Agreements are meant to be followed
At Henderson Heinrichs, we regularly negotiate and conclude separation agreements for our clients. Parties cannot take the provisions of these agreements lightly. When you reach an agreement with your ex-spouse, you had best stick to it. That’s what the court concluded in the recent Supreme Court of British Columbia case of Owen v. Owen, 2011 BCSC 1284.
In Owen, the court was faced with non-payment of spousal support by a wealthy husband, in contravention of the terms of a separation agreement. The court found that, in addition to losing the money itself, the wife lost certainty, security, and the ability to budget, invest and control her own financial resource, all of which she had bargained for in the agreement.
Because of this, the court agreed that the Agreement had been repudiated by the husband, and on the basis of the action brought forward, that the wife accepted that reputiation. The result was stark: the husband was required to pay back the arrears that had accrued under the terms of the agreement to the date the repudiation was accepted. Further, the wife was freed from her obligations under the agreement and was able to once again pursue a reapportionment of the very substantial family assets, something that she had given up under the agreed upon terms. Finally, as the agreement was no longer in effect, the husband was once again required to pay a higher, interim, spousal support sum which had been ordered prior to the Agreement being reached.
The wife, of course, did not have to accept the repudiation, and she could have sought a far more common remedy; namely, that the agreement be enforced. But the choice was hers, and it serves as a valuable reminder that the person breaching the agreement will rarely receive benefit for that breach from the court.
Posted: October 26th, 2011 under Agreements, Case Analysis, Procedure.
Tags: agreement, enforcement, overturn, repudiate, repudiation
What does it take to Separate?
At Henderson Heinrichs, we are often asked to seek a determination that the spouses in a marriage have no reasonable prospect of reconciliation. Normally, this is not a particularly contentious issue. However, there are circumstances in which a declaration such as this have far-reaching consequences.
In Wolfman-Stotland v. Stotland, 2011 BCCA 175, (CanLII) the court grappled with the question of a spouse’s capacity to separate. In this case, the claimant wife and the respondent husband were 92 and 93 years old respectively, and the wife applied for a s.57 declaration that there was no reasonable prospect of reconciliation. In opposing that application, the Husband sought and received an order that a doctor provide an opinion as to the Wife’s capacity to make the – though the doctor found that the wife had the capacity to instruct counsel regarding the financial aspects of the divorce claimed, she “did not have the capacity to form the intention to live separate and apart from her husband” [at paragraph 14]. The Chambers judge defined the relevant issue as whether the wife had the ability to both manage her affairs and instruct counsel. The Court found that she did not.
The Court of Appeal disagreed. Upon re-examination of the issue, the Appeal Court determined there should not have been a dual test. The ability to manage ones affairs was determined to be a higher capacity than the one needed to instruct counsel and the court overturned the Chambers Judge’s decision.
The Husband’s application to appeal to the Supreme Court of Canada was dismissed, and the test for the capacity necessary to separate therefore remains a very basic one.
Posted: October 18th, 2011 under Case Analysis, Divorce, Family Court, Procedure.
Tags: capacity, declaration, s.57, Section 57, separation
What If No One Follows An Order?
In the recently decided case of Newton v. Luettger, 2011 BCSC 995, the court made an observation which, while simple, is also far reaching in its effects. The case involved a 2005 trial custody order which provided that the parties would share roughly equal time with their two children. The parties concurred at the hearing that the equal division of care never occurred and that the mother regularly had the children in her care for greater than 60% of the time. The mother sought a variation of the trial custody order, relying on the difference between the order and the actual care circumstances as a material change in circumstances.
Mr. Justice R.D. Wilson stated found that,
[9] The argument advanced by the Claimant is based on the proposition that the failure to comply with the terms of an order is equivalent to “a change in the condition, means, needs or other circumstances of the child of the marriage…”. To me, that is a novel proposition. No authority was cited in support of it. Absent binding authority, it is not a proposition which commends itself to me.
[10] Non-compliance with the provisions of an order is not the equivalent of a change in circumstances. The Claimant’s application for a variation order is dismissed because she has failed to establish that there has been a change in the condition, means, needs or other circumstances of the children, or either of them.
Interestingly, neither party seems to have explored the prospect that, while the non-compliance did not in and of itself constitute a change in the children’s circumstances, the care actually received by the children since the pronouncement of the trial decision and their related needs would, in fact, have given rise to a difference. It remains a question as to how far a determination such as Mr. Justice Wilson’s can reach. It is common for parties to seek a variation based on the failure by the other to live up to the terms of an order, and it seems logical that the law should both direct the actions of the parties and also accurately reflect those actions when they change.
Posted: August 10th, 2011 under Case Analysis.
Tags: change, circumstances, custody, variation
Investing in Divorce? Not here.
Sometimes a new idea comes along which reaffirms our faith in what we already have.
A company has been formed in California with the sole purpose of financing divorce litigation. The firm justifies itself by suggesting that spouses of the űber-wealthy (the firm in question specializes in cases with assets valued north of $2 million) require financing to level the playing field. Its altruism diminishes, however, when it comes to remuneration, treating the parties family problems as an investment. The company is paid with a percentage of the ‘winnings’ on the completion of trial or on settlement.
In BC, lawyers in divorce cases are prohibited from being paid on contingency; that is, by taking a percentage of money ‘won’. The parties’ and the children’s interests rather than the potential capital return should be the motivation for the parties’ decisions. The prohibition against contingency billing removes the potential that lawyers will seek to serve their own interests by advocating litigation which that may not be in the interests of those involved.
In regards to the involvement of third parties in the financing of litigation for profit, the common law in British Columbia maintains that this is improper. Such investment in litigation, or champerty, is discussed more fully in Farley v. Pearlson, 2001 BCSC 1237.
While there is always the potential for abuse within a system, B.C. has dealt specifically with the problem of for-profit litigation financing and it seems unlikely that similar investment schemes will appear any time soon in the province.
Posted: December 8th, 2010 under Case Analysis, Common Law, Finances.
Tags: Champerty, Financing, Funding, Investment, Litigation
Fallout from a No-Show
Is there any difference between an order pronounced after a contested hearing and one ordered when one of the parties hasn’t attended? The order itself is equally valid and binding in each circumstance. If the order is later challenged, however, differences emerge. Rule 14-7(77) of the BC Family Rules provides that, “The court my set aside a verdict or judgment obtained if a party does not attend the trial” The test for setting aside an order is generally held to be the test set out in Miracle Feeds v. D&H Enterprises Ltd. 1979 CarswellBC 48, 10 BCLR 58 which provides that that the party seeking to have the order set aside must show that:
- That he did not willfully or deliberately fail to enter an appearance or file a defence to the plaintiff’s claim;
- That he made application to set aside the default judgment as soon as reasonably possible after obtaining knowledge of the default judgment, or give an explanation for any delay in the application being brought
- That he has a meritorious defence or at least a defence worthy of investigation; and,
- That the foregoing requirements will be established to the satisfaction of the court through affidavit material filed by or on behalf of the defendant.
Until that application comes before the court and unless the order is set aside, it is fully valid. But an order obtained in a contested application is not subject to this provision. In the end, it’s probably a wash given that it’s generally a little easier to get an order when no one is opposing you.
Posted: November 26th, 2010 under Case Analysis, Legislation Analysis.
Tags: 14-7(77), miracle feeds, orders, set aside, undefended
