29 November 2011

Family Law Act Third Reading Bill Posted

Bill 16 has been posted on the legislature's website as it was passed on third reading. The new act, which will be formally cited as the Family Law Act, S.B.C. 2011, c. 25 (meaning the twenty-fifth chapter of the statutes of British Columbia enacted in 2011), has not yet been posted on the website of the Queen's Printer; the third reading bill is the closest we'll get to an official draft until the act is formally published.

26 November 2011

New Child Support Tables for 2012

The federal Department of Justice has announced new child support tables for the Child Support Guidelines which will take effect on 31 December 2011. The tables were last updated in 2006.

According to the Department's notice, the same formulas were used to determine the new amounts as were used in 2006, and any changes in the new tables are the result of changes in federal and provincial tax rules.

The changes are relatively minor. Some payors with incomes below $50,000 per year may see their child support obligations decrease:
$25,000 income
one child = $213 per month ($230 under 2006 tables)
three children = $533 per month ($525 under 2006 tables)
six children = $680 per month ($751 under 2006 tables)

$50,000 income
one child = $458 per month ($465 under 2006 tables)
three children = $998 per month ($994 under 2006 tables)
six children = $1496 per month ($1482 under 2006 tables)
Most payors, however, will see their child support obligations increase:
$75,000 income
one child = $701 per month ($698 under 2006 tables)
three children = $1483 per month ($1459 under 2006 tables)
six children = $2205 per month ($2162 under 2006 tables)

$100,000 income
one child = $921 per month ($906 under 2006 tables)
three children = $1923 per month ($1875 under 2006 tables)
six children = $2848 per month ($2770 under 2006 tables)
The Department has also published a great child support calculator for the new tables. Note that the old tables will remain in force until the new tables take effect at the end of December.

25 November 2011

Family Law Act Receives Royal Assent

Bill 16, the Family Law Act, passed third reading in the provincial legislature on 23 November 2011 seemingly without amendment and received Royal Assent yesterday, according to the legislature's excellent "Progress of Bills" webpage.

Although the act is now law, most of it — in fact, almost all of it — is not in force, and will not come into force except by order in council in, according to the Attorney General, 12 to 18 months.

Section 482 of the act sets out a table showing which parts of the act are in force now, and which will come into effect later on. Effective immediately:
  • Family Relations Act, s. 90 (parental support) is repealed
  • Family Relations Act, s. 120.1 (property agreements of unmarried parties) is repealed
  • Land (Spouse Protection) Act, ss. 1, 3, 5 and 6 are amended to make the act apply to persons who have cohabited in marriage-like relationship for at least two years
  • Property Transfer Tax Act, s. 1 is amended to make the act apply to persons who have cohabited in marriage-like relationship for at least two years
  • Evidence Act, ss. 6, 7 and 8 are amended to make "spouses" competent witnesses, not just husbands and wives

In addition, references to "husband and wife" or "a man and a woman" are changed to "spouse" or "two people" in the Family Relations Act, the Industrial Roads Act, the Insurance (Vehicle) Act, the Law and Equity Act, the Marriage Act, the Members' Conflict of Interest Act, the Property Law Act, the School Act, the Wills Act, and the Workers Compensation Act,

References to "father" and "mother" are changed to "parent" in the Mental Health Act, the Property Transfer Tax Act, the School Act, and the Workers Compensation Act.

Other minor amendments less susceptible to generalization are made to the Adoption Act and the Name Act.


The Attorney General's office has posted a new webpage with background to the new act, the past discussion papers including the white paper, and news releases.

24 November 2011

Supreme Court Releases Decision in Polygamy Reference

On 24 November 2011, the Chief Justice of the Supreme Court of British Columbia released his decision in Reference re: Section 293 of the Criminal Code of Canada, otherwise known as the Polygamy Reference. The British Columbia Attorney General asked the court to declare whether the prohibition on polygamy under s. 293 of the Criminal Code was consistent with the basic freedoms guaranteed by the Charter of Rights and Freedoms.

The decision is a masterwork of legal analysis and I won't offer it the indignity of a synopsis. Suffice it to say that the government won.

On the main question, the constitutionality of s. 293, the Chief held that:
"[1359] For the reasons I have given, s. 293 is consistent with the Canadian Charter of Rights and Freedoms except to the extent that it includes within its terms, children between the ages of 12 and 17 who marry into polygamy or a conjugal union with more than one person at the same time.

"[1360] For greater clarity, as I have indicated in my reasons, the inconsistency does not extend to persons who marry into polygamy before the age of 18 but are 18 years of age or older at the time of the laying of the Information in respect of conduct that occurred at or after 18 years of age."
To cure this minor defect, the Chief elected to limit the meaning of s. 293 to exclude its application to minors between 12 and 17 years of age:
"[1362] ... I would read down 'every one' in s. 293 to exclude the noted group of potential accused persons."
The Chief distilled the evidence presented and reasons for his conclusion in the introduction to his judgment:
"[5] I have concluded that this case is essentially about harm; more specifically, Parliament’s reasoned apprehension of harm arising out of the practice of polygamy. This includes harm to women, to children, to society and to the institution of monogamous marriage.

"[6] Based on the most comprehensive judicial record on the subject ever produced, I have concluded that the Attorneys General and their allied Interested Persons have demonstrated a very strong basis for a reasoned apprehension of harm to many in our society inherent in the practice of polygamy as I have defined it in these reasons.

"[7] I turn to some of the harms that are reasonably apprehended to arise.

"[8] Women in polygamous relationships are at an elevated risk of physical and psychological harm. They face higher rates of domestic violence and abuse, including sexual abuse. Competition for material and emotional access to a shared husband can lead to fractious co-wife relationships. These factors contribute to the higher rates of depressive disorders and other mental health issues that women in polygamous relationships face. They have more children, are more likely to die in childbirth and live shorter lives than their monogamous counterparts. They tend to have less autonomy, and report higher rates of marital dissatisfaction and lower levels of self-esteem. They also fare worse economically, as resources may be inequitably divided or simply insufficient.

"[9] Children in polygamous families face higher infant mortality, even controlling for economic status and other relevant variables. They tend to suffer more emotional, behavioural and physical problems, as well as lower educational achievement than children in monogamous families. These outcomes are likely the result of higher levels of conflict, emotional stress and tension in polygamous families. In particular, rivalry and jealousy among co-wives can cause significant emotional problems for their children. The inability of fathers to give sufficient affection and disciplinary attention to all of their children can further reduce children’s emotional security. Children are also at enhanced risk of psychological and physical abuse and neglect.

"[10] Early marriage for girls is common, frequently to significantly older men. The resultant early sexual activity, pregnancies and childbirth have negative health implications for girls, and also significantly limit their socio-economic development. Shortened inter-birth intervals pose a heightened risk of various problems for both mother and child.

"[11] The sex ratio imbalance inherent in polygamy means that young men are forced out of polygamous communities to sustain the ability of senior men to accumulate more wives. These young men and boys often receive limited education as a result and must navigate their way outside their communities with few life skills and social support.

"[12] Another significant harm to children is their exposure to, and potential internalization of, harmful gender stereotypes.

"[13] Polygamy has negative impacts on society flowing from the high fertility rates, large family size and poverty associated with the practice. It generates a class of largely poor, unmarried men who are statistically predisposed to violence and other anti-social behaviour. Polygamy also institutionalizes gender inequality. Patriarchal hierarchy and authoritarian control are common features of polygamous communities. Individuals in polygynous societies tend to have fewer civil liberties than their counterparts in societies which prohibit the practice.

"[14] Polygamy’s harm to society includes the critical fact that a great many of its individual harms are not specific to any particular religious, cultural or regional context. They can be generalized and expected to occur wherever polygamy exists."
On the secondary question, the Attorney General's request for the court to determine the elements of the conduct s. 293 seeks to prohibit, the Chief held that:
"[1363] ... [T]he elements of the polygamy offence (s. 293(1)(a)(i)) and those of the conjugal union offence (s. 293(1)(a)(ii)) are the same:
  1. an identified person, who
  2. with the intent to do so,
  3. practices, enters into, or in any manner agrees or consents to practice or enter into,
  4. a marriage, whether or not it is by law recognized as a binding form of marriage, with more than one person at the same time.
"[1364] Section 293 does not require that the polygamy or conjugal union in question involved a minor or occurred in a context of dependence, exploitation, abuse of authority, a gross imbalance of power or undue influence."
This should be of assistance in any future attempt to prosecute a charge of polygamy.

This decision also offers helpful definitions of legal terminology in relation to marriage which I suspect will be of interest to readers of this blog, in particular the anonymous commentator who believes that British Columbia's legislation sanctions polygamy by allowing married persons who are not yet divorced to enter into unmarried common-law "spousal" relationships (see the comments to this post for further discussion of this point):
"[135] Polygamy is an umbrella term that refers to the state of having more than one spouse at the same time. It includes both polygyny and polyandry. Polygyny is the practice of a male having multiple female spouses. Polyandry is the converse, a female with multiple male spouses. ...

"[138] Polyamory is subject to varied definitions but refers generally to consensual relationships in which participants have more than one partner. ...

"[139] Bigamy is the act of entering into a marriage when one of the spouses is already married. It is criminalized by s. 290 of the Criminal Code:
290. (1) Every one commits bigamy who
(a) in Canada,
(i) being married, goes through a form of marriage with another person,

(ii) knowing that another person is married, goes through a form of marriage with that person, or

(iii) on the same day or simultaneously, goes through a form of marriage with more than one person; or
(b) being a Canadian citizen resident in Canada leaves Canada with intent to do anything mentioned in subparagraphs (a)(i) to (iii) and, pursuant thereto, does outside Canada anything mentioned in those subparagraphs in circumstances mentioned therein.
"[140] 'Form of marriage' is defined in s. 214:
“form of marriage” includes a ceremony of marriage that is recognized as valid
(a) by the law of the place where it was celebrated, or

(b) by the law of the place where an accused is tried, notwithstanding that it is not recognized as valid by the law of the place where it was celebrated;
"[141] Bigamy is an indictable offence, and offenders are liable to imprisonment for a term not exceeding five years (s. 291).

"[142] The offence of bigamy focuses on attempts to enter into multiple marriages by means of the civil marriage process. Its commission involves perpetuating a fraud against the state in that the state’s marriage requirements are employed for a marriage that is a nullity. As the Law Reform Commission of Canada observed in Bigamy, Working Paper 42 ... at 11:
This is why the prohibition of bigamy seems justified, since by assuming all the ritual and official characteristics of marriage, such conduct destroys the meaning of the institution itself. Aside from its duplicity, a bigamous marriage is a valid marriage in all respects: this is what makes it a real threat to the institution.
"[143] Bigamy frequently also involves a deception against one of the individuals involved.
"[144] In Canada, bigamy is distinguished from polygamy by the requirement of multiple state sanctioned marriages. Individuals who enter into multiple marriages but do not attempt to do so through the civil marriage process are not captured by the bigamy offence."

21 November 2011

A Reply to the Times Colonist

On 19 November 2011, the Victoria Times Colonist published a somewhat ill-informed editorial concerning the Family Law Act tabled last week in the legislature. As it happens, I like the new legislation, and I thought I'd provide a few comments in reply.

Here's the Colonist's editorial verbatim, without a word missing, in red with my comments following.
"A case can be made that the new Family Law Act, tabled Monday in the legislature, is the most far reaching social reform of our era. The massive bill completely redefines the civil structures that underpin marriage and family life."
This legislation certainly is an exercise in social policy. However, it doesn't "completely redefine" the civil structures that underpin marriage and family life; it redesigns property laws from a model shared with some of the maritime provinces to a model shared with Alberta and Ontario, and extends property rights from married couples to unmarried couples who have cohabited for at least two years. It doesn't change our recognition of unmarried spousal and parental relationships, and it doesn't change the law on child support or spousal support.
"It also rewrites the statute book. Close to 100 separate acts are being amended to accommodate the changes involved."
Most of the changes update references to "husband and wife" to "spouse" and "mother or father" to "parent" and are barely worth notice. More significant changes are only being made to the Commercial Arbitration Act, the Infants Act, the Child, Family and Community Service Act and the Vital Statistics Act, but the changes don't rewrite the basic scheme of these acts, they just accommodate them to the changes in the Family Law Act.
"In outlining the package, Attorney-General Shirley Bond has stressed two broad themes.

"The bill makes family law more child-centred. This is being done by changing the focus of custody hearings. In future, judges will be encouraged to set aside parental interests and award custody purely on the basis of what is best for the children.

"And there is a strong emphasis on mediation, rather than lawsuits, to settle divorce proceedings. These are valuable reforms, and the government is to be commended for them."
These are indeed the themes the Attorney General has chosen to emphasize. They're hardly the only important changes, they're just the ones that would fit into a sound bite for the evening news.
"The move toward mediation in particular is long overdue. Family quarrels currently occupy a quarter of all the court time in B.C. Anything that discourages divisive and wasteful litigation should be welcomed."
Actually, the move toward mediation has been underway for a couple of decades now and is hardly overdue. Mandatory mediation has been a feature of the Supreme Court civil system since 2001 and optional mediation has been available from family justice counsellors in the Provincial Court since 2003, never mind the judicial mediation offered at judicial case conferences and family case conferences.
"But important as these changes are, they are trivial compared with some real bombshells in the legislation. There are three to note:

"- At present, when a married couple separates, both are entitled to an equal share of all property. Current law draws no distinction between assets acquired during the marriage and those owned before it. All are divided equally.

"The adoption of this principle was one of the great emancipating forces of the 20th century. By protecting financially weaker spouses, who were often women, it made marriage a union of equals.

"But the new act eliminates this provision entirely. In future, property acquired prior to a marriage can be excluded if the spouse who owned it wishes. That sounds more like a Hollywood prenuptial agreement than a contract of marriage."
As I've mentioned, the current system for property division is shared by only a few other provinces. Most of Canada deals with property division on the Alberta and Ontario models which split property acquired after marriage equally and share in the growth in value of assets brought into the marriage; many people find this system of property sharing more intuitively appropriate than the current system.

The real "emancipating forces" which equalized women's property rights were the Married Women's Property Acts of the eighteenth, nineteenth and early twentieth centuries which gradually gave married women equal property rights with their unmarried sisters, and eventually equal property rights with their husbands... but this all happened long before the Family Relations Acts of 1972 and 1978. Or the Family Law Act of 2011, for that matter.
"- The act extends the division of property to common-law arrangements. Presently, couples who do not wish to marry can live together without merging their finances.

"That is being changed. If a couple cohabits for two years, upon separation either will be entitled to an equal share of whatever assets they accumulate. Pension contributions are included in the calculation.

"This is too heavy-handed. If the qualifying period were set at five years instead of two, such a policy might be justified.

"But it is unreasonable to extend marital obligations to couples who may have no intention of staying together.

"This will simply back up the court system even further, as the full force of law comes down on thousands of casual arrangements."
This too is an issue of social policy. Under the current law, unmarried spouses are excluded from the parts of the Family Relations Act that divide property between married couples. Under the existing regime, unless a couple own property together, an unmarried spouse gets nothing, no matter if the couple has been together for two years, five years or twenty.

An unmarried spouse who wishes to make a claim against property owned by the other spouse must make a difficult claim under the equitable doctrine of unjust enrichment, which may result in the spouse being entitled to some share in the property. Such claims are hard to prove, which means that they're expensive, and they rarely result in an entitlement anywhere close to what the couple would have had, had they been married.

The choice facing the government was to continue the inequity between married and unmarried relationships or to recognize the increasing frequency of long-term unmarried relationships and give unmarried spouses the rights married spouses have enjoyed since 1978.

The Colonist is right to observe that there is an element of unfairness to this for couples in existing unmarried spousal relationships. That is, however, the nature of legislative change; either it happens and hurts some people now or it never happens and hurts a lot more people as an injustice is perpetuated. Couples who wish to avoid the effect of the new act are best advised to get it together and make a property agreement now, before the new law takes legal effect.
"- While this omnibus bill deals with nearly every conceivable aspect of family law, there is one it ignores. There are no provisions to address the unequal treatment of fathers.

"It's well known that separation proceedings tilt against men when it comes to awarding child custody. In disputed cases, only 10 per cent of fathers are successful."
This is unmitigated and egregious hooey. This argument rests on an unproven allegation that fathers are treated unequally and ignores the fact that orders for joint custody have become the unwritten rule and presumptive starting point over the last fifteen years. More separated couples have joint custody of their children now than at any point in recorded legal history.
"The minister might believe her legislation deals with this concern by encouraging judges to ignore parental interests and focus on the children. But experience shows that the bias against fathers is deeply rooted in our family law system.

"In a statute several years in the drafting, this inequity should have been dealt with."
The Colonist cites no authority for this sweeping condemnation of the justice system. Surely before dropping its institutional weight behind such an allegation, the paper could point to some objective support for such a profound contention? I'm positive that such an august paper wouldn't base an unsigned editorial on mere rumour and carping innuendo.
"These are all issues upon which reasonable people can disagree. Yet there are huge issues at stake.

"Marriage is the most important wealth-creating and wealth-diffusing institution in modern society. As it stands, the new act weakens that feature of marriage, even as it foists unwanted obligations on short-term relationships."
If I understand this argument, the Colonist claims that the new legislation weakens the "wealth-creating" and "wealth-diffusing" qualities of marriage. I have no idea what this means, however if the point is that marriage is inherently wealth-creating, surely this feature is shared with the ever-increasing numbers of long-term, unmarried spousal relationships? What is it exactly which makes an unmarried spousal relationship less economically valuable than a married relationship?

The Colonist is also off base in assuming that unmarried relationships are inherently "short-term." Many of these relationships are just as long, if not longer, than married relationships, and many involve a degree of financial enmeshment that is no less significant for the fact that they are unsolemnized.
"Both parties in the legislature have agreed to pass the bill in just a few days, virtually sight unseen. That would be a serious disservice.

"Such immense changes require a full airing. The government should put this over to the new year, and allow for a proper debate."
As a matter of fact, the Attorney General's office has taken enormous pains since 2006 to expose this legislation to public comment. It is not the case that this bill emerged one morning like mushrooms after the rain; there have been extensive public consultations, with various public groups as well as with the bench and bar. This legislation is hardly a rush job, it has been five years in the making.

You can still find many of the background papers published by the Ministry in the course of the Family Relations Act Review on its website; the consultation report is an especially worthwhile read.

Update: 22 November 2011

As it turns out, two colleagues of mine have managed to preempt my reply. Read the letters to the editor of Trudi Brown, Q.C. and Mary Mouat.

20 November 2011

Decision on Role of Illegal Conduct in Family Law Cases

The kerfuffle surrounding the tabling of the Family Law Act has done nothing to staunch the flow of decisions issuing from the courts. That's a good thing, because in the judgment recently released in the case of Daemore v. Von Windheim, the Supreme Court had the rare opportunity to consider how a party's illegal conduct should play into its analysis of a family law problem.

The Latin maxim ex turpi causa non oritur actio — no right of action arises from a base cause — often abbreviated as ex turpi or ex turpi causa, stands for the principle that you shouldn't be able bring a law suit out of a problem which stems from your own wrongful conduct. For example, a thief injured while burgling a property shouldn't be able to sue the owner for negligence, and a drug dealer shouldn't be able to sue to recover his stolen stash. As you can imagine, this legal principle rarely crops up in family law disputes.

At the time of trial, the husband was 69 and the wife was 55. They had been together since the wife was in her late teens and had married in 1981, but were separated for 16 years by the time the husband's claims for spousal support and certain orders relating to property were heard. This is how the judge summarized the peculiar nature of the case:
"[3] The claims which are advanced by the parties are not, in concept, unusual. The circumstances which underlie these claims, however, are extraordinary. ... Both parties have repeatedly and on an ongoing basis, including in recent years, jointly engaged in various forms of wrongful activity. Their three children have participated in some of these forms of illicit or wrongful conduct. Several of the witnesses who appeared before me unabashedly acknowledged their involvement in earlier activity that was either criminal or fraudulent."
The parties' separate criminal careers, as summarized by the judge, are astonishing for their breadth and manifest disregard for the law; the problem this caused at trial was the judge's inability to accept the testimony of either of them. At the end of the day, however, the truthfulness of the parties was eclipsed by yet another problem:

"[60] I do not consider that there is any merit to any of the disparate claims advanced by Mr. Daemore or Ms. Von Windheim. Each of their respective claims suffers from various deficiencies arising from the application of those legal principles which are relevant to the particular claim. There is, moreover, an overarching impediment to many of these claims. This impediment is the result of the criminality and illegality which pervades most of the claims before me.

"[61] The maxim ex turpi causa non oritur actio, generally raised as a defence, but available to the court on its own motion, is directly relevant. The issues engaged by application of the maxim were not raised in the pleadings of the parties. They were raised by me in advance of argument and counsel were provided with a further opportunity to supplement their submissions in writing."

The judge then summarized the law on the issue (I've put the important bits in bold):
  • Hall v. Hebert, 1993 Supreme Court of Canada: "The power expressed in the maxim ... finds its roots in the insistence of the courts that the judicial process not be used for abusive, illegal purposes."
  • British Columbia v. Zastowny, 2008 Supreme Court of Canada: "The following principles and approach are established in Hall v. Hebert and are applicable in the present case. 1) Application of the ex turpi doctrine in the tort context invalidates otherwise valid and enforceable actions in tort. 2) ... its application must be ... made subject to clear limits and should occur 'in very limited circumstances'. 3) The only justification for its application is the preservation of the integrity of the legal system. This concern is only in issue where a damage award in a civil suit would allow a person to profit from illegal or wrongful conduct or would permit evasion or rebate of a penalty prescribed by the criminal law."
  • Randhawa v. 420413 B.C. Ltd., 2007 BC Court of Appeal: The maxim "applies in contract and in tort to maintain the internal consistency of the law ... The justification for the rule is the preservation of the integrity of the legal system; it should be applied sparingly. ... [I]t is not necessary to plead the doctrine. It is a question of law. It is necessary to plead the material facts to support the application of the doctrine."
These cases all deal with ex turpi causa in the context of contracts and torts. In Daemor, however, some of property claims were based in statute and others in the law of trusts. The judge continued:
  • BMF Trading v. Abraxis Holdings Ltd., 2002 BC Supreme Court: "The modern doctrine of constructive trust, which has been created to remedy injustice to innocent or vulnerable parties, is not a device to be utilized by sophisticated business people caught in the web of their own intrigue. Constructive trusts are not to be used as a reward to parties who have gained advantages by denying legal ownership of an asset, only then to assert ownership when it suits them at a later date. This court must not facilitate such manipulation."
  • Stoneman v. Gladman, 2005 Ontario Superior Court of Justice: "The trustee’s disinterest does not confer legal capacity on the plaintiffs, and unlike the trustee, they remain tainted by their professed acknowledgment that the scheme that they seek to have enforced is dishonourable and illegal."
  • J.T.L. v. R.G.L., 2010 BC Supreme Court: "Ex turpi causa is concerned not specifically with the lawfulness of contracts, but generally with the enforcement of rights by the courts. The courts will not enforce a right, which would otherwise be enforceable, if the right arises out of an act committed by the person asserting the right which is sufficiently anti-social to justify courts refusing to enforce that right. ... The purpose of the ex turpi causa rule is to defend the integrity of the legal system and the repute in which courts ought to be held by law-abiding members of the community."
Having thus established that ex turpi causa is a principle of general application available to the court whenever the integrity of the justice system is imperiled, the judge observed that:
"[77] ... The unlawful conduct of Mr. Daemore and Ms. Von Windheim is flagrant and pervasive. It arises not as a matter of inference, but is unequivocally acknowledged. Importantly, such illegality is central to many of the claims being advanced."
And further:
"[118] Here, the evidence of both parties is unreliable. There are also few proven facts from which I can make or draw appropriate inferences. Any such exercise would be wholly speculative. As a result, I do not consider that there is any principled basis for me to conclude that either party holds any specific additional property or to fix the value of any further family assets. If any unfairness results to the parties ... they have only themselves to blame."
Ultimately, the court dismissed the husband's claim for spousal support and certain orders based on the law of trusts; dismissed the wife's claim for child support but entirely reapportioned to her the properties she had been solely responsible for maintaining over the parties' lengthy separation.

Frankly, the specific result doesn't much matter; what does matter is the court's overview of the ex turpi causa maxim, his summary of its key legal principles, and his clear conclusion that the maxim applies to any relief claimed in court, whether under based on statute law or the law of contract, trusts or tort. This case will be essential reading whenever a party's criminal conduct relates to a claim he or she elects to advance in court.

18 November 2011

The Early and Unlamented Deaths of ss. 90 and 120.1:
Government takes quick action on parental support and unmarried persons' property agreements

I've had the opportunity to take a more in depth reading of the transitional and repeal provisions of the Family Law Act, largely as a result of some issues brought to my attention by Nate Russell of Courthouse Libraries BC.

The nuts and bolts of the new Family Law Act run from ss. 1 to 244. The government's power to make the host of new regulations the act will require runs from ss. 245 to 249. The transitional provisions — the sections which guide the changes from the old Family Relations Act to the new Family Law Act — are brief and run from ss. 250 to 256. The really dry stuff, about the other laws that will be changed or repealed to accommodate the new act run from s. 257 all the way through to s. 482 and are dreadfully dry reading. This is, however, where you can find the really interesting things which motivated the call from Nate.

At the end of the act, further to s. 482, is a table showing which parts of the act come into force upon the act receiving Royal Assent which will come into force down the road by Order in Council. As readers will recall, the Attorney General has announced that implementation of the act will take 12 to 18 months. However, a close look at the table shows that some parts of the act will come into effect the moment the bill receives Royal Assent, two or three days after it clears Third Reading, and won't need to wait for the eventual Order in Council. (Read my post "The Present Effect of the Proposed Family Law Act" for a brief discussion about how a bill becomes law.) An acquaintance at the Attorney General's office has confirmed that this is indeed the intention behind s. 482.

Apart from some minor housekeeping changing references to "husband and wife" to "spouse," the provisions coming into effect right away will:
  • make the Land (Spouse Protection) Act available to unmarried spouses,
  • repeal the provisions of the Family Relations Act for parental support (s. 90), and
  • repeal other provisions relating to the effect of property agreements between unmarried couples (s. 120.1).

The last point is the most important, I think, although frankly the repeal of parental support is a close runner up. (Read my post "Parental Support in British Columbia" for an explanation of this subject.)

If you go back to my post "Why you DON'T want a cohabitation agreement," you'll see a long explanation about how s. 120.1 made the property rules applicable to married couples applicable to unmarried couples who had the misfortune to make an agreement about property. This meant that cohabitation agreements were usually very bad for the person owning property, as they could produce a far worse result than the worst case result without an agreement.

The repeal of s. 120.1 now means that unmarried couples can go ahead and enter into property agreements now before the rest of the Family Law Act comes into effect without getting caught by the unexpected and frankly counterintuitive consequences of s. 120.1. In other words, unmarried couples can make an agreement now to avoid the property sharing provisions of the new act without worrying about the negative consequences of the old act.

My thanks again to Nate for pointing this out.

14 November 2011

Family Law Act Introduced!

Attorney General Shirley Bond has this afternoon tabled Bill 16, the Family Law Act, for first reading in the Legislature. Assuming the bill becomes law, which seems a near inevitability given the government's comfortable majority at present, the new Family Law Act will completely revamp British Columbia's law on domestic relations and give us the most progressive legislation on relationship breakdown in the country.

In this post I will provide a rough summary of the key features of the proposed Family Law Act. Later posts will provide more details and better analysis, and examine some of the technical issues relating to the implementation of the new legislation. For more information about the background to the bill, click on the "White Paper" and "Family Relations Act" labels below.

A new emphasis on out-of-court resolution

The act encourages the resolution of family law problems by means other than litigation. The act gives equal emphasis to agreements and court orders, and provides better support for out of court negotiations by making complete disclosure mandatory in all cases and by imposing penalties for failures to make disclosure which result in the court setting aside an agreement.

The act will give the court new authority to refer parties to counselling and to out-of-court dispute resolution services like counselling and mediation, including as a means of helping parties comply with court orders. The court will be able to appoint a parenting coordinator to manage the implementation of orders and agreements involving children, even over the objection of a party.

The act also provides improved support for the arbitration of family law disputes and will make a host of changes to the Commercial Arbitration Act to better accommodate family law disputes.

A child-focused approach to parenting after separation

The new act throws out conflict-laden terms like "custody" and "access" and replaces them with a new model of parenting after separation which prioritizes a child's entitlement to proper parenting and meaningful time with each parent over a parent's right to control the child's upbringing and have a schedule of contact with the child.

Under the act, parents who have lived together after their child was born will be the child's guardians until they agree or a court orders otherwise.

People who are guardians, which may include people other than parents, have parental responsibilities in respect of the child, including the duty to raise the child, to make decisions about where the child lives and with whom the child spends time, and to make choices about the child's medical care, school, religion and so forth. Parental responsibilities can be divided or shared between guardians. The time a child is with a guardian is parenting time, and references in the legislation to parenting arrangements means arrangements made in respect of parental responsibilities and parenting time.

People who are not guardians, including parents who are not guardians, have contact with a child and do not have parental responsibilities. "Parenting arrangements" does not include arrangements made in respect of contact.

A new approach to the best interests of children

Decisions about parenting arrangements and contact, whether in an order or an agreement, are to be made in the best interests of the child. The best interests of the child are no longer the "paramount" consideration but the only consideration the court or the parties may take into account when making an order or agreement affecting a child.

The act provides a new, expanded definition of best interests which, among other things, requires consideration of: the child's views and wishes, the history of the child's care, the capacity of the child's parents, and any history of family violence. The act requires the court to assess the nature, extent and impact of family violence on the child's well being and provides a list of factors which the court must consider in making this assessment.

Planning for a parent's incapacity

The act allows guardians to appoint stand-by guardians to take over a guardian's parental responsibilities in the event the guardian is no longer able to manage those responsibilities. The appointment may take effect on the guardian's incapacity and may be permanent or last only for the duration of incapacity.

A guardian may also appoint a person to take over in the event of the guardian's death. Testamentary guardians may be appointed by the deceased guardian's will or through the execution of a new form.

Managing children's property

Under the new act, parents are not presumptively entitled to act as guardians of their children's property, except for property with a value less than a certain amount. Property guardians, who may include parents, must be appointed by the court in consultation with the Public Guardian and Trustee.

At last, some rules about moving with a child!

The act provides a mechanism to address mobility issues. This is welcome indeed as the law on this extremely difficult issue has so far been entirely governed by case law, much of which is inconsistent to the point of being contradictory, despite the Supreme Court of Canada's decision in Gordon v. Goertz.

Under the new act, a guardian wishing to "relocate" with a child will have to give 60 days' notice to anyone else who is a guardian or has contact with the child. Relocation means a change in a child’s residence “that can be reasonably be expected to have a significant impact on a child’s relationship” with a guardian or another significant person. A guardian who opposes a proposed relocation will have 30 days to from delivery of the notice to file an objection.

The act provides a test to determine whether the court should allow a proposed relocation when negotiations between the parties have failed: the guardian wishing to move must prove that the proposed move is being made in good faith and that reasonable arrangements have been made to preserve the child's relationship with the parent who is not moving. When the guardians have equal or almost equal parenting time, the guardian wishing to move must also prove that the move is in the child's best interests.

New rules about assisted reproduction

The new act makes extensive provisions for people having children by assisted reproduction. Until now assisted reproduction has been governed only by the federal Assisted Human Reproduction Act and the common law; there was no provincial legislation on the subject.

Under the Family Law Act, people will be able to contract for the donation of sperm or eggs, or for a woman to act as a surrogate mother carrying an embryo created with any combination of donated gametes, including or not the gametes of the people wishing to have the child. These contracts, as long as they are executed prior to conception, will be sufficient to determine the legal parentage of a child, and, if the parties to the agreement wish, can name more than just the people wishing to have the child as parents. A donor or surrogate may also be a legal parent.

Prioritizing child support obligations

Under the new act, as under the current law, parents as well as stepparents and guardians are responsible to pay child support. The new act will make the duty of a guardian who isn't a parent secondary to that of a parent, and a stepparent's duty to pay child support secondary to that of a non-parent guardian.

A payor's obligation to pay child support will continue to take priority over any obligation to pay spousal support, meaning that if a payor can't pay both amounts only child support will be payable. However, the end of a child support obligation may result in a reconsideration of the payor's spousal support obligation.

Independent children under the age of majority

Children younger than age 19 may stop being entitled to child support where they have voluntarily withdrawn from their parents' care, for reasons other than family violence or intolerable living conditions.

An expanded definition of "spouse" for spousal support

"Spouses" are entitled to apply for spousal support. Spouse, for the purposes of spousal support applications, includes:
  1. people who are married or who used to be married;
  2. unmarried people who have lived together in marriage-like relationships for more than two years; and,
  3. unmarried people who have lived together for less than two years but have had a child together.
Married spouses must apply for spousal support under the new act within two years of divorce or the annulment of their marriage. Unmarried spouses must apply within two years of the date of their separation.

Harmonizing spousal support with the Divorce Act

The provisions for spousal support in the new legislation mirror those set out in the federal Divorce Act. A spouse's entitlement to support is determined by reference to a list of objectives and, once entitlement is found, the amount of support payable and the length of time it will be payable for are determined by reference to a list of factors.

The Spousal Support Advisory Guidelines is not referenced in the new legislation. This continues the present status of the Advisory Guidelines, which is not a law and has been formally adopted by neither the Divorce Act nor the Family Relations Act.

A limited revival of misconduct

Spousal misconduct has been a forbidden consideration since introduction of the no-fault amendments to the Divorce Act in 1968; before those amendments, spousal misconduct, such as committing adultery or being abusive, was a legitimate consideration in making or refusing to make a spousal support order.

The new act will allow the court to consider misconduct which causes or prolongs a spouse's need for support as well as misconduct which unreasonably affects the capacity of a spouse to pay support. The point here, I think, is to penalize: goldbricking spouses who fail to take meaningful steps to become self-sufficient within a reasonable period of time; oppressive behaviour which hinders or delays a spouse's ability to be self-sufficient; and, spouses who arrange a decrease in personal income to duck a support obligation.

Reviewable arrangements for spousal support

Orders and agreements on spousal support may require that provisions for spousal support be reviewable. A review can happen at a certain date or upon the occurrence of a specific event, and the order or agreement can specify how the review will occur — such as by a court hearing or by a process of mediation — and what issues or circumstances will be considered at the review.

Under the act, spousal support will also be reviewable when a spouse becomes entitled to receive benefits from a pension, whether the order or agreement provides for a review in those circumstances or not.

Making support obligations binding on a payor's estate

Orders and agreements for child support and spousal support can be made binding on a payor's estate. The court can also require a payor to maintain a life insurance with a spouse or child named as the beneficiary of the policy.

A new, more intuitive scheme for property division

Under the new act, there will be two categories of asset, assets presumptively excluded from division and assets presumptively divided equally. Under the Family Relations Act, almost all property owned by either or both spouses was up for division, regardless of who owned an asset or when it was acquired; all that mattered was whether the property was "ordinarily used for a family purpose."

Under the new act, excluded property includes assets acquired by a spouse before the relationship, gifts and inheritances received by a spouse, certain kinds of court awards and certain kinds of insurance payments. Except for the increase in value of excluded property during the relationship, excluded property remains the property of the spouse who acquired it.

Family property is primarily composed of the assets acquired by either spouse during the relationship and is owned by a spouse at the date of separation. Family property is presumptively shared equally between spouses.

The court can divide excluded property or reapportion family property but only when it would be "significantly unfair" not to do so. The point here, I think, is to raise the threshold of unfairness that must be met before the court can depart from the presumptive property division scheme.

As if these changes weren't enough, the new scheme for property division will apply to married spouses as well as unmarried people who have lived together for more than two years! This is a really important feature of the new law because unmarried couples are cut out of the parts of the Family Relations Act which divide property between married spouses, largely leaving unmarried people stuck with difficult and often unsatisfactory claims based on unjust enrichment and trust law.

Allocating responsibility for debts

The act will also allow the court to divide responsibility for "family debts" between spouses. Family debts are debts incurred during the relationship, or incurred to maintain family property after separation, and is presumptively shared equally between spouses

Addressing family violence

The act has a new definition of family violence which includes, in addition to physical abuse, sexual, emotional and psychological abuse, forcible confinement and restriction of a person's autonomy, and withholding the necessities of life.

When a person is at risk of family violence, the court may make a protection order which can include provisions restricting contact between the parties, restraining a party from going to the family home, restraining stalking-type behaviour, or restraining a party from possessing weapons. The new act provides that where another order under the Family Law Act conflicts with a protection order, the terms of that order are suspended to the extent of the conflict. This could mean, for example, that a protection order preventing communication between the parties might result in the suspension of a separate order for contact or parenting time if that order would normally require communication between the parties.

The Family Law Act contains no provisions to enforce protection orders. Instead, such orders can only be enforced by the police through s. 127(1) of the Criminal Code which makes it an offence to breach a court order.

Better management of court processes

Under the act, the court will be able to make a number of conduct orders intended to help the court manage its processes, manage the parties before it and encourage the settlement of disputes. Among other things, the court can order that parties attend counselling, impose restrictions on how they communicate with each other, and require that a party post a bond to secure his or her good behaviour.

Conduct orders include case management orders such as an order striking or dismissing all or part of a claim, an order prohibiting a party from bringing further applications without permission from the court, or an order requiring all further applications to be heard by the same judge.

The new act enhances the court's ability to enforce its own orders — except for the enforcement of protection orders — and the court may order that a party post security for the party's compliance with an order, pay the other party's expenses for enforcing an order, or pay a fine of up to $5,000. Where nothing else will secure a party's compliance, the court may order that the party be jailed for up to 30 days. These provisions apply to the provincial court as well as a the supreme court, and will significantly improve the provincial court's ability to deal with parties in contempt of court.

What else is going on?

In anticipation of the new act, the Supreme Court has revived its rules committee — yes, the committee which was responsible for the brand new family law rules introduced last summer — to overhaul them again to accommodate the new language, new processes and new orders available under the Family Law Act. The Provincial Court has struck a rules committee to the same purpose.

Whatever changes may flow from rules committees' recommendations, they are unlikely take effect any sooner than the coming into force of the new act.

A few final, but still preliminary, thoughts

I am, on the whole, tremendously impressed with the proposed legislation. It is progressive and forward-thinking, and puts the entitlements of children before the rights of their parents. It brings the law on domestic relations in British Columbia into the twenty-first century by squarely addressing the complex issue of assisted human reproduction, the nuanced impact of family violence and the increasing prevalence of long-term unmarried relationships. It also fixes a number of existing problems by giving the provincial court the teeth to enforce its own orders and by bringing the mechanics of property division more in line with people's intuitive expectations.

It remains to be seen, however, how the new act will work in practice. It is not clear to me, for example, how the enforcement of protection orders through the Criminal Code will work. Will the police cooperate in enforcing protection orders? Will enforcement get bogged down by the much higher burden of proof that applies in criminal matters? Or, to take a different subject, how will the presumption of shared guardianship unfold? Will it work to effectively and efficiently promote children's best interests, or will it instead encourage litigation by forcing angry parents into court to get an order terminating shared guardianship?

Despite these concerns, concerns which are relatively minor in light of the astonishing breadth of the new law, I remain optimistic that this legislation represents a significant and positive advancement over the the present law. The staff of the Ministry of the Attorney General have devoted an enormous amount of time to this project over the past five years and their efforts are to be recognized and applauded.

The Attorney General's news release on the new act can be found on the provincial government website. (One small correction, though: the first Family Relations Act was introduced in 1972, not 1978.)

Follow the new label "Family Law Act" to track my future posts on the new legislation.

Update: 15 November 2011

You can listen to me talk about the new legislation with Mark Forsythe on CBC Radio's BC Almanac. Topics discussed include the new roles of mediation and arbitration, custody and access reports and views of the child reports, spousal support and the new best interests of the child test.

You can read another post of mine on the background of the Family Law Act at Courthouse Libraries BC's The Stream. This post is written for lawyers and is somewhat more technical in nature.

12 November 2011

The Other Side of the "Sham" Marriage

The BBC has posted a great article about the burgeoning "wedding detective" trade in India, where there are apparently around 15,000 businesses willing to investigate a potential bride or groom. Most of the time these folks will be hired by the bride's family to investigate the groom and authenticate family status, verify income and capital assets, check for other wives or a history of infidelity, and verify sexual orientation. Says the BBC:

"The vast majority of enquiries come from parents who want to assess the 'character' of their future son-in-law ...

"The nature and scope of investigation depends on the moral or cultural values of parents. Someone from a more traditional Indian family might want to check up on whether a bride or groom drinks or smokes.

"Others might be keener to learn whether there are any past relationships, something which can still be frowned upon in India. Conducting a review of a groom's financial dealings and business assets is also common."

Because it is still fairly common for the bride to move in with her in-laws after marriage investigations can sometimes address the character of the potential mother in law:
"'We study the mother-in-law,' says [one detective]. 'How many times does she get angry, how many times does she throws the vessels out, how many times does she go shopping, what does she spend her money on. We understand everything about her and then put it in writing.'"
If only I'd known. Apparently, these investigations can become extraordinarily elaborate, involving "spy cameras hidden in watches, key chains, lockets and shirt buttons," complicated ruses and creative disguises:
"It is normal practice for [another detective] to wear disguises. He dresses as beggars, watchmen and drivers to gain access to a subject's house and life. There is no limit to what persona he might take on. [The detective] once posed as a pimp, after the parents asked for a 'honey trap' test."
Now, detectives are also hired in matrimonial matters in Canada, however here it's usually on an after-the-fact basis... or so I thought. For example, the oddly-named Deception Investigations claims to specialize in "domestic and matrimonial issues" and will surreptitiously investigate your beloved to determine whether he or she is having an affair, hiding assets and so forth, and also offers to chase people down who are in arrears of support. Much the same services are offered by Shadow Investigations and Advanced Surveillance Group.

However, reading Deception's website more closely reveals that they also offer "pre-marital screening." Another company, Surrey Private Investigator, offers the same sort of service under the curious heading "Relationship Investigations:"
"Does your lover have a secret past? Before you become involved with a person, you may decide to conduct a pre-relationship investigation for the purpose of looking into the background of the person with whom you share romantic interests or plan to marry. Isn't it important that you know if they are really who they say they are."
The website of Pinnacle Investigations is much more detailed about the services they offer:
"... A thorough back check is the key to making the right decisions when entering into new relationships where even the slightest suspicions are encountered. ... We conduct property searches, bankruptcy and judgment searches, lien searches, lifestyle checks and mystery shopping. ..."
Now, I can guess what "lifestyle check" is code for, but "mystery shopping" baffles me unless your fiancé or fiancée is a prostitute. Interestingly, Golden West Investigative Group takes a less literate, darker perspective on pre-marital inquiries, and seems to adopt the groom's perspective:
"When entering a partnership relationship (proposed marriage), there are times that one of the parties may be coming into the new marriage with considerably more assets than the other. It is becoming more common to have pre-nuptial agreements in such cases. It is also becoming more common for the party with the greater asset base to hire a firm like Golden West Investigative Group Ltd to conduct a thorough investigation and surveillance to make sure that everything is on the up and up before the marriage occurs. This may sound like a lack of trust but some people have enough assets to be an EASY MARK for a few unscrupulous people. It is sad... but so true in today's world of wealthy entrepreneurs. If you are entering a new relationship, be sure you know who your other future half really is."
It seems that the cultural background which makes the BBC story so charming isn't so far off from the values of the cynical but engaged in British Columbia!

05 November 2011

Supreme Court Releases Important Decision on Lump Sum Spoual Support

The Supreme Court has just released its judgment in Robinson v. Robinson, a case in which the parties had resolved everything on their own except for how spousal support should be paid and how much should be paid. The husband's liability to pay spousal support was admitted, however the wife wanted to receive spousal support in one large payment (a lump sup) or as a mix of monthly payments (periodic payments) and a lump sum; the husband preferred to meet his obligation by way of periodic payments.

Under s. 15.2(1) of the Divorce Act, the court may "make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable." The Family Relations Act says almost the same thing at s. 93(5).

Periodic payments are the most common form of spousal support. Periodic payments allow the payor and the recipient to make stable financial plans, and have the benefit of being tax-deductible for the payor. Periodic payments are also usually more affordable for the payor since few people have the cash lying around to make a large lump sum payment.

On the other hand, lump sum payments are attractive to payors who want to have done with their obligation and don't relish the thought of cutting a cheque each month to someone they're no longer very fond of. Recipients sometimes like the idea of a lump sum payment if the money will allow them to invest in a business or pay for education that will help them get back on their feet. Although lump sum payments aren't tax-deductible for payors, they're also not taxable income for recipients.

In the case of the Robinson family, by the time the case came to trial the husband was in his fifties, with a good income in the low six figures and living overseas with his new partner, and in recent years had suffered a number of heart attacks and a stroke requiring hospitalization. Quoting from the judgment, the wife sought a lump sum for the following reasons:

"[81] The wife is now [in her fifties]. She is unable to become and remain economically independent and self-sufficient without ongoing financial assistance from the husband. She seeks an order that the husband pay ongoing spousal support for an indefinite period. However, because of his past behaviour, and in order to terminate all contact with the husband, she seeks an order that the spousal support be paid in a lump sum.

"[82] The wife submits that both parties would benefit from a clean break, since they continue to have a difficult, stormy relationship and poor communication, which has not improved after many years. ...

"[83] She cites a number of other incidents of miscommunication and discord between the parties regarding financial matters, including: the withdrawal of funds from the parties’ joint account; the concern over the payment of ___ funds; and the situation regarding the purchase of the ___ condominium.

"[84] It is the submission of the wife that as the relationship between the parties has been strained since 20__ and became increasingly more difficult until the separation in 20__, and since the communication between the parties remains minimal and difficult, the clean break afforded by a lump sum payment is the appropriate form of spousal support in her circumstances.

"[85] The wife deposes that the wait each month to see whether funds will be forthcoming exacerbates her [illness], and she believes the stress and anxiety have a negative impact on her [illness]. A lump sum will alleviate this concern."

The husband sought to pay on a periodic basis and said that a lump sum would be inappropriate for these reasons:

"[88] The husband submits that periodic payments of spousal support are appropriate in these circumstances since a lump sum payment is made only in exceptional circumstances.

"[89] ... The husband is aware of no medical condition which would preclude the wife from taking employment, either in the past or currently. She has means, including her ability to earn income. The husband has consistently encouraged the wife to take either course work or find employment, but she has refused to do so.

"[90] On the basis of the circumstances of this case and the case law submitted, the husband submits that the wife should use her capital to generate income, as that capital is already available as a result of a reapportionment of the family assets. Means includes the ability to earn an income both personally and from one’s capital.

"[91] This is not a case where the husband can make back the capital [which a lump sum payment would require him to spend], since his income is now reduced from previous years’ income. ... She does not have a one-time need for additional capital.

"[92] Enforceability is not an issue in this matter, as the husband has an excellent record of [paying] spousal support."

The trial judge began her analysis by quoting from an appeal case out of Ontario released earlier this year, Davis v. Crawford (I've put the important bits in bold):

"[66] Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.

"[67] The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example: short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.

"[68] Similarly, the disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.

"[69] In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award."

Considering these factors, the judge concluded that the wife should receive the lump sum she sought: "lump sum spousal support will assist the wife to be self-sufficient and meet her needs to maintain her standard of living with use of the capital from the lump sum together with the capital achieved in the division and reapportionment of the family assets " and "the advantages of a clean break outweigh the minimal tax benefit of periodic payments in addition to a lump sum."

The question then turned to the calculation of amount, one of the main problems with lump sum orders identified in the Davis decision. After restating the relevant provisions of the Spousal Support Advisory Guidelines (ss. 3.4.2, 7.1, 10.1 and 10.2), the court reviewed a number of of the more important cases on the subject. Again quoting from the judgment:
  • As stated in Smith v. Smith [a 2006 case of the B.C. Supreme Court] ... "the present value of a periodic support stream in favour of Mr. Smith until Ms. Huntley attains age 65 would approximate $105,000, $123,000 and $140,000 at the low, mid and high points, respectively, of the range suggested by the draft guidelines. Allowing for income tax at an average rate of 30%, the after-tax present value amounts would approximate $70,000, $82,000 and $93,000, respectively. The reapportionment I have ordered, based as it was on markedly different income-earning capacity, accounts for approximately $50,000 of the present value of the future support stream."
  • In Wilson v. Wilson ... a 1997 decision of the B.C. Court of Appeal, the lump sum award was in an amount "equal to the present value" of the monthly payment.
  • In the case of Raymond v. Raymond ... decided by the Ontario Superior Court of Justice in 2008, the calculation of lump sum spousal support took into account the net amount of the mid-range figure from the SSAG, less 6% to represent the present value of the lump sum payment, and less 50% to take into account future contingencies.
  • In Durakovic v. Durakovic, ... also a 2008 decision of the Ontario Superior Court of Justice, the lump sum entitlement was calculated by using a monthly figure extrapolated for the number of months remaining in entitlement, less 30% for income tax payable, less 3% for present value, less 25% for negative contingencies which was noted to be "lower than other cases as there are only two years left to run on the calculation of the lump sum."
To summarize, then, in calculating a lump sum amount, the court can take into account:
  1. the ranges proposed by the Spousal Support Advisory Guidelines formulas;
  2. the tax consequences periodic payments would have attracted (a deduction to account for the tax the recipient would have owed on periodic payments);
  3. the decreasing value of the dollar over time (another deduction); and,
  4. the possibility of future changes which would have reduced the amount of the periodic payment (another deduction).
Applying these factors to a very learned understanding of the fine details of the Advisory Guidelines (and, I believe, her own calculations), the judge concluded:

"[123] An appropriate amount of monthly support is a starting point in the calculation of the lump sum.

"[124] With income of the wife of ___, support payable for 9 and one-half years, and the husbands’ accurate income and age of ___, the SSAG range of monthly payments provided by the computer application is $5,156, low, $6,016, mid, and $6,875, high.

"[125] The Without Child Support Formula ... provides for a range from 1.5% to 2% of the difference between the spouses’ gross incomes for each year of marriage up to a maximum of 50%. Taking 1.5% to 2% of the income difference results in a range of $5,755 to $7,633.

"[126] However, the maximum under the Formula is 50% of the income difference, which is $6,851.

"[127] Taking into account the Formula and the maximum, and the computer application of the Formula, the range is $5,156 to $6,851 per month. Taking into account the totality of the circumstances, I would determine monthly spousal support at the mid-point of this range or $6,000 per month as a starting point for calculation of the lump sum.

"[128] The lump sum calculations provided by the computer application of the Formula do not provide an appropriate result in this case where there is a restructuring of support ... to arrive at a lump sum. This is an example of an exception ... where the 'formula outcomes, even after consideration of restructuring, will not generate results consistent with the support objectives and factors under the Divorce Act.' ... [The] computer applications provide a reference point but an award that meets the requirements of the Divorce Act and Family Relations Act requires another method of calculation.

"[129] I prefer the method illustrated by the cases of Wilson, Durakovic, Raymond, and Smith, which take into account in various manners the factors of relative tax situations, an appropriate discount rate for the present value, and a contingency rate where necessary. In this case where the health of the payor spouse is subject to a heart condition which has required quadruple bypass surgery and continues to require medication, a significant contingency adjustment is required as there is a real possibility that the husband will not be able to continue to work until his planned retirement date.

"[130] There are 9 and one-half years or 114 months remaining for the payment of spousal support from December 2011, for a total of $684,000. From this gross amount, I would deduct tax which would be payable by the wife at an assumed rate of 35%. The discount rate for present value is 7%. To that amount I apply a contingency discount of 20%. The net amount is $330,782.

"[131] I find that the wife is entitled to lump sum spousal support in the amount of $330,000."

I expect this will be required reading for some time for cases involving not just the payment of spousal support as a lump sum, but the calculation of the lump sum when such an order is made.

I also appreciate and ask readers to note the judge's careful reading of the Advisory Guidelines. The Advisory Guidelines is very detailed and offers a nuanced range of exceptions and restructuring opportunities intended to help the formulas adapt to better suit complicated and unusual situations; too often lawyers overlook that deeper analysis and churn out calculations that don't consider these other options.

02 November 2011

Access Pro Bono Launches New Website

Access Pro Bono, the organization formed in 2010 by the merger of the Western Canada Society to Access Justice and Pro Bono Law of British Columbia, has just launched a fantastic new website at www.accessprobono.ca, thanks to funding from the Legal Services Society, the agency which provides legal aid in British Columbia. The new site is very user-friendly and easy to navigate.

According to the executive director, Jamie Maclaren, Access Pro Bono
"...made a conscious decision to focus the new site on the pro bono legal services that we offer to low-income British Columbians and how to access them, rather than the ins and outs of our organization...

"Today's launched version of the site is Phase 1 of our ongoing web development project. We will be adding more dynamic elements and more resources to the site in subsequent phases, including CLE-TV programs for pro bono lawyers, greater integration with Clicklaw, more BC-based legal resources, more videos introducing our many programs and projects, and better web-based access to our services."

The new site is quite sharp and worth a visit.