Suing your ex’s family for conspiracy is no longer illegal if they help evade child support

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Personal Finance Family Finance

Supportive extended families need to know where to draw the line

Publication date:

February 7, 2022 • February 7, 2022 • 4 minute reading time • Join the conversation Ontario Court of Appeals in Toronto. Ontario Court of Appeals in Toronto. Photo by THE CANADEAN PRESS/Colin Perkel files

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After the divorce, it is common for extended families to get involved in a couple’s divorce. Usually, the family of a divorced spouse will provide emotional support or occasionally pay legal or accounting fees. Other times, the extended family can become “cheerleaders” who take sides and increase conflict.

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In extreme cases, the extended family is so invested in the result that they help the divorced spouse reduce his or her financial obligations for maintenance or property.

More than thirty years ago, the Supreme Court of Canada considered whether a conspiracy claim could be filed in a parenting case. The Court ruled that a conspiracy charge was inappropriate, saying: “The spectacle of parents suing not only their former husbands, but also the grandparents and aunts and uncles of their children…one to pause. The disruption of the familial and social environment so important to a child’s well-being may well be considered reason enough for the law’s inaction.”

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The Supreme Court also reasoned that since all counties had enacted specific legislation to address the issues arising from family breakups, there was no point in filing a conspiracy claim in a parenting case.

In the past, when a spouse has hidden assets or income, even where he may have been assisted by extended family, the court’s sanctions have been largely limited to punishing the spouse through a court order (which often goes unpaid). ) or by a contemptuous finding. While claims have sometimes been made against extended family members, these claims are uncommon and largely unsuccessful.

More recently, the Ontario court of appeals has changed the landscape for extended families when the divorced couple argues over finances.

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In Leitch v Novac, the woman sued the man’s parents, a family business and several trusts and their trustees, alleging that the man’s family and the various entities had colluded to nullify her family claims and reduce the income and assets to hide from the man.

After the divorce of the parties, the husband’s father set up a company to provide management services to a casino company. The father and husband had verbally agreed that the husband would receive 40 percent of the management fees that would otherwise be paid to the father’s company over the term of the contract. Before the end of the contract, the casino owner bought off the contract for nearly $6,000,000, and the lump sum was paid to the father’s company. While the buyout took place after the divorce, the 40 percent share of the spouse would have been the income on which the spousal support and child support would have been based. However, the husband’s father kept all income from the buyout.

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The facts on which the alleged conspiracy was based were in large part various draft memos from the father’s accountant, who structured the payment to the father’s company. A draft memo described the surrender steps as follows: “(the father) takes his tax-exempt proceeds and lends to (the husband) his share as a loan that will be forgiven when the husband’s divorce is final.” Another draft memo adds that “this (will) keep the income out of (the spouse’s) hands.”

When claiming conspiracy against the extended family and the other entities, the wife had to prove whether or not the means used by the father and husband were lawful or illegal, or whether the predominant purpose of their behavior was to harm her. or whether the behavior was unlawful, or whether the father and the man should have known that the woman was likely to be harmed.

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In Canada, child and spousal support is determined on the basis of income.

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Changes to the divorce law are a major shift when it comes to the roles and responsibilities of spouses toward their children.

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The father, corporations and trusts have filed for partial summary judgment in an effort to have the conspiracy claims dismissed for trial. The motions judge granted summary judgment, finding that the basis for the claims had not been established. Her decision was based in part on her belief that such a claim would open the floodgates to family law disputes involving the extended family.

The Ontario Court of Appeals saw things very differently and overruled the motion judge’s finding. The court sent the case to trial on all issues, including the conspiracy claims.

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Judge William Hourigan echoed the oft-quoted sentence that “non-disclosure is the cancer of family law” and then turned to the “related illness” of the “invisible litigants” whom he described as “willing to betray both the spirit and the letter.” breaking family law to achieve the desired outcome, including by facilitating the deliberate concealment of assets or income.”

Using the tort of conspiracy in family law, he found, may be necessary in certain circumstances to ensure fairness and achieve justice. Otherwise, co-conspirators could participate in hiding income or assets on a “no risk” basis. To prevent invisible litigants from participating in a party’s secrecy, they must be prepared for a conspiracy claim.

Supportive extended families need to know where to draw the line.

Laurie H. Pawlitza is a senior partner in the family law group at Torkin Manes LLP in Toronto.

lpawlitza@torkinmanes.com

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This post Suing your ex’s family for conspiracy is no longer illegal if they help evade child support

was original published at “https://financialpost.com/personal-finance/family-finance/suing-your-exs-family-for-conspiracy-no-longer-out-of-bounds-if-they-help-in-the-evasion-of-child-support”

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