Is it a Loan or a Gift?

BarristerA classic problem that frequently occurs in family law disputes is whether the funds given to a married adult child are a gift or a loan. In Rivas v. Milionis 2018 ONCA 845 the Ontario Court of Appeal upheld a judge’s order that found that a mortgage placed by parents on their married daughter’s home did not secure a legitimate debt to the parents, as the monies advanced to the couple were a gift.

The couple purchased their family home in 2000, financing the purchase with a bank mortgage. In 2004 they encountered financial problems and the wife’s parents provided financial assistance and later agreed to pay off their mortgage, thus alleviating their tight financial circumstances. Discussions between the wife and her parents took place in 2004. The mortgage was discharged in February 2005 and in July 2005 the wife’s parents placed a new mortgage on the family home.

The husband testified that he was baffled when his wife’s parents asked them to execute a mortgage in their favour, but he realized that resisting their overture would cause conflict in the family, so he signed the mortgage documents. He also said that he cooperated to keep his wife happy and relied on her assurance that the house would always be theirs.

All was well until ten years later, when the couple separated and the wife’s parents sought to enforce their mortgage security. The court referred to the presumption of a resulting trust in a situation where there is a transfer of property from a parent to an adult child. The presumption is that property transferred from a parent to an adult child is not a gift but is held in trust by the adult child for his or her parent. Pecore v. Pecore, 2007 SCC 17. That presumption can, of course, be rebutted.

It is noteworthy that the court at first instance did not hear oral evidence, thus, none of the parties were cross-examined. The judge ruled:

“I do not accept Tasos’ [the wife’s father] evidence that the many transfers of money were loans. He stated that each of the transfers constituted a loan however, as noted earlier, there was no evidence that the parents at the very least told their daughter and son-in-law that those transfers were loans or that he communicated the loan terms of each transfer to them. I accept the husband’s evidence that the parents never suggested to him until June or July 2005 that the transfers made from 2000 to 2005 were loans.”

An important factor in the judge’s decision was the “mortgage-freedom” celebration that the parties testified about when the conventional mortgage was paid off by the wife’s parents in 2005.

Parents who generously support their adult children must understand that it is too late after the fact to suggest that monies provided are a loan, unless there is evidence, such as a promissory note, signed by the parties at the time of the advance of funds, with each party having independent legal advice.

Lawdiva aka Georgialee Lang

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This is Why We Have a Court of Appeal

GeorgiaLeeLang016People make mistakes and judges are people too…In Wang v. Sigouin 2017 BCCA 372 the parties married in 1993 and separated in 2015. The couple lived with their two children in Shanghai but had real estate in Vancouver, including a two bedroom apartment with a tenant and a one-bedroom unit that was available for family use when visiting Vancouver.

Despite the fact that litigation had already been commenced by the husband in China, the wife brought an application to the court in British Columbia asserting that she lived in British Columbia with her high-school-age daughter and sought an order for exclusive occupation of the Vancouver two-bedroom apartment.

The husband responded to the application arguing that the BC court did not have jurisdiction over the parties because neither of them ever resided in BC and also challenged the wife’s application for occupation of the tenanted apartment as it was not the parties’ “ordinary place of residence” as required by the law.

The British Columbia Court of Appeal determined that the chambers judge had been mislead and that the evidence before him confirmed that neither parent nor children resided in BC.

The evidence revealed that the parties’ daughter attended school in Shanghai. Because of the inaccurate submissions he received, the chambers judge ordered exclusive occupation of the apartment to the wife and pending the eviction of the tenant, the husband was ordered to pay the wife $400 per night so that she could pay for hotel accommodation in Vancouver, until the tenant’s departure.

The judge failed to consider the husband’s challenge to the court’s jurisdiction likely because he was told that the wife and daughter lived in BC and owned real estate in BC. Without assessing the matter the court simply agreed with the wife’s counsel that the court had jurisdiction.

Ultimately, the appeal court reversed all of the judge’s orders and sent the case back to the court to determine the issues in accordance with the law and the correct facts.

An unfortunate case where additional legal fees were incurred by the parties to correct an injustice, however, it is the responsibility of counsel to ensure that accurate information and correct legal principles are before the court.

Lawdiva aka Georgialee Lang

The Difficulty of Ridding Your Case of a “Seized” Judge.

GeorgiaLeeLang100It is not unusual, especially in family law cases, to have a judge conclude a hearing with the phrase “I will seize myself of this case”. What that means is that the judge has decided that it is reasonable, necessary, or simply prudent for him or her to hear all future court applications regarding the case.

Often this is good news to the parties and their lawyers, but other times it is a fate that is not welcomed.

Madam Justice Martinson in AA v. SNA 2009 BCSC 387 explained the rationale behind a judge seizing herself of a case:

“[77] It is imperative in high conflict family cases generally, and certainly in cases involving allegations of alienation like this one, that one member of the Court take charge of the case. Having a single judge hear cases is required by s. 14 of the Supreme Court Act:

(1) All proceedings in the court and all business arising from those proceedings, if practicable and convenient, must be heard, determined and disposed of before a single judge.

(2) All proceedings subsequent to the hearing or trial including the final order, except as otherwise provided, and on a rehearing must, if practicable and convenient, be before the judge before whom the trial or hearing took place.

[78] The reasons for doing so for all cases are obvious. The judge will be familiar with the case so the litigants do not have to explain the situation over and over again. It avoids “judge shopping” to try to get a better result. It prevents inconsistent approaches. It saves legal and other costs. There will be times in dealing with some cases when it is not convenient or practical to do so.”

In cases like the latter, judges often seize themselves with the proviso that if the matter is urgent and they are not readily available, then another judge can hear the case.

But often one party, usually the party who consistently “loses”, alleges bias and seeks to rid the case of the seized judge. Recently, the British Columbia Court of Appeal in NRG v. GRG 2017 BCCA 407 weighed in on this topic saying:

“There is much wisdom in Madam Justice Martinson’s observation that a family unit may benefit from a judge seizing him or herself of a case. That does not mean, however, that the seized judge should remain seized to the last application filed. The very fact the judge is seized of the case increases the opportunity to develop an impermissible point of view about the case or the parties, and emphasizes the vital requirement of assiduous objectivity. All trial judges will know there may come a time in the conduct of a case when the judge says, “I have done my best and should pass this to fresh eyes.” In our respectful view, this may be such a time.”

The Appeal Court noted that while the appellant sought an order from the appellate panel reversing the Supreme Court judge’s “seizure” proclamation, the Court observed they lacked jurisdiction to overturn the seizure, not wishing to interfere with the lower court’s process, and also did not characterize it as an order of the court. They suggested that a litigant must appear before the seized judge or the Chief Justice of the Supreme Court to obtain such a direction.

Frequently, a complaint against a judge who has seized himself is accompanied by an application requesting a judge to remove himself from a case based on a reasonable apprehension of bias, another application that must go before the judge in question and is most commonly dismissed.

I remember a case many years ago where I drew what I believed to be an “unfavourable” judge and convinced opposing counsel to adjourn the case so that settlement discussions could ensue. When we advised the court we were adjourning by consent, the clever judge declared that he would be seized of the case, despite hearing no evidence at all. It was clear he figured out that the adjournment was an escape from his courtroom…and he was right!

Lawdiva aka Georgialee Lang

How “Uncivil” Can a Lawyer be in Court? The Groia Case

GEO_edited-1If you are a litigator in Canada you should know the name “Joe Groia”. He is a masterful legal advocate from Ontario who specializes in securities law. His prominence in the legal profession was capped this week when Groia v. The Law Society of Upper Canada (now the Law Society of Ontario) was argued before the Supreme Court of Canada. (Law Society of Upper Canada v. Joseph Peter Paul Groia, 2012 ONLSHP 94)

Why is Mr. Groia suing Ontario’s Law Society and why would the Supreme Court of Canada agree to hear his case? In June 2012 the Law Society held that Mr. Groia had professionally misconducted himself while defending his client John Felderhof in an action taken against him by the Ontario Securities Commission. You may recall that Mr. Felderhof was second in command at Bre-X Minerals Ltd, the Canadian-owned gold mine in Borneo that turned out to be a fraud, leaving thousands of investors with losses of hundreds of millions of dollars after investing in the bogus company.

Groia’s representation of Mr. Felderhof was second-to-none, as Mr. Felderhof, after 160 days of trial, was acquitted of all charges. However, the Law Society took it upon themselves to call Mr. Groia to account for his allegedly “uncivil” behaviour during the proceedings, conduct so egregious that during the trial, lawyers for the Ontario Securities Commission asked the judge to stop the trial arguing that he had lost jurisdiction by failing to rein in Mr. Groia’s outrageously rude behaviour in the courtroom. That application failed and the trial continued.

Two Ontario courts reviewed and upheld the Law Society’s ruling against Mr. Groia, describing his trial conduct as “unrestrained invective”, excessive rhetoric”, “theatrically excessive”, “sarcastic and petulant”, “more guerrilla theatre than advocacy in court”, and “attacks on the prosecutor’s integrity”.

Nonetheless, it is noteworthy and significant to Mr. Groia’s defence that the trial judge did not hold him in contempt, neither did he report Mr. Groia’s trial behaviour to the Law Society.

Groia, in rebuttal offered the following arguments:

1. He cast no personal aspersions against opposing counsel, but only targeted the Securities Commission and the prosecution;

2. His basis for alleging prosecutorial misconduct was based on his reasonably held views;

3. His language was mischaracterized by the Law Society and the courts;

4. The tone of the trial was an important factor in assessing his conduct, particularly in light of the prosecutor’s behaviour;

5. The Law Society retroactively applied standards of the “civility movement” to his conduct; and

6. His obligation as an effective advocate outstripped any absence of civility.

Without reading the whole of the transcripts of the trial, it is difficult to assess whether Mr. Groia’s behaviour fell so far below the standard of professionalism of a barrister that he ought to have been sanctioned by the Law Society. His original punishment was a two-month suspension of his license to practice law and an order that he pay costs of $250,000. This penalty was later reduced by the courts to a one-month suspension and $200,000 in costs.

Mr. Groia would, of course, argue that even reading the transcripts one would not be in a position to assess the conduct and roles of each of the counsel and judge at the trial and that may very well be true. It’s the old story that “you had to be there” to understand the dynamics.

Media reports from the hearing in the Supreme Court of Canada this week, appear to underscore the high court’s focus on the absence of disapproval from the trial judge, who was best placed to determine whether Mr. Groia’s conduct sunk to a level where he deserved to be chastised or disciplined.

As a trial lawyer in hard-fought cases, I tend to agree that it is not the Law Society’s place to interfere as a back-seat referee in a hotly contested proceeding where an unsuccessful defence will lead to dire consequences for the accused.

The Supreme Court of Canada clearly wants to provide guidance to litigators. We must now wait to see what the Supremes think…

Supreme Court of Canada Refuses to Hear Lawyers Who Argue “Gonzo Logic”

GeorgiaLeeLang025While President Trump’s opponent are having a large-scale melt-down over his recent appointments, perhaps the most consequential of these appointments is his nomination of Justice  Neil Grosuch to replace the late Justice Scalia on the United States Supreme Court.

But lest you think that Canada’s judicial appointments lack the intensity and angst of our American friends, you need only refer back to Prime Minister Stephen Harper’s appointment of Federal Court of Appeal Justice Marc Nadon to the Supreme Court of Canada in 2013.

You may also recall that Ontario lawyer, Rocco Galati, challenged Mr. Harper’s appointment by filing a lawsuit against Mr. Harper, the Governor-General, Justice Nadon, the Attorney-General, and the Minister of Justice, which undoubtedly prompted the government’s prompt action to have the Supreme Court of Canada issue a ruling on Justice Nadon’s eligibility for our highest court, this after he had already been appointed.

The argument against his appointment was that Mr. Justice Nadon, as a  Federal Court judge, was not qualified to represent Quebec on the Supreme Court of Canada, despite his long tenure as a lawyer in Quebec.

The eventual outcome confirmed Mr. Galati’s position that Judge Nadon was not eligible, a surprise to the Harper government who had contrary opinions from two retired Supreme Court of Canada justices and several constitutional experts.

Most of this has been long forgotten by Canadians, but Mr. Galati’s 2016 application to the Federal Court of Appeal to be paid $800.00 per hour by Canadian taxpayers for his legal work in bringing this challenge has brought this case back to media scrutiny, particularly in light of the Supreme Court of Canada’s decision this week to refuse to hear the case.

Mr. Galati claimed the sum of $51,706.00 and his co-counsel, Paul Slansky, wished to be paid $16,769.oo, again at a rate of $800.00 per hour.

Both counsel admitted that this is not the hourly rate they normally charge, but this amount reflects their years at the bar and their expertise, a proposition that was soundly rejected by the Federal Court of Appeal in their Reasons.

The Court found that Mr. Galati’s and Mr. Slansky’s request for full indemnity for their legal services, called “special costs” was unwarranted for a variety of sensible reasons. For starters, their litigation did not decide the outcome of the Nadon issue, as shortly after they filed their action, the Supreme Court of Canada stepped in, thus ousting their private action. They were not successful litigants.

As well, “special costs”are only awarded when the opposing litigant’s behaviour has been egregious, even outrageous. Short of that, a costs tariff comes into play, a tariff that is far from reimbursement for all legal costs. Additionally, Mr. Galati and his colleague were representing themselves and were actually in-person litigants, not entitled to costs.

The Federal Court also remarked that experienced counsel would know that if costs were to be awarded, the tariff rules would govern. But the court’s ire was raised in response to Mr. Galati’s argument that the constitution supported his request for special costs and that to deny his claim was to be evidence that the Federal Court was “in bed” with the federal government.  To this audacious statement the court replied:

“It is therefore unnecessary for me to deal with the argument as to constitutional entitlement as it does not arise on these facts. That said, it sometimes occurs that a party makes an argument that is so scandalous that it deserves to be condemned, whether it arises on the facts of the case or not. This is such a case.”

The Court found that Mr. Galati’s  allegation of collusion between the court and the government was “reminiscent of the Gonzo logic of the Vietnam War era, where entire villages were destroyed to save them from the enemy…this argument deserves to be condemned without reservation.”

Regrettably, it is cases like this that lower the reputation of lawyers to right-thinking members of the Canadian public. But “gonzo” aptly describes arguments that are “weird, eccentric and crazy”.

Lawdiva aka Georgialee Lang

 

 

 

 

Bob Dylan: Nobel Prize in Literature and Legal Muse

GeorgiaLeeLang057This past weekend I saw Bob Dylan perform in concert in Indio, California, a musical extravaganza that featured Dylan, Neil Young, the Rolling Stones, The Who, and Paul McCartney, but it was Dylan’s weekend, as he was feted by his fellow artists for his Nobel Prize in Literature. He joins luminaries such as Jean Paul Sartre, Alice Munro, Doris Lessing, John Steinbeck, Albert Camus, Boris Pasternak, Harold Pinter, Toni Morrison, and many others, 113 awarded thus far.

As relevant today as he was in the turbulent 60’s, Dylan’s music and lyrics captured the imagination of a whole generation and became the soundtrack for America’s civil rights and anti-war movements. And his poetry remains as profound today as fifty years ago.

University of Tennessee  Professor Alex Long scoured legal databases for the year 2007 and found that Bob Dylan’s lyrics were cited in Reasons for Judgment 186 times, compared to 74 for the Beatles, 69 for Bruce Springsteen,  Paul Simon, 59; Woody Guthrie, 43; the Rolling Stones, 39; the Grateful Dead, 32; Simon & Garfunkel, 30; Joni Mitchell, 28; and R.E.M., 27.

Several appellate judges in California have said “You don’t need a weatherman to know which way the wind is blowin’ ” from the song “Subterranean Homesick Blues” in reference to the fact that an expert isn’t required to offer an opinion when any layperson could discern the facts.

Even the United State Supreme Court has relied on Dylan’s lyrics to make a point. Chief Justice John Roberts Jr. quoted Dylan’s line “If you ain’t got nothing, you’ve got nothing to lose” from his song “Like a Rolling Stone”.

And the late Justice Antonin Scalia, in a case involving privacy protection for employees that use company email, said “The times they are a-changing’ is a feeble excuse for disregard of duty”.

I wonder if a Judge will ever recite this line from Dylan’s “Hurricane” , Dylan’s ode to wrongfully convicted Rubin “Hurricane” Carter.

“The trial was a pig-circus he never had a chance”

Lawdiva aka Georgialee Lang

Should This Be Stopped? Foreign Mothers Give Birth to Children in Canada to Secure Citizenship

DSC00275_1Canada, the true north strong and free, is the envy of the world and one of its most valuable assets is its citizenship. Before the Harper government left office they made sweeping changes to Canada’s Immigration Act, making it more difficult to qualify for citizenship. Meeting great opposition however, the Conservative government did not tackle  the phenomenon of “birth tourism”, a subject that remains  highly controversial, particularly in Vancouver.

Those who favour birth tourism argue that innocent children, born in Canada to a foreign mother, should not be deprived of the benefits and advantages of  birth citizenship, saying that to ban birth citizenship is a racist response to what is a miniscule practice in Canada.

Kerry Starchuk of Richmond BC, a suburb of Vancouver, is an advocate for a ban on birth tourism. She has organized a petition to raise the issue in the House of Commons this fall. Backed by Conservative Member of Parliament Alice Wong, the petition was posted on-line in mid-June 2016 and quickly acquired more than double the 500 required signatures to be referred to the House of Commons.

The petition favours the elimination of birthright citizenship in Canada unless one of the parents of the child born in Canada is a Canadian citizen or permanent resident of Canada.

Ms. Starchuk’s chief complaint is that her home for 28 years is now bordered by a “maternity motel” for pregnant women from China, one of several such homes in Richmond. Local Chinese newspapers and websites in Vancouver and Asia display advertisements soliciting Mandarin-speaking mothers, and promote the advantages of delivering a baby in Canada, suggesting that having a Canadian child will assist them to obtain citizenship as well.

Services offered include airport shuttles, language translation services, provision of obstetricians, and assistance with birth certificates, child tax benefits, medical coverage,  social insurance numbers, and passport and visa applications. These maternity motels boast of healthy  food prepared by professional chefs and describe  views of the snow-capped north shore mountains from their  facility.

China and Hong Kong are well-versed in the potential exploitation of birth tourism, a phenomenon they struggled with when mainland Chinese mothers travelled to Hong Kong to give birth in order to obtain better health care, Hong Kong residency, and the freedom to dodge China’s one-child policy. Until Hong Kong  passed laws banning birth tourism in 2013, statistics indicate that up to half of all children born in Hong Kong had parents who lived elsewhere.

Immigration lawyer Richard Kurland presents the argument that this isn’t really a  Canadian problem, citing the huge number of foreign workers and long-term visitors to Canada of over a million people per year, compared to 232 births attributed to birth tourism.

I predict that Ms. Starchuk’s petition will languish just like similar proposals to rid Canada of birth tourism.

Interestingly, Canada and the United States are the only G7 countries that permit babies born on their soil to obtain citizenship.

Lawdiva aka Georgialee Lang