June 13, 2023 – Unreasonably Deducting Expenses From Income

“One of the Applicant’s arguments respecting imputation of income to the Respondent is that he has unreasonably deducted expenses from the income that he has generated from his rental property.  It follows from the foregoing general comments that a party who claims that business expenses are being unreasonably deducted from income has the burden of proving that the expenses are unreasonable (Szitas v. Szitas, 2012 ONSC 1548 (CanLII), 2012 CarswellOnt 3501 (S.C.J.); Desormeaux v. Beauchamp, 2009 CarswellOnt 747 (S.C.J.); Bekkers v. Bekkers, 2008 CanLII 864 (ON SC), 2008 CarswellOnt 173 (S.C.J.); Joy v. Mullins, 2010 CarswellOnt 7477 (S.C.J.)).   However, the parent who seeks to deduct expenses from their income for child support purposes must as part of their basic general disclosure obligation explain the reasons for the expenses and how they were calculated, and must provide documentary proof of significant expenses in an organized manner so that the court can make a proper determination as to the reasonableness of the expense from the standpoint of the child support calculation (SzitasMacGillivray v. Ross, 2008 CarswellNS 631 (S.C.);  R.(P.C.J.) v. R. (D.C.), 2003 CarswellBC 788 (C.A.);  Manchester v. Zajac, 2011 CarswellOnt 13546 (S.C.J.); Williams v. Williams, 2011 CarswellOnt 6588 (S.C.J.);  Meade v. Meade, 2002 CanLII 2806 (ON SC), 2002 CarswellOnt 2670 (S.C.J.);  Wilcox v. Snow, 1999 NSCA 163 (C.A.) (CanLII);  Izyuk v. Langley, 2015 ONSC 2409 (S.C.J.) (CanLII)).  This is particularly important in situations where the expenses reported on the party’s income tax returns fluctuate from year to year (Armstrong v. Armstrong, 2010 CarswellBC 3252 (S.C.)).  If the party seeking to deduct expenses from income fails to provide meaningful supporting documentation or other evidence in respect of those deductions, an adverse inference may be drawn by the court in making the income determination (Orser v. Grant, 2000 CarswellOnt 1354 (S.C.J.);  Izyuk).

In order to impute expenses that have been deducted against income for tax purposes back into a parent’s income pursuant to section 19(1)(g) of the Guidelines, it is not necessary to establish that the party who claimed the deductions acted improperly or outside the norm for claiming expenses in the income tax context.  Section 19(2) specifically provides that the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act (Canada).  Rather, the issue is whether the full deduction of the expense results in a fair representation of the actual disposable income that should be available to the party for personal expenses and child support (Halliwell v. Halliwell, 2017 ONCA 349 (C.A.) (CanLII)).    In determining whether expenses claimed by a party as against income are unreasonable, the court must balance the business necessity of the expense against the alternative of using those monies for the purposes of child support (Osmar v. Osmar, 2000 CanLII 22530 (ON SC), 2000 CarswellOnt 1928 (S.C.J.);  Izyuk).  In carrying out this analysis, the court must keep in mind the principle which the Supreme Court of Canada established in D.B.S. that payor parents should not be permitted to manipulate their financial affairs so as to prefer their own interests over those of their children.”

Roloson v. Clyde, 2017 ONSC 3642 (CanLII) at 207-208

June 12, 2023 – Rule 2 = Procedural Freedom for Judges

“Applicant counsel argued that the court should require a motion to vary before helping the parties to resolve their disagreement as to whether the final order permits them to authorize another person to assist with pick-up and drop-offs required by the Access Schedule.

I do not agree. To require a further motion to vary in these circumstances, where the Court gave the parties notice and opportunity to be heard on this specific issue, would have been to create further process without purpose, causing further delay, cost and time to the parties and their children.

In my view, assisting the parties in this way is consistent with, if not required by, the primary objective identified in Rule 2(2) of Family Law Rules. The Ontario Court of Appeal in A.A. v. Z.G., 2020 ONCA 192 recently described “dealing with cases justly” to mean “ensuring that the procedure is fair to all parties, saving time and expense and dealing with the case in the way that is most appropriate to its importance and complexity”. In order to achieve fair and expeditious resolutions, Rule 2 “specifically grants judges some procedural freedom” (at para 24).

Such freedom, elsewhere referred to by the Ontario Court of Appeal as  “great latitude”, enables a court, particularly in cases involving unrepresented litigants, to make such substantive orders, whether requested or not, as are  needed to effect a just and fair result between the parties: Titova v Titov, 2012 ONCA 864 (at para 48); see also Rule 25(19)(c).”

Medu v. Medu, 2020 ONSC 3696 (CanLII) at 44-47

June 9, 2023 – Parenting Orders for “Adult Children”

“On its face, s. 16.1 of the Divorce Act unambiguously gives this court the power to make parenting orders with respect to an adult child who meets the definition of a “child of the marriage”.  In Perino v. Perino, 2009 CanLII 41900 (ONSC) (“Perino 2009”), at paras. 8 and 13, Justice Corbett held that a custody and access order could be made under the Act in respect of an adult.  In Ross v. Ross (2004), 2004 BCCA 131 (CanLII), 2 R.F.L. (6th) 200 (B.C.C.A.), an application judge held that granting a parenting order in respect of a disabled adult child would infringe his rights as an adult, and that the court therefore did not have jurisdiction under the Divorce Act to make such an order. The B.C. Court of Appeal overturned this decision based on the clear language of the Act.

Ms. L. contends that, even if M. technically meets the definition of a “child of the marriage”, my ability to make orders with respect to him is confined to support orders.  She relies on the definitions of children in Ontario statutes governing parenting and support of the children of unmarried couples.  Under the Children’s Law Reform Act, R.S.O. 1990, c. C.12 (CLRA), which governs parenting orders, a child must be a minor. Pursuant to 2020 amendments to the Family Law Act, R.S.O. 1990, F.3, which governs support orders, the definition of a child resembles that in the Divorce Act. As a result, if the parties had never married and Mr. R. was applying under the CLRA, M. could not be subject to a parenting order under Ontario law.  Ms. L. argues that the more limited definition in the CLRA acknowledges the inappropriateness of making a parenting order with respect to an adult child, and that it should inform my finding on jurisdiction under federal legislation.

The Ontario legislature’s decision to change the definition of child in the Family Law Act, but not the CLRA, does not allow me to disregard the plain language of the federal legislation that governs this application. The Divorce Act does not define a “child of the marriage” differently for the purpose of parenting orders and support orders.  This presumably reflects a deliberate legislative choice to give this court the power to make parenting orders with respect to individuals over the age of 18 who remain under their parents’ charge because they are “unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life”.

Ms. L. says that there is no firm authority in Ontario to make a parenting order with respect to an adult disabled person, as the caselaw focuses on support orders.  This is incorrect. Corbett J. ultimately decided not to make a “general custody order” in Perino v. Perino, 2012 ONSC 32 (“Perino 2012”), a case involving extreme parental alienation. He did however order access between Marisa Perino, a cognitively impaired adult, and her mother, having earlier found, in Perino v. Perino, 2008 CanLII 11048 (ONSC) (“Perino 2008”) that he had the jurisdiction to make such an order.

The court accordingly has the jurisdiction to make a parenting order with respect to an adult child who meets the definition of a “child of the marriage” in the Divorce Act.  Based on evidence relied on by both parties, M. is unquestionably such a child.  He remains in his parents’ charge and cannot withdraw from it due to his disability.”

J.F.R. v. K.L.L., 2022 ONSC 5067 (CanLII) at 11-15

June 8, 2023 – Relocation Principles on Motions

“Section 39.4(3) of the CLRA addresses authorization of relocation and applies to interim motions such as the present one. It provides that, in determining whether to authorize the relocation of a child, the court shall take into account the best interests of the child in accordance with section 24 of the Act, as well as the following factors:

a.   the reasons for the relocation;

b.  the impact of the relocation on the child;

c.   the amount of time spent with the child by each person who has parenting time or is an applicant for a parenting order with respect to the child, and the level of involvement in the child’s life of each of those persons;

d.   whether the person who intends to relocate the child has complied with any applicable notice requirement under section 39.3 and any applicable Act, regulation, order, family arbitration award and agreement;

e.   the existence of an order, family arbitration award or agreement that specifies the geographic area in which the child is to reside;

f.   the reasonableness of the proposal of the person who intends to relocate the child to vary the exercise of decision-making responsibility, parenting time or contact, taking into consideration, among other things, the location of the new residence and the travel expenses; and

g.   whether each person who has decision-making responsibility or parenting time or is an applicant for a parenting order with respect to the child has complied with their obligations under any applicable Act, regulation, order, family arbitration award or agreement, and the likelihood of future compliance.

Hales v Lightfoot, 2022 ONSC 3517 (CanLII) at 19

June 7, 2023 – RESPs as Section 7 Expenses?

“Section 7(1) of the CSG provides the court with the ability to provide for an amount to cover all or a portion of certain expenses, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to separation. Contributions to an RESP do not fit into any of the categories of s.7 set out in s.7(1)(a) – (f).  While RESPs are savings vehicles, earmarked for post-secondary education for a child, they are not necessarily required to be used for that purpose. Parents cannot be compelled by a court order to contribute into an RESP, absent an agreement: see C.S. v. D.A.S., 2020 ONCJ 16, at para. 143; Popovski v. Pirkova, 2017 ONSC 2363, at para. 49; and Smith v. Smith, 2011 NSSC 269, at para. 80.”

         de Vasquez v. Mendoza, 2022 ONSC 3398 (CanLII) at 91

June 6, 2023 – Unauthorized Recordings

“It may well be that Suzanne Salga made the recording surreptitiously. She is alleged to have done that from time to time and she had a clear ongoing concern about the personal and financial relationship between her father and Ms. Marley. However, the unauthorized recording of a conversation does not make the evidence inadmissible, regardless of whether it was legal to do so. Therefore, I will consider it as part of the evidence of a course of dealing as a whole.”

         Marley v. Salga, 2019 ONSC 3527 (CanLII) at 39

June 5, 2023 – Interfering With Decisions To Grant/Deny Adjournments

“Our case law is clear that without a clear error of law or misperception of the facts, there is no basis for this court to interfere with a judge’s decision whether to grant an adjournment: see e.g. Khimji v. Danani (2004), 2004 CanLII 12037 (ON CA), 69 O.R. (3d) 790 (C.A.), at para. 14 (per Laskin J.A. dissenting, but not on this point). This is especially the case in family law matters where motion and trial judges’ case management role is so crucial to the process.”

            Holly v. Greco, 2019 ONCA 464 (CanLII) at 9

June 2, 2023 – Unjust Enrichment & Constructive Trust Claims

“If a party establishes the three elements of a claim for unjust enrichment – enrichment, corresponding deprivation, and lack of juristic reason – the remedy can take one of two forms: a personal (or monetary) award or a proprietary award: Kerr, at paras. 46, 55; Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303, at para. 89. The framework in which a court should assess the appropriate remedy was summarized by this court in Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522, at para. 52:

In this way, the framework established in Kerr requires the court to ask the following questions:

1) Have the elements of unjust enrichment – enrichment and a corresponding deprivation in the absence of a juristic reason – been made out?;

2) If so, will monetary damages suffice to address the unjust enrichment, keeping in mind bars to recovery and special ties to the property that cannot be remedied by money?;

3) If the answer to question 2 is yes, should the monetary damages be quantified on a fee-for service basis or a joint family venture basis?; and,

4) If, and only if monetary damages are insufficient, is there a sufficient nexus to a property that warrants impressing it with a constructive trust interest?

A monetary award is the default remedy and should suffice in most cases to remedy the unjust enrichment: Kerr, at para. 47; Moore, at para. 89. In Kerr, the Supreme Court of Canada clarified that monetary awards for unjust enrichment could be quantified in two ways. First, a monetary award may be calculated on a quantum meruit or “fee-for-service” basis – the value of the claimant’s uncompensated services. Second, a monetary award may be calculated on a “value survived” basis, by reference to the overall increase in the couple’s wealth during the relationship: Kerr, at paras. 49 and 55.

The concept of joint family venture helps courts to quantify the monetary remedy where a claim of unjust enrichment has been made out. Where the evidence shows that the domestic arrangements under which the unmarried parties have lived amounted to a joint family venture, monetary damages should be calculated on the value survived basis, namely on the basis of a share of the wealth generated in the joint family venture proportionate to the claimant’s contributions: Kerr, at para. 102. If there was no joint family venture, monetary damages calculated on a quantum meruit basis are likely appropriate.

The proprietary remedy of constructive trust in a property requires a claimant to show two things: that monetary damages are inappropriate or insufficient to remedy the unjust enrichment; and the claimant’s contribution was linked to the acquisition, preservation, maintenance, or improvement of the disputed property. The required link has been variously described as demonstrating a “sufficiently substantial and direct” link, a “causal connection”, a “nexus” or a “clear proprietary relationship”: Kerr, at paras. 50-51, 78; Moore, at para. 91. The extent of the constructive trust interest should be proportionate to the claimant’s contributions: Kerr, at para. 53; Moore, at para. 91.”

         Lesko v. Lesko, 2021 ONCA 369 (CanLII) at 14-17

June 1, 2023 – Costs & the Self-Represented Litigant

“In M.A.L. v. R.H.M., 2018 ONSC 2542, Pazaratz J. reviewed some of the factors to be considered when assessing the quantum of costs relative to self-represented litigants. At para. 11 he stated:

[11]           Most of the caselaw dealing with costs claims by self-represented litigants deals with the first of the three objectives set out in Serra.

a.    Self-represented litigants may be awarded costs, and those costs may include an allowance for counsel fees.  Fong v. Chan,1999 CanLII 2052 (ON CA), (1999) 46 O.R. (3d) 330 (C.A.); Jordan v Stewart, 2013 ONSC 5037 (CanLII) (SCJ).

b.    However, self-represented litigants – whether legally trained – are not entitled to costs calculated on the same basis as those of a litigant who retains counsel.  Pirani v Esmail, 2014 ONCA 279 (ON CA) (CanLII); Fong v. Chan, (supra); Reynolds v. Higuchi, 2014 ONSC 3375 (CanLII) (SCJ).

c.   A self-represented litigant can be awarded costs for disbursements as well as the economic loss caused by having to prepare and appear to argue the case.  Fong v. Chan (supra); G.B. v S.A., 2013 ONSC 2147 (CanLII) (Divisional Ct).

d.   A self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case.

e.    Costs should only be awarded to those lay litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation and that, as a result, they incurred an opportunity cost by foregoing remunerative activity. Jordan v Stewart, (supra).

f.      Lost wages as a result of time missed from work to prepare for or argue a case can be compensated by way of costs. G.B. v S.A.,(supra).  But this excludes routine awards on a per diem basis to litigants who would ordinarily be in attendance at court in any event. Warsh v Warsh, 2013 ONSC 1886 (CanLII) (SCJ).

g.    Compensation for the loss of time devoted to preparing and presenting the case should be moderate or reasonable.  Reynolds v. Higuchi, (supra).

h.    Once a court determines that a “counsel fee” is appropriate for a self-represented litigant, one of the biggest challenges is quantifying both the number of hours to be compensated and the appropriate hourly rate.  Courts have awarded anywhere between $20.00 and $200.00 per hour for self-represented litigants, depending on the demonstrated level of skill.  Izyuk v Bilousov, 2011 ONSC 7476 (CanLII)(SCJ). $60 per hour appears to be a commonly used figure. Roach v. Lashley, 2018 ONSC 2086 (CanLII) (SCJ).

i.     The Family Law Rulesdo not specifically address costs claims by self-represented litigants. But all of the Rule 18 and 24 costs provisions apply equally whether litigants are represented or not.”

         Cuthbert v. Nolis, 2022 ONSC 3002 (CanLII) at 9

May 31, 2023 – Spousal Support Orders

“The trial judge provided no analysis as to whether the award achieved the objectives of spousal support. The objectives for needs-based spousal support (as opposed to compensatory-based) are set out in Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420, at para. 46:

Following Moge’s broad view of causation in compensatory support and the concomitant acceptance of the availability of non-compensatory support, courts have shown increasing willingness to order support for ill and disabled spouses. Sometimes they have done this as a “transition” to self-sufficiency. But more often, they have frankly stated that the obligation flows from the marriage relationship itself. Collecting cases, Rogerson explains in “Spousal Support After Moge”:

The [more dominant] approach, … particularly in cases of earning capacity permanently limited by age, illness or disability, and the one generally supported by the developing Court of Appeal jurisprudence, has been to award continuing support without regard to the source of the post-divorce need. On this approach, which I earlier referred to as the “basic social obligation” approach, causal connection arguments have been rejected not only in determining entitlement to support, but also in assessing the extent of the obligation. The message coming from the cases adopting this approach appears to be that one takes one’s spouse as one finds him or her, subject to all his or her, weaknesses and limitations with respect to income-earning capacity; and a spouse with higher earning capacity has a basic obligation to make continuing provision for a spouse who is unable to become self-sufficient at the end of the marriage. One is simply not allowed to abandon a spouse to destitution at the end of a marriage if one has financial resources which might assist in relieving the other spouse’s financial circumstances. [Emphasis in original; citations omitted.]

The evidence here was that the appellant’s disability would continue. The trial judge specifically accepted at para. 49 that, “following her diagnosis of Spontaneous Intracranial Hypotension, [the appellant] has been unable to work”. Yet the trial judge ordered spousal support at only the mid-range of the amounts suggested by the SSAG formula, and at the lowest end of duration from the date of separation. There was no explanation as to why the support terminated when the need clearly continued.

As stated by this court in Gray v. Gray, 2014 ONCA 659, 122 O.R. (3d) 337, at para. 49, “[t]he duration of support is also an issue that ought to be contemplated under the SSAG”. For support to terminate there must be a realistic prospect of the spouse being able to become self sufficient: Reisman v. Reisman, 2014 ONCA 109, 118 O.R. (3d) 721, at para. 28. This court has upheld an indefinite support order in the case of ongoing need due to disability (Gray) and has overturned a time limit for support for a disabled spouse (Djekic v. Zai, 2015 ONCA 25, 54 R.F.L. (7th) 1, at para. 9).

Here the appellant remains disabled and unable to support herself. She lives on government disability payments. There is no evidence that her situation had changed or will change in the future.

One of the purposes of a spousal support order is to relieve financial hardship; another is for a former spouse to fulfil a basic social obligation to provide support where they are able to do so and the recipient spouse is not. Nothing in the trial judge’s reasons explains how the termination of support after only two-and-a-half years achieves these or other objectives of spousal support.”

         McGuire v. Bator, 2022 ONCA 431 (CanLII) at 27-31