Wednesday, March 12, 2014

140 Law - Legal Headlines for Wednesday, March 12, 2014

Here are the leading legal headlines from Wise Law on Twitter for Wednesday, March 12, 2014:
- Rachel Spence, Law Clerk

Visit our Toronto Law Office website: www.wiselaw.net

Tuesday, March 11, 2014

140 Law - Legal Headlines for Tuesday, March 11, 2014

Here are the leading legal headlines from Wise Law on Twitter for Tuesday, March 11, 2014:
-Rachel Spence, Law Clerk

Visit our Toronto Law Office website: www.wiselaw.net

Monday, March 10, 2014

140 Law - Legal Headlines for Monday, March 10, 2014

Here are the leading legal headlines from Wise Law on Twitter for Monday, March 10, 2014:
- Rachel Spence, Law Clerk

Visit our Toronto Law Office website: www.wiselaw.net

Friday, March 07, 2014

140 Law - Legal Headlines for Friday, March 7, 2014

Here are the leading legal headlines from Wise Law on Twitter for Friday, March 7, 2014:
-Rachel Spence, Law Clerk

Visit our Toronto Law Office website: www.wiselaw.net

Sperm Donors - The "Seed" of Legal Liability Has Been Planted In Kansas

BY ANA KRALJEVIC, LAWYER, WISE LAW OFFICE

In an interesting January, 2014 decision, a Kansas court held that a man who became a sperm donor after answering an ad in Craigslist was the legal father of the child that resulted. He was ordered to pay child support.  

The ad was placed by a lesbian couple unable to afford a doctor-assisted artificial insemination procedure not covered by their insurance policy. 

The couple had been together for eight years at the time they placed an ad soliciting a sperm donour.  They purchased the home insemination kit online and eventually became pregnant.  The couple had the sperm donour sign a parental rights waiver which they presumed would sever all parental rights. 

When they later separated, one of the parties petitioned the state for financial assistance when she sustained injuries that left her unable to work.  The Kansas Department for Children and Families demanded that the sperm donour pay child support when it was revealed in her application that the child had been conceived by artificial insemination.  Notwithstanding this unconventional child-conception method, the department took the position that it routinely sought out the father when a single mother petitioned the state for assistance. 

When the matter made its way to the courts, Judge Mattivi held that the contract that the sperm donour executed with the couple was invalid because of a state law that prescribed ghat only a “donor of semen provided to a licensed physician for use in artificial insemination…is treated in law as if he were not the birth father.”  Thus, because the couple had attempted to circumvent the physician requirement by administering the procedure themselves, and therefore had not followed the letter of the law, the parental waiver was rendered void.  Of course, this decision was underpinned by a strong public policy reasons that affirm “[a] parent may not terminate parental rights by contract…even when the parties have consented.” As a result, the sperm donor was recognized as the father of the child despite his clear and vehement intent not to be treated as such. 

The father plans to appeal this ruling, according to news reports.

Would a decision like this ever be handed down by an Ontario court?  One can only speculate and draw inferences from other provincial laws and rulings.

The way that Ontario’s Family Law Act reads today, with no mention of assisted reproduction, it appears that the provincial legislature has neither envisioned nor even turned its mind to how this increasingly common family planning method may be changing the Canadian legal landscape.  

Instead, Canada has prohibited the purchase and sale of genetic material and opted to criminalize what should ultimately be a provincial health issue.  Indeed, large sections of the Assisted Human Reproduction Act, S.C. 2004, c. 2 have been struck down precisely because it intrudes into provincial jurisdiction.

Almost all aspects of assisted reproduction are illegal in Canada - not only directly profiting from the sale and purchase of genetic material, but also benefitting in an intermediary fashion (i.e., counselling individuals to find surrogates, egg donors, or sperm donors, etc.).  As a result, nearly all sperm used for in vitro fertilization is imported from the United States, a costly and last resort for Canadians unable to conceive on their own. 

Canada's Assisted Human Reproduction Act, S.C. 2004, c. 2, provides as follows:

 (1) No person shall purchase, offer to purchase or advertise for the purchase of sperm or ova from a donor or a person acting on behalf of a donor.
·         Purchase or sale of embryos
(2) No person shall
(a) purchase, offer to purchase or advertise for the purchase of an in vitro embryo; or
(b) sell, offer for sale or advertise for sale an in vitro embryo.

Offence and punishment

60. A person who contravenes any of sections 5 to 7 and 9 is guilty of an offence and
(a) is liable, on conviction on indictment, to a fine not exceeding $500,000 or to imprisonment for a term not exceeding ten years, or to both; or
(b) is liable, on summary conviction, to a fine not exceeding $250,000 or to imprisonment for a term not exceeding four years, or to both.

British Columbia, ever the trend setter, has formulated a legislative “test,” or a rough guideline of sorts, addressing the issue of parentage in assisted reproduction scenarios.  It is found in Section 24 of the BC Family Law Act, which officially came into force on March 18, 2013, replacing its predecessor, the Family Relations Act.

Section 24 of the FLA eliminates the presumption that a child who is born as a result of assisted reproduction is automatically the child of the donor who provided the “reproductive material.” 

Donor not automatically parent
24  (1) If a child is born as a result of assisted reproduction, a donor who provided human reproductive material or an embryo for the assisted reproduction of the child
(a) is not, by reason only of the donation, the child's parent,
(b) may not be declared by a court, by reason only of the donation, to be the child's parent, and
(c) is the child's parent only if determined, under this Part, to be the child's parent.

It appears that the intent of the legislature was to leave it open to the court’s discretion to make a determination of parentage based on the totality of the evidence.  The starting point of the analysis is that the mere donation of “human reproductive material” is not the sine qua non of parentage.  Clearly, a vial of sperm does not a parent make.  There are myriad factors and considerations which ought to be weighed when making this determination.  However, the legislation does not prescribe any indicia of parentage in assisted reproduction scenarios, or any specific bright-line test.  This makes these cases very fact specific and difficult to litigate, and therefore leaves it up to the common law to shore up holes in the legislation. 

Based on the cases that have been litigated in Canada thus far, it would seem that non-arm’s length scenarios in which the donor is known to the mother are rife with the potential for parenthood to displace the presumption of “genetic donor.”  

When the mother personally knows the donor and takes the anonymity out of the equation, what would otherwise be a medically sterile transaction suddenly raises questions with respect to the rights and obligations of the biological father.

This is what occurred in a Montreal case in which a woman asked her ex-boyfriend to impregnate her when she could not afford anonymous sperm donation.  The woman had no intention of the ex-boyfriend playing a paternal role and deliberately raised the girl as a single mother.  Three years later, she died of cancer and left the child in the care of her grandparents.  Despite the father’s limited involvement in the girl’s life, he successfully argued that he was legally her father and won a paternity ruling from the Quebec Court of Appeal.  When leave to appeal was sought, the Supreme Court of Canada declined, and thereby upheld the decision.

The ruling has caused concern for lawyers worried about the spectre of sperm donors asserting access and other parental rights in situations where this involvement was explicitly not intended at the time of the sperm donation..  

In many cases, a mother will select assisted reproduction as a family planning method so as to avoid the familial and legal implications that arise with joint parentage. She has likely gone to great lengths to select a donor who respects and agrees with those intentions.


Shouldn't the law respect that?  

- Ana Kraljevic, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

Laws Required to Swat Employers' Hands from Employees' Tip Jar

BY ANA KRALJEVIC, LAWYER, WISE LAW OFFICE

In many workplaces in the service sector, tips are pooled together and, at the end of a shift, divided up among the workers on duty during that shift.  It is common practice for the employer to take a portion of the tip money in a practice known as “tipping-out,” wherein the employees are forced to pay a fixed portion of their tips to the managers and owners. The oft-cited justification is usually to recoup the losses that should be absorbed by the employer anyway such as the cost of broken dishes or worn-out equipment.

But can employers legally do this?  And is there a justification for doing so?  The answer to the first question is yes, they can, in Ontario at least.  Employment rights advocates would answer with a resounding no to the second question, and for strong policy-based reasons.

Tips form a mainstay of the income for employees in the hospitality and service industry.  Indeed, it is the reason why minimum wage standards in these sectors are lower than in most other industries.  Employers know that these workers rely on tips for their livelihood, and the law does to – to some extent.  However, Ontario’s employment laws are checkered and inconsistent and there is no protection afforded to the treatment of tips for these employees.  Given that many of these workers earn a living wage that places them below or very close to the poverty line - the lack of legal protection with respect to this employment issue places them in financial peril.

It is clear that Ontario law is in need of reform.  Currently it is lagging behind many other provinces that have already implemented legal protections in this area.  Quebec specifies that tips belong to the employee as of right and must not be intermingled with wages otherwise due to the employee.   Other provinces, including New Brunswick, Newfoundland and Labrador, and Prince Edward Island have legislation that prohibits employers from seizing an employee’s tips and gratuities.

A look at the statutory provisions and regulations of the Employment Standards Act itself, and how it compares with companion legislation reveals many inconsistencies.  According to s. 11(1) an employer “shall pay all wages earned during each pay period,” and s. 13(1) further adds, unless otherwise provided for in the ESA, “shall not make a deduction from an employee’s wages or cause the employee to return his or her wages.”  Sounds good so far, but then s. 1(1) specifically excludes “tips and other gratuities” from the definition of wages” leaving this vital source of income free for the taking by the employer.

“wages” means,
(a) monetary remuneration payable by an employer to an employee under the terms of an employment contract, oral or written, express or implied,
(b) any payment required to be made by an employer to an employee under this Act, and
(c) any allowances for room or board under an employment contract or prescribed allowances,
but does not include,
(d) tips and other gratuities,
If tips and gratuities are excluded from the definition of wages, then how are they to be characterized in terms of income for the purposes of the ESA? It would seem that the drafters barely turned their minds to it except to the extent that they decided to exclude it from the definition of wages altogether.  However, this apparent intent to exempt tips and gratuities from the definition of wages is difficult to reconcile with the regulation under the ESA that sets the minimum wage for employees serving liquor below the legislated standard minimum wage (O. Reg 285/01).  This regulation specifically sets the minimum wage for employees who serve liquor in the course of their employment at $8.90 an hour, as opposed to the $10.25 legal minimum which applies to most other employees.  

Thus, although the ESA remains silent on how to formally characterize tips, it has implicitly recognized that a bartender’s wage must be supplemented with some other income source so as not to render this provision legally void.  To add even more fuel to the fire, the Income Tax Act recognizes tips and gratuities as taxable income.  Tips that are given to the employee from a customer must be declared on line 104 as “direct tips.” 

The Policy Rationale for the Legislative Protection of Tips and Gratuities

In response to challenges made against the practice of “tipping-out”, restaurant managers have tried to argue that it is necessary for paying dishwashers and other staff who do not receive tips in the course of employment.  However, the outcry against “tipping-out” was never about paying staff, it was always about the employer taking what rightfully belongs to the employee. 

No matter how the employer may try to spin it, most customers pay a gratuity in the expectation that it will go to the employee, not the employer.  A tremendous power imbalance exists in the employer-employee relationship and the retention of gratuities by the employer constitutes a mishandling of this bargaining power.

It is the employer who stands to profit the most from the success of the business while employee salaries stay more or less the same, regardless of performance.  The only exception being when the employee does a particularly good job in the hospitality/service industry and a patron rewards that performance with a tip.  As a matter of sound business practice, it makes little sense for the employer to take the tips earned by minimum-wage employees, which usually constitutes a nominal percentage of the overall profits, and remove the only economic incentive for employees to do good work.  Good workers drum up good business, which drums up more profit for the employer.

The legislation needs to be amended and should encompass workers across a wide spectrum -including hairdressers, valets, and hotel workers – who all rely on tips and gratuities as a significant portion of their incomes.  



Michael Prue, NDP MPP for Beaches East-York, has been lobbying for the passage of a law that would amend the ESA to prevent business owners and management from skimming off tips.  Prue’s Bill 49, the latest of a series of permutations that the bill has undergone since it was initially introduced, passed second reading in May 2013.  Despite its popularity, the bill has died on the order paper before it could receive Royal Assent and become legally enforceable.  On his website, Michael Prue has demanded that the government stop stalling and take action - “the time is now…will this bill be called for third reading by this government?”
The time for the provincial government to recognize the plight of minimum wage workers and formally address their concerns is long overdue.

- Ana Kraljevic, Toronto
Visit our Toronto Law Office website: www.wiselaw.net

New BC Family Law Act - No More Palm Tree Justice for Unmarried Couples

BY ANA KRALJEVIC, LAWYER, WISE LAW OFFICE

Last year, British Columbia wholly revamped its family law legislation with a new approach that has serious implications for common-law spouses, whether desired or not.   The B.C. Family Law Act, S.B.C. 2011, c. 25, came into force on March 18, 2013, and replaced the province’s 32-year-old Family Relations Act.  
Perhaps the the weightiest change in the law was its new definition of “spouse,” which includes both married couples and those who have lived with another person “in a marriage-like relationship” for a period of at least two years.  

Depending on the specific circumstances and intentions of unmarried individuals, this represents either a welcome change or state intrusion into domestic affairs that should really be deferred to the wishes of the parties themselves.  As the Supreme Court of Canada had astutely noted in Kerr v. Baranow, "while domestic partners might not marry for a host of reasons, one of them may be the deliberate choice not to have their lives economically intertwined." 

The New B.C. Law

BC's new definition of spouse is set out in section 3 of its Family Law Act, while its approach to  equal division of marital assets and debt is found in section 81:
3  (1) A person is a spouse for the purposes of this Act if the person
(a) is married to another person, or
(b) has lived with another person in a marriage-like relationship, and
(i)  has done so for a continuous period of at least 2 years, or
(ii)  except in Parts 5 [Property Division] and 6 [Pension Division], has a child with the other person.
(2) A spouse includes a former spouse.
(3) A relationship between spouses begins on the earlier of the following:
(a) the date on which they began to live together in a marriage-like relationship;
(b) the date of their marriage.
(4) For the purposes of this Act,
(a) spouses may be separated despite continuing to live in the same residence, and
(b) the court may consider, as evidence of separation,
(i)  communication, by one spouse to the other spouse, of an intention to separate permanently, and
(ii)  an action, taken by a spouse, that demonstrates the spouse's intention to separate permanently.

Equal entitlement and responsibility

81  Subject to an agreement or order that provides otherwise and except as set out in this Part and Part 6 [Pension Division],
(a) spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution, and
(b) on separation, each spouse has a right to an undivided half interest in all family property as a tenant in common, and is equally responsible for family debt.

Only Assets and debt that are accumulated during the period of cohabitation are subject to division.  Assets  that were accumulated before cohabitation commenced are excluded in the new BC law:

Excluded property


As a result, whether the newly dubbed “spouses” like it or not, assets that accumulated during their marriage-like relationship will be subject to an equal division without any burden of proving equitable principles under the common law.  Whether this was a deliberate decision motivated by a concern for preserving the proprietary rights of common law couples or a more practical interest in judicial economy is unknown.  

What is important to note is that property claims arising out of common law relationships were reportedly taking up as much as 25% of the court’s time.  With this new legislation and its formulaic approach to property division, the family law docket will no doubt be cleared of cases that would otherwise drag on indeterminately.

The Common Law Approach
Previously, under the old BC law, individuals were left with no prescribed statutory entitlements following the dissolution of a common-law relationship, regardless of the number of years they had cohabited or the degree of their contributions to the assets.  Without the legal protections afforded to their married counterparts, common law spouses had no other means for asserting a family property claim other than the equitable principles of constructive trust and the claim to an interest in a joint family venture ushered in by Pettkus v. Becker, [1980] 2 S.C.R.834 and Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R.269.

Ontario continues to follow this equities-based approach.  

Under common law, in order to prove that a spouse is entitled to an interest in an asset arsing from a joint family venture, he or she has the burden of demonstrating: i) the mutual effort of the parties; ii) their degree of economic integration; iii) their actual intent during the relationship; and iv) the prioritization of the family unit in decision-making.  

In most cases, a monetary remedy will be deemed sufficient to remedy the unjust enrichment as opposed to a proprietary interest.  

There are two distinct mechanisms for valuing a monetary award.  The first is the "value survived" approach which determines the claimant's share in the increase in the overall value of the property that is directly proportional to his or her efforts.  The second approach is the "value received" approach (or quantum merit approach) which more or less treats the services provided by the claimant as that of hired help insofar as it is calculated based on a "fee-for-services" basis.  For obvious reasons, claimants are less desirous to have the latter approach used when it leaves one spouse with a disproportionate share of the assets.

The other available option as a remedy, and the one that is the most difficult to prove, is the constructive trust, or a "restitutionary proprietary award."   This award is appropriate where the claimant can prove a causal relationship between his or her contributions and the acquisition, preservation, maintenance, or improvement of the property.  


In Kerr and Baranow, Cromwell J. succinctly said the following about the rights of common law couples to claim an interest in property "cohabitation does not, in itself under the common law of unjust enrichment, entitle one party to a share of the other's property or any other relief.  However, where wealth is accumulated as a result of joint effort, as evidenced by the nature of the parties' relationship and their dealings with each other, the law of unjust enrichment should reflect that reality."  


With the passage of the new law, this statement is no longer applicable in British Columbia.  

The Change in BC

Judges have noted the dichotomy between the legal remedies that are available in common law property claims since the coming into force of the new legislation and how this compares to what has historically been awarded.  

In a BC appeal decided before the new law came into force, Ibbotson v. Fung, 2011 BCSC 1021, (heard on November 14, 2012), the appellate court affirmed a trial judge’s decision to award the Respondent a 25% interest in a home on the basis of a constructive trust.  The trial judge had ordered that the property be sold and the net proceeds of the sale apportioned on a 75/25 basis in order to account for the fact that the Appellant’s mother had made a significant gift towards the acquisition of the property.  The Appellant husband appealed on the basis that the property’s increase in value was attributed to inflation and therefore no direct link existed between the accumulation of wealth during the relationship and the Respondent’s contributions.  The Appeal judge affirmed the decision and found that a monetary remedy would be insufficient to reflect the degree of the Respondent’s contributions which were substantial and direct enough to sustain a proprietary award.   
“In my view, the findings of fact of the trial judge support the necessary and specific nexus between Ms. Ibbotson's contributions and the acquisition, maintenance, preservation and improvement of the Vancouver Property (paragraph 74).” Paragraph 48 of the judgment summarizes the particular circumstances of the parties and the fact-finding analysis that supported the decision.
  • In this case, the parties' were part way through a long-term relationship when the purchase occurred. They identified the opportunity together. Through their joint financial contributions and labour they made the Property habitable, and treated this major asset as a joint venture to which they both contributed over a long period, and to which Lindsay has continued to contribute to this day. When Lindsay made further improvements to the Property after separation, Henry just stood by. As I have said, he was aware of the improvements, but not necessarily consulted. In any event, he did not assert sole ownership to the Property at that time, or, for that matter, at any time during the period of ownership.
Ibbotson v. Fung underscores how BC’s new law translates into very distinct outcomes in terms of real numbers and dollars and cents. 

For example, if this case had been heard after the coming into force of the new legislation the Respondent would have received, by default, a 50% interest in the property.  

What’s more, this remedy would have been awarded with the added benefit of avoiding the high cost and inconvenience that inevitably confront litigants relying on the joint family venture doctrine.  It is an expensive exercise that is daunting for most litigants.  One should point out that the Respondent was forced to jump a very high hurdle in order to be entitled to a mere quarter interest in a property whereas a half-interest would be presumptively be awarded to a married woman simply because of her marital status and irrespective of her efforts and connections to the property. 
While the joint family venture has proved to be a doctrinally useful principle that has alleviated the inequity that otherwise prejudice and disenfranchise common law spouses, it has also resulted in ad-hoc and variable decision making that forces the evolution of the law to proceed on a case-by-case basis.  Its inherent unpredictability has deterred many common law spouses from bringing claims for a proportionate share in the accumulation of wealth that their efforts have helped build.  

Thus, the new BC legislation is promising for common law spouses who enter relationships with few assets and leave it with their partners financially better off.   
- Ana Kraljevic, Toronto
Visit our Toronto Law Office website: www.wiselaw.net