Family Law Bulletin: November 2010
DE FACTO (“COMMON LAW”) SPOUSES HAVE SOCIAL OBLIGATIONS TO SUPPORT EACH OTHER, EVEN IN QUEBEC
Droit de la famille — 102866, 2010 QCCA 1978
Introduction
Reversing a long-standing jurisprudential history to the contrary, the Quebec Court of Appeal has declared that de facto spouses (“common law spouses”) in Quebec (« conjoints de fait ») have a reciprocal social obligation of support.
Under Quebec legislation, de facto spouses have no reciprocal rights or obligations, so there is no statutory basis upon which a de facto spouse can claim support or the division of property from the other spouse. The Superior Court of Quebec rendered a judgment in July 2009 in the high-profile case of “Eric” v. “Lola” (as the media has renamed the parties), in which it concluded that this legislative landscape was intentionally fashioned by the legislature to allow couples the choice of how to organize their mutual rights and obligations, and therefore that it was constitutionally valid. Dissatisfied with this decision, the mother asked to the Court of Appeal to overturn it.
Facts
During their relationship of almost ten years, which began when the mother was only seventeen years old, the parties had three children and never married. The mother did not work during their seven-year cohabitation. In 2006, a judgment of the Superior Court ordered the father to provide child support in accordance with the Quebec Child Support Guidelines of over $34,000 per month, and to pay for a wide range of special expenses and other costs, such as private schooling, extracurricular activities, fees of healthcare professionals, salaries for two caregivers, a driver, a cook, and many expenses related to the residence where the mother and children lived.
The mother asked the Superior Court to treat her relationship with the father as a “marriage”, and, alternatively to conclude that any definition of “marriage” which excludes de facto spouses is in breach of the Canadian Charter of Rights and Freedom (the “Charter”). She sought the same rights upon breakup as those available to her if she had been formally married – in this case including spousal support of $56,000 per month, an alimentary lump sum of $50,000,000, and equal partition of the couple’s family patrimony (similar to “family property” in Ontario).
The mother had argued that several provisions of the Civil Code of Quebec [S.Q. 1991, c. 64] (“CcQ”) which deal with the solemnization of marriage and the rights and obligations of spouses are ultra vires, and that the different treatment of de facto spouses by Quebec legislation was a violation of the right to equality protected by section 15 of the Charter.
The Superior Court Judgment
In 2009, the Honourable Carole Hallée of the Superior Court reviewed the situation of de facto spouses in Quebec and acknowledged that, according to a 2006 study, 34.6% of Quebecers live in a de facto union, whereas an average of 18.4% of couples in Canada choose to live in a de facto union, and that 60% of children in Quebec are born out of wedlock. However, the Court concluded that, according to an analysis of legislative history in Quebec, the absence of legislation imposing support obligations upon de facto spouses does not result from an oversight, but rather from a deliberate choice by the legislature to allow individuals the freedom to choose whether to be subject to the laws applicable to married persons.
The Superior Court relied heavily on the case of Nova Scotia (Attorney General) v. Walsh, [[2002] 4 S.C.R. 325] (“Walsh”), where the Supreme Court of Canada had decided in 2002 that, when analyzing the rules regarding the property rights and obligations of de facto spouses, it is the choice of spouses to marry or not which becomes the most important consideration in the application of section 15 of the Charter. Thus, distinctions between de facto spouses and married spouses being a reflection of the choice made by these persons, the results of such a choice do not breach section 15 of the Charter. The Court applied the principles outlined in Walsh without reserve, despite the fact that Nova Scotia legislation does allow de facto spouses to request support from each other, because the pivotal issue in both Walsh and the present case was the spouses’ choice whether to marry.
Just as the Supreme Court of Canada did in the Walsh case, the Superior Court of Quebec explicitly stated that it is up to the legislature to modify policy on this issue, and that it would undermine the respective institutional roles of the legislative and judiciary branches of government to have the courts intervene when there is no constitutional onus on the legislature to change its stance on this matter.
The Court of Appeal
The Court of Appeal of Quebec agreed with the Superior Court that, with respect to the issue of division of property only, the Walsh case must be applied: the freedom of spouses to choose whether to marry is essential and determines their respective rights and obligations.
However, the Court of Appeal considered that Walsh cannot be applied to the issue of support. The Supreme Court distinguished between the different objectives of support and division of property: support is based on a social objective, whereas division of property is established according to the regime chosen by the parties, either by solemnizing a marriage or by entering a contract. The Court of Appeal declared that in Walsh, the Supreme Court had found that the Matrimonial Property Act of Nova Scotia was constitutional because the division of property was founded on obligations of a contractual nature, where choice is paramount, whereas the social obligation of protecting common law spouses who would be unjustly disadvantaged upon separation was addressed by the possibility of requesting support under the Maintenance and Custody Act of that province. The Court of Appeal then approached the constitutionality of Quebec legislation regarding support with this distinction in mind – that the division of property stems from a contractual obligation, whereas support fulfills a social objective.
The Court of Appeal framed the question as whether the distinction between married spouses and de facto spouses whose union presents “a certain stability” is discriminatory within the meaning of section 15 of the Charter. The distinction in question is that article 585 CcQ allows only married spouses or spouses having entered into a civil union (a provincially legislated analogue to marriage) to request support from each other.
In the Court’s analysis, it explained that, although de facto unions are socially accepted today, the law still contains disadvantages based on stereotypes. The Court reviewed the historical disadvantages suffered by de facto spouses in Quebec law and society, particularly prior to the extensive reform of family law in 1980, and found that the stereotype which led to the disadvantages was that a de facto union is perceived as less stable than a marriage. The Court then compared the legislature’s choice to forgo any changes to the law – despite many recommendations to the contrary in 1996 – with the legislative landscape of the rest of the country. In every other province and territory, de facto spouses are given the right to seek support from each other, and in some cases are treated exactly as married spouses in that regard.
A de facto union, the Court explained, can function in the same way as a marriage or a civil union, and can equally lead to a relationship marked by dependence and financial vulnerability.
The Court noted the distinction between the legislature’s historical objective of protecting the very institution of marriage, aimed at promoting stability in families and in society in general, with a new objective of protecting the parties made vulnerable by a relationship characterized by economic interdependence.
The Court of Appeal explained that the obligation of support is a social obligation and not merely a contractual one, as illustrated by the fact that article 585 CcQ also creates a reciprocal obligation of support between parents and their children. This obligation historically extended to further-removed family members, but was narrowed over time in order to reflect the changing perception of the family unit. Seeing that 34.6% of couples in Quebec were in a de facto union as of 2006 and that 60% of children in Quebec were born out of wedlock, the Court concluded that the concept of the family unit has now evolved to include a family where the spouses are not married and have not entered into a civil union. By excluding over one-third of Quebec couples from a protection afforded to the family unit, the Court found that the legislature did not adequately take into account the contemporary social reality.
The Court noted that many laws in Quebec do treat de facto spouses in the same manner as married spouses, including certain income tax provisions. With respect to stability, the Court also found that de facto unions show a “strong similarity” to marriages when they last for a certain time, particularly when they involve the birth of children.
The Court of Appeal underscored that the issue is not whether de facto spouses are entitled to obtain support pursuant to their cohabitation, but only whether they can petition the courts for support, which petition would be subject to an analysis of all of the well-known criteria relevant to determinations of support.
The Court of Appeal disagreed with the Superior Court’s finding that a failure to prove the concrete effect of the distinction between de facto spouses and married spouses upon breakup was fatal to the mother’s application. On the contrary, the Superior Court should have taken judicial notice of this effect.
The Court qualified the ability to meet one’s basic needs upon the breakup of a union marked by financial dependence as a “fundamental right”, although 1.2 million people in Quebec are deprived of it under current legislation because they are in a de facto union.
The Court also insisted on the fact that, often after the separation of their parents, children born in wedlock enjoy a better material environment than those born into de facto unions. The Court concluded that the exclusion of de facto spouses from article 585 CcQ constitutes a truly discriminatory distinction within the meaning of section 15 of the Charter, and that it is reasonable to conclude that this distinction perpetuates the idea that de facto spouses are less worthy than married spouses of protection with respect to a fundamental right.
Moreover, the Court of Appeal held that this discrimination could not be justified in a free and democratic society as provided in section 1 of the Charter (the “Oakes test”). Indeed, as support is a social obligation, it addresses situations of financial dependence within families. Thus, the objective of allowing couples to choose whether to be subject to support obligations militates against the overall social objective of the law, and therefore is found not to be a pressing and substantial objective. The Court showed scepticism regarding the notion that couples are exercising a genuine free choice when they decide to live in a de facto union. Many laws send the message that after two or three years of cohabitation, de facto spouses have the same rights and obligations as married spouses. In any event, the choice of whether to marry often lies with only one of the parties.
Accordingly, the Court of Appeal ruled that article 585 CcQ is unconstitutional and void, but the effect of this declaration was suspended for one year to allow the legislature to enact an adequate solution. The Court left the definition of the term “de facto spouses” up to the legislature, and suggested that this would also be an opportunity to revisit all rights and obligations of de facto spouses, rather than only those regarding support. The mother was denied specific relief under section 24 of the Charter, meaning that she would have to wait until the law was modified before presenting a claim for support, as would the general public.
Comment
As both the Superior Court and the Court of Appeal acknowledged, the Quebec legislature had made a deliberate decision to promote “choice”. The Court of Appeal has essentially determined that such a “choice” is either not genuine or is intolerable, thereby taking a strong position in favour of protecting persons who find themselves vulnerable upon separation from their de facto spouse, even in cases where the choice was genuine.
It remains to be seen whether the Supreme Court of Canada will be seized of this matter.
Marc Bishai & Martin J. Greenberg
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Caroline Duval - Marc Bishai
___________________________________________________
Family Law Bulletin: October 2010
COURT OF APPEAL REFUSES FATHER’S REQUEST TO LIMIT FINANCIAL DISCLOSURE IN SON’S DIVORCE PROCEEDINGS
Ludmer v. Ludmer, 2009 QCCA 1414
Introduction and issues
Section 9 of the Special Procedure Act [R.S.Q. c. P-27] (“the Act”) grants a judge of the Superior Court of Quebec the power to order a Quebec resident to appear as a witness in front of another Canadian court, and to produce certain documents and information relating to the issue before that court. This was the case in Ludmer v. Ludmer. This case raised several issues concerning privacy and the extent to which a Quebec resident may be compelled to reveal certain information relating to legal proceedings outside Quebec. The judgment of the Court of Appeal of Quebec (leave to appeal to the Supreme Court of Canada was denied) confirmed that the duty to disclose under the Act is extensive, particularly within the context of family law disputes.
Facts
Irving Ludmer (“the father”), a successful businessman residing in Quebec, was the father of Brian Ludmer (“the husband”). The husband was involved in divorce proceedings with Lisa Ludmer (“the wife”) in Ontario, before the Ontario Superior Court of Justice, Family Court Branch (“the Ontario Court”).
In 1971, the father established a trust in favour of his three (3) children, including the husband, by way of what is commonly known as an “estate freeze.” Early in the marriage of the parties, all of the assets of this trust were transferred to a corporation (2864878 Canada Inc.); in exchange, the trust received common and preferred voting shares of the corporation. The common shares were then transferred equally to each of the father’s children, while the trust maintained voting control of the corporation. In 1998, the assets of this corporation were transferred equally to three (3) separate corporations, one for each child, and the trust obtained voting control of each corporation. In 2004, the trust was wound-up, the preferred voting shares were distributed, and the father subscribed to preferred voting shares in each of his children’s corporations to maintain control. The husband’s corporation, 3488055 Canada Inc., never had any operations or employees, and the father had always been the sole director.
In the context of the divorce litigation in Ontario, the wife challenged the validity of the prenuptial contract she had signed with the husband, and therefore argued that the husband’s shares in the corporation controlled by his father (3488055 Canada Inc.) should be included in the family property to be divided between the spouses. She also applied for spousal support and child support. In light of these claims, the extent of the husband’s wealth, including the value of his shares in 3488055 Canada Inc., was called into question; as a result, both the husband and the wife sought to have the husband’s father appear as a witness and produce certain documents in the Ontario Court. This request was granted by the Ontario Court, and a summons (“the Summons”) was subsequently issued, requiring the father to produce the following documents and information:
1) The capital structure, shareholding and control of 3488055 Canada Inc., including the Minute Book and related Records;
2) The capital structure, shareholding and control of all previous entities (including the trust) in which the husband had an interest;
3) The tracing of all assets held by 3488055 Canada Inc., relating to the value of the corporation at the time of divorce and how those assets were acquired or reorganized since the signing of the marriage contract;
4) The tracing of the $625,000 that was used to purchase the family home in Toronto;
5) The tracing of the funds contributed to various RRSP accounts that the father had established in favour of the husband;
6) The nature and description of any assets owned by the husband, or in which he had an interest, at various dates (marriage; signing of the marriage contract; date of evaluation of assets for divorce);
7) The value of any assets owned by the husband, or in which he had an interest, at the above dates, including financial statements;
8) The nature and purpose of any distributions made from 3488055 Canada Inc. to or for the benefit of the husband, including bank statements and cancelled cheques;
9) Any other documents relevant to the issues in the proceedings.
The father then petitioned the Superior Court of Quebec under section 9 of the Act to determine the validity of the Summons, and thus the extent of his disclosure obligations. He argued that much of the information requested was excessive and extremely difficult for him to obtain.
The Superior Court judgment
After reviewing the scope of its discretionary power under the Act, the Superior Court granted the father’s motion in part, but only to strike item 9 of the Summons, declaring it to be illegal, null and void. With regard to the other documents requested in the Summons, the Court found that the information requested was relevant, necessary for trial, otherwise unobtainable, not contrary to public policy, identified with “reasonable specificity,” and that the order sought was not “unduly burdensome” to the father. As such, the Superior Court ordered the father produce the documents and information in the Ontario Court without additional restriction or limitation.
In response to the father’s argument that the information requested was private as it constituted part of his estate planning, the Superior Court found that the father lost any benefit of secrecy when he chose to transfer the trust property to public corporations. Moreover, the Court noted that privacy rights are not absolute and should not prevent a litigant (in this case, the wife) from making proof in support of her claim before the courts.
The Court of Appeal judgment
The Court of Appeal confirmed the Superior Court’s finding that the documents were relevant and necessary, and that to order the father to comply with the Summons would not violate Quebec public policy. In addition, the Court of Appeal deferred the determination of whether the order was “unduly burdensome” to the Ontario Court, as well as the question of whether the father’s testimony and the documents he produced would remain confidential.
1) Documents were relevant and necessary
Although the Court of Appeal disagreed with the Superior Court’s determination as to why the information requested in the Summons was relevant, it nevertheless confirmed that the documents requested were both relevant and necessary, particularly with regard to the wife’s claims for spousal support and her argument that the prenuptial contract should be annulled on the basis of incomplete financial disclosure.
2) The Summons does not violate public order in Quebec
The Court of Appeal rejected the Superior Court’s opinion that the father lost the benefit of secrecy and had waived his right to confidentiality when he chose to transfer the trust property into the corporations, stating that there was no factual evidence to support this conclusion. However, the Court went on to note that, even in the absence of such a waiver of confidentiality, the father was not relieved of his public duty to testify and produce documents that were relevant and necessary to the resolution of the dispute between the husband and the wife.
3) The Summons was not “unduly burdensome,” nor did it constitute a “fishing expedition”
The father argued that to fully comply with the Summons, he would have to produce almost forty (40) years’ worth of documents. The husband argued that the Summons was not “unduly burdensome” as it referred to specific documents in relation to precise assets. The Court of Appeal chose not to comment on the merits of the father’s argument, but found that the argument was made prematurely, as the father had not yet begun the process of assembling the documents. Since the determination of what is “unduly burdensome” is primarily factual, the Court of Appeal determined that the Ontario Court would be better placed to rule on the father’s objections at a later time.
4) Confidentiality of Ontario proceedings
The Superior Court had rejected the father’s argument that his testimony and documents produced in the Ontario Court should be kept confidential, finding that the father waived his right to secrecy by transferring the trust property into a corporation. Although the Court of Appeal did not agree with this reasoning, it declined jurisdiction to determine whether the father’s testimony and documents would be confidential, stating that “it is not properly within the purview of [the] Court to issue an order as to how a trial in a superior court of a sister province should be conducted.” The Court of Appeal also rejected the father’s argument that such an order could be made pursuant to the inherent powers of Quebec courts found at articles 2, 20 and 46 C.C.P., noting that those powers are limited to those “necessary for the exercise of their jurisdiction.” (emphasis in original) The Court goes on to note that had the father chosen to testify in Quebec, as was his right under the Act, he could have applied for an in camera hearing pursuant to article 13 C.C.P., though there is no certainty that such a request would have been granted.
Comment
The Court of Appeal’s judgment clearly delineates the extent and territorial limits of the discretionary power given to Quebec courts under the Act, and confirms a broad duty of disclosure in family matters that also extends to third parties. The Court of Appeal’s finding that there was no evidence that the father intended to waive his right to confidentiality is of particular interest: it might be argued that the father’s choice to use a public vehicle to execute his estate planning would affect the privacy of the information involved regardless of whether he intended it to or not. Despite this, the Court of Appeal’s decision confirms that privacy rights must often yield to the interests of those involved in litigation, even when the party whose privacy is in question is not directly involved in the proceedings.
Megan Cowan & Martin J. Greenberg
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Caroline Duval - Marc Bishai
___________________________________________________
Family Law Bulletin: September 2009
FREEDOM TO CHOOSE OF DE FACTO SPOUSES IN QUEBEC RESPECTS RIGHT TO EQUALITY UNDER THE CHARTER
Droit de la famille – 091768, 2009 QCCS 3210
Introduction & issues
Quebec legislation is unique in that it does not provide for any reciprocal rights or obligations of de facto spouses (“common law spouses”), so there is no statutory basis upon which a de facto spouse can claim support or the division of property from the other spouse. In the high-profile case of Droit de la famille – 091768 [2009 QCCS 3210], the mother asked the Superior Court of Quebec to conclude that her de facto relationship with the father of her children fits into the legal definition of marriage, and, alternatively to conclude that the different treatment of de facto spouses by the Quebec legislation (compared to married spouses) breaches their right to “equality” under the Canadian Charter of Rights and Freedoms (hereinafter, the “Charter”).
During their relationship of almost ten (10) years, the parties had three (3) children, and never married. The mother did not work during their seven- (7) year cohabitation. In 2006, a judgment of the Superior Court ordered the father to provide child support (in accordance with the Quebec Child Support Guidelines) of over $34,000 per month, and to pay for a wide range of special expenses and other costs, such as private schooling, extracurricular activities, fees of healthcare professionals, salaries for two (2) caregivers, a driver, a cook, and many expenses related to the residence where the mother and children lived.
The mother asked the Superior Court to treat her relationship with the father as a “marriage”, and, alternatively to conclude that any definition of “marriage” which excludes de facto spouses is in breach of the Charter. She sought the same rights upon breakup as those available to her if she had been formally married – in this case including spousal support of $56,000 per month, an alimentary lump sum of $50,000,000, and equal partition of the couple’s family patrimony (similar to “family property” in Ontario).
The mother argued that several provisions of the Civil Code of Quebec [S.Q. 1991, c. 64] which deal with the solemnization of marriage and the rights and obligations of spouses are ultra vires, and that the different treatment of de facto spouses by Quebec legislation was a violation of the right to equality protected by section 15 of the Charter. According to the mother, the provinces only have competence to legislate regarding the solemnization of religious marriages and, subsidiarily, the solemnization of marriage is optional, as the provinces do not have the authority to affect the validity of marriages.
The father argued that the Supreme Court of Canada had already resolved all of these issues in Reference re: Same-Sex Marriage [2004 SCC 79, [2004] 3 S.C.R. 698] and in Nova Scotia (Attorney General) v. Walsh [2002 SCC 83, [2002] 4 S.C.R. 325] (hereinafter, “Walsh”).
The Superior Court Judgment
The Superior Court, presided by the Honourable Carole Hallée, reviewed the legal situation of de facto spouses in Quebec, and noted that although the State often provides the same advantages to de facto spouses as it does to couples who have contracted a marriage or a civil union, Quebec legislation creates no rights or obligations between the de facto spouses, regardless of the length of their cohabitation (or the existence of any common children). The Court also acknowledged that, according to a 2006 study, 34.6% of Quebecers live in a de facto union, whereas an average of 18.4% of couples in Canada choose to live in a de facto union, and that 60% of children in Quebec are born out of wedlock.
The Court concluded that, according to an analysis of legislative history in Quebec, the legal situation of de facto spouses does not result from an oversight, but rather from a deliberate choice by the legislature to allow individuals the freedom to choose whether to be subject to the laws applicable to married persons: during the provincial legal reforms of 1980, 1989, 1991, 1996, and 2002, the question of de facto spouses’ reciprocal rights and obligations was considered, and each time it was decided that no additional legislation was warranted.
The Court found that the Civil Marriage Act [S.C. 2005, c. 33] was enacted with the sole aim of allowing same-sex couples to marry, and was not intended to allow Quebecers to marry without solemnizing their union, as the mother had argued.
The Court stated that the separation of legislative powers set out in the Constitution allows the federal government to enact rules on the capacity of persons to marry, whereas the provincial governments have the authority to regulate the solemnization of marriages, and thereby to affect the validity of all marriages solemnized in the province rather than only religious marriages. The Court concluded that the union between the parties in the case at hand could not be qualified as a “marriage” according to the applicable federal and provincial legislation, and that the articles of the Civil Code of Quebec which were under scrutiny were all intra vires.
As for the argument that provincial law discriminates against de facto spouses in violation of section 15 of the Charter, in order to succeed, the mother had to demonstrate that de facto spouses are deprived of certain advantages out of prejudice or because of stereotypes suggesting that these persons deserve less recognition as human beings or as members of Canadian society. The Court found from the evidence presented: a) that de facto spouses do not suffer any disadvantage which results from prejudice or stereotypes; b) that the legislature maintained a distinction between de facto spouses and couples who have contracted a marriage or civil union in order to preserve the freedom of choice and thereby to respect the dignity and autonomy of de facto spouses; and c) that no evidence had been submitted regarding the concrete effect of the distinction between de facto spouses and married spouses upon break-up.
The Superior Court noted that in the Walsh case the Supreme Court of Canada had stated that not all distinctions based on matrimonial status are necessarily discriminatory, that when analyzing the rules regarding the rights and obligations of de facto spouses between each other it is the choice of spouses to marry or not which becomes the most important consideration in the application of section 15 of the Charter, and that distinctions between these types of unions being a reflection of the choice made by these persons, the results of such a choice do not breach section 15 of the Charter.
Not surprisingly, the mother argued that the Walsh case cannot be applied to her situation for various reasons, including the fact that the family law context in Nova Scotia is different from that in Quebec. For example, in Nova Scotia, de facto couples are able to obtain spousal support from each other upon break-up, whereas those couples in Quebec have no such right. The Court nonetheless applied the principles outlined in Walsh without reserve, particularly as that decision was centered on the issue of freedom of choice, and this principle applies equally in Quebec. The Court concluded that the different treatment of de facto spouses conforms to section 15 of the Charter, as it respects their dignity and autonomy by acknowledging their freedom to choose the manner in which they intend to structure their reciprocal obligations; this legislative choice was in no way intended to spread the message that de facto spouses are less worthy of respect or that their unions have less value than those of married persons. These were the Court’s findings with respect to both the issues of division of property and support rights and obligations.
The Court mentioned repeatedly that couples have alternatives to marriage which allow similar or equal protections, namely the Quebec institution of civil union (a provincially regulated analogue to marriage), and the possibility of outlining reciprocal rights and obligations in a private contract or “cohabitation agreement”. Emphasis was also given to the fact that many de facto unions are formed very deliberately, for a variety of reasons, including the desire to avoid lengthy and costly legal proceedings upon breakdown of the relationship.
Just as the Supreme Court of Canada did in the Walsh case, the Superior Court of Quebec explicitly stated that it is up to the Legislator to modify policy on this issue, and that it would undermine the respective institutional roles of the legislative and judiciary branches of government to have the courts intervene when there is no constitutional onus on the legislature to change its stance on this matter. The Court did, however, encourage political debate on this issue, particularly as Quebec is the only province not to have rules for spousal support between de facto spouses, while 60% of Quebec children are born out of wedlock.
Comment
It is possible that a future de facto spouse litigator will petition the Court and concretely demonstrate that children of de facto spouses enjoy a lower standard of living than children of married spouses due to the possibility for the latter to obtain spousal support and a division of property upon separation or divorce. However, even if that should happen, we suggest a different outcome is unlikely. Rather, in light of the ruling in this case, which has been recently inscribed in appeal before the Court of Appeal of Quebec, it seems much more likely that any change in policy on this question will emerge from the legislature rather than the judiciary.
Marc Bishai & Martin J. Greenberg
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Caroline Duval - Marc Bishai
___________________________________________________
Family Law Bulletin: November 2008
SUPREME COURT OF CANADA RULES ON GROUNDS FOR UNEQUAL PARTITION OF THE FAMILY PATRIMONY IN QUEBEC
M.T. v. J.-Y.T., 2008 SCC 50
Introduction
In the case M.T. v. J.-Y.T., the Supreme Court of Canada interpreted article 422 of the Civil code of Quebec ("CcQ"). This article provides an exception to the general rule of equal partition of the family patrimony (similar to "family property" in Ontario), by allowing the exclusion from it of the benefits accrued in the pension plan of one or both of the spouses.
Article 416 CcQ sets forth the general rule that the family patrimony is to be partitioned equally between the spouses upon separation, nullity of marriage, or divorce. Only article 422 CcQ allows for an unequal partition, by awarding unequal shares of the family patrimony, and/or by excluding from the family patrimony the pension benefits of one or both of the spouses.
"422. The court may, on an application, make an exception to the rule of partition into equal shares, and decide that there will be no partition of earnings registered pursuant to the Act respecting the Québec Pension Plan or to similar plans where it would result in an injustice considering, in particular, the brevity of the marriage, the waste of certain property by one of the spouses, or the bad faith of one of them."
This judgment outlines which circumstances amount to an "injustice" within the meaning of article 422 CcQ.
Facts
The parties were married for twelve (12) years, from 1992 to 2004. The husband contributed very substantially to the wife's professional training, as he paid for her intensive courses in office automation, her university master's degree in technical and vocation education, as well as moving expenses and $38,000 in support during a first year of doctoral studies.
The Superior Court
The Husband argued that:
1. this was his second marriage;
2. there was a significant age difference (over 20 years) between him and his wife;
3. his wife was independent and employable, and that she would be able to build a pension fund for herself by the time she reached retirement age;
4. if his pension credits were to be included, he would have to postpone his retirement in order to rebuild his retirement income;
5. the formation of the family patrimony was attributable to his efforts alone.
The Superior Court applied the general rule (article 416 CcQ) and ordered the equal partition of the family patrimony, including the retirement benefits earned during the marriage.
The Court of Appeal
The Court of Appeal took into account the difference between the parties' respective contributions and incomes, the fact that this was the Husband's second marriage, and the age difference between the parties. The difference in age was deemed particularly important, since the husband was near retirement, whereas the Wife was still 23 years away from normal retirement age and could still expect to save for her retirement in the meantime. The court also found that neither party had committed any fault or negligence.
The Court of Appeal applied article 422 CcQ, and ruled that the family patrimony should be partitioned unequally, by excluding from it the husband's pension benefits earned during the marriage.
The Supreme Court of Canada
The unanimous decision of the Supreme Court of Canada was rendered by the Honourable Justice Lebel. In its reasons, the Court stressed three (3) principles:
1. Quebec civil law treats marriage not only as the union of two persons, but also as an "economic union to which both spouses must contribute as best they can". Indeed, article 396 CcQ states:
"396. The spouses contribute towards the expenses of the marriage in proportion to their respective means.
The spouses may make their respective contributions by their activities within the home."
When the respective contributions of the spouses are made in proportion to their respective means, their contributions are deemed to be sufficient.
2. The ejusdem generis interpretation of the list included in article 422 CcQ: "where it would result in an injustice considering, in particular, the brevity of the marriage, the waste of certain property by one of the spouses, or the bad faith of one of them". According to this principle, such a list must not be construed as exhaustive.
3. An interpretation of article 422 CcQ based on the objective of the family patrimony, which the Court considered to be the formation of "an economic union between the spouses". The consequence of such an interpretation is that the spouses' behaviour during the marriage will only be found to create an "injustice" within the meaning of article 422 CcQ if it affects the economic partnership.
These principles of interpretation are what led the Supreme Court to write:
"When cited as a source of injustice within the meaning of art. 422, harmful or wrongful acts, or faults, committed by the spouses must be clearly connected with the fate of the family patrimony. They must, in a word, be in the nature of economic faults."
Accordingly, the Supreme Court stated that the husband's previous marriage had no economic bearing on the marriage in question.
Second, the Court ruled that the considerable gap between the respective contributions of the parties had been tacitly agreed upon. Even the Court of Appeal had found that it was not due to a fault or negligence on the part of the wife, since she had contributed financially and through her activities within the home in proportion to her means.
The Supreme Court very summarily dealt with the age difference between the parties, stating only that they "must have accepted this situation at the start of their union", since they had already lived together for seven (7) years before the marriage.
Comment
The most noteworthy consequence of the Supreme Court's interpretation of article 422 CcQ is the need to analyze the behaviour of the spouses from a purely economic perspective. If one spouse contributes disproportionately to the formation of the family patrimony, the question we must ask is not "is it unjust for the one spouse to contribute so little while the other contributes so much?", but rather "was this an arrangement to which the spouses had agreed, expressly or tacitly?" If the answer is found to be affirmative, then the family patrimony must be partitioned equally.
Marc Bishai
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Caroline Duval - Sarah Canta - Marc Bishai
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Family Law Bulletin: July 2006
QUEBEC COURT OF APPEAL RELUCTANT TO APPLY FEDERAL SPOUSAL SUPPORT GUIDELINES
On June 5, 2006 the Quebec Court of Appeal addressed an issue which has been troubling the Superior Courts of the Province, namely: the issue of whether, and to what degree, to recognize, rely upon, or apply the Lignes directrices facultatives en matière de pension alimentaire pour époux, (ie. the Federal Spousal Support Guidelines, hereinafter the "Guidelines"). Previously, the various decisions of the Superior Court in the Province have been inconsistent. While a majority of the Superior Court decisions declined to apply the Guidelines, some did so, often relying upon decisions rendered in Provinces other than Quebec. A decision of the Quebec Court of Appeal was desired in order to put the issue to rest. In G.V. vs. C.G. 2006 QCCA 763 (C.A.), the Court of Appeal provided some guidance.
At the time of the Superior Court Judgment (September, 2005), Madame was 55 years old. She was a teacher earning approximately $50,000.00. Monsieur was a 58 year old doctor generating an annual income of approximately $227,000.00. The parties had been married in 1971 under the Quebec matrimonial property regime of Partnership of Acquests. Three (3) children had been born of the marriage; the older two (2) children were adults and financially autonomous; the youngest child became an adult during the Superior Court hearing, but remained under the care of his father with whom he was still residing.
The Honourable Sylviane W. Borenstein of the Montreal Superior Court pronounced a divorce between Madame and Monsieur, ordered Monsieur to pay a lump sum in the amount of $75,000.00 and retroactive monthly spousal support of $4,500.00, as well as court costs, including expertise fees. The spousal support quantum was established in accordance with the Guidelines. Monsieur appealed with respect to all of those condemnations.
The unanimous decision of the Court of Appeal was based upon the reasons given by the Honourable Andre Forget. Those relating to the applicability of the Guidelines are significant.
The Court of Appeal did not question Madame's entitlement to spousal support. However, it did take issue with the calculation of the quantum. It noted that the Honourable Sylvaine Borenstein justified her application of the Guidelines by indicating that several other courts, mainly in other Provinces, applied them.
Without diminishing the fact that the Guidelines are a "a useful tool to assist judges in assessing the quantum and duration of spousal support", the Court of Appeal stressed that other judgments rendered by the Superior Courts of Quebec strongly questioned the application of the Guidelines. It referred to the case of D.S. vs. M. Sc.[a], where the Honourable Carole Julien indicated:
« [our translation] Applying the Advisory Guidelines introduces a context of uncertainty for those who plead in the sensitive area of family law. There is a great risk of encouraging litigation rather than resolving matters in an amicable fashion. [...].
To resort to the Advisory Guidelines may be tempting in order to avoid the demanding and delicate analysis of the criteria throughout the Law in the global and particular context of each case. However, it would then constitute an unacceptable shortcut because contrary to the Law.
Finally, the recourse to these Advisory Guidelines in order to corroborate the results obtained from the global analysis provided for in the Law is pernicious. It grants illegitimate credibility to the analysis based on a predominant criterion in order to corroborate an analysis based upon several non-predominant criteria. ».
The Court of Appeal also recalled the Honourable Justice Gendreau's[b] judgment:
« [our translation] The Guidelines are a proposal that must be tried, tested, debated and commented upon before we can review it any further [...]. They do not arise from a federal law. They do not have any official nature and are used for consultation purposes only. Regardless of whichever area of law is concerned, the Court is not a research laboratory. Its mission is to apply the Law with all its rigour ».
The Court of Appeal indicated that the warnings set forth in the above-mentioned judgments are important and must be taken into consideration. It added that the Honourable Justice Borenstein had not avoided the danger of trying to follow a "[our translation] magic recipe or a ready-made grid to resolve spousal support issues" as forewarned by the Honourable L'Heureux-Dubé in Moge[c]. Accordingly, the Court of Appeal chose not to apply the Guidelines.
However, the Court of Appeal did not wish to pronounce a "fundamental decision" regarding the application of the Guidelines, since the facts of the case, and the brevity of the arguments of the respective attorneys, did not warrant same. The Court of Appeal reduced to $2,750 the monthly support ordered, based upon its own analysis of Madame's needs and Monsieur's means.
Michèle Tétreault & Martin J. Greenberg
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Édith Bonnot - Caroline Duval - Michèle Tétreault
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[a] C.S. Montréal, 500-12-267344-038, 2006-01-27.
[b] B.D. c. S.D.U., C.S. Kamouraska, 250-12-004666-067, 2006-02-28.
[c] Moge c. Moge., [1992] 3 R.C.S. 813 (C.S.C.)
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Family Law Bulletin - October 2005
QUEBEC COURT OF APPEAL RULES SETTLEMENT AGREEMENT TO GIVE A "GHET" NOT ENFORCEABLE
The Quebec Court of Appeal's recent decision in Marcovitz vs Bruker (500-09-013353-032; September 20, 2005) exacerbates the concerns of Jewish wives regarding the obtaining of the traditional Jewish divorce (the "Ghet") at the time of a civil divorce.
The relevant facts of the case are as follows: At the time of their divorce, the husband and wife agreed, as part of a written settlement agreement, to "appear before the Rabbinical authorities in the City and District of Montreal for the purpose of obtaining the traditional religious Ghet, immediately upon a Decree Nisi of divorce being granted". For many years the husband refused to co-operate, and the wife eventually sued for damages. The Superior Court judgment rendered on March 28, 2005 (500-05-009878-891) determined that the obligation was enforceable and awarded damages to the wife. The Superior Court considered that the obligation to provide the Ghet was one of a civil contract notwithstanding its religious undertones.
The Court of Appeal ruled otherwise: Because the appearance before a rabbinical tribunal in order to obtain a Ghet is not one that can be properly obtained as an order of corollary relief at the request of a party to divorce proceedings, it does not fall within the ambit of the power of the court to so order. The obligation is in substance a religious one, not a civil one, even though the parties signed a settlement agreement incorporating it and even though that agreement was ratified by a Superior Court judgment of divorce. For an Orthodox Jew, it is not simply a matter of showing up and going through a meaningless ritual.
Justice Allan Hilton of the Court of Appeal stated as follows:
"It matters not that the obligation was stated in the Consent that the Superior Court ratified, since the Superior Court could never have entertained an application for corollary relief under section 17 of the Divorce Act to require the issuance of a ghet. It is not at all unusual to see the parties in an agreement on corollary relief undertake to perform a variety of obligations that are not, strictly speaking, obtainable independently, but which are desirable nevertheless to the extent that they promote an amicable post-divorce environment."
"While I recognize the usefulness of the inclusion of obligations of this nature in divorce agreements, it does not follow that they all automatically become subject to curial supervision and control, whether for specific performance or damages in the event of a breach. In my view, in order for such clauses to be enforceable, they must be directly related to one of the subject matters on which courts issue or vary orders of corollary relief, and otherwise be justiciable."
The court ruled that, if any recourse was available to the wife, it was in a religious forum, not a secular one.
The wife will be seeking leave to appeal to the Supreme Court of Canada.
It is questionable whether the Court of Appeal's attitude is correct: a clearly expressed, specific obligation to provide a Ghet, expressed within a settlement agreement which the parties requested be ratified by the Superior Court, and to which the Superior Court ordered them to conform, would seem to constitute a civil obligation "par excellence", enforceable by the courts. It is further suggested that the husband, having undertaken to provide the Ghet, is estopped from justifying his non-cooperation on the grounds of "religious conviction".
In any event, counsel for Jewish wives will henceforth undoubtedly suggest that husbands provide their wives with Ghets as a condition precedent to the coming into force of a settlement agreement.
Martin J. Greenberg
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Edith Bonnot - Caroline Duval - Michele Tetreault
____________________________________________________
Family Law Bulletin - June 2005
FINALLY: SPOUSAL SUPPORT (ALIMONY) "GUIDELINES"
(OR: WHEN IS A GUIDELINE NOT A GUIDELINE?)
Family lawyers have long bemoaned the difficulty of predicting the outcome of alimony claims: Judgments in similar- fact cases may differ significantly throughout Canada, from region to region and from judge to judge (often within the same court house). This has exacerbated the difficulty in settling certain cases, and has caused an understandable loss of confidence in our family law court system. Spouses involved in alimony disputes need to know (and their lawyers should be able to be advise them of) the probable outcome of their alimony dispute if it is left to a court to resolve.
Child support guidelines were introduced in 1997 by the government of Canada and Quebec. These guidelines have eliminated a tremendous amount of uncertainty, legal expense and waste of court time. While the child support guidelines have occasionally been inappropriate and the courts have a limited discretion to deviate from the guidelines, the guidelines have generally been accepted and appreciated by both family law practitioners and their clients. The existence and routine application of the child support guidelines served to underscore dissatisfaction with the unpredictability of alimony disputes, and increased pressure for the promulgation of spousal support guidelines which would render alimony awards as predictable as child support decisions.
The recently published draft federal "Spousal Support Advisory Guidelines" are somewhat disappointing. At this time they have been published for discussion purposes only. A primary shortcoming is that they are intended to be neither determinative nor prescriptive but, rather, merely descriptive of the existing state of the jurisprudence. Moreover, the guidelines do not even attempt to determine the issue of "entitlement" to spousal support.
If it is agreed or determined that there is an "entitlement" to spousal support, the guidelines are applied basically as follows:
There are separate systems for marriages where child support is to be paid and for those without such "dependant" children;
The duration of the marriage and the respective incomes of the spouses are factored into the calculations;
The guidelines then produce a quantum "range" of annual support and a specific duration of payments.
The draft guidelines do certainly provide limited benefits to spouses in marital breakdown situations (if "entitlement" is not in dispute) - (1) their attorneys can advise them as to the probable (though not certain) statistical quantum and duration of spousal support based upon the case law to date, and (2) the time-consuming and difficult task of preparing "budgets" for the spouses is eliminated. Admittedly, these benefits are valuable to divorcing clients. However, the guidelines are not intended to be binding upon the courts and they do not suggest what the policy or philosophy regarding spousal support law should be. Issues of philosophy and policy are (in the absence of express legislation) determined and interpreted by the court; during recent decades the Supreme Court of Canada has pronounced various significant policy shifts regarding "entitlement" to spousal support as well as quantum and duration. There is no reason to believe this will change or that such policy shifts will not render the guidelines less useful.
Martin J. Greenberg
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The material contained herein above is necessarily of a general nature and should not be regarded as legal advice. For further information or advice, the members of our firm would be pleased to assist you.
Donald M. Hendy - Martin J. Greenberg - Edith Bonnot - Caroline Duval - Michele Tetreault
_____________________________________________________________________