Tuesday, January 14, 2014

140 Law - Legal Headlines for Tuesday, January 14, 2014

Here are the leading legal headlines from Wise Law on Twitter for Tuesday, January 14, 2014:
- Rachel Spence, Law Clerk

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Monday, January 13, 2014

140 Law - Wise Law's Legal Headlines for Monday, January 13, 2014

Here are the leading legal headlines from Wise Law on Twitter for Monday, January 13, 2014:

- Elysia Cherry, Legal Assistant
Visit our Toronto Law Office website: www.wiselaw.net

Friday, January 10, 2014

Family Law Agreements: When Independent Legal Advice is Not Enough

In the spirit of encouraging parties to settle their own affairs, courts are generally loathe to overturn domestic contracts. That being said, if a domestic contract is manifestly unfair to the point of unconscionability, the court reserves the right to set aside an agreement that has been executed and purports to settle all the issues between spouses. 

Why would a domestic contract be deemed unconscionable? 

Contrary to popular belief, independent legal advice is not a condition precedent to the legal enforceability of a domestic contract. Ofcourse, obtaining independent legal advice is the best way to ensure that the domestic agreement will be upheld and fairly reflects the interests of both parties so as to protect it from being challenged later on. 

The only requirements for a valid domestic contract are that it must be in writing, signed, and witnessed. Section 56 of the Family Law Act sets out the most common reasons as to why a domestic contract may be set aside, in whole or in part. They include the following: 

  1. A party to the contract failed to disclose a significant asset or debt in existence when the contract was executed.
  2. A party failed to understand the nature and consequences of the agreement (therefore raising issues of capacity). 
  3. Any other ground upon which an agreement may be attacked pursuant to the ordinary principles of contract law. 
This last reason encompasses fraud, duress, or undue influence. 

A lawyer who is retained to provide ILA should be careful that his or her client has received full financial disclosure and that the contract is consistent with the client’s objectives. There should be no doubt in the lawyer’s mind that the client is signing the contract freely and voluntarily. Merely providing this advice and having the client provide verbal assurances that no undue influence is at play may not be sufficient. 

In the 2000 case of Bradley v. Bradley, the Supreme Court of Ontario affirmed rationale previously set out in in Youngblut v. Youngblut (1979), 11 R.F.L. (2d) 249 (Ont. H.C..  
In Youngblut,  the plaintiff had received independent legal advice when signing a separation agreement. Nevertheless, Justice Carter found that due to duress, she was not bound by the agreement: 
In the case before me while it is true that the plaintiff obtained independent legal advise [sic], and while she may well have been told that on the law then existing she had a right to institute a partition action in which she might well be successful, that is small comfort to a person who wished to have food on the table and a roof over her head at the instant moment and not six months or more from then. I am of the opinion that the pressure upon her, bearing in mind the respondent’s past conduct towards her and his harassing telephone calls, would constitute undue influence and cause her to ignore her solicitor’s advice and execute the deed in return for the money owing to her.
Therefore, Youngblut v. Youngblut demonstrates that simply going through the motions and obtaining legal advice as proof that all four corners of a domestic contract are being observed is simply not enough. The lawyer must be fully apprised of the client’s situation, and that includes not only the history of the relationship and its breakdown, but the current state of the client’s relationship or marriage, the client’s health and emotional states as well as the client’s objectives in entering into the domestic contract. 

The lawyer should fully canvass the full nature of the agreement with the client, along with its attendant risks, effects, and consequences. Only by going through this comprehensive process can the client and the lawyer protect themselves from surprises later on.    
- Ana Kraljevic, Toronto

140 Law - Wise Law's Legal Headlines for Friday, January 10, 2014

Here are the leading legal headlines from Wise Law on Twitter for Friday, January 10, 2014:

- Elysia Cherry, Legal Assistant
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Thursday, January 09, 2014

140 Law - Legal Headlines for Thursday, January 9, 2014

Here are the leading legal headlines from Wise Law on Twitter for Thursday, January 9, 2014:
- Rachel Spence, Law Clerk

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Paternity Testing in Ontario: Perhaps Damned If You Do, But Certainly Damned If You Don’t

Paternity testing, in most cases, is requested in applications in which child support is sought from a putative father, necessitating a declaration of parentage under sections 4 or 5 of Ontario's Children's Law Reform Act.  Biological parentage, however, is but one of the factors that create an obligation to support a child in light of policies that have long recognized that support is the right of the child, not the parent.   
The laws governing the right of the child to receive financial support contemplate a host of scenarios that preserve and safeguard this right, with the best interests of the child trumping any other competing consideration.  For example, where a male may not be the biological father of the child, and this is later proven by paternity testing, he may still be responsible for providing child support if, by his conduct, he has demonstrably stepped into the stead of a parent. 
The wording of Section 31 of the Family Law Act, R.S.O. 1990, c. F-3, as amended, expressly imposes this legal obligation to support children who are not blood relations:  A parent has an obligation to provide support for his or her child. The child support obligation extends to a biological child, an adopted child, or a child to whom a person has demonstrated a "settled intention" to treat as a member of his family.  
Therefore, if a male has been providing financial support to a child who he mistakenly believes is his, for any number of reasons, and can be shown to have met the test of demonstrating a “settled intention” he will be liable to pay support.  His belief that he is actual biological father is often based on the same set of circumstances which create a presumption of paternity in law.    
Section 8 of the Children's Law Reform Act set out factors that establish a presumption of paternity. 

8.  (1)  Unless the contrary is proven on a balance of probabilities, there is a presumption that a male person is, and he shall be recognized in law to be, the father of a child in any one of the following circumstances:
1. The person is married to the mother of the child at the time of the birth of the child.
2. The person was married to the mother of the child by a marriage that was terminated by death or judgment of nullity within 300 days before the birth of the child or by divorce where the decree nisi was granted within 300 days before the birth of the child.
3. The person marries the mother of the child after the birth of the child and acknowledges that he is the natural father.
4. The person was cohabiting with the mother of the child in a relationship of some permanence at the time of the birth of the child or the child is born within 300 days after they ceased to cohabit.
5. The person has certified the child’s birth, as the child’s father, under the Vital Statistics Act or a similar Act in another jurisdiction in Canada.
6. The person has been found or recognized in his lifetime by a court of competent jurisdiction in Canada to be the father of the child. R.S.O. 1990, c. C.12, s. 8 (1).
However, even if one of the circumstances set out in section 8 of the Children’s Law Reform Act can be shown to exist, it is just one factor for the court to turn its mind to.  The Court will look at the totality of evidence in exercising its discretion to recognize paternity as well as its accompanying legal implications.  Therefore, any factor establishing a presumption of paternity is rebuttable in the light of all the evidence.   
If a putative father is contesting paternity and the applicant seeking child support wishes to remove any doubt about parentage, the wisest course of action may be to apply for leave to obtain a paternity test.
Section 10(1) Children's Law Reform Act, R.S.O. 1990, c. 12, as amended, provides as follows:
  • 10.(1) On the application of a party in a civil proceeding in which court is called on to determine a child's parentage, the court may give the party leave to obtain blood tests or DNA tests of the persons who are named in the order granting leave and to submit the results in evidence. 2006, c. 19, Sched. B, s. 4
Obtaining a paternity test may not only be a wise course of action for a party seeking contribution for her child, but it can also provide peace of mind to the putative father before he commences any payments and shows any conduct establishing a loco parentis role.  Since the court can presume that a putative father is the biological father if he refuses to take a paternity test, and the evidence he adduces is insufficient to rebut the presumption, the Children’s Law Reform Act effectively removes any incentive to refuse testing by reserving the right to make an adverse inference in any event. Thus, a party contesting paternity should undergo testing to provide the clearest proof that would rebut the presumption established by any of the factors listed in s. 8 of the Children's Law Reform Act. The case of R. v. S. [1988] O.J. No. 2788 is an example of what a wise investment a paternity test would have been to the Applicant, Mr. R. 
In 1982, a court order was made that compelled Mr. R. to provide support to a child born out of wedlock to Miss S.  The mother, Miss S., assigned the payments to the Ministry of Community and Social Services.  Four years after the order was originally issued, Mr. R. obtained leave to have Miss S., the child, and himself, submit to blood tests in order to ascertain parentage.  As a result of these tests, it was conclusively determined that Mr. R. could not be the father of the child, and, consequently, an uncontested declaration of non-paternity was issued in the Supreme Court of Ontario.
Mr. R. filed two motions with the court. The first was to rescind the  original support order, while the second motion was for an order to recover the monies Mr. R. paid pursuant to the 1982 order. Mr. R. sought reimbursement from COMSOC of the sum of $2,080, a figure which was not disputed.
The court granted an order rescinding the original order for support, but held that there were no legal grounds for recovery of the monies already paid out.  It was clear that there was never a proper factual basis for the support order and therefore a credible basis for retroactively discharging the original support order made.  The judge nonetheless held he had no jurisdiction to make an order directing the repayment of support paid pursuant to the original order.  “By discharging the order today, the legal embarrassment is lifted, but if I cannot order the return of the support paid, Mr. R. will find little solace in the situation.”
“Discharging an order retroactively does not include an inherent statutory power to correct inequities which may arise when the order is discharged. The Family Law Act does not confer upon me a power to order COMSOC to repay to Mr. R. the sum of $2,080 which he paid as support for a child whom we now know not to be his. I therefore deny Mr. R.'s second motion.” Moreover, as a judge of the Provincial Court (Family Division), he concluded that he lacked the jurisdiction grant equitable relief, a power then reserved to the Supreme Court, the former District Court and the Unified Family Court pursuant to Section 109(3) of the Ontario Courts of Justice Act.
Therefore, while the Court may certainly sympathize with parties who have paid support on mistaken grounds, often for lengthy periods of time, it will not necessarily be able to order repayment of support.  Early paternity testing can eliminate this risk, and provide greater certainty to parents, and ultimately the child, from the outset.
- Ana Kraljevic, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Wednesday, January 08, 2014

Supreme Court of Canada Rules on Pension Income and Damages in Wrongful Dismissal

The Supreme Court of Canada's recent ruling in IBM Canada Ltd. v. Waterman provides a great deal of clarity on the issue of collateral benefits such as pensions in a wrongful dismissal action and whether such a benefit ought to be deducted from the amount owed by the employer on account of pay in lieu of notice.

Facts

On March 23, 2009, IBM Canada terminated Richard Waterman's employment, after forty-two years of service, on a without cause basis. At the time of his dismissal, Mr. Waterman was sixty-five years of age and was entitled to a full pension under IBM's defined benefit pension plan. Further, "IBM told Mr. Waterman that on termination, he would be treated as a retiree and that he must begin receiving monthly pension payments as of that date" (IBM v. Waterman, para 7).


Mr. Waterman sued for wrongful dismissal and was awarded 20 months pay in lieu of notice at trial. IBM appealed this decision arguing Mr. Waterman's benefits ought to be deducted from the salary and benefits payable during the notice period.

Issues Before the Court


On appeal to the Supreme Court of Canada, IBM argued two positions:

  1. Damages for wrongful dismissal are compensatory: The purpose of wrongful dismissal damages is to only indemnify an employee for the loss suffered as a result of the dismissal. However, in awarding Mr. Waterman damages for the full notice period without deduction of the pension benefits received during that period, Mr. Waterman is in a better economic position than he would have been in had IBM not breached the employment contract.
  2. Sylvester v. British Columbia: In this 1997 decision, the Supreme Court of Canada held that disability benefits and damages for wrongful dismissal are based on a contrary assumption about the ability of the employee to work. As a result of this decisiondisability benefits received during notice period were deducted from damages for wrongful dismissal. IBM argued that similar to disability benefits, pension benefits also ought to be deducted.
Pension Benefits

Rejecting both of IBM's arguments, the Supreme Court concluded that unlike disability benefits, pension benefits received during the notice cannot be deducted from wrongful dismissal damages.


The Court went on to describe pension benefits as a "collateral benefit" which is a source of income other than wrongful dismissal damages payable by an employer to ameliorate the loss suffered by an employee as a result of a wrongful dismissal. The precedent established in Sylvester does not imply that all benefits received by a plaintiff raise a collateral benefits problem. In order for there to be deduction, the following factors ought to be considered:

  • The benefit has to be be sufficiently connected to the defendant's breach - just because a benefit is loosely connected to the defendant's wrongful conduct, the defendant should not get the credit for having it deducted from wrongful dismissal damages;
  • The purpose of the benefit - if the benefit is specifically intended to indemnify the plaintiff for the loss resulting from the defendant's breach (such as employment insurance benefits), the benefit should be deducted from wrongful dismissal damages; 
  • Benefits received by a plaintiff through private insurance - whether its disability benefits, employment insurance or pension benefits, if provided by a private insurer, such benefits are not deductible from damage awards.
Where the Law Stands

Although this case is clearly a win for employees, surprisingly Sylvester remains good law.  As some leading professionals in the employment law community have noted, rather than distinguishing this case from Sylvester, the Supreme Court could have just as easily done away with the earlier precedent.

Considering mandatory retirement is no longer permitted and that Canadians face an impending pension crisis, it is conceivable that the Supreme Court foresaw the struggles pension-eligible employees would be facing in the coming years.

Last year, the Supreme Court dealt a blow to pensioners in Sun Indalex Finance, LLC v. United Steelworkersruling against the claims of workers and retirees wanting to place pension plans to rank ahead of creditors in corporate bankruptcies.With this ruling, the Court prevented the pendulum from swinging too far away from protection of wrongfully dismissed employees.

- Nitin Pardal, Toronto
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140 Law - Wise Law's Legal Headlines for Wednesday, January 8, 2014

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- Elysia Cherry, Legal Assistant
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Tuesday, January 07, 2014

140 Law - Wise Law's Legal Headlines for Tuesday, January 7, 2014

Here are the leading legal headlines from Wise Law on Twitter for Tuesday, January 7, 2014:
- Elysia Cherry, Legal Assistant 
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Monday, January 06, 2014

140Law - Wise Law's Legal Headlines for Monday, January 6, 2014

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- Rachel Spence, Law Clerk

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Friday, January 03, 2014

140 Law - Legal Headlines for Friday, January 3, 2014

Here are the leading legal headlines from Wise Law on Twitter for Friday, January 3, 2014:
- Elysia Cherry, Legal Assistant
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Thursday, January 02, 2014

140 Law - Legal Headlines for Thursday, January 2, 2014

Here are the leading legal headlines from Wise Law on Twitter for Thursday, January 2, 2014:

- Elysia Cherry, Legal Assistant 
Visit our Toronto Law Office website: www.wiselaw.net