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Written on behalf of Baker & Company

Dependant Relief Claim

When a person passes away without a will, or intestate, the distribution of the estate’s assets is determined by Part II of the Succession Law Reform Act (the “Act”). For example, a spouse will be first in line, followed by children, and so on. However, it is important to note that this part of the Act only applies to married spouses. What happens in a case where the deceased had a common-law spouse at the time of their death? What are the entitlements owing to that spouse, if any?

Dependant Relief Claims Explained

Common-law spouses retain a right to claim a portion of their spouse’s estate in the form of a dependant’s relief claim. These claims are governed by Part V of the Act. In order to make a successful claim for dependant’s relief, a spouse must be able to demonstrate that they were in a common-law relationship with the deceased at the time of their death. In cases where the deceased did have a will, the spouse must also establish that the will failed to provide adequate provisions for their ongoing support.

Once the spouse has established their right to a claim, the court must then determine the amount of the award. To do this, the court will review a number of factors set out under s. 62, including the following:

  • the dependant’s current assets and means;
  • the dependant’s capacity to contribute to their own support;
  • the dependant’s age and physical and mental health;
  • any agreement between the deceased and the dependant;
  • the claims of any other dependant of the deceased; and
  • the length of time the spouses cohabitated.

These are just some of the factors enumerated in the Act. The full list can be viewed under s. 62(1) of the Act.

A Recent Example

A recent decision of the Ontario Superior Court examined a classic scenario of a common-law spouse’s claim for dependant’s relief. In the case at hand, the deceased died intestate and was survived by an adult child and his common-law spouse. Under the laws of succession, the entire estate, valued at $2,851,125.77, would have gone to the daughter of the deceased. The common-law spouse brought a claim for dependant’s relief, seeking an award of half the value of the estate. Specifically, she sought an absolute transfer of the farm property where she resided with the deceased, which was valued at $580,000.00. In addition, she sought to keep all funds and assets she had received to date, which totalled approximately $570,000.00 and then a further cash payment of approximately $275,000.00. This would leave both the applicant and the respondent with approximately equal shares in the estate.

At the time of her spouse’s death, the applicant was 73 years old. She had no physical or mental health issues and was not employed. She resided on a farm property owned by the deceased, where she had lived and worked since 1991. She had originally met the deceased when he hired her to work as his housekeeper, however, a romantic relationship developed over time. Tax records indicated that the pair had declared themselves to be common-law spouses beginning in 1999.

Records showed that the applicant had paid into the household expenses over the years, including veterinary bills, small tools for the farm, home appliances, and food and clothing for the couple.

The court examined what the applicant would require in order to maintain her own care, with the contemplation of the applicant eventually relocating to a one-bedroom accommodation in a nursing care facility. Relying on expert evidence, the court found that the applicant would be likely to suffer a shortfall if she was entitled only to the assets already in her possession. Given that the estate was sizeable enough to provide for the applicant, the court found that the deceased had failed to provide adequate support.

Once the applicant had successfully established a claim against the estate, the court then turned to the amount. While the court considered providing a life estate in the farmhouse for the applicant, it found that there was a contentious relationship between the applicant and the deceased’s daughter, and a life estate in the home would prolong the need for the parties to interact with each other. Under the circumstances, the court held that both parties would be better served by ordering a transfer of the farmhouse to the applicant.

The court ultimately found that a judicious spouse would have provided for the applicant’s care and her ability to live in relative comfort for the remainder of her life. Given that, the court ordered that the applicant keep the assets already in her possession in addition to the transfer of the farmhouse, and also awarded a further payment of approximately $275,000.00. The applicant received everything she had requested, which amounted to half the value of the estate.

Takeaways

This case serves to illustrate how the law can help to make up for a shortfall when a person dies without properly providing for a dependant. Just because a person has been left out of the will, or in a case where there was no will at all, it does not mean that they are without options. If you find yourself facing a similar circumstance, seek the advice of a skilled wills and estates lawyer.

At Baker & Company, our Toronto estate planning lawyers can help you establish an estate plan tailored to your needs, no matter your current family status. We have extensive experience and expertise in providing you with estate planning advice and implementing your desired plan. Should you find yourself in the position of challenging an existing will or estate, our lawyers can also represent you through the litigation process. Call us at 416-777-0100 or contact us online for a consultation.


What Constitutes a ‘Material Change’ to an Agreement of Purchase and Sale?

A recent decision of the Ontario Court of Appeal (ONCA) was faced with determining whether a condominium corporation’s failure to begin construction on a parkette and entry gates by the closing date on a unit in the development constituted a ‘material change’ to the Agreement of Purchase and Sale (APS).

The Background Facts

The appellant had purchased a new construction condominium for $1.6 million, putting down a deposit of $133,000 at the time of signing the APS. The closing date was set for December 13, 2017. A month before the closing date, the builder notified the appellant’s lawyer that the condominium unit was ready for occupancy and that the transaction would be closing as planned.

The appellant’s lawyer requested an extension of the closing date by a month, as the appellant had been unable to secure a mortgage for the balance of the purchase price. The respondent agreed to an extension of one week. On the new closing date, the appellant’s lawyer contacted the respondent and requested a further extension of one day, to allow the appellant “to investigate an issue related to the property”. The respondent consented.

The following day, the appellant’s lawyer contacted the respondent again to say that, contrary to the Disclosure Statement, the construction of a parkette and exit and entry gates had not yet been started. As a result, the appellant wished to extend the closing until those common elements had been completed. The lawyer further stated that their client reserved the right to rescind the APS completely if the respondent no longer planned to construct those elements, pursuant to s. 74 of the Condominium Act (the “Act”). The respondent replied by saying that the appellant had failed to close the transaction and that the respondent was terminating the APS and retaining the deposit.

The respondent later sold the unit for $1.3 million to another purchaser, $300,000 less than the amount in the original APS. The appellant brought an action for the return of her deposit and a determination that she had rightfully rescinded the APS, and the respondent claimed damages for breach of the APS.

Lower level decision

In the original decision, the trial judge considered the appellant’s argument that the respondent’s failure to begin construction of the parkette and entry/exit gates by the date of closing amounted to a ‘material change’ of the APS. In doing so, the court looked at the definition of ‘material change’ under s. 74(2) of the Condominium Act:

[A] change or series of changes that a reasonable purchaser, on an objective basis, would have regarded collectively as sufficiently important to the decision to purchase a unit or proposed unit in the corporation that it is likely that the purchaser would not have entered into the agreement of purchase and sale for the unit or the proposed unit or would have exercised the right to rescind such an agreement of purchase and sale under section s. 73, if the disclosure statement had contained the change or series of changes, but does not include,

[A] change in the schedule of the proposed commencement and completion dates for the amenities of which construction had not been completed as of the date on which the disclosure statement was made.

The court went on to say:

The test for what is a “material change” provides some guidance as to what the legislature considered to be fundamental to an agreement of purchase and sale of a condominium such that if that change occurred, the Purchaser was entitled to end the agreement. The legislature did not consider a change in the construction schedule for amenities to be a material change.

Ultimately, the court found that the issues relied upon by the appellant were not sufficient to rescind the APS, and dismissed the appellant’s action, finding in favour of the respondent. The appellant then appealed the decision.

The Court of Appeal

The Court of Appeal (ONCA) found no fault in the original decision. With respect to s. 74(2) of the Act, the ONCA affirmed the lower court’s interpretation. The appellant further argued that the lower court had erred in characterizing the parkette and gates as ‘amenities’ rather than essential features of the community. The ONCA disagreed, citing a clause of the original APS, which read:

In any event, the Purchaser acknowledges that failure to complete other units within the Condominium in which the Unit is located, or the common elements on or before the Occupancy Date shall not be deemed to be a failure to complete the unit.

Ultimately, this case demonstrates that purchasers of new construction real estate must exercise extreme care when seeking to rescind an APS, or considering the option of not closing on the set date. The financial ramifications can be quite significant. If considering such actions, it would be prudent to seek advice from a knowledgable lawyer well in advance fo the closing date in order to review all potential options.

At Baker & Company in Toronto, our real estate lawyers take the time to meet with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential.  We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of transactions, or through litigation. Call us at 416-777-0100 or contact us online for a consultation.


ONCA Determines Habitual Residence Using SCC Model

When parents display separate intentions with respect to which country their children should live in, courts must often make a determination following an application under the Convention on the Civil Aspects of International Child Abduction, otherwise known as the “Hague Convention” (Convention). If both countries in question are parties to the Convention, the parent seeking to have their child returned from the other party country will make an application and a court in the country where the children are located will make a determination based on the child’s place of habitual residence.

Previously, the model used in Ontario to determine habitual residence was based solely on the intentions of the parents. In a decision last year called Office of the Children’s Lawyer v. Balev, the SCC adopted a hybrid approach to determining habitual residence. In that decision, the SCC rejected the traditional Ontario model and considered both parental intention along with the circumstances and preferences of the children.

A recent decision of the Ontario Court of Appeal (ONCA) is the first Ontario appellate decision to apply the new hybrid model.

Facts of the Case

The parents were married in 2001 and had four children, between 9 and 15 years of age. The father was a German citizen and the mother was Canadian. The family had resided in Germany almost exclusively for the duration of the marriage. The children were dual citizens of Germany and Canada but held only German passports.

In August of 2017, the couple relocated to Ontario with their children. Once here, they purchased a home, cars and invested in significant home renovations. They had also brought most of their belongings with them from Germany. The father did not have a work visa, and the children were issued visas for one year, expiring in September 2018. The parents had not settled on how long they planned to remain in Ontario, but the children quickly adapted, and successfully completed the 2017-2018 school year. They also developed close ties with their mother’s extended family in Ontario.

The couple separated in March of 2018, and the father made plans to return to Germany. In July, the mother filed for divorce in Ontario and sought to retain custody of the children. In August, the father filed a Hague Application for the return of his children to Germany.

The Trial Decision

The judge ordered the involvement of the Office of the Children’s Lawyer (OCL) to represent the children and provide the court with their views and preferences. The OCL counsel conducted extensive interviews with all four children and reported that the oldest three expressed a desire to remain in Ontario, while the youngest remained neutral and did not claim a preference.

When determining habitual residence, the trial judge considered both parental intention and the wishes of the children, as established by the SCC. She found that the parents had not moved to Ontario with a set intention to return to Germany. They had enrolled the children in school for the 2018-2019, spent considerable money on renovating a home, and sought health care coverage for the children. With respect to the children, while they had been in Germany much longer, their time in Ontario was extensive and also more immediate. They had adapted well and had become very close to their mother’s family. She also acknowledged that the three oldest children had expressed a desire to remain in Ontario. On the balance of both factors, the judge determined that their habitual residence was in Ontario, and dismissed the father’s application.

The Court of Appeal

In Balev, the SCC explained the reasoning behind the hybrid approach as one which allowed a court to consider the “focal point of the child’s life – the family and social environment in which its life has developed – immediately prior to the removal or retention”. To do this, the court found that they must examine the following three factors:

  1. The child’s links to and circumstances in country A;
  2. The circumstances of the child’s move from country A to country B; and,
  3. The child’s links to and circumstances in country B.

If a court finds that a child was habitually resident in the country in which the applicant is based, they generally must order that the child be returned. However, the Convention sets out five exceptions which the SCC summarized as follows:

  • The parent seeking return was not exercising custody or consented to the removal or retention;
  • There is grave risk that return would expose the child to physical or psychological harm or place the child in an intolerable situation;
  • The child of sufficient age and maturity objects to being returned;
  • The return of the child would not be permitted by fundamental human rights and fundamental freedoms of the requested state; and
  • The application was brought one year or more from the date of wrongful removal or retention, and the judge determines the child is settled in the new environment.

In examining the trial judge’s decision, the ONCA found no errors of reasoning or fact. The judge had correctly set out and applied the framework from Belev, and she had clearly considered the children’s preferences in light of their circumstances and links to Ontario. The father’s appeal was dismissed.

In Belev, the SCC has set a new model for considering habitual residence when deciding on Hague Applications; one in which the preferences and circumstances of the child are taken into account, along with the intentions of the parents. it is likely that the older the child is, the more weight their opinions will be given. In this case, the three oldest children were all over the age of 10. It will be interesting to see how this model is interpreted in a case where the child is considerably younger.

At Baker & Company, our lawyers are committed to minimizing as much stress as possible for clients involved in a high-conflict divorce. We will help you understand what you can expect, help you communicate with your ex-spouse, put agreements into place to prevent future disputes from arising, and, above all, represent your best interests. Call us at 416-777-0100 or contact us online for a consultation.


Limitation Periods & Civil Litigation: An Overview

A key factor to consider before initiating a civil claim in an Ontario court is whether the limitation period for the claim may have expired. Limitation periods are governed by the provincial Limitations Act, 2002 (the “Act”), which came into force in 2004. The Act attempts to bring consistency to limitation periods for all civil claims in the province, however certain exceptions and other factors do still allow for a degree of uncertainty. For the purposes of the Act, a “claim” is defined as “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission”.

The Basic Limitation Period

In Ontario, the basic limitation period for a civil claim is two years from the time the damage or loss was discovered by the plaintiff. However, determining the date the period begins to run is not as simple as it sounds. The day a claim is discovered is the earliest of the following occurrences:

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

It is not enough to simply say that two years have passed since the act or omission that caused the loss or injury occurred. It must be two years from the date that the injured party became aware of the loss, the act or omission that caused it, and the person or entity responsible. The court also has the discretion to find that a reasonable person would have become aware sooner, given the same circumstances. If this is the case, the court will find that the two-year limitation period began to run on the date a reasonable person would have known.

The Ultimate Limitation Period

Considering the fact that the clock does not begin to run on the basic limitation period until the basis of the claim is discovered, this could leave defendants vulnerable to litigation indefinitely in some cases. In order to provide some certainty in this area, the Act also includes a provision establishing an ultimate limitation period of 15 years from the date that the act or omission occurred, after which period a claimant is barred from bringing an action in court. Discoverability is not a factor for this period – the clock begins to run at the time of the act or omission responsible for the loss or injury.

Exceptions to the Limitation Period

There are a few exceptions to the Ontario civil limitation periods. Specifically, limitation periods can be extended in cases where:

  • The claimant in an action is under the age of majority at the time of the act or omission, or when it is discovered; and
  • When the claim is against a municipality in Ontario or against the provincial government.

If you believe that you have a claim against another party, it’s important to speak to a knowledgable lawyer as soon as possible, in order to protect your right to bring an action within the time periods established under the Act.

At Baker & Company, we take the time to meet with you and understand your unique needs in order to offer solutions to the diverse problems you are facing. We rely on our broad base of experience and expertise to provide you with exceptional legal guidance in any litigation matter. Call us at 416-777-0100 or contact us online for a consultation.


Severing Joint Tenancy Via the ‘Course of Dealings’

It is taken for granted that, if a home is owned jointly, the full interest in the home will pass to one party upon the death of the other, by right of survivorship. While it has always been possible to sever a joint tenancy by mutual agreement or unilaterally (typically by one owner registering a deed to themselves as a tenant in common), there is a rarely-used third method, referred to as the ‘course of dealings’ rule. A recent decision from the Ontario Superior Court of Justice demonstrates how this method of severing joint tenancy may create a greater degree of uncertainty in the right of survivorship.

Joint Tenants at Time of Death

A man and his second wife purchased a home together as joint tenants in 2004. The husband had children from his previous marriage, two daughters and a son. The husband executed a will in 2015. In the will, the husband effectively creates a life estate for his wife with respect to the home, in which he directs the estate trustee (ET) to allow her to remain living in the home until her death, or until one of several other enumerated events occurs. Upon the termination of the life estate, the property is to be sold, with the husband’s share forming a part of the residue of his estate. The husband’s two daughters were the residual beneficiaries of his estate.

Two and a half years after their father passed away, the daughters commenced an application seeking an order declaring that they were entitled as residuary beneficiaries to a 1/2 interest in the property. They further sought an order directing the ET to sell the home and disperse the proceeds accordingly.

In response, the wife registered a Survivorship Application on title to the property and commenced her own application seeking a declaration that she was the sole and beneficial owner of the home.

Severing Joint Tenancy

The court had to first determine whether the joint tenancy ownership had been severed in some way before the husband’s death. A 2012 decision of the Ontario Court of Appeal endorsed three methods for severing joint tenancy:

  1. By unilaterally acting on one’s own share, such as selling or encumbering it (typically an owner will register a deed to him or herself);
  2. By mutual agreement; or
  3. In the course of dealings in which the parties demonstrate an intention to own the property as tenants in common.

The parties to the case at hand agreed that if the joint tenancy had been severed, it would have been by way of the third method, via the “course of dealings”. In order to make this determination, the court was required to consider the totality of the evidence.

The court considered three pieces of evidence in particular:

  1. The will – there was a clear intention on the husband’s part to create a life estate that is inconsistent with joint tenancy. The common law has established that joint tenancy cannot be severed by testamentary disposition alone. However, if the wife knew about the provision, it could help to establish that both parties contemplated their ownership as tenants in common.
  2. Recorded conversation – one of the daughters recorded a conversation between the wife and her husband while in the hospital. While the court could not determine whether the recording had been made surreptitiously, the evidence was deemed to be admissible.  In the recording, the wife could be heard acknowledging the daughter’s share in the home and her life estate under the will. She also appeared to take credit for the terms of the will, saying that had she not insisted the husband sign it, his daughters would not be entitled to a half interest in the home.
  3. An affidavit from a family friend – a long-time family friend of the husband swore an affidavit which stated that she had met with the couple prior to the husband’s death and they discussed his will and his intentions for his estate. The friend said he had asked her to act as an alternate ET, and had mentioned that he intended for his daughter’s to eventually receive his share in the matrimonial home. The affidavit was hearsay, and not sufficient evidence in an of itself, however, it did serve to corroborate the contents of the will and the recorded hospital conversation.

The Court’s Findings

The court found that both the terms of the will and the recorded conversation established that the parties had both intended to treat their ownership of the home as that of tenants in common. The affidavit of the family friend corroborated this. As a result, the court held that, in the course of dealings, the husband and wife had successfully severed their joint tenancy.

The court dismissed the daughter’s application to order the ET to sell the home. The will was very clear about establishing a life estate for the wife and the daughters had no right to demand their inheritance prior to the time contemplated in the will. If there was a breach of the terms of the life estate, it was entirely up to the ET to make that call. The daughters did not hold a legal interest in the land until the life estate was terminated.

What Does This Mean for the Future of Joint Tenancy Ownership?

This case demonstrates that property owners cannot solely rely on the fact that title to their home is held in joint tenancy in order to ensure a right of survivorship. While it is a key factor, parties should also be cautious about how they discuss their intentions with others, and how they structure their estate. Any apparent deviance from an intention to maintain the joint tenancy may be sufficient to extinguish it in court. When drafting any legal documentation, including an estate plan, a will or a domestic agreement that addresses ownership of a jointly-held property, seek the advice of a skilled and knowledgable lawyer to ensure that your intentions are made clear.

At Baker & Company, our experienced Toronto lawyers can help you ensure that your property ownership structure and estate plan accurately reflect your intentions and future plans. We have extensive experience and expertise in providing clients with estate planning and family law advice that contemplates real estate interests, both simple and complex. Call us at 416-777-0100 or contact us online for a consultation.


Resignation & Restarting the Clock on Terms of Service

It may be expected that any employee who resigns from their job and then later returns to the same employer will find that their ‘term of service’ is affected. It is unlikely that someone who had worked with a company for 5 years, left for two and then came back, would be entitled to pick up where they left off. However, what would happen in a situation where a long-term employee submits a resignation, and while still employed by the company, wishes to resume their employment?

A recent decision of the Ontario Court of Appeal has come down on the side of the employer in this situation, holding that the resignation must be taken into consideration, therefore creating an interrupted period of employment. This, in turn, affected the reasonable notice the employee was entitled to upon her eventual termination.

Facts of the Case

The respondent employee was a dental hygienist who had been employed with the appellant employer since 1993. In 2005, she decided to move to a new city with her fiance, and find work elsewhere. She submitted her resignation, which was accepted by her employer. While still working at the practice during the notice period, her relationship came to an end and she requested to be reinstated, as she would no longer be moving. Her employer agreed, and the employee signed a new contract of employment. The contract indicated that should she ever be terminated, she would only be entitled to the minimum notice set out in the Employment Standards Act.

Seven years later, the employee was terminated without cause. At the time of her termination, she was provided with notice pay equivalent to one week of employment. The employee brought an action for wrongful dismissal.

The Lower Court Decision

The Superior Court of Justice found that there was insufficient consideration to support the contract limiting the employee’s common law entitlement to reasonable notice. As a result, the court held that the employee had been wrongfully terminated. Further, it was determined that her damages would be based on the full period she was employed, disregarding the brief period during which she had resigned. She was awarded damages equivalent to 15 months’ notice, totalling $71,650.02.

The Appeal

The employer appealed the decision. The Court of Appeal found that there was valid conisderation to uphold the employment contract signed in 2005. The court further disagreed with the finding regarding the period of employment. The court held:

We agree with the appellant’s submissions that Ms. Theberge-Lindsay’s unequivocal resignation and re-hiring in 2005 marked a break in the employment relationship after which an entirely new contract was reached between her and Dr. Kutcher. There was consideration for that new employment contract, that is, Ms. Theberge-Lindsay’s offer to again be employed by Dr. Kutcher and his acceptance of her offer to again employ her. On this basis, the Employment Standards Act, 2000 minimum notice is the maximum amount to which the respondent is entitled, measured from 2005. On this basis, she is entitled to 7.5 weeks of salary at $1,204 per week, less $1,200 severance already paid.

It remains to be seen whether this decision will be appealed any further, but for now, it appears that a resignation, even a situation in which there is no actual break in the employment, will be found to ‘restart the clock’ with respect to an employee’s term of service.

At Baker & Company, we take the time to meet with you and understand your unique needs in order to offer solutions to the diverse problems you may encounter in the workplace. The highly skilled Toronto employment lawyers at Baker & Company will review and draft employment agreements and advise on termination packages in order to protect employers from future litigation. We also provide practical and effective representation for employees faced with wrongful dismissal by their employer. We rely on our broad base of experience and expertise to provide clear, pragmatic legal advice, and representation in litigation.  Call us at 416-777-0100 or contact us online for a consultation.


Does a Wife’s Failure to Secure Work After Divorce Constitute a Material Change?

In a recent decision, the Ontario Court of Appeal (ONCA) was asked to consider whether a wife’s failure to seek employment for over 20 years post-divorce constituted a material change sufficient to vary her former husband’s spousal support obligations from $4,000 per month to $1 per month.

Background of the Case

The couple had married in 1968 and separated in 1985. At the time of their divorce, the husband was a successful dentist, earning between $250,000 and $300,000 per year. The wife did not work outside of the home, other than some bookkeeping work for her husband’s dental practice during the marriage. Prior to the separation, the wife had successfully undergone treatment for breast cancer.

In 1991, the parties entered into a settlement agreement which formed part of their Divorce Judgment. As part of the settlement, the parties agreed that the husband would pay the wife spousal support in the amount of $4,000 per month for her lifetime.

The Superior Court of Justice Decision

In 2017, the husband brought a motion seeking a number of orders, including a variation of his spousal support obligations. At over 70 years of age, the husband had retired from his dental practice, and his income had changed significantly. In retirement, he earned approximately $65,000 per year, plus some additional income from an open investment. The husband’s motion argued that his support obligations should be terminated based on the material change to his income, as well as the fact that his former wife had failed to seek other employment in the many years since their divorce.

The husband argued that the wife had received a staggering amount of support over the years, especially given that they had been divorced longer than they had been married. In turn, the wife pointed to the 1991 settlement, asserting that her husband had agreed to pay the support for her lifetime, perhaps taking a gamble on her health prospects given her medical history.

The judge found that there had been two material changes to the circumstances, warranting a variation in the husband’s support obligations. The first of which being the change to the husband’s income post-retirement, and the second being the wife’s failure to seek other employment following the divorce:

The case law is clear that there is no “duty” on the wife to become self-sufficient.  However, there is an obligation on her as a spousal support recipient to make reasonable efforts to contribute to her own support.

The judge ordered that the wife’s support entitlement be reduced from $4,000 per month to $1 per month.

The Ontario Court of Appeal

The wife appealed the decision, arguing that the original settlement agreement was not susceptible to amendment, as it had clearly stated the payments were to continue for her lifetime. The ONCA disagreed that the agreement could not be changed, but it did find that the original judge had erred in two ways:

  1. In considering what constituted a “material change” in circumstances, and
  2. In failing to give deference to the original agreement between the parties.

With respect to the material change argument, the ONCA did agree that the husband’s retirement and subsequent income reduction reflected a material change in circumstance. However, they disagreed that the same could be said about the wife’s failure to seek or secure employment in the intervening years since the divorce:

We disagree that the appellant’s failure to seek employment since 1991 constitutes a material change in circumstances. The clear wording of the divorce judgment was that spousal support would continue to death. The appellant was entitled to rely upon that judgment. The respondent waited far too long to raise the appellant’s decision not to seek gainful employment until an age when she was effectively precluded from correcting the situation.

What Does This Mean for Support Awards Going Forward?

This decision highlights the importance of contemplating long-range circumstances when designing and drafting a separation agreement. In the case at hand, the couple had not contemplated future changes in income, retirement, or any expectations that the wife to mitigate her own expenses. When entering into a separation agreement or divorce settlement, it is important to take all potential considerations into account in order to allow for future adjustments as circumstances may dictate. An experienced and skilled family law lawyer will be sure to point out relevant concerns in order to draft a document that allows for flexibility and reasonable amendments as needed in order to protect their client’s interests.

At Baker & Company, our Toronto family law lawyers are highly experienced in high-conflict divorce matters and support litigation. We are committed to making the process of legally addressing a family matter as clear and approachable as possible. Call us at 416-777-0100 or contact us online for a consultation.


Condominium Corporation Not Permitted to Reopen Approval Process for Structural Changes

A home renovation can be a long and drawn-out process; one that causes great inconvenience to a homeowner and may require extensive permissions before it can even begin. Anyone who undertakes a major renovation after completing the due diligence to obtain the necessary permits would be justifiably surprised and upset if said authorization was revoked after the work had been completed. That is just what occurred in a conflict that was recently decided by the Ontario Superior Court between condominium owners and the condominium corporation. The dispute centred around the lack of an agreement under s. 98 of the Condominium Act (the “Act”).

What is a s. 98 Agreement?

Before looking at the case itself, it is helpful to review the purpose of s. 98 of the Act. This section requires that an owner enter into an agreement with the condominium corporation before making any changes that affect the common elements of a condominium. If the changes are approved, the corporation will enter into an agreement with the owner(s) with the primary purpose of setting out the following terms:

  • To apportion the cost of the proposed change(s) between the owner(s) and the corporation;
  • To set out the maintenance, repair, and insurance obligations with respect to the proposed change(s).

Generally, once an agreement is executed, it will be registered on title for the property.

Background of the Case

The applicants in the case at hand were the owners of one unit in a twenty-unit condominium in Muskoka. Soon after purchasing the unit, the applicant husband was appointed to the Board of Directors (the “Board”), a role that he filled for three years. At one point the applicants expressed an interest in buying another unit in the building in order to accommodate more visitors, and the owners of the unit next door to theirs advised them that they were planning to sell. Before committing to purchase the unit, the applicants submitted a proposal to the Board seeking approval to create an opening between the two units in order to create one large condominium. The changes would affect a common element in the building, being the shared wall between the two units.

At the time of the proposal, the Board consisted of four members, one being the applicant husband and another being the owner of the unit next door to the applicants. All four of the Board members were present for the meeting, along with the property manager. However, the owner of the unit the applicant wanted to purchase declared a conflict of interest and excused himself for the relevant portion of the meeting. The applicant remained for the entire meeting but abstained from voting on his proposal. The proposal was approved, leading the applicants to then purchase the condominium from their neighbour. At the meeting, those present had discussed the need for a formal agreement under s. 98 of the Act, but one was never put into place. At the time, the condominium corporation was in the habit of approving changes to common elements without a formal s. 98 agreement.

The applicants completed extensive renovations, opening the connecting wall between the units, and removing the kitchen in one unit to create a more cohesive single condominium. After the changes had been completed, a new Board president was elected. The new president took issue with the lack of a s. 98 agreement with respect to the applicants’ renovations, and all other changes that had been made by other condo owners. It was decided that all owners who had made changes affecting common elements would be required to enter into retroactive agreements. The applicants were provided with an agreement to sign, which contained a clause not found in the agreements received by other owners. It stated as follows:

The Improvements shall be removed by the Unit Owner, at the Unit Owner’s sole expense, before the Unit is sold.  Specifically, the Unit shall be restored to the condition before the Improvements were made, including but not limited to the reinstallation of the common element demising wall within the Unit and any changes that were made by the Unit Owner related thereto.  

The Court’s Ruling

The applicants brought a claim against the corporation, saying that the clause overreached by requiring the restoration of changes unrelated to the common elements. They claimed that the corporation’s behaviour was oppressive and unfairly prejudicial in light of the fact that the changes had already been approved and completed, and the agreements provided to the other owners did not contain a similar clause. The corporation responded saying that the permission previously granted was invalid due to the applicant’s conflict of interest, which resulted in a non-quorum at the meeting, and cited the lack of a s. 98 agreement to further invalidate the approval.

The court found in favour of the applicants, reasoning:

Board approval was sufficient and was given.  [The applicant] did not have a conflict because the proposal was not material to the Condominium.  There was therefore a quorum.  The approval is not problematic as a result of these issues. I therefore conclude that there was an effective Board approval given for the structural change made by the applicants.  The relief sought by the Condominium, which assumes that it can begin the approval process again, is therefore inappropriate.

The court awarded the applicants $10,000 in general damages due to the corporation’s oppressive and unfair conduct. The court did agree that a s. 98 agreement was necessary but ordered the overreaching language in the oppressive clause be removed. The applicants will be required to restore the common wall prior to selling either unit, but would not be required to say, reinstall a kitchen in the second unit. The changes unrelated to the wall would not be covered by a s. 98 agreement as they are not common elements. The applicants would be under no obligation to restore them since restoration was not contemplated at the time approval was granted.

This case should be a lesson to condominium boards regarding the importance of putting a s. 98 agreement into place from the start and setting out all expectations with respect to changes affecting any common elements. A corporation will likely be prevented from placing an unfair onus on condominium owners after the fact if that onus is deemed to be oppressive or unfair.

At Baker & Company in Toronto, we take the time to meet with you and understand your unique needs in order to guide you through your real estate matter, whether commercial or residential.  We rely on our broad base of experience and expertise to provide exceptional legal advice and risk management in a variety of transactions, or through litigation. Call us at 416-777-0100 or contact us online for a consultation.


Anti-SLAPP Motions and Defamation Litigation

In 2017, the CBC aired the results of an investigation conducted by journalists that examined whether some chicken products marketed and sold by Subway, an international fast food franchise, may not have been comprised of 100% chicken meat. The CBC’s conclusion, following an 8-month investigation, was that some products the chain had labelled as chicken contained only approximately 50% chicken DNA (much of the remainder appeared to be comprised of soy product). After the piece aired, Subway publicly disputed the claim and filed a $210 million defamation lawsuit against the broadcaster. The CBC, in the statement of defence, claimed that the chain had been given the opportunity to respond to the claims prior to the piece going public, and failed to do so. They also claimed that the restaurant chain had failed to provide evidence to contradict the results of their independent investigation.

In June of this year, the CBC filed a motion to have the suit dismissed under s. 137.1 (3) of the Courts of Justice Act (the ‘Act’), which is aimed at restricting lawsuits strategically filed to protect the plaintiff from criticism on matters of public interest.

What is Anti-SLAPP legislation?

The Protection of Public Participation Act (the ‘PPPA’) which came into force in Ontario in 2015, aims to curb lawsuits launched specifically to silence public discourse on matters important to the public interest. The passing of the statute amended several pieces of existing legislation, primarily through the incorporation of ss. 137.1-137.5 of the Act, which created a new pre-trial procedure allowing defendants to move for an order dismissing a claim arising out of a defendant’s expressions on matters of public interest. The stated purpose of the section is as follows:

137.1 (1) The purposes of this section and sections 137.2 to 137.5 are,

(a) to encourage individuals to express themselves on matters of public interest;

(b) to promote broad participation in debates on matters of public interest;

(c) to discourage the use of litigation as a means of unduly limiting expression on matters of public interest; and

(d) to reduce the risk that participation by the public in debates on matters of public interest will be hampered by fear of legal action. 2015, c. 23, s. 3.

The Test for Identifying a SLAPP Lawsuit

A 2017 decision of the Ontario Superior Court of Justice helpfully set out a clarification of the test for courts considering a motion under s. 137.1(3) of the Act. In deciding on the motion, brought by a Toronto-area school teacher facing a defamation lawsuit over social media posts she had made speculating on the toxic effects of changes to regulations surrounding a local landfill site, the judge found that the original onus of proof under a SLAPP motion falls to the applicant. The applicant must first establish that the suit surrounds a form of “expression” which was made in relation to a “matter of public interest”.

If an applicant can establish both elements described above, the motion must be granted, unless the respondent can establish the criteria set out in s. 137.1(4) of the Act:

A judge shall not dismiss a proceeding under subsection (3) if the responding party satisfies the judge that,

  • there are grounds to believe that,

(i) the proceeding has substantial merit, and

(ii) the moving party has no valid defence in the proceeding; and 

(b) the harm likely to be or have been suffered by the responding party as a result of the moving party’s expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.

The responding party must satisfy the court that each of the elements above is present in order to avoid a dismissal. In the case at hand, the judge concluded that the applicant had satisfied her part and that the respondents had failed to satisfy theirs. Specifically, they failed to establish the first element, demonstrating that the proceeding had ‘substantial merit’. The corporation had demanded a retraction and apology from the applicant prior to the lawsuit, and she had fully complied, retracting her comments and posting an apology viewable by everyone who had seen her original comments. Following that, the court reasoned, there was no further benefit to be gained via the proceeding as no further harm existed. As a result, the case was dismissed.

Corporations and Individuals Should Review Proposed Defamation Suits with Experienced Counsel

Anti-SLAPP legislation aims not only to put a stop to existing litigation brought by corporations or individuals with considerable resources in order to silence discourse on matters of public interest but also to prevent the courts from being used to intimidate others from potentially speaking up. Defamation lawsuits can have a chilling effect on whistleblowers who fear being targeted and facing severe financial repercussions, and litigants have used this to their advantage in the past. This legislation aims to protect the freedom of expression of those seeking to shed light on matters in which the public has a vested interest. To avoid expending unnecessary time and expense, parties seeking to file a lawsuit to counter what may be perceived as libel or slander are strongly advised to discuss potential pitfalls with respect to anti-SLAPP legislation with experienced litigation lawyers before proceeding.

As for the Subway case, the CBC’s motion to dismiss is set to be heard on September 24, 2019. We will continue to watch this case and will update as appropriate.

At Baker & Company, we are both everyday trusted advisors and problem solvers. Our team of skilled and experienced litigation lawyers are cherry-picked for their ability to analyze cases, counsel clients, and examine and present evidence at trial.  Our litigation team has dealt with all kinds of litigation matters in courts across Ontario and has significant experience at both the trial and appellate levels. Call us at 416-777-0100 or contact us online for a consultation.


Estate Planning Concerns for Later in Life Relationships

Most people understand the importance of putting a carefully considered estate plan into place in order to ensure that one’s wishes are carried out with respect to the distribution of their assets after death. Married and common law couples generally plan their estates so that their assets pass to their spouse after death, who will then in turn pass all of the couple’s assets onto the couple’s children, if they have them.

When a young couple marries or moves in together before having children or acquiring significant assets, estate planning is generally not a complicated prospect. When two people share children and build their wealth together from the start, each party usually has similar long-term goals with respect to their estates and beneficiaries. However, when couples marry or enter into a common law relationship later in life due to divorce or the death of their first spouse, estate matters can become considerably more complicated. Each person is more likely to have grown children, established assets and other interests that were built before the relationship began. This can drastically affect the estate planning process in multiple ways.

How Much to Leave to a Surviving Second Spouse

When an estate plan involves a second spouse or common law partner as well as grown children from a previous relationship, determining the best method for the distribution of assets is key. The risks of leaving everything to the surviving spouse with the intention that they will then leave assets to one’s children after their death are numerous. The surviving spouse may not respect the intention of the original plan, gifting funds during their lifetime to their own children, charitable organizations or elsewhere, leaving little or nothing to gift to the children of the deceased when they pass. The surviving spouse may also enter into a new relationship, one that may involve other children and different or shifting financial priorities.

Aside from the potential for one’s assets to be depleted by the surviving spouse, there is also an emotional component to consider. Grown children may feel hurt, angered or forgotten should a  spouse who is not their parent inherit the entire estate in favour of them, even if the intention exists that the spouse will, in turn, leave assets to the children upon their death. This option leaves a lot of room for uncertainty, which is often what a testator is most trying to avoid when making an estate plan.

Another factor to consider is the taxability of certain assets. Assets such as Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), and Tax-Free Savings Accounts (TFSAs), may or may not be subject to taxes, depending on the beneficiary. Each of these assets can be transferred tax-free upon death to a surviving spouse, however, if they are left to children of the deceased, all will face tax penalties. This may not be a reason to leave these to a spouse rather than to one’s children, but if making decisions on which assets to leave to whom, this should be taken under advisement.

Leaving too little to a second spouse or partner is also a concern, particularly when there is a significant disparity in the parties’ assets and income. Leaving too little may result in insufficient assets, and the surviving spouse may find themselves needing to postpone retirement or facing the need to significantly curb spending in their later years.

A qualified estate planning lawyer will review all aspects of your financial situation and advise on how to determine a happy medium to the benefit of all family members over the long term.

The Matrimonial Home

When a couple shares a home, traditionally they will both go on title as joint tenants, which means that upon the death of one spouse, full ownership will transfer by right to the surviving spouse. When a couple each have children from previous relationships, they may choose instead to own the home as tenants in common. This means that they can allocate the percentage of ownership between them (often a 50/50 split) and when one spouse dies, their share in the property will be distributed according to their will. However, this can result in an awkward ownership split between a surviving spouse and the deceased’s children. Depending on family dynamics, this option could be just fine, but it may cause problems if any tension exists between the surviving spouse and the deceased’s children.

Another option that couples sometimes choose, particularly in common law relationships where the home is solely owned by one party, is for the spouse who owns the home to designate a life estate in the home for their surviving spouse or partner in their will. This option guarantees the right of the surviving spouse to remain in the home for their lifetime (a right not inherent in common law relationships), with the property ownership transferring to the owner’s children upon their death (or sooner, if the surviving spouse enters into a new relationship and/or chooses to leave of their own volition).

Obtaining Independent Legal Advice

When planning an estate involving later in life spouses or common law partners and children from previous relationships, it is advisable that both parties retain their own independent legal counsel. This will ensure that each party receives advice designed to protect their individual interests and allow the design of a plan that adequately addresses each party’s stated intentions.

At Baker & Company, our Toronto estate planning lawyers can help you establish an estate plan tailored to your needs, no matter your current family status. We have extensive experience and expertise in providing you with estate planning advice and implementing your desired plan. Call us at 416-777-0100 or contact us online for a consultation.