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Posts from the ‘Support’ Category

Former Shark Tank Star Ordered to Pay Ex-Wife $125,000 Per Month in Support

Former Shark Tank Star Ordered to Pay Ex-Wife $125,000 Per Month in Support

In a recent ruling by the Ontario court the husband, well-known TV-celebrity Robert Herjavec was ordered to pay his ex-wife, Diane Plese, $125,000 per month in spousal support for an indeterminate period.  He was also ordered to pay her about $25 million, representing an equalization payment and her entitlement to shares in a cottage and vacation property. This is in addition to about $20 million she already received in assets from the marriage.

Herjavec, one of the stars of television’s Shark Tank and Dragon’s Den reality shows, had been married to Plese for 24 years before they split in 2014.  Their separation was prompted by the revelation that he had been having an extramarital affair.

At stake in the divorce was what they considered an “unimaginable fortune,” which had snowballed from an original $31 million sale of Herjavec’s cyber-security company called “Brak” in 2001.  This funded the development of a similar, equally-lucrative business later on.  The influx of wealth had a significant effect on the couple’s lifestyle, as the court explained:

After the Brak sale, the family’s spending patterns changed dramatically.  A new family home was purchased for over $7 million.  It was located in the exclusive Bridle Path area of Toronto.  In addition to many bedrooms, bathrooms, living and dining and family room, it also featured an indoor swimming pool, a ballroom, teahouse, and a huge garage, large enough to store many vehicles. 

They acquired a new recreational property on Fisher Island in Florida.  It cost more than $2.6 million.  Boats and cars were purchased.  The children were sent to exclusive private schools.  Ultimately, Ms. Plese stopped working outside the home altogether.

In the context of settling their family law issues, the court turned to valuing the former couple’s property, including their 22,500-square-foot matrimonial home now valued at around $17 million, their $5 million cottage, their $4.8 million property in Fisher Island, as well as various boats, vehicles, and even their Aeroplan points.  This was a considerable challenge due to the significant difference in valuations provided by their respective experts:   For example, respecting the value each expert attributed to Herjavec’s current business alone, there was a spread of $30 million.

After concluding that Plese was entitled to about $25 million for her share of these items, the court turned to the issue of how much spousal support Herjavec should pay her.  In doing so, the court cited from a paragraph of his own book, as evidence of the importance of the marriage and Plese’s support to his success. The court said:

This was a lengthy marriage of nearly three decades.  The parties both testified they worked as a team.   Mr. Herjavec himself perhaps put it best in his book titled Driven: How to Succeed in Business and in Life.  At page 286 he says:

I’m fortunate in so many ways to have Diane as my spouse.  She earned her optometry degree over six strenuous years of study, years that included countless nights of study and work as an intern.  She knows what it’s like to work eighteen or twenty hours a day in pursuit of a goal; she understands the motivation behind it.  Having obtained her degree she could count on a good income from steady employment, providing a safety net if one of my projects went belly up.  This was enormous comfort to both of us, especially during my first years as an entrepreneur. 

Clearly, Ms. Plese’s contributions from her own work were critical to Mr. Herjavec’s financial success, particularly in the early years of the marriage when he began Brak.   Brak, of course, provided the foundation for [the later company] and its ultimate success.  What Ms. Plese lost when she stopped working outside the home was that very steady employment and her own financial safety net created from her own separate earnings.  This is a compensable loss.

In all the circumstances, the court concluded that Plese was entitled to spousal support of $125,000 per month, with no set termination date.  Although this amount was actually lower than what the Spousal Support Advisory Guidelines would otherwise dictate, it incorporated the ongoing capital positions of each of the former spouses, and represented a reasonable balancing of the economic consequences of the end of their marriage.

For the full text of the decision, see:

Plese v. Herjavec, 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

GM Oshawa Assembly Plant Closing & Divorce

The Ghosts of GM: Past, Present and Future

On November 26, 2018, the General Motors Company (GM) announced that it will cease allocating new product to its Oshawa assembly plant beyond the end of 2019. This came as a shock to the 2,500 employees who work at the Oshawa plant and the many more who depend on their income. While the jury is still out on whether GM will be laying off or re-training its 2,500 employees, one thing is certain—a large cohort of GM’s employees stand to lose their livelihood.

Whether laid off or re-trained, employees who have a potential, current or settled family law matter will need to govern themselves wisely to weather the impact that closure will have on their day-to-day lives. Accordingly, this post explores the likely, and, not so likely, family law implications of GM’s closure of its once thriving Oshawa assembly plant.

The Ghost of GM Past: Settled Family Law Matters

If your family law matter was previously settled by way of a Separation Agreement or Final Order, the loss of employment income may trigger a review of child support or spousal support, or parenting.

Support obligations

It is likely that the loss of employment income will mean that you cannot afford to pay child support and/or spousal support as set out in a Separation Agreement or Final Order. In the case of a Separation Agreement, you may be able to rely on a built-in review clause to revisit the issue of support. Most Separation Agreements contain a dispute resolution clause which may be the first place to start in this endeavor. In the case of a Final Order, you will likely want to bring a Motion to Change a Final Order if you and your ex-spouse cannot agree on the appropriate adjustment out of court. A qualified lawyer can assist with making this process as seamless as possible.

Parenting

It is not likely that your loss of income will impact settled parenting arrangements. However, you may find yourself needing to reduce your parenting time with the children in order to focus on finding a new job. In this scenario, you may likely need to rely on the dispute resolution clause in your Separation Agreement or bring a Motion to Change a Final Order altering an access schedule in order to achieve the desired relief.

The Ghost of GM Present: Current Family Law Matters

If you are currently going through a legal separation from your spouse, the loss of employment income may affect a number of aspects in your separation, including but not limited to, support, assets and liabilities and alternative career planning.

Child support and spousal support

You may have credible grounds by which to vary a temporary Order for support in your legal proceeding. As an Order for support would have been based on your GM income at the time, the Order may be varied by the new circumstances. You may seek such relief at a pre-trial conference or by bringing a motion. It is not likely, however, that your loss of income resulting from being laid off will extinguish your entire obligation to pay support. Rather, you may still be required to pay support on the basis of employment insurance income or imputed income. However, the extent of any such continuing obligation depends on the particular facts of your case.

Assets and liabilities

The loss of employment income may result in a budgetary deficit, impacting your ability to keep the matrimonial home. If you are no longer able to maintain your share of the mortgage and bills associated with the matrimonial home, it may have to be listed for sale—which may be the most poignant of all of your post-closure concerns. Worry not. There may be options available to you for preventing this outcome such as, a buy-out, borrowing or disposition of investments, RRSPs, RRIFs or your GM pension. However, the viability of these options to save the matrimonial home will need to be assessed against the surrounding issues in your proceeding such as support, equalization and other issues relevant to your case.

Alternative career planning

You may wish to delay your re-entry into the workforce to obtain credentials in a more stable industry. While this will yield economic benefits in the long run, your current financial obligations of support and solvency will be deciding factors. Delayed income generation caused by alternative career training may likely be manageable provided that the financial obligations of your ongoing separation are minimal. However, your freedom and ability to pursue such an undertaking may require a corresponding compromise and will depend on the unique facts of your case.

The Ghost of GM Future: Potential Family Law Matters

If you have been planning to separate from your spouse, the loss of employment income can have significant family law implications on a number of obligations arising in separation, including but not limited to, support, parenting and family property.

Child support and spousal support

It is not likely that being laid off will defer support obligations. You may be obligated to pay support if you receive employment insurance income sufficient enough to meet legislative minimums. If you do not qualify for employment insurance, your spouse may still seek support by imputing an income on you commensurate with your work experience, whereby you will be required to pay support. In either scenario, the obligation to pay child support and spousal support may survive the loss of income depending on the facts of your particular situation.

Parenting

It is likely that being laid off will mean expanded parenting time. While increased parenting time may yield social benefits, it may also impinge on your economic rehabilitation. Your spouse may expect you to dedicate your new found time to caring for young children who are not in school. These, and other significant changes to parenting time after initiating your separation, may likely hinder your re-entry into the workforce. A properly drafted parenting agreement can help by moderating unrealistic expectations.

Family property

You will have a legal duty upon separating from your spouse to avoid the reckless depletion of family property. While you may wish to list personal or real property for sale to help make ends meet, it is not likely that you will be able to freely dispose of family property after your date of separation without your spouse’s prior consent or proper accounting. You will have to be mindful of how you manage family property as mismanagement may prejudice the equalization of net family property and may result in a Court order.

Bottom line

The closure of GM’s Oshawa assembly plant in 2019 will disrupt the lives of many families, the impact of which might be felt most by those dealing with a potential, current or settled family law matter. Contacting a lawyer for legal advice tailored to the particular facts of your case is a proven way to mitigate the effects of an imminent disruption to income. While it may seem impossible to afford a lawyer at this time, there may be options available to finance the cost of much-needed legal representation.

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.

Russell Alexander Collaborative Family Lawyers’ First Annual Holiday Toy Drive

Poster for Russell Alexander Collaborative Family Lawyers' Toy Drive

 

Russell Alexander Collaborative Family Lawyers are pleased to announce the start of their First Annual Holiday Toy Drive. This year the drive will be supporting Bethesda House located in the Durham Region and A Place Called Home located in The City of Kawartha Lakes.

New, unwrapped gift donations can be made in the Brooklin office for the Bethesda House. They have informed us of the lack of gifts for children 13-17 years of age. Some gift suggestions for them include:

  • Sports equipment
  • Art supplies
  • Games
  • Movie passes and gift cards
  • Purses and backpacks
  • Make-up, lotion, perfume
  • Hats and scarves

The Lindsay office is accepting new, unwrapped gifts to be donated for A Place Called Home. There is no recommended age for donations for this organization.

If you wish to donate to the toy drive this year, it will be running from November 1, 2018 through to December 7, 2018. You may drop by with your donation in the Brooklin or Lindsay office any time between 9:00 a.m. and 5:00 p.m. on Monday to Friday. For further details, feel free to give our office a call at 905-655-6335.

Italy Proposes New Law with Hopes to Abolish “Support”

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Italy Proposes New Law with Hopes to Abolish “Support”

The Italian government has recently proposed a Bill to abolish child support and sole custody. The Bill is intended to provide a framework for “perfect co-parenting”, yet critics fear the effects it may have on women’s rights.

The Bill indicates it would enable parents equal time with their children and each parent would pay for the child’s expenses whenever they are in their care. If one of the parents are unable to pay the expenses, then the other parent (who has the financial means) would pay for those expenses directly and not in the form of “support”.

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Critics of the proposed legislation fear that since Italy’s society is made up of less than 50 percent of women who work outside of the home, that this would influence mother’s with unstable employment to feel pressured into remaining in an unhealthy marriage. Nadia Somma, a representative of Demetra, an Italian anti-domestic violence center, stated that the proposed law would “turn back the clock 50 years on women’s rights”.

Due to current government support, this legislation is likely to pass in the Italian Parliament. Experts indicate the enforcement period to range from six to 17 months.

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

 

 

 

Father Says Kid’s Karate is OK, but MMA is Not; Court Rules on Special Expenses

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Father Says Kid’s Karate is OK, but MMA is Not; Court Rules on Special Expenses

As readers of my Blog will know, under the rules relating to child support in Ontario, parents are obliged to financially support their children, and this duty comes to the forefront when the parents are separated or divorced.

However, there are actually two distinct aspects of that mandatory child support:  1) The one for basic support that is set out in the Child Support Guidelines (CSGs); and 2) the “special or extraordinary expenses” that are allowed for in s. 7 of those same Guidelines.

“Special or extraordinary expenses” are defined to include items such as:

  • Child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment
  • The portion of the medical and dental insurance premiums attributable to the child
  • Certain health-related expenses
  • Extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs
  • Expenses for post-secondary education
  • Extraordinary expenses for extracurricular activities

If one parent refuses to agree to pay for a particular special expense, the other parent may have to apply to the court to have a judge make a determination, the legal test being whether it is both “reasonable” and “necessary” in the circumstances.

This was the situation in the very recent case of Newstead v. Hachey, where the court considered whether the child’s Mixed Martial Arts (MMA) training – which the mother had unilaterally enrolled him in – was justifiably a section 7 special expense.   Although the child was also enrolled in Karate, the father thought the MMA training was inappropriate because of its violent focus.  He continued to help pay for it under protest, but asked the court to decide.  The court explained:

While the husband is not happy with certain expenses being incurred by the wife for the children without his consultation or approval, he has not balked at paying.  … He did not agree with the wife’s decision to put [the son] into Mixed Martial Arts.  His view is that while Karate provided a benefit to the child, MMA is different as the only objective of the sport is to hurt or subdue the opponent.  He is afraid that sends the wrong message to [the son], who has had behavioral issues which times included aggression.  Still, despite his protests, the husband is not refusing to contribute to these expenses.

The court pointed out that section 7 of the Guidelines does require the parents to consult or agree to the MMA lessons, but it was a factor the court could take into account in assessing reasonableness:

Section 7 does not specifically require prior consultation for allowable expenses; the test rather is that the expense must be reasonable and necessary.  Section 7(1) of the CSGs says “the court may … provide for an amount”.  The relief, as such, is discretionary.  It follows that a failure or refusal by a claiming parent to discuss the expense with the other parent in advance could bear on the court’s exercise of its discretion in determining whether the expense is reasonable or, for that matter, whether it is necessary.

In the end, the court essentially allowed for the MMA expense to be shared in the overall support calculations, but admonished the wife that she could have those kinds of costs denied in the future simply because she failed to consult with the father beforehand.  The court said:

I encourage the parties and in particular the wife to have these discussions in advance, and simply caution both parties that how they approach future expenditures could impact whether they would be allowed by the court if contested.

For the full text of the decision, see:

Newstead v. Hachey

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

Changes to Divorce Act Recommended

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Changes to Divorce Act Recommended

The Canadian Bar Association (CBA), which is the largest professional, nation-wide association for lawyers in Canada, has recently recommended updates to the federal Divorce Act. Put forward by the CBA’s Family Law Section, these suggested changes are aimed at reflecting new realities related to modern-day parenting.
The proposed changes relate to three topics:

• Relocation – Although the test for a court ordering a child to be relocated hinges on the “best interests” of that child, courts are given little guidance on how to apply that test in specific cases. The proposed legislative changes would improve clarity and consistency.

• Child Support in shared parenting situations – The suggested amendments call for the legislation to include a formula for determining child support in shared parenting situations. Currently, the proper approach for courts to apply is complex.

• Updating Divorce Act terminology – The CBA’s proposed changes would see both the Federal Child Support Guidelines and the Divorce Act get updated so that terms such as “custody”, “access” and “best interests of the child” are modernized and replaced with more progressive terms. In particular, the clarity and meaning of the latter term would benefit from incorporating specified factors such as the impact of the child’s cultural, linguistic or spiritual upbringing, as well as the question of whether there is domestic violence in his or her home life.
If for no other reason, from a sheer temporal standpoint this kind of “freshening up” of the Divorce Act is long overdue, since it’s provisions have not been significantly amended for 30 years.

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

If You are Divorced in a Foreign Country, Can a Canadian Court Make Orders Too?

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If You are Divorced in a Foreign Country, Can a Canadian Court Make Orders Too?

The facts in Cheng v. Liu are a little unusual, but the core question was this:

If a couple’s divorce is validly granted outside of Canada by a foreign court, does this preclude a Canadian court from later making any corollary orders – such as rulings on issues of support or custody – arising from that same divorce?

The husband, an engineer, was a Canadian citizen who lived in Canada.  The wife lived in China and had never been to Canada.  They got married in China in 2006 and had a daughter who lived with the wife in China her entire life.  They separated about a year after getting married, in around late 2007 or early 2008.

The wife then covered all the legal bases:  She applied in China for a divorce, and custody of their child.  She also applied in Canadian, under the federal Divorce Act, to ask for a divorce, as well as spousal support, child support, and custody.  Finally, also in Canada under the Ontario Family Law Act, she asked for equalization of net family property.

Meanwhile, the Chinese court granted the wife her divorce and awarded her sole custody of the child.  The wife’s other Ontario-based claims were still pending.

The husband, faced with all of these competing actions requiring his response, asked the Ontario court to suspend (or “stay”) the proceedings so that the entire matter could be determined in China.  This led to several rulings and some procedural wrangling, and ultimately a hearing before the Ontario Court of Appeal for its determination.

Against this complicated background the Ontario Court of Appeal had a simple question to consider:  In light of the Chinese divorce order, could a Canadian court make additional orders relating to child support, spousal support, and equalization of property?

The Court’s conclusion was mixed:  The divorce-related issues were closed for consideration, but the child support issues were still up for an Ontario Family court to rule on.

On the first point – and based on longstanding precedent that considered the provisions of the federal Divorce Act – the law states that once the foreign Chinese court had made a valid divorce order, this removes the authority of the Ontario court to hear and determine corollary matters.  So on the remaining divorce-related issues, the Ontario court had no authority.

However, the situation under the provincial Family Law Act was different:  the Ontario court could still rule on questions relating to child support, since the foreign court in China had not already done so in its divorce order.   The Family Law Act allowed child support claims to be made even after a divorce, and the foreign divorce order had no impact on that.  Indeed, the whole purpose for the Ontario legislation was to ensure that parents provide financial support for their dependent children.  Allowing the Ontario court to continuing to make orders under the Family Law Act even though the Divorce Act provisions had been trumped was actually a harmonious outcome to ensure child support would be covered.

For the full text of the decision, see:

Cheng v. Liu

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

 

Thinking of Doing Some Cyber-Sleuthing? Think Again

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Thinking of Doing Some Cyber-Sleuthing? Think Again

I wrote a recent Blog about the admissibility of surreptitiously-recorded telephone conversations in Family law proceedings.  I have also written several times on how courts approach the admission of Facebook evidence.

Particularly in nasty divorce and custody disputes, it is likely that courts will have to grapple with these kinds of issues regularly, given how easy its become for spouses to try to secretly gather evidence against each other, using a Smartphone, keystroke logger, spyware, etc.

But for the average embattled spouse locked in bitter litigation, how effective is this as an evidence-gathering mechanism for use in Family court?

The answer:  Not very.

Under Canadian law, secretly-gathered computer data, emails, internet history, video, audio and similar evidence is generally not admissible in routine Family law hearings, except in unusual circumstances and only after a court has held a separate mini-hearing, called a voir dire, on the specific issue.  Overall, the odds are not very good that such evidence will be admitted.

Case in point:  In a called T. (T.) v. J.(T.) the court considered a situation where the husband had hacked into his wife’s private email, using the password she had allowed him to have when the marriage was in happier times.   The emails disclosed what was, in the court’s words, “an arguably disturbing exchange between [the wife] and her lawyer, which could be interpreted as evidencing some potential risk or threat to his safety.”  Still, the court found the husband’s email hacking was not only unjustified, it was a clear violation of the wife’s privacy rights.  The court also concluded that the email evidence irrelevant and inadmissible.

Similarly, in a decision in U. (A.J.) v. U. (G.S.) the court considered whether to admit evidence that the husband had collected through the use of spyware he had illegally installed on his former wife’s laptop.  The evidence showed the wife’s activities on internet chat rooms, and established that she had engaged in extra-marital sex.  The court examined the issue in the context of the couple’s dispute over custody and access issues, ultimately concluding that the affair and the online activity was out-of-character for the wife, and was not reflective of her ability to parent the children of the marriage.  The court added that it would be “a rare case” that illegally-obtained evidence should be admitted, and only after the trial judge holds a hearing to determine its admissibility.  The burden was always on the party seeking to enter such evidence to establish “a compelling reason to do so.”

For the full text of the decisions, see:

(A.J.) v. U. (G.S.)

(T.) v. J. (T.)

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