As the court noted:

This led to a long series of emails between the parties over the next five days that grew increasingly combative, vitriolic and lengthy.

The court continued the narrative:

It should be noted that in her original request on April 12, 2018, the [mother] had contemplated travelling on the afternoon of Monday, April 23 and returning on the morning of Wednesday, April 25, 2018. If the [father] had consented to this arrangement immediately in his initial response, rather than waiting five days and many emails to do so, this might well have resolved the matter. But after the extensive and often bitter emails that the parties had exchanged between April 12 and April 17, 2018, the [mother] was no longer willing to entertain a proposal she herself had contemplated in her original email. Instead, by this point the [mother] was determined that [the son] would travel to New York for both family events.

Since she could not get the boy’s passport in a timely manner, she decided to take matters into her own hands and arranged for him to be driven to New York by her parents. Border officials let them through even though the boy had only a birth certificate with him.

All of this was done without the father’s consent, although the mother advised of the boy’s whereabouts by email later that day.   During the span of the trip, the boy missed a total of five days of school, plus a regularly-scheduled access evening with the father.

This prompted the father to bring a motion, asking the court to declare the mother in breach of a prior order respecting their children’s travel arrangements.  The court granted the father’s motion and made the declaration.

The court noted that in 2015, after extensive litigation, the parents had agreed to the terms that governed any travel with their children.  Those terms had been embodied in three detailed paragraphs of a formal court order.  It stated that the father was to hold the son’s passport, and that the mother needed to get his consent before taking the boy somewhere like New York.

In defending her contravention of these requirements, the mother claimed that regardless of that prior order, her taking the boy to New York was actually in his best interests, and that the father’s consent should be dispensed with.

The court said it might have agreed with that argument, except for the fact the prior order contained the terms the parents had themselves agreed to.

Next, the mother argued that the father had withheld his consent to the trip unreasonably, and that she had no choice but to go anyway.  The court rejected this notion too, saying that it had no power to examine that issue; the parents had made it clear in their agreement – as reflected in the order – that they were giving each other the right to grant or withhold consent as they each saw fit.  As the court noted:

… the Order does not permit one parent to dispense with the other parent’s consent to travel, simply because the travelling parent regards the withholding of consent to be unreasonable.

Absent the father’s agreement, the mother had ignored a clear court order when she took the boy to New York anyway.  The whole point of the prior order, the court noted, was to avoid this kind of uncertainty and confusion over travel, which was not in the boy’s best interests.

However, in terms of the appropriate remedy, the court rejected the father’s request for $2,500 over and above his legal fees, noting this kind of penalty was reserved for contempt-of-court cases, not orders that declared a party in breach. The court added:

In coming to this determination, I have given careful consideration to the [father’s] submission that breach of court orders must have real consequences. These reasons should not in any way be interpreted as condoning parties in family law litigation from ignoring court orders. At the same time, I would observe that, in my judgment, these parties do take court orders very seriously. Having clarified the fact that the [mother] breached [the travel terms] paragraph … of the Order, I fully expect both parties to comply with it in the future. That said, the parties should understand that any future breaches of [those terms] will likely have much more significant consequences.

The court also admonished the parents that, going forward, they should,

…  be “brief and respectful in their emails, making no reference to either party or parties or their activities. Had this rule been followed in the present case, it is entirely possible that the conflict and disruption over this matter might well have been avoided.

For the full text of the decision, see:

Shapiro v. Feintuch, 2018

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

Cross-Border Abductions by Parents: Supreme Court Rules on Child’s “Habitual Residence” Under the Hague Convention

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Cross-Border Abductions by Parents: Supreme Court Rules on Child’s “Habitual Residence” Under the Hague Convention

A recent decision from the Supreme Court of Canada hones in on a narrow-but-important issue that arises in parental abduction across international borders – meaning situations where one parent removes a child to another country over the objection of the other, and in contravention of existing custody/access arrangements in force at the time.

In Office of the Children’s Lawyer v. Balev  the crux of the case was whether the Ontario court had jurisdiction to order the children returned to their father in Germany, even though they were happily living with the mother in Ontario.   The Supreme Court of Canada introduced the factual narrative of the case this way:

The story begins in Germany, where the family — a father, a mother, and two children, all citizens of Canada — were living. Because the children were struggling in school, the parents decided that the mother should take the children to Canada for 16 months to experience the Canadian school system. During that period, the father [suspecting the children would not be returned] purported to revoke his consent and brought an action under the Hague Convention for an order that the children be returned. While he pursued remedies in the German courts — unsuccessfully — the period of consent expired and the mother remained in Canada with the children. After the father resumed the application, a judge of the Ontario Superior Court of Justice ordered that the children be returned to Germany. The Divisional Court reversed this decision [on later appeal]. The Court of Appeal reinstated it. That decision was appealed to this Court.

From these facts, the legal issue arose as to whether the children in this scenario were “habitually resident” in Ontario for the purposes of the Convention on the Civil Aspects of International Child Abduction (the “Hague Convention”).  If so, the Ontario court could grant an order in the father’s favour to have the children returned.  Unfortunately, the term “habitually resident” is not defined in the Convention itself, although it has been considered by the courts of other subscribing states around the world.

In considering the matter afresh after several levels of appeal, the Supreme Court first noted the two main goals of the Hague Convention, which are:

  • Enforcing parents’ custody rights; and
  • Ensuring the prompt return of children to their “habitual residence” where they have been wrongfully-removed to or wrongfully-retained elsewhere.

The Court added that a determination under the Convention is not a custody order, but merely a mechanism for restoring the status quo.

The concept of a “habitual residence” could be considered either from the perspective of the parents, or from that of the child, the Court found.  Historically in Canada, it has typically been the parents intention (rather than the child’s level of acclimatization and wishes) that governs the issue of where the child lives.    Nonetheless, the Court concluded that a “hybrid” approach was more appropriate, meaning one that focuses on relevant considerations that arise from the facts of the specific case. That hybrid approach requires a court to look at:

  • The child’s links to country A and overall circumstances;
  • The circumstances of the child’s move from country A to country B; and
  • The child’s links to and circumstances in country B.

Pertinent considerations include the duration, regularity, conditions, and reasons for the child’s stay in a member state and the child’s nationality. No single factor dominates the analysis.

With that said, the Hague Convention does include an exception to the general rule that a wrongfully-removed or retrained child must be returned to his or her country of habitual residence in cases where:

  1. The child has reached an appropriate age and degree of maturity at which his or her views can be taken into account, and
  2. the child objects to return.

The Court concluded that these factors call for a straightforward assessment by the court.

In the end, the described hybrid approach to the concept of “habitual residence” best adheres to the principles that inform the rulings from other countries on this point, not to mention the overall intentions and goals of the Hague Convention itself.  These goals all have a harmonizing purpose that has been agreed-to by its contracting member states.

Having looked at the background legal principles, the Court resumed its review of the facts even though the issue was moot. (In 2017 a German court had granted the mother custody and they had been returned to Ontario).  It vindicated the father nonetheless, finding that an earlier court was correct in declaring the children were “habitually resident” in Germany and should have been returned there.

For the full text of the decision, see:

Office of the Children’s Lawyer v. Balev, 2018 

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

 

Was Husband in Contempt for Not Achieving the Impossible?

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Was Husband in Contempt for Not Achieving the Impossible?

The facts in Malboeuf v. Hanna raised an interesting issue:   Should a spouse be held in contempt for failing to satisfy a court Order that was impossible to comply with in the first place?

At an earlier hearing to address issues arising from their separation, the court ordered the husband to designate the wife as the irrevocable beneficiary of his life insurance policy.  Under the wording of the Order he was required within 30 days to “make arrangements to change the existing beneficiary designations to ‘irrevocable’ beneficiary designations ‘in trust for the children’ (if allowed by the insurer).  The goal was to secure the husband’s child support obligations towards their children by making the wife the trustee of the funds.

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The problem was that the insurer, RBC Insurance, did not allow such irrevocable designations on its policies.

This prompted the wife to claim that the husband was accordingly in breach of the strict wording of the Order, and should be found in contempt of court. At the least, he should have circumvented the obstacle raised by RBC’s policy by taking reasonable, good faith steps to try to achieve that required outcome through other means.  For example, he could have obtained a further Order requiring RBC to make the designation irrevocable, or could have purchased a new policy that did allow such designations to be made.

The husband countered that he had satisfied the technical wording of the Order by making the request to RBC; from there, it was out of his hands.  The “irrevocable” designation would be in place but for the fact that RBC did not allow it.

The court reviewed the law on civil contempt of court, noting that to prove the husband’s contempt the wife had to show all three of the following:

1)  that there was a clear and unequivocal Order stating what the husband should/should not do,

2) the husband actually knew the terms of the Order, and

3) he intentionally failed to do what was ordered of him.

The court added that even with all three elements established, it still had the power to override a contempt finding if it felt the husband had acted in good faith to take reasonable steps to try to comply.

In this scenario, the court concluded that the husband was not in breach. First of all, the Order did not clearly and unequivocally require him to irrevocably designate the wife, but rather contained built-in wording that contemplated a potential hurdle (i.e. “if allowed by the insurer”).  That alone absolved the husband from being held in contempt.

Nor was there anything in the wording of the Order that clearly and unequivocally required him to take other steps, such as getting a new policy or getting a court to force RBC to bend its policy.  Without such added obligations being clearly placed upon him, the husband could not be found in contempt in this situation.

For the full text of the decision, see:

Malboeuf v. Hanna, 2018

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

 

Court Issues Important Ruling on “Double Wills”

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Court Issues Important Ruling on “Double Wills”

In some circumstances, we recommend  that clients prepare a “double” Will – more properly referred to as a “primary” Will and a “secondary” Will for a single testator.  The primary Will deals with estate assets that require probate; the secondary Will covers assets that can be transferred to beneficiaries without having to go through the probate process.

Done right, this can minimize a testator’s probate fees and administration taxes.

However, the ruling in a recent Ontario decision called Re Milne Estate addressed a question that can dramatically affect the legal validity of this kind of Will arrangement.  Specifically, the court considered whether a Will is still valid if it allows the executors to decide whether property falls under the primary Will or the secondary Will.

The testator in Re Milne Estate had created two Wills.  The Primary Will covered all his property except certain named assets, and except other assets that the Trustees determined did not need to be included after-the-fact.   The Secondary Will addressed all property owned by the testator, and then specifically included certain named assets, and included those assets that the Trustees decided could be left out.

This wording was problematic; the two Wills essentially worked at cross-purposes to each other.  To be valid in law, a Will of any type had to conform to certain requirements, most notably that it had to demonstrate certainty in terms of the subject-matter that it covered.   This included certainty as to:

  • The intention to create a legal trust mechanism;
  • The subject-matter or property committed to the trust; and
  • The objects of that trust or the purposes to which the property is to be applied.

After confirming that there is no legal prohibition against the use of multiple Wills in Ontario, the court held that in this particular case, the Secondary Will was valid, but the Primary Will was not.

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Although it met two of the other legally-required “certainties,” the Primary Will in this case fell short of meeting the requirement as to certainty of the subject-matter or property:  By giving the Trustees after-the-fact discretion it left questions as to the exact property that was subject to its provisions.  In contrast, Secondary Will included all of the testator’s property of every kind, without exclusion.  It overlapped with the Primary Will completely, and with no gap.

The court accordingly directed the registrar not to accept the Primary Will for probate, but allowed the Secondary Will to go forward.

For those with multiple Wills, this decision in Re Milne Estate signals a need to have the wording reviewed by a lawyer, to ensure that the wording is valid and achieves its intended goals.

For the full text of the decision, see:

Milne Estate (Re), (2018)

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