Determining the Child Support Obligations of a Step Parent A spouse who stands in the place of a parent to a child can be obligated to pay child support, according to s. 5 of the Ontario Child Support Guidelines (“Guidelines”). The amount a step-parent will be ordered to pay is at the discretion of courts. When exercising this discretion, the court will look to the other provisions of the Guidelines, and to any other parent’s obligation to support the child (including biological parents). The approach courts take to calculate the amount of child support owing by a step-parent can vary. They range from apportionment to percentages and top-ups. However, the case law has carved out several principles that courts generally follow in their determination of a step-parents’ child support obligations. These principles are described below. Primary Child Support Obligation of the Biological Parent The Ontario Court of Appeal in Wright v. Zaver, 59 OR (3d) 26 [2002] interpreted s. 3 of the Guidelines as placing a primary obligation on the biological parent to pay child support in the amount that is determined by the Guidelines (sometimes referred to as the table amount). The Guidelines determine the quantum of child support based on the income of the payor parent and the number of children to whom support is owed. For the biological parent, this amount is automatically calculated, and cannot ordinarily be negotiated lower due to the presence of a step-parent. On the other hand, the step-parent can argue for a reduction in the quantum of child support payable if a court finds that it is appropriate to do so. The full Guideline amount may be the starting point for the court’s determination, but the step-parent can rebut the supposition that they owe the full table Guideline amount with compelling evidence that the Guideline amount would be inappropriate (Kobe v Kobe, [2002] OTC 186 [ONSC]). Regardless of the approach taken, the Guideline table amount will likely still serve as an upper limit for the step-parent’s support obligation. Step-parent’s Child Support Obligation is in Addition to Biological Parent’s Obligation If a court orders a step-parent to pay child support in accordance with the Guidelines, the biological parent’s support obligations are still not displaced. It is at the discretion of the court to determine what additional amount would be appropriate for the step-parent to pay. In most cases, it is unlikely that courts will find it appropriate to award a “windfall” to the support recipient resulting from collecting the full amount of child support twice: from the biological parent and from the step-parent. It is also unlikely that the court will grant this accumulated child support obligation from all parents when this would lead to a standard of living beyond one the child has previously enjoyed. However, if the child support payable by the biological parent is not enough to provide the child with the standard of living enjoyed previous to their parent’s separation, the step-parent may be obliged to top up the amount paid by the biological parent or pay the full Guideline amount, where the biological parent is unable to pay at all, or cannot be located. Children First Objective It is important to keep the objectives found in section 1 of the Guidelines in mind. These include that a “fair standard of support” and “reduction of conflict between parents” are relevant to the determination of appropriate support by a step-parent. The legislation and courts set out to provide a degree of certainty for parents sorting out their affairs after a separation. However, primacy is given to the standard of living the child enjoyed when the parents were still living together, and the best interests of the child, in accordance with the “children first” perspective of the Guidelines. If you have more questions about your family law matter contact Amy Jephson at 289-638-3172 or amy.jephson@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Justin DominicBlog, Family LawSeptember 25, 2020September 29, 2020
Back To School Amid Covid-19? The Ontario Superior Court of Justice (ONSC) has recently, and in numerous instances, been called upon to decide the question as to whether children should be sent back to school amid the current Covid-19 pandemic. According to the Guide to reopening Ontario’s schools issued by the Ministry of Education, parents can choose between online schooling from home or in-person schooling for the next semester. However, when separated or divorced parents cannot agree on this, the courts are, often perhaps unnecessarily, asked to get involved. This Blog reports on four Endorsements released on this issue by the ONSC over the course of the last few weeks and comments on alternative strategies to resolve the back to school question in the best interest of the child and everyone involved. Home-schooling may only be ordered when a medical condition or the safety of a child’s inner circle requires it The two cases Chase v Chase and Wilson v Wilson come to different outcomes that can nevertheless be reconciled. In Chase, the ONSC ordered for the child to be registered for in-person schooling, whereas the court came to the opposite conclusion in Wilson. Factually, the two cases differ, because only in Wilson did the court find that there were underlying health concerns, namely asthma, that would put one of the Wilson children at disproportionate risk if they had to return to school in September. This important health factor is was weighted by the court and balanced against the child’s mental health, psychological, academic and social interests, as well as many parents’ need for childcare which usually speak in favour of attending school in-person. The ONSC’s approach to expert evidence on the safety of in-person schooling Notably, the ONSC in Chase pays deference to the government’s decision to reopen schools. The court holds that the government is better placed to decide upon the reopening than the courts are because the government is benefitting from extensive expert evidence and is conducting consultations with relevant stakeholders on this matter. As a consequence, the ONSC rejects to consider a recently released report by the Toronto Hospital for Sick Children that the parties, in this case, made reference to in the proceeding. Stating that there is evidence on both sides, the ONSC declines to be the adjudicator between differing expert opinions, leaving it to the government to evaluate the conflicting evidence. The court does, however, look to the particular facts of each case to determine whether there are individual risk factors that weigh in favour of making an exception from the general in-person attendance requirement set out in the respective provincial Education Act, i.e. in s. 21(1) of the Ontario Education Act, R.S.O. 1990, c. E.2 In its finding in Chase, the ONSC draws upon non-binding, yet persuasive arguments from two Quebec Superior Court decisions delivered on May 7, 2020: Droit de la famille – 20641, 2020 QCCS 1462 (CanLII) and Droit de la famille – 20682, 2020 QCCS 1547 (CanLII). The two decisions, too, come to different conclusions due to the fact that in only one of the two cases a family member suffers from a medical condition that puts the family at disproportionate risk, outweighing the child’s interest to return back to school. The approach by the ONSC taken in Chase following the Quebec decisions falls neatly in line with the principled division of powers between the executive branch and the judiciary. It is the responsibility of the government to establish general policies with broad application, whereas the judiciary has to focus on individual cases in order to ensure that the government’s policies in their application to actual people do not lead to unintended hardships. In Wilson, however, the ONSC takes a slightly different approach. Here, the court in fact considers the report of the Toronto Hospital for Sick Children, which recommends a return to in-person schooling. The court determines that it is unclear whether the in-person plan actually conforms with expert reports and that it appears to lack some of the recommended safeguards. The court concludes that it did not have any evidence to the contrary that returning to school was safe. To some degree, the ONSC in this case did evaluate the evidence and made a finding on its reliability in order to justify a decision that diverges from the recommendation of the Sick Children report. For this reason, it remains somewhat unclear whether reliance on expert reports will help a parent’s case to achieve the desired order. Conclusion from current case law In a third decision, Manabat v. Smith decided on September 2nd and involving one of DSF’s family lawyers, Katelyn Bell, the court affirmed a test previously set out in another very recent case, Zinati v. Spence, 2020 ONSC 5231. This test summarizes the factors determined in the (sparse) case law on the question of whether it is in the child’s best interest to be schooled at home or in person during the current pandemic: The risk of exposure to COVID-19 that the child will face if she or he is in school or not in school; Whether the child or a member of their family is at increased risk from COVID- 19 as a result of health conditions or other risk factors; The risk a child faces to their mental health, social development, academic development or psychological well being from learning online; Any proposed or planned measure to alleviate any of the risks noted above; The child’s wishes if they can be reasonably ascertained; and The ability of the parent or parents with whom the child will be residing during school days to support online learning, including competing demands of the parent’s work or caregiving responsibilities or other demands. Overall, the outcome of every case will really depend on the children and the family involved. Alternatives to an Application to Court A further comment made by the ONSC in Wilson deserves mentioning. The Honorable Justice Himel points out that bringing the issue of whether the child should return to school or not before a judge is not the most recommendable course of action. For one, the decision is likely going to be made on the written evidentiary record due to a lack of time and resources and a large number of emergency applications that need to be decided upon before school starts. This means that a judge who has never met the parties, let alone the child, will decide on what is in the best interest of the child and the family. A course of action that would empower the parties to make the decision and yet provide the benefit of professional advice and opinion is court-based mediation. This service is readily available and often free or subsidized. It has the further benefit of mitigating the tremendous burden on the family justice system that has arisen from the Covid-19 pandemic. If you have more questions about your education law matter for both private or public schools contact John Schuman at 416-446-5080 and john.schuman@devrylaw.ca or Katelyn Bell at 416-446-5837 and katelyn.bell@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Justin DominicBlog, COVID-19, Education Law, Family LawSeptember 17, 2020September 29, 2020
Separation Calculation of a Defined Benefit Plan A pension can be a great way to plan for retirement. However, they can cause difficulties in separation and divorce. Deciding how much a pension is worth, how it should be divided and what discounts may apply can all be complex issues. Before a spouse retires and starts collecting a pension, the pension is “property” (like a house or RRPS or other assets) that is divided as part of property equalization pursuant to Part 1 of Ontario’s Family Law Act. (Note common-law couples do not equalize their assets on separation and so they have no claims to each other’s pensions under the Family Law Act). Pensions are very valuable assets. Their value is not what the spouse paid into the pension, but the total present value of what the spouse will receive on retirement from the part pension that accrued during the marriage. A spouse will be getting payments of just $2000 per month could have a pension worth half a million dollars! So, prior to changes to the Family Law Act in 2009, where one spouse earned his or her pension during the marriage, it was common for that spouse to get the pension and the other to get the house, which could make life financially difficult for the spouse with the pension. Since 2009, the most common way that people have dealt with pensions is to divide them “at source.” That means the portion of the pension that has to be transferred to the other spouse’s pension or LIRA (locked-in retirement account). That decreased the pension payments for one spouse while increasing the money paid to the other spouse on retirement. However, no payments are immediately necessary to deal with the pensions when equalizing property on divorce. To divide a pension at source after separation, spouses with a provincially regulated pension go to their HR departments, fill out some paperwork, pay a fee (usually $600 per pension) and the pension board calculates how much should be transferred to “equalize” the part of the pension or pensions that accrued during the marriage. Federally regulated pensions can also be divided at source, but the process is a little different. This takes the pensions out of the equalization calculation and all the other property is divided as if there was no pension. That avoids one spouse getting the pension and the other spouse getting everything else. But sometimes the best long-term financial decision is not to divide the pension at source. Financial advisors helping a separating spouse may advise that the spouse with the pension will be better off in the end if they keep the full pension and get all the full pension payments on retirement. So, one or both spouses may prefer that the pension be included in the equalization calculation and be reflected in the cash that changes hands immediately. If the parties cannot agree on which way to divide the pension, sections 10.1(4) and (5) of the Family Law Act have the effect of making division at the source the preferred way to divide a pension and only allow a judge to order the cash payment in limited circumstances. Where spouses are going to include the pension in the equalization calculation so as to leave the pension intact, the spouses use the calculations that they got back from the pension board after filing the forms through HR. The pension board gives the value of pension accrued during the marriage, so that is the number to plug into the equalization calculation for the value of the pension. However, that calculation contemplates that the pension will be transferred to another pension or to a LIRA, which means the person who receives the transfer will pay the tax when receiving the payments after retirement. When the pension is not being divided at source, the spouse who is keeping the pension will have to pay all the taxes on the pension benefit payments. So, the tax debt associated with the pension also has to be included in the property equalization calculations. Essentially that means that the total value of the pension is reduced by the liability. So instead of sharing 100% of the calculated total value of the pension in equalization calculations, only 85%, 75%, 60% or some other amount is shared between the spouses. The reduction takes into account the taxes that have to be paid on the pension benefits payments. The amount of tax that a person will ultimately have to pay on pension benefit payments is influenced by several factors, such as: the size of the pension benefits payments what other income the person will be declaring and what impact that has on the marginal tax rate applied to the pension earnings what credits or deductions can be applied to reduce the tax on the pension benefit payments when the pension benefit payments will start what other assets the person may be using during retirement There is no way to know what the tax liability will be without consulting an accountant or other tax professional. Even then, the liability can change with other changes in a person’s life. For that reason, the value of the liability is often “discounted” to take into account uncertainty and the fact that liability will not be incurred for some time. Rather than hire an accountant to do more precise calculations, many people just want to use an educated guess as to what the tax liability will be. For most pensions, the benefit payments will pay the recipient between $44,000 and $50,000 per year, which puts there tax rate at a little over 24%. For income over $48,353 but less than $78,783, the marginal tax rate is just under 30%. So many people just assume that the tax liability will be around 25% of the pension payments. The 25% reduction is not set out in the law. It is an assumption. The factors above could make it too high or too low. For a person with a modest pension and no other retirement income, or who is a long way from retirement, 25% will too much of a reduction. For people with good pensions, or who have other money for retirement, 25% may be too low. Getting the number right is something that you should really speak to a lawyer about to make sure the pension is shared at the correct value. Since pensions can be worth a lot of money, the discount can also be worth a lot of money. Speaking to a lawyer to get the numbers right can save you money. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Justin DominicBlog, Family LawJuly 6, 2020September 29, 2020
Custody, Access and Covid19 In the recently decided case of Ribeiro vs Wright, the Ontario Superior Court of Justice affirmed that parties with a pre-existing separation agreement or court order in place with respect to access rights cannot unilaterally change their access schedule on the basis of COVID-19. The court stated that parties should not attempt to take advantage of the current challenges in relation to COVID-19 and seek to unilaterally not put in place different schedules for access. Parents who share custody of their children should continue to respect custody agreements during Covid-19 and continue their split parenting arrangements with their former spouse unless there is specific evidence that the child’s health is at risk. CHALLENGES AFFECTING PARENTS & ACCESS DURING COVID-19 There are some challenges in relation to access rights and issues that affect family law matters in relation to COVID-19 – including but not limited to the following: Parents who are unable to work from home and have to interact with the general public on a regular basis Example: Individuals who are considered to be essential workers (Nurses, Grocery Clerks, etc.) Parents returning home to Canada from abroad who must self isolate for a period of 14-days Parents who fail to comply with social/physical distancing recommendations from public health or parents who fail to take reasonable health precautions in relation to the safety of their children Parents who rely on their own parents for child care EMERGENCY ORDER IN ONTARIO COURTS & FAMILY LAW As Ontario courts are still closed and operating in a virtual capacity due to the emergency order in place currently, courts are continuing to only hear urgent matters on a case-by-case basis. If you have additional questions pertaining to family law matters, access or additional COVID-19 related issues related to family law, feel free to contact the lawyers at Devry Smith Frank LLP to discuss your rights and options. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Justin DominicBlog, COVID-19, Family LawJune 30, 2020September 29, 2020
3 important things to keep in mind when the Children’s Aid Society comes knocking The Children’s Aid Society is knocking at your door. Now. You might have been warned of their visit, but they do not need to give you notice. The visit could be the result of someone giving Children’s Aid information about your parenting which raises concerns about the safety or well-being of your children. You may never know what made them come knocking. You must answer the door. You must let them in. This intrusion can be alarming and upsetting. But what do you do next? How can you act to best keep your family together? CONTACT A FAMILY LAWYER OR A CHILD PROTECTION LAWYER The stakes are high. Children’s Aid could take your children away as a result of this visit. If you have been given advance notice, contact a family lawyer or a child protection lawyer as early as possible. If you did not receive notice, contact a family lawyer or a child protection lawyer as soon as practicable. The circumstances of each situation are unique; tailored advice to your situation may be critical in preventing the seizure of your children, or in expediting their return if they are removed. Speak to a lawyer before signing any kind of “agreement” with Children’s Aid. It is possible that the Society may request “authorizations” from you to speak with other people as part of their investigation—e.g. teachers, doctors, et cetera—and your consent will simply speed up this process (they will be able to eventually speak with them regardless of whether you consent or not). Generally speaking, if you are uncertain what you are being asked to sign, speak with a family lawyer or a child protection lawyer first. If any criminal charges such as assault or sexual assault are alleged, do not discuss these matters with Children’s Aid until you have spoken with a lawyer. Children’s Aid works with the police and will report everything you say to them and they may be used against you. That being said… BE WELCOMING, FRIENDLY, AND CO-OPERATIVE Children’s Aid is not the police. Work together with them and show that you share their concern for the safety and well-being of your children. Be a “team player,” knowledgeable that the goal is to ensure that all that happens is in the best interest of the children. Do not refuse to meet with Children’s Aid or otherwise behave in a manner that raises their suspicion that you have something to hide. If you had time to prepare for the visit, ensure your home makes a good first impression. This means ensuring the home covers the basics: safe for children with enough food but also demonstrates that this is a happy and loving home. Children’s Aid will want to inspect everywhere—e.g. see the children’s rooms—so be welcoming and offer them a complete tour. During the COVID-19 pandemic, there may be a heightened emphasis on health and safety. Show Children’s Aid that you and your family are taking appropriate measures to prevent the spread of the virus. Do the children know to wash their hands before eating? Do they practice social distancing from their friends or wear appropriate face coverings when in public places? ALLOW CHILDREN’S AID TO SPEAK WITH YOUR CHILDREN ALONE Children’s Aid has the right to interview your children without your consent. Facilitate this and make it easy for them. As a parent, do not create the impression that you are attempting to interfere or hide something. While children have the right to have a lawyer present while speaking with Children’s Aid, this is the right of the child—not the parent. It must be the child who arranges to have a lawyer present if this is their desire. Do not assume that Children’s Aid has completed its investigation until you are notified that the file is closed. Ask for disclosure if the investigation is ongoing. After the home visit, you may be watched from a distance. Knowing how to act and respond to an investigation from Children’s Aid may improve the chances that your family remains together. If you are uncertain, contact a family lawyer or a child protection lawyer as soon as possible. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Justin DominicBlog, Family LawJune 29, 2020September 29, 2020
“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”
How to Deal with an Emergency Parenting Motion during COVID-19 This blog is co-written by our former articling student, Janet Son. Co-parenting with your ex-partner is difficult even in normal times. Now trying to co-parent amidst a pandemic with ever-changing safety guidelines is even more challenging. The courts are closed until at least July 6, 2020, and only hearing urgent matters. Despite this, there has been a flood of COVID-19 era decisions on parenting arrangements. Ribeiro v. Wright by Justice Pazaratz set out the principles on how parents should be approaching access orders during COVID-19: The presumption is that all existing parenting orders should comply with subject to modifications that may be necessary to ensure that COVID-19 precautions are adhered to (para 7) A blanket policy that children should never leave their primary residence to visit their other parent is inconsistent with a comprehensive analysis of the best interests of the child (para 10) A custodial or access parent may need to forgo their parenting time temporarily if they are subject to specific personal restrictions such as self-isolation for 14 days due to travel, sickness or exposure to illness (para 12) A parent’s personal risk factors such as employment as an essential worker may require controls and precautions before direct contact with their child can take place (para 13) Finally, reckless behaviour such as failing to comply with social distancing measures may raise concerns about parental judgment in which parent-child contact may be reconsidered (para 14) If you are considering bringing an emergency parenting motion or you have been served with one, Justice Pazaratz outlined a number of requirements (para 21): The parent bringing the motion must bring specific evidence or examples of behaviour or plans by the other parent that are inconsistent with COVID-19 safety protocols The parent responding must provide specific and absolute reassurances that COVID-19 safety measures are being followed Both parents must bring specific and realistic time-sharing proposals that are child-centred Judges will take judicial notice that many public facilities are closed and so parents should take this opportunity to spend time with their children at home Here are some cases where judges applied or distinguished Ribeiro v. Wright: WHEN YOUR CHILD IS IMMUNOCOMPROMISED In Trudeau v. Auger, an emergency motion was brought by the mother to temporarily suspend in-person access with the father as the child was immunocompromised. In this case, Justice Kwolek ordered the father to take the following precautions: disinfect frequently touched items such as doorknobs, maintain social distancing, stay at home except for necessary trips to the grocery store or pharmacy, allow no one else to enter the home, do not take the child to any public locations, wear a mask and stand at least 2 meters away when together (para 52). Justice Kwolek also outlined circumstances that may justify a suspension of access in the future: Evidence of a parent’s disregard for the safety of their child Specific medical evidence regarding the child that access would place them at significant risk of COVID-19 Specific evidence that shows increased risk due to travelling between households in your particular community If a parent becomes ill, access will be temporarily suspended If a more restrictive order is made by the government to restrict movement even further, existing parenting schedules should be re-visited (para 59) WHEN SOMEONE IN YOUR HOUSEHOLD IS A FRONTLINE WORKER In Blaskavitch v. Smith, the mother brought an emergency motion as the father’s partner is a personal support worker at a long-term care facility (para 18). The father set out in great detail the protocols in place at the facility his partner works at and the precautions they are taking within their home. They also confirmed that there have been no cases of COVID-19 at the facility (para 43). As a result, Justice Trousdale found that the father and his partner were taking all reasonable precautions and there was no evidence that his partner was not complying with work protocols. There was no cause for a temporary change in the residence of the child during COVID-19 (para 44). Though the motion was dismissed on a without prejudice basis, Justice Trousdale expected each parent to inform the other immediately if any person in their household tests positive or presents symptoms of COVID-19 so that temporary changes to access can be made. Key Takeaway: Avoid the temptation to use this situation as an opportunity to change the parenting status quo, unless you can provide concrete evidence specific to your child that they will be in danger from the existing parenting order. There are only narrow circumstances in which the court will vary an order in order to maintain as much consistency and normalcy for your children during this very distressing time. If you have been served with a motion, rally as much evidence to show that you are taking all precautions at your workplace and at home to protect your children from COVID-19. To conclude, court resources are currently scarce and the judiciary is urging parents to cooperate as much as possible and avoid litigation except only for the most serious cases. If you have more questions about bringing or defending against an emergency parenting motion during COVID-19 contact Andreina Minicozzi at 289-638-3179 or andreina.minicozzi@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawJune 1, 2020September 29, 2020
COVID-19 – Family Law Property Scam Even during this pandemic, there are some separated or separating spouses who are trying to take advantage of the situation, and the operation of Part 1 of Ontario’s Family Law Act, to try to get ALL of their ex’s wealth. It is important for married spouses to understand how that can happen, so they can plan accordingly. Up until COVID19 hit, when it came to property matters, separated spouses were more concerned about what happens when assets increase significantly after separation and when those separated spouses share in that increase and when they don’t. Unfortunately, due to the COVID19, the economy is facing the opposite situation, with people’s RRSPs and other investment savings plummeting in value. Even with the Courts almost completely closed, many spouses are making legal claims to try to get ALL of what their ex has left. There may be some situations where that is the proper result, but in most it is not. This type of action is not unique to COVID19. It is also a concern whenever the economy takes a downturn. It was also a problem in 2008 and 2009. To understand how his scam works, it is necessary to understand how property division works after a marriage occurs. There is no property division for common law couples under Ontario’s Family Law Act. To briefly summarize and simplify how property division works (follow the links for a complete explanation), with some exceptions, married couples share the increase in their net worths from their date of marriage to the day they separate. That makes those two dates very important. With the possible exception of matrimonial homes, married spouses start counting how much net worth they have, and really how much what they have has increased in value from the date of marriage. For the purposes of property division under Ontario’s Family Law Act, they stop considering their increase in net worth on the date they separate. But, in these trouble times, that same law means that they stop counting any decrease in network on the date of separation too. The value of what a spouse owns before the date of marriage and after the date of separation don’t matter. All that matters is what the married spouses had on those two dates. That fact is what makes this scam work. Ontario Family Law recognizes that spouses do not have to physically separate, meaning one spouse walking out of the home, for the spouse to be separated. The law recognizes that spouses can live “separate and apart under the same roof.” The law says that when the spouses move apart is not necessarily the important date for property division, but rather the important date is when they stop living together as husband and wife, even if they continue to reside under the same roof. That gives at least one spouse a big incentive to say the marriage was over, and the parties stopped living as husband and wife BEFORE the COVID19 crisis hit. It gives an incentive to say the marriage ended before the value of their spouse’s assets plummeted – and to say that they were just sharing the same space as co-tenants, not as spouses anymore. To illustrate the advantage this gives, consider a situation where one spouse had $500,000 in investments, but no other significant assets on January 1, 2020 and the other spouse had very little. By the end of March, those investments have fallen to $250,000 in value and the stress of being isolated together in the home means that one spouse walks out. But, that spouse with no assets does not want to share in $250,000. That spouse wants to share in $500,000. So, that spouse says they separated – stopped living like spouses – on January 1 when the investments were worth $500,000. Under Ontario Ontario’s property equalization scheme, that means that spouse would be owed an equalization payment of half the assets on January 1 – $250,000 – or ALL of what his or her ex has left. That is an extreme case. Most won’t have results that bad. But, it illustrates the point. Of course, the opposite it also true. If the spouses had a big fight on New Years, never got along afterward, and stopped living like spouses then, the spouse with the investments has a BIG INCENTIVE to try to reconcile the relationship, even briefly, while the investment value has cratered. Because, if the spouses rekindle their relationship, even for a couple of days or nights, the date of separation becomes that last date, and they share in the LOW value for the assets. That could be a big help, particularly if everyone’s investments rebound after the crisis. The law is not so unreasonable as to allow one spouse to pick the date of separation that benefits him or her the most. If the parties cannot agree, it is a judge or family arbitrator that decides. With so much money potentially at stake, there is clear incentive for one spouse to lie or stretch the truth. Consequently, judges try to look at the facts objectively and ask themselves: “When would an objective person, who knew the couple, say the relationship was over?” In determining that, it is not just when the couple stopped having sex, or even when one spouse started having an affair (some relationships recover from that). The judge (or arbitrator) looks at factors such as: when the spouses stopped eating together, when they stopped going out or vacationing together, when they stopped showing signs of affection for each other, when they stopped referring to each other as spouses, when they took the wedding rings off, when they separated their finances (opened separate accounts or stopped paying each other’s bills), many other possible factors depending on the family’s situation. Determining when spouses separated in these difficult circumstances can be open to argument. Also, the separation date can be very dependent on the specific facts of the individual case. Since there can be a lot of money at stake, it is important for spouses in the midst of a separation to get in touch with a lawyer who can provide advice based on the specifics of the individual situation. The specific circumstances can make a big difference on what a separating spouse should do to protect himself or herself. It can be important even for someone to speak to a lawyer before he or she walks out to determine when might be the best time to do that, or even if that matters anymore. In these situations, the lawyer’s advice can save a spouse thousands, even hundreds of thousands, of dollars – especially when it helps avoid a scam. For more information about family law related questions and advice, please contact John Schuman at john.schuman@devrylaw.ca or 416-446-5080. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawMay 5, 2020September 30, 2020
Property Division During COVID-19 In my previous post, I touched on the issue of changing support obligations in light of the pandemic. More and more, separating spouses are wondering how property issues will be dealt with in light of the pandemic, particularly as assets are dropping in value after separation. In Ontario, we follow an “equalization” regime under the Family Law Act. Broadly put, this means that spouses share in the increase of their net worth for the duration of their marriage. Generally, the spouse who had the greater increase of net worth during the marriage would pay the other spouse one half of the difference. For example, if Husband’s net worth grew by $100,000 during the marriage, while Wife’s net worth grew by $50,000, then Husband would owe Wife and equalization payment of $25,000 (which is half the difference between $100,000 and $50,000). Equalization is explained more fully here. For now, it is important to understand that two dates become very important: the date of marriage, and the date of separation. Both spouses’ net worth as of these dates become crystallized, which determines the figures used to calculate the equalization payment owing. Generally, fluctuations in the value of assets following separation are not considered, which could lead to unfair results. Some examples: Husband is an employee at a publicly-traded company but receives company shares as part of his compensation package. At the date of separation (pre-pandemic), he solely-owned shares worth $1,000,000. Following the pandemic, the value of the shares dropped by 10%, which may continue to plummet. This provides for a $100,000 reduction of the husband’s net worth post-separation. However, following a true “equalization” would provide that any decrease in value post-separation is not shared between the parties. As such, Husband would be accountable for the entirety of his equalization payment, while still absorbing the decrease of his net worth post-separation. Wife solely owns a retail store in downtown Toronto. At the date of separation (pre-pandemic), it was worth $500,000. In light of the pandemic, she is unable to pay her overhead costs and must close her doors. As a result, she is stuck with a business that she will struggle to sell. Again, a true equalization regime would have no regard for any post-separation fluctuations in value, leaving Wife accountable for an equalization payment that would otherwise be owed to her Husband. In either scenario above, the spouse owning the assets could look to section 5(6) of Ontario’s Family Law Act to request an “unequal division of net family properties” to avoid absorbing the entirety of the loss. Even then, the test under section 5(6) is stringent. The moving party would need to demonstrate that following a true equalization regime would “shock the conscience of the court”. For more information about property division or any other family law related issue, please contact the author of this blog post, Mason Morningstar at mason.morningstar@devrylaw.caor 416-446-3336. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawMay 5, 2020September 30, 2020
Changing Child Support or Spousal Support Payments During COVID-19 Child and spousal support obligations take effect either pursuant to a court order or a separation agreement (to be sure, many people make informal arrangements amongst themselves, though this is rarely advisable). Separation agreements typically contain review clauses which outline the process for changing a payor’s child or spousal support obligations, along with what kind of change in circumstances will trigger the review. Parties who have signed a separation agreement addressing support should begin there when seeking to vary a support obligation. In Ontario, support orders are made either pursuant to the Divorce Act or the Family Law Act, depending on the court in which the proceedings took place. Sections 17(4) and 17(4.1) the Divorce Act and sections 37(2) and 37(2.1) of the Family Law Act outline the tests for varying child support and spousal support slightly differently. In practice, however, we are generally concerned with whether a “material change in circumstances” has taken place since the order was made. A “material change” is interpreted as a change, which if known at the time of the order, would have resulted in a different order being made. The loss of employment (or even a reduction of income) beyond the payor’s control would generally justify a variation of child and/or spousal support in ordinary times. To date, there is no reason to believe that the loss of employment or income resulting from the pandemic would be any different. That said, support payors should be careful in navigating a reduction of support. At all times, they should make good faith efforts to be transparent and continue paying what is affordable to them. For example, if a support payor underwent a 40% loss of income as a result of COVID-19, a good faith effort would be to negotiate a roughly 40% reduction to their current support obligations. Practically speaking, however, this may not necessarily be feasible. The support payor’s remaining monthly expenses (such as rent/mortgage, utilities, car insurance, debt payments, etc.) have not automatically dropped by 40% as well. It will be important for the support payor to alleviate their losses as much as possible, for example, by applying for emergency relief from the government where appropriate, deferring debt payments and insurance premiums where possible and looking for other employment in the meantime. When the courts resume regular function, many of these support payors will need to begin court proceedings to formally vary their support obligations or any arrears that accrue over the ensuing months. A payor’s good (or bad) faith efforts to continue paying support will likely be a factor considered by the court when addressing the issue. For more information about child support or any other family law related issue, please contact the author of this blog post, Mason Morningstar at mason.morningstar@devrylaw.caor 416-446-3336. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, COVID-19, Family LawMay 4, 2020September 30, 2020
What to Expect With Your Family Law Matter After COVID-19 Andreina Minicozzi and Devry Smith Frank LLP are committed to following the guidelines and recommendations outlined by the Public Health Agency of Canada to ensure the safety and wellbeing of employees, colleagues, clients, friends, and families. During these unprecedented times, we understand that your family law matter may be in flux. It is important to recognize what the landscape of family law may look like in Ontario after COVID-19. This post looks at such a future. With limited relief currently available to families through the courts, these unprecedented times may change the future of family law forever. Alternative dispute resolution, which continues to be refined, has surged, and on the other hand, the courts are now forced to offer a more streamlined and efficient process. Overall, this may bode well for the family law system holistically. Alternative Dispute Resolution Alternative dispute resolution such as mediation, arbitration and collaborative family law have become staples in the legal landscape and while the courts have scaled back on the issues which they can resolve, these alternative dispute options continue strongly and have the capability to adapt to an online platform much quicker. An online mediation could allow a couple to resolve their family law matter over a shared video conference platform such as Zoom. Arbitration allows parties to hire a private arbitrator to make a decision on their dispute. Arbitration can use video conferencing for oral arguments and cross-examination, and documents can be exchanged electronically in moments. Litigation can be lengthy and expensive, but with the health of alternative dispute resolution maintaining its position in the legal landscape amid such a crisis, you can expect many more family law matters to engage with the justice system through mediation, arbitration, and collaborative family law given their streamlined service and ability to adapt to changing landscapes. A Streamlined Court System Canadian courts are now also rapidly updating their procedure to accommodate litigants through remote access and virtual hearings. Even such processes like notarizing documents and signing affidavits have been adapted to accommodate the need to changes in this current landscape. We have also seen an advanced email filing system for many Ontario courts The longer social distancing is required, the more the courts will need to adapt, increasing the options for remote or virtual hearings and streamlining further processes. This is also stated with the understanding that there will be a predictable influx of new and ongoing family law matters that need to be addressed once the restrictions relating to COVID-19 are lifted. Even long after Canada has recovered from COVID-19, you can expect such streamlined processes in family law to remain as the new norm or at least a viable option for litigants; a welcomed culmination of a time where the entire world was forced to adapt for the better. What may result is a more modernized court process through technology and expediency, and one predicated on efficiency. Conclusion The future of family law may just mean a move away from the courts to other dispute resolution platforms, and a nuanced family court process that is more streamlined and efficient. Nevertheless, while understanding the future of family law is intricate, developing and dynamic, for many, the future is now. If you believe your family law matter requires urgent attention by the courts, please do not hesitate to contact Andreina Minicozzi at Devry Smith Frank LLP to have your rights assessed and protected. By G63tEGnX1EBlog, COVID-19, Family LawApril 29, 2020September 30, 2020
