Family Law Unjust Enrichment – Joint Venture Property Rights for Common Law vs Married Spouses

Posted on May 1, 2013 by admin

Elsewhere I have discussed the different property rights that exist between common-law and formally married spouses.  They are not the same and continue to remain very different.

Married parties are subject to the property scheme imposed by the Family Law Act.  Grossly simplified, each of the spouses walk away from the marriage with an equal net worth.[1]

Common-law parties are limited to common-law rights also known as judge made law.  These can arise from the way that title is held.  An example are houses registered in both names and as such belong to both parties.  Or alternatively, the application of judge made equitable rules which one can paraphrase as being “fairness rules”.  One of those rules is unjust enrichment.  Unjust enrichment and its close cousin, joint venture, were explored and expanded upon by the Supreme Court of Canada in its 2011 decision in Kerr v. Baranow.

For married couples, the property regime under the Family Law Act does not entirely exclude the application of the fairness rules or unjust enrichment.  However, the Ontario Court of Appeal [2] has held that although the law is clear that equitable principles such as unjust enrichment have not been supplanted by the enactment of the Family Law Act in the vast majority of cases an unjust enrichment that arises as a result of the marriage would be fully addressed through the operation of the equalization provisions.

In other words, the court will rarely use these extra ordinary powers.

[1] The Formula is far more complicated than this and requires an in-depth review with a qualified family law lawyer, such as those as Dale Streiman and Kurz L.L.P.

[2] McNamee v. McNamee in 2011.

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WRONGFUL DISMISSAL – IS THE RULE OF THUMB MADE OUT OF PLASTER OR STEEL?

Posted on April 15, 2013 by admin

Wrongful Dismissal, which is discussed elsewhere on this site, is the judge made law that is superimposed upon the Employment Standards Act.  It deals with the situation of an employee who is dismissed without cause and what compensation they should receive as a result.

The question becomes what reasonable notice should the employee have received at the end of their contract of employment in such an event.  The “contract” is almost always unspoken and unwritten.

The practical starting point or rule of thumb widely discussed by both lawyers and courts is the equivalent of one month’s pay for each year of service.

The formula indeed is not a formula as is set out in virtually every court decision on point including the Supreme Court of Canada in Honda Canada Inc. v. Keays.

The courts on one hand, steadfastly hold that there is no such rule of thumb but rather state that the question of what is reasonable notice is to be decided on a case by case point, examining all of the factors in determining appropriate pay in lieu of notice.  Those factors include seniority of the employee, their responsibilities, the job market, efforts to find a new job and the age of the employee.

However, time after time when one examines the fact situations being fed in to a careful analysis of all court decisions relating to wrongful dismissal, the rule of thumb seems to be transformed from plaster to steel.

For a very long time, the upper reach of such pay in lieu of notice has been 24 months.  There have been some adjustments when the court wishes to penalize a particularly bad employer who has engaged in such foul behavior as falsely accusing an employee of theft.

In the recent decision of the Ontario Superior Court in Abrahim  v. Sliwin, Superior Court Justice Douglas Grey firstly denied the existence of the rule of thumb and then made a decision which was in essence the equivalent of applying the rule of thumb of one month’s pay for each year of service.  Interestingly, Justice Grey made the non binding comment that he might have broken the 24 months ceiling had he been so asked.

This is an excellent example in exposing the difference between the severance and termination pay one is entitled to under the Employment Standards Act and the wrongful dismissal damages one is entitled to under the very same circumstances.  The judge made law evolves with time and its only real boundaries are those imposed by the judges themselves with one eye towards any governing legislation.  Conversely the Employment Standards Act is enacted, made by the provincial legislature, and is literally a predictable formula.

Dale, Streiman and Kurz LLP, has been providing assistance for many years to its clients both, employers and employees in determining what is an appropriate notice period and assisting in the appropriate method of terminating employees so as to minimize such payments.

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DISOBEYING A COURT ORDER CAN LEAD TO FINES OR EVEN JAIL

Posted on April 1, 2013 by admin

The courts, including those having jurisdiction over family law matters are an important representation of the state.  When the court makes an Order, it is not one solely between the litigants, but more importantly, is viewed as an Order by the court itself.

Failing to obey an Order of the court, can in certain circumstances lead to the court viewing the offending party as showing disrespect, not only to the other party (often an estranged spouse), but to the authority of the court itself.

The court has many tools to deal with such contempt including striking the pleadings of the offending party, and its ultimate resource jailing the contemptuous party.

Striking pleadings means that one is no longer a participant in the court process and the other party can proceed as if the offender had never filed any documents and was not participating in the law suit.  The court would only hear one side before making its decision.

Examples of contempt are failure to pay the full amount of support that is required, not preserving assets if they had been so ordered or refusing to transfer property pursuant to a court Order.

The most severe of remedies, namely jail, is rarely administered.  However, this power was recently brought into sharp relief in the recent Ontario Superior Court decision of Picken v Picken.

In that case, the husband had been ordered within a divorce action to preserve the sale proceeds from the sale of a property.  Eventually there was to be a payment to the wife for her share of $154,000.00, yet the husband, in the face of a direct Order to the contrary, dealt with the proceeds unilaterally and had kept out of the sale proceeds of more than $400,000.00, only $77,000.00.

The court felt that this lack of respect for the court process and an Order of the court could only be remedied by a finding of contempt which included a jail sentence of thirty days.

The husband was lead out of the court room in handcuffs and in an alarming twist, found himself housed for most of his sentence in a maximum security jail sharing a pod with six accused killers.

At times, a litigant would be excused for feeling that the court process is cumbersome, expensive and ineffective, but occasionally the court will flex its muscle.

A finding of contempt is an extremely technical and difficult process.  The lawyers of Dale, Streiman and Kurz LLP have a great deal of experience, both in bringing and responding to such an application.

By: Fred Streiman

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COMMONLAW SPOUSES PROPERTY RIGHT LIMITATION PROBLEMS

Posted on March 19, 2013 by admin

          We have discussed elsewhere the extremely complicated issue of the rights that commonlaw partners have against the other’s property in the event of a separation.  Those rights are very different than those granted under the Family Law Act to married spouses. These commonlaw property rights are generally rights of equity or judge made law.

One particular heading for such a claim is that of constructive trust in which the court imposes a trust right against the others property justified on the grounds of unjust enrichment or other equitable remedies (in English, it is unfair that the other benefited from your actions).

However, this has run into limitation problems.Generally speaking in Ontario, all claims are governed by the Limitations Act which holds that any lawsuit must be started within two years of the date on which the right should reasonably have been discovered by the Plaintiff.

If such a limitation period was imposed upon commonlaw spouses, one could envision a scenario in which the commonlaw spouse who feels that he or she has a claim, must bring such a claim even before the relationship ends.

Justice Perkins in 2013, made a decision that may yet be appealed.  In the case of McConnell v. Huxtable, Justice Perkins decided to use the specific limitation period under the Real Property Limitations Act which provides a ten year limitation period for claims to recover land.

This is all clearly extremely complicated and complications that the drafters of the Family Law Act hoped would never arise, but they have nonetheless courtesy of various court decisions, and most importantly, the Supreme Court of Canada in Scott v. Branow.

The lawyers at Dale, Streiman and Kurz L.L.P. have on many occasions had to grapple on behalf of their clients with thorny and competing equitable claims between separating commonlaw spouses.  One should appreciate that the gender of the parties is irrelevant and indeed Dale, Streiman and Kurz L.L.P. has extensive experience in acting for same sex commonlaw parties who are separating.

Any commonlaw spouse who finds themself separating would do well to speak to an experienced family law lawyer to assist them with this thorny issue.

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Survivors Pension Benefits should not be Ignored

Posted on March 6, 2013 by admin

Unfair vs Unconscionable

The Ontario Court of Appeal in its December 2012 judgment in Symmons v. Symmons reviewed a Trial decision that involved many complicated and interacting factors. In that case, the parties first lived together for almost 6 years, married in 1999 and separated 10 years later.  However, the husband was 13 years older than his now estranged bride and he had retired.  Because of the age gap, the pension the husband had earned at work had vested fully, including the survivor’s benefits to be enjoyed by his now former spouse.  Those survivor benefits were deemed to be worth over $300,000.

The wife was very unhappy that this was being tagged as an asset that she would have to now share with her retired husband and attempted to convince the court that is was unfair and indeed it met the test of unjust enrichment or alternatively an unconscionable division under Section 5 (6) of the Family Law Act.

In the end, the Ontario Court of Appeal said no, holding that it was not unconscionable (which one might describe as being unfair on steroids), because the wife’s net worth had increased substantially during the marriage and taking into account the survivors benefit amongst other factors.  The Court did equalize the survivors benefits.

I have in this article used the words unfair and unconscionable rather loosely, which is incorrect.  For married parties, the property division scheme is set out in the Family Law Act.  It is a very precise formula which must be followed.

A spouse may argue that to blindly follow the formula would produce an unconscionable result and therefore the court should use its discretion and order a different result.

The drafters of the Family Law Act very specifically chose the word unconscionable rather than unfair.  Unconscionable means a result that would shock the conscience of the court and its threshold is exceptionally high.  This area of law has been litigated many times since the enactment of the Family Law Act.   To determine whether or not a fact situation has a reasonable chance of meeting that test requires a lengthy and detailed examination with a qualified family law lawyer.

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Family Law Unjust Enrichment – Joint Venture Property Rights for Common Law vs Married Spouses

Posted on February 14, 2013 by admin

Elsewhere I have discussed the different property rights that exist between common-law and formally married spouses.  They are not the same and continue to remain very different.

Married parties are subject to the property scheme imposed by the Family Law Act.  Grossly simplified, each of the spouses walk away from the marriage with an equal net worth.[1]

Common-law parties are limited to common-law rights also known as judge made law.  These can arise from the way that title is held.  An example are houses registered in both names and as such belong to both parties.  Or alternatively, the application of judge made equitable rules which one can paraphrase as being “fairness rules”.  One of those rules is unjust enrichment.  Unjust enrichment and its close cousin, joint venture, were explored and expanded upon by the Supreme Court of Canada in its 2011 decision in Kerr v. Baranow.

For married couples, the property regime under the Family Law Act does not entirely exclude the application of the fairness rules or unjust enrichment.  However, the Ontario Court of Appeal [2] has held that although the law is clear that equitable principles such as unjust enrichment have not been supplanted by the enactment of the Family Law Act in the vast majority of cases an unjust enrichment that arises as a result of the marriage would be fully addressed through the operation of the equalization provisions.

In other words, the court will rarely use these extra ordinary powers.

The holding onto these extraordinary judge made remedies is an ongoing source of aggravation for the people who carefully crafted the Family Law Act, hoping that it would bring certainty rather than fuel for property division litigation.

Simply put, there are many competing factors when spouses separate, whether married or not and only a thorough review of all of those factors by a qualified family law lawyer can produce advice worth listening to.

[1] The Formula is far more complicated than this and requires an in-depth review with a qualified family law lawyer, such as those as Dale Streiman and Kurz L.L.P.

[2] McNamee v. McNamee in 2011.

By: Fred Streiman

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Survivors Pension Benefits should not be Ignored Unfair vs Unconscionable

Posted on January 31, 2013 by admin

The Ontario Court of Appeal in its December 2012 judgment in Symmons v. Symmons reviewed a Trial decision that involved many complicated and interacting factors. In that case, the parties first lived together for almost 6 years, married in 1999 and separated 10 years later.  However, the husband was 13 years older than his now estranged bride and he had retired.  Because of the age gap, the pension the husband had earned at work had vested fully, including the survivor’s benefits to be enjoyed by his now former spouse.  Those survivor benefits were deemed to be worth over $300,000.

The wife was very unhappy that this was being tagged as an asset that she would have to now share with her retired husband and attempted to convince the court that is was unfair and indeed it met the test of unjust enrichment or alternatively an unconscionable division under Section 5 (6) of the Family Law Act.

In the end, the Ontario Court of Appeal said no, holding that it was not unconscionable (which one might describe as being unfair on steroids), because the wife’s net worth had increased substantially during the marriage and taking into account the survivors benefit amongst other factors.  The Court did equalize the survivors benefits.

I have in this article used the words unfair and unconscionable rather loosely, which is incorrect.  For married parties, the property division scheme is set out in the Family Law Act.  It is a very precise formula which must be followed.

A spouse may argue that to blindly follow the formula would produce an unconscionable result and therefore the court should use its discretion and order a different result.

The drafters of the Family Law Act very specifically chose the word unconscionable rather than unfair.  Unconscionable means a result that would shock the conscience of the court and its threshold is exceptionally high.  This area of law has been litigated many times since the enactment of the Family Law Act.   To determine whether or not a fact situation has a reasonable chance of meeting that test requires a lengthy and detailed examination with a qualified family law lawyer.

By: Fred Streiman

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ASSUMPTION OF RISK-IS THE THRILL REALLY WORTH IT?

Posted on January 15, 2013 by admin

“It was like having the life having sucked out of you. It’s just sliding down a cable. Maybe without a tour group, it’d be kind of fun. Maybe.”

— Stan, South Park,  TV: South Park 16.6 “I Should Have Never Gone Zip lining”

When Deanna Loychuk and Danielle Westgeest booked their zip line adventure at Cougar Mountain in Whistler, British Columbia, they were eagerly looking forward to their exhilarating cable line expedition through the forest.  They made a reservation and followed through, ready to embark on their adventure.  They were asked by Cougar Mountain to sign a release and signed it without thinking twice.

We have all done that at one point in time, foolishly, thinking we are invincible and there would be no need to worry about lawsuits and court actions when you could be the next “Evel Knievel”.  They saw the usual title and words “release of liability”, “waiver of claims” “please read carefully” and nonetheless submitted the form before their excursion.  They were not forced to go zip lining.  No one from Cougar Mountain coerced them to engage in this thrill seeking behaviour.

The ride began and the two women collided as a result of miscommunication between the guides in control of the rides resulting in injuries to both women.  Together they sued Cougar Mountain but lost at trial (2011 BCSC 193, 81 C.C.L.T. (3d) 89 and the decision was upheld at the British Columbia Court of Appeal (2012 BCCA 122 (CanLii))

Cougar Mountain admitted the accident was caused by the negligence of their staff but argued that the women had waived their cause of action by signing a valid release.  The two Plaintiffs unsuccessfully argued that the release was unenforceable as it was not explained to them, unconscionable, was invalid under the BC Consumer Protection Act due to the deceptive acts of Cougar Mountain and invalid because there was no consideration.  The trial judge rejected these arguments and dismissed the action.

Upon appeal, the court found that it was not unconscionable for an operator of a facility at which participants engage in inherently risky recreational activities to require that person to sign a release barring future claims citing the fact that such participation is voluntary, not mandatory.

The Judge held that the release was not unconscionable or deceptive and that the consideration for signing the release was the ability to participate in the activity, whether or not they read or understood the true meaning of the release they were giving.

Although a British Columbia case, the effects of this decision are far reaching and likely to be adopted in Ontario in similar circumstances.

What does this mean for the everyday thrill seeker? It means that one who engages in objectively dangerous activities and signs a release gives up their right to sue if something goes wrong or damage occurs, even if the fault lays with another party.

In other words, when you sign a release, you are contracting out of negligence claims, thereby giving up your common law rights without even perhaps realizing this is the case.  It is only in significant circumstances will a release be set aside to restore a cause of action.

The message seems to be very clear—if you participate in a risky activity, sign a waiver which has clear terms, is legible and understandable you will have no rights against a party and assume the risks yourself if an injury or damage ensues.

This case should cause people to think twice about whether or not the activity they want to engage in such as zip lining, horseback riding, sky diving or bungee jumping is really worth the risk in the long run.

By: SHANA DALE

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HENSON TRUSTS AND WILLS

Posted on December 3, 2012 by admin

A Henson Trust is a methodology by which a person making a Will (the testator) makes provisions for a disabled beneficiary, usually a child, without jeopardizing the beneficiaries’ ongoing government assistance.  The most common scenario is a disabled child who is receiving monies under the Ontario Disability Support Plan (ODSP).  The ODSP program will reduce its benefits dollar for dollar, if the recipient receives a benefit over a prescribed limit under a Will.   Namely the problem was how to leave money to a beneficiary receiving disability benefits without barring them from receiving those ongoing benefits or suffering a corresponding reduction. The Henson Trust, named after a 1987 Ontario Divisional Court case, created an approved arrangement now commonly referred to as a Henson Trust and found in many Wills.

A Henson Trust is the creation of a completely discretionary trust, in the hands of the executors of one’s Will.  It gives those executors complete and utter discretion to distribute as much of the income and capital of the estate or an amount set aside for one particular beneficiary as they see fit.  It is that absolute discretion during the lifetime of the beneficiary that allows the Henson Trust to be characterized as never actually being received by the disabled beneficiary.

More simply put, it never belongs to the disabled beneficiary because it is distributed only if and when the executor wants to.  If it is not within the disabled beneficiary’s control, it is not theirs and therefore does not interfere with the beneficiary’s receipt of ODSP or any government plan.

The challenge of course is very carefully choosing an executor who will act as the trustee/administrator of the Henson Trust.

Not only must one very carefully choose an executor that one has absolute faith in, but the testator must keep one eye very carefully on the age of the executor/trustee.  Often the partial or complete solution is naming a sibling of the disabled beneficiary as the executor.  The risk of course is naming one of the executor’s siblings as the trustee of the Henson Trust only to find that person becoming disabled or dying long before the end of life of the disabled beneficiary.

In large estates, the solution, in the absence of such family members or a trusted executor, can be the appointment of a corporate trustee.

Discuss this issue with your lawyer who is experienced in the drafting of Wills and understanding the interrelationship between a Henson Trust and the receipt of ODSP benefits.

By:  Fred Streiman

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The Right to Name a Child

Posted on November 19, 2012 by admin

This issue arises frequently after a brief relationship or marriage which results in the birth of a child.  An example of this conflict is a mother seeking at the outset after separation trying to expunge any reference to the birth father’s surname.  The law with respect to this is governed by the Vital Statistics Act and highlights the importance of the Statement of Live Birth required thereunder.

Some mothers have registered their children in this fashion excluding any reference whatsoever to the birth father.  At one time, the law appeared to be that such a registration was final.  In a recent Ontario Superior Court decision Garland v. Brouwer, the court had to deal with such a situation to determine the appropriate surname of the parties two year old child.  In that case, the mother unilaterally completed the Statement of Live Birth and made no reference to the father and had given the child her surname.  The father who had remained active in the child’s life both financially and by way of access, asked for a hyphenated surname to be imposed.  Nonetheless the court for various reasons including exercising its Parens Patriae Jurisdiction 1ordered that the child’s surname be amended to include a hyphenated surname.

Another important law is the Change of Name Act.  Pursuant to section 5 of that Act, a person with lawful custody of a child may apply to the Registrar General to change the child’s surname, unless a court order or separation agreement prohibits the change.  Only if the separation agreement requires the consent of the other, need the sole custodial parent seek the consent of the other.  In other words, if you were concerned that your now estranged spouse who is about to be granted sole custody may change the surname of the child, you should attempt to have included in any court order or separation agreement a provision that bars this.

Parens Patriae Jurisdiction - “the state in its capacity as provider of protection for those who are unable to care for themselves”.  Alternatively, the state is the ultimate parent.

By:  Fred Streiman

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