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

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.

Family Law Act Fact Sheet

On Tuesday, I presented at the eWomen Network Vancouver Island Accelerated Networking Dinner.

The presentation I gave was a summary of changes that are coming with the new Family Law Act.

Carly and I at the eWomenNetwork dinner on August 14, 2012

According to the explanitory notes to the Family Law Act, it will do the following  (bold portion taken from the explanatory note to the Family Law Act – italics portion are Christine’s commentary):

  • Promote family dispute resolution to resolve disputes;
  •  More emphasis placed on mediation, collaborative law, arbitration, parenting coordinators and out of court dispute resolution;
  • Clarify when and how agreements may be set aside;
  •  The court will only be able change the terms of a written agreement if: one of the parties failed to disclose significant property or debts, one person took advantage of the other’s vulnerability, one spouse did not understand the nature and consequences of the agreement, there is a common law reason the contract would be voidable;
  • The test for determining if an agreement is valid changes from “unfair” to “significantly unfair”;
  • Establish a comprehensive scheme to determine a child’s legal parent, including in situations where technology has been used to assist reproduction;
  • Ensure that the best interests of the child are the only consideration when resolving parenting disputes, and add into the consideration of the best interests of the child any history of family violence and, unless inappropriate, the child’s views;
  • There is no presumption of equal parenting time;
  • Emphasize responsibilities to children and promote cooperation by eliminating divisive terms, replacing “custody” and “access” with “guardianship”, “parental responsibilities” and “contact with a child”;
  • Establish a clear framework to determine whether a parent may relocate with a child;
  • Extend rights and duties respecting property division to unmarried persons who qualify as spouses, and modify the property division framework to meet recommendations from the British Columbia Law Institute respecting pension division;
  • Spouses will have access to the property division provisions of the Family Law Act.  A spouse is a person who has lived in a marriage-like relationship for two years or is legally married.
  • Align spousal support more closely with the Divorce Act (Canada) and eliminate parental support;
  • The court may order that spousal support (and child support) may continue after the person who pays support dies.
  • Increase the range of remedies and consequences for non-compliance with agreements and orders;
  • Replace civil restraining orders with orders to protect safety and orders to manage behaviours that are problematic but do not present a risk of family violence;
  • Amend the Commercial Arbitration Act to change the title and add provisions unique to arbitrations respecting family law disputes;

There are many, many, many more details and changes to be aware of –  it is very important to consult with a lawyer for legal advice.   The extended version of my presentation goes into more of these details.  I will be interested to see, after the legislation comes into force, if it does all of things it promises to do!

Contempt of Court: what is it and how to avoid it?

At the National Family Law Conference last month, the Honourable Madame Justice Elizabeth Jollimore of the Supreme Court of Nova Scotia  and Sharon Kravetsky  gave an excellent presentation entitled: “Contempt: Substantive Law and Strategic Considerations.”    This presentation got me thinking about contempt of court in a family law context – people have asked me if they can have their spouse (or former spouse) found in contempt of court – without knowing exactly what it involves.

What is civil contempt of court?

Black’s Law Dictionary defines civil contempt as: “The failure to obey a court order that was issued for another party’s benefit.  A civil contempt proceeding is coercive or remidial in nature.  The usual sancation is to confirm the contemner until he or she complies with the court order.”

The Saskatchewan family law case of Brown v. Bezanson explains what contempt of court is used for and what needs to be met to make a finding of contempt:

A proceeding for civil contempt is available to redress a private wrong by forcing compliance with an order for the benefit of the party in whose favor the order was made.  Sanctions for civil contempt are thus mainly coercive in nature.  Their aim is to force complaince with the order.  They may also be punative where the circumstances warrant it.

The burden of proof in contempt applicaitons is beyond a reasonable doubt and rests with a party alleging the contempt.

In civil contempt proceedings the following evidence must be proven beyond a reasonable doubt:

  1. The terms of the order must be clear and unambiguous;
  2. The contemner must have knowledge of the terms of the order;
  3. The breach of the terms of the order;
  4. The appropriate mens rea must be present.

JP Boyd’s BC Family Law Resource provides a description of the procedural process to make an application to seek a finding that someone is in contempt of court in a family law proceeding.

What are the penalties for being found in civil contempt?

In terms of penalties for contempt, Sharon Kravetsky states in her paper “Contempt: Compliance, Restoration and Punishment” at page 21:

Traditional responses to contempt are fines or imprisionment.  These responses may be the reason contempt is such an unsatisfactory remedy in family law.  Stretching already strained finances or incarcerating a care-giver or access parent does little to serve the best interest of a child.  In contempt cases which involve children, there is always concern about the best interests.  More imaginative responses may be necessary.

Penalties for contempt of court in family law cases have included (but are not limited to): incarceration, terms of incarceration, fines, court ordered costs, suspension of child support payments, make up access visits, change in primary care of a child, and changes in decision making authority for a child.

How can I avoid being found in contempt of court?

Generally being in contempt of court is something you bring upon yourself by account of your own behaviour (by doing or failing to do something).  Some common sense tips for not being found in contempt include:

1) Do not act like my Cousin Vinnie:

http://www.youtube.com/watch?v=pFOnB9ODRkA

2) Follow court orders;

3) If you are unclear about a court order, seek clarification as soon as possible;

4) If you are unable to comply with a court order, seek to have the court order changed by the court so you can comply with the terms of the order; and

5) Consult a lawyer with any quesitons you have about a court order.

National Family Law Conference

Last week I attended the National Family Law Program in Halifax, Nova Scotia.

The conference had amazing presenters and it was really fun to see some of my family law friends from around the country.

Enjoying my first lobster dinner with Andrea Farnham (from the firm Farnham West Stolee LLP)

Over the next few weeks I will be blogging about some of the materials and ideas presented at the conference as well as some of my own including:

  • Gifts and loans;
  • Evidence in family law trials;
  • Gender bias in family law; and
  • Retroactive support.

I am already looking forward to the 2014 program.

Divorce: Shouts & Murmers

 The last few weeks have been full of interesting news items about divorce.  Here are a couple to check out:

Nick Downes - Published in the New Yorker January 17, 2000

The New Yorker:

In a recent “Shouts & Murmers” Cora Frazier wrote about divorcing in exchange for working  from home and getting rid of the daily commute.  It is a hillarious read, especially on your daily commute to work (after a morning of bickering with your spouse):
5% of [Americans] surveyed said they would actually be willing to divorce their spouse if that meant they could stop commuting and work from home instead.
Mainstreet.com.

You see, this was the choice the survey offered me, as I understood it: I could continue to take a forty-seven-minute train ride (or a thirty-eight-minute ferry ride) and a twelve-minute subway ride to and from work every day while remaining your wife, or I could work from home and cease to be married to you. I have chosen the latter.

You probably have a few questions, as I did. For example, will this home be our home, where you also live? Given the fact that we will no longer be husband and wife, this is a complication. I asked the surveyor this question, but she had already moved on to “Would you give up manicures if it meant you didn’t have to commute?” (No.)

www.perezhilton.com:

Perez Hilton always posts interesting tidbits about celebrity divorces.  Kim Kardashian’s divorce is proceeding with depositions, and Kris Humprhies is set to testify.  Winnie Cooper is getting a divorce (not from Kevin Arnold) and has given some reasons why.

 Supreme Court of British Columbia:

mentioned  earlier this month, the case of  Aquilini v. Aquilini is proceeding in the Supreme Court of British Columbia.  A decision was published yesterday, penned by the Honourable Madam Justice Stromberg-Stein, on the application of Francesco Aquilini to seal the  court file in his divorce proceedings including, but not limited to, reasons for judgment, court orders, affidavits, and transcripts.

Ms. Aquilini argued that the public interst in having open court proceedings should override the privacy interests of Mr. Aquilini and family.  A leading court decision in this regard is Edmonton Journal v. Alberta, which  states:

In summary, the public interest in open trials and in the ability of the press to provide complete reports of what takes place in the courtroom is rooted in the need (1) to maintain an effective evidentiary process; (2) to ensure a judiciary and juries that behave fairly and that are sensitive to the values espoused by the society; (3) to promote a shared sense that our courts operate with integrity and dispense justice; and (4) to provide an ongoing opportunity for the community to learn how the justice system operates and how the law being applied daily in the courts affects them.

 In this case, an interim order was granted sealing the file, pending the outcome of a two day application for a permanent sealing order (to be heard in August 2012), to protect personal and financial information fo Mr. Aquilini, that he believes may otherwise be open to competitors and news outlets.

 Let me know if you run across any interesting divorce articles to share!

 

Family Law Act: March 18, 2013

I am looking forward to lots of things in 2013…for example:

The Family Law Act is coming into force on March 18, 2012 – it has just been announced.  The new legislation will substantially change family law in British Columbia and it will replace the Family Relations Act.