Workplace Accommodation Has Limits In Pourasadi v Bentley Leathers Inc., the Human Rights Tribunal found that accommodating a store manager by permitting the employee not to assist customers was not required, since assisting customers was an essential duty of her position. Many are familiar with the concept of an employer’s duty to accommodate disabled employees under Ontario’s Human Rights Code, but the grey area of accommodation in the workplace is about how much an employer is expected to accommodate. You might guess that the answer is to the “point of undue hardship” — and you would be right — but even this phrase can be confusing. If you work as a server at a restaurant, is the employer expected to accommodate you so you do not have to serve patrons? The Human Rights Tribunal (“Tribunal”) considered a similar scenario in its decision in Pourasadi v Bentley Leathers Inc. The Respondent-Employer (“Employer”) sells a variety of merchandise including purses, backpacks, totes, luggage and briefcases. The Applicant-Employee (“Employee”) began working for the Respondent in 2005 and became a store manager in 2006, working at the employer’s Promenade Mall location. In 2008, the Employee injured her right wrist while unpacking a box and was compensated for these injuries through a WSIB claim. The Employee continued to work full time from August 2008 until November 2009, subject to her restrictions, and was provided with modified duties from November 2008 onward. The Employee underwent wrist surgery in November 2009 but her condition did not improve. She returned to work at the Promenade Mall store in April 2010 with various physical restrictions. A WSIB Functional Abilities Evaluation in July 2012 concluded that the store manager job was not suitable for the Employee because the position included tasks that she was restricted from performing and no further accommodations or modifications could be implemented. The Employer later dismissed the Employee after it learned the Employee had been turning customers away while she worked alone because of her physical limitations. The Employee filed an application under the Human Rights Code alleging discrimination on the basis of disability. The Employee argued that the Code required the Employer to schedule another employee to work with her, who could perform all tasks outside her abilities, or alternatively, that she should be allowed to turn away customers or ask them to come back when another employee was present. Her position was that aside from these limitations, her other work was still valuable to the Employer. Both parties conceded that roughly 65-70% of the Employee’s position involved sales and customer service, but disagreed about how often the Employee would turn away customers because of her disability. Further, the Employer argued that it was not required to provide an accommodation which would not require the employee to complete the essential functions of her job (see e.g. Yeats v Commissionaires Great Lakes and Perron v Revera Long Term Care Inc). Before rendering its decision, the Tribunal referenced some key provisions of the Code regarding accommodation: (1) A right of a person under this Act is not infringed for the reason only that the person is incapable of performing or fulfilling the essential duties or requirements attending the exercise of the right because of disability. (2) No tribunal or court shall find a person incapable unless it is satisfied that the needs of the person cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any. So the question then becomes, what constitutes undue hardship? As seen in the Supreme Court of Canada’s decision of Hydro‑Québec v. Syndicat des employé‑e‑s de techniques professionnelles et de bureau d’Hydro‑Québec, section locale 2000, “[t]he test is not whether it was impossible for the employer to accommodate the employee’s characteristics. The employer does not have a duty to change working conditions in a fundamental way, but does have a duty, if it can do so without undue hardship, to arrange the employee’s workplace or duties to enable the employee to do his or her work.” The Tribunal added, however, section 17 does not require permanently changing the essential duties of a position or permanently assigning the essential duties of a position to other employees. The duty to accommodate also does not require exempting employees from performing the essential duties of their position. The “accommodations” sought by the Employee would not enable her to meet the essential duties of her position, but instead pass them onto another employee. In light of these considerations, the Tribunal concluded the Employee had not discriminated against the Employee. The concept of accommodation in the workplace is a frequent discussion topic on our blog (see our past blog posts about religious accommodation, mental illness, childcare obligations and family status). What is interesting about this concept is that every situation is different because reasonable accommodation is very fact-dependent. In this case, the Employee had already undergone surgery and other means of recovery without success. It was evident from her support through WSIB that she would be unable to perform her job’s physical activities for an indefinite period. In fact, WSIB had commenced a re-training program for her shortly before her termination. Employers are held to a high standard when it comes to reasonable accommodation because of the importance of preventing discrimination in the workplace. But tribunals and courts are also aware of an employer’s limitations and employers cannot be expected to provide an infinite amount of accommodation, especially when the disability is permanent. This case shows that the length of accommodation and how core aspects of a job are defined will be large indicators for determining whether an employer has met their duty under the Code. As an aside, it is interesting to note that had the Employee in this case been unionized, this may have turned out differently, as collective agreements can be drafted to impose stricter accommodation policies on employees (see e.g. County of Brant v OPSEU). If you are an employee suffering from discrimination in your workplace or an employer looking to provide accommodation to an employee, the Employment Law Team at Devry Smith Frank LLP will be happy to assist you. By Fauzan SiddiquiBlogJune 14, 2016November 25, 2020
Tax Treatment of Family Law Matters Divorce and separation are understandably difficult periods in a person’s life. Often, they are focused on issues such as the parenting of children, dividing matrimonial property or ensuring that there is sufficient financial support for them or their children. Rarely do minds wander into the realm of wondering about the tax issues that can arise in the context of family law litigation. However, these issues are significant, live and should be diligently considered. In this article, I provide but a general overview of some of the tax issues that can frequently arise when spouses or parents separate. Each of these topics, by themselves, could warrant an article. The aim of this short piece is simply to highlight some of the more common tax issues that arise in the context of family law litigation so that parties can remain attuned to how any possible settlement or resolution can affect their tax liabilities. Tax Treatment of Spousal Support Provided that it meets the requirements in the Income Tax Act, spousal support is generally deductible from income for the payor spouse, and is included as income for the recipient spouse for tax purposes. However, there a number of different payments that could constitute ‘spousal support’ and it is important to examine them carefully to determine their tax treatment. What Qualifies As “Spousal Support” In many cases, it will be very clear what amount of money is being paid as spousal support pursuant to a written agreement or court order. However, in some cases, parties fail to apportion ‘support’ amounts as ‘child’ or ‘spousal’ and these designations (or lack thereof) can have some significant implications come tax time. In the case of orders made, or agreements entered into or altered after April 1997, only amounts that can be clearly identified as spousal support or payments for the benefit of the former spouse are considered spousal support. All other amounts are considered child support. In the case of these agreements or orders, only spousal support amounts are taxable/deductible. In case of orders made, or agreed to before May 1997, all payments for support are deductible to the payor and attributable to the recipient. As well, one must always remember that child support takes priority over spousal support. If a court order or agreement specifies that both spousal and child support, then any payments made by the payor will first be considered child support by the CRA. Once the full amount of child support has been paid, then the remainder of payments will be considered spousal support by the CRA. However, these rules do not apply when child support and spousal support are payable under different agreements or court orders. The Basic Rules In order to qualify for the support tax treatment under the Income Tax Act, payments must be: Subject to the recipient’s discretion (the payments must be with ‘no strings attached’) Made on a periodic basis (lump-sum payments do not qualify for these rules) Paid for the support of the recipient; and Paid pursuant to a written agreement or Court order. While most support payments made pursuant to Court order or marital agreement meet these requirements, it is nonetheless important to receive legal advice to ensure that you are not running afoul of the Act or the CRA policy. Lump-sum Payments Lump sum payments are not deductible by the payor or included in the income of the recipient. This isn’t common knowledge and, while it may play into the favour of support recipients, is certainly not the avenue to get preferable tax treatment as a payor. While the difference between ‘periodic’ and ‘lump-sum’ may seem clear, it (like most tax law formulae) is not. The following example should be illustrative. Parties A and B separate and enter into a separation agreement. If the agreement stipulated that the recipient would receive $12,000.00 in spousal support, payable in monthly installments of $1,000.00, this would most likely constitute a lump sum payment, and would not attract the special tax treatment. If the agreement stipulated that the recipient receive base spousal support in the amount of $1,000.00 per month, this would be a periodic payment. While the foregoing example is overly simplistic, it highlights the need for careful drafting and characterization of payments to ensure that parties reap the benefits of the special tax treatment. In order to avoid the CRA deeming periodic payments as lump-sum payments, it is important to consult a family law lawyer to ensure that the amounts are properly characterized. Third Party Payments In most cases, spousal support will be paid directly to the recipient. However, there are situations where payments are made by the payor to a third party, which are in the nature of spousal support. In order for these payments to qualify, they must meet certain requirements under the Income Tax Act. To qualify, the payments must be: Made pursuant to a written agreement or Court order; The agreement or order must specifically refer to ss.56.1(2) and 60.1(2) of the Income Tax Act or contain sufficiently clear language confirming the parties’ understanding that the payments will be considered spousal support and will be taxable/deductible; Paid for the support of the recipient. If the payments are for specific living expenses, such as medical, rent or mortgage expenses, they may not be included in determining the amount of deduction available. Made in the current or immediately preceding taxation year. While the above list may make third-party payments seem straightforward, they are, in reality, complicated. And because of their susceptibility in being employed in tax evasion schemes, these arrangements are subject to special scrutiny by the CRA. If you are planning on incorporating a third-party payment arrangement into your separation, it is advisable that you consult a lawyer prior to entering into the agreement or order to avoid any issues come tax time. Tax Treatment of Child Support Like spousal support, there is a divergence in the tax treatment of child support payments depending on the date on which the order or agreement was made. If the order or agreement arose after April 1997, then the child support is not deductible by the payor and is not included in the income of the recipient. For agreements or orders made before May 1997, child support is deductible by the payor and included in the income of the recipient, unless one of the following exemptions apply: Changes to the Quantum of Support – If the amount of support payable is changed after April 1997, then the child support will not be deductible/included in income. A New Court Order of Agreement – If 1) a new order or agreement is made after April 1997; 2) the previous order or agreement remains in effect; and 3) the effect of the new order or agreement is to change the overall amount of child support payable, the post-April 1997 tax rules apply to both orders or agreements. Express Terms – An order or written agreement may specify that child support payments made after a certain date (not earlier than May 1, 1997) will no longer be taxable and deductible Election – If there is an order or agreement prior to May 1997 and a person wishes, they can make an election with the CRA that the post-April 1997 rules will apply to the payments. Tax Treatment of Family Law Legal Fees In certain circumstances, legal fees incurred in the context of family law litigation are tax-deductible. Under Lines 221and 232 of your tax return, the following legal fee expenses can be deducted by a support recipient from their income: Legal fees incurred to establish entitlement to spousal or child support; Legal fees incurred to increase the amount of spousal or child support payable; Legal fees incurred to claim retroactive spousal or child support or to enforce arrears of support; Legal fees incurred to try and make child support non-taxable. However, a recipient cannot claim a deduction for the following legal fees: Legal fees incurred to get a divorce or separation; Legal fees incurred to obtain an equalization of family property, or any other division of property; Legal fees incurred in relation to custody and access; For a payor spouse, there is no income deduction for legal fees associated with contesting or negotiating the amount of support payable. How to Take Advantage of the Tax Benefits The best way to ensure that any support arrangements are taxed in a preferential way is to speak with a lawyer, preferably one well-versed in both family law and tax law. They will review any marriage, cohabitation or separation agreement to ensure that it is structured to maximize any tax benefits. They can help you file your income tax return to make sure it is in compliance with the Income Tax Act, its regulations and CRA policy. If you are engaged in family litigation, an experienced family lawyer can help you put your best foot forward in court to increase the likelihood that any orders will be in a form that allows you to minimize the tax payable on any support you receive. A good lawyer will take the necessary steps to ensure that the order or agreement is registered with the CRA, and is in compliance with their rules. By Fauzan SiddiquiBlog, Family LawMarch 16, 2016November 25, 2020
Beware a House of Lies: Negligent Misrepresentation in Real Estate By Ivan Merrow Negligent misrepresentation is a more specific type of negligence claim used to compensate victims of lies or misinformation that cause them harm. In general, people are most vulnerable when relying on professional advice to decide what to do next. For example, when buying a home, people rely on the advice of their real estate agent and the representations made by the seller when making their decision. If either the seller or real estate agent knowingly deceives the buyer during the sale, the deceptive party may become liable for negligent misrepresentation. That was exactly the situation in the leading negligent misrepresentation case Krawchuk v. Scherbak, which was decided in the Ontario Court of Appeal in 2011. Krawchuk epitomizes every homebuyer’ nightmare: after purchasing her first home, the plaintiff Ms. Krawchuk discovered that the house had serious structural defects and plumbing problems. The sellers knew there were problems with the home, but did not disclose the defects. Ms. Krawchuk moved in and noticed the foundation was shifting. She also soon found out that the plumbing was ramshackle. The eventual repair costs exceeded the value of the entire home’s purchase price by $80,000. Krawchuk tells us the case the plaintiff has to meet for a negligent misrepresentation claim to succeed: the defendant owed the plaintiff a duty of care based on a “special relationship”;the defendant made statement(s) to the plaintiff that were untrue, inaccurate or misleading;the defendant acted negligently in making the statement(s);the defendant reasonably relied on the statement(s); andthe defendant sustained damages as a result. Ms. Krawchuk was found to have a special relationship with the sellers. They had a duty to disclose known defects and errors in the home to potential buyers. The sellers’ statements were found by the court to be plainly untrue. The Court found that the sellers were also negligent, because once a home seller chooses to “break the silence” about the condition of their home, they must speak truthfully and completely. Importantly, Ms. Krawchuk was able to demonstrate that she relied on the sellers’ statements to make the purchase. She may not have been successful if there was evidence that the lies or misinformation were not a determining factor in her purchase. Ms. Krawchuck actually asked the sellers about the sloping floors and seemed content with their answer. Little did she know that the floors were sloping because the structure was falling apart. The sellers attempted to argue that the sloping floors were a “patent defect” that was obvious, and it was Ms. Krawchuk’s fault for failing to inspect the house properly. The Court disagreed, because the purpose of the sellers’ information form was to tell the buyer about any known defects. Home buyers do not have a duty to challenge the honesty of home sellers—they should be able to reasonably rely on the sellers’ disclosure. Finally, Ms. Krawchuk was in fact damaged by her reliance on the sellers’ statements. Ms. Krawchuk was compensated for her losses after a long battle. The lesson for home sellers is this: disclose all known defects in your home, or remain completely silent so buyers know they have to investigate it for themselves. Home buyers should ask plenty of questions and retain independent legal counsel when purchasing a home. If you have any questions about negligent misrepresentation, real estate transactions, or other legal issues, contact the lawyers at Devry Smith Frank LLP at 1-416-449-1400. By Fauzan SiddiquiBlog, Real EstateDecember 15, 2015November 24, 2020
Are Uber Drivers Properly Insured? Since its inception over 6 years ago, ride-sharing service Uber has continued to make headlines as one of the most controversial technology companies in the mobile era. This “uber-convenient” service, which uses an online app to connect passengers with drivers using their personal vehicles, has faced legal challenges from consumer groups, municipalities, and provincial legislators. In the face of these obstacles, Uber has continued its expansion to more than 300 cities and is now valued in excess of $40-billion (US). The Uber app allows customers to order rides on their smartphones, have them automatically billed to their credit cards, and monitor who is picking them up. One of the controversial issues that Uber faces is properly ensuring its drivers. In Ontario, the standard automobile policy excludes coverage when the automobile is used to carry paying passengers or used as a taxi. Earlier this year, the Financial Services Commission of Ontario (FSCO), which regulates provincially-incorporated property and casualty insurance companies, warned drivers and users of the ride-sharing services that they may not be protected against certain damages, losses, and liabilities that may arise out of use of the service. While Uber drivers should be opting for a more expensive commercial license, most do not, and instead, continue operating under their existing personal auto insurance policies. Under these policies, if an Uber driver were to get into a serious accident while driving for the ride-sharing company, insurers would likely limit the amount they pay out in claims. In addition, they would then go after the driver for the money for violating the terms of their personal policy. Uber has responded to these insurance concerns by providing contingent insurance to cover drivers in case they encounter problems, however, the company has been tight-lipped on the exact terms of the policy that operates in Canadian cities. Uber ensures this policy covers everyone during a fare, but there is uncertainty about coverage before and after and even during the ride. Without the details of the policy, it is impossible to know whether it provides adequate insurance for drivers and users. In the face of these insurance complications, The City of Toronto has taken steps to interfere with Uber’s operations. Last November, the City filed an injunction to shut down Uber’s ride-sharing application. According to a recent article in the Globe and Mail, The City of Toronto is claiming that Uber’s service violates municipal taxi licensing regulations—failing to meet the $2-million coverage that is required to operate under city bylaws. However, Uber’s website maintains that it provides $5-million in insurance coverage for users. In March, a judge ruled that if the company chooses to provide a copy of its insurance policy as evidence, the document must be made public. Uber has argued that the document is a “trade secret” and that making it public “would cause serious harm to its commercial interests and competitive position.” But Justice James Diamond of the Superior Court disagreed with this, stating in his ruling, “I am not satisfied that Uber has presented sufficient evidence to show that disclosure of the insurance policy would lead to a loss of any competitive advantage.” This week, the Superior Court of Ontario put the issue surrounding Uber’s operations to rest, for the time being, dismissing the city’s application for an injunction. In his decision, Justice Sean Dunphy concluded that there is “no evidence” Uber is operating as a taxi broker, and therefore not subject to city bylaws regulating taxis. As a result, Uber will continue its operations in Toronto. For more information regarding this blog post or any other insurance-related topic, please contact our insurance defence group at https://devrylaw.ca/insurance-defence/ or our personal injury group at https://devrylaw.ca/personal-injury-law-firm/ “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Insurance DefenceJuly 16, 2015June 16, 2020
Time of Essence Clause in Real Estate Transactions Remember that time when you made a reservation for a restaurant but later forgot about it or changed your mind right before? And then you breathed a sigh of relief knowing the restaurant will never know who you are and you will not have to pay a fine for going back on your word. Although a rather large leap, the same cannot be said for real estate transactions. Almost invariably in Canada, a contract of sale for a piece of real estate property will expressly provide that time is of the essence. So if you change your mind about purchasing the property or cannot attain suitable funding in time for the closing date, for instance, you may be liable for damages and have the contract come to an end. However, there are several important things to note: You cannot rely on the clause unless you have demonstrated that you are ready, willing, and able to complete the agreement. In other words, if both parties are not ready to close on a real estate transaction, neither party can immediately rely on the clause to bring an action for specific performance, damages, or termination of the contract. Similarly, you must proceed diligently to fulfil your obligations, and not act in bad faith by interfering with the other party’s ability to fulfil their responsibilities. Further, a clause providing for the time of essence in a contract of sale can be negated largely in three different ways: Waiver: If one party in a contract takes action that makes it clear that the strict contractual provisions will not be enforced. For instance, if both parties agree to extend the closing date by two days then there is a waiver. Election: When one party breaches the contract and for instance does not have the requisite financing completed on the closing date, the other party could agree to extend the closing date. Bad faith: As discussed earlier, if the transaction fails to close because of one party’s lack of action or bad faith, that party cannot rely on the time of essence clause. So just remember – take more care and time in entering into an agreement to purchase real estate than you would for where will you have dinner tonight. For more information or any other questions regarding real estate transactions, please contact our real estate lawyers. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateJuly 16, 2015June 16, 2020
Bankrupt Employer ≠ Helpless Employee It has long been recognized by the courts that there is a power imbalance between employers and employees. Given the nature of the employer-employee relationship, one may be able to see why an employee may feel as though they are at the mercy of their employer. Luckily, there are statutory safeguards to place employees on an even playing field with their employer. An employee will often rely on a employer to be paid for the work they perform, as well as any benefits to which they were entitled under the employment contract. After working for an employer for an extended period time, it is not unusual for an employee to become heavily dependent on the steady stream of income and benefits from their employer. It would be understandable then that an employee, who showed up to work one day to find that their employer has gone bankrupt, would panic, and feel vulnerable and distraught. Such a scenario may evoke memories of the recent news that Target would be bowing out of the Canadian marketplace. Target, however, has not gone bankrupt in Canada – it has filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA), which is perhaps a topic for another blog. That being said, their current situation in Canada acts as a good starting point to discuss what employees can do in the case that their employer goes bankrupt. This was also recently discussed in another article in The Lawyers Weekly which you can find here. Employees of a bankrupt employer are not entirely without the means to try to recover unpaid wages or termination and severance pay. One of the means an employee can use is the Wage Earner Protection Program (“WEPP”). According to Service Canada, the WEPP “compensates eligible workers for unpaid wages, vacation, severance and termination pay they are owed when their employer declares bankruptcy or becomes subject to a receivership under the Bankruptcy and Insolvency Act.” WEPP is therefore an extremely valuable resource for an employee faced with a bankrupt employer. Employees’ claims for unpaid wages, termination pay etc., are equivalent to that of unsecured creditors. In other words, employees would be closer to the end of the line of creditors hoping to get whatever assets (liquidated or not) the company had remaining. This could mean that by the time it was the employees’ turn to collect on their unpaid wages or termination pay etc., the company may not have anything left to give. WEPP, however, is not paid out of the assets of the bankrupt company, but rather directly from Service Canada. This gives employees some certainty that, if they meet all the necessary criteria set out by WEPP, they will be able to recover some of the money their bankrupt employer owes them. If found to be eligible for WEPP, it appears that an individual can receive a maximum payment equaling up to four weeks of insurable Employment Insurance earning which in 2015 is $3,807.68. Another place employees can look to for help when their employer is felled by bankruptcy is the Employment Standards Act, 2000 (“ESA”). Under section 81 of the ESA, directors of an employer can be liable for wages in a few instances, one of which is if, “the employer is insolvent, the employee has caused a claim for unpaid wages to be filed with the receiver appointed by a court with respect to the employer or with the employer’s trustee in bankruptcy and the claim has not been paid.” (s.81(1)(a)) This acts as a remedy for employees to seek compensation from directors in the case that after bankruptcy they have been unsuccessful in recovering unpaid wages. It is important to note that this remedy only applies to wages, and not termination or severance pay. In short, while a bankrupt employer may mean the end of your employment, you are not entirely helpless and if you choose to avail yourself of some of the avenues explained above, you have a chance of recovering at least some of what you are owed. By Fauzan SiddiquiBlog, Employment LawJune 9, 2015December 3, 2020
Does Child Support Affect Child Custody or Access? Every family law professional, and every family court judge, will tell you that child custody and access are completely separate issues from child support. How child support is determined is completely different from how judges decide who gets custody. However, there are at least two ways in which child support can influence parenting issues in family court cases: Failing to pay appropriate child support immediately gives the impression that a parent does not care about the child. That can affect how a Family Court Judge or Family Arbitrator views that parent’s fitness as a parent. Shared Custody/Shared Parenting changes the way Child Support is Calculated. Sometimes people view shared custody as much as a financial arrangement as a parenting arrangement in the children’s best interests. However, things can work out differently than they expect. The Importance of Paying Child Support Right From Separation Child support is the right of the child. The right of children to share in their parents’ wealth exists from the moment of separation. It is a big mistake for a parent to withhold child support to the parent with whom the children primarily reside. It costs a lot of money to raise children. They have on-going needs. When one parent leaves the children with the other parent, that parent must recognize that the children’s needs continue. That means paying appropriate child support right from separation. You can use online tools to figure out your base child support obligation. When parents do not recognize that their children still have financial needs after separation, by immediately paying appropriate child support, Family Court Judges interpret that as a parent not caring about the children’s needs. Judges view parents who do not care, or understand, their children’s needs as poor parents – parents who cannot make good decisions for their kids, and therefore should not have custody. That leads Family Court Judges to believe that parents who do not immediately start paying appropriate child support as parents who should not have custody. That, of course, can be an incorrect assumption by the Family Court Judge. But a parent who starts off giving the Family Court a bad impression of him or her as a parent will have a much harder time in their case. That parent has barriers to overcome to get the parenting arrangements that he or she wants – barriers that he or she would not have had if she or he had shown devotion to the kids right from the start by paying child support. You can make sure you are doing the right things after separation by speaking to a top family law lawyer, and by watching the video below that sets out some of the other mistakes that you need to avoid:https://www.youtube.com/embed/bgIewOxGDlw?rel=0 Under section 9 of the Child Support Guidelines, child support changes when the children spend close to an equal amount of time with each parent. The magic number is 40%. When a child spends 40% of his or her time with a parent, that parent no longer has to pay the table amount of child support, but pays another amount that reflects a fair sharing of the costs of raising that child. The principles for how parents should financially support their children in shared parenting situations were set out by the Supreme Court of Canada in the case of Contino v. Leonelli-Contino. To summarize, when children share their time close to equally between parents, the starting point is that the parents each pay the table child support to the other. However, the way that works out, is that the parent with the higher income pays his or her table amount of child support minus the other parent’s child support obligation. For some parents, they want to have the children for forty percent or more of the time so that they can get a “break” in child support. Several family court judges are suspicious when a parent seeks to move to shared parenting because they want the break in child support. if the judge believes that a parent is more interested in the break in child support, than in the child’s best interests, that judge will not order shared parenting. If a parent wants shared parenting out of a since interest in being very involved in the children’s lives and protecting their interest, that parent may actually want to offer to pay full child support so that the judge has no doubt about that parent’s motives and feels safe ordering shared parenting. In addition, a parent who wants a shared parenting regime should watch the video below, which sets out when shared parenting, and other parenting arraignments, work best for the children, to make sure that the plan is best for the children and the judge will see that too:https://www.youtube.com/embed/i8y37J0ipzU There are some additional consideration regarding child support in shared parenting situation. First, in Contino, the Supreme Court said that the ‘set off” of child support was only the starting point. If that approach did not result in the parents sharing the costs of raising the children in proportion to their respective incomes, then the Family Court should make a different child support order that does. For example, a Family Court Judge will not order “set-off” or reduced child support, where one parent continues to bear the bulk of the cost for raising the children. Set-off only works where both parents are not only sharing parenting time, but also sharing the costs of raising the children. A second consideration regarding child support in shared parenting situations is that it does not always save money. Kids can be expensive. When the children are being raised in two homes instead of one, the children’s expenses are often not divided in two, but multiplied by two. Each child may need two beds, two sets of clothes, two TVs, two gaming systems, two bicycles, two sets of toys, and the list goes on. In shared parenting, a parent may find that child support goes down, but the extra expenses that parent pays are much more than the decrease in chid support. Many parents in shared parenting think it would be “cheaper” to have the children live with the other parent and just pay child support, but cannot do that because of how involved they are with their children. A third consideration is that in several shared parenting scenarios the support paying parent may pay more support than when the children have one primary residence. This is particularly true when one parent makes a lot more than the other. In that situation, the “set off” of support may not result in much of a decrease in child support. However, because to the adjustments to tax benefits and deductions, and other cash flow considerations, when the Spousal Support Advisory Guidelines are applied, the decrease in child support is more than made up fore by an increase in spousal support – and spousal support may not necessarily end when a child reaches 18 or finishes school as is the case for child support. It is important to have a good family lawyer do the support calculations for you to figure out the most prudent way to arrange support in light of your family’s circumstances. Child Support and Child Custody Are Still Separate Issues Despite the above, child support and child custody are not legally linked. So, except for the circumstances described above, parents should not try to link them. For example, a parent cannot deny access because the other parent is not paying child support. Similarly, a parent is not “entitled” to see the children just because he or she is paying child support. How much time a parent spends with the children and when is determined based on what is in the child’s best interests, not based on how much child support that parent is paying, And telling the children how much support you are paying is never a good idea. That is involving the children in adult issues, which can only be harmful (and judges do not let parents see children if it is going to cause harm.) Judges will not order that the wealthier parent get the children because he or she will be able to give the children a better lifestyle. Child support is supposed to permit children to share in the wealth of both their parents. Saying the other parent is “too poor” to raise the children properly is a pretty good way to anger a judge and lose your case. Finally, paying child support does not mean that a parent gets to dictate how the other parent raises the children, or even how the receiving parent uses the child support. Unless a court or arbitrator decides otherwise, what a parent does during his or her “parenting time” is not the business of the other parent. After separation, parents do not get to control how each other uses their money, including child support. If a parent is using child support money to buy drugs or alcohol, or gambling it away, then the support paying parent may have a case to say that the receiving parent is a bad parent because of addiction issues. But, that determination is based on each parent’s parenting ability and the best interests of the children – not on a consideration of child support. There are a lot of things to consider in each of child support and child custody. There are more things to consider, and things get more complicated, when the two issues interact. In addition, a lot can change depending on the specifics of your situation. In these situations, you really need to set up a consultation with a good family lawyer to learn your rights and obligations in your specific circumstances. Make an appointment to meet with Certified Specialist in Family Law, John Schuman, by calling 416-446-5847 or emailing him. We respond to all inquiries promptly. By Fauzan SiddiquiBlog, Family LawFebruary 19, 2015December 5, 2020
Canada Revenue Agency (CRA) Offers Advice for Settling Tax Dispute Claims, Part 1 On June 19, 2014, the Canadian Tax Foundation (“CTF”) held an event titled “Tax Dispute Resolution: an Inside Look from the Government’s Perspective.” Devry Smith Frank LLP (“DSF”)’s tax litigation team attended the event to better assist its corporate and personal clients to resolve their disputes with the Canada Revenue Agency (“CRA”). Part one of this three-part article series begins with Ms. Anne-Marie Lésvesque, Assistant Commissioner of Appeals for the CRA: CRA has a two-year backlog of ongoing donation tax credit disputes Ms. Lésvesque, speaking for the CRA, explained that the timely resolution of disputes is made more difficult by an imbalance between resources dedicated to the CRA’s appeals unit and the number of ongoing disputes. As an example, Ms. Lésvesque explained that the CRA is currently dealing with a glut of 175,000 donation tax credit disputes. In a regular year, the number is closer to 50,000 to 60,000. Ms. Lésvesque estimated that it would take one to two years to eliminate this backlog. In the meantime, tax litigation lawyers like those at DSF can work with you to protect your rights while moving your tax dispute closer to resolution with the CRA. Avoid commonly used arguments that are commonly unsuccessful Speaking from the CRA’s perspective, Ms. Lésvesque also suggested that repetitive appeals such as the “natural persons argument” have increased in popularity but are not succeeding at the appeal level or in tax court. Toronto tax lawyers like DSF’s own save their clients time and money by refusing to put forward “fad” arguments that are unlikely to be successful. Cases of legal interpretation are more likely to go to trial Ms. Lésvesque also shared that while the CRA appeals process must be viewed as impartial, it is legally bound to follow the CRA’s published interpretation of the Income Tax Act(the “Act”). Settlement in cases where the CRA’s and taxpayer’s interpretation of the Act are different are more likely to go to trial. In contrast, the CRA is far less likely to go to trial where the facts are in dispute. Ms. Lésvesque explained that where there are issues of credibility, the taxpayer should have the benefit of the doubt, at least in his or her first dispute with the CRA. Tax lawyers at DSF can help taxpayers put forward their best case when explaining why the CRA has made errors in its tax reassessments or enforcement measures. Ms. Lésvesque suggested that the CRA’s success rate at trial is currently 80%. Having a great lawyer on your side can increase the odds both for early settlement and success at trial in your tax law case. Stay tuned to the Devry Smith Frank LLP tax litigation blog for part two of this series that discusses what the Department of Justice’s former Senior Counsel had to say about settling tax dispute claims at this event. As always, for any tax law related matters in Toronto, Ontario Canada, contact Devry Smith Frank LLP at 1-416-446-1400. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, TaxJuly 31, 2014June 10, 2020
Legal advice needed about child custody John Schuman, Toronto Family Law lawyer at Devry Smith Frank LLP, was asked this question just recently: “My ex is trying to get custody of my six year old and I have been the sole support to my child her whole life. Her father has been in and out of the jail and is a drug addict. He claims that he changed but I am not buying it. He is abusive and I have police reports to prove it. I also have papers from children’s aid society saying that he is unfit parent. What should I do?” Based on what you said, it sounds like your ex has an uphill battle to get custody of your child. Judges have specific factors that they have to consider before making an order for custody of a child. Those factors help the judge decide what order is in the “child’s best interest.” You may also want to listen to this podcast that goes over not only how judges decide custody cases, but also what “custody” actually means. However, as the decision comes down to what is best for the child, it is difficult for people who are abusive, or have substance abuse problems, or have who have concerned a children’s aid society to get custody of a child. Access is a different matter. This is for two reasons. First, access can take many forms, occur in different places, can be supervised, or occur in a therapeutic setting, or for limited times. All of these considerations may make it possible for access to be “safe” for the child. Judges won’t order access if doing so may put the child at risk of harm. However, there are only very limited circumstances where the risk of harm cannot be addressed by supervised access. Second, from a psychological and developmental perspective, there is a great benefit to children in knowing who their parents are. Children form a sense of identity by knowing who their parents are – even if they form a sense of identity by deciding that they are not like their parents because they don’t like who their parents are. Children who don’t know their parents do less well psychological because a piece of their identity is missing. So, for the child’s sake, courts do like to try order some access. What children want, or what they think they want, is not determinative of anything in custody and access cases in family court. There can be difficulty where a parent wanders in and out of the child’s life on the parent’s whim. That can be a bad situation because the child does not get to really know the parent, but suffers a loss, or perhaps feels rejected every time the parent disappears. In those cases access may not be a good idea. A child psychologist or social worker may be able to help you and your ex sort out what is best for your child. However, that option is only possible if both parties agree on the professional and agree to participate in good faith to work for the benefit of the children. If the parents can do that, they can come up with much better solutions than a court may order because they can focus on the specifics of the child’s life and needs that a judge may not hear about if the parents do not present their cases carefully and effectively. Child custody cases can be very difficult and there can be a lot at stake for the children. For difficult parenting cases, it is extremely important to speak to a good family lawyer who knows how the law could apply to a specific situation and can help you explore all the options for dealing with the problems. You may also want to pick up a copy of this $20, easy-to-understand book on Ontario Family Law. It explains custody-access law, how judges make custody and access decisions, the court process and other options for working out parenting matters – there are a lot of better options for working out parenting conflicts that result in tailor made solutions that benefit the children more than a court imposed custody order, but court may be necessary in some cases. For more information regarding child custody, access or any other family law related topic, please contact Toronto family lawyer John Schuman at 416-446-5080 By Fauzan SiddiquiBlog, Family LawJuly 9, 2014December 3, 2020
How Do You Give Money To Your Child, But Not Their Spouse? It is very common for parents to want to give money, or property, to their adult children, but want to keep it from their child’s spouse (their son-in-law or daughter-in-law). So common is this question, that both this podcast and this podcast address the issue. There are ways to to do this, but you need to be very careful. The law does do a little to protect these gifts. Common-law couples do not share in each other’s property. Gifts that parents give to a married child, while their child is married, are usually “excluded” from the property division scheme for married spouses in Ontario. However, there are three easy ways in which a child can lose the exclusion for that gift and have to share it with his or her spouse. These are: If the child puts the money into a “matrimonial home” because, without a marriage contract, spouses always share the full value of the matrimonial home or homes that they have on the date of separation. Keep in mind that spouses can have more than one matrimonial home. A cottage, even a partial interest in a cottage, can be a matrimonial home and so a spouse can become entitled to some of the value of his or her spouse’s family’s traditional family cottage. If the child puts the gift into an asset that is shared with his or her spouse, such as a joint bank account. The value of the gift may still be taken out of the property division calculations if the gift can be “traced.” However, three is controversy on how such tracing should be done, and there is no guarantee that any of the gift can be protected using tracing. Also, it is possible that a spouse can get an interest in an asset, even if his or her name is not on title, if he or she also contributes a lot to the asset. In that case, the attempts to protect the gift can be very difficult. There is not proof that the gift was a gift instead of payment for services or repayment of a loan or similar. However, this is easily remedied by the parents making the gift doing a formal written “deed of gift.” (The parents may need to see a lawyer to draft that document, but if a lot of money is involved, it is worth it.) Another way that a gift may be shared with a spouse is through support. Any income (such as interest) that the gift earns is income for child support purposes. That cannot be changed. The gift itself doe snot matter for child support – unless it is a related gift that looks like income or “pay” from the parents. Spousal support can also erode a gift. The gift can get caught up in spousal support in two ways. First, a large gift can either increase a spouse’s ability to pay support, or decrease his or her “need” for money. That can affect the amount of support. Second, income from the gift may be included in the recipient child’s income for the calculation of spousal support. This second consideration is also more easily remedied because a proper deed of gift can say that the gift, and income from it, are not to be considered income for spousal support purposes. There are some ways for parents to give a gift to a child and protect. The best way to protect a gift is to get the child and his or her spouse to sign a marriage contract. A marriage contract can specifically state that an asset is not going to be included in property division calculations, whether it is a matrimonial home or not. A marriage contract can even provide that a matrimonial home will not be included in the property division calculations. Alternatively, it can give one spouse a set credit in those calculations. A marriage contract can also limited spousal support, which means it can say that a gift from parents will not be included in the spousal support calculations. Marriage contracts cannot change the rules for child support. Marriage contracts work well because the child’s spouse knows about the gift and specifically gives up the right to share in it. The whole transaction will seem fair to a judge as long as the parties follow the rules for marriage contracts. To learn more about those, listen to this podcast, or watch this video. Your child and his or her spouse will both need lawyers – but that will be a worthwhile investment if there is a lot at stake. Marriage contracts can be very unromantic. Many people have difficulty asking their spouse for a marriage contract. It is often much easier for a spouse’s parents to insist on the marriage contract, and even make the giving of a substantial gift contingent on it. Another way to keep assets out of the hands of a son-in-law or daughter-in-law is to put them in a trust. The child can have use of the assets throughout he trust, but not actually own them. There are ways to attack trusts, and judges may be willing to consider those if a person thinks his or her spouse actually owns the assets. It is best not to keep a son-in-law or daughter-in-law in the dark about the trust. Also, the rules for trusts can be complex. Additionally, they have to be set up in a particular way that takes into account the particular circumstances of the family, in order for the trust to accomplish the gifting parent’s particular objectives. There can also be tax implications. It is important to hire a good lawyer to set up the trust. The rules that apply to gifts from parents to their married children, the considerations about how to protect those gifts, and many other family law issues are covered in this $20, easy-to-understand book on Ontario Family Law. However, it is a very good idea for parents who want to make any sort of substantial gift to their married children to speak to a good lawyer about the best way to do that, and to protect the gift. For more information on areas of family law, please contact Toronto family lawyer John Schuman at (416)-446-5080 By Fauzan SiddiquiBlog, Family LawMarch 7, 2014September 9, 2022