FAMILY COURT - DON'T ASSUME YOU WILL GET YOUR LEGAL EXPENSES BACK - THE RULES:

No party in a Family Court case should presume he or she will be awarded his or her costs for the case. Generally, costs are only addressed by the Family Court at the end of the case, when the issues are decided on a final basis by either the Court or by settlement between the parties themselves. The exception – costs incurred for motions or other steps during the case may attract cost orders by the Court, depending on the circumstances. 

Several recent Family Court cases in Ontario offer more guidance and direction about entitlement to costs in Family Court cases and the factors usually applied by the Court to decide if costs will be granted to a party and, if so, the manner in which the amount of those costs will be determined. 

A.        JUDICIAL DISCRETION AND THE FAMILY LAW RULES:

Firstly, whether costs will be awarded to a party in a Family Court proceeding is discretionary. There is no absolute rule of law that the Family Court must award costs in a case. Section 131 of Ontario’s Courts of Justice Act, R.S.O. 1990, c. C. 43 statutorily confers discretion to the Family Court in determining any award of costs in a Family Court proceeding. Sub-section 131(1) reads:

Costs

131. (1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.  R.S.O. 1990, c. C.43, s. 131 (1).

Rule 24 of Ontario’s Family Law Rules, O. Reg 114/99 (the “Rules”) promulgate guiding and general principles for the Court’s exercise of discretion when determining costs in a Family Court proceeding.

Based on the Rules, the case law in Ontario identifies important and fundamental objectives for the Family Court to consider and balance when determining if costs should be awarded in a Family Court proceeding:

(a)       to partially indemnify successful litigants for the cost of litigation;

(b)       to encourage settlement; and

(c)       to discourage and sanction inappropriate behavior by Family Court litigants.

In exercising this discretion whether it is appropriate to award or deny costs to a party in a case, the Family Court should generally consider all of the relevant factors and circumstances in that case, to the extent they could be ascertained.

Reference:

Serra v. Serra, 2009 ONCA 395 (CanLII); 66 RFL (6th); [2009] Carswell 2475; [2009 O.J. No. 1905 (QL) (“Serra”)

Wallegham v. Wallegham, 2015 ONSC 8066 (CanLII) (SCJ) (“Wallegham”)

Scipione v. Scipione, 2015 ONSC 5982 (CanLII) (SCJ) (“Scipione”)

B.        ENTITLEMENT TO COSTS - GENERAL PRINCIPLES:

(a)       Presumption of Costs to the Successful Party and Unreasonable Behaviour:

Pursuant to sub-Rule 24(1) of the Rules, there is a presumption that a successful party is entitled to costs of a motion, enforcement, case or appeal. However, despite sub-Rule 24(1), sub-Rule 24(4) provides that a successful party who has behaved unreasonably during a case may be deprived of all, or part of, that party’s own costs, or be ordered to pay all, or part of, the unsuccessful party’s costs.

Pursuant to sub-Rule 24(5) of the Rules, in deciding whether a party has behaved unreasonably, the Court “shall examine”:

(a)      the party’s behaviour in relation to the issues from the time they arose, including whether the party made an offer to settle;

(b)        the reasonableness of any offer the party made; and

(c)        any offer the party withdrew or failed to accept.  O. Reg. 114/99, r. 24 (5).

(b)       Divided Success and Mixed Results:  

If success in a step of, or the final outcome of, a case is divided, the Court may apportion costs as appropriate, pursuant to sub-Rule 25(6) of the Rules. If the step or the case is divided, or results in mixed success, sub-Rule 24(6) permits the Court to exercise discretion to apportion costs or order that no costs are payable. 

The case law in Ontario establishes that a Court may also assess and ascertain success on a global basis and award costs to whichever party was more successful. Similarly, where the parties have settled their step or case by negotiated agreement, the Court may award costs to the party who was more successful overall or on a global basis.

(c)       Non-Attendance; Unprepared for Case or Hearing:

If a party does not appear at a step in the case, or appears but is not properly prepared to deal with the issues at that step, the Court “shall award costs against the party” unless the Court orders otherwise in the interests of justice, pursuant to sub-Rule 24(7). Therefore, where a party has failed to attend at a step in the case or is inadequately prepared to address the issues at hand, sub-Rule 24(7) creates a presumption that the unprepared or absent party will pay the other party’s costs. However, the Court may exercise discretion if it would be in interests of justice to not award costs in the circumstances.

Generally, when deciding whether to award costs and, if so, the appropriate amount of costs, the Court should consider: (i) all of the factors and circumstances of the particular case; and (ii) the reasonableness of the parties’ conduct and their positions during the case, respectively, to the extent they could be ascertained.

If a successful party is determined to have acted unreasonably, sub-Rule 24(4) gives discretion to the Court to deprive the successful party of any costs, to apportion costs between the parties in a manner determined appropriate by the Court or require that the successful party pay the other party’s costs. 

Generally, unreasonable behavior that has previously been held to reach this threshold includes, but is not limited to: a “pattern of conduct” reflecting a party’s lack of respect for Court orders and/or the parent-child relationship, even if that objectionable conduct does not constitute bad faith.

(d)       Offers to Settle:

In determining entitlement to costs and the amount of costs to award, the Family Court will also consider whether either party made an offer to settle to the other about any of the issues in dispute.

If a party fails to accept a reasonable offer to settle, it potentially could result in that party paying costs to the offering party, particularly if the offer made meets the criteria required for offers to settle set out by sub-Rule 18(14) of the Rules. 

If sub-Rule 18(14) does not apply, the Family Court may still consider any written offer given by a party, the date on which any written offer was made, the terms of any such offer and the failure of either party to make or accept an offer to settle when determining costs.

(e)       Bad Faith:

If a party has acted in bad faith, the Court “shall decide costs on a full recovery basis and shall order the party to pay them immediately”, provided that the costs claimed by the other party are fair and reasonable, pursuant to sub-Rule 24(8) of the Rules.

C.        DETERMINING THE AMOUNT (QUANTUM) OF COSTS – GENERAL PRINCIPLES AND FACTORS:

Ontario case law establishes that, if the Family Court determines a party is entitled to costs, the following general principles and factors will generally be considered by the Court in determining the amount (or quantum) of costs to order: 

(a)       the amount awarded is not determined by actual costs incurred by the successful party;

(b)       the amount of costs must be proportional in relation to the issues and amounts dealt with and the final outcome of those issues;

(c)       costs should be fair and reasonable; and

(d)       parties’ expectations regarding the amount of costs that will be awarded is a relevant consideration in determining what is fair and reasonable or, what is generally referred to as, “proportionality” of costs.

Generally, the Family Court will also consider the following case-by-case, specific factors, pursuant to sub-Rule 24(11) of the Rules:

(a)       the importance, complexity or difficulty of the issues addressed;

(b)       the reasonableness or unreasonableness of each party;

(c)       the rates of the lawyer(s) involved for the party(ies);

(d)       the amount of time properly spent working on the case;

(e)       the cost of any expenses properly paid or payable; and

(f)        anything else, or other factor, that is relevant or appropriate to consider.

When determining the amount of costs payable, if any, usually the Family Court also considers the ability of a party to pay costs and the impact of ordering costs will have on the party, considering that party’s financial circumstances to the extent they are known. However, this factor will likely be less significant, or be given less weight by the Family Court in determining the amount of costs to be ordered than, for example: (a) the other, successful party’s overall success in the matter; and (b) the reasonableness of the behaviour of the party who will pay costs.

Historically, the Family Court has also taken a somewhat modified approach on costs in cases focusing on parenting matters (custody, access, etc.). Generally, the Family Court has been more cautious in ordering costs in these types of cases or with respect to these specific issues, primarily to try to ensure that parties with valid and meritorious claims or concerns will not be deterred from raising those matters in the Court, when appropriate or necessary to do so. 

D.        CASE EXAMPLE – MOTION DURING THE CASE:

            Wallegham v. Wallegham, 2015 ONSC 8066 (CanLII) (SCJ)   (“Wallegham”)

The Wallegham case is an example of the Court applying the principles and factors for costs set out above to an interim, or temporary, motion hearing in a Family Court case dealing with the temporary parenting of a child. 

(a)       Nature of the Motion – Brief Background:

The parties married in 2008 and separated May 1, 2015.  They had one child, born January 9, 2015, who had remained in the mother’s primary care since the date of separation. The mother’s and father’s dispute was acrimonious. 

Pursuant to a temporary Court order, dated June 26, 2015, the child was to remain in the mother’s primary care. The father was granted daytime access, but supervised by the mother only, three days per week in the parties’ former matrimonial home. Due to fairly significant conflict and acrimony between the parties, they later agreed that the father’s access would change and take place at the mother’s sister’s home under her supervision.

Subsequently the father brought a motion, heard on October 23, 2015, to change and expand the terms of his access, including eliminating any requirement for it to be supervised by anyone. Specifically, the father requested unsupervised access every weekend from Friday evening to Sunday evening and on every Wednesday for two-hour visits with the child. He also requested the option of taking the child to visit his extended family in London, Ontario, during his time with the child, as he requested. 

However, the mother opposed the father’s motion. Her position - the father’s access should continue to be supervised at a local YWCA access centre.

(b)       The Decision of the Court on Parenting:  

After the hearing, the Court ordered a more expanded, progressive access schedule in favour of the father:  

(i)        initially, the father would have the child in his primary care during the daytime three days per week (based on the earlier Court order) provided, however, that this access would take place in the father’s own home, supervised by his mother (the paternal grandmother);  

(ii)       beginning November 23, 2015, the father’s access would be increased to two evenings per week and one overnight per weekend from early evening on Friday to Saturday afternoon, without any supervision requirement; and

(iii)     the father was granted the opportunity to take the child to visit extended family in London, Ontario, during his primary care time with the child.

(c)       The Decision of the Court on Costs:

After the decision by the Court on the parenting dispute, the father claimed he had been successful on his motion and, therefore, he requested costs against the mother. The mother acknowledged: (i) there had been divided, or mixed, success to both parties on the motion; and (ii) the father had been more successful than she overall. However, the mother asserted that the father’s costs should be limited to only $750, minus the costs she had incurred to prepare her cost submissions to the Court, because she had offered, prior to the Court deciding the issue of costs, to pay the father $1,500, inclusive, to resolve the costs issues, but he did not accept that offer by her.

The Court ordered no costs were payable by either party.

By applying the principles and factors set out above, the Court decided neither party would have to pay costs to the other for this motion during the case because, among other reasons:

(a)       from an overall or global perspective, success between the parties was divided, or mixed, even though the father was somewhat more successful than the mother;

(b)       both parties initially formed and maintained unreasonable positions with respect to parenting time;

(c)       on the one hand, the father had acted unreasonably by requesting fairly dramatic and drastic changes in the parenting arrangements, which were inappropriate given his inexperience as a parent and the fairly tender age of the child and, on the other hand, the mother also acted unreasonably by rejecting the father’s mother (the paternal grandmother) as a person capable of supervising his access with the child;

(d)       the Court concluded that both parties, if acting reasonably, ought to have been capable of agreeing on and resolving on their own a compromise, similar to the ‘middle ground’ approach taken by the Court, in the best interests of the child, being the paramount consideration;

(e)       the father failed to make an offer to settle the matter out of Court;

(f)        the mother had limited financial means and a compromised ability to pay costs to the father; and

(g)       the mother had made an offer to pay costs in an amount equal to or higher than what the Court would have awarded, which the father failed to accept before the Court made its decision on costs.

E.         CASE EXAMPLE – FAMILY COURT TRIAL:

Scipione v. Scipione, 2015 ONSC 5982 (CanLII) (SCJ) (“Scipione”)

The Scipione case is another example of the Court applying the principles and factors for costs set out above, but with respect to a trial in a Family Court case involving many issues between the parties. However, the Scipione case also offers guidance for the treatment of costs on motions during a case, too, which are consistent with the Wallegham case.    

(a)       Nature of the Case – Brief Background:

The parties had a relationship for more than twenty years. After it broke down, they became embroiled in an acrimonious, protracted dispute, mostly about child and spousal support.  Eventually, when attempted negotiations failed, the husband brought a Family Court case. The case proceeded to a lengthy trial of issues, following which the Court rendered decisions to resolve all of the issues in dispute between the parties. When costs were determined, the Court ordered the husband, who was mostly unsuccessful at the trial, to pay costs to the mother in the amount of $52,000.

Less than one year after the trial decision, the husband brought a new motion seeking to revisit nearly all of the issues regarding support that were determined at the trial. Initially the wife responded by seeking to dismiss the husband’s new motion, but ultimately she made her own counterclaim against the husband and emphasized in her documentation filed with the Court that she preferred for the husband’s motion to be dismissed and that her counterclaims were made by her only in response to the husband’s new motion. In other words, she made it clear that she preferred for the entire case to be dismissed promptly, with the earlier trial decision continuing to apply.   

By negotiation in the midst of the hearing, the parties resolved all of the issues raised by the husband’s motion and the wife’s counterclaims, except for costs, by entering a consent on the third day of the hearing of the motion. However, based on their agreement, it was unclear to the Court who succeeded on the motion for the purpose of determining costs of the motion, as requested by both parties.

The wife claimed full indemnity for her costs ($83,034.46), plus HST, by asserting that the husband had been “entirely unsuccessful”. She also claimed that his motion caused her to incur significant legal fees to, effectively, revisit the very same issues that had been previously decided on by the Court. On the other hand, the husband argued that the wife should have to pay to him $20,000 in costs – he believed that success for the motion he brought was divided, or mixed. He also argued that costs should not be triggered, because the matter was resolved by settlement between the parties, rather than by a decision of the Court. He also claimed his total fees arising from his motion were approximately $55,375, before tax.

(b)       The Decision of the Court on Costs:

The Family Court did not make a decision on the specific family law issues in dispute in the case, because the parties reached a written settlement of those themselves. However, the Family Court did consider the costs in the case, which both parties requested.  

The Court ordered the husband to pay costs of $70,000.00 to the wife, inclusive of tax and disbursements, holding that he had been largely unsuccessful on his motion. The Court did not order full recovery of her legal expenses, because the “bill of costs” submitted by her to the Court did not identify or contain adequate information to justify an order for the full recovery of all of her legal expenses.  

The Court considered and applied the general principles and factors for determining costs in a Family Court case, as set out above and, in particular, addressed these specific issues for determining costs:

(i)        Offers to settle; Impact - the cost consequences triggered by offers to settle;

(ii)       Determining success - how to determine if a party is successful and how that success impacts costs of the case; 

(iii)     Divided (mixed) success - how to deal with costs when success is divided, or mixed, between the parties for the issues at hand; and

(iv)      Allocating costs for settlements - how costs are allocated if the parties resolve and settle their dispute before the case is actually decided finally by the Court;

(v)       Unreasonable Behaviour – the consequences and implications for costs; and

(vi)      Setting the amount - how to determine the amount of costs and, to do so, the detailed documentation that is generally required by a party to justify a certain amount of costs. 

(i)        Offers to Settle – Implication on Costs:

Firstly, the Family Court considered when offers to settle trigger cost consequences in Family Court proceedings.  

Pursuant to sub-Rule 18(14) of the Rules, a party in the case is entitled to costs, unless ordered otherwise by the Court, if that party: (a) had made a written offer to settle not less than seven days before the trial of issues; and (b) obtained a result at the trial that met, or was better than, the terms of that party’s offer to settle.

If these conditions are satisfied, the party is entitled to partial recovery of his or her legal expenses to the date on which the offer to settle was served and full recovery of his or her legal expenses as of that date, subject to the other factors generally to be considered by the Court before awarding those costs.

(ii)       Determining Success and Imp

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LIVING COMMON LAW? A FEW TIPS YOU SHOULD CONSIDER. SURPRISE!

If you are living common law, or hoping to do so, here are a few tips you should consider in terms of your relationship and what happens if it breaks down:

  1. Generally, you will be considered to be common law if you and your partner reside together for three years or more, or if you both have a child together.
  2. If you have a child together, but your relationship breaks down afterwards, the same rules apply to you for child support as they do for married spouses, including paying Table child support and contributing to the child’s special and extraordinary expenses (including post-secondary education), if you are not the primary care parent (subject to a few exceptions).
  3. The same thing applies for spousal support between common law spouses – you are treated legally as if you were had been married, more or less, for spousal support purposes. Generally, the legal obligation to support your common law partner will arise if you have lived together continuously for three years or more, or are in a relationship of “some permanence” and have a child together.
  4. Only married couples share the value of their property when their relationship breaks down. This is done by a fairly complicated formula, known as equalizing each spouse’s “net family property”. Effectively, the spouses split-the-difference between the net worth each accumulated during the marriage, subject to certain exclusions. However, for two people who live together at common law, but who do not actually marry, the law is different. When two people live together in a common law relationship, their property routinely is co-mingled and inter-mixed. If they separate, disagreements often arise about what each person will take from the relationship.  For example, if one partner has contributed time or work that helps the other buy or maintain property, such as a home, this may give rise to a claim for the non-owner spouse. Generally, common law spouses have to make more complicated legal claims against their separated partner, if they feel there has been unfairness arise from the relationship and its breakdown, such as family joint venture, constructive trust and unjust enrichment claims. In any event, property division and settlement for common law spouses is very different than for married spouses and, generally, more complicated to address legally quite often.
  5. Unlike married spouses, common law spouses do not have an inalienable, statutory and equal right to stay in the family home following a relationship breakdown, if that spouse’s name is not legally reflected on the title of the property. What’s more, the titled spouse (who actually is registered as the owner) can sell or re-mortgage the property without the other’s written permission, subject to the Court intervening if requested by the non-titled party. This is another example of how common law spouses are treated differently in Ontario law than married spouses.
  6. Because of the greater uncertainty for common law spouses and the different law that will apply on relationship breakdown, a domestic contract, such as a cohabitation agreement, should be considered to at least minimize the uncertainty that can arise on separation and, at the same time, offer protection to a common law spouse during the relationship, particularly if that partner is contributing money, time or effort to the other’s asset(s), or otherwise providing family support while the other is advancing his or her professional goals. In short, if you are common law, you should have a domestic contract in place (ideally early in the relationship) to minimize your worry, uncertainty about the future and to ensure that you are properly compensated for your contribution to the relationship.

This WARDSPC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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MARRIAGE BREAKDOWN - WHAT WILL HAPPEN TO OUR HOME?

On marriage breakdown (not relationship breakdown), a key area of confusion and uncertainty for many separated spouses is what happens to the matrimonial home. Only married spouses can own or occupy a matrimonial home – common law spouses cannot do so (Family Law Act).

 

“Matrimonial home” is defined by section 18 of Ontario’s Family Law Act:

 

“Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home.”

 

Practically, it is any property at the separation date that is ordinarily occupied by the spouses as their family residence.

 

Spouses can have more than one matrimonial home – it is a fact-specific issue. For example, the home in town and the cottage could both potentially qualify as matrimonial homes, if the facts support that finding.

 

Depending on the facts, matrimonial homes can be treated differently in terms of what must happen to them on marriage breakdown.

 

Often they form part of the formulaic approach to property distribution and resolution under the Family Law Act, a challenging formula to understand and master for most (including many lawyers). 

 

For many reasons, including emotional and financial, a spouse may not wish to leave, or refuse to list and sell, or wish to delay any disposition of a matrimonial home, often understandably.

 

Spouses can try to retain the matrimonial home, but if it jointly owned legally, Ontario law gives either spouse the right to seek a listing and sale of it. Often Judges are reluctant to order a listing and sale prior to a trial, but they will do so if the circumstances are appropriate.

 

If the home is jointly owned, both spouses have a statutory right to possess it both during marriage as well as after separation and neither can be forced to sell their half to the other. Spouses do not have a right of first refusal to purchase the matrimonial home from the other where it is jointly owned. In fact, in Ontario, the Partition Act gives the Court power to force the sale of a jointly owned matrimonial home, if the parties cannot come to a buy-out agreement, for example. Spouses are entitled to list the matrimonial home on the market in an effort to obtain the best market value, but a spouse will not be required generally to accept less than fair market value from the other spouse.

 

The Partition Act is only available in situations of joint ownership. Where the title to the matrimonial home is in the name of only one of the spouses, then the Partition Act does not apply. This does not mean that the other spouse has no claim against the matrimonial home. The non-titled spouse still has a claim to the equity from the property through the equalization process provided for under the Family Law Act. A spouse may also have equitable trust claims against the home, too. However, legal title matters. The non-titled spouse cannot force the titled spouse to sell the matrimonial home, or limit the ability of the titled spouse to keep it, sell it, refinance it or even make a gift of it, unless a Court order is made otherwise.

 

Buy-out decisions must be carefully planned and considered. Future projections on carrying expenses must be reviewed. A decision is often made about whether a spouse can reasonably afford the home, rather than have it sold, or sell the interest to the other spouse. Generally, the Court will focus mostly only on the real property value of the matrimonial home and the right of the other spouse to maximize their return from it. Uncommonly does the Court put emphasis on or stock in the importance and emotional value of the home to either spouse (or children), when it comes to addressing the property issues only.

 

If a spouse wishes to buy out the interest of the other in the matrimonial home, tactically, letting that be known can create unequal bargaining positions in the negotiations or litigation. The other spouse can, in effect, try to lever that desire to gain a tactical advantage – sometimes this happens.

 

Usually there are several options to consider on marriage breakdown, with multiple factors to review, before any temporary or permanent decisions are made about the matrimonial home. An early decision can impact the final outcome, of course.

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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DENYING ACCESS TO A GRANDPARENT - AUTONOMY, YES, BUT NOT ARBITRARY

In Ontario, grandparents face a challenge when they are denied access to their grandchildren.

A new Ontario case – Nicholas v. Herdman (2015) is a case in point.

This case mostly affirms the traditional approach of the law to grandparents seeking time with their grandchildren.

Here, their granddaughter was two years old. The parents would not allow any access by the grandmother and only limited, supervised access by the grandfather. The grandparents alleged they had played a close, important role in their grandchild’s young life, including caring for her because the parents could not afford childcare. They alleged they had a loving relationship with their granddaughter.

The evidence indicated family stress – the grandparents did not care for their daughter’s new partner. Family conflict abounded, to the point that their daughter severed her relationship with these grandparents (and, therefore, their relationship with their granddaughter).

The affidavit evidence in the case was contradictory. Ultimately the grandparents claimed that their daughter had acted arbitrarily and capriciously, which was not in their granddaughter’s best interests.

The parents responded by claiming they were protecting the granddaughter from the grandmother’s manipulative and controlling behavior, which allegedly had transpired for years before. They also claimed both grandparents’ behaviour was increasingly erratic, unstable and emotionally damaging to them and the granddaughter.

In short, the allegations exchanged by both sides were hurtful, inflammatory and very contradictory in nature – often a challenging exercise to sort through in Family Court.

Grandparent Access Law Generally in Ontario

The starting point: section 21 of Ontario’s Children’s Law Reform Act, which provides for ‘a parent of a child or any other person’ to ‘apply to the court for an order respecting custody of or access to the child.’ Custody of or access to a child must be determined on the basis of the best interests of the child, pursuant to sub-section 24(1) of that legislation.

The oft-referred to case in Ontario for this area is Chapman v. Chapman, a decision of the Ontario Court of Appeal. Interestingly, this case started in this area initially. In this case, the Court held that that parental autonomy for making decisions for or about children should be respected in the absence of any evidence that the parents’ conduct an inability to act in the children’s best interests. A Court should generally defer to the parent’s decisions about grandparent access unless all three of the following tests are met in the circumstances:

a) Is there already a positive grandparent-grandchild relationship?

b) Has the parent’s decision negatively impacted or imperiled the positive grandparent-grandchild relationship?

c) Has the parent acted arbitrarily?

The Outcome of This Case

Based on third party evidence from extended family members, the Court found that a positive relationship between the granddaughter and her grandparents existed – they were actively involved in her care.

The Court also found that the parents’ conduct imperiled the relationship between the granddaughter and her grandparents. For example, the child had seen her grandmother five days per week for several months of her young life. What’s more, the stipulation that supervision is necessary for the grandfather to see his granddaughter when none was previously required had a significant impact on the grandfather-granddaughter relationship and the frequency of contact.

The Court also held that it was clear since the grandchild had been born that her mother desired for her parents to be a part of her child’s life. However, over a period of a few months, the parents began feeling that the grandparents were being controlling and manipulative of their parenting, their care of the granddaughter, her activities and her relationship with other extended family members. Therefore, the Court concluded based on all of the evidence that the parent’s decision to terminate access was not arbitrary and not a capricious or isolated action. It was, finds the Court, a result of long-term conflict that finally materialized to the point of no return.

The Court also found that the parents were loving, capable and made decisions affecting their daughter in their daughter’s best interest generally. The Court accepted they had legitimate and genuine issues and concerns, for some time, about the grandparents efforts to diminish them and marginalize their role in their daughter’s life and upbringing.

Following the Chapman case, this Court gave deference to these parents’ autonomy to decide if these grandparents should pay a role in their granddaughter’s life, as there was no evidence satisfying the Court that the grandparents’ behaviour demonstrated an inability to act in accordance with the child’s best interests. Without that evidence presented by the grandparents, they lost and were granted no parental rights, including no access. 

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

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SEPARATED PARENTS CLAIMING ELIGIBLE DEPENDENT AND CHILD PERSONAL TAX CREDITS - MAKE SURE YOUR AGREEMENT IS PROPERLY WORDED

The case: Letoria v. R (2015) - a decision of the federal Tax Court of Canada

By their Family Court Order, made on consent, Mom and Dad agreed to:

1. shared parenting of their child;

2. calculate what each owed to the other for Table child support (based on their respective incomes from all sources); and

3. declare that the Dad would pay the set-off amount to Mom (because his child support payment was higher at the time).

Note: The Order declared what Table child support amount each owed to the other, but only required the Dad to pay the set-off amount to Mom.

Subsequently, the Dad filed his personal income tax return for that year claiming a personal tax credit for eligible dependents and the child amount, per section 118 of the federal Income Tax Act.

The Tax Court denied his claim for these personal benefits.

Effectively, because the Family Court Order did not expressly indicate that the Mom had to pay child support to Dad, the language in the Income Tax Act denied the Dad the ability to claim these personal tax benefits. A complicated analysis, no doubt, but the Court ultimately determined that the Income Tax Act would have to be changed to allow a shared-parenting parent to claim these benefits, if the approach is to be pay the set-off amount between each party's child support obligation to the other. 

What does this mean to you? Make sure you obtain qualified legal and accounting advice for your family law matters. Here, if the Dad had done so, he likely could have structured the Court Order to allow him to successfully claim these personal tax credits in future. By not doing so, he not only will not received those credits, but he presumably incurred substantial legal expense in being told he could not do so.

There is often interplay between family law and tax issues that have to be considered and, if they are not, the financial implications can be harsh.

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

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IF A CHILD IS ABDUCTED OR NOT RETURNED BY THE OTHER PARENT FROM A U.S. (FOREIGN) VACATION/TRIP - THE HAGUE CONVENTION

If a child from Canada is abducted to a foreign country, or is not returned from vacation in or a trip to a foreign country, the left-behind parent in Canada faces a challenging process to have the child returned (but there is a legal process available).

Generally, the Hague Convention on Civil Aspects of International Child Abduction (“Hague Convention”) applies (as of this time).

Canada is a signatory of the Hague Convention, along with the U.S. and about 86 other countries.

The Hague Convention is an international treaty. Co-operating countries have agreed to work together to return children who are wrongfully removed from a signatory country.

The goals of the Hague Convention are: (1) to secure the immediate return of a child wrongfully removed or wrongfully retained in any Contracting State; and (2) to ensure that rights of custody and access under the law of a signatory country are effectively respected in other signatory countries.   

If, for example, a child is removed from Canada unlawfully and taken to the U.S., the parent in Canada would contact the federal government and police (the “Central Authority”), following which an application would be sent to the U.S. State Department for the return of the child. These government officials are supposed to co-operate to locate the child, have the case evaluated and have a lawyer appointed in the U.S. to petition the Court to order the child to be returned.

Generally, the test for a return order under the Hague Convention is: (1) prior to removal or wrongful retention, the child was habitually resident in a foreign country; (2) the removal or retention was in breach of custody rights under the foreign country’s law; and (3) the petitioner actually was exercising custody rights at the time of the removal or wrongful retention.

If this prima facie case is met, the child will generally be ordered returned to Canada, unless the removing parent can establish one of these positions/defences: (1) the child has become well-settled in the new surroundings; (2) the petitioner consented or acquiesced in the removal or retention; (3) there is grave risk of danger to the child in the home country; (4) the child is a mature child who objects to removal; and/or (5) the returning the child would violate public policy.  

Even if one of these tests may be established, however, the U.S. Court still could order the return of the child if the Court finds that doing so would better satisfy the goals and objectives of the Hague Convention. 

Therefore, if there is a real and reasonable risk that a child may be abducted, or not be returned to Canada from a foreign vacation, caution should be exercised.

In addition, travel consent forms are helpful, particularly to rebut any argument by the removing parent in making these defences to try to keep the child in the foreign country.

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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CAN I TAKE OVER THE RESPs FOR THE KIDS?

You and your partner separate. What about the RESPs that you have accumulated during the relationship for the children? Commonly parents dispute who may and how to administer RESPs on relationship breakdowns. Often one co-trustee believes he or she should be responsible for the RESPs solely, without the involvement of the other.

An RESP is, effectively, a trust fund. Like other trusts, it is possible for one of the parent co-trustees to remove the other, legally. The parents hold the trust fund, as co-trustees, for the benefit of the beneficiaries, the children. So long as the RESP is properly established, specific trust-related legal documentation is not generally required. Each parent is held to a higher standard, as a trustee, and is a fiduciary to the children as the trustee of their trust funds. Therefore, if a parent acts inappropriately, the parent at fault may not only be removed, but be subject to a breach of fiduciary claim, too. 

If the parents/trustees cannot co-operate to administer the trust fund together, one can seek the removal of the other as a co-trustee and, if the grounds to do so are proved, the Court will likely remove one of the parents. The Court will apply the traditional legal test and factors for any co-trustee seeking the removal of another co-trustee, as sometimes arises in other types of trust arrangements, like estates.

The recent case in Ontario about this: McConnell v. McConnell (2015 ONSC 2243, CarswellOnt 4939).

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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Spousal Support - Unmarried? Yes, You May Still Be Entitled. Some Basic Tips - What You Need To Know About Spousal Suport in Ontario

Spousal support.........some basic points to consider:

Generally, there are three types of spousal support in Ontario: (1) compensatory; (2) contractual (i.e., pursuant to a domestic contract, or “pre-nup”, for example; and (3) non-compensatory (the most common type of support ordered by Ontario Family Courts) currently, which is generally thought of as a ‘needs-based’ type of support. “Need”, at least on an interim basis, generally goes beyond basic necessities and is most often assessed based on the standard of living to which the claimant became accustomed during the relationship.  

A recent Ontario case is illustrative: Knowles v. Lindstrom, 2015 Ontario Superior Court

In this case, the Court affirms these general principles for spousal support in Ontario:

- Unmarried spouses may be entitled to spousal support under the Family Law Act of Ontario, if they have cohabited continuously for not less than three years (section 29)

- After a separation, generally, spousal support entitlement will begin as of when the claim for support is made (which should be in writing, for certainty)

- The test for whether a married or unmarried spouse is entitled to spousal support an on interim basis (including the period following a separation) is whether the claimant can make out, on an interim basis, a prima facie need for spousal support pending the outcome of the case or trial (typically on a non-compensatory basis) – in other words, can he or she satisfy the Court that, when the trial is heard, if necessary, she will likely be determined to be entitled to spousal support?

- If the parties entered a domestic contract before the separation, that is often considered for whether a claimant is entitled to spousal support (i.e., contractual support)

- Generally, the amount of spousal support the Court will order is based on the Spousal Support Advisory Guidelines in Ontario (but they are not the law in Ontario, but rather a guideline oft-utilized by lawyers and the Court to try to assess spousal support amounts) – ultimately, the Court has discretion to determine any amount of interim spousal support, based on the factors in each case

- If the payor earns non-taxable income (i.e., does not pay tax on the income), the Court will typically ‘gross-up’ the payor’s income to calculate spousal support

If you are separating, or may be separated, you should speak to a qualified lawyer about your spousal support position to ensure that you are properly protected and correctly pursue your position, legally. 

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

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CAN I DEAL WITH THE CUSTODY OF MY CHILD IN MY WILL? PRE-PLANNING TIPS FOR YOUR MINOR CHILDREN

You can specify testamentary custody for your child in your last will and testament in Ontario.

Under Ontario’s Children’s Law Reform Act (“CLRA”), if you have custody of a child, you can specify in your Will who you wish to have custody if you pass away, but only for a ninety-day period after your passing. The person you appoint must consent to having custody. However, custody of a child is always subject to the decision of the Court. Your wishes in your Will will be considered, but they are not determinative. The “best interests” of your child will always govern. If your child is able to express them, your child’s own wishes and preferences will be considered, too. 

Choosing your appointee is important, of course. You should discuss it with the person you choose, before you appoint them by your Will. The other parent, if applicable, should agree to the choice and, ideally, make a Will consistent with your choice, too, to avoid uncertainty. 

You can also appoint your Estate Trustee in your Will to be responsible for managing your child’s property until your minor child reaches a certain age, such as eighteen.

If you pass away, but you do not have a Will in place, or you do not specify in your Will how your minor child’s property is to be held and managed for your child, the CLRA requires that a “guardian of property” be appointed to do so. This role may be applied for by the other, surviving parent, or by another person (typically other family members or friends).  Generally the Court will give preference to a surviving parent, but that person’s appointment is not automatic. Any application to be a minor child’s “guardian of property” must be given to the Ontario Office of the Children’s Lawyer, too, which is the government agency in Ontario representing the interests of children in judicial custody and access matters, among other things. They can intervene and raise concerns, too, which can create problems, delay and more expense.

If you are a parent, that does not necessarily mean you have the authority manage your child’s property, or be your child’s “guardian of property”. For example, if your minor child receives property by an inheritance, for example, you may not, as a parent, have the right automatically to hold and manage that property for your child.

 

Generally, any person applying to be a minor child’s guardian of property will have to provide evidence to the Court about your ability to manage the property (i.e., your qualifications and experience) and the views and preferences of the child, if they can be determined. Typically the applying person must submit a management plan for the child’s property, which must address where the child will live, the child’s living expenses, discretionary expenses for the child (such as, for example, music lessons, sports expenses and equipment, camps, etc.), the investment plan for any liquid assets and the financial education of the minor child.

Generally, a guardian of property will be required to transfer all of the property to the child when the child reaches the age of eighteen.

Therefore, it is important that you:

1)         make a proper Will;

2)         specify your choice for custody of your minor child(ren) in your Will; and

3)         specify in your Will how your child’s property is to be managed.

If you have a minor child, but no Will, it may mean that someone will need to apply to be the guardian of property for your child, which can be expensive, time-consuming and uncertain. Similarly, if your spouse or partner passes away, you should not assume that you will automatically have the right to manage your minor child’s property – that may not be the case. 

Good planning for your minor children is essential. 

This WARDSPC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

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Family Law

Generally, spousal support is taxable to you. The payor may also tax deduct it. However, lump-sum ‘catch-up’ (i.e., “retroactive”) spousal amounts are different. If you are awarded, or agree on, a lump-sum spousal support payment for the past, it is typically adjusted to reflect that: a) you likely will not be required to pay tax on it; and b) the payor is not likely able to deduct it. The Family Court will take this ‘net’ approach to lump-sum “retroactive” spousal awards, rather than require the parties to try to sort out the tax consequences with the Canada Revenue Agency directly (which usually does not cause a fair outcome for either party, or both). The Family Court will reduce the amount that is payable by multiplying it by the payor’s marginal tax rate, your marginal tax rate, or an average between the two rates, typically. The amount you receive will be less than the monthly amount payable to you in the past, to reflect the tax adjustment. While this may seem unfair, it is currently the law in Ontario. A good case on this (as of June, 2015) is: Hume v. Tomlinson, 2015 ONSC 843. Parties are free to negotiate whatever they wish, but typically the payor will ask for a reduction to reflect the tax for past, catch-up amounts paid. What you need to know:

- Generally, spousal support is taxable to you, tax deductible to the payor

- Lump-sum ‘catch-up’ awards are treated differently, generally

- Lump-sum ‘catch-up’ awards will be adjusted for tax (i.e., you will receive less), typically

This BLAWG is general and informational only. It is not legal advice, or intended to be. Advice for your circumstances may require specific/more information. 

More information or assistance: jason@wardlegal  www.wardlegal.ca

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COLLABORATIVE FAMILY LAW - A NEW, BETTER WAY

Collaborative family law is a way for you to resolve your relationship breakdown issues more respectfully -- without going to Family Court. It is a better alternative to an acrimonious, traditional battle in Court, with high stakes and high legal expenses. It is, basically, a much better way, which many lawyers and other family law professionals now support and encourage.

Collaborative Practice Team meeting

This alternative offers you and your former spouse or partner the support, protection, and guidance of your own lawyers, but also the benefit of child and financial specialists, family professionals, and other experts, if they would be helpful in your circumstances, working together on your team.

For the collaborative alternative, you commit to:

  1. Negotiate a mutually acceptable settlement without having the Family Court decide issues for you.
  2. Maintain open communication and information sharing.
  3. Create shared solutions acknowledging your priorities and objectives, including to live independently in future.
  4. Manage your legal expenses in an informed, constructive way.
  5. Achieve an outcome that is decided upon by you, with the support of your own lawyer, not by a third party, like a Judge.

You can find more information about collaborative family law here:

Ontario Collaborative Law Federation

Wards PC Lawyers - Collaborative

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

 

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