In very complicated files, it can sometime pay to seek help from the court by bringing in a civil claim, formally titled the tort of conspiracy. A Tort is a civil wrong such as negligence or breach of contract. One would ask the court in their application that various additional persons are jointly and severally liable to pay damages to the Applicant as they all conspired and/or were involved in some wrong. Often that wrong is sheltering or concealing the other party’s, ie. husband or wife’s income and/or assets to deprive the other spouse and her children their respective support entitlements or equalization payment.

If one thinks about it, it is not that uncommon for people with some money who participate in a family business to have intertwining business interests. Often, the family will rally in support of their family member in the event of a divorce. The ex-spouse will be portrayed as greedy or threatening of the family business. There can be a strong temptation to hide or minimize the involvement or wealth of their sibling or relative.

Conversely, it is not difficult to envision that such a suspicion, even if unfounded will arise. It is always remarkable that the trust and love between spouses that was intense enough to create a human life, upon separation dissolves into animosity, a complete lack of trust and a conviction that the other at all times is lying.

The facts that one would allege would be something along the lines that x alleges that y conspired with his parents or other family members to structure their business interests and income from the businesses, both just prior to separation and post separation with the intention of concealing, diverting and sheltering y’s assets and income to defeat and hinder x’s claims and entitlements to both child and spousal support. In particular y and his family members use various devices, trusts and corporate vehicles to conceal y’s true interests and entitlements to assets and income from an adjudication of support in favor of x. Further, through the structuring and creation of various trusts and after separation and through subsequent transactions between the corporations and trusts, they concealed and diverted significant assets and income that would otherwise be accounted for in the determination of y’s obligation to x for both the support of the children of the marriage and his or herself.

Allegations such as these are relatively easy to make, extremely difficult, complicated and complex to prove.

The standard defence to such allegations if that they were made in the normal course, or for estate planning purposes, and there was no malevolent intent.

One could look at a couple of important cases as to what needs to be proved for a successful claim of conspiracy. One is directed to the case of D’,Agone v. D’, Agone, a 2017 decision of theAlberta Court of Appeal and obviously following the Superior Court of Canada case in Canada Cement LaFarge Limited v British Columbia Lightweight Aggregate Limited. The tort of conspiracy requires the Defendants to have an agreement to engage in a course ofconduct with a predominant purpose of injuring the Plaintiff or if the conduct of the Defendants is unlawful, to have acted knowingly or having ought to have known that injury to the Plaintiff is likely to result. The scope of the tort of conspiracy is far from clear and it may be found where the parties combine and effect loss in the following manner:

1. Whether the means used by the Defendants are lawful or unlawful, the predominant purpose of their conduct is to cause injury to the Plaintiff or where the conduct and the Defendant is unlawful, the conduct is directed toward the Plaintiffs and the Defendants should know in the circumstances that injury to the Plaintiff is likely to result. If the action is unlawful, there must at least be evidence that the conspirators knew or ought to have known that their action would injure the Plaintiff. This has been described as constructive intent.

The Alberta Court of Appeal went further in Maraiche Investment Corp. v Paul in a 2012 decision which summarized the tort as being:

1. An agreement between two or more persons;
2. Concerted action taken pursuant to the agreement;
3. If the action was lawful, there must be evidence that the conspirators intended to cause damage to the Plaintiff;
4. Actual damage suffered by the Plaintiff.

The agreement may be inferred and need not be in any specific form or even constitute a binding contract. Proving an agreement to a conspiracy is often dependent on circumstantial evidence. However, to be party to a conspiracy, more than mere knowledge that a conspiracy exists is required. The facts that the alleged agreement must be known and intention to be part of the alleged agreement must be found. There must be intentional participation with a view to furthering the common design and purpose.

An unlawful conspiracy requires the alleged co-conspirators to do something contrary to law to further their agreement. This can include fraud, perjury or breach of a court Order.

The third characterization of civil conspiracy includes knowing, assistance and breach of trust. This requires that there be a trust and that the trustee perpetuate a dishonest and fraudulent breach of the trust and that the Respondent participate in actual knowledge of the trustee’s dishonest and fraudulent breach of trust. The knowledge required for this type of liability is actual knowledge, recklessness or willful blindness will also suffice.

Our office has been involved in many cases in which friends and families of the other spouse have actively assisted in hiding and concealing assets. The downturn to all of this is the incredible legal fees that are involved. In the recent Ontario Superior Court of Justice decision of Justice Faieta in Leitch v Novac, no less than seven lawyers were involved in acting for the numerous parties involved in the lawsuit.

Clearly, this particular case involved millions of dollars. However, in Justice Faieta’s decision, which arose from a motion dealing with what emails and evidence should be produced, but having no real substantive impact. In other words there was no decision that money move from one person to another, nor was any support or division of property decided. This was simply on a preliminary point as to what documents were to be released. That process involved seven lawyers, produced a many foot high column of paper for the court to digest, and legal fees that this author estimates well in excess of $100,000.00. I would not be surprised if it was $200,000.00. This was war by attrition.

The husband, who was at the receiving end of the wife’s rath, clearly had acted like an absolute idiot. When the wife asked the husband after separation to pay for a $354 dental bill for one of their children, he in a scrooge like response indicated that he did not have the money, that he had less than $1,000.00 in his bank account. However, later bank records show that he had almost three quarters of a million dollars in his account on that day. A little bit of generosity can often avoid the trench warfare that this insane court action makes obvious.

As evidence of the voracious appetite for legal fees that these complex cases can produce, the wife told the court that even though she received one million dollars from the sale of the matrimonial home, the vast majority of that was gone to pay her living expenses and to pay for her legal and accounting fees in chasing her husband.

Despite the inference that the husband and his family were wealthy people and that a relatively fat target was being hunted, the court basically pleaded with the parties to settle their differences and offered to make arrangements for judicial assistance in providing in essence mediation.

So what have we learned, aside from the usual repetition by this author of how in absence of common sense, grafted to an ill motive by one of the parties, can lead them down the path of financial destruction or a war of attrition. Perhaps indeed that is the husband’s motive in the case at point.

We have also learned about some of the technical factors involved in making an allegation of the tort of conspiracy. However, one’s lawyer needs to be careful before pulling the trigger on such an allegation. It will by definition increase the numbers of lawyers that are involved, the legal fees that that will engender for all and cast a very wide net by way of disclosure and the paper trail that is being chased.

Justice Faieta’s decision is an excellent summary of what is relevant documentation, how is to be provided and also, some tips in dealing with electronic discovery. The issue of search terms became an important tool in the review of over four hundred thousand emails that were hoped to be produced and synthesized in this case.

This fish net would have hauled up as many discarded rubber boots as prime cod and one can imagine the effort that would be required in actually reviewing even a few thousand emails, let alone the four hundred thousand that were being pursued in this case.

Be careful what one wishes for and choose one’s potential spouse carefully. It is a life long obligation whether or not the marriage succeeds or not.

We are frequently consulted by clients seeking a reduction in either child or spousal support. They may come armed with the fact that a child is no longer attending school or the other spouse is now living with a new partner and seek a reduction in support.

It is not that simple and, one needs to be careful what they wish for.

What our clients frequently ignore, and we counsel them to be extremely careful about is the big picture. Once you open Pandora’s box of support that has been and should be paid, all the factors between the parties come into play.

Has the payor’s income increased since the date of the original order or agreement?

In light of the payor’s present pay, what type of support would the Child Support and Spousal Support Guidelines trigger? If one has, what in hindsight is a better than what the courts would normally grant deal, trying to shake the tree so as to have the last apple fall from it, can be a short-sighted effort.

You need an experienced family law lawyer to examine the big picture before deciding whether or not to pull the trigger on seeking a variation from the courts.

This scenario was played out in spades in the recent Ontario Court of Appeal decision in Slnogo. Mr. Slnogo, quite legitimately felt that his entitlement to pay child support for a 20 year old that was no longer attending school on a full time basis and was obviously over the age of 18 should come to an end.

On that legitimate basis, Mr. Slnogo ate the poisoned apple. He sought to eliminate child support. He also attempted to rely on the fact that he had received a lucrative early retirement package at age 53.

While Mr. Slnogo found an empathetic judge at the motion level, he did not do nearly as well on appeal. Mr. Slnogo took a circumstance in which he was required to pay spousal support of $2,650.00 per month and, by the time that the appeal was finished it was retroactively cranked up to $20,000.00 per month and then a percentage of his income from 2014 onwards.

In this case we have the intersecting issues of early retirement and whether or not that is a material change in circumstances sufficient to justify a change in support. This has been spoken of in other blog articles.

Mr. Slnogo not only received his early pension payout which exceeded a million dollars but was also able to continue to work for his former employer as a consultant at $150.00 per hour.

Who gave this gentleman advice to actually pull the trigger on seeking a variation?

It is not unusual for one, upon retiring and finding their income correspondingly reduced, coming to the logical conclusion that their spousal support payments be reduced.

However as usual in family law, nothing is that straight forward. The Divorce Act pursuant to section 17(1)(a) gives the court the ability to change an existing order either retroactively or prospectively. However the test is a two-step one (the courts love dividing tests into steps and stages).

The Supreme Court of Canada in Willick said:

“The approach which a court should take is to determine first whether the conditions for variation exists and if they do exist, what variation of the existing order ought to be made in light of the change in circumstances. In deciding whether the conditions for variation exist, it is common ground that the change must be a material change of circumstances.”

This is further interpreted by the Ontario Divisional Court in Hickey v. Princ. Has there been a material change in anybody’s situation. For the interpretation of “material”the test is restated; if the change was known at the time of the original order, it would likely have resulted in a different order. However, if the change and its likelihood was known at the time of the original order or agreement, it cannot be relied on as basis of the variation. The onus of proving the material change is on the party looking for the change.

So in other words, if at the time that the order or agreement was made, it was imminent that the payor was about to retire, it is going to be almost impossible to later tell the court that there has been a material change. The change was obvious and anticipated when the original order or agreement was made. One of the steps we take at our office is to look at what is on the immediate horizon and specifically to find whether or not it is or will not be a material change.

In the recent Ontario Superior Court decision of Hanniman, Justice Ryan Bell heard the variation application of Mr. Hanniman. He had entered into a Separation Agreement in 2011 and retired a few months later in July 2012 at the age of 61. He had spent more than 35 year working for the RCMP. He wanted a reduction in spousal support.

While Mr. Hanniman had retired on a full pension, the court did not accept that this was anything other than a voluntary retirement.

The courts are not particularly impressed with retirements prior to the age of 65, whether or not one is entitled to a full pension or not. One’s personal choice to retire is generally not viewed as a material change in circumstances for the purposes of payment of spousal support. Officer Hanniman found himself facing the very same response by Justice Bell.

If there is going to be a Separation Agreement in which a retirement at the earliest opportunity to do so on a full pension is to be deemed to be a basis upon which support is to be reduced, it had better be very specifically spelt out, failing which, one is not likely to find an empathic ear.

The second step should the court find that there has been a material change in circumstances is to look at all the objectives set out in either the Divorce Act or Family Law Act to determine what order should now be made.

Officer Hanniman was a double loser when he brought up the very reasonably argument of double dipping as described in the Supreme Court of Canada decision inBoston v. Boston. At the time of separation, Officer Hanniman equalized his work pension, by transferring one half of his pension credits to his wife (it’s good to be a police officer, Officer Hanniman’s pension was valued at $713,000.00).

Officer Hanniman argued that it was unfair once he had shared his pension with his wife that that same pension income should be used as a source of determining ongoing spousal support obligation. The Supreme Court of Canada in Boston generally held that that was the appropriate position.

Officer Hanniman here again found no sympathy from the court.

Justice Bell quite properly stated “as a general rule double recovery should be avoided where possible…it is generally unfair to allow the payee spouse to reap the benefit of the pension both as an asset and as a source of income. To avoid double recovery, the court should where practicable focus on that portion of the payor’s income and assets that have not been part of the equalization…of matrimonial assets when the payees continuing need for support is shown”.

BUT this cannot always be avoided and is permitting in limited circumstances. One of those circumstances is an economic hardship. The income disparity between Mr. and Mrs. Hanniman was great. She was living barely above the poverty line while Officer Hanniman’s income even after retirement was well over a $100,000.00 per year.

One might call this palm tree justice, but the rules of equity and fairness in this author’s mind often first lead to a judicial conclusion forwhich the court then look for a legal justification.

Both the Family Law Act and the Divorce Act give the court the ability to make a onetime lump sum spousal support payment. Sometimes especially in high conflict cases, the court or the parties will agree that a lump sum payment rather than periodic monthly payments are the best alternative.

Examples of when this is called for is with a self-employed individual in whom proving their income and collecting support from them can be highly problematic.

However, lump sum support payments do not enjoy the tax treatment that periodic ones do. Periodic spousal support paid either pursuant to a court order or a written agreement is entitled to be deducted from the income of the payor and included in the taxable income of the recipient. Lump sum spousal support enjoys no such treatment. There is also the issue of present value. Present value is an actuarial term, which refers to the discount that should be applied to a lump sum payment. Simply put, it is the difference in the value of $10,000.00 paid to you all at once as opposed to receiving it gradually over a 10 year period.

In the recent Ontario Court of Appeal decision in Perri, the court rather mercilessly shot down almost all of the appellant’s requests to change a decision rendered at trial. However, the Ontario Court of Appeal did admonish the trial judge for not determining what tax rate should be applied as a deduction for the quantum of lump sum spousal support that was ordered. The Ontario Court of Appeal decided that the appropriate rate was the half way point between the two marginal rates of both the payor and recipient. Simply put, for every extra dollar the payor earned, he had to give the government 42% in tax. For every extra dollar the wife earned, she would have had to give the government 30% in tax. The court simply choose the half way point of 36% and as such that was the deduction from the lump sum payment ordered.

When parties separate, they at times lose track of each other. One party may start a court case and in certain circumstances, the other will know nothing about it. At other times, one can make a simple mistake and not attend court when they are required to. There are methods of setting aside a Court Order arising from a motion or action that you did not participate in. The Court does provide the tools in relatively unusual circumstances. One should not rely on these rules as an excuse to ignore a court action, knowing that at a later date you can re-open them. That is playing with fire.

However in certain circumstances, the Court in Family Law matters can look to both Family Law Rule 25.19 (e) as well as the Rules of Civil Procedure Rule 19.08. The Ontario Court of Appeal in the 2017 decision of Grey v. Greyinterpreted the Family Law Rules relating to set aside an Order obtained against someone who failed to show up at Trial or Motion. The two Court summarized earlier decisionsand set out five factors.

• Did the defaulting party move as quickly as possible once they learned of the decision against them?
• Is there is a good explanation why the defaulting party never showed up?
• Can the defaulting party set out facts that show they have a reasonable shot at a Defence to the decision the Court has rendered against the defaulting party?
• What is the prejudice to both the person asking to set aside the Order and the person resisting it?
• If the Court does re-open the case, how does that reflect on the integrityof the Judicial System?

The Court of Appeal has even gone further to state that these factors are not exclusive and written in stone. The Ontario Court of Appeal has held that having a good arguable Defence to the Default Judgment trumps all other factors and the Court may exercise its discretionto set aside the Default Judgment, even if the other factors are unsatisfied in whole or in part. See the 2014Ontario Court of Appeal decision in Mountainview Farms v. McQueen decision.

Clearly this is a complicated process fraught with incredible consequences to all. Even if one is successful in setting aside a Default Judgment at the minimum, they would be hit with a substantial cost Order against them.

We have written previously about the court’s recognition of a Maher, an Islamic Marriage Contract. For a number of years, these have been recognized by the Ontario Courts as being valid and enforceable.

However, the courts will look at these contracts like any other, examine their context and contents for their interpretation and application.

As an example, in the recent Ontario Court of Appeal Decision of Bakhshi vs. Hosseinzadeh, the question arose as to whether or not the 230 gold coins valued at approximately $70,000.00 that were due and payable upon separation were to be included in the global calculation of an equalization payment. As the readers of the website will note, an equalization payment is the method by which property claims between divorcing spouses (we mean married folks not common law) in government. Is the Maher money thrown into the pot and equalized, which in essence would negate it’seffect or is it an additional obligation of the Maher payor, usually the husband.

In this particular case, the Ontario Court of Appeal looked at the Maher contract. Distinguishing it from earlier decisions the court held that the Maher money was part of the collective pot/assets to be equalized. The court examined the actual contract and noted that the one in question made no provision that the Maher obligation was in addition to other rights.

Moral of the story, Mahers are important and those who enter into it must pay attention to its details. The courts will read and enforce them.

There are many factors that are taken into account in determining how long spousal support shall run.  In the absence of an agreement and if the court is asked to impose a time limit it looks to many different factors.  Those factors include:

• SSAG ( Spousal Support Advisory Guidelines)
• Length of relationship (often the duration of spousal support corresponds with the number of years of the relationship itself).
• Are there any children from the relationship? (this will dramatically skew the results above). A short relationship that gives rise to the birth of a child will also dramatically increase the duration of spousal support.
• Age of the parties
• Future change in circumstances of the parties (an example might be the recipient forming a new relationship which provides him or her with an equivalent standard of living that they enjoyed prior to separation).
• Unlike child support, the Spousal Support Advisory Guidelines are indeed merely guidelines and the courts use them as a starting point and are required to explain if they diverge from the guidelines. The guidelines take a number of factors into account such as the residence of the child/children, their custody, the incomes of the parties and produce a range of support from high, medium to low.
• Often, the courts will simply sidestep the determination of duration by ordering a review a number of years down the road when the courts will look at the matter afresh. A review is different from seeking a change based upon a material change in circumstances.  In the latter, the court asks what is different from when the court initially made its order and the change in circumstances needs to be significant.  A modest increase or decrease in income is not sufficient.
• Determining spousal support and its duration is still of more of an art form than a scientific calculation in sharp contrast to the calculation of child support.
• In other words a lawyer needs experience to predict what is often unpredictable.

As we have discussed elsewhere in this blog, the best defence against an attack on the validity of Marriage Contract, is that its terms were fair. There are many other factors that are involved, but more often than not, no other provision is as important. We often will force our clients to be more generous to their intended spouses, than those spouses themselves are asking for to try and dial up the fairness quotient.

This is often done by in the event of the parties separating, we include a provision for some type of a reasonable lump sum payment so that the other party is not left destitute.

In the 2015 decision of Justice Vogelsamg of the Ontario Superior Court in Butler v Butler, he had no difficulty in setting aside a Separation Agreement that had been signed after a 26 year marriage. The wife entered into this agreement, shortly after the separation in which she settled for far less which she otherwise would have been entitled to. The husband had worked throughout the marriage for a major auto manufacturer and the wife had no real employment or any history of employment. While the wife had some general idea as to what the family’s finances were, she had no real independent legal advice and she signed an agreement in which she gave up any claim for spousal support. The husband had no malicious intent, but nonetheless, the deal that he had his wife agree to, was wildly unfair. Not only did the wife release any claims to spousal support, she also gave up her claim against the husband’s substantial pension that he had at Honda, where he had worked throughout the marriage. Sometimes, too good of a deal, is no deal at all.

The courts have taken a very dim view of secretly recording telephone calls, video taping and private investigator’s reports being admissible in family law actions. In a series of decisions, including one of this author’s favourite judges, Justice Sherr of the Ontario Court of Justice (the man deserves to be on the Court of Appeal but that’s another matter) in Hameed v. Hameed and recently commented upon by Justice Howard in his recent decision of Veljannovski, the courts have held that admitting secret recordings should be strongly discouraged in that they only raise the temperature in high conflict family law cases rather than allowing the parties to build trust where none exists. The courts have generally found these recordings to be odious and repugnant and admissible only in the narrowest of circumstances. The parties seeking its admission must establish a compelling reason for doing so.

Conversely our office has been involved in a number of cases in which the evidence of a private investigator has proved to be crucial. In a Ontario Court of Justice case before Justice Dunn the report of a private investigator who was able to confirm the use of crack cocaine by members of the mother’s family, while the child was in her care was crucial in convincing the judge to severely restrict access by the then custodial mother to access to her own child. It really is a case by case strategy and decision and it needs the hand of an experienced family law lawyer to decide whether or not the fees and risks involved make sense.

We would be remiss in also not noting the excellent article by Brian Burke and Margaretta Hanna titled “Surreptitious Recordings In Family Law” which was one of the sources of this brief article.