17 January 2015

How to Tell the Kids You're Separating

Alyson Jones, a well-respected West Vancouver family and child counsellor, collaborative coach, parenting coordinator, parent educator and author, has published an article in the Huffington Post about how parents can tell their children that they're separating. Most parents find telling their kids about their separation to be extraordinarily challenging. In fact, noted clinical psychologist Joan Kelly has found that a ridiculously small number of children, less than 20% if I recall, are told anything about what's going on between their parents and that this can have negative short- and long-term consequences for children's wellbeing.

I won't spoil Alyson's helpful article — you really should read it — but here's a short digest of her main points:

1. Prepare for the talk by meeting with a mental health coach expert in parenting issues.

2. Tell the children together. Take the talk seriously; don't be too casual in your approach.

3. Although you shouldn't be afraid of your children's emotional reaction, you can't get carried away by your own; be strong.

4. Tell the children that you both love them and that this will never change.

5. Tell the children what will be different in their lives and what won't.

Gary Neuman's book, Helping Your Kids Cope with Divorce the Sandcastles Way, is another helpful resource on this subject.

15 January 2015

Court of Appeal Releases Helpful Decision on Relocation under the Divorce Act

The British Columbia Court of Appeal has just released a decision on relocation under the Divorce Act that will be very useful for practitioners and anyone researching the issue. Relocation cases, also known as mobility cases, happen when one parent wants to take the child and move a significant distance away from the other parent. Most of the time, the staying parent objects to the move because of the effect the distance will likely have on his or her relationship with the child; it is terribly difficult, if not impossible, to maintain a close relationship with a child when contact is reduced to a telephone call once a week and, depending on the distance, weekend visits once every two or three months.

In T.K. v R.J.H.A., the parties were married and the wife sought to move from Victoria to Toronto with the two children. The trial judge considered the wife's claim under the Divorce Act rather than the Family Law Act, and ultimately concluded that it was in the children's interests to continue with the shared parenting arrangement that had prevailed previously. The wife appealed this result.

I don't think it's necessary to say much about this case, as the law, at least the law emanating from the Court of Appeal, is fairly well settled. The case, however, should be read and is very helpful for:

  • the court's excellent survey of the leading appellate cases on mobility; 
  • confirming that Gordon v Goertz remains the leading case for mobility applications heard under the Divorce Act;
  • addressing the restricted circumstances under which the reasons for a proposed move may be considered under Gordon; and,
  • discussing the double-bind that can arise if there is a factual presumption in favour of the status quo and against relocation.
The cases reviewed in T.K. include Nunweiler v Nunweiler, Falvai v Falvai, S.S.L. v J.W.W., Hejzlar v Mitchell-Hejzlar and Stav v Stav, appeal cases all. The court's description of the law on relocation as a "jurisprudential minefield" is apt.

12 January 2015

Quickscribe 2.0: Legislation service training session coming up, register now

Quickscribe Services is offering a free lunch-and-learn training session on its excellent legislation tracking and research service, Quickscribe 2.0, which I've written about elsewhere. The session qualifies for one CPD credit  a will be held by webinar at noon on Wednesday 14 January 2015.

Quickscribe 2.0 offers access to all provincial, and some federal, legislation and regulations, without point-in-time capabilities, tracking of pending and in-force amendments and speedy consolidations. Public annotations are provided by leading practitioners; users can also make private annotations available only to themselves or only within a firm. The service features a cool tracking feature that will alert you to amendments and new annotations.

Although Quickscribe 1.0 was perhaps not as helpful as it could have been for family law practitioners, I have found Quickscribe 2.0 to be a handy research aid and surprisingly useful. You can take a slideshow-style tour of Quickscribe 2.0 or request a free trial.

Register for the training session on Eventbrite.

05 January 2015

Supreme Court Releases Important Decision on Jurisdiction in Property Cases Under the FLA

Over the winter break, Madam Justice Donegan of the British Columbia Supreme Court handed down her judgment in Cockerham v Hanc, an  important decision discussing some of the more difficult parts of the new Family Law Act on when the court should take jurisdiction in disputes about property division and spousal support. "Jurisdiction" has a number of meanings. For the purposes of this post, I mean jurisdiction in the sense of the court's authority to hear a particular case when the same case could potentially also be heard by a different court. Courts don't like to be stepping on each other's toes — with good reason! — and whether to take jurisdiction when jurisdiction is challenged is among the more important and more difficult decisions the court has to make.

Cockerham involved an unmarried couple who began to live together in Ontario in 2007 and separated in early 2014, following which Cockerham, who was unemployed, moved to British Columbia while Hanc stayed in Ontario where his job was. Cockerham started court proceedings in British Columbia a few months later, following a contact from Hanc's lawyer in Ontario. In her claim, Cockerham asked for:
  • an equal division of the family property, including a house and a condominium in Ontario;
  • an interest in Hanc's other property;
  • an equal apportionment of responsibility for her student loans, amounting to some $200,000; and,
  • spousal support.
Hanc replied to Cockerham's claim with a Jurisdictional Response, a court form under the Supreme Court Family Rules which is filed when a party to a lawsuit, usually a respondent, believes that the court should not or cannot take jurisdiction in the case. Hanc subsequently applied for an order under SCFR 18-2 that Cockerham's case be dismissed or suspended, "on the grounds that this court does not have jurisdiction or that the court ought to decline to exercise its jurisdiction," and it is this application which gave Madam Justice Donegan reason to consider some of the more complicated parts of the Family Law Act.

The reasons for Hanc's application are probably obvious from the short facts I've given. Here, however, is the court's concise synopsis:
"[26] Mr. Hanc submits that the appropriate forum for these issues to be decided is Ontario. The parties resided in Ontario until their separation, when Ms. Cockerham moved to Kamloops. Mr. Hanc has no ties to British Columbia and owns no property here. He is not, and has never been, a resident of British Columbia. He has no connection to this province. With respect to Ms. Cockerham’s claim for spousal support, Mr. Hanc submits that it must be claimed pursuant to the provisions of the [Interjurisdictional Support Orders Act]. The [Family Law Act], he submits, does not empower a British Columbia court to make an original order for support against a non-resident.

"[27] With respect to the claim for division of family property and debt, Mr. Hanc asserts that there is no real and substantial connection between British Columbia and the facts on which the proceeding against him is based. As such, he submits that this court lacks territorial jurisdiction under either the provisions of the Court Jurisdiction and Proceedings Transfer Act ... or the FLA. In the alternative, if the court determines that it does have jurisdiction in respect of this claim, Mr. Hanc submits that this court ought to decline jurisdiction in favour of Ontario."
Fair enough. Now the Court Jurisdiction and Proceedings Transfer Act, which deals with the court's authority to hear a case, has been around since 2003. We've had enough court decisions on the act to understand it fairly well. The Family Law Act, on the other hand is fairly new and the parts of the act that deal with property located outside the province, and the ability of British Columbia courts to make orders about that property, are ridiculously complex, which is what makes this decision so important. If you want to read them in their entirety for yourself — which you should — look for Division 6 of Part 5. It's harder to read than the federal Income Tax Act, and just as likely to keep you awake at night.

Determining Whether to Take Jurisdiction under Part 5 of the Family Law Act

Here is the step-by-step analysis taken by Justice Donegan with respect to the property portion of Cockerham's claim.
1. The burden of proving that the court has the jurisdiction to hear a case is on the person who claims that the court has jurisdiction. (Para. 31) 
2. The first place to look is normally the Court Jurisdiction and Proceedings Transfer Act, unless there is legislation that applies to the case which specifically addresses the jurisdiction issue. (Para. 32) 
3. The Family Law Act specifically addresses the jurisdiction issue at Division 6 of Part 5. (Para. 33)  
4. The test for the court to decide whether it should make orders under Part 5, the part of the act dealing with property and debt, is set out in s. 106. (Para. 42) Here's what s. 106 says:
(1) This section applies if an order respecting property division, respecting the same spouses, may be made in more than one jurisdiction. 
(2) Despite any other provision of this Part, the Supreme Court has authority to make an order under this Part only if one of the following conditions is met: 
(a) a spouse has started another proceeding in the Supreme Court, to which a proceeding under this Part is a counterclaim; 
(b) both spouses submit, either in an agreement or during the proceeding, to the Supreme Court's jurisdiction under this Part; 
(c) either spouse is habitually resident in British Columbia at the time a proceeding under this Part is started; 
(d) there is a real and substantial connection between British Columbia and the facts on which the proceeding under this Part is based.
   (3) For the purposes of subsection (2) (d), a real and substantial connection is presumed to exist if one or more of the following apply:
(a) property that is the subject of the proceeding is located in British Columbia; 
(b) the most recent common habitual residence of the spouses was in British Columbia; 
(c) a notice of family claim with respect to the spouses has been issued under the Divorce Act (Canada) in British Columbia.
   (4) Despite subsection (2), a court may decline to make an order under this Part if the court, having regard to the interests of the spouses and the ends of justice, considers that it is more appropriate for jurisdiction to be exercised outside British Columbia. 
(5) In determining whether to decline jurisdiction under subsection (4), the court must consider all of the following: 
(a) [Repealed. 2014-9-15(b)]. 
(b) the relative convenience and expense for the spouses and their witnesses; 
(c) if section 108 [choice of law rules] applies, the law to be applied to issues in the proceeding; 
(d) the desirability of avoiding multiple proceedings or conflicting decisions in different courts or tribunals; 
(e) the extent to which an order respecting property or debt
(i) made in another jurisdiction would be enforceable in British Columbia, and 
(ii) made in British Columbia would be enforceable in another jurisdiction;
    (f) the fair and efficient working of the Canadian legal system as a whole; 
(g) any other circumstances the court considers relevant.
   (6) A determination of authority under subsection (2) or of whether to decline jurisdiction under subsection (4) is to be made solely by reference to this section.
Bit of a mouthful, isn't it? 
5. However, under s-s. (1), s. 106 only applies if an order about property division between the same people can be made in more than one jurisdiction. (Para. 46) 
6. If s. 106 applies, the court must then decide whether one or more of the conditions in s-s. (2) are met, giving it the authority to make orders under Part 5. (Para. 49) 
7. Even if the court has jurisdiction under s. 106(2), under s-s. (4) it must then decide whether it should exercise that jurisdiction or "it is more appropriate for jurisdiction to be exercised outside British Columbia," considering the factors set out in s-s. (5). (Paras. 57 and 59)
Application to the Case

Following this reasoning, the judge held that Cockerham had the burden of establishing that the British Columbia court could take jurisdiction over property mostly located in Ontario. She held that the Family Law Act has specific provisions addressing jurisdiction over that property and that the Family Law Act applied rather than the Court Jurisdiction and Proceedings Transfer Act.

She then turned to s. 106 and concluded that the section applied to the case before her as orders between Cockerham and Hanc about the family property could be made in both Ontario, where the parties had lived during the whole of their relationship and where the bulk of their property was located, and in British Columbia, where Cockerham lived now and where the proceeds of an RRSP account and some jewelry were located.

The judge then decided that Cockerham was "habitually resident within British Columbia," under s. 106(2)(c), which would allow the court to take jurisdiction and make orders about the Ontario property under Part 5.
Habitual Residence
I'm going to pause here to dwell on "habitual residence" and "ordinary residence" for a moment. These terms are used in the Court Jurisdiction and Proceedings Transfer Act, pop up in the case law about jurisdiction all the time, and can be confusing. Here's Justice Donegal's handy summary of the case law, cites omitted as usual:
"[51] What is meant by habitual residence? 'Habitual' and 'ordinary' residence are two expressions that have been used interchangeably ... 
"[52] In [S.R.L. v. K.J.T.] Madam Justice Fenlon summarized the principles governing the determination of ordinary residence at para. 30 as follows:
I now turn to the principles governing the determination of ordinary residence.
a) Preponderance of time spent at a residence is not determinative; 
b) A person may be ordinarily resident without being actually resident; 
c) It is where a person regularly, normally or customarily lives his or her customary mode of life as opposed to a special, occasional, or casual residence; 
d) It is where a person intends to make a home for an indefinite period; an intention to reside there permanently is not required."
Accordingly, Her Ladyship concluded that:
"[53] On the basis of these authorities, I am satisfied that at the time of filing her claim, Ms. Cockerham was habitually resident in British Columbia. 
"[54] In March of 2014, Ms. Cockerham left the home she had previously shared with Mr. Hanc in Ontario. With nowhere to go, she moved to [city], British Columbia and into the home of her mother and step-father, residents of [city] for several years. Having spent time here in the past with family and friends, it was a place familiar to her, a place where she now receives financial and emotional support. 
"[55] Ms. Cockerham's evidence is clear that she is not a visitor or tourist here — this is her home. Her activities following her arrival here all support the conclusion that British Columbia is where she now normally and customarily resides. She obtained a British Columbia driver's licence. She secured a family doctor, who is currently treating her for a medical condition. She has applied for a multitude of jobs in [city] in fields related to her degree. She has significant and meaningful family ties here. That Ms. Cockerham may be accepted to a residency program next year that may see her away from [city] temporarily does not affect a finding that she was, and remains, habitually resident in British Columbia pursuant to s. 106(2)(c) of the FLA."
However, although the judge held that she could take jurisdiction under s. 106(2)(c), she declined to exercise that jurisdiction in favour of the courts of Ontario under s. 106(4):
"[61] Other than the engagement ring that Ms. Cockerham kept and a small RRSP that she has now cashed and spent, the property and debts at issue are all located and based in Ontario. Mr. Hanc's real and other property is all located in Ontario. Ms. Cockerham's claims, as they have been pled, relate substantially to that real property, but also include claims to Mr. Hanc's RRSPs, pensions, chattels, insurance, savings, business interests, options, shares, and club memberships. Neither party owns any real property in British Columbia. 
"[62] If this matter were to proceed in British Columbia, the inconvenience and expense to the parties would be very high, particularly to Mr. Hanc. The parties lived their lives together in Ontario. Civilian witnesses that may be required would largely be from Ontario. Mr. Hanc's financial information is all in Ontario. Expert witnesses from Ontario would be required in relation to appraisals of the real property and possibly his other assets. The significant family debt that is claimed is based upon a contract signed by the parties in Ontario. Bank representatives involved in the contract and/or in keeping of the records may be required to testify. To hear this matter, with nearly all Ontario witnesses, would be very inconvenient and expensive to many people, significantly Mr. Hanc. 
"[63] Further, s. 108 of the FLA applies to this case and leads to the inevitable conclusion that the applicable internal law that would apply to Ms. Cockerham's claims under Part 5 of the FLA is the law of Ontario."
Of course this means that we need to talk about s. 108 as well.
Applicable Law
Section 108 is another difficult part of Division 6. In a nutshell, when the court takes jurisdiction under s. 106, s. 108 is used to figure out the law that should be used to divide the property, which might be the rules about the division of family property set out in the rest of Part 5 or might be the laws of the jurisdiction in which the parties had their "last common habitual residence" — the last place they lived together. Here's s. 108, which is just as difficult to read as s. 106:
(1) In this section, "regime of community of property" means a system of law, including a regime of partnership of acquests, in which property owned or acquired and debt owing or acquired during the relationship between the spouses 
(a) are deemed to be owned or owing by both spouses, and 
(b) are divided, on separation of the spouses, as if both spouses equally owned the property or owed the debt,
but does not include a regime of separate property or a system of law under which a spouse's interest is deferred until or after the occurrence of an event that signifies the end of the relationship between the spouses. 
(2) If the Supreme Court takes jurisdiction under this Division, the Supreme Court must act in accordance with the rules set out in this section. 
(3) Subject to subsection (4), if spouses make an agreement respecting the division of property or debt, the substantive rights of the spouses in a proceeding under this Part are determined by the agreement. 
(4) The enforcement of an agreement under subsection (3) is subject to any restriction that the proper law of the relationship places on the ability of spouses to determine the division of property or debt by agreement. 
(5) Subject to subsection (3), if the spouses' first common habitual residence during the relationship between the spouses was in a jurisdiction in which a regime of community of property applies, property owned or acquired and debt owing or acquired during the relationship between the spouses that is property or debt to which the regime of community of property applies must be divided at the end of the relationship between the spouses according to that regime of community of property. 
(6) If neither subsection (3) nor (5) applies, the substantive rights of spouses in a proceeding under this Part must be determined according to the proper law of the relationship.
In other words, if the parties have an agreement about property, their property should be divided according to their agreement. If the parties used to live in a place that had rules like the old Family Relations Act, where all property used for a family purpose was divided, whether bought before or during the relationship, those are the rules that should be used. If neither of these situations apply, you then have to figure out the "proper law of the relationship," according to the test set out in s. 107:
The proper law of the relationship between the spouses for the purposes of section 108 is 
(a) the internal law of the jurisdiction in which the spouses had their most recent common habitual residence, 
(b) if the jurisdiction under paragraph (a) is outside Canada and is not the jurisdiction most closely associated with the relationship between the spouses, the internal law of the jurisdiction that is most closely associated with the relationship between the spouses, or 
(c) if the spouses did not have a common habitual residence, the internal law of the jurisdiction in which the spouse making an application for an order under this Part was most recently habitually resident.
The judge's conclusions under s. 108 merely confirm her decision to decline to act made under s. 106(4):
"[64] Section 108(2) mandates that if the court takes jurisdiction under Division 6 of Part 5, it must act in accordance with s. 108. As there is no agreement between the parties regarding the applicable internal law, only subsections (5) and (6) are relevant. ... 
"[65] The parties' first common habitual residence was in Ontario. It was their only residence together where they lived and participated in everyday family life. If Ontario has a 'regime of community property', the applicable internal law is that of Ontario. If Ontario does not have a 'regime of community property', the applicable internal law is determined by s. 107 of the FLA. Also known as the 'proper law' of the spousal relationship, this too would be Ontario law because Ontario is the jurisdiction where the parties had their most recent common habitual residence. 
"[66] As I have concluded the law of Ontario would apply to Ms. Cockerham's claims under Part 5, additional inconvenience and expense would be required if this matter proceeded in British Columbia. As Mr. Hanc points out, an expert in Ontario family law would be required to offer opinion evidence on the law of property and debt division."
I should mention that at this point in her reasons, the judge analyses Cockerham's claim under the Court Jurisdiction and Proceedings Transfer Act, reaching an identical conclusion. Her analysis of this act will be helpful for anyone looking into whether there is a "real and substantial connection" — another cryptic phrase bedevilling the case law on jurisdiction! — between British Columbia and the facts of a particular case. 

Determining Whether to Take Jurisdiction under Part 7 of the Family Law Act

As for Cockerham's claim for spousal support — spousal support and child support are covered in Part 7 of the act — the court rejected this as well, on the basis that the Interjurisdictional Support Orders Act, a law which has been passed by each province and territory, provided the appropriate mechanism for a resident of British Columbia to obtain a support order against someone living in another province.

Following the Court of Appeal's decision on the Interjurisdictional Support Orders Act and the Family Relations Act in a 2006 case called Nurani v Virani, Justice Donegan held that:
"[92] Neither the [Supreme Court Family Rules] nor the FLA alters the [Interjurisdictional Support Orders Act] scheme or renders it now inapplicable. Express statutory language would be required for such a result. No such language exists. Although Ms. Cockerham argues that the ISOA mechanisms are inconsistent with the object of the Family Rules, describing them as slow and cumbersome, one can also see how its scheme is consistent with the object as well. A process whereby no court appearance in British Columbia or another jurisdiction is required in order to obtain a support order could be seen as promoting a just and inexpensive determination of the issue. 
"[93] In any event, in the absence of express statutory language rendering the ISOA inapplicable in light of the FLA, [the Court of Appeal's decisions in Nurani] remain binding authority on this court. Mr. Hanc is not a resident of British Columbia, nor has he ever been. He has no connections to British Columbia whatsoever. In these circumstances, this court has no jurisdiction to make an original order for support against him pursuant to the FLA. ... Ms. Cockerham has the mechanisms of the ISOA available to her should she so chose."
Summary

I am grateful to Justice Donegan for her clear analysis of Division 6. It is a very difficult part of the act and her decision in Cockerham is, I believe, the first treatment of the division by the court. Here is a short summary of the steps required to analyze a claim involving property located outside British Columbia.
1. The burden of proving that the court has the jurisdiction to hear a case lies on the person who claims that the court has jurisdiction.
2. Claims about the interests of spouses in property located outside of British Columbia brought under the Family Law Act should be analyzed under that act rather than the Court Jurisdiction and Proceedings Transfer Act.
3. Determine if s. 106 of the Family Law Act applies by examining whether an order about property division between the same people can be made in more than one jurisdiction. 
4. If s. 106 applies, determine whether one or more of the conditions in s-s. (2) are met to give the court authority to make orders under Part 5 of the Family Law Act
5. If the court has jurisdiction under s. 106(2), determine whether the court should exercise that jurisdiction or leave the matter to a court in another jurisdiction under s. 106(4), considering the factors set out in s. 106(5). 
6. If the court decides to act, determine the law to apply under ss. 107 and 108. Note that the applicable law may be a factor in determining whether to decline to act under s. 106(4).
My thanks to my colleague Mary Fus, a lawyer with a thriving family law practice in Kamloops, for bringing this important case to my attention.

17 December 2014

Provincial Court Releases Important Decision: Party can be ordered to pay legal fees resulting from party's misconduct

Just in time for the holidays, the Provincial Court of British Columbia has released a decision that is sure to bring much good cheer to those frustrated by a party's failure to make proper financial disclose. In T.J.B. v B.A.F., the Honourable Judge Challenger was asked to consider the father's application to retroactively reduce the amount of child support he was required to pay and to reduce or cancel his arrears of child support, as well as the mother's application for an order that the father be penalized for failing to provide proper disclosure.

Background

To give some background to the decision, the parents separated in the spring of 2009 and signed a separation agreement in the summer. The agreement required the father to pay child support for their two children. The father must have run into trouble in fairly short order as in 2012 he applied to retroactively change the amount of child support he was required to pay and to reduce or cancel arrears of child support that had accumulated. That application was dismissed in 2013 as a result of the father's failure to provide "complete and accurate financial disclosure," and the father was additionally prohibited from making further applications without the court's permission. The father accordingly applied for permission to bring the current application in 2014, and was ordered to provide a Financial Statement by the judge. This is how Judge Challenger described the Financial Statement subsequently filed by the father:
"[11] ... [In his Financial Statement, the father] attests to having been unemployed since November of 2013. He refers on the cover page to the potential for [the Family Maintenance Enforcement Program] to garnish his Employment Insurance benefits. The annual income page is blank save for '0.00' as total income and total benefits. He sets out expenses of $30,424.00 annually. He estimated that his additional expenses related to his parenting time with the children are $500.00 per month however no details were provided as to the basis for this estimate. 
"[12] He did not attach his 2013 income tax return or any income information for that year or up to that date in 2014. His 2012 Notice of Assessment was attached which reflected a line 150 income of $415.00 which was the net of business income of $11,000.00. His 2011 Notice of Assessment showed a line 150 income of $27,474.00 which was comprised of $27,075.00 in employment income and $225.00 in other employment income. His 2010 Notice of Assessment showed a line 150 income of $55,098.00."
Yes, the father did produce some documentation concerning his income, but the documentation provided was inadequate — Notices of Assessment, for example, don't tell you nearly enough about the tax payor's sources of income to property determine the payor's income — and not nearly sufficient to satisfy his obligations under the Child Support Guidelines. Under s. 21(1) of the Guidelines, by the way, someone who is applying for a support order must produce the following documents when his or her income is relevant to the application:
(a) a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years; 
(b) a copy of every notice of assessment and reassessment issued to the spouse for each of the three most recent taxation years; 
(c) where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse's employer setting out that information including the spouse's rate of annual salary or remuneration; 
(d) where the spouse is self-employed, for the three most recent taxation years
(i) the financial statements of the spouse's business or professional practice, other than a partnership, and 
(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm's length;
  (e) where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years; 
(f) where the spouse controls a corporation, for its three most recent taxation years
(i) the financial statements of the corporation and its subsidiaries, and 
(ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length;
  (g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements; and 
(h) in addition to any income information that must be included under paragraphs (c) to (g), where the spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year, or if such a statement is not provided, a letter from the appropriate authority stating the required information.
To drive the point home, at a Family Case Conference held prior to the hearing before Judge Challenger, the father was fined $500 for failing to disclose his financial documents in this Financial Statement and was ordered to produce "all relevant financial documents." The father filed a new Financial Statement pursuant to that order, however it too was found wanting by Judge Challenger:
"[26] The Financial Statement filed September 30th reflects a 2014 income to date of $13,662.75 comprised of approximately equal amounts of employment income and EI benefits. He also included a letter that shows that as of February of 2014 he was working ... in exchange for shares. The value of those shares at present and as of February was $9000.00 but his understanding is that they could be worth up to $30,000 to $45,000.00 or even as high as $75,000.00. He claims expenses of $32,188.88. ... 
"[28] He did not disclose any financial documentation or information with respect to the companies he has operated or any freelance work done in his personal capacity for 2011 and 2012 either in these proceedings or in the course of his earlier application. He uses a software accounting program for these purposes and did not disclose those records either. He did not disclose the statements for his savings account. He was unable to account for $50,000.00 of the payout monies from the family home, an amount over and above the down payment and renovations done to his home and the $72,000.00 in savings he said he has used for living expenses. ... 
"[32] [The father] did not provide any financial documentation other than his tax returns for the years 2011, 2012 or 2013."
Disclosure in Family Law Disputes

Financial disclosure is a cornerstone of family law, whether a problem is being resolved through adversarial or non-adversarial means. Without adequate disclosure, which goes far beyond the minimum standard set by s. 21 of the Child Support Guidelines, it can be impossible to determine a fair amount of child support and spousal support, a fair sharing of children's special expenses or a fair distribution of family property and family debt. In fact, in a famous 1994 case from the Supreme Court of British Columbia, Cunha v da Cunha, Mr. Justice Fraser wrote that:
"Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably‑based suspicion that justice was not done. Non‑disclosure also has a tendency to deprive children of proper support."
The new Family Law Act was drafted with this problem in mind. Section 5 imposes a duty to make "full and true disclosure" on the parties to a family law dispute, whether the parties are in court or not, s. 212 allows the court to make orders for disclosure "at any stage of a proceeding," and s. 213 provides a toothy means for enforcing inadequate disclosure. 

Section 213 has been well used by the court, as you'll see in my summary of the case law on that section. When a party has failed to comply with an order for disclosure or a disclosure requirement of the rules of court, or has made disclosure that is incomplete, false or misleading, under s-s. (2) the court may:
(a) make [a further order for disclosure]; 
(b) draw an inference that is adverse to the person, including attributing income to that person in an amount that the court considers appropriate, and make an order based on the inference; 
(c) require a party to give security in any form that the court directs; 
(d) make an order requiring the person described in subsection (1) to pay
(i) a party for all or part of the expenses reasonably and necessarily incurred as a result of the non-disclosure of information or the incomplete, false or misleading disclosure, including fees and expenses related to family dispute resolution, 
(ii) an amount not exceeding $5,000 to or for the benefit of a party, or a spouse or child whose interests were affected by the non-disclosure of information or the incomplete, false or misleading disclosure, or 
(iii) a fine not exceeding $5,000;
  (e) make any other order the court considers appropriate.
From my point of view, the enforcement provisions of the Family Law Act are among its more significant innovations. Too often the Provincial Court was unable to impose meaningful consequences for a party's disobedience of a court order, or failure to comply with a disclosure obligation, as a result of its limited powers to punish for contempt of court and the limited remedies provided by the old Family Relations Act. The courts have since leapt on s. 213 and the act's other enforcement measures, as well they should. The cases on s. 213 to date have focussed on fines under s-s. (2)(d)(ii) and (iii), however, and few have looked at the court's power to make orders for the payment of a party's expenses under s-s. (2)(d)(i). Not so in T.J.B.

Decision

Citing the principle established by the Honourable Judge Merrick in J.C.P. v J.P., a recent Provincial Court case from 2013, 
"[54] If a party is required to apply to the court for an order for financial disclosure, then the party making the application should be compensated. The greater the effort, the greater the compensation",
Judge Challenger ultimately decided to require the father to pay the mother's legal fees incurred as a result of his non-disclosure, holding as follows (important bits in bold, as always):
"[67] [The father] has continually provided the Court with incomplete and misleading disclosure. The disclosure required was not onerous or complex. 
"[68] None of his Financial Statements have been complete or accurate. The figures he reports in the Financial Statement filed in late September in respect to the value of his property, his debts and a strata levy are irreconcilable with those in the Financial Statement filed in March and materially inconsistent with his evidence at the hearing. His earlier Financial Statements also do not accord with his evidence. ... 
"[70] I find that the financial materials he filed in support of his motion to be permitted to file a further application were incomplete, inaccurate and mislead the Court. This is a highly aggravating factor. ... 
"[71] He substantially failed to comply with the order for disclosure made by [the Family Case Conference judge] by not providing all his bank records and by again failing to file a complete Financial Statement. 
"[72] He has never made complete disclosure of the financial or banking documents related to his self-employment. 
"[73] I find [the father's] conduct has satisfied all of the grounds set out in s 213(1) of the FLA — failure to make timely disclosure when required to do so by a court order or as required by the Family Law Rules and the disclosure of incomplete, false, and misleading information.

"[74] In order to determine the severity of this penalty, the circumstances of the present case, the degree of non-disclosure, and any reasons for late disclosure must be considered as well as any reasons provided for late or non-disclosure which have an evidentiary basis. 

"[75] In the circumstances of the present case there has been an ongoing lack of complete disclosure. Some of the information that has been disclosed has been shown to be materially misleading. The incomplete and misleading disclosure provided by [the father] was particularly aggravating in that it resulted in the court falling into error in granting his motion to file this application. 
"[76] As much of the information required for the proper hearing of this application was never disclosed and no attempts were made to disclose it, the Court cannot consider the issue of late disclosure or of any reasons provided for late disclosure. 

"[77] With respect to reasons for non-disclosure, no legitimate reasons were ever provided by [the father] for his insufficient disclosure beyond his claim that he did not have the ability to fill out financial statements properly. I do not accept his evidence in this regard for the reasons stated above.

"[78] I find that [the father] must be penalized for his abuse of the court process and wasting of court time and [the mother]'s resources. The penalty imposed should also communicate to other litigants the consequences of impeding the court process or wasting valuable court resources by disclosing incomplete, false, and misleading information. The conduct of [the father] is something that needs to be denounced in order to prevent similar conduct on the part of other litigants and, as a result, facilitate access by those litigants who need court time for legitimate purposes. A 'robust application' of s. 213(2) is required to facilitate this goal.

"[79] Finally the Court must look to compensate [the mother] in these circumstances. Due to a proceeding wrongfully brought and improperly prosecuted by [the father] she has been required to engage a lawyer to represent her, for the second time, at great financial cost. For this proceeding alone she has incurred legal bills that amount to $13,617.00. ... 
"[80] I find that in order to sufficiently penalize [the father], discourage other litigants from providing incomplete, false, and misleading disclosure; and properly compensate [the mother] for legal bills incurred as a direct result of [the father]'s incomplete disclosure, an order pursuant to FLA, s. 213(2)(d)(i) requiring [the father] to pay the legal fees incurred by [the mother] is an appropriate penalty in the circumstances."
This is an amazing result, particularly as it emanates from a court that had been hamstrung for so long by the inadequacies of the Family Relations Act. The decision is a logical extension of the caselaw accumulating to date under s. 213(2)(d)(ii) and (iii), and is a worthy successor to Cunha as a caution to litigants thinking of making anything other than full and complete disclosure.

A number of principles can be drawn from Judge Challenger's analysis.

1. The court will not consider the reasons for a party's non-disclosure if disclosure is not ultimately made and the party has not even attempted to make disclosure.

2. Aggravating factors in the court's consideration of an appropriate penalty for non-disclosure include providing disclosure that is incomplete and misleading and: 
a. is used for the purposes of a leave application; 
b. is used for the purposes the purpose of one's own substantive application; 
c. leads the court into error; and, 
d. amounts to an abuse of process.
3. Denunciation, the punishment of one person to discourage others from similar behaviour and normally a consideration in sentencing in criminal justice matters, may be a factor in the court's consideration of an appropriate penalty for non-disclosure.

4. Where, considering these factors, a party's behaviour is found to be sufficiently deserving of sanction, the court may order that the party pay for the legal costs of the other party, as an expense "reasonably and necessarily incurred as a result of the non-disclosure of information or ... incomplete, false or misleading disclosure" under s. 213(2)(d)(i).

Lest the gravity of this potential consequence be lost to those contemplating partial- or non-disclosure,  I should point out that in the Supreme Court an order that one party pay "costs" to another is not an order that the party pay for the other side's legal bill, but pay a sum calculated using fixed amounts that usually totals one-third to one-half of his or her legal bill.

The father's application to vary his child support obligation and to reduce or cancel his arrears of support was dismissed. The fine for the mother's legal fees was made payable immediately, and enforceable by the Family Maintenance Enforcement Program.

My thanks to my friend and colleague, Agnes Huang, for bringing this important case to my attention.

16 December 2014

Nominations Open for 2014 Clawbies

I'm a bit late getting to this, but nominations are now open for the 2014 Canadian Law Blog Awards. The awards "celebrate excellence in law-related blogging" in Canada, which is no reason why you shouldn't make a nomination. Nominate a blog or three by writing your own blog post about those blogs or by tweeting a nomination using the hashtag #clawbies2014.

My nominations for this year's awards in the large-groups-of-people-working-together category are:
  • ABlawg.ca, a publication of the Univeristy of Calgary's excellent Faculty of Law. ABlawg features a stable of solid academic writers who provide commentary on every area of the law. ABlawg is a perennial favourite of the Clawbies, but that doesn't mean it shouldn't win again. 
  • The CanLII Connects agglomerating blog, an important project of the awesome legal information portal CanLII. This blog hosts original and reposted case commentary provided by expert authors from across Canada and is going to become Canada's largest source of free legal commentary in very short order.
  • The Stream, the official blog of Courthouse Libraries BC. This blog provides timely information about developments in the case law, updates to the rules of court and practice directives and legislative amendments, as well as insightful commentary from a number of prominent lawyers.
My nominations in the solo-author-labouring-alone category are:
  • The blog written by barbara findlay, QC as an adjunct to her firm website. barbara is a family law lawyer and a tireless  advocate of LGBTTQ rights and her blog covers legal issues ranging from assisted reproduction to multi-parent families to immigration and sponsorship.
  • The blog of Georgialee Lang, another well-known family law lawyer, writing as her alter ego, Lawdiva. Georgialee's blog tackles controversial current legal issues, usually with a focus on family law matters, with a refreshing bluntness. 
  • Sara Cohen's Fertility Law Canada blog. Sarah is a fertility law lawyer and her blog is a wonderful resource of information about assisted reproduction, legal parentage and multi-parent families.
Visit the Clawbies website to read about past winners and how to to nominate your own favourite legal blog. A fairly complete collection of Canadian law blogs is available at Stem's Lawblogs.ca website.

15 December 2014

Important Legislation About Matrimonial Property on Reserves Coming Into Effect

The Family Homes on Reserves and Matrimonial Interests or Rights Act, a fairly new piece of federal legislation, allows First Nations to make rules about homes on First Nations lands and attempts to address a problem that's festered for almost 150 years. Sections 91 and 92 of the Constitution Act, 1867 divides the powers involved in running a country between the federal and provincial governments and, among other things, gives the federal government exclusive authority over "Indians, and Lands reserved for the Indians" and the provincial governments exclusive authority over "Property and Civil Rights in the Province," thereby allowing the provinces to make all the rules they wish about family law and the division of property between spouses but making those rules ineffective on First Nations lands.

The Family Homes on Reserves Act became law on 16 June 2013, with the first bits coming into force on 16 December 2013 and a huge swack, the remainder of the act, coming into force on 16 December 2014. The act applies only to the First Nations that are "bands" as defined by the Indian Act.

Although the act doesn't affect the underlying title to First Nations lands, which continues to be held by the Queen in most of Canada, it does allow First Nations governments to establish laws about how family homes on reserve lands will be used and occupied when a relationship between married or unmarried spouses has broken down. Here's what s. 4 of the act says:
The purpose of this Act is to provide for the enactment of First Nation laws and the establishment of provisional rules and procedures that apply during a conjugal relationship, when that relationship breaks down or on the death of a spouse or common-law partner, respecting the use, occupation and possession of family homes on First Nation reserves and the division of the value of any interests or rights held by spouses or common-law partners in or to structures and lands on those reserves.
(I don't know why federal legislation must be written in such clunky, hard-to-parse language, but there it is.) For First Nations that are listed in the schedule to the First Nations Land Management Act and have the right to manage their lands under a self-government agreement with Canada, the act also provides a lengthy set of provisional rules that apply when the laws the act entitles them to make are not in effect.

Here are the important parts of the act. Sections 1 to 11 and 53 came into force in 2013, sections 12 to 52 come into force tomorrow.
  • Sections 7, 8 and 9: First Nations governments can make laws about the use, occupation and possession of family homes located on reserve lands during and after the breakdown of a "conjugal relationship." The laws must be put to a plebiscite, are approved with the support of a majority of the members of the First Nation.
  • Section 12: The provisional rules about the use, occupation and possession of family homes set out in sections 13 to 52 apply to First Nations with rights of self-government and are listed in the First Nations Land Management Act and do not have laws about family homes that are in effect.
  • Section 13: Each spouse or partner may occupy the family home during their relationship, whether the person is a First Nation member or a status Indian or not. However, the 
  • Section 15: A spouse or partner with an interest in or right to the family home, must not sell it or use it as collateral for a lone without the consent of the other person.
  • Sections 16 and 17: A spouse or partner can apply for a temporary exclusive occupancy order, including an order for the removal of a person's belongs from the home and an order that a person not go near the home, without notice to the other person if family violence has occurred and order should be made right away. If the judge making the order is a provincially-appointed judge, the judge must send the order and all supporting materials to a judge with the power to make orders under the Divorce Act for a review of the order.
  • Section 18: Either spouse or parter can apply to change an exclusive occupancy order.
  • Sections 20 and 21: A spouse or partner can apply for a permanent exclusive occupancy order, and the judge hearing the application must consider, among other things, the best interests of the children living in the home, any agreement between the parties, the collective interests of the First Nations members in their reserve lands, the length of time that the person has lived on the reserve and the availability of other accommodation, family violence. The order can include a term requiring the person with exclusive occupancy to keep the home in good condition or requiring either party to pay for the costs of the home. The order can be made to survive the death of the spouse or partner with the interest in or right to the family home.
  • Section 23: Exclusive occupancy orders do not change who holds an interest in or right to the family home.
  • Sections 28 and 29: When a conjugal relationship breaks down, each party is entitled to an amount equal to one-half of the value of the family home, plus extra rights to the other person's interests in property located on First Nations lands that change depending on whether the party is a member of the First Nation. A court order a different sharing of property interests depending on factors like the length of the relationship, the terms of an agreement between the parties and the debts incurred by each party. 
  • Section 30: Applications must be made within 3 years of the date the parties ceased to cohabit. 
  • Sections 30 and 31:The court can order that an amount payable under ss. 28 or 29 be paid as a lump-sum, be paid in instalments, be set-off by another amount or be satisfied by the transfer of a property interest or right. The court's ability to transfer property interests or rights is subject to a number of factors relating to the the status of the First Nation, the applicant's status as a member of the First Nation and the circumstances of the parties' relationship.
  • Sections 34 to 40: These sections establish rules about estates and the rights of person upon the death of their spouses and partners.
  • Section 43: A court with jurisdiction under the Divorce Act has jurisdiction to deal with applications under the Family Homes on Reserves Act.
  • Section 48: The court may determine whether a person has a right in a home or land situated on First Nations lands on the application of a spouse or partner, a survivor, an executor of a will, or the counsel of the First Nation on whose lands the home or land is located.
Remember that the provisional rules do not apply to all First Nations, and that both the provisional rules and the First Nations laws on family homes apply in place of the matrimonial property provisions of any provincial legislation.