Divorce Drives Litigant into Depression and Bankruptcy

DSC00275_1You may have heard of the “good divorce”, a concept explored by Psychology Today in 2009 where they suggested that “it is possible if you know how to do it”. Unfortunately, as a divorce lawyer I rarely see the good ones, only the tragically destructive ones.

In worst case scenarios, divorce can be the trigger for personal bankruptcy as it was for Miroslaw Kuczera from Ontario. (Kuczera (Re), 2018 ONCA 322 CanLII)

In an Ontario Court of Appeal decision we read that Mr. Kuczera was a happy family man with two children, employed as an electrician, until his marriage ended in 2007, leading to an acrimonious divorce that included allegations that he was an abusive spouse.

As is typical in high conflict divorces, he had no access to his property and when his legal fees overwhelmed his financial resources he took to using credit cards and borrowed $16,000 from his brother. The loan was to be paid back in 2009 failing which a property owned by Mr. Kuczera in Poland would be forfeited to his brother.

By May 2009 bankruptcy was inevitable and he retained a bankruptcy trustee, made the required monthly payments and was discharged from bankruptcy in October 2010.

Meanwhile the family law litigation continued unabated and his discharge was revoked when the bankruptcy trustee alleged that he had not disclosed the Poland property. He then made a consumer proposal to escape the bankruptcy proceedings which required him to pay $66,0000 over 5 years.

By this time his mental health sadly deteriorated with the combination of soul-destroying family litigation and the exhausting bankruptcy proceedings. His psychiatrist diagnosed him as clinically depressed and suffering from “Dissociative Identity Disorder”.

In January 2012 the family home issue was finally resolved and he received $72,000, but when asked where the money went he had little to say, except that his teenage daughter, who lived with him, was a drug addict, and that he purchased expensive Chinese medicines for his ill son. He said that he always carried cash and that quite likely the children had helped themselves as well. His mental and emotional state left him unable to cope.

The bankruptcy registrar refused to grant an immediate discharge to Mr. Kuczera, delaying it by six months and ordering that he pay the sum of $61,000, writing:

“I appreciate that the bankrupt will find an order of payment of this magnitude difficult in light of the circumstances present at the date of the hearing. However, it is my view that this situation could have been avoided had the bankrupt acted reasonably with his creditors. He clearly did not wish to pay his creditors under the proposal when he received significant funds in 2012. His current situation is his own doing.”

Mr. Kuczera’s appeal from the registrar was dismissed with the court refusing to admit updated psychiatric reports. But then the case came to the Ontario Court of Appeal, who took an entirely different view of his situation.

To begin, the highest court admitted the psychiatric report and affirmed that even though it was only filed after the registrar’s initial hearing and that it came from the bankrupt’s personal therapist, it met the legal test for admission, contrary to the registrar and first appeal court’s views.

While the missing funds were problematic, the Ontario Court of Appeal accepted that Mr. Kuczera’s mental condition affected both his “thinking and his actions”. The Court also found there was no evidence that he had benefitted personally from the sale proceeds. The finding that he had not disclosed the property in Poland was found to be erroneous. The Court said:

“The condition imposed by the Registrar that the appellant pay $61,000 as a condition of his discharge, given his personal history, was more than just “difficult” for the appellant. It was crushing.It does not reflect the rehabilitative objective of the”…(bankruptcy legislation).

While not all family litigants suffer from the dire consequences recounted here, there can be no doubt that family litigation, particularly in high conflict cases and proceedings that carry on for many years after the initial separation, are the cause of mental and physical impairment, financial devastation, and even suicide.

There is a better way and that is to move family law cases out of the courtroom and into Family Law Centres with dedicated judges, lawyers, counsellors, financial experts and other professionals, with a focus on negotiation, mediation and arbitration. Will any government dedicate the funds to try this better way? Don’t hold your breath!

Lawdiva aka Georgialee Lang


Wife Returns $1 Million Dollar Cheque to Husband and Seeks Monthly Support

GeorgiaLeeLang057When couples separate one of the first legal issues to consider is whether one spouse should pay the other interim spousal support. Interim spousal support is support intended to ensure that the lower income, or non-income earning spouse has sufficient income to support her or himself until matters are finalized, either though settlement or at trial.

In an unusual case out of Ontario, Bridge v. Laurence, 2017 ONSC 7417, Mr. Laurence presented his separated spouse with a cheque for $1 million dollars, after their 30-year marriage ended.

The parties had been in mediation and he asserted that he and his wife had concluded an agreement whereby she would receive 49.9% of the shares of his very successful company, which included 18% of shares she already owned. He then declared a dividend in her favour of $1 million dollars. He would also receive a similar dividend. Earlier the parties had each received nearly $1 million dollars in the division of other family property. On this basis he concluded that his wife would not require interim support as she would have sufficient funds to support herself.

Ms. Bridge initially advised the mediator that she agreed “generally” to her husband’s proposal, but shortly thereafter changed her mind, after she consulted her lawyer. She sent the cheque back to her husband and said that since she only owned 18% of the company, she was entitled to a dividend of $360,000 and no more, since she was not willing to give up spousal support.

Mr. Laurence, however, refused to provide her with a cheque for $360,000 leading to a stalemate that required court intervention.

The Court was not amused by either husband or wife, mildly scolding them for failing to collaborate to ensure efficient and cost-effective litigation, with consequential “litigation gridlock”. Mr. Laurence was also criticized for filing material “without limit”, demanding irrelevant disclosure from his wife, and “stubbornly refusing” to reciprocate in the disclosure department. In a final shot, the Court noted that Ms. Bridge had refused payment, but foolishly expended over $200,000 on legal fees:

“The parties seem determined to pay their lawyers to fight about almost every aspect of issues that should have been resolvable well before now.”

Ms. Bridge earned a law degree but had retrained and worked as a school teacher earning $111,000 per year. In the two preceding years her husband’s company earned $1 million dollars in annual income. The Court held that:

“Need is relative. Interim spousal support is intended to preserve the accustomed lifestyle of the support recipient pending the trial. Both parties live frugally despite their wealth. As a consequence, the evidence does not show that the applicant has accumulated significant debt since separation. Nor has she been required to significantly liquidate her assets. On the other hand, during the same period, the respondent has continued to accumulate wealth.”

Ultimately, the Court ordered Mr. Laurence to pay a dividend of $360,000 to his wife and to pay himself a $1 million dollar dividend, if he so chose. The remaining dividend of $640,000 would be held in escrow pending the trial or settlement of the family dispute. In addition, Ms. Bridge would receive $300,000 in lump sum interim spousal support, payable in 90 days, an amount easily payable by Mr. Laurence from his dividend cheque or other funds.

Ms. Bridge’s claim for $12,544 a month in interim spousal support and $350,891.00 in retroactive support was dismissed.

This is yet another case where money, energy, and time is wasted which could be better spent working with a tax specialist/accountant to craft a division of corporate property beneficial to both parties, accompanied by a determination of the income status of each party after the pie is divided. Only then can there be a proper analysis of the need or not, for spousal support.

Lawdiva aka Georgialee Lang


Guest Post: How to Find Your Perfect Divorce Lawyer

Let’s face it, most of us who commit ourselves into the bond of marriage are reluctant to think about it one day crumbling into a messy divorce, but the truth is, with today’s increasing divorce numbers, the reality is downright dismal ( in the US around 50% of all first marriages end in divorce, about 67% for second marriages and the numbers quickly rise with the number of additional marriages).

So what does this mean in terms of finding an attorney if you are among that fifty percent wanting to dissolve you marriage? Plenty!

Here are a few tips to heed if you find yourself needing someone to help you wade through the murky and unfamiliar waters of divorce.

• Before you file: Really consider the ramifications of filing for divorce. Have you exhausted every avenue before taking the steps for your divorce? Counseling and separation can be important steps to take before you make the final move.

Be very careful about moving about before the divorce, this could potentially be used against you, especially in the case of determining custody for minor children. Run a credit check for yourself, if possible get your finances in the best shape that you can. Divorce is extremely expensive and no matter the verdict, both parties will lose when it comes to finances.

Are you the non-breadwinner? You will need to take care of your personal finances as well as your healthcare, housing, cars and personal effects. A good attorney will inform you of what you should do long before you sign anything. Above all, if you can avoid divorce, then do so. Except in the cases of abuse or criminal behaviors on the part of your spouse, you should give your marriage every effort. Divorce should always be a last resort.

• Arbitration and Mediation versus litigation: The dissolution of a marriage cannot be on the same footing as breaking a business contract, though similar as seen through the eyes of the law, no one can put a price on the cost of someone’s betrayal or the lives of children of divorced parents who will forever grieve the loss of a family unit.

But there are ways to lessen the emotional trauma often association with divorce. If at all possible going through mediation services versus outright litigation will help not only with the overall costs, but will help families make choices over issues that can become quickly contentious if presided over by a non-family member or law enforcement.

Talk with your attorney; chances are if they have experience with family law and especially mediation expertise, this would make a better fit than someone hell-bent on taking on your spouse for every nickel and dime. Consider arbitration as an alternative to a lengthy, drawn-out court battle.

• Your attorney’s personal history: Find out about your attorney. Are they married? Or have they also been through a divorce, child custody battles with their own children or were they able to use their legal acumen to help minimize the trauma inflicted on all parties involved.

Sit down and talk with them about your personal feelings in regards to your spouse’s role, your custody concerns and your future. Do they really seem to be listening, adding thoughtful comments to your concerns or do you feel even more ambivalent after you leave their office?

Other than the death of a family member, going through a divorce is right there when it comes to life-altering experiences and more than ever, you will need someone who you feel confident in, someone who will stand up and defend you and fight for all rights.

A good family law lawyer will explain your rights and what you can expect with a divorce, they will not try to sugarcoat the truth about how difficult the situations will be, they will in all likelihood try to talk you out of a divorce, but if you are both in agreement about pursuing a divorce, they will be with you every step of the way.

GUEST AUTHOR NOAH KOVACS has over ten years experience in the legal field. He has since retired early and enjoys blogging about small business law, at Noah Kovacs and everything in between. He recently purchased his first cabin and spends his free time remodeling its kitchen for his family. Twitter: @NoahKovacs.

Why is Family Law Arbitration the Future for Divorcing Spouses?

No matter what news sites you frequent or what newspapers you read, inevitably you will see a plethora of articles decrying the state of family law, whether it’s in Canada, the United States, Great Britain, or a myriad of other countries where beleaguered husbands, wives, parents, grandparents and children are taking a stand against justice systems that do not serve their best interests.

The legitimate complaints are legion and run the gamut from too few judges and impossibly lengthy delays; to outrageous legal fees, and a system that fosters disharmony and conflict.

Family law mediation has played an important role in alleviating the worst parts of the family courts, but mediation, which requires two reasonable people willing to compromise on the issues between them, is not for everyone.

There will always be people who are unable to “give in” and would rather have a decision foisted on them, than agree to anything their estranged spouse might suggest. The mere fact that a proposal comes from their former partner is enough to compel them to reject it.

These are the people who end up in court in lengthy trials that have exacting costs: financially and emotionally. When custody of children is an issue, the battleground of the courtroom renders justice that is often demanding, demeaning and destructive.

Certainly it is true that courtroom justice is for the very few who can afford it. Our system of family law has priced itself out of reach of the average middle-class family.

As social reformers and parliamentarians search for a remedy for what ails our family law courts, many jurisdictions have arrived at the conclusion that mediation must be expanded, to include judicial mediation, and that arbitration must be implemented for those cases that need decisive finality.

British Columbia’s long-awaited overhaul of the 1979 Family Relations Act, the pending Family Law Act, codifies family law arbitration, a sign that B.C’s Attorney-General’s Ministry has realized that family law courts are the worst place for couples to resolve their divorce issues.

How does arbitration work? First of all, you need senior, experienced family law lawyers or retired judges with an affinity for family law, a group that is almost extinct. Insiders know very well that most judges would opt out of family law cases if they had a choice. Extensive training is necessary to learn the skills required, akin to those a judge brings to her courtroom.

An arbitrator must be a neutral professional who understands the purpose and goals of arbitration and is an expert in the rules of evidence, rules that are less stringent than those found in the litigation arena. Also important is a depth of knowledge of substantive family law.

The key to arbitration is not to turn the process into a facsimile of the court system. The cornerstone of arbitration is a simplified, expedited decision-making process where both parties are heard and swift, reasoned, justice is fashioned.

The parties and their lawyers choose how they wish to proceed. Often couples agree on a statement of facts, submit their evidence via affidavits, provide a summary of the law relied on, and deliver their material to the arbitrator. Sometimes the parties’ lawyers will request an opportunity to provide oral argument with time limits agreed to in advance.

Where the arbitrator is charged with deciding one or two discrete legal issues, the arbitration can be booked within thirty days and the arbitrator can and should produce a written decision within thirty days after receiving the parties’ submissions.

Family law arbitration is also ideal for couples who do not want their “dirty laundry” on display for the entire world to see. Our courts operate transparently, a value that is cherished in democratic countries; however, the Reasons for Judgment in any given lawsuit are published on the internet, often revealing embarrassing details of family life and finances. Did you know your neighbor Mr. Smith was a cross-dresser?

For couples who have tried mediation and failed, arbitration is the beginning of a future that eschews high-costs and high conflict, an option whose time has come.

Lawdiva aka Georgialee Lang

Family Law Not For The Faint of Heart

The practice of family law is not for the faint of heart. The simplicity that existed twenty years ago has truly passed.

It is no longer enough to rely on stale, outdated legal maxims. Gone are the days of custody to mom; $300.00 per month in child support; spousal support for stay-at-home moms to terminate in three years; and all the other quaint practices that have been eclipsed by complex business arrangements, complicated tax issues, divergent parenting arrangements and intricate support concepts.

It is my thesis that family law lawyers of the 21st century must face a future that has already arrived, arm themselves with new, bold principles and eschew the unsophisticated strategies of the past. Thinkers, great and small have mused about the future in terms that are pertinent to today’s family law lawyers:

“The future is here. It’s just not widely distributed.” William Gibson, author
“The future belongs to those who prepare for it today.” Malcolm X
“The future depends upon what we do in the present”. Mahatma Gandhi
“The future ain’t what it used to be”. Yogi Berra
“The future is much like the present, only longer”. Dan Quisenberry, Pro Athlete

In a world of IPads, IPods, blackberries and other sophisticated devices, the pace expected of family law lawyers has also accelerated which, in turn, has heightened the pressure for lawyers and clients alike.

All of this is occurring while the family justice system is collapsing under the weight of it all. Experts all over the world agree that the solution is mediation and arbitration, leaving the court system only for the very wealthy, who can afford it.

Lawdiva aka Georgialee Lang