CUSTODY AND ACCESS – SOLE OR JOINT CUSTODY – DE FACTO CUSTODIAL PARENT OBSTRUCTING COMMUNICATION

By | Blog | No Comments

A parent cannot disengage from attempting any meaningful effort to communicate with the other parent and then expect to gain sole custody based on an alleged inability to communicate (at para. 31). Here, the parents separated when the child was three. For the first two years of the child’s life, they had shared parenting responsibilities. The mother contended that, several months before separation, the father assaulted her physically and she was afraid of him. The father denied the assault. They separated when the mother left the home with the child without notice and refused to speak to the father. Since then, she had avoided all contact with him. She set the terms of access, which was facilitated through third parties. When the father began a logbook to communicate about the child, the mother saw this as an attempt to control her.

The court found that both parents had the ability to meet the needs of the child, who was happy and well-adjusted. The father’s entries in the logbook were child focused and appropriate. The court could not determine whether the alleged assault had occurred or not. However, it concluded that the mother’s decision not to engage in meaningful communication was not the result of any past domestic violence, but that she chose this course to strengthen her position for sole custody. The court did not believe there was a power imbalance between the parties. The mother had to find a way to communicate with the father effectively in the child’s best interests. The fact that the child had remained with the mother since separation as a result of the mother’s actions did not strengthen her claim for sole custody and primary residence. The court granted joint custody with week-about residence of the child: Bjarneson v. Karambetsos, 2016 ONCJ 684 (Cleghorn J.).

LAO LAW – The Bottom Line in Family Law

APPEALS – SPOUSAL SUPPORT – MATERIAL CHANGE – RETIREMENT – WHETHER APPLICATION PREMATURE

By | Blog | No Comments

In most cases, an application to vary support brought two-and-a-half years prior to the alleged change in circumstances would run counter to the fundamental principle that a material change must have already occurred in order for a court to have jurisdiction to vary a final order (at para. 28). There is a risk in such a case that the financial disclosure and other evidence in support of an alleged material change will be speculative due to its prematurity.

Here, following a 24-year marriage, the court made an order in 1996 requiring the husband to pay ongoing spousal support and to maintain insurance policies in favour of the wife. In January 2014, the husband, now aged 70, brought an application to terminate his support and life insurance obligations effective June 1, 2016, on the basis of a planned retirement. The husband’s application was granted and the wife, now age 69, appealed.

While the Court of Appeal would not endorse, as a general principle, the application judge’s encouragement of the early timing of the application to vary, this case was exceptional in that there was evidence to support the conclusion that the husband would indeed retire, that the subsequent change in his income would be very significant, and that there was sufficient financial information to permit the judge to determine that his retirement would be a material change (at para. 27). This ground of appeal was dismissed.

The judge also did not err in finding that the husband’s retirement and reduction in income was a material change in circumstances. While the husband’s retirement was within the court’s contemplation when making the order in 1996, the effect of that retirement was not considered in fixing the amount of support, nor was there any evidence on the record to permit an assessment of the financial impact of retirement (at para. 31). A determination that the wife was entitled to support “forever” could not foreclose the husband’s future application to reduce or terminate his support obligation upon a material change in his financial circumstances. The judge’s findings that the husband was sincere in his proposed retirement and intended to live frugally within his reduced means were available to her (at para. 32): Schulstad v. Schulstad2017 ONCA 95 (Weiler, Rouleau and Roberts JJ,A.).

LAO LAW – The Bottom Line in Family Law

SUPPORT – SPOUSAL SUPPORT – LONG-TERM MARRIAGE – COMPENSATORY AND NON-COMPENSATORY SUPPORT

By | Blog | No Comments

The parties separated after 30 years of cohabitation, including 24 years of marriage. They had two children. The husband was an accountant who earned $230,000. The wife had been working as an elementary school teacher since 2007. During much of the marriage, she was out of the work force as a result of child care responsibilities. She did do some part-time work during this time. The husband argued that support should be time limited and at the low end of the SSAG range. The court held that the wife was entitled to support on a compensatory and non-compensatory basis. Her assumption of child care duties allowed the husband to build his career. The non-compensatory claim was based on the economic interdependency of the couple over their lengthy marriage and the significant decline in the wife’s standard of living from the marital standard. The court held that the midpoint of the SSAG range would address the compensatory and non-compensatory aspects of the wife’s claim, and ordered indefinite support of $5,200 per month: Boulanger v. Hebert-Boulanger, 2017 ONSC 482 (Van Melle J.).

Ramsden, Elizabeth; LAO LAW – The Bottom Line in Family Law, February 2, 2017.

SUPPORT – CHILD SUPPORT – INTERIM ORDERS – RETROACTIVE AND ONGOING SUPPORT – IMPUTING INCOME – PERSISTENCE IN UNSUCCESSFUL BUSINESS VENTURE

By | Blog | No Comments

Where the father had paid little support since the parties’ separation in late 2011, the court granted the mother’s motion for a temporary order for payment of child support arrears and ongoing child support. When the parties separated, the father earned over $100,000 as an industrial designer. He lost his job in 2012. He started his own business in 2014. However, as of early 2017, he claimed that the business would not be profitable for a couple more years. The mother claimed that the father was deliberately underemployed and/or failing to disclose his income, as he was living in a million dollar home owned by his current partner. The court calculated support arrears owing for the years 2012, 2013, and 2014 based on the father’s income as shown in his tax returns. For the years 2015 and 2016, the court noted that despite financial disclosure orders, the father had failed to provide disclosure of his corporation’s finances or those of his wife’s corporation, in which he had an interest. He claimed an income of less than $25,000, expenses of $40,000, but no debts. The court drew an adverse inference from his refusal to provide information that would reveal his true income. The father had had more than enough time to pursue his business venture. The mother had established that income should be imputed to the father. Guided by evidence provided by the mother as to the range of income of a senior industrial designer, the court imputed income of $49,628 to the father in each of 2015, 2016 and 2017 on a without prejudice basis. The court ordered the father to pay arrears of nearly $62,000 and ongoing child support of $951/month: Boyer v. Brown, 2017 ONSC 501 (Sheard J.).

Ramsden, Elizabeth; LAO LAW – The Bottom Line in Family Law, February 2, 2017.

SUPPORT- CHILD SUPPORT – RETROACTIVE S.7 EXPENSES – LENGTHY DELAY IN APPLYING

By | Blog | No Comments

Where the mother delayed 15 years in seeking s.7 expenses, and the children to whom the expenses related were now 31 and 29 years old, the court held that she could not seek retroactive s.7 expenses from the father.

In response to the father’s 2016 motion to terminate child support and rescind arrears under a 2002 support order, the mother sought an order for retroactive s.7 expenses. She had not sought s.7 expenses in 2002 or since, and none had ever been ordered or paid. The court held that none of the factors in D.B.S. v. S.R.G. , 2006 SCC 37 favoured the mother. She did not have a reasonable excuse for not seeking s.7 expenses earlier. Although she said she couldn’t locate the father to make the claim, the court was not convinced. The father’s conduct was not blameworthy. He had paid the support ordered until 2007, after which his payments became less regular because the children were adults. While he should have brought a motion to change rather than using self-help, the court did not find this behaviour morally blameworthy. The circumstances of the children, now adults, did not justify making a s.7 order. Finally, a retroactive order for s.7 expenses would cause the father hardship given the delay, the lack of notice, and the children’s ages. The father should be entitled to rely on the certainty of the 2002 final order. It was not in the interests of fairness for a court to now order s.7 expenses: Gough v. Blanchard, 2017 ONSC 523 (Harvison Young J.).

Ramsden, Elizabeth; LAO LAW – The Bottom Line in Family Law, February 2, 2017.

NET FAMILY PROPERTY – DEBTS AND OTHER LIABILITIES – ONUS OF PROOF

By | Blog | No Comments

The court refused to allow the husband to deduct from his net family property a debt of $100,000 that he said he owed to a limited partnership from which he had resigned in 2011. In 2007, the partnership lent the husband $100,000, which was then used to purchase units of the partnership.There was no evidence provided about the expectation of repayment except that given by the husband. He testified that the partnership suffered significant losses from 2012 to 2016 and then went into bankruptcy protection. However, no call had been made on the debt so far. In the past several years, the husband had been able to deduct his net partnership losses relating to his shares in the partnership to significantly reduce his taxable income. The court noted that the party asserting the value of an asset or liability under his control bears the onus of providing credible evidence in support and if such a value cannot be readily determined, an independent valuation must be obtained: Conway v. Conway, 2005 CANLII 14136 (Ont.S.C.J.). Here, the court was not satisfied that the promissory note represented a genuine debt and that there was an expectation of repayment: Boulanger v. Hebert-Boulanger, 2017 ONSC 482 (Van Melle J.).

Ramsden, Elizabeth; LAO LAW – The Bottom Line in Family Law, February 2, 2017.

APPEALS – CUSTODY – SEPARATION OF SIBLINGS

By | Blog | No Comments

The divisional Court upheld an order that gave the father primary care of the parties’ five-year old son. The father lived in London, Ontario with his current wife. Her seven-year old daughter lived with them on a  week-about basis. The mother lived in Orillia with her other two children, one older and one younger than the five-year old son. The parents had shared parenting on a week-about basis until the child had to start kindergarten, at which time, the mother assumed primary care. Although the child had been in his mother’s primary care for over a year before the trial, the trial judge held that it was in the child’s best interests to live primarily with his father. The child was bonded to both parents and both parents were capable. However, the child had some behavioural issues and the one significant difference that the father could offer was the ability to provide consistent discipline. The trial judge found that the mother struggled with effectiveness generally and discipline particularly, which was not beneficial to the child. A privately retained assessor also supported primary care to the father, despite the father’s inflexibility and tendency to denigrate the mother’s role. The trial judge put in place a three-year access schedule that could only be altered by advance written agreement.

On appeal, the mother argued that the judge failed to give primacy to the principle that siblings should not be separated except in extreme, compelling circumstances. The Divisional Court found that the judge was very alert to the issue of moving the child away from the primary residence with his siblings and expressly referred to cases cautioning against the separation of siblings. Nonetheless, the judge found it was in the child’s best interests to be in the father’s care and the court found no basis to interfere: Callaghan v. Jackson, 2017 ONSC 593 (Div.Ct.) (Kiteley, Kruzick, Myers JJ.), aff’g 2015 ONSC 7559 (Eberhard J.).

Ramsden, Elizabeth; LAO LAW – The Bottom Line in Family Law, February 2, 2017.

Suspicious Will-Making: When Should You Challenge The Validity?

By | Blog | No Comments

Challengers to the validity of a Will sometimes cite “suspicious circumstances” as a reason to discredit a Will and the intentions of the testator. But what does this mean? And how do the courts assess whether the circumstances are sufficiently suspicious?

Valid Wills

As a general rule, there are three conditions that make a valid Will:

  • The Will was duly executed (that is, it complied with the formalities of the Succession Law Reform Act;
  • The testator knew of and approved the contents in the Will; and
  • The testator had testamentary capacity.

If one of these components is missing, or is questionable, it may be appropriate to bring a court application challenging the validity of the Will.

Suspicious circumstances

The presence of suspicious circumstances surrounding the making of a Will is not a stand-alone ground to challenge a Will; however, there are circumstances that may impact on which party has the legal burden of proving testamentary capacity and/or knowledge and approval of the Will. For example:

  • Whether the testator was experiencing any physical or mental impairment/deterioration at the time the Will was signed;
  • Whether the Will constitutes a significant change from previous Wills;
  • The factual circumstances surrounding the preparation and execution of the Will;
  • Whether a beneficiary was instrumental in the preparation of the Will;
  • Whether the testator has been isolated from family or friends;
  • The extent to which the testator is dependent on any of the beneficiaries;
  • Whether the testator is unwilling to provide full information to a solicitor in relation to the assets, liabilities or family circumstances; and
  • Whether the Will makes testamentary sense.

Undue Influence

Undue influence is another possible ground to change a Will, if you believe your loved one was influenced into changing their Will by another family member or a friend.

The burden to prove undue influence is on the person alleging it, and it is a high threshold to meet. Ultimately, a testator may be influenced by appeals to affection, gratitude or pity, as long as the influence does not rise to the level of actual coercion, such that the influencer overpowers the free will of the testator.

Fraud

Finally, you can also challenge a Will based on allegations of fraud or forgery, but these challenges are rare.

Kelley, Erin; Nelligan O’Brien Payne LLP, January 18,2017.

 

PAYING THE PRICE FOR FAILING TO PRODUCE DISCLOSURE

By | Blog | No Comments

In conducting an analysis of a spouse’s income for support purposes involving a business, a chartered business valuator will typically request corporate financial statements, general ledgers and other financial documents (e.g., bank loan agreement, tax returns, invoices supporting expenses, etc.).

The valuator is interested in reviewing these documents for two main reasons. First, the documents will provide information to assess the compensation and personal benefits received by the spouse as well as persons or corporations with whom the spouse is related.

Second, the information will assist with the assessment of the level of pre-tax corporate income available for attribution to the spouse for support purposes under section 18 of the Federal Child Support Guidelines. For example, the bank loan agreement may have loan covenants designed to maintain adequate cash flow, minimum working capital and financial ratios.

An important issue affecting disclosure that often arises is the desire for confidentiality, which may lead the parties to seek a sealing order or enter into a confidentiality agreement. However, there are many potential difficulties with confidentiality agreements. Blaney v. Blaney, 2012 ONSC 1777 (Ont. S.C.J.) addresses the obligation to produce disclosure, as follows:

The obligation and onus to satisfy the court as to income and the value of assets and debts is on the person whose income or asset or debt is called into question. Here the respondent (husband) had that obligation. His obligation existed prior to any court orders, conferences or court attendances. [Emphasis added.]

The valuator may also request personal bank statements and credit card statements when there is a significant difference between a spouse’s reported income and the level of spending or lifestyle of the spouse. However, disclosure must be proportional to the issues involved (see Rule 1.04 (1.1) of the Family Law Rules).

What are the consequences of non-disclosure?

Consider the facts of the Ontario Court of Appeal case of Roberts v. Roberts, 2015 ONCA 450 (Ont. C.A.) where a husband continually did not comply with court disclosure orders. The wife requested disclosure from her husband by bringing a motion. The judge ordered the parties to exchange disclosure requests and respond in a defined period of time. Husband did not comply. Wife brought another motion, and on consent, the time line was amended. Husband did not comply. Wife brought a motion to strike the husband’s pleadings.

Instead of striking the husband’s pleadings, the judge provided the husband with a further extension, with condition that if he did not produce the required disclosure, the wife would be entitled to renew her motion to strike.

The husband did not answer all disclosure requests. Wife renewed her motion to strike the husband’s pleadings and the order was granted. The appeal court agreed with the trial judge, as follows:

The appellant’s conduct in ignoring court orders and failing to follow the basic principles of family law litigation put him in the exceptional category …where the judge’s discretion to strike his pleadings was reasonably exercised.

In the case of Laframboise v. Laframboise, 2015 ONSC 1752 (Ont. S. C. J.), the husband did not provide general ledgers from 2009 to 2012 to the wife’s ecpert, as he claimed they had been destroyed by a virus.

General ledgers were provided to the wife’s expert from 2005 to 2008. Based on the general ledgers provided prior to 2009, the expert estimated the level of personal expenses paid by the business from 2009 to 2012 based on patterns of personal spending recorded in the company in years prior to 2009.

On the other hand, the husband’s expert obtained the general ledgers for 2009, 2010 and 2012 from the husband’s accountant (the accountant advised that 2011 general ledger was not available due to an IT issue). The husband’s expert was also provided summaries of corporate credit card activities, not provided to the wife’s expert despite the requests to do so.

Based on the evidence, the court drew an inference that the husband’s income levels were closer to those determined by the wife’s expert (Mr. Pittman) than the husband’s expert (Mr. Savage):

Here, knowing the content of Mr. Pittman’s report, the applicant chose both to limit the scope of Mr. Savage’s work on his behalf, and not to provide the respondent with all of the documentation provided to Mr. Savage. These circumstances support an inference that the applicant’s incomes available for support purposes were closer to those determined by Mr. Pittman.

The failure to provide timely disclosure is often an impediment to a quick resolution of the financial issues of a divorce and can result in severe consequences such as a court’s power to strike a spouse’s pleadings, award costs against a party, draw adverse inferences, etc.

Roher, Bruce; The lawyers Weekly, February 19, 2016.

Support – Spousal Support – Material Change in Circumstances – Retirement – Double Dipping

By | Blog | No Comments

The court found a material change in circumstances based on the husband’s retirement, which would reduce his income by almost 55 percent. However, the wife was still entitled to some non-compensatory support. The wife continued to suffer economic hardship from the breakdown of the marriage. The husband’s pension was equalized in 2006, when the parties resolved the property and support issues on consent. While the wife had been overly selective in terms of employment and reluctant to use her capital for income purposes, she had made some employment efforts and had not wholly mismanaged her assets. The husband had the ability to pay a modest amount of support. His retirement income, while diminished, was more than capable of meeting his needs, particularly as he had re-partnered. These factors led the court to conclude that the husband should continue to pay support over and above what could be founded solely upon the post-separation increase in the value of his pension. In the result, the court reduced the amount payable from $2,000 per month to $1,000 per month:Boudreau v. Boudreau, 2015 ONSC 7956 (Phillips J.).

Warner, Lauren; LAO LAW – The Bottom Line in Family Law, January 7, 2016.