Family Law with Carrie Campbell; Don’t Allow Family to Become Overly Involved in Your Divorce

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Carrie Campbell

In case there was any doubt, the Ontario Court of Appeal has confirmed that full, complete and fair financial disclosure is vital in family law. The Court also confirms it is a bad idea for third parties, such as family members, friends, etc., to become overly involved in someone else’s separation!

In February 2020, the Court heard the appeal of the case of Leitch v. Novac, and released it’s decision last week (Leitch v. Novac, 2020 ONCA 257). The appeal was of a decision released on January 31, 2019, cited as Leitch v. Novac, 2019 ONSC 794. The financial facts of the case are complicated, involving not only the couple, but also the husband’s parents, a family trust and others, as parties to the case. From reading a brief summary of the facts from the original decision, I understand the couple separated in 2012 and they have twin daughters, who are now teenagers. This is clearly a very high-conflict case, a fact made obvious by the claims begin addressed, and that it’s been 8 years since this couple separated. The Wife’s Application makes a number of allegations, including the Tort of Conspiracy, which is a very unusual claim in family law. To briefly summarize, the Wife alleges that the Husband conspired with his parents, to structure their business interests and income, such that the Husband’s income would appear to be substantially lower than reality; thereby substantially reducing his support obligations to her. Although in the initial decision, in 2019, the Judge found that the Wife did not satisfy the test to establish the Tort of Conspiracy, she went on to express her concern about this Tort being extended to family law cases in general. She noted that the Child Support Guidelines set out how to deal with income for support payors, including the power to attribute income to a payor, when it is appropriate to do so. It was obvious the Judge was also very concerned, that family courts would be flooded with cases making this claim in the future, if this claim were allowed. The Ontario Court of Appeal disagreed. At paragraph 44 of the decision, the Court noted that without proper financial disclosure, “Lawyers for recipients cannot adequately advise their clients, while lawyers for payors become unwitting participants in a fraud on the court. Judges cannot correctly guide the parties to a fair resolution at family law conferences and cannot make a proper decision at trial. Payees are forced to accept an arbitrary amount of support unilaterally determined by the payor. Children must make do with less. All this to avoid legal obligations, which have been calculated to be a fair quantification of the payor's required financial contribution.” The Court went on to state at paragraph 45 “There is a related malady that often works hand-in-hand with nondisclosure to deny justice in family law proceedings. The problem is what I will call ‘invisible litigants.‘ These are family members or friends of a family law litigant who insert themselves into the litigation process. They go beyond providing emotional support during a difficult time to become active participants in the litigation. Usually their intentions are good, and their interference makes no difference in the ultimate result. However, sometimes they introduce or reinforce a win-at-all-costs litigation mentality. These invisible litigants are willing to break both the spirit and letter of the family law legislation to achieve their desired result, including by facilitating the deliberate hiding of assets or income.”

The Court recognized that, in reality, if third parties are assisting someone by hiding assets and/or income, and if the spouse cannot make a claim against those third parties, the spouse may have no way to collect on any Judgement they receive against their husband or wife. If the assets are in someone else’s name, to get to the asset, that person must be a party to the proceeding. Ultimately the Ontario Court of Appeal allowed the Wife’s appeal and the case has now been referred back to a different judge for trial of the issues.

I agree with the Ontario Court of Appeal, although I hate that families end up in this mess. I wonder how the children are doing…and then I shake my head. We don’t need to wonder, we know how they are doing, just by reading that they have been living in unresolved conflict for at least the past 8 years – the children are Not doing well.

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