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Posts tagged ‘VanSickle (Elms) v. VanSickle’

Court Rebukes Father Bent on Cutting Off Daughter’s Support

Close-up of assorted Canadian paper currency

Close-up of assorted Canadian paper currency

Court Rebukes Father Bent on Cutting Off Daughter’s Support

By definition, the role of family law judges is to be fair, impartial and unbiased. But it’s safe to speculate that they routinely see a good deal of needless legal wrangling from litigants. Faced with the fruitless and unnecessary protraction of proceedings – often spurred by one party’s intractable desire to “make a point” or “get even” – sometimes judges will express their exasperation.

This judicial frustration was evident throughout the decision in VanSickle (Elms) v. VanSickle, where the judge set the stage with the following opening words:

This is a family tragedy. The [father’s] relationship with his two children, … is now irreparably shattered. The parties have spent money they could ill afford on four days of trial wherein the [husband] has done his utmost to convince the court that his daughter, a university student, is no longer a dependent and not entitled to any support from him. ….

The parents had divorced in 1996 after 10 years of marriage. By court order in 2000, to which both father and mother agreed, the father’s access to the two children was terminated and he was ordered to pay support of about $585 per month, which the father dutifully paid.

The court order terminated the father’s access to the children, but he was claiming that they had severed ties with him, and that as a result he should no longer be obligated to pay child support for them. Since that order, he had made no effort to contact them, either in person, by telephone, e-mail, letters or cards. One of the children, a son aged 23, was financially independent and no longer needed support.

However, the other child, a daughter also in her 20s, had tried to get in touch with the father in 2007, in the hope that he would help with her university costs. He did provide $600 for the first semester but declined to help beyond that, expressing his disappointment that she had not maintained more contact with him. The daughter then dropped out of university and moved back with her mother, who had also been diagnosed with breast cancer around that time.

The father remarried in 2003 and his business – of which he was the sole officer, director, and shareholder — continued to do well (for example, in 2011 he took $70,000 in salary, paid his new wife $45,000, but then kept almost $240,000 in the business by way of retained earnings for that same year). Yet in 2007 – prompted by the daughter’s email request for help with university costs – he instructed his lawyer to contact the mother to ask her consent to have his child support obligations for both children terminated. With respect to the daughter in particular, he claimed that she was at school for most of the year but lived with her boyfriend for the rest of the time, and therefore was no longer in her mother’s charge. Also, he later asked for a repayment of half the child support he had already paid for a certain period up to and beyond 2007. The mother responded by asking for a retroactive adjustment for s. 7 expenses and for his contribution to the children’s post-secondary expenses.

The question for the judge was whether the adult daughter was still a “child of the marriage” in these circumstances, to the point that the father should still support her despite his unwillingness to do so and despite the cessation of a father-daughter relationship between them. (The Divorce Act defines a “child of the marriage” as an offspring who has “not withdrawn from [the] charge” of the parents; moreover the jurisprudence suggests that an adult child regularly attending post-secondary education is not legally considered to have “withdrawn” from the parents’ charge).

The judge found that the daughter was indeed still a “child of the marriage”, and ordered the father to pay retroactive support for 2007 onward. Despite her having to take educational breaks for various valid reasons, once the daughter returned to university in September of 2009, she resumed that status for the purposes of child support entitlement. Applying the established factors in situations involving an adult child in post-secondary education, her education plan was reasonable; moreover she had shown financial self-sufficiency and a determination to finish her program.

In ordering the father to pay, the judge rebuked him for failing to co-operate and for dragging out the proceedings:

With respect to Mr. VanSickle’s conduct, I have no difficulty in finding that he has engaged in blameworthy conduct. He had a positive obligation by court order to disclose not only his income, but the income of his corporation and he did absolutely nothing. Even in the face of demands, he did not properly comply with the disclosure requirements. He knew that his income was higher and yet did nothing to ensure that his children shared in that increase in income.

With respect to the children’s past and present circumstances, this is a situation where an increased amount of support would have had a positive impact on the lives of the children. I accept the evidence of the applicant and the children regarding their lifestyle, the difficulties they had with housing and the financial struggles of the family. If Mr. VanSickle had assisted Jillian with her university expenses in January 2008, she may very well have completed her degree at McMaster. One will never know.

With respect to the non-existence relationship between her and the father, the judge added:

By the time of trial, it was clear that neither [the son or the daughter] is interested in a relationship with their father. At the same time, Mr. VanSickle’s conduct is such that it is not surprising to the court that this is the case. This is not a situation where [the daughter] has unilaterally and without justification terminated her relationship with her father.

First, Mr. VanSickle chose not to see his children. He could have had supervised access to them when he and [the mother] first separated and he chose not to do so. He consented to an order in 2000 which terminated all access to his children. He did nothing to reach out to these children after the date of that order. It was Jillian who made the first overtures towards her father in 2007 when she was seeking financial assistance from him. While it is true that Mr. VanSickle responded to that request and attempted to reinstate his relationship with the children, his efforts, in my view, were minimal at best. …

In the end, and concluding that the husband’s true income would have to be scrutinized and determined (after taking into account retained earnings, income splitting with his new wife, and the validity of certain expenses that were actually deducted for his personal use), the judge held that the daughter was to bear one-third of her own university costs, and that the remainder was to be shared by the parents in proportion to their respective incomes.

For the full text of the decision, see:

VanSickle (Elms) v. VanSickle, 2012 ONSC 7340

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

Business Owners Beware: Court Can Force Your Hand to Compel Appropriate Child Support

wall street

Business Owners Beware: Court Can Force Your Hand to Compel Appropriate Child Support

Consider this scenario: A separated or divorced parent draws their entire income from a corporation for which he or she is single-handedly “running the show”. That means the parent has considerable discretion in deciding things such as salaries, bonuses, and retained earnings for the corporate entity.

But that parent is also obligated to pay child support, which we know is geared to income.

The question is this: How far should a court go to force the parent’s hand, in terms of withdrawing funds from the corporation to pay that child support?

This was the legal question underlying a case called VanSickle (Elms) v. VanSickle. Specifically, for the purposes of calculating the child support he owed the court had to grapple with whether to impute income to the father – who was the sole shareholder, officer and director of a company he ran from a home office – because he had kept too much of the available money sheltered in the corporation.

To make its ruling, the court undertook a detailed analysis of the finances, structure, and operations of the father’s business. The corporation had no significant debt, and it had a significant cash surplus of more than $150,000. That money, as the father made clear in his evidence, was available for his own personal use when needed. (For example, he took money out of the corporation and declared it as income when he needed funds to pay his legal fees). Also, the court noted the father’s lifestyle since the first child support order had significantly improved; yet he had not had a corresponding obligation to pay added support to his children.

Given that the father had displayed a liberal hand at drawing money out of the corporation for her personal needs, he was equally able to withdraw some money to pay retroactive child support, the court found. There was no unusual hardship to the father in this scenario.

The court also noted (perhaps sardonically) that since 2008, when the litigation between the father and the mother started, the corporation had suddenly and consistently had an upsurge in retained earnings (meaning money that the father kept in the business, rather than withdraw as income). To this observation, the court added:

Although I certainly accept the [father’s] evidence that his business is seasonal and fluctuates and that it is a prudent business practice to retain some earnings in the corporation to make sure monies are available when needed, I am also satisfied that one of the reasons the money remained in the corporation was so that his income was not increased for child support purposes. As I stated earlier, he had no difficulty in taking out additional money from the corporation to pay his legal fees, to purchase a roof, to pay his personal income tax liability or provide a bonus to either he or his wife. As the sole officer, director and shareholder of the corporation, he had sole decision-making authority and is able to access funds as he sees fit.

The court was also somewhat circumspect about the father’s practice of income-splitting with his new wife. While the father had done nothing illegal or inappropriate in choosing to income-split, the court took issue with the amount:

Although I do not doubt that the [father’s new] spouse works hard and is entitled to compensation from the corporation, the amount of that compensation is excessive when considered in relation to the income the [father] receives. For example, despite being the president and sole shareholder of the corporation and working incredibly long hours, the corporation pays the [father’s new] wife the same salary that he receives. In fact, in some years, she received more than he did. … It is also of note that prior to this marriage, the corporation did not employ anyone to do the job [the new wife] was hired to do. …

In the end, the court concluded that the father’s income for child support purposes had been understated. It imputed between $68,000 and over $90,000 in income for each of the three years that were the focus of the mother’s retroactive support claim, and attributed another $5,000 per year to the father’s income on account of the overly-generous income-splitting with his new wife. The court made a few other adjustments, including taking into account certain home-office expenses from which the father also benefited (e.g. meals, telephone, cell phone, internet, fuel, repairs, gas, and insurance).

The result was a court order for annual retroactive child support amount of between $10,000 and $15,000 for each of the three contentious years, to be remitted by the father a rate of $1,500 per month until paid in full.

For the full text of the decision, see:

VanSickle (Elms) v. VanSickle, 2012 ONSC 7340

 

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

Ontario Courts Tell it Like it Is

A judge-cartoon

Ontario Courts Tell it Like it Is

While reviewing a few Ontario family decisions recently, I noticed that the judges introduced their written reasons with a subtle and judicially-uncharacteristic lament, and in some cases, outright incredulity.

Using phrases like “a family tragedy” or “unhappy story” the judges provide a glimpse of some of the empathy and quiet frustration underlying their otherwise-impartial decisions.

For example, in Zesta Engineering Ltd. v. Cloutier, the court introduced the case this way:

This lawsuit is a case study of the risks and consequences of intertwining business, family, and marital relationships. On its face, this proceeding involves claims for breach of fiduciary duty and misappropriation of corporate assets by departing employees, coupled with counterclaims for wrongful dismissal. Beneath the surface it is the unhappy story of the impact of a marriage breakdown on a successful business enterprise, and the decade of litigation that has ensued.

In a case called VanSickle (Elms) v. VanSickle the court began its judgment this way:

This is a family tragedy. The [father’s] relationship with his two children, … is now irreparably shattered. The parties have spent money they could ill afford on four days of trial wherein the [husband] has done his utmost to convince the court that his daughter, a university student, is no longer a dependent and not entitled to any support from him. ….

And from Justice Quinn (who can often be relied on for a little editorializing in his judgments, see my previous Blogs, there is the less-moderate introduction to the decision in Szakacs v. Clarke, where he pointedly tells it like it is:

Introduction

For best courtroom adaptation of a work of fiction, the award goes to the applicant, Clarissa Olenka Szakacs, who shamelessly feigned what she thought was necessary to convince the court to circumscribe access by the respondent to their almost-six-year-old daughter.

One could sit in Family Court for many years and not encounter such a callously conniving and mendaciously manipulative litigant. …

At several points throughout the trial, Ms. Szakacs emphasized that she was a Christian who practiced Christian values. There must be some key pages missing from her copy of the Bible.

Finally, in a judgment from only a few months ago called De Cruz-Lee v. Lee, the exasperated yet still-mindful judge said:

Overview

1 This case is a classic illustration of the difficulty of obtaining justice when a trial is conducted by a party or parties who are self-represented. Ms. Angela De Cruz-Lee (“Ms. De Cruz-Lee”) was self-represented and conducted the trial by herself. It is said that a person who represents himself has a fool for a client. That saying should add something about how self-representation is about the most expensive trial lawyer you can pay for. … [T]his trial originally was scheduled for one to four days and was set … to settle two issues. On November 17, 2014 a further pre-trial was held. The issues were down to ownership of the home estimated to be a one to two day trial. The trial in fact went on for nine days. The dispute was over an approximate $53,000 held in trust. Regrettably, the costs of this trial will consume most if not all of that amount. I note that Superior Court trials in Family Court are governed by a variety of rules. These rules are designed to ensure trials are expeditiously run at some cost efficient level. At this trial, those rules meant nothing. …

In writing this judgment, I have cautioned myself, that in the end, Ms. De Cruz-Lee was poorly represented and I am going to have to make allowance for that fact in making my decision.

Judges are only human. Such sentiments are no real surprise in light of the parade of difficult, doubtless heart-wrenching family disputes that come before them daily – some of which should never have been aired in a Canadian courtroom at all.

For the full text of the decisions, see:

Zesta Engineering Ltd. v. Cloutier, 2010 ONSC 5810

VanSickle (Elms) v. VanSickle, 2012 ONSC 7340

Szakacs v. Clarke, [2014] O.J. No. 6214

De Cruz-Lee v. Lee, 2015 ONSC 1900

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

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