Case Digest/Comments

The Office of the Children’s Lawyer (OCL) Not Compellable to Provide Services… for Now

The Ontario Court of Appeal has ruled that the courts ought not to compel the Office of the Children’s Lawyer to provide service without giving the OCL an opportunity to decide whether it would become involved.*

Under the Courts of Justice Act,^ at the request of a court the Children’s Lawyer “may” act as the legal representative of a minor who is not a party to the proceeding.

On the one hand, historically the Superior Court has “parens patriae” jurisdiction (the public power to intervene against negligent parents) to protect minors who are otherwise unable to fend for themselves. On the other, the statutory language is merely permissible and not mandatory. Whether the OCL is compellable to provide services by orders of the court has been subject to debate.

As a matter of policy, the OCL are involved in child protection proceedings. Therefore, the residual parens patriae jurisdiction will only be invoked in matters involving custody and access.

Although the Court of Appeal declined to rule on the very point of whether the OCL is compellable to provide services under the court’s parens patriae jurisdiction, the Court of Appeal reasoned that given the limited resources available to the OCL, it is improper to order the OCL to provide services prior to making a request as contemplated by the legislation.

The judge of the first instance ought to have made the requests first, without intervening in the OCL’s discretion to provide services. If the OCL declines to act, the court may further request that the OCL reconsider its decision. Only after all available remedies are exhausted should the courts consider exercising their parens patriae jurisdiction.

*Bhajan v. Bhajan, [2010] ONCA 714, (2011) 104 O.R. (3d) 168

^R.S.O. 1990, c. C43, as am. ss. 89(3.1)


This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.

N.Y. Judge Clamps Down on Deadbeat Dad, Orders Exactly What He May Spend Money On

A deadbeat dad in New York has been put on probation by the judge under the New York State Family Court Act §§454(3)(c) and 456 with strict spending conditions.

The judge ordered in the Matter of Mary M., 2011 NY Slip Op 50972(U), that Thomas M. “shall not purchase, lease or rent” dozens of everyday items that are “not necessities” until he has paid Mary M. the $14,112 he owes in back child support. Meanwhile, he must stay current on $102 in weekly payments.

The restrictions include these:

Thomas M. may not “purchase, lease or rent” the following:

• alcoholic beverages • cigarettes or any tobacco products • food or drink of any kind from a restaurant, bar or tavern • cell phone • television • computer • any electronic device, except medical equipment • DVD, DVR, digital music or digital movie • recreational vehicle • recreational licenses of any kind, including, but not limited to hunting and fishing licenses • movie tickets • recreational event tickets • airfare or train fare • health club membership • sporting goods of any kind • ammunition, guns or firearms • fishing equipment • camping or hiking equipment • jewelry • magazines • newspapers • cable or satellite TV service • Internet service • campground site • hotel room • any interest in real property, except his primary residence

With the Probation Department’s prior written permission, he may “purchase, lease or rent”:

• clothing • furniture • appliances • motor vehicles • household materials for renovations, except emergency repairs; and • books

Thomas M. was self-represented.

The Domestic Contract and Its Many Shades of Grey

While the Family Law Act allows domestic contracts to be enforceable within the confines of the legislation, whether an agreement to agree constitutes a domestic contract is subject to judicial interpretation.

In the recent decision of Ward v. Ward,* the Ontario Court of Appeal examined the issue of whether a Memorandum of Agreement (MOA) is considered a valid domestic contract and therefore enforceable in law.

At separation the parties decided to resolve their matrimonial issues through the collaborative law practice. Neither party provided sworn financial statements. Rather, the parties relied on the information provided by the husband as well as financial information provided by their accountant.

After eight meetings the parties agreed to a potential settlement, and their lawyers wrote out items of resolution in a MOA. The MOA incorporated the resolutions of nine issues, including the equalization process and child and spousal support.

Pursuant to the MOA, the husband paid the wife $250,000 one week after the agreement was reached. In the meantime the lawyers were trying to finalize the agreement.

The agreement was never finalized. The parties commenced a proceeding before the court seeking a trial to determine whether the MOA was a settlement and a domestic contract in accordance with the Family Law Act.

The Court of Appeal set aside the trial judge’s declaration that the MOA was only an “agreement to agree” and therefore not binding. The trial judge had been of the view that, to reach a final settlement, more information was required.

In contrast, the Court of Appeal held that (i) the wife had been assisted by an experienced family law lawyer and therefore understood the nature of the settlement (i.e., to be binding on the parties), and  (ii) there was no evidence that the husband had failed to disclose significant assets.

In particular the Court of Appeal relied on the parties’ awareness of the husband’s potential fluctuation in his income and on their familiarity with the equalization and held that the evidence did not support the trial judge’s conclusion that “more information is required.”

In essence, the Court of Appeal took the programmatic approach to find whether the MOA was indeed considered a domestic contract under the law. In particular the Court of Appeal ruled the following:

At common law, an agreement is binding if the parties consider that it contains all essential terms, even if the parties also agree that those terms will subsequently be recorded in a more formal document together with the usual terms ancillary to that type of agreement. However, an agreement is not final or binding if it is merely an agreement to later agree on essential provisions or to defer the binding nature of the agreement until the execution of the proposed subsequent formal contract. …

As well, to be binding, it is not necessary that the original contract include all the ancillary terms that are already implicit in its content.

In the end the Court of Appeal ruled that, based on the preamble of the MOA,  the terms of the MOA, and the conduct of the parties, the MOA was binding as a separation agreement and therefore legally enforceable under the Family Law Act.

*2011 ONCA 178; 104 O.R. (3d) 401

This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.

A Brief Note on Adultery in Divorce and Family Law

People are often misinformed about the true nature of adultery in family law. This is understandable. Information on the subject that is presented in TV dramas or the movies is rarely technically correct.

It’s important to understand that in family law adultery isn’t the same as “cheating.” While the definition of “cheating” is often subject to one’s moral latitude, the legal definition of adultery is not. For example, while having a sexually explicit conversation with another may be considered cheating by many, legally speaking, something more is required to establish adultery.

To establish adultery, no sex tape is required. Admission of an affair by the guilty spouse (or the third party) will likely suffice.* However, at the same time, evidence that amounts to a mere suspicion of your spouse having an affair (e.g., an unexplained lipstick stain on your husband’s shirt or a napkin with a phone number written on it) isn’t enough. The court must be convinced that on the balance of probabilities adultery has been committed.^

Interestingly, in the practice of family law, divorce claims on the ground of adultery are not all that common because adultery is only one of the three grounds for determining the breakdown of a marriage, the others being “cruelty” and “living separate and apart for at least one year.”

In many cases, separation is triggered by the discovery of an extramarital affair. However, by the time the parties are ready to deal with a divorce, they will likely have already been living separate and apart for one year. Therefore a claim of adultery will be unnecessary.

When confronted with a choice of claiming adultery or simply living separate and apart as the basis for divorce, I generally encourage my clients to choose the latter because it’s cheaper, less likely to be contested, and saves the parties from reliving difficult past events.

*see e.g., d’Entremont v. d’Entremont (1992), 44 R.F.L. (3d) 224 (N.S.C.A.)

^see e.g., George v. George, [1950] O.R. 787 (C.A.)

This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.

A Further Note on Living Separate and Apart (according to the Ontario Court of Appeal)

It is true that every marriage is different. Spouses can live apart while under the same roof, and they can cohabit even if they live in separate locations. Today I’d like to elaborate on what it means to live “separate and apart” for the purposes of getting a divorce.

In Greaves v. Greaves,* the parties disputed the date of separation in a contested divorce proceeding. The wife moved out of the matrimonial home into a shelter and subsequently found housing with her two teenage sons. However, after a year or two, husband and wife resumed contact and then later a sexual relationship. She started sleeping over at the house and left clothing there.

In determining whether the parties were living apart or not, the learned judge followed Oswell v. Oswell,^ a decision by the Ontario Court of Appeal. The court looked at various objective factors, including the following:

  1. there must be a physical separation…  Just because a spouse remains in the same house for reasons of economic necessity does not mean that they are not living separate and apart;
  2. there must also be a withdrawal by one or both spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium, or of repudiating the marital relationship;
  3. the absence of sexual relations is not conclusive but is a factor to be considered;
  4. other matters to be considered are the discussion of family problems and communication between the spouses; presence or absence of joint social activities; the meal pattern.
  5. although the performance of household tasks is also a factor… weight should be given to those matters which are peculiar to the husband and wife relationship outlined above.
  6. The court must have regard to the true intent of a spouse as opposed to a spouse’s stated intent… [a]n additional consideration… in determining the true intent of a spouse as opposed to that spouse’s stated intentions is the method in which the spouse has filed income tax returns.

After careful deliberation, the judge held that the relationship resembled a long-standing affair more than a marriage. The wife’s refusal to return home despite her husband’s pleas is indicative of an intention not to truly reconcile and resume the marriage.

*(2004), 4 R.F.L. (6th) 1, 2004 CanLII 2548(Ont. S.C.J.)

^(1990), 74 O.R. (2d) 15 (H.C.J.), aff’d (1992), 12 (O.R.) 3d 95 (C.A.)

This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.

Professional Licence and Degrees in Family Law in Ontario

Dr. Caratun married Mrs. Caratun to assist him in immigrating to North America to practise dentistry. Mrs. Caratun worked extremely hard over a number of years in Israel and Canada to assist him in reaching this goal. Two days after reaching it, he rejected Mrs. Caratun as his wife, at a time when family assets were next to non-existent but his future income-earning ability was substantial.

Mrs. Caratun sued to include Dr. Caratun’s licence to practise dentistry as property.*

Was Dr. Caratun’s licence to practise dentistry considered as property in Ontario?

The short answer is : No. The Ontario Court of Appeal held that a degree or professional licence acquired during the marriage with the contribution of the other spouse does not constitute property for the purposes of s. 4 of the Family Law Act.^

The Ontario Court of Appeal explained that the broad definition of “property” clearly encompasses many forms of intangibles. However, there are several difficulties in considering a professional degree as property: (1) it is not transferable; (2) the value of it in the future depends on the efforts of the degree holder; and (3) the only difference between a licence and any other right to work is in its exclusivity. Therefore, it was deemed clearly inappropriate to consider such attainments as property for the purposes of determining equalization payments pursuant to the Family Law Act.

The Court of Appeal, by allowing Dr. Caratun’s appeal, concluded that not all rights to income are considered as properties, especially if they are dependent on personal service.

In the end Mrs. Caratun was awarded compensatory support in the amount of $30,000, the sum determined by the trial judge to reflect her contribution to Dr. Caratun’s licence.

* (1992), 11 O.R. (3d) 385 (C.A.)

^R.S.O. 1990, c.F.3, as am.

Please note that the law is only applicable in Ontario and may have changed since the publication of this article. This blog is provided for your reference only and is not a substitute for the law. This article is not legal advice and should not be regarded as such.

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Structured Spousal Support Settlement: Tax-Deductible or Not?

In Canada periodic spousal support paid to a former spouse is deductible from the payor’s income and taxable on the recipient. This is because it’s treated as expenditure for the payor and income for the recipient. Interestingly, a lump-sum support settlement is neither deductible from the payor nor taxable on the recipient because it’s treated as a transfer of capital.

The distinction between period payments and a lump-sum amount becomes blurred when the settlement becomes structured, i.e., payable in installments either with or without a down payment.

The Federal Court of Appeal provided some guidance in McKimmon v. M.N.R.* In McKimmon the taxpayer disputed the deductibility of certain spousal support payments made pursuant of a court order to his former wife. In particular, the taxpayer was obliged to pay $115,000 in 5 annual payments.

The court recognized that in determining whether sums of money received are of income or capital nature, there are no hard and fast rules. Rather, the court is required to examine all the circumstances to judge which characterization is proper.

In particular, the court proposed 8 principles as follows:

  1. The length of the payment periods. Amounts paid weekly or monthly are often treated as income, but payments made at longer intervals are more capital in nature.
  2. The number of payments in relation to the income and living standards of both the payor and the recipient. Where a payment represents a very substantial portion of a taxpayer’s income or even exceeds it, it’s difficult to view it as an allowance. Where a payment is no greater than what might be expected from an allowance, it is more likely be treated as such.
  3. Whether the payments are interest-bearing. It’s more common to associate an obligation to pay interest with a lump-sum payment than with periodic support.
  4. Whether prepayment is allowed at the option of the payor and/or accelerated in the event of default at the option of the recipient. Prepayment and acceleration provisions are commonly associated with obligations to pay capital sums and would not normally be associated with an ongoing support obligation.
  5. Whether the payments allow a significant degree of capital accumulation by the recipient. Common experience indicates that support payments that do not allow rapid accumulation of a significant pool of capital over a short period are likely to be treated as income.
  6. Whether the payments are stipulated to continue for an indefinite period or for a fixed term. Obligation of an indefinite nature is commonly treated as income.
  7. Whether the agreed payments can be assigned and whether the obligation survives the lifetime of either the payor or the recipient. A capital payment is typically assignable, surviving the life of the payor, and thus binds the estate at common law.^
  8. Whether the payments purport to release the payor from any further obligation to pay support. Where there is such a release, it’s easier to view the payment as being capital in nature.

*[1989] F.C.J. No. 1137 (F.C.A.)

^This rule regarding the ability to survive and assign has been modified by statute. Therefore it may no longer be applicable.

Please note that law may have been changed since the publication of this article. This blog is provided for your reference only and is not a substitute of the law. This article is not legal advice and should not be regarded as such.

Recognition of Foreign Divorce at Common Law

The recognition of a foreign divorce in Canada is governed by the Divorce Act.* In particular, a foreign divorce is only recognized as valid in Canada if the following statutory criteria are met:

  1. A divorce granted, on or after the coming into force of this Act, pursuant to a law of a country or subdivision of a country other than Canada by a tribunal or other authority having jurisdiction to do so shall be recognized for all purposes of determining the marital status in Canada of any person, if either former spouse was ordinarily resident in that country or subdivision for at least one year immediately preceding the commencement of proceedings for the divorce.
  2. A divorce granted, after July 1, 1968, pursuant to a law of a country or subdivision of a country other than Canada by a tribunal or other authority having jurisdiction to do so, on the basis of the domicile of the wife in that country or subdivision determined as if she were unmarried and, if she was a minor, as if she had attained the age of majority, shall be recognized for all purposes of determining the marital status in Canada of any person.

If the facts of the case don’t fit squarely under the provisions above, the parties may nonetheless seek recognition of the divorce at common law pursuant to s. 22(3) of the Divorce Act.

According to the decision of the British House of Lords in Indyka v. Indyka,+ which has been followed on several occasions, there are several grounds at common law upon which a foreign divorce may be recognized as valid. In particular, a foreign divorce may be recognized if either of the parties has a real and substantial connection to the jurisdiction that granted the divorce.

In Martinez v. Basil,^ a recent decision rendered by Justice Spies of the Ontario Superior Court of Justice, the learned judge indeed followed Indyka and stated that “it should only be in very rare circumstances that a foreign divorce, properly obtained pursuant to the laws of that jurisdiction, should not be recognized as being valid.”

If you require assistance regarding the validity of your foreign divorce, please call our office at 416-433-5531.

*R.S.C. 1985, c. 3 (2nd suppl.)

+(1967), [1969] 1 A.C. 33 (U.K. H..L.)

^(2010), 86 F.L.R. (6th) 210

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