A fresh perspective on divorce, spousal support, child support, parenting after separation and everything family law

Incomes over $350,000.00: Spousal Support Advisory Guidelines

I receive a weekly e-mail from Supreme Court Advocacy (a boutique law firm in Ottawa focusing on Supreme Court of Canada advocacy and agency).

The newsletter from Supreme Court Advocacy is a great resource and provides an up to date summary of activity at the Supreme Court of Canada.

Earlier in March, this newsletter provided a very good summary of the case of Hathaway v. Hathaway (2014 BCCA 310).

In this case, Mr. Hathaway (a high income earner) had been ordered, by the British Columbia Supreme Court, to pay child support of $12,814.00 per month and spousal support of $24,124.00 per month. At the trial level Mr. Hathaway’s income was determined to be one million dollars a year by the Honourable Mr. Justice Abrioux.

Mr. Hathaway appealed this decision and the British Columbia Court of Appeal denied his appeal.

Mr. Hathaway, at the Court of Appeal, contended that the trial judge erred in three respects (failing to consider Section 11 (which sets a ceiling for incomes over $350,000.00 per annum) and Section 12 (relating to property division) of the Spousal Support Advisory Guidelines, failing to consider the provisions of the Federal Child Support Guidelines regarding incomes over $150,000.00 (Section 4), and the principles relating to reapportioning family assets). Mr. Hathaway’s appeal was dismissed by the Court of Appeal and leave to the Supreme Court of Canada was also dismissed.

The case of Hathaway highlights the importance of considering/arguing Section 4 of the Federal Child Support Guidelines and Section 11 of the Spousal Support Advisory Guidelines at a trial level. A failure to do so will limit the ability to make such arguments or considerations at an appeal level (as per paragraph 34 of the Court of Appeal Decision).

The upshot of this case, from my perspective, is:

  • Reading the Child Support Guidelines and the Spousal Support Advisory Guidelines is a free and useful exercise if support issues are at play in your family law matter (regardless of your income);
  • If you are dealing with a case where incomes are over $150,000.00 per annum pay special attention to Section 4 of the Child Support Guidelines;
  • If you are dealing with a case where incomes are over $350,000.00 per annum pay special attention to Section 11 of the Spousal Support Advisory Guidelines;
  • It is helpful to get advice from an accountant in a case where you are working to determine an appropriate guideline income for support purposes (I encourage my clients to consult with an accountant regarding determination of income for support purposes regardless if they are paying or receiving support – it is very helpful); and
  • This is a first world problem to have…
    Guideline income

  • Ex Parte Orders… This has nothing to do with partying with your ex…

    Except, perhaps, in the case that you are trying to get an injunction to prevent your ex from talking about your potentially embarrassing behavior – like in the case of Party Av. Party B in which Party A successfully obtained an ex parte order preventing his former partner from disclosing the details of their affair, as follows:

    The appellant is a married businessman. The respondent is an unmarried businesswoman. The two engaged in an affair which was ultimately terminated at the instance of the appellant. During the course of the affair, the parties engaged in activities, the details of which the appellant would prefer to keep undisclosed.

    After the affair ended, the respondent made public disclosure of many aspects of the parties’ activities. The appellant commenced an action against the respondent alleging breach of confidence and breach of the Privacy Act, R.S.B.C. 1996, c. 373, by the respondent. He sought an ex parte order to restrain the respondent from further disclosure, and on May 9, 2011, his application was heard, in camera, and an order was granted against the respondent by a justice of the Supreme Court (the “First Justice”) including the following terms:

    1. This Order orders you, among other things, to cease and desist from publishing or disclosing the Private Information as defined below

    2. You are at liberty to apply to this Court to set aside or vary this Order upon giving two (2) clear day’s notice to the Plaintiff’s solicitor of your intention to do so.

    3. If you disobey this Order you may be guilty of contempt of Court and may be sent to prison, or fined, or both.

    THIS COURT ORDERS that:

    4. The Defendant, by herself or by her employee, agents, or otherwise, and any other person with knowledge of the terms of this Order, be and is hereby restrained from disseminating, publishing, or otherwise disclosing any private information about the Plaintiff, his sexual practices, or anything that would connect him to having had a sexual relationship with the Defendant (the “Private Information”), until the trial or other disposition of this proceeding or until further Order of this Honourable Court…

    Ex Parte (Latin meaning “from (by or for) one party”) are orders obtained on the application of just one party in a court case, without notification to the other party/parties.

    In British Columbia, we have dropped the Latin and now call them “orders without notice” in the rules of court.

    Applications without notice should only be brought in extraordinary and emergent circumstances and the party bringing the application must explain to the court why it is not possible to provide notice to the other party. The duration of the order is generally to be made for a period sufficient to give the other party notice of the order and schedule a full hearing.

    The party bringing the application without notice must also make full disclosure of all of the relevant and material facts relating to the order they are seeking (both for and against their case). Failing to make such frank disclosure may result in the order being set aside or an order of special costs being awarded against the person obtaining the order (for example in this case). Further, failure to make full and frank disclosure can tarnish your credibility in future proceedings before the court. For example, in one case, the court stated:

    This evidence of the father lacks believability in this regard as does his justification for obtaining the second ex parte order.

    In the Supreme Court of British Columbia orders without notice can be brought pursuant to Supreme Court Family Rule 12-4(3).

    Supreme Court Family Rule 10-9(8) provides that an order without notice can be varied or set aside on the application of the other party to the litigation.

    In the Provincial Court of British Columbia an order without notice can be made under Rule 20(3) of the Provincial Court (Family) Rules. There are other rules in the Provincial Court Family Rules that give Judges discretion in extraordinary circumstances: Rule 5(8) allows for Provincial Court Judges to make court orders without following regular Registry procedures and Rule 12(2) provides for a Provincial Court Judge to dispense with service requirements.

    In family law cases orders without notice are often made for three purposes: 1) personal protection and protection of children (including preventing children from being relocated without consent); 2) protection of property; and 3) exclusive use of property.

    A review of 2013 decisions in British Columbia shows that recent ex parte orders without notice have also been granted for a number of other reasons, for example:

  • spousal support (paragraph 20 – order made in 2008);
  • custody and access (paragraph 3); and
  • access to records (paragraph 14 – order made earlier than 2009).

    Divorce Cartoon

  • Family Law: Debt or Loan?

    At the National Family Law Conference Stacie R. Glazman, LL.M., C.S., CBV, presented a paper entitled “Thanks for the Money, Mom and Dad.  Do I have to Pay You Back?”

    Ms. Glazman is an excellent speaker (and author) so the topics stuck with me.  Her paper, and presentation, addressed an issue that can become contentious: if a parent advances money to their married child:

    • is the money a gift?
    • is the money a loan?
    • is the money a gift to only their child (and not the spouse)?
    • is the money a loan to only their child (and not the spouse)?

    Often becasue these gifts/loans are given in the context of family relationships, they are not documented and recorded with the same level of detail that business transactions are.  When parties separate, and money has to be separated, and disputes often arise as to who gets the benefit of the money from mom and dad, or who has to pay the money back to mom and dad.

    In 2007 the Supreme Court of Canada released a decision dealing with the loan vs. gift issue, in an estate context.  In the Pecore v. Pecore decision, the court found that the presupmtion of advancement is not applicable to transfers between parents and adult independent children.  Previously, the presumption of advancement had applied to property transfers between parents and independent adult children where no consideration was given.  The presumption of advancement meaning: a presumption that the transfer was intended as a gift.  Baesd on the Pecore decision, the presumption is that of a resulting trust (i.e. a “loan”).

    Ms. Glazman summarizes the test as follows at page 8 of her paper:

    1. Determine if the presumption of resulting trust applies because the transfer is gratuitous and the recipient is obliged to return it;
    2. The onus is on the person claiming “gift” to show that a gift was intended;
    3. Look to the evidence as to the transferor’s actual intention to see if it is sufficient to rebut the presumption on a balance of probabilities.
    How does this apply to family law?

    Many courts across Canada have found that the law in Pecore has been applied to family law cases where there are “gift vs. loan” disputes.  For example, the recent case of T.S. v. M.S. and J.P provides a useful summary of the application of the Pecore decision to family law in British Columbia at paragraph 35, citing the case of Hawley v. Paradis:

    29        … The recent cases of Ng2008 BCSC 172 (CanLII), [2008 BCSC 172 ] and Krupa v. Krupa, 2008 BCSC 414 (CanLII), 2008 BCSC 414 [Krupa], have both considered the principles in Pecore within the context of transfers of money or property made by a parent to a child within a dispute over the division of marital property. Ng and Krupa are instructive in this case. In Ng at para. 37, Garson J. held that, according to Pecore, “a presumption of advancement as between parents and children will only arise in cases where the child is a minor”. She further stated that the presumption of a resulting trust had been rebutted in that case. In my view, Mr. Paradis’ contention that Garson J. thought other conclusions could be reached regarding the presumption of advancement is untenable. Rather, it appears clear to me that she was indicating that she was bound to follow the law as set out by the majority in Pecore, as am I. In Krupa, Madam Justice Ross concluded that the presumption of advancement with respect to gratuitous transfers from a parent to a child is limited to transfers involving minor children. She also stated at para. 78, “There is a presumption of resulting trust with respect to gratuitous transfers from a parent to an adult child.” Ross J. further considered D.L.M.2008 NBCA 2 (CanLII), [2008 NBCA 2, 289 D.L.R. (4th) 37] and held that the factors in Locke continue to be relevant to ascertaining intent when considering whether a transfer made by a parent to an adult child is a loan or a gift.

    30        Based on the case law presented to me, I conclude:

    1. that the presumption of advancement no longer applies between adult children and their parents;
    2. that as between adult children and their parents, the presumption is a resulting trust when the parents make gratuitous transfers to children;
    3. that the court must consider all of the evidence in determining whether the parent intended the transfer as a gift or a loan;
    4. that the factors considered in Wiens and Locke will assist the court in determining whether the advance was a loan or a gift.

    What evidence and factors will the court consider?

    The court may consider a number of factors in making the determination if a transfer was a gift or a loan.

    The factors set out in the Locke case, are:

    • Whether there are any documents showing that the transfer was a loan;
    • If a manner of repayment is specified;
    • If security is held for the loan;
    • If there are advances to one child and not to others (i.e. if this is a pattern of giving);
    • If there was a demand for payment prior to separation;
    • If there has been some form of repayment; and
    • If there is a likelihood or expectation of repayment.

    The evidence in each case will have an important impact on determining if the transfer was a gift or loan.

    Divorce: how much are the Vancouver Canucks worth?

    The answer is – we may never find out.

    As reported by Neal Hall in the Vancouver Sun:

    Vancouver Canucks owner Francesco Aquilini has filed an application in court to keep the team’s financial information private during his divorce case.

    A little background…

    Francesco Aquilini is involved in divorce proceedings with his wife, Taliah Aquilini, in a Supreme Court of British Columbia file opened on February 22, 2012.

    The Aquilini family has substantial assets, including an ownership interest in the Vancouver Canucks.  The team was valued at $300 million dollars by Forbes (calculated in November 2011).

    Of course a valuation in Forbes is not adequate information to rely upon in dividing family assets upon marital breakdown.

    What documents and information can I get about family assets in my divorce proceedings?

    In divorce proceedings, a spouse is entitled to substantial financial disclosure – far more financial information than an estimate of value from Forbes.

    A spouse is entitled to a Financial Statement, in Form F8 – which is a sworn statement setting out the income, assets and liabilities of the the other spouse, along with supporting documentation (such as tax returns and property assessments).

    A spouse can also employ the Supreme Court Family Rules to gain more in depth access to information regarding both family assets, and other assets of the spouse.

    Some of the methods to get financial information in a divorce proceeding include (but are not limited to):

    • Examinations for discovery;
    • Demands for production of documents (including demanding documents directly from the corporation/ business in which the spouse has an interest);
    • Examination and inspection of documents;
    • Discovery by interrogatories;
    • Examination of witnesses; and
    • Expert reports on financial issues.
    You wrote in a previous blog that divorce files are only accessible to specific people…why does Francesco Aquilini need a further court order?

    Divorce files are generally only accessible by the spouses and their respective legal counsel.

    However, court proceedings are usually opened to the public, and court decisions are also made public.

    Pursuant to Rule 5-1 of the Supreme Court Family Rules, the Supreme Court of British Columbia can make an order sealing financial information, if:

     the court considers that public disclosure of any information filed under this rule would be a hardship on the person in respect of whom the information is filed

    Court documents, filed in the above noted application, set out:

    One very prominent business owned by the Aquilini family is the Vancouver Canucks. Serious harm would flow to that business if its financial information were made publicly available.

    The application brought by Mr. Aquilini should be heard in the Supreme Court of British Columbia (Vancouver Registry) on Tuesday, June 12, 2012, according to NBC Sports.

    NOTE – If you need to find a courtroom or hearing time, daily lists can be found on Court Services Online.

    Provincial Court of British Columbia: how do you divide the dog?

    When parties separate, who gets to keep the family pet?  I know in my family, if things take a turn, a live issue will be who gets to keep Darryl Murray, the red standard poodle.

    "Who wouldn't want to celebrate Christmas with me?"

    In a decision of the British Columbia Provincial Court, the Honourable Judge S.D. Frame considerd a claim made by a man who wanted the court to make a declaration of ownership in a boarder collie named Laddie.  The man also sought specified access with the collie.

    The Court held that the man did not have an ownership interest in Laddie:

    By anthropomorphizing this dog, Ms. MacDonald led Mr. Kitchen to, and Mr. Kitchen allowed himself to be possessed of an expectation that, the dog was “the child” of both of them.  This, however, despite the sentimental aspects, does not create a beneficial or legal interest in a dog.

    The Vancouver Sun ran an article on Sunday about this case and notes the Ontario Superior Court of Justice case of Warnica v. Gering (metioned in Judge Frame’s decision).  In that case, the court dismisses a custody claim for a dog, finding that the court should not make custody orders for pets, despite pets being important to people’s lives:

    Whether in the Family Court or otherwise, I do not believe that any court should be in the business of making custody orders for pets, disguised or otherwise. To the extent that any of my colleagues may feel otherwise, I respectfully disagree. Obviously, I acknowledge that pets are of great importance to human beings. Strong bonds develop between them and the human beings that look after them. To some people, the relationship with their pets takes on a significance exceeding that of any other. They go to extraordinary lengths to preserve that relationship; even at a cost that some would say is disproportionate. Some may consider them to be children; however, they are not children.

    In the Alberta case of Boschee v. Duncana wife claimed $200 per month to support her husband’s St. Bernard dog (in addition to claiming $1500.00 per month in spousal support). The wife argued that she required pet support to cover the veterinary costs and the costs of feeding and caring for the dog after her husband left the dog in her care. The court found that a St. Bernand dog costs more to maintain and feed than the usual smaller variety.   In that case, the court ruled that $200 per month was a reasonable sum to compensate the wife for the time and expense required to look after her husband’s dog and ordered him to pay this as a dog maintenance cost.

    So who gets to keep the family pet? That should be up to you and your former partner to come to an agreement on – not for a court to decide.

    Exclusive Occupancy of the Family Residence: what is a “practical impossibility”?

    After separation it is difficult for spouses to remain the same residence in most cases.

    While it is usually much quicker and cheaper to resolve the matter of who is going to live where by agreement, in British Columbia, if spouses cannot come to an agreement about who is going to remain in the family residence (and who is going to leave) the spouse who wishes to stay in the residence (without the company of their estranged spouse) can bring a court application to for interim exclusive occupancy.

    The Family Relations Act sets out that one spouse can seek a court order for interim exclusive occupancy of the family residence.  To be successful the spouse seeking exclusive occupancy need to show:

    • shared use of the home is a practical impossibility; and

      House too full? Photo courtesy of mlabowicz -flickr

    • on the balance of convenience the they are the preferred occupant.

    A question arises – what is a practical impossibility?  Practical impossibility could mean many things – for example, I consider a day without coffee a practical impossibility.

    The courts have considered different circumstances that spouses have alleged create a practical impossibility leading to that spouse being awarded interim exclusive occupancy of the family residence.

    In a recent Supreme Court of British Columbia decision a wife alleged her husband engaged in behavior, including but not limited to, the following,  which created a practical impossibility:

    • growing marijuana;
    • leaving a women’s phone number by the bed;
    • leaving antifreeze in a place the wife’s dog could have consumed it;
    • making noise at night;
    • violating privacy by trying to access a personal computer and going into the wife’s room;
    • engaging in violence against the wife;

    The court found that if the main allegations were proved it could have been easily concluded that there was a practical impossibility but, given the conflicting evidence, such a conclusion could not be made.

    In another case, the court found that the wife’s evidence  of health problems caused by remaining in the same house as her husband did not establish a practical impossibility, however, the court had an obligation under the Divorce Act the Family Relations Act and the Law of Equity Act to consider the best interests of the children.   It was found by the court that the impact of the parties disagreements on the children made it a practical impossibility for the parties to remain in the same home.

    The Court has decided that it is the burden of the spouse claiming exclusive occupancy to prove the practical impossibility.  Once a practical impossibility is established, the Court is to consider the balance of convenience.