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Posts from the ‘Property Division, Sharing & The Matrimonial Home’ Category

Tick, Tock: What’s the Legal Deadline for Trying to Set Aside a Separation Agreement?

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Tick, Tock: What’s the Legal Deadline for Trying to Set Aside a Separation Agreement?

In a recent case called F.K. v. E.A. the court was asked to rule on a novel question: If a spouse wants a court order setting aside his or her signed separation agreement as invalid, what is the deadline for applying? And when does it begin to run?

The couple began their relationship in 2000, and the husband proposed in 2004. The wedding itself was hastily-planned over a period of less then 30 days, and took place in June of 2005. Against that background, the couple entered into what they called a “Prenuptial Agreement” based on a template that the wife found on the internet. It was witnessed by a mutual friend. In it, the couple agreed that each of them:

1) Waived the right to claim spousal support from each other, and

2) Would remain separate as to property, and not be subject to an equalization of Net Family Property.

The Agreement also purported to confirm in writing two events that did NOT actually happen, namely:

1) That the parties had provided fair and reasonable financial disclosure to each other before signing, and

2) That both of them retained their own lawyer and received independent legal advice.

The wife later explained that they did not bother “going through the motions” to fulfil these two duties because the Agreement was wholly uncontentious: Both before and after the wedding they had conducted themselves with financial independence; the Agreement merely confirmed and documented that agreed status.

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Unfortunately, the spouses split in October of 2012, after 7 years of marriage. The wife gave the husband $1,600 to help with first and last months’ rent, but made it clear he could expect nothing further from her.

He then went to a lawyer to discuss his legal options, and explained the lack of legal advice and financial disclosure in particular. Although his lawyer advised that the Agreement was “not worth the paper it was written on”, the husband took no concrete steps at that time.

A full five years later, in 2017, he applied to the court to have the Agreement set aside. In addition to its other shortcomings impacting validity, he claimed it was signed after the wife issued an ultimatum; this left him feeling rushed and in a state of duress, he said.

The wife countered by stating the husband was simply out of time to have the Agreement set aside. She said this type of claim was subject to a two-year limitation period set by provincial legislation, and that the husband had failed to take any steps with the court within that deadline. She asked the court to grant her summary judgment.

The court addressed the various legal arguments. First, it concluded that husband’s bid to set the Agreement aside was indeed tantamount to a legal “claim”, and was theoretically subject to the general two-year deadline. The more pressing question, however, was precisely when the clock on that two-year period began to run.

In law, this “discoverability” threshold was the point at which the husband knew or ought to have known that:

1) He had suffered some loss, and

2) A legal proceeding was the appropriate method for trying to redress it.

In this case, that point was back in 2012, when the husband first attended his lawyer’s office post-separation.

At that point, he knew there was some potential legal issue with the validity of the Agreement and the circumstances in which it was signed, based on the advice from his lawyer. He also knew he could expect “nothing further” from the wife after separation, beyond the $1,600 in rent money, and that all other financial issues were off-the-table. So he knew in 2012 that he was facing a potential loss, and he knew that a legal claim would be the only way to potentially recover it.

Since it was now 7 years past that discoverability point, the husband was too late to bring his claim to set the Agreement aside.

As a last-ditch argument, the husband had also asked for special forbearance in the circumstances: The law should not be applied to him, since his case was the first time in all the Ontario jurisprudence where a claim to set aside a marriage contract was being foreclosed by the two-year deadline.

But the court rejected this argument too. The husband’s error or ignorance about the limitation period did not stop it from running, it said. All citizens are presumed to know the “law of the land”, and it applied equally to his situation even if the husband’s thwarted claim was the “test case”.

Since the husband was out of time to bring his claim, there was no genuine issue for trial. The court granted the wife’s application for summary judgment.

For the full text of the decision, see:

F.K. v. E.A., 2019 ONSC 3707 (CanLII),

How To: Make a Valid Separation Agreement

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 Husband Be Forced to Obtain a Separate Home Appraisal?

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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

 

Texas Wife ‘Blows Up’ Marriage Memorabilia to Celebrate Divorce Being Finalized 

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Texas Wife ‘Blows Up’ Marriage Memorabilia to Celebrate Divorce Being Finalized 

On the Saturday night of November 10th, Kimberly Santleben-Stiteler held a party consisting of about 40 guests in Medina County, Texas. This party was to celebrate the finalization of ending of her ‘miserable’ marriage of 14 years.

During the party, the wife compiled a garage full of items such as the wedding ring, photos during the marriage, and the wedding dress, which was then attached to 20 pounds of explosives. She then proceeded to shoot the garage with a rifle from 200 yards away, resulting in an explosion that could be seen from up to 15 miles away.

The Texan summarized the event as a “liberating and gave a feeling of closure”.

For more information on this story visit: https://www.star-telegram.com/news/state/texas/article221527670.html

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

 

 

Arizona may soon decide what happens to embryos after divorce

Arizona May Soon Decide What Happens To Embryos After Divorce

Senate Bill 1393 would require courts to give frozen embryos to the spouse who “intends to allow the embryos to develop to birth.”

It was reported that “If both adults want to use the embryos to have a baby, the court would have to give them to the one who “provides the best chance” of successfully doing so. … [and that] the spouse who does not receive the embryos would not have parental rights or responsibilities to any resulting children unless they agree to them.”

“Opponents say it would interfere in infertility treatment, could force exes to become parents against their will, and is a back-door way to change the legal definition of personhood in Arizona.”

It was also reported that “The influential Center for Arizona Policy, an anti-abortion advocacy group, is pushing the legislation.”

In Canada, Do Sperm Cells Constitute “Property” Subject to Division After Separation?

We previously reviewed a British Columbia Court decision that reviewed whether the sperm straws were “property”, and whether the best interests of the existing children, plus any future offspring from the same donor, should be considered in determining what should be done with them.

Ultimately – and while noting that “the court is ill-equipped to handle moral and philosophical arguments – it ruled that the 13 sperm straws were indeed “property”, and that they should be divided equally between the former partners. However, the best interests of the children that had already been born from the particular donor’s sperm straws, as well as any future children that might be born, were not part of the consideration. Trying to analyze (and potentially place limits on) the use to which a couple could use the sperms straws would be “borderline discriminatory”. Moreover, identifying the best interests of a child yet unborn would be merely speculation.

What is Ontario doing?

We previously reviewed the the All Families Are Equal Act (Parentage and Related Registrations Statute Law Amendment), 2016 proposes some important government-initiated changes designed to provide “greater clarity to parenting laws in Ontario”. As for November 2, 2016, the Bill has been ordered for Third Reading, which means it’s one step closer to being enacted into a law.

The Bill makes various changes to existing legislation, most notably the Children’s Law Reform Act where it sets out new rules of “parentage” for the purposes of all Ontario laws; it also clarifies the interplay of those new laws with existing ones. In particular, new provisions are aimed specifically at rights relating to children born through assisted reproduction, as follows:

• The mere fact that a person provides reproductive materials (i.e. sperm or an ovum) or an embryo for use in assisted reproduction is not in itself sufficient to make that person a parent (except of course where those items are provided for the person’s own reproductive use).

• A child’s birth parent, meaning the person who gives birth to the child, is considered a parent of the child; the only exception is a surrogate (who under normal circumstances is not considered to be the child’s parent).

• If the child is conceived without assisted reproduction, then the child’s biological father is also considered to be a parent, although this is subject to rebuttable presumptions (expressly set out in the new law) as to how the biological father may be determined. There are special rules for insemination by a sperm donor.

• If a child is conceived through sexual intercourse, then the person who provided sperm is also a parent of the child. Rebuttable presumptions are set out respecting how that person may be determined; the biological parents may agree in advance in writing that the person providing the sperm does not intend to be a parent of the child.

• A birth parent’s spouse at the time a child is conceived – either through assisted reproduction or through insemination by a sperm donor – is presumed to be a parent of the child. This is also subject to a rebuttable presumption, and there are also exceptions.

• A birth parent may enter into a pre-conception parentage agreement, involving one or more persons, in which they agree together to be the parents of a child who has not yet been conceived. To be valid, the agreement must involve no more than four parties.

Obviously this is an evolving area of law for many jurisdictions with different governments and Courts having quite different approaches to the difficult question: What happens to embryos after divorce?

What do you think?

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

Bitcoin and Divorce: Perils and Pitfalls

 

Bitcoin and Divorce: Perils and Pitfalls

We are seeing increasing divorce cases that involve Bitcoin and other crypto currencies.

This Is Money reports that there have already been several divorce cases that involve Bitcoin. They rightly point out that discovery and tracing of this asset can be problematic for lawyers:

“Tracing cryptocurrencies could be enormously time-consuming and expensive. This is, of course, much easier if cryptocurrencies are traded via an online investment platform and bought with funds from a bank account, as the original value of the transaction can then be established. When cryptocurrency is purchased directly and moved offline, it becomes almost impossible to trace.”

For divorcing couples in Ontario, full financial disclosure is the norm. So, if you own Bitcoin or other crypto currencies you will need to disclosure these assets (and their value) to your spouse. If fail to disclose your Bitcoin then there is a chance that any Court Order or divorce agreement you enter into may be set aside if the asset is discovered later as result of this non-disclosure.

The relevant date to value the asset would be your date of separation (DOS). The Bitcoin may also be exempt from sharing if you brought this asset into the marriage and owned it on your date of marriage (DOM). The value of the Bitcoin on your DOM may be a deduction to any final sharing you do with your spouse. However, the value increase of you Bitcoin from your DOM to your DOS may have to be shared with your spouse.

You should engage the services of an experienced family lawyer if you are divorcing and you (or your spouse) own Bitcoin or other crypto currencies.

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

Money is No Object for Divorcing U.K. Couple

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Money is No Object for Divorcing U.K. Couple

Over the years I have often posted about cases in which a Canadian court invites warring former spouses to reflect on the sheer amount of money they are spending on lawyers and court costs, in waging prolonged battles with each other. [Russ:  there are several of these but here’s just one. All too frequently, the costs of repeatedly going to court – often to dispute relatively trifling legal points – can quickly outstrip the monetary value of what’s being fought over, not to mention the benefit of the overall exercise.

This dubious litigation strategy is certainly not confined to Canadian family law litigants.  As reported in a recent article in the U.K. newspaper known as The Guardian, a separated wealthy British couple have already spent over £2 million (about CDN $3.5 million) slugging it out both in and out of court, all to fight over their £6.6m in family assets (about CDN$11.5 million). This despite the fact that they are only the pre-trial stage of the proceedings, with the trial yet to come.

According to one judge, the two have “completely lost touch with reality,” and noted that the trial itself will cost at least another £200,000 (or CDN$350,000) in lawyers’ fees.

The article reports that the former couple, who ran a company that supplies luxury towels and bathrobes to high-end hotels and spas, had been so single-minded embroiled in their conflict that they ran the risk that there would be no money left for either of them at the end.  At least one judge had admonished them along the way, advising that their litigation campaign was a “scandalous waste of court time.”

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

Saving the Golden Goose: Part II – Including Specialized Professions as An Alternative Option to the Traditional Court System

Saving the Golden Goose: Part II – Including Specialized Professions as An Alternative Option to the Traditional Court System

As mentioned in our previous blog Saving the Golden Goose: Part I, a court process allows for only a rights based determination of the issues at hand. However, there are many intricacies involved in the enmeshment of family business and the process of separation and divorce. As an alternative to a purely rights based approach, other options can be considered in the collaborative approach, including:

  • Family trusts or holding companies as a method of sharing income from the family business
  • Tax planning, avoiding the possibility of triggering a Canada Revenue Agency audit
  • Considering the formation of a new family trust
  • Employment of children in the family business
  • Estate, succession, and capacity planning
  • Ensuring insurance is in place to cushion the effects of any risks
  • Gifting shares or portions of the family business to children or other family members
  • Maintaining the privacy of the family business
  • Managing the continuation of income streams
  • Splitting income amongst family members
  • Delaying equalization or sharing business payments (Ie: if and when the family business sells)
  • Preserving the family legacy for generations
  • Recognizing and predicting the ebb and flow of the market and business patterns

Unlike the court system, the collaborative process is unique in that it offers the additional benefit of involving neutral professionals who specialize in associated areas, listed above. These neutrals are able to address relevant areas of the family law matter, often with more experience in their particular field than lawyers. Neutrals are also able to complete work at their hourly rate, rather than at the lawyer’s fee. They are also able to take on some of the information gathering that would alternatively be completed by the spouses, which can be stressful. This makes including neutrals an efficient way to deal with issues in a cost effective manner.

Financial Professionals

Collaborative Financial Specialists may be accountants, financial planners, and business valuators who have expertise in helping separating families address issues relating to the family business. They play a vital role in the collaborative process by ensuring that clients provide full and frank financial disclosure. Financial disclosure includes aspects such as income, liabilities, and assets of both the spouses and the business. A business valuator may value the business and, as in the case of many self employed individuals, complete an income analysis to determine yearly income for support purposes. In the collaborative process, family business owners can work alongside the financial professional and/or business valuator to assist them in understanding the intricacies of the business based on its unique field.

Financial Specialists thoroughly vet the documents and prepare detailed reports which help to streamline settlement discussions. Financial Specialists further add value to the collaborative process by educating clients about their finances and helping to manage their expectations from a neutral perspective. This impartial stance helps to keep client expectations realistic, making negotiated settlement more likely.

Another key benefit of financial professionals is their ability to “even the playing field”. In some family matters, one spouse may have been much more involved in the finances of the family business. The other spouse may feel they are ill equipped to negotiate the finances associated with the business, and may worry about being taken advantage of by their spouse. A financial neutral can spend time separately with both parties to ensure that all the cards are on the table, and that each spouse understands the basis upon which they are negotiating.

Family Professionals

While it may not immediately seem to be a common sense approach to include a family professional within the context of a family business matter, family professionals can often deal with may of the underlying issues associated with restructuring a family and a family business. Emotions can run additionally high when dealing with the very real and salient issues associated with the individuals which make up a family business team.

Much of the concept of “Interest Based Negotiation” centers on interests that are not purely financial. A family professional can assist in identifying and bringing these interests to the table. Anger, loss and grief are a natural part of divorce or separation, especially when a family’s livelihood is on the line. A family neutral gives families access to support and guidance for managing these emotions which can intensify the conflict and derail settlement attempts in traditional divorce.

Collaborative Family Professionals are counselors, social workers, psychologists or mediators who have specialized skills in handling the emotional aspects of the issues pertaining to separation and divorce. They further discuss parenting, and help ensure that feelings, needs, and concerns are understood and respected where children concerned. This is especially pertinent when there are children working within a family business, who have their own independent concerns about how the divorce will affect their future within the business context.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders.  For more information, visit us at RussellAlexander.com

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Can Court Order be Set Aside Due to Wife’s ADHD?

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Can Court Order be Set Aside Due to Wife’s ADHD?

In a case called Hatuka v. Segal, the couple separated in 2016 and started the process of untangling their financial affairs.  The wife continued to live in the $1.7 million matrimonial home with their two school-aged children.

By early 2017, the husband was having financial challenge:  He could not afford to service the home’s $610,000 mortgage and also carry the costs of a separate residence.   He asked the court to compel a sale of the former matrimonial home.   After two court hearing dates in which wife appeared without counsel and requested an adjournment, the court finally granted the husband’s request and ordered the home sold immediately.

The wife then brought a motion to have the order set aside.  She relied on Rule 25(19) of the Family Law Rules, which allows a court order to be changed in certain circumstances, namely those involving fraud, mistake, or lack of notice.  (And – as was clarified in a recent Blog, a court has recently concluded that – despite its wording – the Rule allows for orders not merely to be “changed”, but to be set aside entirely as well).

The wife – who happened to be a foreign-trained but non-practicing lawyer – claimed that to sell the home now would bring her hardship and distress, since there were no child or spousal support orders yet in place.  Although both spouses filed extensive materials in support of their respective positions, the court noted that the wife’s included a 93-page personal affidavit with 32 exhibits.

In examining the merits of wife’s argument on the motion, the court began by stating:

 The basis upon which [the wife] seeks to apply Rule 25(19) to set aside the Order of March 22, 2017 is unclear. …

[The wife] does not raise any issue of mistake.

[The wife] does not raise any issue of lack of notice or non-attendance.

[The wife’s] affidavit of August 18, 2017 claims that she has suffered litigation disadvantage as a result of the following assertions.  These were the initial focus of her counsel’s submissions on this motion to set aside:

(a)               she has ADHD and learning disabilities;

(b)               she is a recent immigrant with limited English skills;

(c)               she has been largely self-represented, with gaps in representation; and

(d)               she strongly believes that [the husband] has taken advantage of her, while abusing the court process.

The court concluded simply:  “These are not grounds for a Rule 25(19) analysis.”  The court also rejected the wife’s contention that the husband had failed to disclose his full income, and there had accordingly been fraud, adding:

Setting aside an order under Rule 25(19) (a) carries a high threshold.  Fraud within Rule 25(19)(a) does not have a special meaning outside the common law.  A moving party must clearly prove that the other party knowingly or recklessly made a false statement with knowledge of the falsehood, and did so with wrongful intent.

The court dismissed the wife’s motion.

For the full text of the decision, see:

Hatuka v. Segal 

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders.  For more information, visit us at RussellAlexander.com

 

 

 

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