By David Harris-Lowe  – Partner, Family Law

You may hear about lawyers talk to you about legal costs when a court action is started.  This refers to two things – the amount you pay your lawyer for legal representation and also whether one litigant has to pay the other legal costs for the cost of the law suit.  In family law cases, this is governed by Rule 24 of the Family Law Rules.  The idea is simple, whichever party is successful can expect to have some or all of his or her legal costs paid for by the unsuccessful party.  This usually amounts to somewhere between 50% and 80% of the successful party’s legal costs that will be paid for.

A key factor in determining success and the amount of costs payable is whether a party has made an offer to settle and whether the party obtained a result that was more favourable than the offer to settle.  The goal is to encourage litigants to resolve their cases quickly and without legal costs because they know if they don’t accept reasonable offers they might have to pay legal costs.

Take for example a situation where Terry owes Jordan some money.  Terry says it’s $8,000 and Jordan says it’s $10,000.  Terry offers to pay $9,500 because Terry doesn’t want a trial.  Jordan wants it all and doesn’t accept the offer.  They have a trial that lasts a day and Terry pays $5,000 to the lawyer.  After the trial the judge decides that Terry owes Jordan $8,500.  Terry obtained a result that is more favourable than the offer of $9,500.  This means that Jordan owes Terry legal costs.  Depending on when the offer was made, Terry should recover around $3,000 in legal costs.  So, Terry pays Jordan $8,500 minus the $3,000.  Jordan receives $5,500 and pays the lawyer $5,000, leaving $500.00.  Jordan, shouldn’t have been so aggressive.

The decision about when to make an Offer to Settle, now much it should be and how costs rules work in a legal case is extremely important to your case.  It is important to get legal advice from a lawyer who understands these rules and can discuss the risks with you so you can determine what the risks are and what risks you want to take.

Timothy Gronfors. Associate, Family Law.

 

As a playful means for highlighting millennials’ preference for spending on luxuries rather

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than saving for essentials, a recent BBC article has developed the satirical ‘avocado toast index’.

Using statistics from across the globe, the index calculates how many years it will take to afford a down-payment on a house by merely forgoing a daily ‘smashed avocado-on-toast’ breakfast. And good news Mexico City millennials – your abstinence from avocado toasts will yield you a home in 9 short years!

Leaving aside whatever superfluous financial priorities millennials may (or may not) have, the article does highlight a chilling reality: prospective first-time home buyers are struggling to crack today’s market. For many young couples, this real estate crunch has necessitated a turn to family members for financial assistance.  

But what happens to that financial contribution if the couple separates? Was it intended as a gift or a loan? Is the parent entitled to a repayment? How these questions are answered can have a massive impact on the resulting property distribution.

But let’s take a step back and narrow the parameters. As a starting point, let’s assume that our hypothetical couple, John and Jane, are common law partners (there are very distinct rules on matrimonial homes and property division for married couples).  Let’s further assume that after losing out on a number of bidding wars that resulted in sales above listing price, John and Jane realize that they’ve been priced out of the market and that their pre-approval for a mortgage will not suffice. Thankfully, Jane’s father has come to the rescue; he’s willing to contribute $30,000 towards the down-payment, which will in turn allow the couple to qualify for a larger mortgage.

In an ideal world, Jane and John take their new financing, purchase their dream home, and live  happily ever-after but, unfortunately, Jane and John end up separating five years down the road and are forced to sell the home. Jane subsequently contends that $30,000 from the net sale proceeds should be paid back to her father. John alleges that the $30,000 was a gift to them as a young couple with no strings attached.

The Supreme Court of Canada has established two possible ‘presumptions’ when dealing with such gratuitous transfers (i.e. where a transfer is made without consideration). Unless the transfer is specifically from a parent to their child, the presumption is that the transfer was a bargain rather than a gift, meaning that it must be repaid. In our circumstance, while it was Jane’s father that made the gratuitous payment, Jane was an adult when she received it meaning that the presumption will be that the $30,000 was a loan/bargain. Because presumptions are simply starting points, John will have the onus of proving otherwise and that the $30,000 was a gift.

To add a further wrinkle to our scenario, let’s assume that when John and Jane accepted the $30,000, their bank sent out a commitment letter outlining that as a condition for receiving the funds, all three parties must sign a ‘gift letter’ clearly stating that the $30,000 is not a loan. Later, in the subsequent court battle, John produces this letter as evidence that the $30,000 was intended to be a gift. While the outcome of any one case will depend on all the surrounding facts, in decisions such as Crepeau v Crepeau the courts have found that a bank ‘gift letter’ is insufficient evidence to rebut the presumption of a bargain/loan. As in Crepeau, the finding may well be that such a ‘gift letter’ was executed solely for the purpose of obtaining the mortgage approval with no true intention to gift.

A recent Globe and Mail article by Josh O’Kane pointed out that while slightly more than 1/3 of Canadian millennials now own a home, nearly two-fifths received financial assistance from their parents to do so. Whether it’s from a parent, relative, or friend, home buyers receiving gratuitous transfers can benefit immensely from the assistance of a qualified family lawyer. There are various mechanisms, such as a cohabitation agreement, which can give the parties peace of mind in knowing that their intentions are properly delineated and help avoid a costly court battle down the road.  

By Douglas J. Manning, Partner, Certified Specialist in Family Law

Yes!  But why would you want to?

In a recent British Columbia court decision, one of the issues was whether the husband and the wife had entered into an oral marriage contract that excluded the sharing of the wife’s rental property from being shared in the parties division of property when they separated.

Both parties had come from previous marriage-like relationships. The wife owned 2 properties coming into this marriage.  The value of one of the properties increased by about $500,000 during the 3 year marriage.  The parties never occupied the property during the marriage and they never shared the rental income. The husband never paid any of the expenses associated with the property.

The wife’s evidence was that the parties had a verbal contract that the husband would not have any interest in the property, nor would the value of the property or any increase in the value be included in what the wife would have to account for in the sharing of the parties’ net worth.

The husband maintained that they had talked about putting his name on title to the property and therefore he would have been a joint owner and thus the intention was to share the asset and the increase in the value over the marriage should be included in the mix of the property to be shared.

The wife gave evidence that each party agreed to be responsible for their own expenses and pay their own debts and not look to the other for assistance.  The evidence showed that they more or less were responsible for their own individual expenses, never had a joint bank account and each was financially responsible for their own children from their prior relationships. However, the parties did share their living expenses together, including the costs of vacations, etc..

The issue was largely one of credibility. Who did the judge believe?  On balance the court preferred the wife’s evidence as it was more consistent with how the parties conducted themselves.  They had very little integration of their financial matters and this supported the wife’s contention that there was no mutual intention to share the value of her pre-marriage rental property or the increase in its value.

Of course all of this could have been avoided had the parties decided to have a written marriage contract that clearly set out their expectations, rights and obligations.  If you are going into a new relationship and have considerable assets or there is a significant difference in your incomes, it would be wise to consider the use of a cohabitation agreement or marriage contract.

Barrie Hayes, Partner, Family Law

The Family Law Act provides a statutory framework for the equalization of family property upon separation. The framework essentially exits out from the equalization the value of property the spouses owned on the date of marriage, and any property the spouses received from third parties; inheritances, life insurance policies, and certain civil judgments during the marriage.

The spouses deduct, from the value of their respective family assets at date of separation, any outstanding debt which then produces the spouses’ respective net family properties. In the event that one spouse has  net family property which is greater than the other spouse’s net family property, the spouse with the higher net family property owes a monetary payment to the other spouse equal to one half of the difference in the two net family properties.

This statutory framework provides a fairly focused, straightforward system for settling property issues between separating spouses.

Unfortunately the legislation only applies to legally married spouses. Common-law spouses have no recognition under the Family Law Act for property equalization.

Common-law spouses, in pursuing property issues arising from separation, have to resort to the common-law principle of unjust enrichment. Unjust enrichment will provide monetary relief to a common-law spouse if the common-law spouse can demonstrate that, through either financial or labour contributions made by the spouse, the other spouse was enriched by such contributions. The spouse pursuing unjust enrichment also has also to demonstrate that he/she suffered a deprivation by virtue of the contributions, and further that there was no legal reason justifying the contributions to the other spouse.

Cases dealing with unjust enrichment have increasingly recognized the claim and have broadened its application to common-law spouses.

The Supreme Court of Canada has recently advanced the unjust enrichment principle in creating the concept of a joint family venture in common law relationships. If a common-law relationship is determined to be a joint family venture, the law of unjust enrichment will compensate the contributing common-law spouse for the difference in the increase in assets between the two common-law spouses from the date of commencement of cohabitation until the date of separation.

Although the unjust enrichment principle greatly assists in providing fairness in dealing with property issues between separating common-law spouses, it lacks the precision and certainty provided by the Family Law Act to legal married spouses.

Other provinces in Canada have passed legislation which gives common-law spouses the same statutory property equalization rights as legal married spouses. Hopefully, over time, Ontario common-law spouses will be afforded the same statutory property entitlement.

David Harris-Lowe, Partner, Family Law

36 days in trial after two years in the court system.  $500,000.00 in legal fees, with one party owing the other almost $200,000.00 as part of those legal costs.  This was only part of the fallout recently after two parents were unable to agree to a custody and access arrangement relating to their seven year old daughter.  This case attracted significant media attention not just because of the large sums of time and money expended, but also because of the harm that can be caused to children from marriage breakdown.

The parties’ daughter was anxious and agitated because she was worried about one of her parents getting mad because her tooth fell out while seeing the other parent.  Their daughter was told bad things will happen when she’s visiting the other parent or that the other parent didn’t love her.  The judge wrote – “What will it take to convince angry parents that nasty and aggressive litigation never turns out well?”  He also said that “no matter how hard we try, we don’t seem to be getting the message out to separating parents”:

a)   Nasty doesn’t work.

b)   Withholding the child doesn’t work.

c)    Sarcastic emails don’t work.

d)   Bad-mouthing the other parent doesn’t work.

e)   Twisting the child’s life to create a new status quo doesn’t work.

f)    Selfish decisions which may be emotionally satisfying in the short term, never look good in        a courtroom.

Cases like this should cause participants in the family law justice system to pause and reflect on how we approach these types of cases.  However, my experience is that the reality is most lawyers actually do encourage reasonableness and settlement. 

If you are, or feel you are about to go down the road to a ‘high conflict’ separation then the following are useful suggestions:

a) Get help.  Retain a lawyer.  See a counsellor.  Bounce ideas off a friend who is prepared to        tell you you’re taking the wrong approach.

b)    Don’t have parental discussions in front of the children.

c)    If you can’t have a discussion with the other parent without arguments and put downs,              then establish a process so that you can have discussions in a way that avoids this.

d)    Just because the other parent says mean or hurtful things, doesn’t mean you have to                  respond in kind. 

e)    Ask yourself, what would a judge think about my communication and actions?

f)     Take care of yourself.

Hiring good professionals in high conflict cases is important.  They will be honest with you in giving advice, even if you don’t always want to hear their advice.  A good lawyer can guide you through the system and, if needed, advocate for you in an effective and efficient way.

By Douglas J. Manning, Partner, Certified Specialist in Family Law

There certainly has been a lot of media attention and commentary about the process and evidence in the criminal trial involving media personality Jian Ghomeshi.  But I am not writing about whether the alleged victims were treated fairly or whether the scope of the evidence was too broad or too narrow.  Rather, I was struck by how much evidence there was from Emails and other forms of electronic communications between the alleged victims and the accused and how that evidence was used in the trial.

If I recall correctly, Mr. Ghomeshi’s defense team was able to put their hands on numerous Emails going back over 10 years (as well as more recent emails and texts over the past couple of years between the complaints and Mr. Ghomeshi and others).  I was struck by how effective this bundle of evidence was, at least in the court of public opinion and in the media reports.

I immediately drew parallels in my mind to how relevant and effective this type of evidence has been, and could be, in a family law matter where history and credibility might be at issue.  Let’s consider an example.   In a child custody case, one parent might raised the issue that the other parent has been disinterested in the children for years and has never “pulled their weight” in terms of the day to day tasks that parents are required to perform for their children.  Yet there might be a string of Emails over the years from the complaining parent to the other parent, or other friends or relatives singing the praises of the other parent as a caring, committed, involved and child-focused parent.  Sort of a “parent of the year” characterization.  Or some of the emails may just be coordinating tasks for the children between parents – who is taking the children to appointments, their extracurricular activities, shopping, etc.

If the parent being accused of non-involvement has kept those Emails, or can get those Emails, from the internet provider, then he or she can make good use of this “evidence” to poke holes in the picture the complaining parent is trying to paint and, in doing so, this might have a side-effect of diminishing the credibility of the complaining parent.

Over the past 15 years or so of practicing family law I have developed the habit of advising clients to be very careful of what they put out there on the internet, whether it be Emails, Facebook post, Instagram messages etc.  Once it is “out there”, it is very hard (impossible) to get it back.

A word to the wise.

Thomas Dart, Partner, Family Law

We are in the midst of an Ontario election. The campaigns of the three leading parties can only best be described as adversarial. As voters, we should ask: Is the adversarial nature of the campaign helpful to the governance of Ontario? I think most of us would answer most emphatically in the negative.

We have numerous problems in Ontario mostly caused by a declining economy. Is the best method of solving these problems competition between adversaries? What if the three parties got together and collaborated – throwing their resources and obvious intellect at finding a common solution to these problems? What if they involved some grassroots members of our society? In other words, can we change the cultural norm where we automatically think that the adversarial system will lead us to a positive solution?

Similarly, in the family law field, many more professionals who are involved in assisting families with relationship breakdowns are beginning to seriously question the adversarial system as the best method to resolve family law problems. In fact, for many years now, family law lawyers have been using non-adversarial approaches to the resolution of family law disputes. Governments are also beginning to shift family justice resources toward mediation services.

In April, 2013, the National Action Committee on Access to Justice in Civil and Family Matters noted in its report that, its “vision of a family justice system and the recommendations for change” should be based on several guiding principles[1]:

  • minimize conflict – programs services and procedures should be designed to minimize conflict and its negative impact on children.
  • Collaboration – program services and procedures should encourage collaboration and consensual dispute resolution should be at the center of the family justice system provided that judicial intervention is readily available when needed
  • client centered – the family justice system should be designed for and around the needs of the families that use it
  • empowered families – families should, to the extent possible, be empowered to assume responsibility for their own outcomes
  • integrated multidisciplinary services – services to families going through separation and divorce should be coordinated, integrated and multidisciplinary
  • early resolution – information and services should be available early so people can resolve their problems as quickly as possible
  • voice, fairness and safety – people with family justice problems should have the opportunity to be heard and receive the services and processes that are respectful, fair and safe
  • accessible – the family justice system has to be affordable, understandable and timely
  • proportional – processes and services should be proportional to the interests of any child affected, the importance of the issues and the complexity of the case

Family breakdown affects most of us in one way or another over the course of our lifetime. Those of us who have never separated certainly know a good friend or close relative who has experienced a relationship breakdown and we have witnessed firsthand the suffering which it can cause. When we recognize that 40% of marriages break down, we can assume that probably another 30% of the population experiences the repercussions. Grandparents lose rights to see their grandchildren, for example. The divorce breakdown rate does not take into account the number of common law relationships that fail as there is no means to track those. So the information we have regarding the percentage of families who actually experience family breakdown is probably low. We all know as well that children suffer the most when their parents separate.  Family breakdown impacts so many other aspects of our society – it can create physical and mental health issues, job loss, engender criminal conduct and so on.

There are several groups, consisting of lawyers, mental health professionals and judges, at work trying to convince government that these issues should be an essential part of the current Ontario election platforms of all parties. One group wrote a letter to all three political parties asking them to put this on their agenda.  Other groups are meeting with government and among themselves to strategize implementation of the reforms. The Liberal party has at least put the issue on their platform – but it is not getting much publicity. It was not even mentioned in the recent debate. In any case, the parties should not make this yet another adversarial issue – all three parties should adopt this platform – no more studies are needed – action is required now.

A collaborative effort for reform among the leaders of our Province would signal to our families who are suffering that they can set aside adversarial differences in the interests of improving their lives. That signal would perhaps begin that major shift in culture which our National Action Committee has so strongly endorsed. Who will speak for our families? Who will help them? Where is our leadership?

 


[1] Meaningful Change, Beyond Wise Words, April 2013, pp. 3-4

Barrie Hayes, Partner, Family Law

Statistics Canada has recently released an analytical paper addressing parenting and child support after separation or divorce. Highlights of the paper are as follows:

In 2011, approximately 5,000,000 Canadians had separated or divorced within the last 20 years. Of these, about one quarter currently had at least one child aged 18 years or younger, together.

Most often, the mother’s home was the child’s primary residence after separation or divorce, reported by 70% of separated or divorced parents. Another 15% indicated that the child mainly lived with the father while 9% reported equal living time between the two parents’ homes.

The majority of parents whose child lived primarily with their ex-partner spent either no time or less than three months in the last year with their child: 18% had no contact with their child and 44% spent some time, but less than three months.

Just over one third of parents indicated that majority decisions on the health, religion and education of their child were made either jointly or alternatively with their ex-partner.

Parents often had written arrangements on child residency and time-sharing, at 55% and 45% respectively. In 2011, parents were equally as likely to work with lawyers to draft a written agreement, as they were to go to court for a judge ordered arrangement.

Over half of parents reported they complied with the arrangements on time-sharing, while another one quarter, followed the arrangements for time-sharing most of the time. The top reason cited for noncompliance with time-sharing arrangements was the ex-partner canceling his or her own time with the child.

About three quarters of separated or divorced parents were satisfied with the time spent with their child.

In 2011, 21% of separated or divorced parents were paying some form of financial support for their children, while 26% were receiving child support.

Over half (55%) of all written arrangements for child support where registered with a support enforcement program. Registration in the support enforcement program increased with the level of legal involvement with 76% of judge ordered arrangements being registered with the program.

Thomas Dart, Partner, Family Law

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Are there any similarities between the Olympics and the family law court system? Well…..if you are caught up in a family law dispute with your life long partner, you may think so. What are the differences? 

There is competition – many times, particularly if you are in court, the adversarial system drives you to seek out a ‘win’. Much like the Olympic judges who set the marks for the figure skaters, the Family Court Judges have a lot of ‘discretion’, it seems, to make life changing decisions for you and sometimes you just don’t know how or why the decision came out the way it did. You did your best, your best presentation ever, but somehow, you lost – not even a medal !!…..if you are caught up in a family law dispute with your life long partner, you may think so. What are the differences?

The cost – well not 52 billion dollars, but in your case, it may as well have been, as whatever it cost, it was not at all affordable for you ! 

The air of reality and unreality – the courtroom somehow seems so unreal, sort of like the Sochi Castle, so impressive. Everyone has high expectations when you first see it and yet, the experience in the court room, like the interior of the Castle, somehow leaves you feeling empty. What is justice? And Where is it? What just happened in there? A judge’s decision in a family law case is only the beginning, not the end, of the competition it seems.

There are Rules – no doping, no cheating, everyone in a particular event has to follow the same rules. Well there’s lots of rules for family law litigants – some of them seem a bit repetitive and hard to understand and follow. But if you don’t follow the rules, you have no hope of a resolution of the differences between you. You can be ‘thrown out of court’ if you don’t follow the Rules just like you can be disqualified from an event, for a false start, even though you are just doing your best.

The Olympics are exciting, entertaining, and the Champions are highly regarded. There is a “feel good” atmosphere, if you get a medal. For the rest, disappointment, and perhaps despair.

The big difference now though is that the goals are now changing. The Olympics produce champions – in a civilized and famous way. In Family Law, there can be no champions and you sure don’t want the publicity. You also don’t really want to be an ‘adversary’ of your life long partner – you just want the hurt to go away and be able to move on in some constructive manner, try to recover from the damage of the failed relationship.

So we hope that the times might in fact be ‘a changin’ to quote Bob Dylan for people who are going through the tragedy of a separation – there is a movement afoot in Ontario to divert people from the court system, away  from the competitive environment  – move them to consent dispute resolution services  like mediation or collaborative law; help make the experience more understandable, provide more information not only about the law but about the way in which disputes can be resolved outside of the court system – most importantly to change the culture – to put it into the words of the National Action Committee on Access to Justice in Family Law: “The main theme of this report is the need for culture change and, as much as possible, a further shift away from the adversarial process. Inevitably, some disputes will wind up in front of a judge in a courtroom for adjudication at a hearing or trial. Our object is to reduce their numbers, through providing a wide range of dispute resolution methods, before any family member darkens a courthouse door and even afterwards once they have to go through that door. Inside the courthouse, a unified family court can maintain a range of non-adversarial methods, thanks to the commitment of specialized judges and court staff. ….. At the unified family court intake stage is where the necessary triage and referrals take place. And, for those who enter the court process, at the “front end”, there is lots of room for non-adversarial procedures and work by non-judicial professionals. Family court judges should be reserved for those disputes that require a judge.”

I know that’s a lot of words, but if it can be made to come to pass, we will see a lot fewer damaged families coming out of a separation. Let’s hope that those working hard to make this change will see it come to pass in their lifetimes !!

Thomas Dart

Partner, Family Law

Not too many people are aware that Judges who sit in family court are not necessarily specialized in the area of family law. Under the current system, due to lack of judicial resources, Judges are appointed to the Bench from all different legal backgrounds. Some practised criminal law, some corporate commercial, some wills and estates, some were general practitioners, some were civil litigators and some were family lawyers prior to their appointments.  No lawyer and indeed no Judge can be a specialist in all aspects of law in this day and age. So often when you appear in family court, you may not have a Judge whose specialty is family law. Judges are very dedicated to public service and they will learn as fast as they can, but the reality is that some simply don’t have the training or the background to fully appreciate the many nuances that are involved in a family court matter. 

In a recent blog we did report on the initiative by Supreme Court of Canada Justice, the Honorable Beverly McLachlin. Under her influence,  Justice Thomas Cromwell has prepared a report on access to family justice. A full copy of the report of his Action Committee on Access  to Justice in Civil and Family Matters can be found at http://www.cfcj-fcjc.org/sites/default/files/docs/Report%20of%20the%20Family%20Law%20WG%20Meaningful%20Change%20April%202013.pdf

One of his most important recommendations is the establishment throughout each Province of a specialized family court with specialized family court judges.

His report is not being ignored in Ontario.  A number of professional organizations from all areas connected with family law problems have begun meeting to see what can be done about implementing the many excellent recommendations contained in this welcome report. 

We shall keep you posted as this important report gains recognition.