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Clients often ask us to explain the purpose of a Settlement Conference, which is to have meaningful settlement discussions to see if a case, or issues of a case, can be settled without the need for a trial. In family law, litigants are entitled to one Settlement Conference unless otherwise permitted by the case management judge. The parties to a case are expected to prepare and attend at a Settlement Conference in full compliance with the Family Law RulesEach party is expected to attend at the Settlement Conference and to be prepared to discuss settlement confident that they have as much relevant information available to them as is necessary to assist. A party who attends at a Settlement Conference without being prepared cannot make an informed decision about issues concerning their case, and a lawyer cannot competently provide their client with settlement advice. 

 

In a recent case of the Ontario Superior Court of Justice, Ni. v. Yan 2020 ONSC 5941, Mr. Justice D.A. Jarvis made it clear that a Settlement Conference should never be a forum to dispute and adjudicate upon issues of financial disclosure. In this case, the parties who had counsel were disregarding the Family Law Rules and practise directions regarding the purpose and value of a Settlement Conference.  

 

Background

 

Both parties prepared through the assistance of their legal counsel lengthly Settlement Conference Briefs with voluminous attachments in preparation for their Settlement Conference concerning equalization and the parties' net family property for assets in Canada and China, and support. These materials collectively contained over 236 pages and 20 tabbed attachments.

 

The Wife claimed that there were over 25 assets for which no disclosure had been provided. Each party made additional allegations in their materials that the other party had not provided financial disclosure with a list of over 35 outstanding disclosure requests. However, the parties failed to properly complete their paperwork and to include the specific items that the court requires such as an updated Financial Statement, a Net Family Property Statement, or to estimate the time it would take for a trial

 

To make matters even worse, neither party had previously attempted to bring a motion before the court to deal with the disclosure issues, which is what an experienced lawyer knows to do prior to the scheduling a Settlement Conference. You cannot settle a case if you do not have financial disclosure, and it would be negligent to have any comprehensive settlement discussions or to conduct a Settlement Conference prior to disclosure.

 

It is clear that the lack of attempt by counsel to rectify the financial disclosure issues before the conduct of a Settlement Conference signaled to Justice Jarvis that neither party was taking the purpose of a Settlement Conference seriously. Justice Jarvis made it clear that the court's time must be respected, and you must come to court prepared to deal with your case. There are rules of practise in place for a purpose, and they are not to be blatantly disregarded to use the court to attempt to achieve another purpose.

 

The Ruling

 

The court held that the Settlement Conference had to be adjourned, and that no further Settlement Conference could be scheduled without leave from Justice Jarvis as the case management judge. The Settlement Conference would not be proceeding because neither party was properly prepared or at the stage of the case that it made any sense to have any substantial settlement discussions. 

 

Justice Jarvis referred to a passage from Justice Kitely in Greco-Wang v. Wang2014 ONSC 5366 and added:

 

"Members of the public who are users of civil courts are not entitled to unlimited access to trial judges”. While that observation was made in the context of a Trial Scheduling Conference, it is equally, if not more, pertinent to settlement conference events. Too often serial settlement conference events are permitted in circumstances where there are continuing complaints about inadequate or refused disclosure impacting a party’s ability to make an informed settlement decision. That practice must end.

 

The court noted that financial disclosure had to be complete prior to the conduct of a Settlement Conference by way of a motion. A failure to comply with any financial disclosure so ordered at a motion may invite the non-complaint party's pleadings to be struck. The court made it clear that parties are entitled to one Settlement Conference unless otherwise ordered. Either the parties were to comply with their disclosure obligations "or their day in court would not happen any time in the near future" (at para. 12). The court stated that a Settlement Conference should not be used for "serialized mediation" (at para. 12).

 

Our Take Away

 

If you and your lawyer decide to disregard the Family Law Rules and practise directions, you do so at great risk of your case not being heard.  Even worse, you may upset a judge so much that they may cancel the Settlement Conference and release a written reported Ruling, as occurred in this case. This case is a lesson to all family law litigants that the rules of the court must be followed, and a failure to do so will not be looked at kindly by the court.

 

If you are dealing with a family law matter before the court, and you need assistance with a Settlement Conference or legal representation, we invite you to contact an experienced lawyer at our firm for more information about how we may be of assistance.

 

Aubrey Sherman is the managing partner at Sherman Law LLP in Kitchener, Ontario. His practice focuses on family law, estate planning, and estate administration. The team at Sherman Law LLP in Waterloo Region has over 40 years of experience providing clients with creative and innovative solutions. If you wish to discuss your family law or estate planning matter in further detail, please contact our office to arrange for a consultation. We can be reached by phone at 519-884-0034 or by email.

 

 

 

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Many parents have recently found themselves in disagreement over whether or not in-person learning at school is safe for their children with the rise of COVID-19 cases across much of the country. Parents may find themselves in disagreement, and naturally there is often divided opinion between parents, especially for those who are separated and divorced and do not see to eye-to-eye on issues of parenting.

 

In a recent case of Zinati v. Spence 2020 ONSC 5231, the Ontario Superior Court of Justice considered at motion the issue of whether it is safe for a child to attend school in-person.

 

Parents disagree over whether or not school is safe for a child

 

The mother and father of the child, who was 6 years old and was to start Grade 1 this year, exercised de facto joint decision making. Like many children, the child's last year of school was interrupted by the COVID-19 shutdown. The child's school resumed in-person learning in September 2020. However, the father did not wish the child to attend in-person schooling, while the mother supported that the child return to in-person learning.

 

The issue before the court was to determine if it was in the child's best interest to return to in-person learning at her school, or to continue with online learning. 

 

To make matters even more complicated, the child's stepmother is a front-line health care worker who therefore may be of exposed risk of getting COVID-19. Both homes were also shared by a grandparent. However, the court did not consider the grandparents to be at increased risk other than risks associated with age. The court was satisfied that the stepmother was following health guidelines established by her profession. The child had no health issues of her own that would put her at an increased risk if she were to contract the virus.

 

How has the court been dealing with cases involving children and return to school during the concerns relating to COVID-19?

 

There have been a number of decisions recently released relating to the question of safety for students returning to school during COVID-19.  In Chase v. Chase 2020 ONSC 5083, Justice Himel of the court heard an urgent motion in writing where the parents could not agree about whether or not their child should attend school in-person or online. In Chase v. Chase, the court referenced two cases from Quebec, which is unusual because Quebec decisions are rarely binding on Ontario courts. In one of the Quebec cases, a return to school order did not occur because a family member was at high risk of contracting the virus because of an autoimmune disorder. In the other case, the court found that the government and provincial health authorities were in the best position to determine if a return to school decision was safe.

 

In our case at hand, the court examined a child-focused approach to the school attendance issue and quoted the earlier Ontario decision in Chase v. Chase, which stated at paragraph 42:

 

"The Ontario government is in a better position than the courts to assess and address school attendance risks. The decision to re-open the schools was made with the benefit of medical expert advisers and in consultation with Ontario school boards. The teachers’ unions and others have provided their input as well as their concerns. While the parties spent considerable time addressing a recently released report by the Toronto Hospital for Sick Children, I decline to consider same. There are experts on all sides of the Covid-19 debate, however, the decision to re-open schools and the steps being taken to protect children and staff fall within the purview of the Ontario government."

 

The Court's View

 

Justice Akbarali held that while no child is entirely free of the health risks associated with COVID-19 while attending school, the risks have not found be severe enough to warrant keeping children who are not at a higher risk of health complications from attending at in-person learning. The court found that there were not sufficient grounds to warrant requiring the child to attend school virtually or to delay the child's return to in-person learning. 

 

The court also held that there would be no order as to costs because the issue "novel, important, and an all-or-nothing issue." The court found that since neither party acted in bad faith or took unreasonable positions that there was to be no costs of the motion.

 

If you are dealing with a complication arising from a situation of schooling for a child during COVID-19 as it applies to your family law and parenting matter, we invite you to contact an experienced lawyer at our firm for more information about how we may be of assistance.

 

Aubrey Sherman is the managing partner at Sherman Law LLP in Kitchener, Ontario. His practice focuses on family law, estate planning, and estate administration. The team at Sherman Law LLP in Waterloo Region has over 40 years of experience providing clients with creative and innovative solutions. If you wish to discuss your family law or estate planning matter in further detail, please contact our office to arrange for a consultation. We can be reached by phone at 519-884-0034 or by email.

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The Supreme Court of Canada in Michel v. Graydon, 2020 SCC 24 recently released a decision clarifying its position on awarding a variance in retroactive child support to children who are not adults. 

 

What is retroactive child support?

 

Retroactive child support is support that a parent is ordered to pay in situations when they should have been paying more child support than they had been previously under the Child Support Guidelines. Sometimes, the avoidance of the party paying support may not be discovered until the child is an adult. This decision now gives clarity in this important area of family law as to the difference between what should have been paid  in child support and what amounts of retroactive child support can be recovered when the child is an adult. 

 

The Payor/Father did not report all of his income, which left him with smaller child support payments

 

The facts of this case revolved around two parents, referred in the decisions as "M" (the mother) and "G" (the father). The parents had a child referred to as "A", who was born in 1991. M and G separated in 1994. Upon separation, A lived with his mother and his father agreed to pay child support. These terms were formalized in an Order on Consent in 2001. 

 

The father's child support obligations came to end in 2012. After this time, the mother came to realize that the father had been understating his income firm 2001 to 2012, with the exception of 2004. Upon learning this fact, the mother applied under British Columbia's Family Law Act to retroactively vary child support for the period in which the father underreported his income and underpaid his child support. 

 

The Recipient/Mother's Application for retroactive support was successful, but then it was overturned on appeal

 

The Application first appeared before a hearing judge who awarded the mother $23,000 in retroactive child support. However, on appeal to the Supreme Court of British Columbia, the father was successful in overturning the decision. The court referred to a 2006 Supreme Court of Canada decision, which held that an Application for child support under the Divorce Act had to be made while the child was still "a child of the marriage". The court held that the same position should be made to an Application under the province's Family Law Act

 

The Supreme Court of Canada 

 

The mother appealed the decision to the Supreme Court of Canada. In the majority's decision, the court stated that Applications for retroactive child support must be analyzed through the provincial and federal laws for which they are based. The court stated that its decision in 2006 only applied to the Divorce Act, and should not be interpreted as an imposition on all provincial laws dealing with the issue of child support.

 

The SCC held that it was within the law to to award a retroactive variance of child support. Upon reviewing the facts of the case, the court held that the father had underreported his income, which lead to his failure to meet his child support obligations. The court also found that the payor father would not experience undue hardship if he was required to make the payment of retroactive child support. As a result, the hearing judge's decision was enforced and the father was required to pay $23,000 plus costs. And we are confident that those costs would be significant.

 

If you are dealing with a complication arising from a situation of retroactive child support as it applies to your family law and parenting matter, we invite you to contact an experienced lawyer at our firm for more information about how we may be of assistance.

 

Aubrey Sherman is the managing partner at Sherman Law LLP in Kitchener, Ontario. His practice focuses on family law, estate planning, and estate administration. The team at Sherman Law LLP in Waterloo Region has over 40 years of experience providing clients with creative and innovative solutions. If you wish to discuss your family law or estate planning matter in further detail, please contact our office to arrange for a consultation. We can be reached by phone at 519-884-0034 or by email.

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The Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) defines a category of property known as “excluded property” that is excluded from the equalization of a spouse’s net family property upon separation and marriage breakdown, which can also include the death of a married spouse if the surviving spouse chooses an election under the FLA.

 

If a spouse owns property on the date of marriage breakdown that qualifies as excluded property, the value of that excluded property is excluded from the total calculation of that spouse’s net family property subject to equalization. The most common category of excluded property is property that a spouse acquires by way of a gift or inheritance from a third person during the marriage, income from such a gift or inheritance if expressly excluded by the donor, and property into which such a gift or inheritance can be traced including damages, proceeds, a right to proceeds of a life insurance policy, and unadjusted pensionable earnings under the Canada Pension Plan.

 

Paul’s Inheritance

 

Let’s apply this scenario to a real life situation. Paul is married to Mandy and he receives an inheritance of $350,000 during the marriage and the Will expressly excludes income on the inheritance. Paul decides to invest the inheritance in a separate account to which no other funds are contributed, and the income is reinvested each year to the exclusion of his spouse, Mandy. Paul decides to use a portion of the funds to buy a sports car, which is registered in his name alone. Paul and Mandy subsequently separate. On the date of the marriage breakdown, Paul continues to own the sports car and the investment account has grown to $495,000. The value of the investment account is excluded from Paul’s calculation of net family property, as is the value of the sports car because it is traceable to the inheritance, and it was acquired with the excluded inheritance funds.

 

The outcome of the above example would be markedly different absent a marriage contract if a matrimonial home is involved. If a matrimonial home is acquired by Paul by way of gift or inheritance during the marriage, it will not automatically qualify as excluded property. Similarly, if property that is otherwise excluded property in accordance with the FLA is used to acquire a matrimonial home that Paul and Mandy ordinarily occupy as a family residence, it is no longer excluded property.

 

Using the above example, if Paul takes the $350,000 inheritance and makes a lump sum payment against the mortgage on his matrimonial home, the $350,000 contribution is no longer excluded property and is subject to equalization with Mandy because he used the inheritance to pay off a mortgage on a matrimonial home and therefore lost his right for exclusion of this portion of the inheritance.

 

For illustration, if Paul inherited a cottage property on Lake Joseph from his father that was used seasonally by spouse, Mandy and his family during the marriage, notwithstanding the fact that the cottage was inherited during the marriage, it would not automatically be excluded property because it was occupied by Paul and Mandy as a matrimonial home. In the FLA, you can have more than one matrimonial home.

 

The concept of excluded property in the FLA has some flexibility built into its application. A further category of excluded property in the FLA is provided at paragraph 6 of subsection 4(2), whereby property that “the spouses have agreed by a domestic contract is not to be included in the spouse’s net family property” can be excluded. This flexibility permits spouses to enter into a marriage contract to exclude property from equalization that would otherwise be subject to equalization, such as a matrimonial home.

 

Returning to our case with Paul, let’s assume Paul anticipated receiving the cottage as part of his inheritance, and further that Paul anticipated using the cash portion of his inheritance to either acquire a matrimonial home or pay down the mortgage. Paul and Mandy could enter into a marriage contract that specifically maintains excluded property status for both the cottage and any portion of the inheritance that is traced into a matrimonial home. This is a common motivation for clients choosing the advantage of entering into a marriage contact, especially as housing prices continue to rise in Waterloo Region and couples are relying on family wealth to finance home purchases. A marriage contract is beneficial documents for those entering into marriage, but especially helpful for those in blended families who wish to ensure that property is excluded both upon marriage breakdown and in estate planning.

 

Aubrey Sherman is the managing partner at Sherman Law LLP in Kitchener, Ontario. His practice focuses on family law, estate planning, and estate administration. The team at Sherman Law LLP in Waterloo Region has over 40 years of experience providing clients with creative and innovative solutions. If you wish to discuss your family law or estate planning matter in further detail, please contact our office to arrange for a consultation. We can be reached by phone at 519-884-0034 or by email.

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A marriage contract can often be an essential component of estate planning. Often, the need for this contract and related discussion arises during a consultation with a client when the children of the first or second generation in a successful small family business begin to marry and/or establish families of their own, particularly where those children are also beneficiaries of a discretionary family trust that holds common shares in the family business. Those generations that contributed to the family wealth often come to require our services with the goal to protect assets from claims under the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), in the event of a marriage breakdown by the spouses of subsequent generations.

 

The Matrimonial Home

 

The treatment of the family home is often a central consideration when considering the appropriateness for entering into a marriage contract. If a family home is a “matrimonial home” for purposes of the FLA, it will be treated differently than other property if there is an equalization of net family property in the event of marriage breakdown. A “matrimonial home” is any property in which one of the spouses has an interest that is ordinarily occupied by the spouses as their family residence at the time of separation. There can be more than one matrimonial home. For example, if the spouses jointly own a primary home and one spouse also owns a vacation property such as a cottage, each property is a matrimonial home provided the other components of the definition are met. Seasonal use of a recreational property such as a cottage will usually qualify as “ordinary occupation” for this purpose.

 

When married spouses separate or when one spouse dies, either spouse (or the surviving spouse in the case of the death of a spouse), can make a claim for an “equalization of net family property”. The equalization is effected through a combination of a cash payment and/or asset transfer, known as an “equalization payment”, from the spouse who had the greater increase in net family property during the marriage to the spouse with the lesser increase in net family property during the marriage. The equalization payment equalizes the increase in value of property during the marriage, but it does not physically divide property. The amount of the equalization payment is 50% of the difference between the two changes in net family property, often referred to as net worth. For example, if Tom has an increase in net worth of $200,000 and Sally has an increase in net worth of $70,000, Tom makes an equalization payment to Sally of $65,000, which is 50% of the difference between $200,000 and $70,000.

 

Bringing a Home into the Marriage

 

A noteworthy exception to the general rule is when a matrimonial home is brought into the marriage and also owned on the date of separation. In this circumstance, the FLA does not permit a deduction from net family property for the value of the matrimonial home on the date of marriage, effectively equalizing the equity on the date of separation, as opposed to the increase in the equity during the marriage.

 

Let’s apply this reasoning to an actual situation. Assume Bob owns a home worth $1 million on the date of marriage, and it is a matrimonial home. Bob and Shirley also have investments of $100,000 on the date of marriage. Neither spouse has debts. Accordingly, Bob has a net family property of $1.1 million on the date of marriage and Shirley has net family property of $100,000 on the date of marriage. Bob and Shirley separate after 8 years of marriage. Bob owns the same matrimonial home as on the date of marriage, but it is now worth $1.6 million. Each spouse’s investments have grown to $200,000. Neither Bob nor Shirley has any debts. Therefore, Bob has net family property of $1.8 million on the date of separation, while Shirley has net family property of $200,000 on the date of separation. The growth in the value of Bob’s net family property is $700,000, while the growth in Shirley’s net family property is $100,000.

 

If the matrimonial home was treated the same as any other property, Bob would owe Shirley an equalization payment of $300,000, being 50% of the difference between $700,000 and $100,000. However, because Bob owned the same matrimonial home on both the date of marriage and the date of separation, its value on the date of marriage is not deducted. That means Bob has net family property of $1.7 million, as opposed to $700,000, and in fact owes an equalization payment to Shirley of $800,000 as opposed to $300,000. It is worth noting that if Bob had sold the original home after the date of marriage and the spouses were living in a different matrimonial home on the date of separation, the date of marriage deduction for the value of the original home would be permitted, and the equalization payment would be $300,000.

 

These differences in outcomes illustrated in the above example may seem unfair, especially to a spouse who is bringing a previously owned home into the marriage. Addressing the imbalance of how the home will be valued and divided upon marriage breakdown is often one of the central reasons for a party to decide the necessity of entering into a marriage contract as part of estate planning particularly for blended families or those entering into subsequent marriages.

 

Aubrey Sherman is the managing partner at Sherman Law LLP in Kitchener, Ontario. His practice focuses on family law, estate planning, and estate administration. The team at Sherman Law LLP in Waterloo Region has over 40 years of experience providing clients with creative and innovative solutions. If you wish to discuss your family law or estate planning matter in further detail, please contact our office to arrange for a consultation. We can be reached by phone at 519-884-0034 or by email.

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Modern families and those trying to conceive have benefited from technological advances in helping women become pregnant who have previously been unable to do so. These types of advances in technology can frequently come with challenging questions for the courts to consider during marriage breakdown as to property division and ownership. In a recent decision of S.H. v. D.H., 2019 ONCA 454, the Ontario Court of Appeal overturned a 2018 Ontario Superior Court of Justice decision, which had ruled that the wife should be awarded custody of her frozen embryos after the ending of a marriage.

 

The relationship

 

The parties identified only as D.H. and S.H. married in February 2009. The couple wanted to have a family and had trouble conceiving. The case arose in 2011 when the couple paid $11,500 US for the purchase of four embryos created from anonymous sperm and egg donors in the United States. Two were viable. One was implanted in the wife known as D.H. and resulted in a now 6 year old son. The second embryo was frozen.

 

The couple separated in December 2012 after the birth of their son. Following the separation the wife who was in her 40s, sought to gain possession of the second embryo so she could have another child and her son could have a biological sibling. She had agreed not to pursue child support from the husband known as S.H. should she have another child, but he refused to provide his consent.

 

At Trial

 

In July 2018, the wife argued that her ex-husband had signed an agreement that even in the event of a separation; the wife’s wishes to have a child would prevail. The husband argued that he had paid for the embryos and they belonged to him. The husband stated that he had changed his mind post-divorce and now wanted the frozen embryo to be donated.

 

On July 9, 2018, the Honourable Mr. Justice Robert Del Frate of the Ontario Superior Court, 2018 ONSC 4506 released his written reasons for the judgment and sided with the wife relying on the contracts that the couple had signed when they embarked on the fertility process. “There is no law on point that has considered how to dispose of embryos when neither party has a biological connection to [them], Del Frate J. wrote in his decision. “It would be contrary to contract law were I to decide that the wishes of the parties at the time of entering into this contract were other than what they agreed to.” Del Frate J. said that the wife could have the embryo if she reimbursed the husband $1,438 US – representing half of the cost of its creation.

 

The Appeal

 

The husband appealed this decision, arguing he had changed his mind after signing the contract and that the law allowed him to do so. He argued that his ex-wife would be committing a criminal offence if she had the embryo implanted over his express objection. The wife argued that his consent was no longer required because they were no longer spouses.

 

“The idea that donor consent can become frozen in time, rendered unsusceptible to changes of mind, belies the central importance placed upon consent in the statutory scheme.”

 

-The Honorable Madam Justice Fairburn for the appeal court

 

The Honourable Madam Justice Michal Fairburn wrote for the appeal court. The court began its analysis by stating that neither contract nor property law principles govern this case adding that “Parliament has imposed a consent-based, rather than a contract-based, model through legislation and regulation.” The court acknowledged the difficult decision faced by the trial judge, but pointed out that the Assisted Human Reproduction Act should be considered in this case. “The appellant’s unmitigated right to withdraw his consent overtakes any prior contractual agreement to the contrary, and is dispositive in this case,” Fairburn J. wrote. “I do not accept that donors may simply contract away their right to withdraw consent under the criminal law.” The Act states that a donor’s written consent is necessary, and it “prohibits the use of an in vitro embryo for any purpose without regulation-compliant written consent.”

 

The court found that both former spouses retained rights to the embryo to which neither were genetically related. Spouses who obtain embryos are considered “donors” even if neither of them have a biological connection to the embryo. The wife therefore could not have a purchased frozen embryo implanted over the objections of her ex-husband.

 

Aubrey Sherman is the managing partner at Sherman Law LLP in Kitchener, Ontario. His practice focuses on family law, estate planning, and estate administration. The team at Sherman Law LLP in Waterloo Region has over 40 years of experience providing clients with creative and innovative solutions. If you wish to discuss your family law or estate planning matter in further detail, please contact our office to arrange for a consultation. We can be reached by phone at 519-884-0034 or by email.

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