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Posts tagged ‘and enforcement of court order’

Should Real Estate Downtown Be Factored into Realtor’s Income for Support Purposes?

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Should Real Estate Downtown Be Factored into Realtor’s Income for Support Purposes?

Many of you will know that for child and spousal support purposes, the amount of annual income that a support-payor earns is tied to the amount of support that he or she must pay (although this is subject to other considerations as well).  In a recent Family Law case from B.C. the husband, a prominent and highly- successful  real estate agent, argued that the volatility and uncertainty in the real estate market should be factored into assessing his income for use in his divorce proceedings.

As background:  Under federal divorce and child support law, courts extrapolate a support-payor’s income using the past three years of his or her earnings.  In this case, that amount averaged about $2 million per year. The husband’s realty company – of which he was the sole shareholder – had done extremely well, with 7-year earnings of over $13 million.

Nonetheless, the husband claimed that his past earnings were not necessarily reflective of his future earnings, because of the uncertainty in the West Vancouver real estate market in which he worked.   He predicted an imminent downturn sparked by government’s Foreign Buyer’s Tax (among other things), which in turn would impact his ability to pay support for his former wife of 17 years and for their two children.  Although they had lived a lavish lifestyle in the past, he asked the court to take note of a pending market downturn, and adjust his support obligations in a commensurate manner.

As the court explained his argument:

The [agent husband] argues that it would be devastating to him if his income for support purposes is based on an average of the realty company’s past three years’ net income. He says that the real estate market slowed down from 2016 to 2017 and is likely to slow further down in 2018. He argues that the slow down has been caused by the foreign buyer’s tax, the tightening of residential mortgage insurance rules, and the increases to the Bank of Canada interest rate. The [husband] says these have resulted in a general tightening in the mortgage financing marketplace. Further, he says there is a hesitancy in the real estate market due to uncertainty over what steps the NDP government might take, some of which have been announced since the [husband] swore his affidavit.

The court essentially accepted some – but not all – of the husband’s argument.  It agreed that the upward trajectory of Vancouver-area real estate prices has likely ended, and accepted that the husband had “reason to be pessimistic about the real estate market and hence his income.”

However, the court found it reasonable to conclude that any negative impact has already been felt by now. The court accordingly looked at the husband’s 2017 income figures, together with his income for 2018 thus far, and set the child and spousal support figures accordingly.

For the full text of the decision, see:

Thiessen v Soprovich

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

Does Husband’s Bankruptcy Suspend His Obligation to Pay Costs Order in Wife’s Favour?

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Does Husband’s Bankruptcy Suspend His Obligation to Pay Costs Order in Wife’s Favor?

Here’s a legal scenario to consider:

  • The husband in a divorce proceeding is ordered by the court to pay $35,000 in legal costs to the wife. He fails to pay – or even to make any attempt to pay.
  • The wife succeeds in getting a court order to have the husband’s pleadings struck out entirely, for failure to pay the ordered costs. The court also orders that he be prevented from participating in the trial going-forward (e. he cannot testify, call or cross-examine witnesses, or make submissions).
  • However, given the drastic outcome, the court gives the husband a little extra time to pay the $35,000 before finalizing the part where his pleadings get struck out.
  • In the meantime, the husband makes an assignment in bankruptcy. He never does pay.

This was the situation in a case called Clark v. Moxley. The legal twist is that under Canadian federal bankruptcy legislation, all costs decisions against the husband were automatically stayed (i.e. suspended) the moment he declared bankruptcy.  After that point, creditors – including the wife with the $35,000 order in her favour – could no longer take individual steps to pursue payment from him, except via the trustee in bankruptcy.

So the legal question for the court was this:  If the wife was not in a position to enforce the costs order in her favour, did this still mean the husband’s pleadings could be struck out for non-payment?

Naturally, the husband was against this outcome:  He claimed that in light of his bankruptcy the order should not be given effect – especially since there were significant and serious custody / parenting issues outstanding, not to mention efforts on the wife’s part to exclude him from the child’s life.  If his pleadings were struck out, he would be alienated from the child.

Rather unsympathetically, the court noted that the husband was on the brink of a rather dire situation because of his own decision not to pay the ordered costs.  However, under federal bankruptcy law, that order was technically no longer enforceable once he assigned himself into bankruptcy.  That non-enforceability stripped the court of its legal justification to strike his pleadings.   Also, the husband’s bankruptcy had occurred before the motion to strike his pleadings was fully concluded.

The court therefore declined to strike the husband’s pleadings at this juncture.  It added the decision to strike pleadings is traditionally considered one of a last resort, to be used in a proportionate manner, and where there are no other remedies.

The court observed that the wife would still be eligible to fully participate in the husband’s bankruptcy proceedings, and to oppose his discharge from it.   If the costs survived the bankruptcy, then the court could still order the husband to pay them after-the-fact, or could ask for security for costs if the husband wanted to return to court to make a new application.

For the full text of the decision, see:

Clark v. Moxley

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 Bankrupt Wife Still Claim for Equalization of NFP?

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Can Bankrupt Wife Still Claim for Equalization of NFP?

If a spouse declares bankruptcy, is he or she then prevented from claiming for equalization of Net Family Property (NFP?) under Ontario Family law?

That was the question in Kinsella v. Mills, which involved a couple who had separated after 7 years of marriage. At that point, they signed Minutes of Settlement that finalized the splitting of their financial affairs, which was intended to deal with all issues including spousal support, equalization of NFP and constructive trust claims.  The Settlement reflected the couple’s agreement that the husband would take sole ownership of the matrimonial home and assume all debts and costs, and in return would pay the wife an agreed lump sum, together with a monthly amount.

Less than a year later, the wife declared bankruptcy.  She was automatically discharged nine months later.  The couple’s divorce was formalized a few months after that.

The wife then applied to the court to set aside that Settlement, claiming that it was unfair, signed under duress, and in a situation where she had no independent legal advice and did not know what she was signing. If she was successful, the wife planned to re-launch her claim for equalization of NFP, and wanted it divided unequally in her favour.

The husband resisted, pointing out that after the marriage breakdown he was left with a large amount of debt.  Because of the wife’s bankruptcy, she was released from having to pay it, but he was still saddled with debt that they had rung up together.  Nothing about the Settlement was unfair, in his view.

The court was asked to make a ruling.  It observed that nothing in the Family Law Act or the federal Bankruptcy and Insolvency Act  specifically prevents a spouse from making a claim for equalization of NFP after declaring bankruptcy. However, after examining the interplay between the two, the court concluded that the legislation operated to effectively do so.  The court noted the following:

  • The wife’s claim to any equalization payment from husband fell within the very broad definition of “property” under the bankruptcy legislation.
  • The moment she declared bankruptcy, she was no longer entitled to dispose of or otherwise deal with her property. Instead, it immediately vested in the bankruptcy trustee.
  • Once any equalization claim vested with the trustee – and unless the trustee actually joined the wife in the Family Law proceeding – the wife’s hands were tied.

The court added that this impasse be remedied by the wife being discharged as a bankrupt, but getting the trustee’s consent to go forward, or by firing the trustee.  The Family Court also had no authority to undo the wife’s bankruptcy.

Having found the wife to lack the capacity to bring the equalization claim, the court added that the Settlement itself was not subject to being undone, since there was no evidence of duress.  The wife had also failed to obtain legal advice before signing it, despite being encouraged to do so.

For the full text of the decision, see:

Kinsella v. Mills

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

Who Should Get Access to a Dead Person’s Emails?

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Who Should Get Access to a Dead Person’s Emails?

As reported in several recent articles in U.S. media outlets, the U.S. Supreme Court has been asked to rule on an intriguing new legal issue, one that is becoming increasingly prevalent in this era of rampant technology:  Who should have access to the emails belonging to a person who has died?

The question arose in connection with the Yahoo! account used by a now-dead Massachusetts man named John Ajemian.   Four years prior to his 2006 death in a motorcycle accident at the age of 42, he had set up the Yahoo! account with his brother. He had not bothered to make a Will, so when he died there was no governing provision for how the Yahoo! account was to be dealt with.

His two siblings were initially unsuccessful in their application to a Probate and Family Court to grant them access to his account, pursuant to their authority as his surviving relatives. That court had accepted Yahoo!’s lack-of-consent-related arguments, based on the federal Stored Communications Act.

However, after a successful appeal to the state Appeal Court, the lower-court ruling was overturned.  While falling short of imposing a positive mandate for Yahoo! to release the man’s emails, the Appeal ruling at least contemplated the possibility that Yahoo! could do so with the family’s permission.   (The Appeal court also sent one issue back to the Probate and Family Court for a re-hearing, namely the question of whether Yahoo’s stated Terms of Service agreement constituted a valid reason for refusing access.  That outcome will hinge on contract law principles, and will require the court to look at the matter from the standpoint of whether such agreements are valid and enforceable.)

The matter has now been scheduled to be considered yet again, this time by way of an application for judicial review brought before the U.S. Supreme Court.  No date has yet been set for that hearing.

It will be interesting to see how that top Court comes down on the matter, especially knowing that the outcome is so directly and arguably referable to other, similar tech-related scenarios and predicaments.

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

 

What Does A Lawyer Do?

Street Answers: What Does A Lawyer Do?

Let’s ask a lawyer! It sounds like an easy question, do you know the answer?

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! Expanded EI Parental Leave

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New! Expanded EI Parental Leave

The Canadian federal government has announced recently that it is changing the rules relating to parental leave under the Employment Insurance program.  After the birth of a child, a parent can now spread up to 12 months of his or her EI benefits over an 18-month period. The total value of the benefits to which a parent is entitled does not change, so the benefits for that 18-month period are paid at a lower rate.

In other words, from a dollar standpoint this means that a parent who would normally receive $543 per week over 12 months can now receive $326 per week over 18 months.

The changes take effect on or after December 3, 2017 for federally-regulated employees (e.g. employees in banking, transportation, telecommunications, the federal public service, etc.); the corresponding amendments that apply to provincial workers are not yet in force, so employees in that sector may have to wait until they are eligible to actually have the extra time off work.  (The Ontario government has committed to bringing in analogous amendments, however).

The intent is to give families more flexibility around arranging for family responsibilities, and these changes are being implemented in tandem with changes to family caregiver and maternity benefits.

See also the CBC News report on these changes.

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 Upholds Separation Agreement as Being “In Substantial Compliance” with the Law

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Court Upholds Separation Agreement as Being “In Substantial Compliance” with the Law

Do you have a two-decades-old separation agreement that you are trying to have overturned?  Then the recent Ontario Court of Appeal decision in Smith v. Smith might be of interest to you.

The facts were these:  Before getting married, and just as they were about to move in together, the husband and wife signed a cohabitation agreement, in which the wife gave up any claim to spousal support.   The husband had previously had a prior relationship end badly, and was eager not to have history repeat itself.

When they split 18 years (and two kids) later, the wife claimed spousal support nonetheless, but the trial judge upheld the terms of the separation agreement and dismissed her claim.

She brought an appeal, claiming that the trial judge had erred.  She wanted the agreement to release her spousal support overturned, since she claimed it did not conform to the provisions of the federal Divorce Act – whether viewed from the time it was signed, or now.

The Appeal Court took a closer look at the situation, including the wife’s assertion that the trial judge had overlooked certain facts, such as:

  • The alleged power imbalance between her and the husband;
  • The lack of any discussion about spousal support; and
  • The fact that she had no independent legal advice when she signed the agreement (though she admitted having the chance to obtain it at the time).

The Appeal Court rejected these arguments.  It pointed out that when tasked with reviewing a separation agreement purporting to release spousal support, a court’s job involved two steps:  to first consider the circumstances at the time it was reached, and then to look at the substance to see whether it complied at the time with the federal Divorce Act.

During the first step, the court pointed to specific findings of fact that the trial judge had made, namely:

  • The wife knew the husband wanted a cohabitation agreement, and they had discussed it before she received the draft prepared by his lawyer.
  • She skimmed the agreement, read some parts, and did not read others.
  • She had a full six weeks to obtain independent legal advice, but – by her own admission – chose not to do so.
  • At the time she signed the agreement, she though it was fair. There was no fraud, coercion, or duress.

As for the second step, the Court found the agreement to be in “substantial compliance” with the Divorce Act. More importantly, in light of all the circumstances including the economic disadvantages suffered by each spouse because of their 18-year marriage, the wife would not be entitled to spousal support even if the separation agreement did not exist.

The Court affirmed the trial judge’s conclusions, dismissed the appeal, and confirmed the validity of the agreement.

For the full text of the decision, see:

Smith v. Smith

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

Religious School’s Barring Child of Same-Sex Couple Not a Breach of Human Rights

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Religious School’s Barring Child of Same-Sex Couple Not a Breach of Human Rights

In a perhaps-surprising decision of an adjudicator of the Human Rights Tribunal of Ontario, a Christian evangelical school that refused to admit the adopted son of a married same-sex couple was held not to have breached the anti-discrimination provisions of the Ontario Human Rights Code (the “Code”).

The private school had justified barring the child from its preschool program on the basis that it had a long-established biblical stance against same-sex marriage, and that to allow the child to attend would clash with the school’s teaching and values.

Faced with the school’s rejection of their application, the couple brought a complaint under the Code for discrimination based on sex, creed, marital status and family status.

The adjudicator ruled that the school’s decision fell within a narrow “special interest” exception found in s. 18 of the Code.   That exception essentially permitted the school to discriminate in providing services where “membership or participation in a religious … organization that is primarily engaged in serving the interests of persons identified by a prohibited ground of discrimination is restricted to persons who are similarly identified.”  In other words, the school was not in breach of the Code if it could prove that it was effectively restricting participation in the school’s program to only those who were part of the religious group that it was designed to serve, even if that restriction was otherwise discriminatory.

The adjudicator concluded that the evangelical school fell within the definition of a “special interest” organization, and had not breached the Code-enforced right to equal treatment of services.  As the adjudicator stated:

The school has a well-defined and specific set of creedal beliefs, mission statement and mandate. The respondent [school’s] evidence was clear that the school requires all parents to share these values if they are considering the school for their family.

The adjudicator added that the parents chose to apply to the school precisely because of the opportunity to immerse the child in a Christian religious educational environment. The adjudicator added:

While I empathize with the parents’ feelings of unfairness that their child would not be admitted, the respondent [school] made no secret of its beliefs and was upfront that it may not be the right fit for every family.

Does this ruling come as a surprise?  What are your thoughts?

For the full-text of the decision, see:

H.S. v. The Private Academy

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: Enforcement of Child Support in Ontario


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

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

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

If a payment is missed, the FRO takes action to enforce the order or agreement. To do this, the FRO needs as much up-to-date information about the paying parent as possible. This includes his or her full name, address, social insurance number, place of employment or business, income, and any property he or she owns. The information about the paying parent goes on a Support Deduction Information Form which is available at the court. This form is given to the FRO along with the support order or agreement. It is important to update this form whenever the information changes.

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

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

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

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

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

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

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

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

• suspending their driver’s licences

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

• canceling their passports.

Once the order or agreement is filed with the FRO, then it is the FRO, not the other parent, that is responsible for any actions taken to enforce it.
Sometimes parents receiving support withdraw from the FRO because it is easier to receive payments directly from the other parent. But if problems arise later, and they want to re-file with the FRO, they might have to pay a fee to do this.

Parents who have an obligation to pay support should also know that the FRO cannot change the amount that the order or agreement says they have to pay. If they think that a change in their financial situation justifies a reduction in the amount of support they should pay, they must get a new agreement or go to court to get the support order changed.

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

Untangling Financial Information – By Guesswork and Extrapolation

Untangling Financial Information – By Guesswork and Extrapolation

Although it’s a relatively short little ruling, the decision in Yahya v. Omar gives a glimpse of the type of judicial guesswork that goes into determining a separated couple’s income and earning capacity for the purposes of determining their respective spousal and child support obligations to each other.

The parents lived together common-law for over 15 years, and had three children together.  The judge who ruled on an earlier motion for interim financial relief had held that the father’s income was about $56,000, even though this was a higher figure than he reported on Line 150 of his income tax return.  The judge made a temporary order for the father to pay child and spousal support accordingly.

The parents appeared in succession before four more judges who made orders dealing with various issues, including how the proceeds of the sale of their condominium were to be dealt with, how payment of child support was to be made out of those proceeds, and various other orders. In each case the financial disclosure provided by the parties was less than fulsome.

The father then brought a new motion for an order that the initial child support order was improperly made, because it should be based on his actual income, rather than what the original judge had declared. He claimed that at the time of separation he operated a taxi cab business, and for the past few years his income had been in the range of about $40,000 gross, and under $15,000 net per year.  The father said that although that information had been available to the initial motion judge – and the judge acknowledged that the support might change depending on further disclosure – the judge had improperly relied on the income on his financial statement, which showed about $51,500.

Moreover, the father stated that he had actually been unwell and unable to work for a few months, and that he had surrendered his taxi and was now driving for UBER.   Based on pro rata extrapolation, the father said his income would about $30,000 per year.  He asked that his child support be reduced accordingly.

In contrast, the mother claimed that the father’s income should be set at least $43,000, but ideally it should be set at $90,000 based on both the lifestyle he was apparently living.

In addition to refuting the mother’s figures, the father claimed that she should be looking for work in order to contribute to her own support. But the mother refuted this, claiming that she had a health condition that prevented her from working.  Her only backing for this diagnosis was a one-line letter from a doctor.

The court considered these submissions by both parties.  Starting with the father’s income, it found that the family’s lifestyle certainly showed they were living well beyond the amounts shown in his recent income tax returns, but this did not mean his income should be set at $90,000.  In fact, the court noted the father was “living with various family members and friends”, although he gave no additional financial details around those arrangements.

With no further clarity as to his income, the court concluded that the initial temporary order would have to stand until trial, unless the father could provide further disclosure that warranted a change to it.

As for the mother’s claim to be unable to work:  The court firstly returned the doctor’s letter to the mother, because it had not been properly tendered in evidence, then added that she needed to provide proper disclosure if she wanted to support her claim and settle the outstanding financial issues.  Respecting the level of proof needed for her ostensible medical diagnosis, the court diplomatically added:

If it consists of a single sentence from a family doctor, it will not suffice in which case she should consider investigating employment.

To the extent that it could with the information available, the court made several orders to resolve some of the issues relating to the treatment of the proceeds of sale, and certain arrangements respecting the payment of support.  It added that the next step “must be an informed and productive settlement conference,” which the court emphasized would require each party to file financial statements, as well as net family property statements.

For the full text of the decision, see:

Yahya v. Omar

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