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Posts from the ‘Gambling’ Category

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.

Should Support-Paying Ex-Husband Be Saddled with Ex-Wife’s Financial Irresponsibility?

wife gamble

Should Support-Paying Ex-Husband Be Saddled with Ex-Wife’s Financial Irresponsibility?

The couple – both musicians in their 50s – separated after 23 years’ marriage. They had a wedding/corporate events band together for which the husband was the keyboardist and manager, while the wife was the lead singer. However, the wife had been diagnosed with Multiple Sclerosis during the marriage and her health was in significant decline. This had translated into them having fewer and fewer gigs for the band; this affected the net income for both of them, and by extension the calculation of support after their split.

Their matter came back before the court to determine how much spousal support the husband should pay, particularly in light of the wife’s ongoing illness-related need. While he conceded that he owed her spousal support, he took issue with the $1800 per month she was asking for, insisting that a figure of $700 was more appropriate in light of his income, her ability to earn at a reduced level, and the fact that she had dissipated a large chunk of her capital assets since the separation.

In particular, the court heard that shortly after they split up, the couple had come to an agreement: The wife was paid $371,000, with 2/3rd of that representing a buy-out of her interested in the matrimonial home, and the remainder being certain RRSP rollovers and the returns on certain investments the couple had made during the marriage. However, within two years after separation, she had already spent or squandered $170,000 of that money, mainly through gambling and making questionable financial decisions. These included her extending a $20,000 undocumented loan to a friend, buying a new car for that same friend to use on a regular basis, and losing $20,000 on the rash purchase of a co-op condo that – it turned out – had no elevator and did not permit dogs, both of which were deal-breakers for her.

The husband said that in light of the wife’s gambling and poor financial decision-making, both of which led to her squandering the capital she was supposed to use for day-to-day living, he should not be held accountable to pay higher support payments to compensate. At the least, her income for support purposes should include those amounts that she could have earned had she invested the $371,000 wisely.

The court considered these arguments, and pointed out that in some sense the wife’s mis-spent capital was irrelevant to how much support the husband should pay because no matter what the amount, it would be insufficient to meet her living expenses and she would have to keep encroaching on the capital regardless. Still, the court agreed that when determining the amount, the wife should be imputed to have earned a reasonable amount of investment income; the effect of her failure to invest should not now be visited on the husband.

In the end, the court determined that under the circumstances the wife should have been earning $2,000 per year through investments, plus another $6,000 from mentoring young musicians and other various pursuits that she could be earning even despite her medical limitations. After scrutinizing the husband’s income and assets in detail as well, the court arrived at a figure of $1,000 per month that he was ordered to pay her in spousal support.

For the full text of the decision, see:

Rossi v. Spanier, [2014] O.J. No. 4880; 2014 ONSC 4984

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 www.RussellAlexander.com.

Gambling, Drinking and Affairs – Should Spouses Have to Account for their Misdeeds?

gamble

Gambling, Drinking and Affairs – Should Spouses Have to Account for their Misdeeds?

In a recent blog , I discussed a case called Malandra v. Malandra, where the court found that – for the purposes of deciding whether their Net Family Property (NFP) should be unequally divided – the husband should not be held solely accountable for certain bad business investments.

This question of whether the NFP should be divided unequally comes up often: among other things courts must consider whether one of the spouses behaved in a manner that makes an even split unfair. Here are some of the categories of spousal misdeed that can come under the court’s scrutiny:

1) Reckless Investing

In a case called Lamantia v. Solarino, 2010 ONSC 2927, the question was whether the husband should be held accountable for deceit and various financial misconduct designed to hide his reckless investments in the stock market. He had forged the wife’s signature, and had borrowed from credit cards for which she became liable without her knowledge. He also took active steps to keep the wife from learning the true state of their financial affairs; for example, he made sure their bank statements were sent to another address. Furthermore, he continued to play the stock market even though the wife had asked him to stop. Those bad investments led to significant capital losses for the couple.

In finding that the NPF should not be equally divided, the court found that the husband had engaged in a pattern of deceit and engaged in conduct that made it unconscionable for the NFP to be divided equally.

2) Spending to Feed an Addiction

In a second case, Dillon v. Dillon, 2010 ONSC 5858, the husband was a severe alcoholic, who incurred debts to feed his alcohol addictions. He lost many jobs over the years, and took pains to hide the dire family financial circumstances from the wife, who was completely unaware.

Given that their financial circumstances were spurred by the husband’s need to incur debt to feed his addiction, the court found this was a situation completely out of the wife’s control. Because of his reckless behaviour, she had effectively contributed significantly more than the husband toward amassing their family assets which formed the NFP – for example a cottage worth $260,000, and RRSPs funds amounting to $150,000. She had also paid over $50,000 towards the husband’s debts in order to keep things afloat for the benefit of their children.

By concealing the extent and timing of his “financial perdition” (as the court called it), the husband deprived the wife of an opportunity to prevent his destructive behaviour, or to prepare herself for retirement. The court found that the husband had “taken advantage of the [wife’s] selfless act of placing herself in a position of vulnerability in the best interests of her children.” An unequal division of NFP was ordered.

3) Spending Money on an Affair Partner

Finally, in a case called Hutchings v. Hutchings (2001), 2001 CanLII 28130 (ON SC), 20 R.F.L. (5th) 83 (Ont. S.C.J.), the husband was engaged in an extra-marital affair, and used family money in to order to travel with his mistress to Europe and Quebec. The wife was suspicious, and accused the husband of spending money on not just this but other affairs as well; however she was never able to prove the allegations. In this case, the court also ordered that the husband had engaged in reckless and intentional depletion of the NFP and that there should be an unequal division.

For the full text of the decisions, see:

Lamantia v. Solarino, 2010 ONSC 2927

Dillon v. Dillon, 2010 ONSC 5848

Hutchings v. Hutchings (2001), 2001 CanLII 28130 (ON SC), 20 R.F.L. (5th) 83 (Ont. S.C.J.)

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 our main site.

82 Year-Old Gambling Husband Loses Almost Everything – Should the Wife Get What’s Left?

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82 Year-Old Gambling Husband Loses Almost Everything – Should the Wife Get What’s Left?

The couple had been married for over 60 years in a traditional marriage: The husband, now 82 years old, had always been the breadwinner and had handled the couple’s finances; the wife, now aged 78, had stayed home throughout the marriage to raise their children.

But as they neared their twilight years the wife started to take notice about their finances: she realized that they seemed to be losing net worth over time, rather than gaining it. It was only when the bank started making demands on various loans and mortgages (the existence of which she was unaware), that she learned that they were in financial trouble.

It turned out that – unbeknownst to her – the husband had gambled away almost all their money. In fact two of their adult children had to come up with money in order to save the couple’s home; their other children had to step financially, in as well.

The wife could not persuade the husband to stop; eventually, all they had left was $60,000 in the bank. After significant resistance by the husband, the wife placed the remaining money in a joint account and added the name of one of the couple’s daughters, who would have to be consulted if any funds were withdrawn. This, as the court described it, made the husband “furious”; things went further downhill from there. The court explained:

The [husband] refers to the placing of the remaining funds in the three names as “the swindle”. He says the adult children were all involved in “the swindle”. The [wife] does not dispute the facts of the alleged “swindle” but felt it was necessary to enlist [the daughter] to stand with her against the husband’s expected demands to take the money and lose it.

The court continued:

 

[The husband] has been angry with [the wife] and their children ever since they began interfering with his control of all things financial. … The parties had two jointly owned properties in Florida that were sold. Because he was angry with his wife and children, [the husband] took the proceeds of $15, 567.08 from the first sale in Florida and either spent, gambled or hid it.

[The husband’s] anger about “the swindle” was exacerbated by the support his children gave their mother when she left him. To address what he perceived as wrongs against him, after the separation, he went out and borrowed $44,000 against a line of credit. This line had been paid off from the proceeds of sale of the [matrimonial] home and was still available for borrowing up to an allowable limit of $44,000. The [wife] did not appreciate that the line could be activated and she would still be a joint signatory and therefore liable. The [husband] either spent, gambled or hid the money. He knew full well that this would rebound to affect his wife. He admits that he did it on purpose and would have borrowed more, even up to $60,000, if he could have.

The court summed up the husband’s approach this way:

The demeanour of the [husband] in the trial was such that the court could only conclude that he was not sorry for the predicament that he had created for his wife, but rather, he was quite pleased with himself.

In these circumstances, the court had no trouble finding that the husband had engaged in improvident depletion of the couple’s funds, pointing out that the husband had squandered the money needed for mortgage payments, basic living, and retirement, and not the couple’s disposable income. It also wasted no time in concluding that the husband’s gambling and hiding of funds was outrageous or “unconscionable”, to the point where there should be an unequal division of property in favour of the wife under the Ontario Family Law Act.

It therefore ordered that the husband’s right in the remaining bank accounts be transferred to the wife, and that the need for his consent to do so should be dispensed with.

For the full text of the decision, see:

Weddel v. Weddel, 2006 CanLII 21589 (ON SC)  http://canlii.ca/t/1nptd

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 www.RussellAlexander.com.

Leaving lost wages? Court may order an unequal division property.

leaving

Leaving lost wages? Court may order an unequal division property.

This week, we take a look at gambling: specifically, situations where a spouse fritters away money during the marriage on games-of-chance, and how that imprudent conduct affects the equalization of property after the couple breaks up.

How does a court ‘deal’ with unlucky gamblers?

In the first case, R.(A.) v. R. (H.), 2000 CarswellOnt 4844 the husband asked for an unequal division family property, claiming that the wife had recklessly depleted the family assets: over the course of a 4-year period, she had squandered over $14,000 on bingo. In fact, she had hawked the family jewellery to fund her habit, and had forged the husband’ signature to his father’s account, all to fund her bingo habit. This was at a time when the husband’s modest income annual amounted to between $25,000 and $40,000 per year.

While sympathetic to the woman’s circumstances and apparent self-esteem issues (for which she blamed the husband), the court stopped short of declaring that the wife had an actual addiction. Instead, in light of the wife’s gambling and other financial factors, and in particular the wife’s unconscionable conduct in misappropriating funds, the court considered her behaviour to amount to “reckless depletion” of family assets and ordered that there be an unequal division of family property upon their divorce.

A second, more recent case called Laing v. Mahmoud, 2011 ONSC 4047 (CanLII). There, it was the husband who had a gambling problem: bank records showed that he had spent a significant amount of the family’s money at the Casino, sometimes making 3 or 4 withdrawals from the nearby ATM in a single day. In one month alone, he withdrew $9,000 that could not be accounted for (despite his claims that this money was spent to buy business supplies, or to pay his workers, or that he spent it on expenses for the family – who at the time happened to be living in a friend’s home rent-free). The business records did not corroborate his claims; nor for that matter did the evidence of the wife, as the court explained:

The argument that [the husband] was making withdrawals from the ATM at the Casino in Hull for gambling purposes is further supported by the evidence of [the wife] who gave clear detailed testimony. She stated that she went to the Casino for the first and last time with [the husband] on his birthday in 2002. [The husband] appeared to be very comfortable at the Casino. People greeted him by name and appeared to know him. Employees offered him food and appeared to know his habits. [The husband] told [the wife] which would be “good machines” due for a big payout. On that occasion, [the wife] won $700 and when the parties went to cash out her winnings, [the husband] had a special card for that purpose. It was obvious to [the wife] that [the husband] regularly attended the Casino. …

Under the circumstances, the court found that even if only a portion of the ATM withdrawals were used for gambling, it represented an unacceptable proportion of his net income that was lost to the family, and “crossed the threshold into the realm of reckless depletion.” The court found that an equal division of net family property would be therefore be unconscionable, and ordered an unequal division instead.

For the full text of the decision, see:

Laing v. Mahmoud, 2011 ONSC 4047 (CanLII) http://canlii.ca/t/fm470

R.(A.) v. R. (H.), 2000 CarswellOnt 4844 (S.C.J.)

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 www.RussellAlexander.com.