This Week in Family Law Special Edition

January is here, and that brings with it our annual review of interesting and important cases from the last year. There has once again been a bumper crop to choose from, and we are struck, more than ever, by the enormous cost to which parties put themselves to resolve issues that often seem to have straightforward solutions. Notwithstanding the rise of mediation and arbitration, many families of modest means still risk all for the fight rather than look to less expensive, less adversarial routes forward through separation. And, we note that the family justice system still has not found a way to stream the highest conflict cases into a more hands-on, early intervention approach, to the detriment of families, and especially to children. So much work yet to be done.

The cases below comprise Part I (Part II will follow next week) of an eclectic selection of what caught our attention in 2009. Reasonable lawyers will of course differ as to which cases are the most significant, but here is our take on the year that was. Readers wanting a more fulsome exposition of the cases mentioned below are encouraged to consult Philip's 2009 Year in Review paper presented at the Six Minute Lawyer in December 2009, available through the Law Society of Upper Canada.

Retroactive and Prospective Child Support

Ewing v. Ewing, 67 R.F.L. (6th) 280 (Alta. C.A.): This is a very important case from the Alberta Court of Appeal on determining income and establishing appropriate child support in high-income cases. Given the extensive reconsideration and interpretation in this case of the Supreme Court of Canada's decision in Francis v. Baker, 50 R.F.L. (4th) 228 (S.C.C.), this case is unquestionably one of the most important since the passage of the federal Child Support Guidelines. This case arguably signals a return to the intent of the drafters of the Guidelines, namely, that there would be extensive discretion with respect to child support in cases where payors have an income above $150,000. This, in contradistinction to the near rote application of the Guidelines even in very high-income families, resulting in absurd monthly child support awards. See for example Desrochers v. Tait, 70 R.F.L. (6th) 165 (Ont. S.C.J.), where $36,000 per month was ordered as child support for a three-year-old. The decision in Ewing is a considered an attempt to re-establish a principled basis for child support in high-income cases. While there are other interesting aspects of the case (including a consideration of the calculation of income for support purposes) the issue of the "appropriate" amount of child support in high-income cases is by far the most significant.

In this case the parties had two children, aged 15 and 19, who lived with their mother. The original settlement provided for a payment of $1,500 per month for two children and provided for variation if there was an important change. In 2003 child support was increased to $6,000 per month. The father was earning $750,000 per year. Between 2002 and 2005, the father's income exceeded one million per year and the mother applied for a retroactive variation. Child support was at that time set at $13,776 per month. On appeal, the ongoing amount was confirmed, and the Court awarded a lump sum of $200,000. In 2007 when the mother learned that the father's income was higher than had been estimated for 2005 and 2006, she brought another retroactive variation application. The Chambers judge averaged the father's income over three years to determine a fair income and found the father's income to be $1.9 million in 2005 and 2.1 million in 2006. Table amounts were then applied to those figures and the Court exercised the discretion provided by section 4 of the Guidelines to depart from the tables. This resulted in considerable retroactive support ranging between $22,500 per month to $28,000 per month for 2005 and 2006.

Three main issues were dealt with on appeal. First, the Court found that section 17 of the Divorce Act can be applied to determine income retroactively. The mother had argued that when determining retroactive income one would simply look at the year in question to determine the actual income for that year. Second, the Court considered the issue of non-recurring income, and set out a non-exhaustive list of issues to consider when determining the appropriate treatment of such income. The Court noted, quite properly, that even in an in-tact family, not all one-time increases in income would necessarily result in an increased standard of living. The real question is: "What would have happened if the family were together?"

Third, as noted, the Court considered the meaning of the word "appropriate" in section 4 of the Guidelines. The Court shifted the interpretation of some of the language of Francis v. Baker, suggesting that while a payor must adduce "clear and compelling" evidence in support of a deviation from the table amount, the entirety of the evidence need only be sufficient to "raise a concern" about whether the table amount is inappropriate. This is a significant shift in emphasis, as historically, most courts have focused only on the "clear and compelling" language. By focusing on that language, it is likely that courts have been placing too high an evidentiary burden on high-income payors, leading to very high child support awards that cannot be justified by examining even generous budgets.

In this case, the child support being paid was vastly in excess of what was agreed to at the time of separation, and the evidence showed no change in the condition, means, needs and circumstances of the children. The Court of Appeal concluded that since the payment of $13,776 per month had not resulted in any increased benefit to the children, it would be difficult to order anything beyond that amount. The husband had not applied for a downward variation. The Court therefore found that there was no need to order a new trial and fixed ongoing support at $13,776, right where it had been since the last variation.

Post-Valuation Date Changes

Serra v. Serra, 66 R.F.L. (6th) 40 (Ont. C.A.), is an important decision of the Ontario Court of Appeal on post-valuation date changes in the value of assets. In Ontario and other equalization provinces the value of assets is determined at the separation date, not at the date of trial. What to do then, where there is a very significant change in the value of assets between separation and trial? Serra provides an answer, but it is an answer that will apply to a very narrow band of cases, where extreme changes in value have taken place, such that equalization would be "unconscionable." The Ontario Court of Appeal was very careful to leave the scheme of the Ontario Family Law Act fully intact and acknowledged that not every change in value post-separation will lead to the application of section 5(6)(h) of the Family Law Act.

In this case, Mr. Serra's stars were aligned (if that can be possible given the overall financial state of affairs). Mrs. Serra had sought a preservation order, tying up his ability to deal with his business. She had obtained a very significant interim support award which required him to maintain the business to pay the award. There were dramatic changes to the textile industry between separation and trial. And, Mr. Serra had done everything he could to make his business survive in the circumstances. At trial, however, the Court awarded the wife judgment having a value somewhere between 100 per cent and 200 per cent of the value of his assets. The Court of Appeal had no trouble finding this to be "unconscionable" within the meaning of section 5(6). In doing so the Court overcame its own decision in LeVan v. LeVan, 51 R.F.L. (6th) 237 (Ont. C.A.), finding that these circumstances fit within section 5(6)(h), which heretofore was not considered by the Court to be a basket clause. This decision significantly develops the law of property in Ontario, in family law, and we commend it to you.

Jurisdiction

Olney v. Rainville, 2009 CarswellBC 2290 (B.C. C.A.) is an extremely unusual case about jurisdiction, with soap opera facts to boot. It may fit less in the "important" category than in the simply "interesting" category, but here it is. This is a decision of the B.C. Court of Appeal and deals with the issues of territorial jurisdiction and forum conveniens.

The facts are a bit complicated but boil down to this. Two Supreme Court clerks meet, marry, and have a child. The parties were later divorced in France and the father had regular access, which he exercised. The mother remarried. It then came out that the mother had been having an affair during the first marriage, and that the child was the biological child of husband number 2, not husband number 1. Mom now wanted a declaration that the second husband was the father of the child. The biological father was listed on the birth certificate.

But why was this going on in B.C., you ask? Well, as it turned out, the mother was born there, so this was her domicile of origin. The first husband was born in Quebec. They worked together at the Supreme Court, moved to England, then to Geneva, and finally to France, where they divorced. The mother still lived in Geneva and the first husband now lived in Quebec. The mother (not a Supreme Court clerk for nothing) had done her homework and desperately wanted B.C. to assume jurisdiction, because under Quebec law, evidently, a person is prohibited from seeking a declaration of paternity that is contrary to what is shown on the birth certificate if the person shown as the father has acted as and been reputed to be the father for a period of 18 months. This would apply squarely to the case, were it to be heard in Quebec.

The B.C. Court of Appeal found the mother to be domiciled in B.C. As noted, this was her domicile of origin and she had not yet acquired a domicile of choice. The Court found, in what we think was a stretch, a real and substantial connection with British Columbia. To their credit, however, they declined to exercise that jurisdiction finding Quebec to be a more convenient forum. The Court rejected the mother's strenuous argument that she would have a juridical advantage in British Columbia because she could avoid the section 530 argument under the Quebec Civil Code. The Court of Appeal correctly noted that modern law does not mean you get to choose where you have the best case - the fact that she would have a better case in B.C. was not to be a factor in determining forum conveniens.

In light of the fact that the courts, at least in Ontario, have established that a child can have two mothers and therefore two fathers, the negotiated solution here may be to seek a declaration of parentage with the child simply to have two fathers and one mother. That would ensure that the first husband would continue to have a role to play in the child's life, but the biological father would be recognized as well.

"Oh what a tangled web we weave when first we practice to deceive."

Manitoba Property Law - Common law Spouses

Field v. McLaren, 69 R.F.L. (6th) 166 (Man. Q.B.): This is a significant and important decision under the Family Property Act of Manitoba, which deals with amendments which extended property rights to common law partners. There is not a great deal of case law on these amendments and the Court did a careful job of analyzing whether this particular common law couple met the criteria under the Act. The case is helpful even in other provinces which do not extend property rights to common law couples, as there is a discussion of what constitutes living separate and apart.

Hague Convention

Beatty v. Schatz, 69 R.F.L. (6th) 107 (B.C. C.A.), was the B.C. mini-series on whether a ten-year-old boy wrongfully retained in Canada by his father, should be returned to Ireland as sought by his mother, or should be permitted to stay in British Columbia. There were several appearances below, leave to appeal, and finally an appeal, before it was finally determined that the boy should be returned to Ireland.

The case was all about what to do with the child's views. He was brought to Canada by his father, in contravention of an undertaking to the Irish Court to return him (custody proceedings were underway in Ireland). Justice Martinson ordered a "Views of the Child Report," which was conducted by an experienced psychologist. The psychologist reported that while the child was fairly young, he seemed quite self-aware and mature and was able to express his wishes consistently. He stated that he wanted to live with his father in British Columbia. The father took the position that the child's views should be accepted and said that he had not influenced the child in reaching those wishes. Justice Martinson did not believe that.

Justice Martinson noted that the child's wishes did not put an end to the matter. One must look at the nature and strength of the child's views, and the extent to which those views are authentically the child's own. The Court concluded that while the child stated a wish to be with his father, he was not mature enough to understand the subtleties of what was happening or the long-term consequences on his well-being. She concluded that not returning the child to Ireland would send the wrong message, namely, that it is acceptable to wrongfully retain a child in another country, even in the face of an undertaking to the Court to return the child, so long as the child says he does not want to return.

The Court of Appeal unanimously upheld the trial judge, noting that the father's position came perilously close to the proposition that the child's best interests are whatever the child wishes, something "as any parent knows . . . is not the case."

This case stands for the important proposition that the wishes of the child in a Hague application are important, but they are not presumptive or determinative. This is a case that squarely upholds the purpose of the Hague Convention, and is a useful read for that reason.

Child Protection

Children's Aid Society of Ottawa v. D. (C.), 68 R.F.L. (6th) 425 (Ont. S.C.J.) stands squarely for the proposition that the test in a child protection application is whether there is a child protection concern, not what is in the child's best interests. The respondent parents applied for summary judgment dismissing the Society's child protection application which had been brought on the basis that the child was likely to suffer emotional harm resulting from the actions of her parents. The Society had become involved in 2007 after the then 14-year-old child attempted suicide, telling her treating doctors that if she were to be returned to her parents' home, she would try to kill herself again. The child was apprehended and placed in Society care in January 2008. In June 2008, when the Society attempted to withdraw its protection application, the child's counsel contested that course of action, and the Court made an order returning the child to her parents' care subject to a supervision order. In December 2008, the Society sought a nine-month supervision order requesting a finding that the child was in need of protection. All of the evidence suggested that notwithstanding the child's position that she would kill herself if she remained at home, she had loving and devoted parents who had done everything they could to ensure that the child received appropriate care and treatment. Justice Ratushny started by stating that the trial issue was whether the child was in need of protection either at the hearing date or at "some other date, depending on the circumstances."

The Society's position was that there was and remained a causal connection between the actions of the parents and the risk of the child suffering emotional harm sufficient to ground its application. The Society also submitted that the Court ought to consider evidence relevant to the best interests of the child. The parents' position was that at no time had the child been in need of protection. Further, they submitted, this was a bifurcated proceeding where the issue of whether the child is in need of protection is decided first, and only when that finding is made does the question of best interests become relevant to the determination of the appropriate order to be made. Justice Ratushny clearly stated that the court must decide whether a child is in need of protection without a consideration of best interests.

In this case, the Court found that there was no causal connection between the child's risk of emotional harm and the parenting of the respondents. The child had complex mental health issues which triggered her behaviours and distress. The parents have "never abandoned their beloved child," and had "worked long and hard to try and help her." In the result, the Court found no genuine factual issue material to a protection concern and "certainly no evidence of a causal connection."

A clear and compelling decision and a must-read for those in the child-protection field.

Adoption - Dispensing with Consent

C. (M.A.) v. K. (M.), 63 R.F.L. (6th) 438 (Ont. C.J.): This is another in a series of important cases about same-sex relationships and how children fit into those relationships. This was a ruling on a motion to dispense with the father's consent to an adoption, where the father was an involved parent and had been since the child's birth.

M and C were a lesbian couple. M was the biological mother. MK was a gay man and the child's biological father, as well as a parent with access. MK was a very involved parent. M and C commenced an adoption proceeding to secure for C the same status that M and MK enjoyed as the biological parents. In order for this to go through, MK would have had to relinquish his status as a parent and, unsurprisingly, he was unwilling to do so. The previously cooperative parenting arrangement disintegrated, bringing significant conflict, including this application.

Justice Cohen dismissed the motion, with stern and wise words. We refer you to the judgment for the full text, which is worth reading, but essentially she reminded the mothers that when they chose a known donor, rather than an unknown donor, they knew that if they chose well, their child would develop a relationship with a parent who was not a part of their immediate family. They also knew that if things went badly, a court might interpret the child's best interests to include preserving a relationship with the father. The parents, she said, could simply not now turn back the clock.

In our view, this case is mandatory reading for any parties contemplating involving a third party for the purposes of having a child. All began here with the best of goodwill and intentions, and yet deteriorated so badly. In our view it was clear from the outset that a court would not find that the child's best interests lay in terminating the father's rights to allow the adoption.