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Archive for October, 2006

BC SPOUSAL SUPPORT AWARDS AND SPOUSAL SUPPORT ADVISORY GUIDELINES USURP JUDICIAL DISCRETION

Sunday, October 8th, 2006

It seems BC Courts have not recognized that spousal support guidelines are advisory only and not law and should not usurp the role of the court making an individual analysis as required by the Divorce Act.  While other courts across Canada have criticized the guidelines BC Courts accept them and in cases of short marriages have awarded awards grossly in excess of the guidelines ranges both in quantum and duration.

Contrast the two BC cases below with the two from Quebec and New Brunswick.  Whether BC cases will cause a net migration of high net worth individuals out of Bc remains to be seen but there is not doubt BC is the most generous spousal support award province in Canada.  The summaries below are taken from an article by the authors of the SSAG.

Toth v. Kun, [2006] B.C.J. No. 739, 2006 BCCA 173 (C.A.) (Hall J.A.)
Married 10 years, no children, husband 64, wife 41
Interim support $2,300/mo., varied to $2,400 in April 2003
Wife health problems, but will recover, poor English
Husband earned $70,000, but now retired, only $42,000
At trial: support varied to $1,500, indefinite
On appeal: too onerous, so time limited, step-down
$1,200/mo. to Sept. 2006, then $1,000/mo. to Sept. 2009, support paid 6 ¬? years
Range $525-$700, 5 to 10 years [within global range on restructuring]

Ahn v. Ahn, [2005] B.C.J. No. 2742, 2005 BCSC 1745 (S.C.)(Master Taylor)
Together 14 months, married 8 months, husband 57, wife 46
Husband earns $154,885, wife nothing
Wife left job in Washington State, earning $47,000 U.S., unable to work in Canada
Husband wanted executive assistant and wife
Interim spousal support of $3,500/mo. plus rent-free in house (husband pays $2,200/mo.)
Wife relies upon “compensatory exception” in Guidelines

G.V. v. C.G., [2006] J.Q. no. 5231 (Que. C.A.) (Forget J.C.A.)
Married 32 years, 3 children, one (18) now with husband, custodial payor
Wife 55, earning $50,000, husband earns $227,000
Child support $15,948, grossed-up to $33,000
Trial judge applied Advisory Guidelines: range $4,500 to $6,000; low end of range ordered, $4,500 indefinite
Trial judge erred by not engaging in a detailed individual analysis
Court states that [TRANSLATION] « the dossier as it is and the brief pleadings of counsel on this aspect do not permit us, in my opinion, to pronounce a judgment of principle upon the utilisation of the Advisory Guidelines. » Court refers to important criticisms of Advisory Guidelines found in judgments of Justices Julien and Gendreau [see cases below] and concerns about « recipes »and formulas being used to avoid the difficult individual analysis required.

S.C. v. J.C., [2006] N.B.J. No. 186, 2006 NBCA 46 (N.B.C.A.)(Larlee J.A.)
Married 25 years, two adult children, wife 42 (40 separation), husband 45, traditional marriage
Husband army officer, earns $100,000
Wife working in Kingston, Ont., Health Ministry, earns $46,764
Trial judge ordered $1,625/mo., using Advisory Guidelines, for 5 years
Appeal dismissed, Guidelines approved, help to bring consistency and predictability
Trial judge used low end of range, income issues raised by wife
Almost a presumption of indefinite support, review favoured here ordinarily over time limit
But deference to trial judge: wife young, no dependents, capable, steady employment
Wife quickly able to reintegrate into work force, 5 years a longer term

BC Retroactive Child Support Update

Wednesday, October 4th, 2006

The principles on Canadian and British Columbia retroactive child support have been recently established by the Supreme Court of Canada in the 2006 case of D.B.S. v. S.R.G. et al. which states that the Court should take a holistic view of the matter and decide each case on the basis of particular facts as follows:

            1.         The payor parent‚Äôs interest in certainty must be balanced with the need for fairness to the child and for flexibility.

            2.         Consideration shall be given to the recipient parent‚Äôs reason for delay in seeking child support.

            3.         The Courts look at the conduct of the payor parent.

            4.         Past and present circumstances of the child, including the child‚Äôs needs at the time the support should have been paid.

            5.         Whether a retroactive aware might entail hardship. 

Most importantly, the date of the retroactive aware should be to the date of effective notice by the recipient parent that child support should be paid or increased but to no more than three years in the past.  Effective notice does not require the recipient parent to take legal action; all that is required is that the topic be broached.  Once that has occurred, the payor parent can no longer assume that the status quo is fair.  However, where the payor parent has engaged in blameworthy conduct, the date when the circumstances change materially, will be the presumptive start date of the award.

British Columbia Family Law Property Division of trust Interests and Valuation Issues

Wednesday, October 4th, 2006

This BC Family Law property division paper supplements a BC Family Law paper entitled ‚ÄòValuation of Contingent and Discretionary Trusts‚Äô prepared by Lorne N. MacLean for Continuing Legal Education  in November 2004.

One of the problems with dividing a trust, is that the trust represents a complex package of rights, powers and interests which are not necessarily fixed at any point in time.  While assets acquired during the marriage as a shared enterprise often represent little cause for emotion and bitterness, dividing a trust set up by a third party will likely cause that third party to believe the court is making an unjustified division of wealth completely unconnected to the marriage.

Valuation issues with respect to trusts can include the following:

(more…)

BC Family Law and the BC Federal Spousal Support Advisory Guidelines BC Case Update

Wednesday, October 4th, 2006

Our BC Court of Appeal has applied the draft Spousal Support Advisory Guidelines in the last 5 BC family law and divorce decisions in Tedham, Yemchuk, Warkentin, Redpath and Stein.  The new test is that the SSAG must be used by the courts except in exceptional circumstances.  The Guidelines are complicated but a simple summary is:

• The formula for cases where no child support is involved suggests an annual payment of 1.5% to 2% of the difference between the spouses’ gross incomes for each year of marriage or cohabitation, up to a maximum of 50%. Spousal support is to be paid for a duration of six months to a year for each year of marriage, and is indefinite for marriages of 20 years or longer. Say you were married 10 years, your gross income is $300,000 and your ex-spouse’s is $60,000. To determine your minimum support payment, multiply your income difference ($240,000) by 1.5, then multiply again by 10 (number of years of marriage). The grand total: $36,000 per year. Given the duration of your marriage, you’d be expected to pay this amount for at least five years.

• With child support, the formula is based on the combined individual net disposable income (INDI) of both spouses. Add together your and your ex-spouse’s INDIs, then multiply by 40% to 46% of the combined INDI: That’s the amount of support likely to be awarded to the lower-income spouse.

In Redpath, the Court of Appeal provided the following analysis of how important the draft advisory guidelines are (see the portion highlighted in red):

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