PLAY FAIR OR PAY THE PRICE

PLAY FAIR OR PAY THE PRICE
Date: 20 May, 2021

Our firm takes great pride in the accomplishments of a former partner, now the Honourable Justice Mr. Marvin Kurz of the Ontario Superior Court of Justice.

Marvin as he will be eternally known to us rendered a decision in the Dowdall case in November 2020.

The fact situation was one in which the wife after separation made a formal offer to settle the issue of her support in the amount of $3,800.00 per month for an eight-year period. The amount would not be subject to change regardless of any changes in the parties’ circumstances.

However, Ms. Dowdall had made her offer based upon the husband’s representation of his income.

Mr. Dowdall told his wife that his salary had been reduced by virtue of COVID-19 reductions at work to $150,000.00 per year. What he failed to tell his wife was that actually he had been offered a new position and that his income had increased in all likelihood to in excess of $300,000.00 per year. Mr. Dowdall took advantage of the outstanding offer to settle by the wife and accepted it. However, when he attempted to formalize this settlement acceptance, the wife objected.

She had not been told of the actual increase of Mr. Dowdall’s income in contrast to his representation to her that his income had been reduced. In essence, Mr. Dowdall was earning in all likelihood double that which he had told his wife.

Justice Kurz was not impressed and felt that the non-disclosure by Mr. Dowdall of his true income deprived her of the opportunity to withdraw her offer.

Pursuant to the spousal support advisory guidelines, Mr. Dowdall’s true income would have suggested support of double the amount that Mrs. Dowdall offered to settle her claim for.

Mr. Dowdall was not content to live by Justice Kurz’s decision and appealed to the Ontario Court of Appeal.

The Court of Appeal was not impressed and dismissed Mr. Dowdall’s application despite the fact that he was represented by prominent family law counsel.

The Court agreed that enforcing the settlement would be unfair and unreasonable and that Mr. Dowdall’s failure to disclose his true income sabotaged his motion. Courts are not inclined to interfere with settlements reached between parties so long as there has been full and frank disclosure and the opportunity to obtain independent legal advice. However in contrast, if there has been intentional and material non-disclosure, the Court is more than ready, willing and able to jump in and set aside the results of such disclosure.

Justice Kurz’s trial decision on the motion was vindicated by the Ontario Court of Appeal as it very well should have been.

Sad but true, the spouse whom no doubt you described as “my best friend and soul mate” at your wedding now has no monetary value to you.

Clearly the moral is disclosure is mandatory if you want the Court to help you even in the face of a lack of a corresponding effort.

Now my Machiavellian theory for a motion and appeal that seemed like a loser from day one. This is complete conjecture.

If the husband had been successful either at the motion or appeal he would potentially have saved himself 8 years of alimony at $7,600.00 per month vs. $3,800.00. The after tax spread roughly speaking might have been $182,000.00. He gambled and lost a guess of $75,000.00 in legal fees and costs.

Not certain those odds and the potential gain made sense. On the other hand, if after the offer had been accepted and the deal reached, and then for the first time the husband earned a significant salary increase, he would have been in the clear.

Disclosure in Family Law

Date: 25 Feb, 2021

It is a capital mistake to theorize before one has data. Insensibly, one begins to twist facts to suit theories, instead of theories to suit facts”. Sherlock Holmes

While spoken by the famous detective, one finds that proving the validity of claims in family law is no different. Whether you are alleging the misuse of funds, additional income of your spouse, or deficiencies in the ability to parent, evidence to support your claims is always required. Those who have started the family law process will have already been introduced to the all-encompassing term of disclosure, which in the most general of explanations amounts to supporting documents.

In family law, courts have held that fact finding or the exchange and discussion of disclosure should not be a battle. The reason is a practical one. Both sides need to provide full information about the issues before an informed decision can be made regarding a settlement, or before a judge can make a reasoned decision on the merits of the case.

In fact, the exchange of information should be marked by an orderly prompt request for disclosure with an organized and speedy reply. To be frank, exchanging information should not be a drawn-out game of hide and seek. It is expected that requests for information may narrow in scope or give rise to further requests as information is exchanged. Parties should be aware that failure to provide disclosure or supporting documents to support their own claims could have dire consequences on their own case as well as their ability to participate in the proceedings overall.

If parties do not submit to the initial request and obligation to be forthcoming regarding their documents and relevant information, a procedural Order for disclosure may be made. That is an issued Order from the court compelling the production of documents or information required to move the matter forward. Once an Order is made, parties may find themselves in breach if they continue to withhold documents and information.

Rule 1(8) of the Family Rules provides:

If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,

  1. an order for costs;
  2. an order dismissing a claim;
  3. an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;
  4. an order that all or part of a document that was required to be provided but was not, may not be used in the case;
  5. if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;
  6. an order postponing the trial or any other step in the case; and
  7. on motion, a contempt order. O. Reg. 322/13, s. 1.

Some of the most common consequences for failure to disclose or respond to a request for disclosure include:

  • having adverse inferences drawn against you; or in the worst case,
  • having your pleadings or other court documents struck from the record.

This means that the court can draw an inference in favour of the person making the request if you fail to provide information that could prove otherwise. This could also result in an imputing of income or in the dismissal of claim, depending on the issues at bar. The later relief of striking pleadings or documents is generally reserved for extreme cases. However, parties should be aware that the court is extremely critical of refusal to provide disclosure. Justice Myers has opened a very intriguing discourse by asking just how many orders does a party get to breach on top of ignoring the primary objective that requires early, voluntary and compete disclosure without an order even being made? She went on to state in Roberts v. Roberts 2015 ONCA 450, that,

“It is not the remedy that should be exceptional. Rather, it is the continued existence of cases with parties who ignore their disclosure obligations that ought to be exceptional. The remedy will become exceptional when the Rules are followed and enforced as written and as interpreted, that is once cases with non-disclosure issues are exceptional, then the need to consider striking pleadings for non-disclosure will be exceptional.”

All in all, it is best practice to review requests made for disclosure, assess the significance to the claims and the ability of each party to gather same, and provide it as soon as possible lest one loses the ability to argue your case at all by having your pleading struck from the record.

In family law, standard requests include Notices of Assessments, Income Tax returns, and bank statements that support the figures outlined in your sworn financial statement. Depending on the complexity of your matter, your personal circumstances, and the issues arising from the breakdown of your relationship, there is likely a lot more disclosure that needs to be provided in order to allow both sides to present their cases in a fair manner.

To find out what disclosure is necessary and relevant to your matter, speak with a family law lawyer regarding your case.

REMOVAL OF THE JUDGE RECUSAL MOTION- REASONABLE APPREHENSION BIAS

Date: 14 Jan, 2020

On rare occasions, one can remove the presiding judge if one can show that the judge is displaying bias in the hearing before them or for some other reason is not objective. One should look at the decision of Justice Paull of the Ontario Court of Justice in CAS Oxford v. EMT, a 2019 decision. In that case, Justice Paull reviewed all of the law in this area, which begins with the Supreme Court of Canada decision in R v. S, a 1997 decision and the Committee for Justice of Liberty v. Canada, a 1976 Supreme Court of Canada decision. The courts had held “the apprehension of bias must be a reasonable one held by reasonable and right minded persons applying themselves to the question and obtaining thereon the required information. The test is what would an informed person viewing the matter realistically and practicality…. and having thought the matter through conclude. The presence or absence of an apprehension of bias is evaluated through the eyes of a reasonable, informed practical and realistic person.

The Ontario Court of Appeal also weighed in Bailey vs. Barbour in 2012. It requires a high threshold of evidence when a party seeks a recusal i.e. the disqualification of a judge. Allegations of judicial bias will have to overcome a strong presumption of judicial impartiality.

Rarely attempted and even more rarely accomplished.

SEVERING JOINT TENANCY

Date: 14 Jan, 2020

In an earlier blog, we canvassed the difference between joint tenancy and tenants in common. We concluded that blog with the question; what if the intention of one of the owners of the real estate changes their mind, and no longer wishes there to be an automatic right of survivorship.

How this is done is an area has been canvassed by many judges over many years in many jurisdictions. Justice Reid in 2019 in the decision of Marley vs. Salga reviewed the law on this issue. Quite frankly, the facts are so exotic and specific they do not justify repeating. (well I do anyone but very briefly below). However, the author does recommend the case as being an excellent summary of the law on this complex area.

The leading case in Ontario on severing a joint tenancy is Hansen² 2012 Ontario Court of Appeal. It reinforced the laws English roots arising from the famous 1864 decision of Williams vs. Hensman which sets out three methods by which a joint tenancy can be severed. One example is anyone of the persons operating upon his own share may cause a severance as to that share. Such an owner always has the right to sever their interest from the joint tenancy and end of course at the same time their own right of survivorship. Secondly, a joint tenancy may be severed by mutual agreement. The third alternative is there may be a severance by any course of dealing sufficiently clear that the interest of all were mutually treated as constituting a tenancy in common. There must be an express acts of severance, it is not suffice to rely on an intention or a declaration behind the backs of the other person’s interest. Chief Justice Winkler in the Hensman decision in essence reduced it down to the three rules:

  1. Unilaterally acting on one’s own share such as selling or encumbering it.
  2. A mutual agreement between the co-owners to sever the joint tenancy.
  3. Any course of dealing sufficient to prove that the interest of all were mutually treated as constituting a tenancy in common.

It is the last that is the most indefinite and gives rise to litigation. The normal method of severing a joint tenancy, which is definitive, is simply to convey one’s own interest to oneself. This does not require a consent of any other interested party and clearly meets rule number one set out above.

In the unique facts of the Marley vs. Salga decision, the deceased had made survivorship provisions in his Will, but that was not sufficient. More importantly, was a recorded conversation at the hospital of the parties involved in which the severance was discussed and in that unusual fact situation, the survivor appeared to agree with the abandonment of the right of survivorship.

There is great controversy over whether or not the decision is correct and nonetheless this was the decision. The case should be looked upon not so much as a precedent based upon its particular facts, but as a review once again of the important law of what it takes to sever a joint tenancy.

What is the risk if one fails to sever a joint tenancy upon separation? At times, a simple commencement of a court action has been determined to be a dealing which negates the joint tenancy. But any prudent lawyer would advise if one no longer wished the automatic right of survivorship to take place and they are willing to abandon their own potential benefit of the right of survivorship to take active steps and to sever the joint tenancy. As stated earlier, this can be done as simply as transferring one’s interest in the property onto themselves.

IT’S A GIFT IDIOT

Date: 12 Dec, 2019

The Ontario Court of Appeal recently opinioned in the decision of Rados² on parental gifts and loans. See our blog titled “Loans from Parents”.

One principle for all to recognize is that when your parents give you money that is not spent upon acquiring a matrimonial home or comingled with your now estranged spouse, simply treat the money as a gift and it is a 100% exclusion under the Family Law Act. You do not have to share it with your estranged spouse. Do not argue that it is a loan for reasons canvassed in another blog. If the money is transferred from parent to child and invested in the matrimonial home such as by reducing an outstanding mortgage, then the loan issue can be re-examined.

BIFURCATION, PLAIN ENGLISH? SETTING ASIDE A DOMESTIC CONTRACT

Date: 12 Dec, 2019

The Court of Appeal on a number of occasions as well as Trial Judges at most opportunities speak of the importance of plain language both in the written material presented before it and in their own decisions. However, human beings are loathed to waste the wealth of the English language in which magical words convey a meaning in a distinct and elegant fashion.

Exhibit A, the word “Bifurcation”. Bifurcation is a fancy term for a two-step process. It may appear esoteric, but it is a phrase and process that frequently arises in family law. One prime example is a disgruntled party trying to set aside the terms of an earlier signed Separation Agreement or Domestic Contract. The evidence and test for setting aside such an agreement is very different from the evidence and issues that need to be examined should setting aside be successful so that the court can largely start afresh. Starting afresh often infers looking anew at the financial evidence or other facts that need to be weighed before a new decision can be made. Often the party resisting an effort to set aside a previous agreement argues that bifurcation should apply as that will save the court a great deal of time and effort not to mention concealing private information that can remain private should the existing agreement stand. This has been discussed in a number of cases, including Cohen² a 2019 decision of Justice Oudete of the Ontario Superior Court, which examines Section 56 (4) of the Family Law Act which in turn harkens back to the LeVan² 2008 Ontario Court of Appeal decision.

LeVan stands for a number of propositions, including the importance of full financial disclosure and a lack of undue pressure.

That case dealt with a marriage contract and as this author has stated more than once, the greatest protector against setting aside an agreement is that it was fair in the first place. The court looks at a number of factors, including true independent legal advice; was the party seeking to set aside the agreement represented by an experience family law lawyer? One must also look to the importance of the Supreme Court of Canada decision in Hryniak v. Mauldin.

In Ontario it is Rule 12 (5) of the Family Law Rules that permits the court to bifurcate a case. That in turn takes us back to the Simioni² 2009 decision. For bifurcation to take place, the court is to examine the following issues.

  • Are the issues for the court relatively straight forward and the extent to which the issues proposed for the first trial are intertwined with those that will arise in the second?
  • Whether a decision from the first trial will likely put an end to the action or significantly narrow remaining issues or will significantly increase the likelihood of settlement?
  • Where resources have already been devoted to all issues.
  • Where bifurcation would cause any delay.
  • Advantages prejudiced if bifurcated.
  • Whether the severance is sought on consent or over the objections of one or more parties.

Justice Julie Oudete in Cohen² once again gives an exhausted review of the law when bifurcation is sought and the question of interim temporary spousal support is involved. An important decision whenever the question of bifurcation is on the horizon.

Arbitration – Pros and Cons

Date: 12 Dec, 2019

A helpful alternative to court may be mediation and/or arbitration.  We have canvassed mediation in another blog.  Arbitration requires the written agreement of the parties to have their matters decided by an independent third party chosen by the parties themselves.  Unlike judges in which one has no influence on their selection, the parties directly chose by mutual agreement who will decide their matter.  Also, arbitration can be faster, cheaper and if no appeal is ever launched, completely confidential.  Arbitrators in the family/estate litigation law field are generally highly experienced family/estate litigation law lawyers or retired judges, whom the parties’ lawyers have a great deal of faith in being able to grasp complex issues and deal with matters in a fair fashion. 

However, as in all choices in life, there are negatives that one must be aware of.  For arbitration to be binding, all the formalities under the Arbitration Act, including certificates of independent legal advice, must be fulfilled or arbitration cannot proceed. 

In arbitration, the arbitrators’ jurisdiction is completely limited within the four corners of the arbitration agreement.  The appeal process must be specifically laid out. 

A critical component of deciding a family/estate litigation law case is the necessity of complete financial disclosure.  Arbitrators do not have the ability to order third parties such as banks to release information unlike the authority granted to judges.  Another issue is the enforcement of an arbitration award.  The arbitrator has no ability to find a party in contempt and impose the penalties that such a finding makes available in the court system.  If there is an appeal, then all of the confidentially is lost. 

It is not uncommon to find separation agreements that simply indicate that in the event of a future dispute, such disputes must be resolved by way of arbitration.  These are actually not binding as for an arbitration to proceed, all the various formalities under the Arbitration Act must completed.  That includes the signing of a certificate of independent legal advice for each party.  As long as that is missing, the arbitration cannot proceed. 

It is an alternate solution, but one in which the pros and cons must be laid out before a decision to participate can be made. 

SUPPORT DEAD OR ALIVE

Date: 12 Dec, 2019

One’s entitlement to support from an estranged spouse or common law partner is governed either by the Divorce Act or the Family Law Act. After death, a dependent that has not been properly looked after by the deceased in their Will may bring an application for dependent relief under the Succession Law Reform Act. In most circumstances, if a party is a dependent of a deceased that failed to make such a provision, they may commence an action under the Succession Law Reform Act for dependency relief. One cannot contract out of that obligation unlike the right to receive spousal support under both the Divorce Act and the Family Law Act.

The courts have held on a number of occasions the purpose of a dependent support order under the Succession Law Reform Act is significantly different than the purpose of a spousal support order under the Divorce Act. One needs to start with the decision in Cummings² a 2004 decision of the Ontario Court of Appeal and the decision in Phillips- Renwick vs. Renwick Estate a 2003 trial decision of the Ontario Superior Court of Justice.

While support if bared under a valid agreement can be waived one cannot contract out of the entitlement to dependent relief under the Succession Law Reform Act.

WHAT TO DO IN THE FACE OF A DENIAL OF ACCESS #2

Date: 21 Nov, 2019

Another example of the incredible difficulty of the Court managing access in the face of one or both difficult parents is outlined in the case of Elliott vs. Filipova.  In this Superior Court decision by Justice Abrahams, the relationship between the parents of two children aged 8 and 10 had deteriorated into complete chaos.  The children lived with the mother and the father desperately tried to get access in the face of the mother’s open hostility, not only towards the father but any Orders made by the Court.  Irrespective of the Orders that had been made, the mother found some methodology by which to frustrate the father’s access.  Justice Abrahams notes exposure to conflict has been called the single most damaging factor for children in the face of divorce.  The mother’s behaviour became so bad that the father sought a change in custody based upon the mother’s inability to foster a positive relationship with both parents.  The mother’s lack of respect and the level of hostility that she showed to the father was such that the Court felt that it’s “visceral response would be to Order a change in custody based solely on the conduct of the mother”.  However, that is not the test but rather what is in the best interest of the children.  Justice Abrahams warned the mother repeatedly that he was close to making such a change and he adjourned the father’s motion seeking a change in temporary custody on very strict terms.  The Judge admonished the mother by warning her that failure to abide by any of the conditions he was now placing upon ongoing access and residence of the child on the part of the mother, may very well lead to such a temporary change in custody.  One of the children had their own mental health issues and a change in custody would have moved the children from Brockville to Ottawa.  Will the mother look at this as a warning bell to be heeded or will she continue to ignore yet another Order of the Court blinded by her hatred towards the father. Again, evidence of the difficulty in managing human contact by the judicial system

WHAT TO DO IN THE FACE OF A DENIAL OF ACCESS

Date: 21 Nov, 2019

This author has opined on numerous occasions about situations in which access is not being encouraged and facilitated between separated spouses.  More often than not it leads back to mental health difficulties on the part of at least one of the contestants.  In the decision of Justice Trimble, in Janowski vs. Zebrowski, the judge had clear evidence that the mother had repeatedly disobeyed Court Orders with respect to access.  She had put forward that it was detrimental to the child to see the father and had proffered evidence from a therapist.  The Court looked at the therapist’s evidence with considerable skepticism for various reasons. 

The Court reviewed the numerous recent decisions on the issue of contempt in the family law area.  These principles are set out Haywood², Stuyt², Geremia vs. Harb and Godard².  In the last decision, the Ontario Court of Appeal stated that a parent’s obligation is do what is reasonable and necessary and to actively require the child to comply with the Order for access by exhortation and the threat of execution of discipline.   Reasoning with a child is insufficient and is a breach of the access Order.  There is a positive obligation to ensure that a child complies with the Order.

However, what the Court giveth it taketh with the other hand.  The Court of Appeal in Ruffolo vs. David, a 2019 decision of the Ontario Court of Appeal, found that the Courts contempt powers are exceptional and are rarely to be applied.  Justice Trimble resorted to a common judicial tactic of giving the mother yet again one more firm warning and made a very detailed access Order.  Justice Trimble warned the mother that if the access Order was not followed, then in the absence of the mother’s cooperation, the matter could immediately be brought back before Justice Trimble.  Justice Trimble also sought further information from the Children’s Aid Society and the Police. 

This decision is another example of the almost impossible inability of the court to deal with humans unlike their money.  The Court is very good at moving money from one party to another, but controlling human behaviour is far more challenging and at times impossible.