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Posts Tagged ‘BC family asset division’

New BC Family Relations Act Reform 2010 BC Family Law White Paper-Lorne N. MacLean interviewed on CKNW AM 980 on the Proposed BC Family Law Act

Monday, July 19th, 2010

New BC Family Law changes- BC Family Relations Act Reform 2010 and the BC Family Law Act White Paper provides dramatic BC Family Law reforms to BC spousal support, BC family property division, BC common law property division, BC child custody-Lorne N. MacLean will be interviewed on the BC Family Relations Act Reform Law , tonight at 5:30PM on CKNW AM 980. Mr. MacLean will be talking about important new changes to the Family Relations Act. The new act will be called the Family Law Act and the deadline for written input/comment on the white paper will be October 8, 2010. Some of the proposed changes to Family Relations Act reflect issues that Mr. MacLean has addressed before the Supreme Court of Canada in Young v. Young [1993] 4 S.C.R. 3 and in the Leskun v. Leskun [2006] 1 S.C.R. 920 decision. Some of the proposed changes will address the property rights of married and common-law couples; guardianship of children and decision-making about children; the enforcement of access orders; mobility and relocation issues; spousal support; and, parenting coordination, arbitration and mediation. Below is the executive summary, for the report click here.

New Family Relations Act Reform 2010 Changes Coming


White Paper on Family Relations Act Reform 2010 EXECUTIVE SUMMARY

British Columbia’s Family Relations Act has not been comprehensively reviewed since its introduction in the late 1970s. Since 2006, the British Columbia Ministry of Attorney General has been researching and consulting on how best to modernize this important area of the law. The draft legislation discussed in this white paper reflects the results of its policy review.

The main features of the proposed new family statute are:

TOPIC RECOMMENDED POLICY
Overall Approach Promote co-operation to the extent possible. For example:
• Structure the law so that court is not the only implied starting point.
• Promote a broader range of non-court dispute resolution options.
• Adopt a conflict prevention approach to family law disputes.
• Increase the law’s ability to deal with family violence and safety issues.
• Use less adversarial terminology.
• Meet the overall goals of the Family Relations Act review.

Non-Court Dispute Resolution and Agreements

Promote non-court dispute resolution. For example:
• Require family justice professionals to provide early information to clients on dispute resolution options.
Enable parenting coordination by agreement or court order.
• Amend the Commercial Arbitration Act to address family arbitrations.
• Provide for regulation-making authority to define practice standards/qualifications for family dispute resolution practitioners, as and if required.

Encourage agreements by providing greater clarity regarding when and how an agreement may be set aside:
• Parenting agreements may be set aside if they are not in the best interests of the child.
• Child support agreements may be set aside if they fail to comply with the Federal Child Support Guidelines.
• All agreements may be set aside for lack of procedural fairness, such as significant failure to disclose or where one party has taken unfair advantage of the other.
• Property and support agreements can be set aside for non-procedural reasons in limited circumstances where it would be clearly unfair.

Legal Parentage
Include a comprehensive scheme to determine a child’s legal parents, including in situations where reproductive technology has been used.

Children’s Best Interests

Make children’s best interests the only consideration in parenting disputes and identify children’s safety as an overarching objective of the best interests of the child test.
Add further best interests’ factors, including the history of the child’s care, family violence, and consideration of civil or criminal proceedings relevant to the safety or well-being of the child.
Provide for consideration of a child’s views “unless it would be inappropriate” to encourage greater inclusion of children’s views.
Guardianship Enact reforms to the Act’s treatment of guardianship, including the following:
• Replace the terms “custody” and “access” with “guardianship” and “parenting time”.
• Define “guardianship” through a list of “parental responsibilities” that can be allocated to allow for more customized parenting arrangements.

Provide that parents retain responsibility for their children upon separation if they have lived together with the child after the child’s birth. (Note: this does not mean that the law presumes an automatic 50-50 split of parental responsibilities or parenting time.) If they have not, the parent with whom the child lives is the guardian.
• Consolidate guardianship of children into the new law by including testamentary and standby guardianship.

When Orders or Agreements for Time with a Child are not Respected

Include a new range of tools and remedies to address non-compliance with orders and agreements for time with a child:
• Remedies range from moderate to extraordinary remedies depending on the facts of the situation and history of non-compliance.
• Provide different remedies for failure to allow parenting time/contact and failure to exercise parenting time/contact.

Relocation

Introduce a relocation regime that aims to increase certainty and predictability of the law of relocation, the highlights of which are:
• Include a mandatory 60-day notice-of-move provision, to provide an opportunity for parties to try to resolve any disputes about the proposed move.
• List factors that must be considered (e.g. the reasons for the proposed move and whether the proposed move is likely to enhance the general quality of life of the child and the guardian planning the move) and factors that must not be considered (e.g. whether the guardian would be willing to move without the child in any event).
• Include presumptions to be applied where the proposed move is contested.

Children’s Property
Add provisions relating to children’s property that would:
• Enable a child’s guardian(s) to manage property below a certain monetary threshold without a court order.
• Provide court oversight of larger children’s trusts, including the appointment of private trustees.

Property Division

Enact major reforms to the law’s property division regime, that would:
• Extend it to common-law spouses who have lived together for two years in a marriage-like relationship or who are in marriage-like relationship of some permanence and have children together.
• Exclude certain types of property (e.g. pre-relationship property, gifts, and inheritances) from the pool of family property to be divided 50-50.
• Limit judicial discretion to reapportion family property or to divide excluded property to circumstances where it would be clearly unfair not to do so.
• Provide that debts are subject to equal division.
• Set as defaults: the date of separation as the triggering event and the date of the court order or agreement as the valuation date.
• Limit the ability of judges to set aside or change property division agreements.
• Enable interim orders, including for the distribution of property for the purposes of funding litigation or dispute resolution.
• Enact conflict of laws provisions to address property outside of British Columbia.

Pension Division

Enact most of the major and housekeeping recommendations made by the British Columbia Law Institute in its 2006 report on the division of pensions.
Extend the pension division scheme to unmarried spouses who meet the definition of spouse.
Support Minor changes to the child support provisions to ensure consistency with new Act’s language and
structure.

Minor changes to spousal support provisions:
• Align provincial spousal support factors and objectives more closely with the Divorce Act.
• Explicitly permit periodic reviews.
• Permit variation applications in light of the spousal support objectives and factors where there has been a change in circumstances, new evidence or a failure to make full and frank disclosure.
• Limit consideration of a spouse’s alleged misconduct to that which “arbitrarily or unreasonably” affects the need for support or the ability to provide it.
• Provide that spousal support obligations continue after the death of the paying spouse unless otherwise agreed or ordered.
• Clarify that spousal support should be awarded only where spousal support objectives have not already been met through property division.
• Spousal Support Advisory Guidelines will not be referred to in the Act and will remain advisory.

Eliminate parental support obligations.

Case Management and Enforcement Tools

Include a broader range of case management and enforcement tools for judges. In particular:
• Provide for a new type of order called “conduct orders” and corresponding remedies for non-compliance to manage behaviour and facilitate resolution, for example, through referrals to a service, program, counselling or non-court dispute resolution process, providing for a party to pay the other’s reasonable expenses incurred as a result of the non-compliance, and limiting frivolous or vexatious litigation.
• Establish a general duty to disclose information, and provide for a greater range of remedies for failure to comply with an order to disclose.

Protection Orders

Replace existing family law restraining orders with “protection orders” enforceable under the Criminal Code.
Court Jurisdiction and Procedural Matters The new family statute will carry forward many of the jurisdictional provisions from the Family Relations Act. Proposed procedural changes include the following:
• Lawyers must certify that information about non-court dispute resolution options has been provided prior to filing court documents.
• Family cases are to be conducted, to the extent possible, in a way that minimizes delay, cost and formality, reduces conflict and promotes co-operation, protects those involved, and is proportionate to the dispute.
• Children who are 16 or older or who are parents, spouses or former spouses will be able to conduct court cases without a litigation guardian.

Transition

Where a court action has been started but not yet resolved before the effective date, the Family Relations Act applies unless the parties enter into a written agreement stating that the new Act governs. Cases that have already been time-barred under the Family Relations Act are not revived by the new Act.
Where a court action has been started on or after the effective date, the new Act applies.
Orders and declarations made under the previous law continue in force according to their terms, but subsequent applications made on or after the effective date (e.g., to vary or enforce) are governed by the new Act.

BC FAMILY ASSET and BC PROPERTY DIVISION- NEW BC FAMILY LAW RULES ALLOW INTERIM ADVANCES FOR BC LEGAL FEES AND EXPERT REPORTS

Sunday, July 11th, 2010

BC Family Law and Interim Distribution of BC Family Assets and Advances to Pay BC Legal Fees: Who Pays the Piper in Divorce?

We are all familiar with the notion that “he who pays the piper calls the tune,” but what happens when you don’t have the money to pay the piper? In contested divorce cases it is not uncommon for legal fees and expenses to reach the point where you face difficulty paying your lawyer to represent your interests for lack of funds. In cases of mid to high net worth divorcing couples there are usually substantial assets that require dividing – bank accounts, trust/income funds, houses, property (local and foreign) and insurance policies to name but a few. Assets by their very nature have an intrinsic monetary value. The question is whether or not a divorcing spouse short on capital before a trial needed to pay their legal fees can access these assets or borrow against them to pay past, present and future legal expenses before the trial that will likely divide these family assets- most often equally? Is there any reason that all assets should remain untouchable until the trial is over and judgment rendered?

A new rule may allow people access to income and assets before a trial where in the past this was more difficult if not impossible to achieve. Lorne MacLean of the MacLean Family Law Group points out new BC Supreme Court Family rule 12-1 may allow a much needed interim advance of funds for a spouse needing funds to live on or to pay legal and expert fees as it states:

Photo Lorne MacLean BC Family Law Attorney

BC Supreme Court Family Law Rule 12-1

Allowance of income from property
(3) If property is the subject matter of a family law case and the court is satisfied that the property will be more than sufficient to answer all claims on it, the court at any time

(a) may allow the whole or part of the income of the property to be paid, during such period as the court may direct, to a party who has an interest in it, or

(b) in the case of personal property, may order that part of the personal property be delivered or transferred to a party.

Recovery of specific property
(4) If a party claims the recovery of specific property other than land, the court may order that the property claimed be given up to the party, pending the outcome of the family law case, either unconditionally or on terms and conditions, if any, relating to giving security, time, mode of trial or otherwise.

In the past a party claiming an advance against their ultimate share in property met with stiff judicial precedent against them.
In British Columbia the leading authority – Ansari v. Ansari [2000] BCJ No. 763 – holds that advances (interim distributions) or borrowing funds against family assets subject to division in a divorce proceeding to pay past, present and future legal fees are not allowed except to fund unusual disbursements relating specifically to the valuation of assets. In Ansari v. Ansari [2000] B.C.J. No. 763 (BCSC) – Macaulay J.noted:

(a) Jurisdiction for interim payment from family assets founded in s.66 of the Family Relations Act (as decided in Erskine v. Erskine (1991) 31 R.F.L. (3d) 273)

(b) Two step test established by Kirkpatrick J. in Jiwa v. Jiwa [1992] B.C.J. No. 3024 (S.C.):

(1) Is the advance required to mount a challenge to the other spouse’s position at trial?

(2) Will the advance or the payment on an interim distribution basis jeopardize the other spouse’s position at trial?

Macaulay J. held at paragraph 28 in Ansari:

As the interim distribution of assets sought relates primarily to past and projected legal expenses in the matrimonial litigation, entitlement falls to be determined, in my view, within s.66 and with regard to the limitations expressed in earlier decisions. The weight of authority is against ordering an interim distribution of assets to meet past and, in particular, future legal expenses except to fund unusual disbursements relating specifically to the valuation of assets. I decline to order an interim distribution in favour of either party.

The more recent case of Herr v. Herr [2006] B.C.J. No. 1624 – held as in Ansari that no interim disposition of funds should be allowed allowed and at paragraphs 19 and 20 Ralph J. stated:

“The purpose for which the true interim distribution was required was not specific but appeared to be for past and future legal expenses. As recognized in Ansari the weight of authority is against ordering an interim distribution of assets to meet past and future legal expenses except to fund unusual disbursements relating to the valuation of assets.”

“In my respectful view, having already authorized a substantial draw upon these funds to pay the arrears of support, the Master erred in further authorizing the payment of $40,000 for the unspecified past and future legal expense. I conclude that Mr. Herr’s appeal with respect to the Master’s order relating to the interim distribution of $40,000 should be allowed and that the order must be set aside.”

Similarly, in Hiemstra v. Hiemstra [2001] B.C.J. No. 522 – No interim distribution of funds was allowed to pay legal fees and in McLeod v. McLeod [2001] B.C.J. No. 1201 (S.C.) – Kirkpatrick J. followed Ansari and refused to make an interim order for distribution of funds for legal fees. Kirkpatrick J. also followed the Pierce decision, in that she did not find that “such an advance is, in equity, required”. The distinguishing features in this case are that the wife was already receiving a substantial sum (close to $5000 per month) for child support and the husband was paying a good portion of the household expenses, and spousal support of almost $4000. Therefore, the circumstances were not so dire as to require the disbursement of funds to the wife out of the property.

An older line of cases did allow some advances for legal fees:

(a) Pierce v. Pierce [1994] B.C.J. No. 3079 (S.C.) as per Melnick J. – the focus in ordering an advance is not whether it is required for one spouse to fund his or her lawsuit against the other, but rather whether, in order to make a determination regarding assets, as contemplated by s.52 of
Family Relations Act, such an advance is, in equity, required.

(b) Ford v. Ford (6 February 1992), Vancouver Registry A913765 – allowed for release of funds for legal fees.

(c) Newbury J. in Lane v. Lane [1991] B.C.J. No. 3246 (S.C.) – lump sum payment ordered to reimburse a wife for past accounting and legal expenses but would not order payment for estimated future legal expenses.

The big change regarding experts in family matters is the emphasis on 1 neutral expert being appointed by consent or if disputed by court order as follows:

Single Court Appointed Expert
13-4
Application to court
(3) If the parties do not agree that a joint expert is required or do not agree on any matter relating to the appointment of a joint expert, any party may apply to the court in accordance with Rule 10-5 for an order
(a) appointing a joint expert, and
(b) settling any matter relating to the appointment of the joint expert.

Note also full cooperation is required and full disclosure mandated under this rule.

Appointment of Court’s own Expert
13-5
(10) The remuneration of an expert appointed under this rule
(a) must be fixed by the court and consented to by the expert, and
(b) may include
(i) a fee for the report, and any supplementary reports, required under Rule 13-6, and
(ii) an appropriate sum for each day that the expert’s attendance in court is required.
Security for remuneration

(11) The court may make one or both of the following orders, without prejudice to any party’s right to costs:
(a) an order directing that the expert’s remuneration be paid by the persons and at the time ordered by the court;
(b) an order for security for the expert’s remuneration

If you have an issue with needing to access monies you are properly owed before trial call us toll free at 1-877-602-9900 to help you ensure your case is handled properly and that funds you need to protect your rights and properly instruct your lawyer and valuation experts can be obtained.

BC CHILD CUSTODY and BC CHILD MOBILITY UPDATE-Moving a Child Away

Tuesday, April 20th, 2010

Summer at MacLean Family Law Group's Fort St John BC Office

BC Child Custody and BC Child Mobility or change of residence cases often involve the need by one parent to move themselves and their child away from their existing residence- classified as BC child mobility or change of residence- to return to be closer to family support, to move away to obtain a promotion or to accept a required transfer, or to move with a new partner for one of the same reasons. What is good for one parent -and possibly for the child whose life is bound inextricably with the parent- is often the exact opposite for the other parent and possibly for the child as well. In cases where one parent is the sole custodian and the other parent has limited involvement, the decision to allow a parent with custody to move away is an easy one but those cases are rare. I often tell the courts we have a wonderful child with two great parents and that shared custody is the best possible outcome but how can you maintain maximum contact by the child to both parents if one parent and the child are allowed to move away?

In the past the court looked at the option of deciding whether the parent and child could move or whether they would be forced to remain “prometheus bound” to their present location despite lost opportunities to improve the moving parent’s life. If the court allowed a parent to move away with the child its’ result would largely sever maximum contact to the parent who remained behind in the original location.

A recent BC Court of Appeal decision has approached the problem of child mobility by adding a developing concept the writer and other lawyers have postulated for some time:

1. Consider whether both parents should remain in the same location;

2. Consider whether one parent and the child should move away;

3. Allow the parent who wants to move to move but leave the child in the care of the remaining parent-this often
forces the parent wanting to move to pick between sacrificing their career or their custody of the child;

4. Consider whether both parents can move to the new location and maintain the same regime
of care and control of the child as was in place in the old location.

I have often argued that plans to move are ill conceived and offer no clear benefit over the current regime. I have also argued- in cases where the access parent is unemployed and/or providing little positive parenting assistance or financial aid- that a move with a new partner to a new location or by one spouse to a new city with a solid financial upside that the move should proceed and the parent who has no job or a nominal income could easily move there and do as well in the new location and maintain the existing contact with their child.

The recent BC Court of Appeal decision of S.S.L. v. J.W.W., 2010 BCCA 55 set out how all four approaches must be properly considered by a trial judge in a child focussed approach.

Discussion

[21] The point of departure in Canada for any parental mobility case must be the Supreme Court’s decision in Gordon. In Nunweiler, this Court was clear that the approach set down in Gordon to a custodial parent’s variation application was to be taken, insofar as applicable, to an original application regarding children whose parenting they had been sharing.

[22] However, as the plethora of judgments that have applied Gordon demonstrate, the factors listed at para. 49 in the judgment of McLachlin J. (as she then was) provide insufficient guidance for two good parents, their counsel, and the trial court as they face the agonizing decision required in two circumstances: (1) a pre-school age child who has been in the primary care of one parent (usually the mother) where age-appropriate access is unworkable if one parent moves away (Karpodinis v. Kantas, 2006 BCCA 272, leave to appeal refused [2006] S.C.C.A. No. 318; Hanna v. Hanna, 2002 BCCA 702), and (2) a joint parenting situation where one or both parents’ needs (economic, educational or personal) are seen as requiring a change.

[23] This case falls within the second group, in some of which, as here, the only issue is the child’s primary residence, because the parents agree that joint guardianship and joint custody should continue.

[24] In my view, the court’s task in these joint parenting cases is to analyze the evidence in four possible scenarios, in this case, (i) primary residence with mother (London, Ontario); (ii) primary residence with father (Victoria, B.C.); (iii) shared parenting in Victoria; and (iv) shared parenting in London, but to do so knowing the court’s first task will be to determine which parent is to have primary residence. When the question of primary residence is evenly balanced and the court finds the best interests of the children require both parents to be in the same locale, then the court will need to choose between the shared parenting options offered by the parents, without presuming the current care-giving and residential arrangement is to be the preferred one.

[25] Proximity of parental homes will usually be in the best interests of children with two good parents. But proximity may be achieved in either proposed location. The choice of the existing location cannot be the default position. In Woodhouse v. Woodhouse (1996), 136 D.L.R. (4th) 577 (Ont. C.A.) at para. 89, Osborne J.A. observed in dissent (at para. 89):

[89] … Balancing the relevant factors is required in order to accommodate the broad post-separation spectrum of parenting arrangements with which courts will be confronted. It is essential, I think, that the process be flexible and realistic. In some cases, when the relevant factors are balanced, it will be appropriate to deny the custodial parent the right to move with the children. In other cases, asking the non-custodial parent to move may be more in the children’s best interests than requiring the custodial parent to stay. Consistent with the majority judgment in Gordon, I do not think that any one of the relevant factors should be viewed as dispositive so as to automatically determine the outcome. [Emphasis added.]

[26] Authorities in other jurisdictions reveal similar views. In U. v. U, [2002] HCA 36 at paras. 175-76, Hayne J. wrote, in concurring reasons for the High Court of Australia:

[175] When one parent (for whatever reason) wishes a child who is, or is to be, resident with that parent to move to a place distant from the other parent, it should not be assumed that that other parent cannot, or should not, contemplate moving to be near the child. There may be (and for all that is known, in this case there was) compelling reason for that other parent (here, the father) not to move, but it would ordinarily be expected that these reasons would be explored in evidence and the validity of any assumption that the other parent will not move would be examined. Just as, in this case, the mother was asked what she would do, if she could not have the child reside with her in India, so too it might have been expected that the father would be asked what he would do, if the mother were to have the child reside with her in India. Such questions should not be treated as mere forensic tests of parental devotion, to which only one answer is seen as being satisfactory proof of being a loving parent. Rather, they are no more than a prelude to a deeper inquiry about where the best interests of the child may lie and what arrangements will best serve those interests.

[176] It is now recognised as self-evidently true that, apart from some cases of abusive relationships, children benefit from the development of good relationships with both their parents. The right to know and be cared for by both parents and the right of contact on a regular basis with both parents are said to be principles underlying the objects of Pt VII of the Act. If effect is to be given to those principles, it must not be assumed that one parent (the father) cannot move and that the mother must, in every case, subordinate her ambitions and wishes, not to the needs of the child, but to the wishes of the father to pursue his life in a place of his choosing. It is the interests of the child which are paramount, not the interests or needs of the parents, let alone the interests of one of them.

[Italic emphasis in original; underlining emphasis added.]

[27] See also Tropea v. Tropea, 87 N.Y.2d 727 (1996) (N.Y. C.A.); and Payne v. Payne, [2001] EWCA Civ 166 (U.K. C.A.).

[28] This approach to the evidence of both parents avoids the problem of the “double bind” described recently in Bourgeois v. Plante, 2009 PEICA 12 at para. 32:

… Various courts have cautioned that it is problematic to rely on representations made by the custodial parent that he or she will not move without the children should an application to relocate be denied. This inquiry is commonly called the “classic double bind.” If a parent responds by stating they are not willing to remain behind with the children, this raises the prospect of the parent looking after their own interests and not having the interests of the children paramount. Then, on the other side of the equation, if a parent advises the court that they are willing to forego a move if unsuccessful, this suggests that such a move is not necessary for the well being of the parent or the children. If a trial judge mistakenly relies on a parent’s willingness to stay behind “for the sake of the children”, the status quo becomes an attractive option for a judge to favour because it avoids the difficult decision the application presents. See: Spencer v. Spencer, supra.

[29] In cases like this where courts are called upon to make what one judge has called an “educated prediction” (McArthur v. Brown, 2008 BCSC 1061 at para. 161) as to the best interests of the children, based not only on evidence of their old life, but also evidence of what parents believe will transpire in their new life, the parents’ evidence should focus on all of the four possible scenarios.

[30] Such an approach takes into account the court’s inability to order a parent to stay or move and the unfairness of preferring the obstinate over the more flexible. It requires the court to set down his or her analysis of the evidence and the decision path so the parents (and ultimately the children) can understand not only the result but how one of the most important decisions in their lives was made.

[31] In evenly balanced shared parenting situations, careful and transparent analysis of the evidence and reasoning is especially important, if courts are to encourage joint parenting following separation and discourage jockeying for position by the parent in a favoured position (very often mothers because of their historic role in a family) who wants to avoid being frozen in a current location by the co-operative approach generally thought ideal for young children, particularly those not yet well bonded to their father. It acknowledges that the lives of families must accommodate change.

[32] This approach takes the focus away from the time factor that bedevils so much of family post-separation litigation. While courts have said consistently for years that the amount of time, measured in days, over-nights, and sometimes hours, is only one of many factors to be considered in determining care-giver roles, this case exemplifies how it can come to dominate a trial to the exclusion of more important child-centred evidence as to the best parenting arrangements in the circumstances as they are and can reasonably be foreseen to be. Far more significant is the role each parent has played in the children’s lives; which parent has taken primary responsibility for their health, safety, education and overall welfare; which parent deals with the mundane but necessary arrangements of their lives – clothing, haircuts, extracurricular activities, gifts for friends, doctors’ and dentists’ appointments, contact with their extended family; and which parent has the best perception of the emotional needs of the children. In sum, what it is that each parent contributes to the children, as care-giver. Only when those contributions are made clear will an understanding be reached as to what arrangements will work best for the children going forward. The analysis of the parent’s role is fundamental to the determination of a primary care-giver, whether continued shared parenting is in the children’s best interests, and where they should live.

[33] I note that in this assessment of each parent’s contributions to the care of their children, it is inevitable the court will be required to assess the resources available to each, in personal and economic terms that permit them to make those contributions, and the potential effect on those resources in each proposed scenario. As many courts have noted, this may require an assessment of a parent’s emotional and economic prospects because children’s interests are necessarily intertwined with those of their parents: Burns v. Burns, 2000 NSCA 1.

[34] Finally, this approach permits the decisions of each parent to receive the respect to which his or her parenting roles entitles them.

If you have a BC family law case involving child mobility call me, Lorne MacLean at 1-877-602-9900 toll free.

Adultery and Misconduct in BC Divorce and British Columbia Separation

Monday, April 19th, 2010

Lorne MacLean- Divorce Lawyer- brings a Fresh Perspective to Your Case


Many BC divorce and British Columbia Separated parents involved in a BC child custody case think their chances of receiving child custody, more or less support, or a larger share of the family property will change if their spouse has had an affair.

In reality an affair has little if any impact on the issues surrounding marriage breakdown. In the infamous case of Leskun we acted for husband who had had an affair and we were successful in the Supreme Court of Canada in upholding the principle that a spouse’s affair was irrelevant to the issues of spousal support unless it could be proven, supported by medical evidence, that the affair had a negative financial impact the other spouse that prevented them from earning what they normally would have earned. The ability of one spouse to sue the other spouse or mistress for damages for an affair or for “alienation of affection” was long ago abolished in British Columbia. While there still is the ability to sue for damages for physical and mental abuse in British Columbia, the Supreme Court of Canada has narrowed the scope of this claim in their decision of Frame v. Smith.

We warn our spouses that a new relationship during the end of a shaky marriage or immediately after the marriage has broken down can negatively impact a child custody claim if it is shown that the new person is introduced too soon into a relationship or that the new relationship distracts the separating spouse from focusing on their children and putting their children’s interests ahead of their own. A new relationship can also impact and reduce a receiving spouse’s claim for support under some circumstances. We want people to go slow as it is imperative people do not “jump from the frying pan into the fire”.The existence of a new relationship often will not help promote a quick settlement so this is a critical factor to consider as well!

Some people argue that Canada should return to the old fault days of divorce where misconduct resulted in negative consequences to the offending spouse. As an example of what might happen if Canada were to return to the antediluvian days of fault we point to the recent decision in United States below.

Wife’s $9m victory in adultery case warns mistresses to ‘lay off’: Cynthia Shackelford, 60, was awarded the unprecedented sum by a jury in the United States for damages to her feelings under an obscure 19th century adultery law; North Carolina is one of seven states in America where the so-called “alienation of affection” law is still in force. It evolved from common law under which women were classes as property of their husbands. As property, they were something that could be stolen. The award was made against Anne Lundquist, 49, an administrator at a private school, who was accused of having an affair with Allan Shackelford, a 62 year-old lawyer who had been married to Mrs. Shackelford for 33 years. The jury awarded her $5 million compensation and also awarded $4 million in punitive damages to be paid by Miss Lundquist. Miss Lundquist, who is now the dean of students at Wells College, in Aurora, New York, did not attend the court hearing and said she had not even been told it was happening. She is appealing. She said: “I’m so caught off guard by everything. I don’t have a lot of money, so where this $9 million comes from is kind of hysterical.” “My main message is to all those women out there who might have their eyes on some guy that is married to not come between anybody,” Ms. Shackelford told “Good Morning America”. “I wanted other people to understand, before they do it, how much it hurts.” Lee Rosen, of the Rosen Law Firm in North Carolina, said the state has around 200 “alienation of affection” claims a year. He said: “If your spouse is going to cheat, you really would like them to cheat with somebody who has a lot of money.”
As reported in:
Coffee Break – North, Fort St. John, Vol. 1.23 March 27-April 4, 2010

WHAT INCOME IS USED FOR BC SPOUSAL AND BC CHILD SUPPORT FOR A SELF EMPLOYED BC OWNER OF A BUSINESS?

Sunday, April 11th, 2010

We often warn our family clients involved in a BC spousal or child support case that the tax return of a BC self employed spouse does not present an accurate picture of the income that the court will use for determining guideline income for BC child and BC spousal support. Recent cases presume that pre-tax profits are available to pay child support or spousal support from the company the paying spouse owns unless that spouse proves a need to keep profits in the company to advance legitimate company objectives.

In the recent case of Purvis v. Purvis 2009 BCSC 1794 the husband successfully overcame the presumption that pre-tax corporate income will be imputed to a payor when they own or control a company.

This case involved an action by the husband for a review and retroactive variation of a 2002 order for child and spousal support payments. The husband unilaterally decreased the support payments in 2003. The wife claimed that the husband had failed to make accurate financial disclosure for the annual review, which was a term of the Mediated Settlement Agreement incorporated into the 2002 order. She sought payment of outstanding arrears for support and that the husband’s income include pre-tax corporate profits from his holding company. The husband’s 2007 and 2008 income were the years in dispute.

Retained earnings or funds needed to operate?
The husband claimed that for the purpose of tax planning, the company Praetorian Construction Management (“Praetorian”) paid annual dividends to its shareholders to reduce its retained earnings. The dividends were paid as income to the husband’s holding company Tukcon Holdings Inc. (“Tukcon”). The court examined the pre-tax earnings and the retained earnings for Tukcon, the latter showing a shareholder loan for $730,916 owing from Praetorian. The husband said that Praetorian was not in a position to repay the shareholder’s loan to Tukcon and therefore Tukcon could not pay out the retained earnings balance to its shareholder (the husband).

Application of the law
In applying Section 18 of the Child Support Guidelines the court mentioned Hausmann v. Klukas, 2009 BCCA 32, where it had been held that if there is any evidence of legitimate calls on corporate income for the purpose of continuing the operations of the business the income will not be included in determining annual income thereby “not killing the goose who lays the golden egg” (Baum v. Baum [1999] B.C.J. No. 3025 B.C.S.C.)). The court in Hausmann (supra) said that where a corporation is owned and controlled by the payor spouse, there is a presumption that pre-tax corporate income will be available to a payor in the absence of evidence to the contrary.

Control of the company
In determining who controlled the holding company, Tukcon, the court found that the husband did not present evidence to reveal the extent to which the previous non-voting shareholder (his ex-common law spouse) was involved in the company pre-2009 and that from 2009 he was Tukcon’s only shareholder. Tukcon was one of the 3 companies who owned Praetorian, for whom the husband was the President and the key employee for obtaining new contracts,

Retained earnings required to continue operations
Applying Hausmann (supra), the court found that the husband had to rebut the presumption. On the evidence submitted by the husband’s accountant, the court found that the amount of $700,000.00 in 2007 was legitimately retained by Tukcon to enable Praetorian to continue operations and was not imputed as income to the husband. However, the evidence did not defeat the presumption that the remaining pre-tax profits for 2008 and the pre-tax profits for 2007 and these amounts were imputed as income to the husband.

Support applied retroactively
On another issue, the court cited case law that supports the proposition that retroactive awards should not reach back farther than three years from the date of notice to the payor parent, unless there is blameworthy conduct on the part of the payor D.B.S. v. S.R.G. 2006 SCC 37. The effect of not disclosing a material change in circumstances (his increased income) resulted in the husband having to pay support retroactively to the date when his circumstances changed in 2003. The wife had the reasonable excuse for not bringing her claims earlier of caring for the children and making attempts to become self-supporting.

It is important you call us for advice if you have a support case involving a shareholder, director, or owner of a company.

Jaqua Page

What Family Property is Shared when we Divorce? BC Family Assets Defined

Friday, April 9th, 2010

When you divorce BC family asset property like the “Wedding Van” above can be divided, most often equally, if they fit the following criteria in one or more of the following ways:

1.s. 58(2)— BC family asset property ordinarily used for a family purpose;

2.s. 58(3)(e)—a venture which fits the BC family asset definition to which the spouse has directly or indirectly contributed; and

3.s. 59—property used primarily for a business towards which a direct or indirect contribution was made by the other spouse to the operation of the business which makes it a divisible BC family asset.

The British Columbia legislation is broad and will capture most property in a marriage but not all. The onus is one the spouse alleging it is not a family asset to prove it is outside the scope of the above factors.

Call us if you have questions on what assets are or are not to be divided upon marriage breakdown. Note different rules apply to unmarried spouses.

BC Separation Law for Divorcing and Separating Common Law and Unmarried Spouses

Thursday, April 8th, 2010

Lorne MacLean Vancouver BC Family Lawyer


We as British Columbia family law and BC divorce lawyers as well as lawyers acting for unmarried couples are often asked to explain the differences in law that applies to divorcing as opposed to separating unmarried couples.

There are several differences between the legal rights of individuals separating from a marriage versus those that are separating from a Common Law relationship. In this article a very brief synopsis of some of the most significant differences will be highlighted. Please note that this should not to be considered as legal advice that is necessarily relevant to your own situation. Should you be considering a separation or are in the midst of a separation we urge you to seek legal advice as soon as possible.

In British Columbia you must cohabit 2 years in a marriage-like relationship before you are considered as being in a common law relationship. If the common law nature of a a relationship is disputed by one party, the Court will embark on a consideration of all factors regarding the relationship to establish whether it fits under this definition. The facts considered will include but not limited to the sexual involvement of the couple, their economic codependence, roles played by each party (ie. homemaker and breadwinner) and whether there are any children borne of the relationship.

1. Property

When married couples separate, no matter how long the marriage, pursuant to section 56 if the Family Relations Act the parties have a presumptive one-half interest in all family property. While under section 65 of the Family Relations Act one or both separating couples may request a reapportionment of assets in their favour, the fact is that the Courts must be persuaded to depart from the presumptive equal splitting of property. This means that with married couples, upon separation property division is somewhat simplified in quantum percentage save for the rare time when there is evidence to suggest that it would be unfair to proceed with the equal division.

All of the assets, property and debt in a marriage are presumed to be family assets and up for division. A party must demonstrate that the exclusion of an asset, property or debt in the division (or reapportionment) is appropriate or else it will be thrown into the pot for consideration.

Conversely, when common law couples separate, there is no presumptive equal split of family assets. As a matter of fact, there are no “family” assets per say, but rather a bundle of assets or property in one or both parties’ names which must be plodded through to determine the quantum of ownership that is appropriate in a given situation. One (or both) parties must claim their stake in the assets or property by arguing that the other party has been unjustly enriched by their own contribution. In basic terms, what needs to be established is that one spouse has been enriched, there is a corresponding deprivation to the other spouse, and there is no legal reason for the enrichment.

This argument can attach to all sorts of assets or property, including but not limited to real property (ie. land and home), vehicles, RRSP’s, pensions and bank accounts.

In common law separations the equitable relief of quantum meruit is generally sought alongside unjust enrichment and roughly translates from Latin as “reasonable value of services”. The approach when arguing this relief usually takes the form of establishing the fair market price for such services as housekeeping services, cooking and child rearing, which in some cases can be attached to the trust claim for unjust enrichment as a means of strengthening it or used in the alternative to such a claim (ie. 10 years at $2000 a month average services rendered established and then this claim settled by a portion of the proceeds of sale of the home).

What is disturbing to many common law parties who apply to Court to enforce their legal rights is that unlike married couples, they may have to first prove the common law nature of their relationship (using the factors listed above) and then they must prove their contribution to assets and property which they always were assured of or assumed they had an equal share in. The Court process may include providing proof from a non-title party to a home of the following services rendered when it comes to the home: gardening services, renovations undertaken, money invested and maintenance services. It can get as tedious as reviewing bills for renovation supplies to see who paid them and having 3rd parties testify to who they saw sweeping the deck and clearing the bushes every Saturday and also what might be charged for such services.

2. Spousal Support

As mentioned above, a common-law partnership is only established in British Columbia after 2 years of a marriage-like relationship. It is only after this two-year mark that upon separation one party can claim spousal support from the other. It is important to note that unlike in marriages, the decision to seek relief of spousal support in Court must be made within 1 year of separation. There is no such deadline upon marriage separation nor is there a minimum length of marriage before one party can receive spousal support from the other. In theory, while rare, a party that was only married for a few months and did not cohabit prior to marriage can request and receive spousal support from the other.

The amount and length that one party receives spousal support from the other is determined in identical fashion in the breakdown of common law relationships and marriages.

3. Child Support

There are no significant differences in basic child support received by parties who were in common law relationships versus those in marriage. The amount and length are determined in identical fashion in the breakdown of common law relationships and marriages.

4. Custody and Access

There are no differences between the manner in which these issues are determined in common law relationships versus those in marriages. The determining factor is the best interests of the child(ren).

BC DIVORCE AND VANCOUVER FAMILY LAW LAWYERS MANAGING PARTNER LORNE MACLEAN AND ASSOCIATE JUSTIN WERB

Wednesday, February 3rd, 2010

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Smart BC Divorce Tip #3 – Protect Yourself At All Times

Thursday, January 21st, 2010

Lorne MacLean, Vancouver BC Family Law Lawyer, at the MacLean Family Law Group is delighted to announce Smart BC Divorce Tips # 3 is now available at our youtube channel called Protect Yourself at All Times-Winning the Financial Aspects of your Divorce and Family Law Case has just been released to positive reviews. These tips are critical if you are involved in a BC Divorce, BC Child custody, BC Child Support, BC Spousal Support and BC Family Asset Division case.

Step 1 – Obtain Proof of all assets and Debts and All Income and Expenses

Copy tax returns, credit card statements, bills, business information and anything that might help you determine how much money you will need to live on and what marital assets you are entitled to. Go through the garbage or install spyware on a computer, if necessary. Tax returns don’t always show the real income to be used for your case so make copies of all company financial documents as well. Store these documents away from the Home and redirect your sensitive mail to a safe location.

Protect Your Money and Assets

Take half of the money from a joint account, and put it in your own name. If your spouse tries to clean out the account, you won’t be able to access that money until a judge says so. This way, you will have access to money, but make sure that you keep a record of how you spend it and this is not an excuse to try to get rid of or hide assets, so act honestly. Consider a restraining order to freeze assets, closing joint credit card accounts and lines of credit to prevent them being run up by your soon to be ex-spouse.

Be Patient

With joint marital assets like homes and stocks probably worth much less than they were a few years ago, some couples are agreeing to stay together until the financial tide turns. If a moneyed husband pushes for divorce because the economy makes it less expensive for him to cash out now, press him for an upside by asking for a bonus for giving up access to a potential gain or by remaining in as a joint owner of the asset.

Lorne MacLean High Net Worth Divorce Lawyerimg_5802

HIGH INCOME BC SPOUSAL SUPPORT AND CHILD SUPPORT GUIDELINES CALCULATION AND GROSS UP FOR LOWER TAXES

Tuesday, December 1st, 2009

img_5989BC spousal support and child support awards start with a proper calculation of the BC paying spouses spousal and child support guideline income which can be taken from tax returns, financial statements showing pre- tax corporate earnings. In cases of the paying spouse earning a foreign income, a figure that may be grossed up to reflect a Canadian equivalent income for exchange rate differences and to take into account the income may be received on a tax free basis or on a reduced tax basis compared to the prevailing rates in Canada. Income will often also include bonuses, severance pay and overtime.

The recent Court of Appeal decision of Gonabady-Namadon v Mohamadzadeh dealt with an appeal from a trial judges’s finding that the husband had failed to disclose his true assets and income and had provided no proof of the taxes he paid on income he earned as a resident of Iran nor any proof of what tax rates in Iran were. The trial judge made negative findings against the husband but fixed his income at $250,000 per annum and found that despite the 13 year marriage where the wife had a child she was not entitled to spousal support. The wife was awarded full recovery of her legal fees for the husband’s steadfast refusal to disclose his true income and assets.

The wife appealed and was successful in increasing the guideline income for the husband from $250,000 to $350,000 per annum based on a gross up for lower tax rates in Iran meaning the husband’s available income was much higher than an equivalent similar gross income in Canada. Further, despite the fact the wife was a doctor with the ability to earn a good income the Court of Appeal held she was entitled to spousal support for the low end of the duration being 6 years on a marriage length of 13 years at a monthly payment of $2300.

I have extracted the key paragraphs from the decision below.
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