Court of Appeal Upholds Parents’ Agreement to Share Children’s Expenses Instead of Paying Guideline Support

canstockphoto1224101The Ontario Court of Appeal, in Stevenson v. Smit, 2014 ONCA 521, upheld an agreement by parents that they would share the children’s expenses instead of having Table child support paid under the Child Support Guidelines.

This was not what the father wanted.

At the time of separation, the father had very low income as he was starting a new business. He had substantial assets, and planned to draw down on those assets to meet his obligations to pay for one-half of the children’s expenses. The parties entered into a separation agreement setting out this solution.

The children’s expenses included private school, camp fees, and post-secondary education.

Several years went by and the father’s income did not improve. He told the mother that he could no longer share in the children’s expenses. That led to litigation.

The mother brought an application to court asking the judge to decide on the amount that the father owed, so that it could be enforced. The father asked the court to allow him to stop sharing expenses, and to instead pay child support under the Guidelines.

The trial judge found that there was no basis to change the support under the agreement, as there was no material change of circumstances. The father had no income at the time of the agreement, and he still had no income.

The father appealed to the Superior Court and lost. He appealed to the Court of Appeal and lost. The Ontario Court of Appeal found that there was no material change of circumstances, so the father would be held to his agreement to share the children’s expenses instead of paying child support.

The father also argued that the court was required to apply the Child Support Guidelines, and that the material change of circumstance test was irrelevant.

However, the Court of Appeal found that the parties entered into a special arrangement regarding child support, outside the parameters of the Guidelines. The parties were entitled to do so, as the children’s needs for and entitlement to support were not bartered away.

In this case, the children would benefit financially from the arrangement to share expenses, given that the father had little income, so Table support would be very low.

However, if the situation was reversed, and the parties agreed to underfund child support, the decision would likely have been very different.

A good take-away is that parties can be creative in meeting the children’s financial needs, and can deviate from Table support, so long as the children will not be worse off than if support was being paid under the Guidelines.

Choosing a Family Lawyer to Support Mediation

When parties enter into a mediation process, one of the first things that I usually hear is, “We don’t want to use lawyers, we’ve heard horror stories…”canstockphoto19774599

There is no doubt that the legal profession has a bad reputation when it comes to family law.  However, many lawyers do work well to support clients who are going through mediation.  And it can be very helpful for parties to receive advice so that they have the legal context for the discussions in mediation.

Although I am a lawyer and I can provide general legal information, I can’t provide legal advice, because that would be a conflict of interest, given my role as a neutral. I recommend that parties going through mediation to obtain independent legal advice as a support to the mediation process.

Let’s look at helpful attributes and business practices for lawyers supporting clients in the mediation process:

Helpful family lawyers:

  • provide their clients with the advice that they need, so that the clients can negotiate the financial and parenting issues in the mediation sessions.
  • are available on a timely basis.
  • do not make the decisions for the clients.
  • charge reasonable fees for their time and advice (no large retainers).
  • talk with the mediator if they have any questions about the process or the decisions made.
  • recognize that parties are free to look at solutions other than what a court might order and that court-ordered solutions come with significant litigation costs and uncertainty.

Some clients refuse to use lawyers.  However, if parties do not obtain legal advice before signing an agreement, there is a greater likelihood that the agreement may be set aside at a later date.

The key for most people is to obtain the advice that they need, at a reasonable cost, in a manner that respects their rights to decide their own future.

I maintain a network of lawyers who work well with clients going through mediation, and am happy to provide referrals to these lawyers if requested. I am also eager to hear of clients’ experiences with their lawyers, both positive and negative, so that I can continue to provide the best referrals possible.

Mediation for marriage contracts or cohabitation agreements

Mediation is an excellent way to have the tough talks about “what if”.mediation for marriage contracts

Let’s face it, most people deciding to spend their lives together aren’t planning to separate. However, we don’t plan to have our house go up in flames when we buy insurance either. We plan for the worst and hope for the best.

The vast majority of people who separate do not have marriage contracts or cohabitation agreements. For some, that’s absolutely fine, as the default law provides a predictable and balanced outcome.

However, there are many situations when the default law doesn’t meet the needs of the couple. For example, if one person is putting the majority of the funds into the home that the couple will live in. In that case, it makes good sense to have a marriage contract, to establish what will happen with those funds if there is a separation. Not having an agreement can be quite costly.

Raising the issue of a marriage contract can be challenging. It’s not at all romantic. It’s even worse than thinking about preparing a will (which many people also avoid). To some, it signals a complete lack of trust in the relationship.

However, it can be seen as a good opportunity to establish the expectations for the relationship, and to give a level of comfort so that the couple can put any concerns about “what if” aside, and just be together.

Mediation is extremely well-suited to marriage contracts, because the whole idea is to have respectful, well-informed discussions to help in problem-solving. The couple crafts, together with the mediator’s assistance, their mutual expectations. Compare this to one person going to a lawyer and having that lawyer prepare an agreement to be given to the other person. There’s no cooperation, or joint discussion of interests. In fact, receiving correspondence from a lawyer can be unpleasant, no matter how the lawyer tries to be non-threatening.

If a couple works in mediation to come to the terms of a cohabitation agreement or marriage contract, Lawyers would still be involved in reviewing or preparing the draft, based on the decisions made in mediation, and providing independent legal advice to the parties. However, the mediator can help establish expectations and smooth the way for this review process.

Mediation is a much less threatening way than the traditional legal approach to approach the thorny issue of a cohabitation agreement or marriage contract. And then, the couple can put the worry out of their minds, and file the contract with their insurance policy, just in case.

Are children’s cell phone costs to be shared by separated parents?

The Federal Child Support Guidelines allow for the sharing of “special or extraordinary” expenses for children, proportionate to their incomes.  This is in addition to basic child support calculated under the Guidelines.  canstockphoto1399762

The issue of what is “special or extraordinary” comes to court often.  Even more frequently, this issue is part of out-of-court discussions, negotiations, and arguments.

Children have so many expenses.  What is extra, and what is not? These cases are really fact-specific.  Typical section 7 expenses are child care expenses and uninsured medical and dental expenses, however, the list of potential other expenses is limitless.

Justice John Harper of the Ontario Superior Court of Justice found in Marunic v. Liberty, 2014 ONSC 957, that given a total family income of over $120,000 per year, and the fact that the cell phones were used by the father to communicate with the children directly while in the mother’s care, because of poor communication between the parents, that the cell phone costs were “special or extraordinary” under section 7 of the Guidelines.  The father was therefore required to pay a share of the costs.

In reaching this decision, Justice Harper considered a decision of the Ontario Court of Appeal, Andrews v. Andrews (1999) 45 O.R. (3rd) 577, where the court set out the requirements for an expense to qualify under section 7:

  1. the expense must be extraordinary;
  2. the expense must be necessary in relation to the best interest of the children; and
  3. the expense must be reasonable having regard to the means of the parents and their spending patters for the children during cohabitation.

He referred to another decision of the Ontario Court of Appeal, Park v. Thompson (2005), 77 O.R. (3d) 601, which found that the cell phones did not qualify as a special or extraordinary expense.  However, each case had to be examined on its own facts. In Marunic v. Liberty, they did qualify.

There were other fairly typical claims considered in this case.  The mother was asking for contribution to expenses for competitive swimming of $3,030 per year, football costs of $350 per year and a school trip costing $350.  The father said that these expenses should be part of base child support, and even if they were not, he did not consent to the swimming expense and it was not reasonable given his income.

Justice Harper noted that there was no requirement that the parents consent to the expense before the child was enrolled in activity.  The father did not object to the child participating in swimming, only to sharing the costs.

The swimming, football and school trip costs were found to be extraordinary, given the mother’s income of $80,000, and in the children’s best interests.  Those costs and the necessary equipment for the sports were to be shared by the parents in proportion to their income. The resulting cost of approximately $64 per month to the father was reasonable.

Voluntary retirement doesn’t mean spousal support ends

Often when parties separate, they include a clause in their separation agreement that says spousal support can end or be reviewed when there is a “material change of circumstances”.  What does this mean if the payor chooses to retire?

In the case of Walts v. Walts, Justice Minnema of the Ontario Superior Court of Justice found that the husband’s planned voluntary retirement at age 55 was not a material change of circumstances, and that spousal support was still payable at the same rate as if he did not retire.

In this case, the parties had been married for 29 years.  The husband was now 55 years old and the wife was now 53 years old.  They separated in 2008, and agreed to spousal support of $1,584 per month based on his employment income of $87,763, and her disability income of $24,771.  There were some minor adjustments over the years to keep up with the cost of living.  The husband’s pension entitlement had been divided after separation, however, the wife could not yet access it.

The husband stated that he had always intended to retire at age 55.  Since separation, he had a heart attack, and that reinforced his wish to retire.

The judge found that the medical evidence did not establish that the husband needed to retire for health reasons.  The retirement was voluntary.

The test for a “material change of circumstances” is set out by the Supreme Court of Canada in Willick v. Willick as,

a change, such that, if known at the time, would likely have resulted in different terms. The corollary to this is that if the matter which is relied on as constituting a change was known at the relevant time it cannot be relied on as the basis for variation.

In this case, because the husband’s retirement was anticipated at the time of separation, it was not a material change of circumstances, and therefore could not be the basis for a change in spousal support.

To the husband’s credit, he brought this motion before he actually retired, so that he still had employment income from which to pay support.

The lesson here is that, especially in long-term marriages with indefinite spousal support obligations, it is extremely important to deal with the issue of retirement in the separation agreement.  Retirement is foreseeable, and therefore the parties’ intentions about the timing of retirement and its effect on spousal support need to be dealt with when the agreement is negotiated.

New Year, New Plans – best practices for separated parenting

The new year is a time to organize, and plan forward.  We often make resolutions, trying to make this year better than the last.

Separated parents can use this time to set expectations for the upcoming year, and avoid last-minute conflicts.

If you already have a schedule in place for your children, you could look at where the holidays will fall, and plan around them as necessary.  For example, where are the children for Easter? Do any changes need to be made in the days before or after? When are extended family celebrations?  These issues are much easier to resolve now than they are the week before the holiday, when extended family plans have already been made.

If parents are able to communicate reasonably well, an initial planning meeting early in the year may be a good idea.  Once the tentative plans are made, online calendars can be helpful for updates and reminders.

If you are not at a point where an in-person meeting is comfortable, initial plans could be made by email, or with the assistance of a mediator.

Google Calendar is an online free resource where parents can establish and update a calendar for the children.  This can be helpful not only for the regular schedule and holidays, but also for information about school trips, events, extra-curricular activities, and children’s social activities.

There are other more specific tools for separated families, including Our Family Wizard, ShareKids and Two Happy Homes. There are fees for some of these services, but they are worth exploring to see if your family would benefit from the added features.

Parenting through separation is challenging.  The best gift that you can give your children is reduced conflict.  By planning ahead of time, you can take the first step down that path.

Online Dispute Resolution For Separation and Divorce

Advances in technology have brought huge opportunities for family mediation. Video and audio conferencing, and shared document and calendar programs provide options to separating couples that help them come to agreement and minimize conflict.

In negotiating separation agreements, it is usually best to have the parties together in the same room, as the subtleties of communication are more apparent, and there are fewer barriers to coming to resolution.

However, with the many demands on our time, including work and travel, sometimes being able to sit in the same room at the same time is just not possible, or would lead to unnecessary delays. When this is the case, options such as video or audio conferencing should be considered. Recent technological advances have made these options much more accessible. A person with an internet connection and computer or tablet can use Skype, GoToMeeting, or a similar platform, and be in the same room as the other party and the mediator for no additional cost to the participant.

Other online options, such as sharing disclosure documents through services such as Support Information Exchange, looking at joint calendars through services such as Google Calendar, Our Family Wizard, or Two Happy Homes, should be considered in appropriate cases. These, or similar services can help reduce conflict by providing some structure and a layer of accountability.

Online Dispute Resolution was a major topic at the recent annual conference for the Association of Family and Conciliation Courts in Los Angeles. The number of products available has increased dramatically over the past several years, and innovation in this area continues.

With mediation, we need to be creative both in designing the process to be followed as well as in generating possible outcomes. The solution must fit the family. Fortunately, the options are expanding.

Some light reading

It can be helpful when separating to consider different options and perspectives.  I’ve put together a library of some resources that may be helpful. These are in no particular order, and different ones will resonate with different people.

Parenting After Separation

  • The Truth About Children and Divorce: Dealing with the Emotions So You and Your Children Can Thrive (Emery, R.E.)
  • Keeping Kids Out of the Middle: Child-Centered Parenting in the Midst of Conflict, Separation and Divorce (Garber, Benjamin D.)
  • Listen to Me! Your Child and Your Divorce (Gottlieb, Daniel)
  • Mom’s House, Dad’s House (Ricci, Isolina)
  • Mom’s House, Dad’s House for Kids (Ricci, Isolina)
  • Parenting After Divorce: Resolving Conflicts and Meeting your Children’s Needs (Stahl., Phlip)
  • Parents are Forever: A step-by-step guide to becoming successful coparents after divorce (Thomas, S.)
  •  In the Name of the Child: A Developmental Approach to Understanding and Helping Children of Conflicted and Violent Divorce (Johnston, J., Roseby, V., Kuehnle, K.)
  • Helping Your Kids Cope with Divorce the Sandcastles Way (Neuman, G., M)

Separation/Divorce generally

  • Surving Your Divorce: A Guide to Canadian Family Law (Cochrane, M. G).

Parenting generally

  • Kids are Worth It: Giving Your Child The Gift of Inner Discipline (Coloroso, B.)
  • Raising Your Spirited Child: a guide for parents whose child is more intense, sensitive, preceptive, persistent, and energetic (Kurcinka, M.K)
  • Kids, Parents, and Power Struggles (Kurcinka, M.K.)
  • 7 Things your teenager won’t tell you: and how to talk about them away (Lippincott, J.M. & Deutsch, R.M.)
  • How to Hug a Porcupine: Negotiating the Prickly Points of the Tween Years (Ross, J.A.)
  • The Whole-Brain Child: Revolutionary Strategies to Nurture your Child’s Developing Mind (Siegel, D. J., & Bryson, T. P.)

Civil Partnership in the UK Treated as Marriage in Ontario,

Many jurisdictions do not allow same sex couples to marry. Ontario does not differentiate between same sex and opposite sex marriage. Families are more and more mobile, and may move from one type of jurisdiction to another. This leads to interesting issues. If parties come to Ontario from a jurisdiction that does not allow them to marry, but they have gone through an alternate ceremony similar to marriage, are they married under Ontario law?

In Hincks v. Gallardo, the parties entered into a civil partnership in the UK. As they were a same sex couple, they were not eligible to marry in the UK. A civil partnership in the UK provides the parties with essentially every material right and responsibility arising from marriage, but the parties are not married.

The parties moved to Ontario. They did not marry here. They then separated. One party started an application for divorce and equalization of net family property. In Ontario, these remedies are available only to married spouses.

However, in Ontario, both same sex and opposite sex couples may marry, and there is no difference in any rights or obligations arising from marriage.

Previously, in Halpern v. Toronto, the definition of marriage as “the voluntary union for life of one man and one woman to the exclusion of all others” was found to violate the equality guarantee in the Canadian Charter of Rights and Freedoms and was reworded to “the voluntary union for life of two persons to the exclusion of all others. This has since been codified in the Civil Marriage Act.

The issue before this court was whether the couple should be treated as married or common law, for the purpose of divorce and equalization of family property.

Both the Attorneys General of Canada and Ontario intervened. The Attorney General of Canada stated that the question of whether parties are married is to be determined by the law of the place where the ceremony took place. As the UK does not recognize the parties as married, Canada should not recognize them as married.

The Attorney General of Ontario stated that the couple should be treated as married, as the definition of “married spouse” in the Family Law Act must be given a broad and liberal interpretation.

The judge found that the parties should be treated as married in Ontario, therefore the claims for divorce and equalization of family property may proceed. She stated:

Failing to recognize this UK civil partnership as a marriage would perpetuate impermissible discrimination primarily because in the UK these parties could not marry because of their sexual orientation, but had to enter into a civil partnership instead.

So, although this couple is not married in the UK, the couple is married in Ontario. This may not be the end of the matter, given the broad-reaching impact of this decision, an appeal would not be surprising.

Upcoming AFCC Information Night in Oakville for Family Professionals

An Evening of

Film, Refreshments, Appetizers, & Discussion of Family Law Dilemmas For:

SOCIAL WORKERS, JUDGES, PSYCHOLOGISTS, MEDIATORS, LAWYERS AND COUNSELLORS

Wednesday November 21st, 2012
5:00pm – 7:00pm
Oakville Conference Centre
2515 Wyecroft Road Oakville, Ontario L6L 6P8

NO CHARGE TO PARTICIPANTS
Lawyers are eligible for 1.5 substantive hours towards CPD requirements.

The Program will include:

  • Brief introduction to the AFCC Ontario Chapter by President-Elect, Dena Moyel
  • Membership information with regard to AFCC and AFCC Ontario
  • Presentation of key issues, concepts, and practice dilemmas with regard to Parent-Child Alienation
  • DVD presentation of popular film clips related to our topic, followed by stimulating panel discussion
The Panel will include:

  • Moderator: The Honourable R. John Harper, Senior Judge of the Family Court (SCJ),
  • Jacqueline Vanbetlehem, Family Reintegration Therapist,  s. 30 Assessor, Parenting Co-ordinator, Mediator/Arbitrator
  • Robert Martin, Family Lawyer
  • Lydia Moritz, Family Lawyer

 * AFCC Vision: A justice system in which all professionals work collaboratively through education, support & access to services to achieve the best possible outcome for children & families.

PLEASE REGISTER BY NOVEMBER 12th, 2012.  There is no registration fee for this program.

To register, please contact Stacey Leger at 905-845-4314 or stacey@oakvillemediation.com