Setting Aside A Separation Agreement In The Absence Of Full Financial Disclosure

Date: 18 Jun, 2019

One of the basic compondentsof a Separation Agreement that will withstand a later attack is having made full financial disclosure of ones’ income, assets and debts as of the time of the agreement.

It is foolish to hide assets or income from ones’ soon to be former spouse in the hopes that they will be tricked into accepting less than that which they are entitled to.

It is one of the basic precepts of fairness and a statutory condition contained within the Family Law Act.

There are many ways of satisfying that disclosure, however the more extensive the disclosure, the greater the likelihood of making the agreement bulletproof.

Some lawyers regularly insist upon sworn financial statements being exchanged. For persons of more modest means, our office will often attach a schedule detailing those assets, debts and liabilities right into the very agreement.

Often a dissatisfied spouse will attempt at a later date to set aside an agreement on the basis that there had not been such disclosure. This often starts a fishing expedition in not only finding investigating the assets and debts at the time of separation, but even as of the date of the attack.

The attacking party should understand that their own lawyer’s file as of the date of separation is fair game to be opened up and reviewed.

If your own lawyer warned you either that the agreement you were about to sign was unfair and/or that the disclosure provided was insufficient, then this can be fatal to such an attack. As the Court of Appeal stated in Butty, a 2009 decision, one cannot sign an agreement in the face of clearly insufficient disclosure, which you are well aware before you sign the agreement yet chose to sign it nonetheless.

By analogy, the same applies with respect to strong warnings from your own lawyer that an agreement is against ones’ own best interest.

An Unequal Division Of Net Family Property Or How Unfair Does Unfair Have To Be or What Property Division If Together Less Than 5 Years

Date: 18 Jun, 2019

The Family Law Act for married couples (not common law) contains a formula for the division of property upon separation. Sometimes simply applying that formula, especially when one person brought into the marriage the matrimonial home, can produce an extremely unfair result. The Family Law Act does provide a provision for a division other than strict adherence to an equalization of the parties’ net family property (at times this can result in simply an equal division of everything). In grossly simplistic terms something other than an equal division.

One of the factors pointed out in the Family Law Act is cohabitation of less than five years. Note the Act uses the word cohabitation and not marriage. So if you are only married for a single year, but that follows four years of living together, one would fail to meet the five year period.

So then what does the court do when you are faced with a relationship of less than five years?

While the law, as stated at its judicial highest, such as by the Ontario Court of Appeal in Serra holds that there is no formula, this often is an impractical and far too expensive a process to abide by. The court has a wide discretion and there are numerous cases applying that discretion in many different ways.

However, the practical solution often is to simply use a percentage in this sense that if five years equals 100% of an equalization payment, every year short of that reduces it by 20%. There are numerous cases that exercise that such as Gomez v. Mchale,Sarcino,Kucera, and Kruschenske.

The law states that the process is subtle,variable and sensitive to numerable factors. However, few of us can afford to have those factors explored at the end of a long hearing. Lawyers in the best interest of our clients frequently look to use the crutch of a mathematical formula that has some judicial legitimacy.

Homemade Separation Agreement Penny Wise Pound Foolish

Date: 18 Jun, 2019

In the recent decision by Justice Lococo of the Ontario Superior Court of Justice in St. Catherine’s, he rendered a decision after a 14 day hotly contested Trial. Numerous issues were percolating on the Judge’s stove, including retroactive child/spousal support, the income of the ex-husband, access and costs.

This couple were together for less than six years and bore two children. The husband’s income was found to be in the range of $300,000.00 to $600,000.00 per year, yet the couple felt that it was appropriate to settle matters between themselves without the assistance of lawyers and using an online Separation Agreement.

This case Witt v. Witt in which the wife largely acted for herself at the Trial could not have been more contentious, more fractious and quite frankly more destructive.

The failure of having a properly drafted Separation Agreement left open many a question that the husband certainly thought had been finally resolved when the homemade agreement was signed. This is not a matter in which one party attempted to trick the other, but the lack of specificityand terms that one would normally find in a professionally drafted agreement were completely absent in the homemade one.

This leads to the frequently asked question, are homemade Separation Agreements valid? The answer lies in whether or not they are ever challenged. In the absence of a challenge, these agreements generally survive. But quite frankly, this is nothing more than a reflection of the level of cooperation between separating spouses in which an existence of a written agreement is almost academic. Parties made a bargain and are abiding by it. However, if the real goal is to have finality, a homemade agreement is far down on the list of how one should obtain that desired result.

One can only imagine the costs that the Witts found themselves incurring. The Witt Trial included expert reportson income, and custody/access, along with attacks on property division and numerous complicated issues.

It also featured a frequent dynamic observed by the author. An enlightened and children first approach by separating spouses rarely survives when a former spouse publically begins a relationship with another. Frequently all rational thought evaporates and emotions previously checked are unharnessed.

In the Witt case, rational priorities as to the best interest of the children gave way to secondary feelings that are not beneficial and indeed became quickly destructive.

One would have thought in a family in which the relatively modest legal fees surrounding a properly drafted agreement should not have been a problem would have indeed been incurred. Perhaps the Witts thought that the less formality the more amicable the atmosphere would have been surrounding the separation. A dangerous assumption, especially when one intends on starting a new relationship.

The case also featured highly contentious access exchanges being videotaped, which in turn were described as being counterproductive by Justice Lococo, yet admitted and taken into account in the Judge’s decision. The case also featured another frequent dynamic in which disciplinary steps being taken in one household is fuel for the other parent to allege child abuse involving outside authorities such as the Children’s Aid Society. Children lose their real position within a family structure and are empowered at far too young an age.

As the author has expanded in other blogs, custody and access disputes that reach as far as the courts are often the reflection of mental health on the part of one or both of the parties involved. I have no idea whether or not this applies in the Witt case, but that is my own personal observation.

It was necessary for the Judge to produce almost nine pages of directions on how child care was to be treated. One must appreciate that nine pages of rules and regulations imposed by a court are guaranteed to produce future problems down the road. No set of rules can meet all of the contingences of life. What is needed is rational thought and behavior on the part of parents, even if they are separated, that place the best interest of the children first and foremost. Any Judge will readily concede that a settlement, especially with respect to children, is far preferable to one imposed by the court.

This decision is a ready example of the wonders of family law. Emotion meets money meets children. Why would any lawyer or Judge chose to be part of such a process unless they feel on some level that they are helping the parties that they represent or are adjudicating over?

Spousal Support Forever Or Does Support Ever End Or Does My New Wife Have To Reveal Her Income To My Old Wife Or Is Retirement Cause For Spousal Support To End

Date: 18 Jun, 2019

Spousal support while still solely at the discretion of the courts has a statutory starting point, namely the Spousal Support Advisory Guidelines (“SSAG”).

The courts have held that the SSAGs should always be the starting point and a Judge must indicate why he or she is diverging from that perspective.

The SAGGs not only provide a range of spousal support, but a suggested duration taking into account a number of factors, including the age of the parties, the length of their relationship and whether there are any children of it.

After a lengthy marriage, the separating parties often agree to indefinite spousal support appreciating that it will be a long term obligation with no specific end date.

The agreement, if there is a Separation Agreement, would be the launch padfor determining whether or not and under what circumstances support should end. If the Separation Agreement simply contains a standard clause referred to as a material change in circumstances clause, then one must prove that there has been such a change. A material change is one in which the status quo has changed to a significant degree and one asks the parties and in absence of an agreement for the courts to come up with a new Order for support.

The issue of retirement often is looked upon as such a material change in circumstances. It stands to reason that when one stops working with a commensurate severe reduction in incomethat should be a material change in circumstances. In the recent decision of Justice Horkins in Angulo, a husband upon obtaining the age of 68 sought an end to spousal support that he had been paying for 17 years. His former wife had little in the way of income and the husband’s second wife was gainfully employed earning in excess of $100,000.00 per annum.

There was nothing medically pressing that was forcing the husband to retire, he simply felt that enough was enough and that continuing to work was too physically and mentally demanding.

The court ultimately agreed with the reasonableness of the husband retiring at age 68 from his job at a bank and there was no obligation for the second wife to contribute towards the first wife’s spousal support.

There are lessons for many and for once it would appear that common sense has prevailed at the judicial level. One cannot help but feel empathetic to the first wife living on a meager income, but support often cannot be looked upon as a permanent pension except when separating from a person of great financial means.

The Courts Need To Be Run Like A Business

Date: 14 May, 2019

I am a lawyer that has practiced in Brampton Ontario for 40 plus years.

While the judicial system is a fundamental pillar of our democracy, that is no reason for a businesslike approach not be applied to it.

The Government for shortsighted economies has starved the support staff of the courts of funding, which in turn has led to a shortage of qualified clerks able to promptly deal with court filings.

I would propose that except for those litigants that are unable to afford the appropriate fees, that every filing should be accompanied by a fee that properly identifies the true cost to the court for the processing of that document. The Province should retain the services of a cost consultant to determine the proper cost of the processing of the filings that require the court’s attention. That cost should be all inclusive, not only of the clerk required, but the hard facilities that are needed to support that individual. That is the fee that should be charged. Like any business, there must be a cost benefit analysis and the proper burden upon the Province should be alleviated by the fee paid by the individual seeking that relief.

As a result of Government cutbacks which I believe are completely unnecessary and detrimental to all concerned. There are huge backlogs on the processing of mundane applications that my office is involved in.

The processing of an uncontested divorce can literally take months to obtain. We have heard reports of stacks of mail received by the courts that have not been opened as they do not have the manpower to deal with them.

Most egregiously from the Provinces’ financial prospective, the Province is not negotiating cheques that have been submitted. As a specific example, an Application for “Probate” at one time was processed within a reasonable four to six weeks within Peel Region.

That has now climbed to generally exceeding six months. Our office has submitted the appropriate documentation and the government’s estate tax in excess of $9,000.00. Again due to the lack of sufficient staff, the Application has not even been looked at and the cheque has not be negotiated. What business would sit on income of $9,000.00 from a single file without negotiating that cheque? Indeed this has come to my specific attention as our accounting department has pointed out that the cheque is now likely stale dated. The Government is losing vast amounts of money unnecessarily.

I repeat, determine what the true cost is and charge it. At the very least this is a transaction that should be a neutral expenditure.

One must also consider the ripple effect upon the economy. People need to wait hours to file documents, which is a great financial burden to the economy. Similarly, various financial transactions such as selling a home cannot take place until the courts are able to attend to what is often a routine transaction. Again, the Government is losing its land transfer tax that would obviously be earned as a result of such a real estate transaction.

I urge the Government to take a businesslike approach to this problem. If the Province indeed is open for business, then let it at least apply this principle to its own house.

Forcing Your Spouse To Have An Expert Determine Their Income

Date: 14 May, 2019

The court does have the authority to order a party to obtainan expert’s report to determine their income for support purposes.

Recently, Justice Tremblay in the case of Sargalis foundin limited circumstances the court does indeed have the authority to order a party to obtain an expert’s report determining the potential payors income for the purpose of calculating support.

Justice Tremblay believed that this should only happen when the cost (and that cost can be very substantial) should only be incurred where the burden on the disclosing party does not outweigh the importance of the information. If there is a more financially reasonable way of determining income that should be pursued before a formal income analysis is to be ordered.

A sensitive hand at the tiller is needed to guide a client through these murky legal waters.

Settlements Far More Flexible Than Court Orders

Date: 14 May, 2019

On a practical basis, there is frequently a give and take in negotiations between spouses in which less of a property settlement is paid or received in return for an equivalent reduction or increase in a property settlement.

However, in the event that the parties cannot settle, it is not within the courts’ jurisdiction to offset a property settlement, formally known as an equalization payment against a right to future child support. This was clearly stated by Justice Shaw in the recent decision of Plimmer vs. Burke. The court does have the ability to stretch out an equalization payment for as much as ten years if the court finds it is too onerous to make an equalization payment in a single lump sum.

Moral, what one can do by way of negotiated settlement and formalized in a separation agreement is far wider than a court imposed solution.

The Many Basic Principles Of Custody

Date: 03 Feb, 2019

The following is an effort to provide a non-exhaustivelist in the most basic and summary of fashions of the laws that apply to custody and access in Ontario.

  1. The primary principle, the primary directive if you wish, is incorporated in section 24 of the Children’s Law Reform Act, the best interest of the child.
  2. Joint custody: one should look at the Ontario Court of Appeals decision of Kaplanis 2015 and Giri v. Wenteges One needs:
    • Evidence of historical communication between parents.
    • Not ordered in the hope joint custody will improve communication.
    • Just because both parents are good, does not mean joint custody is correct.
    • Just because one parent says we cannot communicate is not a bar to joint custody.
    • The younger the child,the more important communication is.
  3. Note in these circumstances, joint custody can also be referred to asshared custody.
  4. The child should have maximum contact with both parents; Gordon v. Goertz 1996 Supreme Court of Canada.
  5. Presumption: regular access by noncustodial parent is in the child’s best interest. It is the child’s right to visit and have an attachment to the noncustodial parent and this right is so important that it is only to be lost in the most extreme of cases; Dadar 1996 New Brunswick, QB.
  6. Supervised access is not supposed to be a long term arrangement for the child. Helpful if require reintroduction to parent or temporary safety concerns; Najjardizaji v. Mehrjerdi 2004 Ontario Court of Justice.
  7. A report by the government agency: The Office of the Children’s Lawyer is not an expert report. The author of an OCL report is a fact finder.  The OntarioCourt of Justice Act, section 112 on behalf of OCL may make recommendations, but these are only a starting point, not the last word. Ganie v. Ganie 2015 Ontario Court of Justice.
  8. Even an assessor’s views under section 30 of the Children’s Law Reform Act is not the last word, but simply one piece of evidence for the court to consider. The court is the final determiner, no assessor or expert is; Woodhouse v. Woodhouse 1996 Ontario Court of Appeal.
  9. Access is right of the child: responsibility of custodial parent to facilitate that access; Scrivo v. Scrivo 2012 Ontario and Tran v. Chen 2012 Ontario.

Parental Alienation Reconciliation Counseling

Date: 30 Aug, 2018

The law is influx on this point. The author would not be surprised if within a year that the courts’ views will shift again.

The courts continue to throw a substantive resources at a problem that defies solution, namely the alienation between child and parent following separation.

When the whole of a family is torn apart, the ragged edges of the division chew up emotions, goodwill and family cohesion. Scars are left on all concerned, including the children.

Those scars can leave for various reasons difficulties in a continuing relationship between parent and child. The trust that the child had in the family unit is completely disturbed and at times children, who can be very moralistic and judgmental,will find one parent wanting. At times, with the prompting of one parent or another, the children may have extremely strained or completely alienated relationships from one of their parents.

This leads to finger pointing. Is it alienation on the part of the custodial parent or as often responded is the alienation actually caused by the other parent’s conduct?Is it alienation or is it estrangement?

Extremely difficulty to rectify. The courts are driven by what is in the child’s best interest and the primary belief that the child should have a strong relationship with both parents for their sense of self-worth. One clumsy solution is reconciliation counseling. The concept is a multi-day therapy intervention program such as Families Moving Forward. This is a Toronto based program that attempts to repair relationships where there has been alienation.

This is an expensive process and its results are uncertain. The question is whether or not the court has the authority to force a parent to attend such a program. The decisions are all over the map. A senior judge in Thunder Bay, D.C. Shaw in Barrett vs. Huver felt that there was limited authority for the court to order attendance and participation inreconciliation counseling. In another decision E.T. vs. L.D., a court of equal seniority held a contrary view. In the Williamson case of the British Court of Appeal it felt that only with expert evidence would the court order family reunification therapy. We also have Justice Jarvis’ decision in Testani, who felt that there was such jurisdiction within the court. The Ontario Court of Appeal weighed in on inKaplanispointing out the absence of any specificlegislative authority. However, there remainsthe courts inherent jurisdiction, as parenspatriae, also known as the court remaining as the ultimate parent of all children within its jurisdiction.

Another wrinkle is whether or not participation in a reconciliation therapy program is a medical treatment, which requires one to consent to under the Health Care Consent Act, Section 10.

We conclude with now retired Justice Quinn, whom in this author’s view is the Canadian Lord Denning. For those who still have all of their hair and eye sight, I explain who Lord Denning was. Lord Denning was a senior English judge, famous for broadening the law in many different areas and writing insightful and ground breaking decisions. Lord Denning had an almost cult following amongst lawyers throughout the Commonwealth. While Justice Quinn does not enjoy similar fame, his numerous illuminating decisions especially in the area of family law are legendary. Justice Quinn in the Brunie decision, pointed out the limitation of the courts in dealing with parties in high conflict custodial and access problems. “The function of family court is not change people, but to dispose of their disputes at a given point in time. I preside over a court not a church”.

If I may paraphrase Justice Quinn, the judicial system is severely hobbled in dealing with human problems of desire, conduct and goodwill. It is good at moving money around, not so good in adjusting one’s soul and temperament.

Capital Reserve and its effect on determining Income for Support Purposes

Date: 12 Aug, 2018

A capital reserve can be described as a portion of a businesses’ capital/income that is needed to sustain the business itself and is not available for the purpose of funding support. This is touched upon in both Section 12 and Section 18 of the Child Support Guidelines. As readers of this blog are aware, the Child Support Guidelines are a federally mandated method of determining the amount of child support to be paid. This was an effort by Parliament to eliminate the wide variety of child support being ordered across the country. Simply put, if you make this much money, you will pay this much in child support. That of course is a vast over simplification and there are many exceptions and factors to be taken into account. One of those factors is for individuals who are self-employed or earn their income from a business, what money is available to be taken from that business to fund support.

Support payors can attempt to shelter profit by leaving it in their company and not drawing it and declaring it in their personal hands. The courts have the ability to go beyond what is simply being declared to determine what income realistically is available. One of those considerations is monies needed for a capital reserve. Alternatively what is needed to sustain the company as a viable enterprise. Often companies need to qualify for operating lines of credit from banks. Those banks may impose a term that the borrowing company maintain a minimum amount of cash reserves on hand.

As is usual with family law, that which appears to be simple,can actually be far more complicated.