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By Jennifer Black – 2016/10/04

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When it comes to a separation, there are different types of costs to consider. Right away, most people think about the financial cost. However, there are other important costs as well. Another big consideration is the time cost; most people wish to deal with the issues of their separation in a timely manner so that they can move on with their lives. Finally, people often don’t consider the emotional costs of a separation, even though, sometimes, this might be the most important consideration in choosing a process to deal with a separation.

Therefore, the costs of separation can be broken down into three main categories:

1) Financial Costs
2) Time Costs
3) Emotional Costs

Financial Costs:

Financial costs are generally what many spouses think about when going through a separation. The Collaborative Process is a much more cost-effective process than the Court process. While the cost will depend upon the complexity of the issues and the time necessary to negotiate an agreement, in the Collaborative Process, most cases cost substantially less than Court cases. In the Collaborative Process, the matter is dealt with out of Court so costs can be kept to a minimum. The Court process is very expensive due to all of the paperwork that needs to be filed with the Court and all the procedural steps of a Court process. Often in the Court process, parties are incurring fees while their lawyer is simply waiting at the Courthouse for the Judge to hear their case.

In the Collaborative Process, parties are able to work with a neutral family professional along with their respective lawyers. Going through a separation is extremely difficult and emotions are often high which can side-track potential progress and cause legal fees to soar. In the Collaborative Process the neutral family professional will help people manage their emotions and keep the process on track, which helps keep legal costs down.

Often a neutral parenting professional becomes involved with the parties as well to resolve issues related to children. He or she can assist with minimizing costs by facilitating the negotiation of a parenting plan. The parenting professional is experienced in the needs of children in the divorce process and is able to provide the parties with advice about what is needed for the children given their ages and current circumstances.

Furthermore, a financial professional can assist in managing costs in the Collaborative Process by collecting the various financial documents needed and facilitating a discussion on the financial issues involved.

The Court process is an adversarial process, which often means costs are unpredictable and can escalate rapidly. In the Collaborative Process, your lawyers work together with both parties and other professionals to reach a mutually agreeable resolution. This team approach makes the Collaborative Process financially efficient by bringing together professional resources within a collaborative atmosphere, as costs are therefore more manageable.

Time Costs:

The details of each specific situation influence how quickly a separation or divorce proceeds. The Collaborative Process can be a more direct and efficient process than going to Court. In the Collaborative Process there is a focus on problem-solving, rather than blame and accusations. There is an opportunity to strive for respectful negotiated results. Full disclosure and open communication will help to address all of the issues in a timely manner. Working together, the parties, lawyers and other professionals involved, set the timelines in the process in order to keep the matter moving efficiently. In the Court process, you often have to wait for multiple court dates in order to move the matter forward. If your matter must proceed to trial there is often a long wait on the trial list. Matters in the Court process may take years to resolve.

Emotional Costs:

The Court process can take a huge emotional toll on people going through a separation. In the Court process, Affidavits are required to be sworn as evidence and sometimes this can degenerate into an “affidavit war,” in which each side writes nasty things about the other in an often fruitless attempt to gain an advantage. Often the Court process can inflame conflict in a separation, whereas the Collaborative Process works to manage and deal with conflict and to find a mutually agreeable resolution.

There is a huge advantage to the Collaborative Process when it comes to emotional costs. The Collaborative Process involves both parties, along with their lawyers and other professionals, to improve communication and work at resolving any conflict. Part of the Collaborative Process is minimizing the emotional costs associated with a separation.

A final important consideration is that an agreement reached together through mutual problem-solving, as in the Collaborative Process, is more likely to be complied with in the long term, as opposed to one reached through an adversarial process.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Jennifer Black is an experienced family law lawyer, collaborative law professional and mediator at SorbaraLaw.

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By Jessica Chyc, student, and James Peluch – 2016/10/04

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In an almost fairytale-like ending to a four year battle with the Toronto Children’s Aid Society (C.A.S.), Jim Peluch of the SorbaraLaw Family Law department (Guelph office) received news on Christmas Eve 2015 that two young children would be reunited with their older half-sibling. The Child and Family Services Review Board overturned an earlier 2011 C.A.S. decision and ordered that two young children with special needs be returned to the care of Jim’s clients, so that they could reside with their older half-sibling and hopefully eventually be adopted by the couple.

This was a good outcome for our Family Law department on a very complicated and narrowly defined legislative issue.

The Child and Family Services Review Board (C.F.S.R.B.) is an administrative tribunal whose powers are prescribed by the Ontario Child and Family Services Act. The issue of children being “at risk” or in need of “protection” in cases of physical abuse, sexual abuse, neglect, or emotional harm, is always determined by a Provincial Court. However, the placement of children once they have been made Crown Wards is an issue in which C.F.S.R.B. can intervene in limited circumstances.

In this case, an older half-sibling of the young children was put in the care of the couple by C.A.S. in 2005. The birth mother went on to have four more children with various male partners over the years. The second and third children were placed in foster care. The fourth and fifth children were born in 2009 and 2010 respectively. Jim’s clients went through a number of screening procedures and after the youngest two children were made Crown Wards in 2011, they were placed with the (potential adoptive) couple in 2011, together with the older half-sibling. After six months the C.A.S. felt that the couple was not a good fit for the two younger children, even though there were no reported problems with the oldest child between 2005 and 2011, and there were favourable reports for four of the first six months that the younger children were placed there. Communication issues arose when the couple relocated to a larger rural property in a neighbouring municipality. The C.A.S. also felt that one of the parents was not sharing information about the children in a straightforward manner; however, the C.A.S. had failed to fully investigate the circumstances surrounding the lack of information sharing.

Jim and his clients attended a hearing which was heard over 6 days between May through November, 2015. The Board heard evidence of the children’s needs and the efforts of the C.A.S. and of the clients to meet those needs. Jim was able to negate the evidence of the C.A.S.’s child-specific adoption homestudy expert, who had prepared a lengthy written report explaining why the couple was not a proper placement for the two youngest children. Her 2015 report essentially confirmed the 2011 C.A.S. decision to remove the children after six months. The C.F.S.R.B. did not agree with the rationale of the C.A.S. or their expert following Jim’s skillful cross examination. They released a 28-page decision outlining their reasons for having the children returned to Jim’s clients on December 24, 2015, and both children were home with the couple by December 30, 2015. At present, all indications are that the three children are getting along reasonably well. The C.F.S.R.B.’s intention of maintaining the sibling relationship where possible was certainly prescient in this particular case.

Congratulations to Jim and to his assistant, Karen Barber, without whom he could not have succeeded.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

James Peluch  is a lawyer at SorbaraLaw, practising predominantly family law in the firm’s Guelph office.

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By Elikem Deley – 2016/10/04

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A recent wave of Canadian case law has shone some light on testamentary freedom, and the exceptions to this freedom.

An individual has the freedom to dispose of his or her estate as he or she wishes. A clear and established exception to this freedom is when a testator has an obligation to a dependent (for example, a spouse, minor child, adult child or other person who is financially dependent on the testator). Another less clear exception to this freedom is when a Will contravenes public policy. The circumstances under which a Will may contravene public policy are varied and have recently been considered by lower provincial Courts and the Court of Appeal of Ontario.

In 2014, the Court of Queen’s Bench in New Brunswick considered whether the deceased’s Will, in which he left everything in his Estate to the National Alliance, a neo-Nazi group in the United States, was void for being illegal and contrary to public policy. The Court held that the monetary gift to the National Alliance should fail because the established mandate of the National Alliance was in contravention of section 319(2) of the Criminal Code of Canada (which prohibits hate propaganda) and because administering the testator’s Estate pursuant to his wishes and funding an association like this would not in the best interests of society: (McCorkill v. Streed, 2014 NBB 148).

In Spence v. BMO Trust Company (2016 ONCA 196), a recent decision of the Ontario Court of Appeal, the deceased left his Estate to one of his two daughters, Donna, and to her two sons. In his Will, Mr. Spence specifically excluded his other daughter, Verolin, and her children because “she has had no communication with me for several years and has shown no interest in me as a father.” In reality, Verolin and her father were very close, having immigrated together to Canada from the United Kingdom, and Mr. Spence and Donna had virtually no contact over many years. The trouble began when Verolin had children with a man who was not white, much to Mr. Spence’s dismay. As a result, he ceased communicating with her during the last 11 years of his life and changed his Will to exclude her and her children. Verolin brought a claim against the Estate, arguing that her exclusion from the Will was for racist reasons and was therefore void for public policy. These racist intentions were reported by family and friends who had knowledge of it from personal conversations with Mr. Spence. Justice Gilmore of the Superior Court of Justice of Ontario agreed with Verolin, finding that Mr. Spence’s reasons for disinheriting his daughter were based on a clearly-stated racist principle and that the provisions of the Will offended “not only human sensibilities but also public policy.” The case was successfully appealed to the Court of Appeal of Ontario in 2016. Mr. Spence’s Will was very clear with respect to his testamentary intentions and did not contain any clauses that were expressly racist. As the Will was unambiguous, the Court of Appeal held that there was no reason to consider any other evidence about Mr. Spence’s intentions, such as the recollections of family and friends. The Court of Appeal therefore held that the Will was not void for being contrary to public policy, and Mr. Spence’s Estate could be distributed as he wished.

In another recent Ontario case, Royal Trust Corporation of Canada v. The University of Western Ontario et al., 2016 ONSC 1143, the Court held that the deceased’s Will was, in fact, void for offending public policy. In this case, Dr. Priebe created a Will that created a scholarship for white, single, heterosexual, female or male science students who are not feminists or athletes. Justice Mitchell of the Superior Court of Justice of Ontario relied on a similar 1990 case about another discriminatory scholarship, and found that Dr. Priebe’s scholarship and the qualifications relating to “race, marital status, and sexual orientation and, in the case of female candidates, philosophical ideology” are void for being contrary to public policy. Even though the Will did not expressly show that Dr. Priebe was misogynistic, homophobic or a white supremacist, Justice Mitchell found that there was no doubt as to Dr. Priebe’s views and that his intention was to discriminate. It is unclear as of August 2016 whether this case has been appealed.

Courts take testamentary freedom very seriously; however, they take Canadian criminal laws and human rights and freedoms very seriously as well. It seems as though the Courts will intervene when a Will is expressly discriminatory, or where the administration of an Estate would place an Executor in a position to contravene public policy or criminal laws. Every case is different, and it is important to discuss your Will and Estate plans with a lawyer to ensure that your wishes are enforceable.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Elikem Deley  is a member of the estates group and practises in the areas of wills, powers of attorney, estate administration and estate litigation.

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By Steven Kenney – 2016/10/04

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When an individual is injured in a car accident, he or she is entitled to apply for Statutory Accident Benefits (SABs) through his or her own auto insurer. There are exceptions and limitations to these benefits. Thus it is extremely important to obtain legal advice as soon as possible.

This article focuses on two changes to the Regulation that governs SABs. These amendments were effective as of February 1, 2014.

Why are these changes significant?

If you have ever been involved or know someone who has been injured in a car accident, then you are also aware of the difficulties faced by victims and their families. It is never just the injured person who is impacted by the trauma. The stress of the medical circumstances is the first part of the crisis. The next hurdle involves legal and insurance questions.

One aspect of being injured is attendant care. Is the injured person medically able to be independent? Do they need assistance to prepare meals, complete personal hygiene, administer medication, change dressings or be mobile?
Our society’s foundation is based upon helping others. This moral guideline is more prevalent during the time of crisis and trauma.

Families and friends come together to support, and assist the injured person. In some instances, it is reflected by driving the individual to appointments, making meals or cleaning the house or helping with personal hygiene. These unprofessional aides are providing attendant care.

The aides do not ask for compensation, but provide assistance willingly. Perhaps it is the familial connection or returning a favour. Whatever the reason, the majority of family and friends will give their time and energy in order to meet the needs of the injured.

How long assistance is needed is largely dependent on the degree of injury. Those victims who are “catastrophic” (for example: paralyzed or brain injured) often receive professional care simply because of the type of medical care required. But not all victims are “catastrophic”. A badly fractured limb, torn muscles/tendons or severe neck injury, generally not determined to be catastrophic, will still need some form of “attendant care”.

Generally, the injured person does not want to impose, or take advantage of family and friends. However, there is comfort in having a family member or close friend nearby, giving encouraging words, and simply being there.

Payment of attendant care benefits to family members and friends has changed over the years. The reason for the changes may relate to the number of fraudulent claims, audit difficulties, or the fact that the benefit is too expensive to cover. Whatever the reason, on February 1, 2014, there was another change.

Previously, the payment of attendant care benefits related to economic loss or the payment of a service, whether to a professional or a family member or friend. The Ontario Court of Appeal (Henry v. Gore) reviewed the terminology and indicated “economic loss” was not a defined term. In other words, the Regulation pertaining to attendant care was not clear.

The amendment now states that if an attendant care provider is not acting in the ordinary course of employment, the benefit payable shall not exceed the amount of economic loss sustained.

What the change means may still require Court interpretation. Until that occurs, in all likelihood, family members and friends who provide attendant care will be giving of their time and energy freely or for a minimal amount.

The impact will vary depending on the degree of injury, need and time involved. Many family members and friends will continue to provide assistance as that is often the nature of those individuals. However, at some point, the stress of being an unprofessional caregiver will become unbearable and create its own victims.

Another aspect of injury is the Minor Injury Guidelines (MIG).

The purpose of the MIG was to provide payment of benefits to a maximum of $3,500, for minor injuries. The insurance industry wanted to remove some of the frustration associated with payment of benefits to make life a little easier for those individuals who sustained minor injuries and to achieve maximum recovery in a short time frame.

Sometimes the body does not recover quickly for many reasons. Pre-existing medical conditions have been cited by physicians as one major factor. For example, the victim may have osteoarthritis, migraines or old injuries.

Previously, an injured party/insured had the opportunity of being removed from the MIG when a physician provided an opinion supporting a pre-existing condition. In other words, the individual would not achieve maximum recovery because of the other medical condition.

The amendment will now require that the pre-existing condition must be in the physician’s clinical records prior to the accident. If there isn’t a clinical record somewhere of this pre-existing condition, then the insurance company will not likely accept it.

Many individuals do not have family physicians, or have not sought medical investigation for suspected health issues or never realized that a prior injury has led to a medical condition. Similarly, physicians do not have detailed notes of every discussion with patients, nor do they have clinical records from retired physicians.

Therefore, some individuals, who are diagnosed after a car accident with a medical condition that existed pre-car accident, will likely have difficulty arguing that the MIG ought not to apply to their situation.

Conclusion:

First and foremost, it is important to obtain legal advice. Secondly, consider hiring a professional caregiver. Thirdly, inform your physician or treating medical professional of all health conditions.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Steven Kenney is a lawyer at SorbaraLaw, currently practising primarily in the areas of medical malpractice and personal injury, though he maintains an interest in corporate and commercial matters as well as employment law.

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A recent case from Ontario’s Superior Court of Justice took a careful look at how a Will can survive even if a part of it has been found invalid.

In Stoor v. Stoor Estate, 2014 ONSC 5684, the deceased, Lillie Stoor, divided her estate into two parts.  One part was her investment portfolio, which she bequeathed to her only son, her nephews and her nieces equally for their immediate enjoyment.  The second was a life Trust for her son made up of the remainder of her estate: other investment and savings accounts, a house and the residue of her estate. Her estate trustees were to invest the assets, and distribute the income and capital to her son at their complete discretion. She also outlined that upon her son’s death, the residue of the Trust was to be distributed to “any and all worthy individuals and or causes who shall be alive or in existence at that time, as my Trustees may, from time to time, in their absolute and unfettered discretion consider advisable”.

Lillie also included a clause explaining exactly why she left her estate to her son by way of Trust instead of giving him the assets outright:“[w]e are all well aware of the mental and physical challenges which my only child and son…has had to live with all through his life.” It was clear that Lillie had concerns about her son’s ability to manage his financial affairs, and a Trust was her well-researched choice to deal with these concerns.

A Trust is created when a person (settlor) transfers property to someone else (trustee) with instructions that the property is to be used specifically for the benefit of a third party (beneficiary). In creating a trust, three criteria must be met, also known as the “three certainties”: 1) certainty of intention – it is clear that the settlor wants to transfer the property and create the trust); 2) certainty of subject matter – it is clear what property is to be transferred and how much is to be given to each beneficiary; and 3) certainty of objects – the beneficiaries are easily ascertainable and identifiable. If a trust does not have all three of these “certainties”, it will fail.

Lillie’s son brought an Application asking the Court to find that the gift to “any and all worthy individuals or causes” of the Trust was void for uncertainty of objects, and that because it was void, the Trust should fail. If it failed, he would get the entire capital and interest of the Trust immediately.

Justice Himel stated that trusts for ‘worthy causes’ or ‘worthy objects’ are not trusts for charitable purposes, and are therefore void for uncertainty. Had the term “charitable purposes” been used, the clause would likely have succeeded. However other terms like “worthy”, “public” or “benevolent” do not necessarily mean the same thing as “charitable”, and therefore cannot be considered the same thing. As a result, this clause was found to be void for uncertainty of objects.

As a result of this clause being found void, the next question was whether this meant that the Trust was not created and Lillie’s son could take his inheritance directly and immediately, or whether the Trust would continue for the son’s lifetime and would pass under the intestacy rules (i.e. the rules of distribution that apply where there is no Will) once he dies.

Justice Himel conducted a careful investigation of Lillie’s intentions. After reviewing the Will, Lillie’s lawyer’s notes from their Will preparation meetings, as well as Affidavit evidence provided by the Estate Trustee, Justice Himel found that Lillie was very clear in her intention for creating the Trust; namely that her son was not to have direct access to it, nor was he to have any interest except for what the Trustees give him in their absolute discretion. It was also clear that the uncertainty only involved what happens after the son dies. As a result of this interpretation of the Will, coupled with Lillie’s clear intentions, the Trust survived and the residue will be distributed according to the intestacy rules when Lillie’s son dies.

It is important to note that even though part of a Will may be found void for uncertainty or ambiguity, the Courts may still give effect to a testator’s intentions as long as they are clear and precise.

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Article written by
Elikem Deley. Elikem is a member of the estates group and practises in the areas of wills, powers of attorney, estate administration and estate litigation.

A recent Ontario Superior Court of Justice decision in El Ashiri v. Pembroke Residence Ltd. has expanded the circumstances in which a director of a corporation may be liable for debts owed to employees or former employees of the corporation, and the scope of that potential personal liability. The Court in El Ashiri used the oppression remedy under the Ontario Business Corporations Act (“OBCA”) to impose personal liability on a director for amounts owing to two employees, including amounts for unpaid wages, vacation and holiday pay, and pay in lieu of notice.

The Oppression Remedy and Statutory Provisions for Unpaid Wages  

Generally speaking, our system of corporate law is premised on the principle that corporations are distinct entities that incur their own debts and obligations.  With limited exceptions, directors or other employees of a corporation are not liable for the debts and obligations of the corporation.

Notwithstanding this general restriction on personal liability, Courts will “pierce the corporate veil” and find directors liable for corporate obligations in certain circumstances. One such circumstance is where a director is found to have caused the corporation to contract with a party when he or she knew or ought to have known that the corporation was incapable of paying or did not intend to pay on the contract. In addition, the OBCA has prescribed an “oppression remedy” through which an aggrieved party can seek damages against the corporation and its directors for oppressive conduct carried out by a corporation.  Traditionally, Courts have been reluctant to use the oppression remedy to impose liability for damages for wrongful dismissal except in certain limited circumstances.

In the employment context, section 131 of the OBCA and section 81 of the Employment Standards Act, 2000 (“ESA”) each provide that directors are liable to employees for unpaid wages up to a maximum of six months’ wages with certain preconditions.  The ESA provision is clear that “wages” in this context excludes termination pay or severance pay as prescribed by the Act or payable under an employment contract.  The OBCA provision contemplates liability for “all debts” of the corporation but this has been found not to include termination pay or severance pay under statute or at common law.  In this regard, while Courts have found that the phrase “all debts” includes amounts owing to employees on account of services provided to the corporation, termination pay and severance pay payable on account of the loss of employment are not amounts paid for services rendered, but rather, are amounts payable on account of a breach of the employment contract.

The effect of these statutory provisions and related case law has been that directors have not generally been found personally liable to former employees for statutory termination pay or severance pay or damages for wrongful dismissal.  This may no longer be the case if the ruling in El Ashiri is followed by other Courts.

El Ashiri

El Ashiri involved claims by two employees of two separate hotel operations for unpaid wages and damages for wrongful dismissal. The hotel operations were carried on by two separate corporations that had common ownership and a common director.  The employees were left with unpaid wages earned and were not paid termination pay upon termination after the hotels ran into financial difficulty.  They sued their respective employers as well as the director of those corporations personally.  The claim against the director was framed as an oppression remedy claim.  By the time the motion was heard, the director was deceased, so the claim was continued as against his estate.

The case was decided on a motion for summary judgment that was not defended. The Court found that the corporate employers were closely held and were controlled by a sole director who used them interchangeably.  The Court also found that the director caused the plaintiffs to work for the benefit of the corporations when he knew that the corporations were not in a position to pay for those services and that he failed to disclose the corporations’ financial troubles to the employees, while preferring other creditors over them.

The Court determined that the employees were creditors of the corporations by virtue of the amounts owed to them for wages etc. and, as a result, they were proper claimants under the oppression remedy. The Court further ruled that the director operated the hotels in a manner that was oppressive, high-handed, callous and unfairly prejudicial to rights and interests of the plaintiffs.  On the basis of these findings, the Court ruled that the director was personally liable to the employees under the oppression remedy and ordered damages against his estate for all amounts owing on account of unpaid wages, including pay in lieu of notice.

There was no discussion in the ruling about the relevant provisions of the OBCA and ESA for personal liability for unpaid wages or the limitation of the scope for that liability as prescribed by the legislation. Likewise, the Court did not provide any rationale for why it chose to impose liability using the oppression remedy as opposed to using the express provisions under the OBCA or the ESA.  In the case of both plaintiffs, however, the damages awarded exceeded the six-month wage limitation prescribed by the relevant legislation, and included damages for pay in lieu of notice that would otherwise not be available under the OBCA and ESA provisions for unpaid wages.  It may well be that the Court chose to frame the judgment under the oppression remedy in order to avoid these limitations.

Take Away Points

While this ruling was based upon unique facts that demonstrated a pattern of conduct that was found to be oppressive, it has certainly opened the door for potential exposure for directors to personal liability for wrongful dismissal damages and other amounts in excess of the limitations prescribed by statute.  It remains to be seen to what extent Courts will follow the rationale from El Ashiri and use the oppression remedy to expand the scope of personal liability for directors. For the time being, though, directors should be wary of this ruling and take extra care to ensure that they do not cause their respective corporations to engage in conduct that could attract the oppression remedy.

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Article written by
Justin Heimpel. Justin is a partner at SorbaraLaw and head of the labour and employment law practice. Justin’s practice is focused primarily on employment and construction matters. Justin was recently selected by his peers for inclusion in The Best Lawyers in Canada® 2015 for Corporate and Commercial Litigation as well as for Employment Law

It is well established in law that the obligation to pay child support may extend beyond the date a child turns eighteen.  For example, it can continue if the child remains dependant on his or her parents because he or she is pursuing full-time post-secondary education.  However, if a child decides to take time off before attending university or college and uses this “gap” period to travel or volunteer, what are the child support obligations on a non-custodial parent? How does the parents’ income impact the obligation?

A recent courtroom victory by our Family Law Lawyer, Grace Sun, helps answer these questions.

Child Support Obligations to an Adult Child  

The child support obligations to a child pursuing full-time, post-secondary education does not end on his or her 18th birthday because the law assumes that full-time students are still dependents and are unable to support themselves. The Child Support Guidelines require both parents to share, in proportion to their incomes, the post-secondary expenses such as tuition, books, fees, residence or its equivalent and meal plans or its equivalent if a child lives away from home to study.  If a child lives with a parent, then Guideline child support may be payable instead of residence and meal plan. However, if a non-custodial parent is a high income earner (over $150,000 gross per year), the Court has the discretion to order child support in addition to the contribution towards post-secondary education expenses.

High Income Earners

A parent earning more than $150,000 gross per year may be required to pay child support based on just $150,000 or if the Court deems that the monthly amount is inappropriate, then a Judge has the discretion to order a different amount, either more or less than the amount payable at the imputed income of $150,000.  The Court must consider the needs of the child and whether or not the Guideline child support based on the parent’s income would in effect transfer wealth to the other spouse over and above what is considered appropriate.

Complexities of “Gap Year”

In this case, the child deferred her entry to University until September 2015 in order to travel for a few months.  She was not taking any courses to improve her grades nor was she required to work to save money in order to attend University.

In analyzing the facts, the Court found that while the daughter’s decision to take a gap year to travel would “undoubtedly be mind-expanding and culturally enhancing, it cannot be properly described as an activity in continuing of her formal undergraduate education”.

The Court distinguished the facts of this case from those cases where a parent had been ordered to pay child support during a “gap” period.  In such cases, the adult child used the gap period to earn money or to take extra courses to improve his or her grades or worked towards a certificate, thereby entitling the child to gain admission to a University.

End Result

On an interim basis, the Court found in favour of our client and did not order the father to pay any child support during the months when the child was travelling.  Child support was also not ordered based on the father’s actual income but rather, it was based on an imputed income of $150,000 and support resumed when the child returned home to live with the custodial parent.

The calculation of child support payments for an adult child or a high income earner is complicated and fact-driven. Please don’t hesitate to contact us for more information.

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Article written by
Grace Sun and Abira Balendran, Law Student. Grace is a family law lawyer at SorbaraLaw, and has extensive experience in all aspects of family law, including separation, divorce, custody and support variation, and child protection hearings.

As Southern Ontario cities continue to grow and the province and municipalities encourage intensification of housing development, developers look upward with mid- and high-rise condominium developments. While the housing market has witnessed a strong demand for mid- to high-rise condominiums, developers cannot afford to build on speculation and need buyers to pay sizeable deposits and commit to purchasing their respective units before the project breaks ground. Banks will simply not finance such projects unless the committed sales are in the 70-80% range. While open houses at sales centres offer a solution, buyers are ultimately purchasing the units sight-unseen, relying upon the purchase agreement and disclosure documents to properly and accurately describe in detail the unit and common element dimensions, and the fit and amenities that are part and parcel of the development. When the buyer ultimately moves into the unit following construction, there is a requirement that the dimensions, fit, finish and amenities will be consistent with the purchase agreement and disclosure statement. This is often the case, but if this requirement is not met by the developer, there can be serious legal repercussions.

Failure by developers to deliver on their promises, or to fix problems or compensate unit owners for any deficiencies can escalate into lawsuits brought by upset buyers. When a legal action is brought by a buyer, other similarly affected buyers in the same condominium project may choose to pursue similar legal recourse. In the past, developers would typically handle such issues dealing with an individual buyer. However, recently, there has been a proliferation of class-action lawsuits brought on by disgruntled condominium purchasers which has become a wake-up call for developers.

Class action lawsuits have been a part of the legal landscape in Ontario for over 20 years, when Ontario’s Class Actions Proceedings Act came into effect. As this body of law develops, lawyers and clients are becoming more inventive in their application. For example, a unit owner and his or her lawyer seeking to bring a class action lawsuit will undoubtedly advertise to all unit owners in a building when dealing with an issue that affects all owners, inviting them to join in a class action lawsuit in a single legal action against the developer. Where a single lawsuit may be frustrating to a developer, a class action suit could potentially be crippling. Consider a lawsuit against a developer by a single buyer seeking damages of $10,000 for a problem that is common to the entire development. If every unit owner in a building of 200 units were to join together in a class action lawsuit, this hypothetical $10,000 could balloon to $2,000,000. A number of such class action suits have been reported over the past few years in Southern Ontario.

Last fall, a class action lawsuit was filed against a condominium developer for installing improper water valves in one of their buildings – the showers in every condominium unit had spikes and drops in water temperature whenever a neighbouring unit flushed a toilet or started a washing machine. One of the unit owners attempted to fix the problem, at a cost of $4,000, and took action against the developer for not reimbursing him. Eventually other owners became involved, and the situation snowballed into a $29 million class action lawsuit.  Similarly, in the past five years, several condominium buildings have become the subject of class-action lawsuits as a result of glass falling off of the structures post-construction.  Plaintiffs in this case included not only residents, but individuals who were injured by the falling glass. Finally, last year, Toronto condominium residents realized that their new condominium building did not have the “easy underground access” to the subway line that they were promised. Once the residents moved in, and realized that there was no such access, a $30 million class action lawsuit was launched against the developer. There are countless potential situations that could lead to a class action lawsuit, including improper or missing amenities, structural matters, leaking or faulty windows and incorrect unit measurements.

As a developer, the key to avoiding class action lawsuits is detailed preparation on two levels: first, having condominium descriptions and disclosure statements that accurately describe the product ultimately constructed and delivered to the buyers. Second, it is crucial that the fit, finish and amenities of the condominium units and common areas are consistent with the disclosure statement. As seen in the case above, something as simple as neglecting to install pressure balancing devices for showers or sinks when promised can have severe repercussions. Ultimately, proper preparation at every stage ensures that the developer does not favour short-term profitability at the risk of long-term prosperity. For more information on this topic or anything related to land use and development, please contact Mark Schumacher, Seth Jutzi or David Sunday.

 

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Article written by
Mark Schumacher and Nigel Smith, Law Student. Mark is a partner at SorbaraLaw, practising in commercial and residential real estate development including condominiums and complete subdivisions, as well as secured financing for these transactions..

Just eight months after Canada’s Anti-Spam Legislation (“CASL”) came into force on July 1, 2014, the Canadian Radio-television and Tele-Communications Commission (“CRTC”) has issued the first significant Notice of Violation against a Quebec-based company called Compu-Finder. CASL prohibits commercial electronic messages (“CEMs”) sent for the purpose of encouraging commercial activity without the express or implied consent of the recipient. The new legislation also requires the inclusion of an ‘unsubscribe’ option on electronic communication. Under CASL, the CRTC can impose penalties of up to $10 million on corporations and $1 million on individuals for violating the CEM rules.

On March 5, 2015, the CRTC announced that it had issued a Notice of Violation and a penalty of $1.1 million against Compu-Finder for what it called flagrant violations of CASL. The CRTC noted that Compu-Finder failed to comply with CASL by sending out CEMs promoting training courses to businesses without the consent of recipients. The CEMs that Compu-Finder sent also neglected to include a functioning ‘unsubscribe’ option. The CRTC became aware of Compu-Finder’s actions through the Spam Reporting Centre, where it received 1,000 complaints against Compu-Finder per day. Compu-Finder has 30 days to submit written representations in its defence to the CRTC. Unless it does so, the company will be found to be in violation of CASL and must pay the fine. The monetary penalty is designed to ensure compliance with CASL, and the CRTC noted that its goal in issuing violations is to encourage companies like Compu-Finder to amend their business practices to comply with the new legislation.

The CRTC has also noted that it is in the process of investigating a number of other CASL complaints, indicating that it is taking CASL violations seriously. It appears that the CRTC is focusing in particular on businesses that are not complying with CASL’s ‘unsubscribe’ requirements for CEMs. On March 25, the CRTC announced that the Vancouver-based online dating website PlentyofFish had entered into a voluntary settlement, under which it paid $48,000 and agreed to implement a CASL compliance program into its business practices. The CRTC had received complaints that CEMs that PlentyofFish was sending had a faulty unsubscribe mechanism. The company took immediate steps to remedy the problem. Entering into a voluntary settlement under CASL means that PlentyofFish will not be considered to have committed the violations.

Whether or not the CRTC continues to issue hefty penalties against offenders, the action against both Compu-Finder and PlentyofFish demonstrates that the new legislation has teeth, and should serve as a warning to businesses that the implications of CASL are not to be underestimated.  If your business has yet to review its electronic marketing practices in order to ensure compliance with CASL, you should consider doing so immediately to avoid customer complaints, bad publicity and potential penalties.

Steps to take include:

•  Ensure that recipients of electronic communica-tions have given their consent. Now that the CASL is in force, businesses that have not sought consent will face added hurdles, as sending electronic correspondence requesting express consent may itself be considered a prohibited CEM. Express consent is not time-limited and therefore continues until it is revoked.

•  Consider whether implied consent has expired. Under CASL, implied consent based on an existing business or non-business relationship with recipients lapses two years after the event that triggered the relationship, such as the purchase of a product. Implied consent also applies to addresses that have been conspicuously published.

•  Keep records of how you have obtained consent. The onus on proving that consent has been given is on the party sending the CEM.

•  Exercise diligence in ensuring that CEMs include the requisite ‘unsubscribe’ option and that it is properly functioning. This appears to be a key factor in the CRTC’s reviews of a company’s CASL compliance.

The initial actions taken by the CRTC should send a message to businesses that violators of CASL risk facing considerable consequences. It is in the best interest of businesses to ensure that they have taken the necessary measures to ensure CASL compliance.

If you have any questions regarding CASL or your business’s compliance status, please contact Cameron Mitchell at cmitchell@sorbaralaw.com.

 

Article written by 

Cameron Mitchell and Katy Hughes, Law Student. Cameron is a business lawyer at SorbaraLaw, specializing in all aspects of corporate-commercial law.

Municipal Bonusing: “Obvious undue advantage” remains the threshold, but still little judicial guidance on how municipalities should draw the line.

Section 106 of the Ontario Municipal Act, 2001 is an “anti-bonusing” provision of broad application, which causes much concern. It is worrisome because its limits and applications are far from clear. By its terms, the provision purports to create an unqualified prohibition on municipalities directly or indirectly assisting any manufacturing, industrial, or commercial enterprise through “bonusing”.  The scope of prohibited “bonusing” extends to the giving or lending of any municipal property, including money, guaranteeing borrowing, leasing or selling any municipal property, or giving a total or partial exemption from any levy, charge, or fee.

Even though the anti-bonusing provision, by its terms, would appear to place very significant and wide-ranging restrictions on municipal action, in the little judicial consideration the provision has received, it has actually been construed and applied quite narrowly.  Four Ontario cases have now considered the anti-bonusing provision, with the most recent consideration being in Vincorp Financial Ltd. v. The Corporation of the County of Oxford (2014) ONSC 2580 released April 30, 2014.

The judicial consideration prior to Vincorp established several principles applicable to the interpretation of the anti-bonusing provision.  Stated briefly these are:

1.  Powers conferred upon municipalities by the Municipal Act, 2001 are to be given a broad and purposive interpretation;

2.  The anti-bonusing provision restricts municipal powers, therefore must be construed narrowly so as not to unduly detract from municipal powers; 

3.  All municipal contracts confer an advantage or benefit of some kind; 

4.  The anti-bonusing provision should be construed as only prohibiting the granting of “obvious undue advantages”. 

The challenge with the anti-bonusing provision lies in the application of these principles to the facts of any particular situation. Determining whether there has been a contravention of the anti-bonusing provision requires a judgment call as to whether there has been an “obvious undue advantage” or, stated another way, an “unmerited windfall” to some enterprise.  These are inherently subjective concepts.  In the absence of further judicial guidance, precisely how municipalities and their advisors should go about making such a judgment call remains unclear.

In Vincorp, the Court had an opportunity to provide further legal guidance, but unfortunately it did not do so.  The Vincorp case involved an expropriated shopping mall owner who alleged that the County of Oxford had provided a bonus to Toyota by expropriating the mall lands and then transferring those lands to Toyota at the “expropriation price” as opposed to “fair market value”.  There was no evidence and no specific finding by the Court as to the actual difference, if any, between these values.

The Court in Vincorp rejected the mall owner’s position, but in reaching its conclusion simply adopted and applied past judicial analysis to conclude that any advantage conferred on Toyota did not pass the pre-existing threshold of “obvious undue advantage”.  The Court noted that the County and the Province would derive significant economic benefits as a result of Toyota building a new manufacturing plant in Woodstock, such that any benefit that might have accrued to Toyota through the transfer of the mall lands at the expropriation price could not be considered an “obvious undue advantage”.

The Vincorp decision’s greatest significance appears to be that it involves a novel, albeit failed, attempt to apply the anti-bonusing provision to an expropriation for a municipal economic development purpose. Beyond that, however, it provides little by way additional judicial guidance as to how to distinguish between “obvious undue advantages” and “merited advantages”.

In the event an appeal from Vincorp is heard (and we understand an appeal has been filed), then it would be hoped that the Court of Appeal takes the opportunity to provide further guidance on how the distinction between  “obvious undue advantages” and “merited advantages” ought to be made.  Municipalities should monitor for further judicial guidance on the anti-bonusing provision and, in the meantime, exercise caution to ensure that any advantage conferred by the municipality cannot be characterized as “undue”.  At present, this appears to mean that the municipality needs to be able to point to significant (and perhaps proportionate) benefits to itself and/or the public any time an advantage is conferred, otherwise a municipality may be exposed to allegations of illegal bonusing.

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Article written by
David Sunday. David is a lawyer at SorbaraLaw, and is the leader of the municipal, land use & development law group.


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