This organization is hosting two seminars this month discussing issues relevant to local small business. The first is “The Increasing Tax Burden for Business and Professionals”. It is a two hour luncheon seminar. You can find the details here.
The second is “Bill 148: Labour Legislation & Minimum Wage”. It is a two-hour breakfast seminar. You can read the details here.
Non-members of the Chamber of Commerce will need to pay $45.00 to $60.00 per seminar.
In the case of J.J. v. C.C., 2017 ONCA 357 the Ontario Court of Appeal examined a Motion to Change. The parties settled on a Parenting Plan. They agreed on a Parenting Coordinator.
The Parenting Plan expired. The Father argued that the plan’s expiration, as well as the degree of conflict between the parties, were a material change in circumstance.
The Court of Appeal held, however, that the Parenting Plan instructed the parties to return to the Parenting Coordinator once the plan had expired. The Father should have used that route first.
During the third day of trial, the Father argued that the child should reside with him. The trial judge decided to interview the child and write a transcript of the results. The Court of Appeal affirmed that this decision was appropriate because:
- The Father had himself to blame because he wanted to amend his pleading during trial;
- The Father consented to the trial judge’s interview suggestion;
- The opinion of the child could be obtained quickly, while further delay was not in the child’s best interests
The Father was upset because he wanted to read the transcript of the conversation between the judge and the child. The trial judge refused. The Court of Appeal held that this was appropriate.
Finally, the trial judge reduced the Mother’s child support arrears award by $27 000 in compensation for a past court costs award. The Mother subsequently filed for Bankruptcy and was ordered to pay only $13 500.00. The Court of Appeal agreed to reduce the set off by 50% to reflect the amount of court costs the Mother was entitled to receive.
There are two lessons for this decision.
First, a judge can interview a child if it is the only practical method of getting a child’s opinion in a timely manner;
Second, be careful about putting in dispute resolution procedures in agreements. Although parties wisely try to avoid court, a court proceeding is the only way to compel a party to do something and force the other side to communicate in a civil and non-threatening manner. Before putting in a dispute resolution clause, consider the likelihood that the other party will be hostile and uncooperative.
You can read the decision here.
There is an interesting case in the Ontario Court of Appeal that provides a counter-intuitive result. It is called Cheng v. Liu, 2017 ONCA 104 (CanLII). You can read it here.
In this case, the Father and Mother had a brief marriage in China. The Father moved back to Canada and the daughter stayed with the Mother in China.
The Mother brought divorce proceedings in the Superior Court of Justice in Ontario. This court held that because the main issue is child support, the Chinese court should resolve the issue.
The Mother brought a claim for: Divorce, child custody, access, support, spousal support and a share of matrimonial property in Chinese court.
The Chinese court issued written reasons for judgment at the end of the trial. The court granted the Divorce. The Father failed to make proper financial disclosure of his Canadian income and assets however and therefore the all issues regarding money (support and property) must be resolved in Ontario,
The Mother attempted to appeal the Chinese decision but was denied. When the Mother attempted to re-activate her Ontario proceeding.
The Honourable Justice Hourigan of the Ontario Court of Appeal reaffirmed the rule that the property issues must be decided in the jurisdiction where the Divorce is granted. Only the Chinese court, therefore could grant the Mother spousal support and an equalization of net family property.
The Mother was entitled to bring a claim for child support in the Ontario Court of Justice, however, because the court that dealt with the Divorce proceedings (China) did not address child support at all.
Justice Hourigan was guided by this doctrine:
“[I]n the matter of the future and welfare of infants, there need be no absolutes or imperatives. It would be a great pity if constitutional doctrine had to be so applied as to prevent a court, able to help a child, from doing so. It is the rule of common sense that I should hear this application.”
This quote and decision is consistent with my understanding technicalities and procedures should not prevent children from getting the support they need.
This judgment is consistent with the rule of thumb that states that ignoring the judgments from other jurisdictions because it is different than those of Ontario is disrespectful and wrong. However, is it disrespectful if an Ontario judge decides an issue usually reserved for a foreign jurisdiction if it is at the request of the foreign judge?
The Ontario Court of Appeal examined an interesting case. It is called Mason v. Mason, 2016 ONCA 725 (CanLII) and you can read it here.
In this case, the Husband and Wife started a business. It was incorporated. The Husband bought out the Wife’s share of the Corporation. The Husband therefore owed the Wife a large amount of money. The payout was part of the Equalization Payment and formally listed in a Separation Agreement.
The Separation Agreement is the same effect as a court order. If a court order or Separation Agreement states that a party owes money to another, then the debt created by the order has an interest rate. The interest rate is called the post-judgment interest rate. The amount is set by the government of Ontario. The Husband argued that the post-judgment interest owing at the time should count as part of the wife’s income. The Honourable Justice Simons held, however, that only the interest accumulated to the Wife that she already received is income.
Let me explain by example. Let us say that the Husband agreed to pay the Wife an Equalization Payment of $200 000 in 2015. The post-judgment interest is 4%. When the parties wanted to calculate the Wife’s income on January 1, 2016 the Wife received $30 000.00. The Wife’s income would include 4% of $30 000. The interest on the remaining $170 000.00 is not income until the Wife receives this amount.
The second issue is the determination of the Husband’s salary. The Husband set his own take-home salary. The Wife also wanted to add pre-tax profit of the Corporation to the Husband’s income. The Corporation suffered a loss during the last year.
Simmons J.A. held recorded the proper procedure as follows:
- Usually, a judge should use the payor’s pre-tax income as recorded in the payor’s income tax return line 150
- If the judge feels that line 150 would not provide an accurate picture of the payor’s income, however, then the judge can examine the payor’s pre-tax corporate profits for the past three years.
Justice Simmons held that the Husband’s income should be higher than that recorded in Line 150 of his income tax returns because:
- The losses sustained were due to one-time reasons that were already resolved;
- Much of the losses were caused by the disruption involving the Divorce;
- Generally, the Corporation’s profits were improving.
The Ontario Court of Appeal provided some clarity on this matter in the case of Frick v. Frick, 2016 ONCA 799 (CanLII). You can read it here.
When parties are formally married, they are both entitled to an equal share of the net wealth accumulated by both of them during the course of the marriage. This is called the Equalization of Net Family Property.
The judge, however, can give one party a larger share of the Net Family Property if the judge is satisfied that an equal division of Net Family Property would be “unconscionable” due to the following:
- a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
- the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
- the part of a spouse’s net family property that consists of gifts made by the other spouse;
- a spouse’s intentional or reckless depletion of his or her net family property;
- the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
- the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
- a written agreement between the spouses that is not a domestic contract; or
- any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.
This is pursuant to the Family Law Act section 5. You can read the provisions here.
The Honourable Madame Justice Benotto examined this provision. She pointed out that the key aspect of this provision is a spouse’s financial malfeasance. The other spouse, however, may not become aware of this malfeasance until after there is full financial disclosure and, in section 5 (6)(d), after there has been a calculation of the net family property. These steps do not take place until well after a party makes an Application. Madame Justice Benotto held that a judge has the option of ordering an unequal division of net family property if a party requests an equalization of net family property. A party does not have to specifically request an unequal division of net family property in the initial Application.
There is much talk to day about cutting edge media. Specifically, resources that can be used to create and edit webinars, podcasts, digital promotions, demo tapes and virtual simulators. Many small businesses, however, do not have the financial capital to invest in this new media or pay companies to generate it.
The Kitchener Public Library has plans to make these resources available to anyone having a library card. They very clearly intent want these resources available to local businesses to generate a profit.
- A virtual reality studio
- A 3D printer
- A centre to transfer VHS and photo negatives to digital
- A digital audio studio
There is an article about these programs in the Record. You can find it here.
The local library is seeking funds to offset the costs of these resources. For local small business this may be a wise investment.
The Superior Court of Justice dealt with an interesting case. It is called Teitler v Dale, 2017 ONSC 248 (CanLII). You can read it here.
In this case the Father Payor owned a business. His income fluctuated every year. The Wife was a homemaker. The parties lived a millionaire’s lifestyle because the Father’s parents gifted a great deal of money throughout the marriage.
The Father’s parents still gifted a great deal of money to the Husband after the separation. The yearly income was $275 000.00 but the yearly expenses are $551,417.88.
The Mother wanted the judge to consider these gifts to be part of the Father’s regular income. If successful, the Father would have to pay more child and spousal support.
The Honourable Justice Harvison Young disbelieved many of the Father’s submissions. First, the judge criticized the Father for failing to provide required financial disclosure.
The judge disbelieved the Father’s claim that the Father’s parents were now unwilling to pay future gifts. If the Father truly believed this threat than he would have changed his lifestyle.
The judge also disbelieved the Father’s claim that the money was loans. The Father’s income is too small for anyone to reasonably expect repayment and, indeed, the Father did not may any payments to his parents.
The judge reviewed the case law regarding whether gifts should be reclassified as regular income. The factors are as follows:
- the regularity of the gifts;
- the duration of their receipt;
- whether the gifts were part of the family’s income during cohabitation that entrenched a particular lifestyle;
- the circumstances of the gifts that earmark them as exceptional;
- whether the gifts do more than provide a basic standard of living; the income generated by the gifts in proportion to the payor’s entire income;
- whether they are paid to support an adult child through a crisis or period of disability;
- whether the gifts are likely to continue;
- and the true purpose and nature of the gifts.
Given the circumstances of the case, the Father’s annual income was imputed to be $1 200 000.
There is an interesting article in the Kitchener-Waterloo Record. It is called: Workplace development near LRT stations lagging home building by Jeff Outhit You can read it here.
One would assume that businesses would be more interested in mass transit than homeowners. This article explains that many businesses are waiting to see if the L.R.T. will be as profitable as promised. Also, there is a glut of office space in the region while residential space is at a premium.
When reviewing past literature regarding the LRT, however, one can see that the principle reason for the L.R.T. was to encourage condo and apartment living. A prime example is the Region of Waterloo Central Transit Corridor Community Building Strategy. You can read it here.
The Ontario Divisional Court considered an appeal in the case of Dean v Dean, 2016 ONSC 4298 (CanLII)
You can read it here.
The chronology of the case is important.
The Wife was unable to work due to medical reasons. She was awarded spousal support in the amount of $1500 per month for an indefinite period of time.
The Husband (Payor) entered into a new spousal relationship. The New Spouse already had three children. The Father of these children demanded that the Husband adopt them as he was no longer willing to pay child support and did not want to see the children again.
The Husband (Payor) and New Spouse agreed to this demand because:
- The New Spouse and the Father had an acrimonious relationship;
- They worried about the psychological damage arising from the Father’s abandonment of the children.
The Father carried out his threat of ceasing child support.
The Husband (Payor) also adopted the child of a deceased family friend who had no life insurance.
The Husband (Payor) brought a Motion to Change. He argued that he could not pay for the children and the full amount of spousal support concurrently.
The Motion’s Court judge held that the adoption of the four children was motivated by a desire to help the children and not to deprive the Wife of her Spousal Support. The Judge reduced the monthly spousal support award to $843 per month.
The Wife appealed to the Divisional Court.
The judges at the Divisional Court held that the spousal support should be restored to $1500.00 per month. The Motions Court judge made two errors.
First, the Divisional Court held that the “First Family Rule” is still the law of Ontario. The “First Family Rule” is to ask whether the Payor’s financial obligation to his or her first family impoverish the second family. In order to answer this question, one must look at the context.
In this case the Husband Payor volunteered to assume the obligation to the second family. Neither the New Spouse nor the deceased friend have the right to expect that the Husband (Payor) would assume financial responsibility for the children. Even if the Husband (Payor) had the best of motives, he should not be allowed to reduce his obligation to the Wife through voluntarily decisions made after separation.
The second error was that the Motions Court judge simply agreed with the Husband (Payor’s) assertion that the Husband (Payor)’s would be unable to pay the full amount of spousal support due to increased child care expenses. The Divisional Court held that the Motions Court judge should have examined the Husband (Payor)’s financial situation in detail and make specific inquires as to why the Husband was unable to pay the full amount of spousal support. In this case:
- Why didn’t the Husband (Payor) and New Spouse rent out property at their new, larger house?
- Why didn’t the New Spouse get a part-time job?
- What about the substantial LIRA that the Husband owned?
- Was the expense of getting a new home reasonable?
- What was the Husband (Payor)’s current income?
- What about the errors in the Financial Statement. The amount recorded for taxes was clearly inflated.