Lawyer Sues Complainant in Law Society Matter After Complaint Dismissed

DSC00280In 2014 Pieter Verbeek, an Ontario lawyer called in 1984, acted for a client in a construction lien matter and in the course of his retainer, contacted a contractor who had failed to pay his client’s bill.

He corresponded with the contractor but on instructions from his client turned the matter over to a collection agency and ignored later telephone calls from the contractor.

Several months later the contractor received collection agency letters, and believing them to be a “sham”, he complained about Mr. Verbeek to the Law Society, alleging fraud and unprofessionalism in failing to return his earlier phone calls.

In April 2015, the Law Society determined they had no jurisdiction to investigate the fraud allegation, but considered Mr. Verbeek’s failure to return calls to the contractor, cautioned Mr. Verbeek about communication obligations, and closed their file.

Mr. Verbeek was upset by the assertion that he participated in a “sham” and in October 2015 filed a lawsuit against the contractor/complainant in Small Claims Court seeking compensation for loss of reputation, defamation and injurious falsehood.

In January 2016 the parties attended an unsuccessful settlement conference in Small Claims Court and Mr. Verbeek was expected to book trial dates. However, he failed to continue with his lawsuit and the suit was dismissed for delay.

In June 2018 the complainant, who had retained counsel to defend him, again complained to the Law Society alleging that due to Mr. Verbeek’s actions he had lost the opportunity to obtain costs in respect of the failed lawsuit.

In January 2020 Mr. Verbeek sent an apology to the complainant and a cheque to cover some of his costs.

The Law Society reprimanded Mr. Verbeek saying:

“Suing the complainant because he complained to the LSO, in our view, may erode public confidence in the legal profession. Such conduct could create a “complaint chill” if members of the public believed making a complaint could put them at risk of retaliatory litigation. It also fails to inspire the confidence, respect and trust of the community and gives an appearance of impropriety. In essence, such conduct does not reflect favourably on the legal profession.”

We’ve all been there…unfounded allegations, indiscreet criticism, but as lawyers, it is necessary to develop a “thick skin”…clients come in all shapes and sizes, some adore their lawyers, others walk away displeased….a sober second thought is required when one thinks that retaliation is an appropriate response to difficulties…

Law Society of Ontario v. Verbeek 2020ONLSTH 52 Canlii

Ex-Husband’s “Retirement” Does Not Pass the “Smell” Test, So No Termination of Spousal Support

GeorgiaLeeLang057George Dooley, of Nova Scotia, came to court seeking to be relieved of his monthly spousal support obligation, which came into effect in May 2014, to his ex-wife, Bernice Dooley. The Dooley’s had been married for 34 years, and at the time he sought to vary the spousal support of $5,000 a month, each of them was in their mid-sixties. Dooley v. Dooley 2020 NSSC 109

Mr. Dooley alleged four material changes in his circumstances, as follows:

a) Canada Revenue Agency had reassessed him and he was required to pay $295,000 in taxes;

b) he had retired;

c) he had separated from his second wife, Laurie;

d) he had financial obligations to the three children of his second marriage.

The court considered each alleged material change in turn, beginning with his CRA reassessment. The evidence indicated that the reassessment took place in 2017 and that he had additional debts including a $375,000 mortgage and $60,000 in consumer debt. As a result he had declared bankruptcy on May 1, 2017 and was entitled to an automatic discharge in January 2018.

Rejecting the CRA reassessment as a material change sufficient to invoke section 17 of the Divorce Act, the court remarked that with his bankruptcy, all of his debts disappeared, leaving him in a better position to pay support than before the bankruptcy. The court also noted that arrears of support are not cancelled by a bankruptcy.

With respect to his retirement, the parties’ earlier agreement provided that retirement would be considered a material change in circumstance, however, Bernice Dooley maintained that her ex-husband had not retired. Mr. Dooley opened Dooley’s Pharmacy in 1984 and retained it after their divorce. He began receiving his Canada Pension Plan in 2015 and sold his interest in Dooley’s Pharmacy in September 2015, receiving $455,000 from the sale. He alleged that all of this money was now gone.

He had also retained the family home after the 2014 divorce, which he renovated shortly thereafter. However, after receiving the funds from the sale of the pharmacy he tore down his newly-renovated home and built two homes on the property, one home for himself, his second wife and her three children; and one for Laurie Dooley’s parents.

After the sale of his business he remained working for the new owner as a pharmacist, with no guaranteed hours. In an affidavit dated August 2016 he deposed that he had not worked since May 2016, however, in a November 2019 affidavit he swore that he continued to work part-time during 2017. He had also worked at several other pharmacies in Nova Scotia prior to his move to Nunavut in September 2017. Throughout the period he maintained his pharmacy license.

Two months after his divorce from Bernice, he married Laurie Dooley, separating from her 19 months later, but not before he adopted her three children, 10-year old twins, and a 16 year-old. The adoptions were finalized shortly after the date of their separation. His new in-laws lived rent-free in the second home he built.

The court rejected his assertion that he was retired, remarking that his acquisition of additional financial obligations, including a second wife and three children, led to the conclusion that he could not afford to retire.

Moving on to consider whether the separation from his second wife and assumption of financial obligations with respect to his three adopted children, constituted a material change, the court noted that Mr. Dooley failed to provide evidence to establish the circumstances of his newly acquired family at the date of his divorce, making it impossible to determine if a change of circumstance had occurred.

Mr. Dooley and his second wife executed a separation agreement in February 2017, wherein each of them waived spousal support and each kept their own property. They agreed that they would both reside in the family home and either of them could, at a later date, apply to court to divide the home. There were no provisions for custody or child support in the agreement. However, he swore that he paid child support to Laurie Dooley for the three children, in the amount of $2,729, a sum that pursuant to the Nunavut guidelines required an annual income of $137,000.

Mr. Dooley’s evidence was inconsistent as he alleged that Laurie Dooley had claimed spousal support in their divorce petition, but later said she had not. Despite a request to provide a copy of the divorce petition, he failed to do so.

The court determined that Mr. Dooley had not proved, on a balance of probabilities, that his separation from Laurie Dooley had affected his ability to pay spousal support to his first wife:

“because there is no evidence they were in a relationship or, if they were, the nature of their relationship when the support order was granted…I don’t know whether the children were part of his household and being support by him when the spousal support order was granted. Certainly, if they were, then the current obligation to support them (even if now formalized in adoption orders) isn’t a material change”.

Not surprisingly, the first Mrs. Dooley queried whether her ex-husband’s alleged separation from his new wife, after 19 months, was bonafide, and I agree that her suspicions were well-founded. This sounds like a classic “sweetheart” deal and does not pass the smell test. Unfortunately, for him, his ill-conceived strategies were too far-fetched for even his QC lawyer to overcome and his application was dismissed.

In Mr. Dooley’s current financial situation, his retirement is years away, which is in keeping with Statistics Canada’s findings that 49% of Canadians 60 years or older are working “out of necessity”.

20-Year Spousal Support Battle Comes to an End

GAL & PAL #2jpgJoan and Michael Beninger have occupied considerable court time in British Columbia and are notable frequent flyers in British Columbia courts dating back to 2000.

With ten reported cases, including three in the Court of Appeal, they have likely spent a small fortune litigating spousal support, most recently in 2019.

In Beninger v. Beninger 2019 BCSC 366 the court entertained an application by Mr. Beninger who sought to terminate spousal support. His former wife cross-applied for retroactive spousal support based on her position that her ex-husband had not paid sufficient support as his Canada Pension income has not been included in the calculation of his total income.

The Beninger’s were married in 1975, separated in 2000, had a trial in 2003, and were now in their sixties. Mrs. Beninger was a traditional housewife and homemaker, raising four girls. Her ex-husband was a tax lawyer who retired in June 2018, hence his application to be relieved of his support payments.

At the time of separation the parties had limited assets due to business investments that had collapsed and in 2001 Mr. Beninger became a bankrupt. He was also on disability leave from his law practice. He returned to full-time employment in 2006 and remarried a woman with significant inherited assets.
Over the years,

Mr. Beninger’s payment of spousal support ebbed and flowed in varying amounts. At trial he was ordered to pay $6,500.00 a month and child support of $2,000 a month for one dependent child, on income of $312,000 per annum. In 2004 his spousal support payment was reduced to $2,000 a month, but by 2006 his income had again increased, and the British Columbia Court of Appeal ordered him to pay $9,000.00 a month. In 2008 he was ordered to pay $10,000.00 a month, an amount confirmed by the BC Court of Appeal.

Over the years he continued to pay support for his dependent daughter in ever increasing amounts. In a 2010 application Mr. Beninger succeeded in terminating his daughter’s support as she was now in graduate school. During the child support application referred to above, Mrs. Beninger sought to have her former husband’s new wife’s income included in the court’s assessment of income, but the court declined to do so.

In 2011 Mrs. Beninger brought an application to increase spousal support based on the termination of child support payments. The court agreed that this was a material change and ordered Mr. Beninger to pay $12,965.00 monthly retroactive to November 1, 2010. The intent of the order was to ensure that Mrs. Beninger received 45% of her former husband’s net disposable income.

In 2012 the parties consented to reduce spousal support to $10,155.00 per month. In 2014 Madam Justice Fenlon, who had remained seized of the case since 2008, established a formula that provided that each year Mrs. Beninger would be paid 45% of Mr. Beninger’s net disposable income.

Despite the court’s attempt to put an end to annual court hearings, the parties could not agree and in 2013 and 2014 they again appeared before Judge Fenlon. At the time of his application to terminate support he was paying support of $11,202.00 a month.

The evidence showed that at the age of 66, in February 2018, Mr. Beninger advised his law firm that he would retire in October 2018. The firm accepted his retirement but requested that he leave in June 2018. Mr. Beninger testified that his practice had been winding down for several years as his hours and billings decreased, making his practice less financially viable for the firm given the significant overhead. Mr. Beninger had commuted to his work at Bennet Jones in Calgary from Vancouver for twelve years while his second wife remained living in Vancouver.

He also deposed that the commute and general demands of a law practice were more than he could manage at his age, particularly given his health conditions, namely, high blood pressure, high cholesterol, and osteoarthritis. His family doctor had recommended retirement in order to reduce his stress level.

He also reported that shortly after his June 2018 retirement he and his wife had moved to Mexico and were living in a condo purchased for $445,000.00. His retirement income was less than $10,000 per annum in Canada Pension Plan payments. He owned assets valued at $200,000 and a Canada Revenue tax debt of $45,000. He had negotiated a without prejudice reduction in spousal support with Mrs. Beninger and was paying $5,000.00 at the time of the termination hearing.

Mrs. Beninger’s retirement income amounted to approximately $21,000 per annum and she owned assets valued at $345,000 and had no debt.

The chambers judge determined that Mr. Beninger’s retirement was entirely reasonable given his age, of 67 at the time of the hearing, the decline in his practice, and ongoing health issues. She also remarked that Mrs. Beninger acknowledged, as early as 2011, that “time was running out”.

Finding a material change led the court to move to the next step of the analysis as to whether spousal support ought to be paid post-retirement. She reviewed the principles of compensatory support and found that after 20 years of support amounting to $1.8 million dollars, Mrs. Beninger had been fully compensated for the disadvantages arising from the marriage and the marriage breakdown. However, on the basis of need, she accepted that Mrs. Beninger would face hardship. However, anything more than a nominal payment would find the second Mrs. Beninger responsible for her husband’s support payments. She said:

“ I am not aware of any basis in principle or precedent to consider the separate financial means of a payor’s new spouse in establishing the quantum of non-compensatory support.”

Ultimately, the court balanced the equities between the parties and ordered Mr. Beninger to pay transitional spousal support of $2,500.00 a month for a period of six months, to terminate thereafter. The application that Mr. Beninger pay retroactive support based on CPP income was dismissed based on a double dipping argument.

Based on the Beninger’s track record, it would not surprise me if this decision is appealed by one of the parties, but that remains to be seen.

The upshot is that after a 25-year marriage and 20 years of spousal support, this high-income earning spouse shared his income with his ex-wife and child in a fair manner. Both parties suffered from the fact there were no assets to divide at the end of their marriage. I expect the family debt was erased with Mr. Beninger’s bankruptcy in 2001.

The parties separated when Mrs. Beninger was in her late 40’s when she might have obtained some kind of employment, but earlier decisions indicate that after several failed attempts she was not employed after the demise of her marriage.

From her current asset disclosure it appeared she had not tucked away any monies from the considerable amount of support she received over the years. Mr. Beninger will enjoy the benefit of a financially stable partner, while his ex-wife will unfortunately join the ranks of elderly women who live near the poverty line, which BC government data indicates is less than $20,000 per annum for a single person.

Sixty-Year Old Retired Spousal Support Payor Must Continue to Pay Support

McPherson v. McPherson 2019 BCSC 933 is one of the many cases where an ex-husband paying spousal support voluntarily retires and then asks the court to terminate his spousal support obligation. In this case the retiree was 60 years old and had 24 years of contributory service, thus earning an unreduced pension of $2,300 a month. His ex-wife’s share of the pension was $800 a month.

The parties were married for just over 20 years and were divorced in 2005. Their mediated settlement terms were incorporated into the divorce order and compelled Mr. McPherson to pay spousal support of $1,200 a month with no end date.

However, oddly, there was a provision that he could bring on a review application in 2007 in the event of a material change in financial circumstances. He brought an application to terminate support in the spring of 2007 and his former wife sought an increase in support, however, both applications were dismissed, and he continued to pay support.

The Court learned that the marriage had been a traditional one with the wife working as a hairdresser at the outset of the marriage but later remaining at home to care for children. At the time the support was negotiated Mr. McPherson earned $56,000 per annum. At the date of his 2019 application he had retired from a position that paid him $112,000 per year. The Court remarked on his good health and his stated desire to spend time training rescue dogs.

The Court confirmed that “Law Courts have no power to compel people to work” but also stated that if a healthy individual with a spousal support obligation retires at an earlier-than-expected age, the question to be answered is “Is that decision reasonable in the circumstances?”

The Court held that given Ms. McPherson’s ongoing entitlement to compensatory support, and Mr. McPherson’s age, health, occupational history, and other circumstances, his decision was unreasonable and unfair. His application was dismissed.
The Court also recited Professors Rogerson and Rollie, from the Spousal Support Advisory Guidelines: The Revised User’s Guide April 2016, as follows:

“When will a retirement be described as “early”? The courts are not always clear. For our purposes, an “early” retirement is either a retirement on a reduced pension or a retirement on a full or unreduced pension before 65 years of age, in the absence of health issues or other special circumstances. If the court sees the early retirement as “voluntary” and not necessary or reasonable, then it is likely that spousal support will not be changed. …”

This is but one of the many cases where voluntary retirement before the age of 65, where there are no health issues, but a mere wish to “stop and smell the roses” does not fly with the BC Supreme Court. I presume that Mr. McPherson’s receipt of a full pension prompted him to believe that his retirement at age 60 would not be questioned. He learned differently.

Tort of Conspiracy Has a Place in Family Law Says Appeal Court

GeorgiaLeeLang057Jennifer Leitch and Anthony Novac cohabited for 17 years, had one child, and separated in September 2012. Ms. Leitch was a litigator for 9 years, but after Mr. Novac’s sale of his online gaming platform for $11.5 million, she went back to university for graduate work in law and began teaching part-time at Osgoode Hall and the University of Toronto Law School, earning about $30,000 a year.

Anthony Novac was an entrepreneur who worked in the casino and gaming industry for 20 years. Anthony’s father, Michael Novac, incorporated Sonco Group Inc. which held real estate and various gaming enterprises. Anthony worked as an executive for Sonco. However, by the time of the parties’ separation, Jennifer and Anthony’s wealth had been significantly depleted.

During the disclosure phase of their matrimonial litigation, Anthony said his income was $125,000 per annum. Ms. Leitch took the position that Anthony had hidden assets in the casino industry and had additional income he failed to disclose.

She sued Anthony, his father Michael, other Novac family members, the company Sonco, and two Novac family trusts for six separate tortious conspiracies and engaged in a nine-day summary trial in Ontario’s Superior Court of Justice.

Mr. Justice Gilmore dismissed her conspiracy claims, and made the following findings:
a. There is no evidence of an agreement;
b. Inaccurate representations by Anthony about his income were not made in concert with Michael;
c. The steps taken by Michael were not intended either actually or foreseeably to harm Jennifer; and
d. None of the actions of Michael or Anthony were wrong at law.

The chambers judge held that Jennifer could still pursue her theory of undisclosed income by seeking imputation of income at trial. Jennifer was ordered to pay costs of $340,000 to her husband and costs of $900,000 to the other defendants. Her assets were frozen when the court acceded to Anthony’s application for security for costs.

On appeal Jennifer asserted that “the factual footprint of the conspiracy claim is substantially the same as the support issues that remain for trial.” Her submission was that, by finding that her father-in-law had the right to allocate to himself the entire proceeds of the buyout, but also that it was open to a trial judge to impute to Anthony part of those proceeds as a remedy for the artificiality of Michael’s allocation to himself, the motion judge created a material risk of inconsistent results. The appeal court agreed, finding an error in law, and noted the absence of any legal analysis for the chambers judge’s decision to bifurcate this issue from the trial issues.

Jennifer’s main appeal centred on Judge Gilmore’s order focusing on one particular allegation of conspiracy involving the River Cree Casino, owned by the Enoch Cree Nation, where her husband, Anthony, was the project manager on behalf of Sonco and was to be personally paid 40% of the management fees payable to Sonco over the term of the contract.

In 2015 the Enoch Cree Nation decided to take over management of the casino and bought out Sonco’s contract for $5.75 million. At the heart of the conspiracy was the fact that Anthony’s father, Michael, retained the entire buy-out payment. Jennifer asserted that her husband and her father-in-law conspired to temporarily divert Anthony’s share of the proceeds so she would receive less in spousal support.

In support of her position she submitted three memos drafted by Sonco’s external accountants, documents that were only disclosed when Jennifer commenced her conspiracy action naming multiple parties. Portions of the memos read:

“Michael Novac takes his tax free proceeds and lends to Antony [sic] his portion as a loan that will be forgiven when Anthony’s divorce is final…
This keeps income out of Anthony’s hands….So based on this model the complete after tax cash flow, both corporate and personal, will be $5,030,772? This will be the cash available personally for distribution between Michael and Anthony?”

The appeal court found that the lower court’s hesitation to permit a tort action to invade the realm of family law was misconceived, recognizing that the Superior Court was clearly motivated by the view that the family law statutory scheme was a complete code and that “conspiracy was too blunt an instrument to use to get at the buyout proceeds for support purposes”.

The appeal court determined that the tort of conspiracy was a valuable tool in the judicial toolbox to respond to the type of misconduct alleged by Jennifer and if it was not available, co-conspirators would have “no skin in the game.” The court rejected the notion that compensation paid by the defendants for conspiracy was contraindicated because it was akin to “punitive damages”.

The appeal court also observed that while nondisclosure in family law cases was the “cancer” of family litigation, equally problematic was the issue of “invisible litigants”, namely family members and friends willing to break both the spirit and letter of the law by facilitating the deliberate hiding of assets or income.

The court allowed the appeal, set aside Judge Gilmore’s order and vacated the costs orders against Jennifer. She was awarded costs of the appeal in the amount of $50,000. Leitch v. Novac 2020 ONCA 257

Lawdiva aka Georgialee Lang

Deference to Arbitrator Falls When Best Interests of Child Are Overlooked

GeorgiaLeeLang009In Canada, courts are becoming increasingly deferential to arbitrators as a result of opinions from the Supreme Court of Canada, namely, Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, and the rapid growth of arbitration, as our court system continues to flounder under the weight of increased traffic and the related costs.

While family law arbitration has been practiced for many decades in Ontario, it is still in its infancy in British Columbia, after being introduced in 2013.

British Columbia’s leading case is McMillan v. McMillan 2016 BCCA 441 where the court established the following principles:

1. an arbitrator’s findings of fact are not open to review;
2. questions of law are questions about what the correct legal test is;
3. questions of mixed fact and law permit a review on the standard of reasonableness, nor correctness;
4. deference to the family law arbitrator calls for “respectful attention” to the reasons offered, or which could have been offered; and
5. the overriding test of reasonableness is whether the decision falls within a range of possible acceptable outcomes which are defensible in respect of the facts and the law.

These legal maxims were at play in the British Columbia Supreme Court’s consideration of an appeal from a family law arbitration award in Forrest v. Forrest 2019 BCSC 1323.

The uncontested facts presented to the arbitrator included the following:

1. Ms. Forrest, age 42 was self-employed as an interior designer and television personality. Her husband was a self-employed Project Manager with one client, BC Hydro.

2. The parties cohabited for 14 years, living initially in Ontario, then in BC and then back again in Ontario. Each of them had two adult children from previous relationships and together had three more children, a boy age 17 and twin girls, age 10. The parents both participated in parenting their seven children.

3. They separated in November 2013 in Ontario, where Ms. Forrest remained with the three biological children while Mr. Forrest moved to British Columbia, although he visited his children often and maintained a rental property nearby his children for a time. In August 2016 Ms. Forrest and the children moved to BC in order to attempt a reconciliation, which ultimately failed.

4. The parties together worked out a parenting schedule from the date of separation until early 2018 when Ms. Forrest announced that she wished to move back to Ontario for employment purposes.

Prior to the 4-day arbitration the parties agreed their 17-year-old son would remain with Mr. Forrest on Vancouver Island. The arbitrator ruled that the twin girls would also remain with their father. Ms. Forrest appealed the arbitrator’s award on the following grounds:

1) That the arbitrator misapprehended and misapplied the best interests of the child test pursuant to s. 37 of the Family Law Act (“FLA”).

2) That the arbitrator made a status quo preference error contrary to sections 37(2)(e), 40(4), and s. 46(2) of the FLA.

3) That the arbitrator failed to conduct a blended analysis by deciding location separately from parenting arrangements contrary to the requirement of section 45 of the FLA.

4) That the arbitrator misapprehended and misapplied the relocation test pursuant to s. 46 of the FLA.

Mr. Justice McIntosh reviewed the findings of fact made by the arbitrator and identified a number of key findings, including:

a) Ms. Forrest “wishes to move in order to pursue her career. She wishes to be as successful as possible, both in order to achieve financial independence and for personal satisfaction. I take no issue with this. I also accept that her opportunities for success in her line of work are in Toronto and not here in Victoria”.

The Court noted that Duggan v. White 2019 BCCA 200, provided ample support for Ms. Forrest’s relocation to Toronto in order to achieve financial independence and career satisfaction, “without that in any way being held against her in the relocation analysis at the heart of this case.”

2. “I find that the emotional health and well-being of the twins would best be served if they could be with their mother. I accept Dr. Colby’s opinion that they would experience emotional harm and would require therapy in order to adjust to their mother’s absence should she move to Toronto without them.”

Judge McIntosh observed that the arbitrator unequivocally accepted Dr. Colby’s opinion that the twins would be best served by being with their mother and she included a counselling provision for the girls to assist them to adjust to living such a distance from their mother. He also remarked that the evidence revealed that the arbitrator’s December 10, 2018 decision was not released until January 20, 2019, wherein the arbitrator “took the unusual step of offering Ms. Forrest three years’ of additional spousal support and increased parenting time if she remained in the Saanich area”, albeit the arbitrator was aware that Ms. Forrest was moving to Toronto.

3. “The twins want to be with their mother. Dr. Colby finds the twins to have a “chronological and gender affinity with their mother” which he finds to be “age appropriate”. I also find that this affinity is present. However, I find that it [is] not simply due to their age and their gender. I find that Amanda has in the past been the primary parent in their lives, taking care of the details of their life, and as such it feels safer and more comfortable for the girls to be with their mother going forward.”

4. “I find that Amanda has been the primary caretake for the twins…I find that Amanda has been more present for the twins….Amanda has taken the leadership role…I find that the history of care of the twins to be a persuasive factor to move the twins to Toronto”…I find Amanda to be a good parent…I do not accept Dr. Colby’s conclusion that the is trying to undermine Stephen’s relationship with the twins….I also believe Dr. Colby got it wrong when he believed that Stephen was an equally involved parent….I find that Amanda’s parenting plan is a better one than Stephen’s”.

Because of these findings, one is stymied as to how the arbitrator came to her final decision that the twins would not relocate with their mother. Mr. Justice McIntosh determined that the facts found by the arbitrator indicated a “clear breach of section 37 (3)” regarding the best interests of the child.

The critical error of law made by the arbitrator was her conflation of the parties’ 17-year-old son’s evidence that he wanted to remain with his father and did not want to be separated from his twin sisters. The problem was that the arbitrator failed to consider only the best interests of the twins. She negated their best interests and allowed their brother’s desires to trump what was best for them. The arbitrator also relied on the twin’s relationship with extended family in Victoria to favour their Victoria residence.

Judge McIntosh considered whether he ought to remit the case back to the arbitrator or amend the arbitration award to reflect the twins’ move to be with their mother, and chose the latter, pursuant to section 31 (4) of the Arbitration Act.

An interesting case that ultimately resulted in four days of court, after a 4-day arbitration.

Lawdiva aka Georgialee Lang

Appeal Court Upholds Reversal of Custody Due to Alienation

B9316548187Z-1.1_20150314202542_000_GFTA6A1QO.1-0The Alberta Court of Appeal recently upheld a chambers judge’s decision to reverse custody of two children, ages 13 and 10, where their custodial parent refused to comply with parenting orders and related counselling orders. B (RM) v. B (DT) 2020 ABCA 11 (CanLII)

The father and mother separated in 2011 and enjoyed shared parenting for six years. In November 2017 the father brought an application to have physical custody of his 11 year-old daughter after obtaining a Views of the Child report. The author of the report expressed concern that the child’s viewpoint and language were atypical of a girl her age.

In January 2018 the girl began living full-time with her father and refused to see her mother. Later in January 2018 the court ordered that the parties return to a shared parenting regime and attend counselling. Six months later the case management judge ordered the girl to have week/on week/off parenting with each parent; that her brother reside with his mother; that mother and daughter attend counselling; and that the orders be enforced with police assistance as required.

Two months later a further order provided that mother would parent her son, the daughter would live with her father and each child would spend weekends with the other parent. Another counselling order was made requiring both parents to attend. The counselling commenced three months later but was abandoned by February 2019 due to a lack of participation by the father. The same month the son left his mother’s home, despite the court order, and returned to live with his father. The Court observed that the father did nothing to facilitate his son’s return to the mother’s home.

A month later the Court ordered an expedited three-day hearing and ordered counselling for the children and separate counsellors for each of the parents. In April of 2019 the Court ordered the mother to have parenting time every second weekend with her daughter, and shared parenting of their son. The court order contained this provision:

“this gives [the father] an opportunity to demonstrate to the court at the June hearing that he is willing and able to facilitate parenting time to [the mother]

if the [father] can demonstrate to this court that he will abide by this Order, the risk his parenting time in June 2019 will be suspended is decreased.”

Despite these orders the mother had no contact with her children.

The expedited hearing occurred in August 2019 over four days. The court heard from three experts who had been involved with the family. The Court determined that each parent had engaged in alienating behaviour and made derogative statements about the other parent.

However, the judge found that the father’s behaviour had instigated the family problems and that if it continued, the children would suffer continued harm. As well, because the previous orders of shared parenting were unsuccessful, the remaining options were to do nothing and leave the children with their alienating father, or direct a custody reversal by placing the children with the rejected parent.

The judge’s conclusion was that the mother would have primary parenting and sole custody of both children, with the father having no contact with the children. The father was also found to be in contempt of five previous orders commencing in January 2018.

The father’s grounds of appeal, which included challenging certain factual findings; asserting that the chambers judge misapplied the best interests test; and seeking to introduce fresh evidence, were rejected, but most notable was his utter failure to offer a viable solution. What he wanted was the return of the children…a complete non-starter.

What this case illustrates is the Court’s apparent inability to provide timely solutions to egregious situations…the alienation in this case began in 2017 and it took until January 2020 to craft a solution that would end the father’s reign of control and obstruction.

We need to do better than this.

Lawdiva aka Georgialee Lang

Appeal Court Refuses to Order Release of Unedited Reasons

Olga Routkovskaia and Michael Gibson represented themselves in a 14-day trial before Provincial Court Judge Steinberg. In a decision handed down on September 7, 2018 the judge made orders for joint guardianship of their 12-year-old child, parenting time for Mr. Gibson to include every second weekend from Thursday to Monday, regular telephone time, and an equal division of holiday parenting time. He also ordered a review of his orders in April 2019.

Ms. Routkovsaia appealed the order to the British Columbia Supreme Court alleging that the trial judge wrongly applied the best interests test and incorrectly assessed family violence. Her appeal was heard by Mr. Justice Ball who after reviewing the transcript of Judge Steinberg’s Reasons, dismissed it, on the basis that it was an interim order, not subject to appeal. Ball J. also said:

“The recorder had difficulty recording reasons because there were often two persons speaking. What is clear from the transcript is that there was a conversation between Ms. Routkovskaia and Judge Steinberg. Judge Steinberg is a very experienced member of the court, he would not have tolerated the kind of consistent interruptions which took place here while he was giving reasons. It is difficult enough to give reasons without being repeatedly interrupted with references to bits of evidence and statements to the effect that “I disagree with this, and I disagree with that”. This is simply a conversation intending to lead to a further hearing which occurred and not a final order.”

Ms. Routkovskaia appealed Justice Ball’s decision to the BC Court of Appeal submitting that he erred in law by finding that the trial order was an interim order. She also alleged a reasonable apprehension of bias and requested the appeal court to order the release of Justice Ball’s unedited Reasons. Ms. Routkovskaia maintained that the edited Reasons failed to reflect evidence of bias and that she needed the unedited transcript to prove her allegations. She deposed that after listening to the audio recording of the Reasons she noted differences between what the judge said in court and what he later released as his Reasons.

Madam Justice Garson, sitting in Court of Appeal chambers, advised Ms. Routkovskaia that according to the Court Record Access Policy she had the right to receive a transcript of the audio recording and that she should first contact the Registry to obtain the transcript. With Garson J’s order in hand she approached the Registry who advised her that they could only release the judge-approved transcript and that she required a court order for the unedited version. She then sought a review of Madam Justice Garson’s order by a panel of the Court of Appeal.

The appellate panel held there was no prohibition against trial judges editing their Reasons. Judges can do so, whether or not they advise litigants that they reserve the right to do so, although notice is preferable. Trial judges cannot edit or change their Reasons “in an attempt to defeat an appeal” but where words are misspoken or require clarification, edits and changes are permissible. The onus is on an applicant to establish that it is in the interests of justice for an unedited transcript to be released. See Alers-Hankey v. Solomon et al 2000 BCCA 196.

The Court found that Ms. Routkovskaia had failed to meet the onus upon her. Routkovskaia v. Gibson 2020 BCCA 8

Garth Drabinsky Denudes Himself of Property: Fraudulent Conveyance Found

GeorgiaLeeLang100Garth Drabinsky, late of Livent and Millhaven Prison, suffered another loss in court this month, in a fraudulent conveyance action brought against him by his former lawyer. In September 2015 Mr. Drabinsky and his wife owned a Toronto home as joint tenants valued at $2.6 million. He transferred the home into his wife’s name for consideration of $2.00 at a time when he was making payments to lawyer Philip Anisman as part of a settlement agreement previously negotiated. Mr. Anisman had represented Mr. Drabinsky in a matter before the Ontario Securities Commission.

The fee settlement provided that Mr. Drabinsky would pay the Mr. Anisman a total of $50,863.00, spread over a 6-month period. Mr. Drabinsky provided the lawyer with 19 post-dated cheques in the amount of $2,677.00 each, dated the 15th of each month from January 15, 2015 to July 15, 2016. The cheques were drawn on the account of Flagship Entertainment Limited, a company controlled by Mr. Drabinsky. Mr. Anisman was able to cash the first two cheques but the later cheques were dishonoured.

After months of haggling over payments and arrears, Mr. Anisman obtained a consent judgment against Mr. Drabinsky for approximately $60,000, which he failed to pay.

At an examination in aid of execution in 2019 Mr. Anisman became aware that Mr. Drabinsky no longer owned the home. He then brought an action against Drabinsky and his wife to reverse the transfer of the home.

The issues before the court were:

1) Was the transfer intended to defeat, hinder, delay, or defraud Drabinsky’s creditors and;
2) Was the action barred by the Limitation Act?

At the hearing Mr. Drabinsky argued that it was the financial institution holding the mortgage on the property that insisted the home be transferred to his wife, as she was the mortgagor, while Drabinsky and his brother were guarantors. However, testimony from a bank officer rebutted this suggestion.

Mr. Drabinsky argued that a two-year limitation period applied to bar the action, but the court applied the ten-year limitation period in the Real Property Limitations Act.

The court also found that prior to the examination in aid of execution there was nothing to prompt the Plaintiff to search the title of the property, as Mr. Drabinsky consistently lead Mr. Anisman to believe that he would be receiving payment imminently, and even provided him with replacement cheques when the previous ones became stale-dated. The court stated:

“Mr. Drabinsky was more than just another debtor; he was a rather renowned debtor who was very much in the public eye. It did not occur to the Plaintiff (or, presumably, to any other creditors) that Mr. Drabinsky would be denuding himself of substantial assets such as the Property. As the Plaintiff submits, there is only a duty to investigate when there is something that leads one to investigate: Fennell v Deol, 2015 ONSC 4835, para 8.”

However, discoverability was not an issue as Mr. Anisman’s claim was brought well before the expiration of the ten-year time period.

The court recited the “badges of fraud” relative to a fraudulent conveyance action, finding that many of them were present:

a) the donor continued in possession and continued to use the property as his own;
b) the transaction was secret;
c) the transfer was made in the fact of threatened legal action;
d) the transfer documents contained false statement as to consideration;
e) the consideration was grossly inadequate;
f) there was unusual haste in making the transfer;
g) some benefit is retained under the settlement by the settlor;
h) a close relationship exists between the parties to the conveyance.

The court granted judgment in favour of the Mr. Anisman with an order that the transfer of title to the property from Mr. Drabinsky and his wife as joint tenants to her alone, was void as against the creditors of Mr. Drabinsky.

Mr. Drabinsky’s civil fraud adds yet another layer to his previous criminal convictions and disbarment. Anisman v. Drabinsky, 2020 ONSC 1197

Lawdiva aka Georgialee Lang

Appeal Court Says No Bias, But Allows Appeal

It will inevitably come up in your law practice. You finish a hearing, get the Reasons, experience the disappointment, and then, while formulating the grounds of appeal, consider an appeal based on a reasonable apprehension of bias. Was the judge sneering, did he sternly caution counsel, did your client feel he or she was misunderstood and unfairly criticized? A constellation of “second guessing” of what occurred at the hearing might lead counsel to seriously consider this ground of appeal.

But I urge you to take this step very carefully. In my 30 year trial career only once did I make this argument before a chambers judge who promptly dismissed my application. At that time I researched the law extensively and remarkably found that in 99% of cases, the alleged “offending” judge declined to recuse him or herself and the matter proceeded. Whether the argument is more successful at the appellate level is doubtful.

In Willms v. Willms 2020 BCCA 51 the Court of Appeal considered an allegation of bias and the appellant’s complaints about the chambers judge, which included the following:

1. Counsel was “harshly” reprimanded by the chambers judge when he submitted that “the respondent had intentionally deposed statements that were deceiving the court”. The judge responded saying: “Don’t call somebody a fraud based on this kind of material. And don’t suggest they’re deceiving the court. It’s a very serious allegation – – could end somebody in jail. … And a conclusion like that based on assumptions is on very, very thin ice indeed. Don’t do it again.”

The Court of Appeal noted that the affidavit said to be deceptive had not been tested, was not the subject of cross-examination, and the respondent’s evidence was not contradicted. After that exchange, counsel changed his approach calling the respondent’s evidence “inconsistent”. The Court of Appeal indicated that the transcript showed the judge’s respectful attention to the balance of counsel’s submissions.

2. Later there was an exchange between counsel and the judge following completed submissions on the respondent’s application to increase spousal support. It was then that appellant’s counsel began argument regarding his application to reduce spousal support. The judge remarked that all the necessary submissions had already been made on the topic of spousal support. Counsel advised the court that he was also seeking to terminate spousal support. The judge asked him where that could be found in the pleadings and a discussion ensued regarding the “fuzzy” reference to it in the material. Nonetheless, the court stated it would take the submissions into account.

3. Counsel also argued that he was repeatedly interrupted by the judge, that the judge dismissed his arguments without proper consideration, and failed to hear all of his submissions, which taken collectively, was evidence of bias.

The appeal court dismissed Mr. Willms appeal on this ground, finding there was nothing in the exchanges that gave rise to a reasonable apprehension of bias if viewed by an impartial observer cognizant of the matters that preceded the dialogue between counsel and the judge, and accepting at face value the judge’s assurance he would take counsel’s submissions into account. Further, the appeal court said that the appellant’s concerns that certain issues were not addressed by the judge could not be blamed on him, as counsel failed to make submissions on those points.

However, Mr. Willms did persuade the appeal court to address a miscalculation in the amount of spousal support and varied the retroactive award from August 2016 to March 2018, the date his former spouse brought her application for an increase in support.

Lawdiva aka Georgialee Lang