contingent tax liability owed at separation

The recent case of Cosentino v. Cosentino has an interesting treatment of contingent tax liabilities owing at separation.  The decision confirms the willingness of courts to discount even tax liabilities where, at the date of separation, they are uncertain.  In the Cosentino case the tax liability did not exist at the date of separation, but arose after. The solicitors online are the best way to go for legal options.

Justice Perkins wrote:

It would be stretching the meaning of “liability” to include an obligation that arose later, merely because it was calculated in relation to a year when the parties were still living together. Not only had the reassessment not come into existence on the valuation date, but also there was no suggestion that it was coming. Taking a financial snapshot of the husband on that date, no one would have suggested he was subject to any contingent liability for income tax.

The decision once again confirms the approach of valuing contingencies prospectively.  The approach requires looking at the circumstances that were in existence at the date of separation  rather than in hindsight.

Does a separation affect your will ? 

Let’s say you have a Will in place. You named your spouse as a beneficiary and perhaps your young children as secondary beneficiaries, just in case something were to happen to you and your spouse. Now add in a separation between you and your spouse, mix it with a pinch of chaos and you have a recipe for disaster, and you will need a lawyer expert on wills, as well as possibly seeking corporate investigation services to ensure the legality and integrity of your affairs during this tumultuous time. Upon separation, a gift to a spouse in your Will becomes revoked under the Wills, Estates and Succession Act (WESA). You may think everything’s fine and there is no need to update your Will…wrong! If you do not update your will upon separation, the mere revocation of your spouse as a beneficiary does not allow for adequate planning for other beneficiaries, especially young children. A minor beneficiary requires an appointed trustee to manage the money and they are unable to receive the benefit until they are of age. For a revocation of a spouse as a beneficiary, there must be clear evidence of a separation to end a spousal relationship. Married couples must wait one year prior to obtaining a divorce, however, putting a separation agreement in place immediately at separation is not only efficient and saves you money when obtaining a divorce, but is also clear evidence of a separation which bars your ex-spouse from being a beneficiary in the event of your death. Common law couples (couples cohabitating with one another for a period of two years in British Columbia, three in Alberta) often think a separation agreement is unnecessary; however, a separation agreement is evidence to support the end of a spousal relationship and it can ultimately prevent your ex-spouse from being a beneficiary.

If one spouse dies prior to finalizing a separation agreement or a divorce, the surviving spouse could make a claim to their estate under WESA. If your Will has been updated to clearly reflect that a separated spouse is not entitled, a claim under WESA cannot be made. It is therefore important to seek advice from an Estate Planning Lawyer soon after separation so these provisions can adequately be drafted.


Married spouses share in any increase in the value of family property between the date of marriage and the date of separation.  When the marriage ends, the spouse with the lower Net Family Property receives a payment for one-half the difference in the two.  That means an equalization payment.
The debt that a spouse brings into the marriage will impact on the spouse’s equalization entitlement.
What happens when the face amount of the debt is greater than its “real value”?  Should a court reduce the face amount of the debt to reflect the likelihood that it will remain unpaid?  The Ontario Court of Appeal was recently confronted with that issue for a debt owing on the date of marriage.
In the case of Zavarella v. Zavarella, the Court of Appeal discounted the wife’s date of marriage debt to zero.  The wife owed about $60,000.00 on the date of marriage.  She had made an assignment into bankruptcy a few weeks before the date of marriage.  Under the Bankruptcy and Insolvency Act, the debt remained owing until the wife’s discharge from bankruptcy.  Given the wife’s assignment into bankruptcy just before the marriage, there was no prospect of payment of the debt.  The Court discounted the debt to zero and remove a county Court Judgement.
The Zavarella case is consistent with the Court’s approach of discounting of family debts based on likelihood of repayment.  In the past, the Court of Appeal has discounted debts owed to family members because they are not likely to enforce them.  The Court has also allowed parties to discount assets based on the contingent costs of realizing the asset.  The court has allowed parties’ to reduce the value of those assets by the anticipated legal fees on the date of separation.

In navigating such legal intricacies, it becomes crucial to enlist the support of experts in the field. Engaging the services of the best private investigator UK can provide valuable insights into the circumstances surrounding familial debts and asset valuations. A prospective approach, rather than hindsight, remains fundamental in evaluating these complex matters within the legal framework. Furthermore, when suspicions of marital discord arise, infidelity investigations can offer additional clarity and understanding.





We don’t like worrying about the future. We don’t want to think about what happens to our house or money after we’re gone.

But what about our loved ones? Our loved ones will have enough to worry about.  If the worst happens, we can make life easier for them by planning ahead.

We have practiced estate law for years.  We know that preparing a will can be draining . We can guide you through the steps and explain your best options.

Preparing a will ensures that your property will be dealt with according to your wishes. You can make sure that a cherished family heirloom stay in the family.  You can decide if your common-law-spouse lives out his or her life in your house.

Part of your estate plan involves a power of attorney. Ontario has three different types of powers of attorney.  You choose another person to make decisions on your behalf. Do you expect needing a medical proxy to help you make healthcare decisions when you are incapacitated? You may want to start planning now.  You can make your wishes known in case of your future incapacity.

These are difficult issues to think about, but they are too important to ignore. Consult a lawyer with expertise in the area of estate planning.  Give yourself peace of mind about the future.


I was recently  involved in a case where the court awarded costs for “unbundled legal services” to a self-represented litigant.  The case is Jordan v. Stewart.  The decision on the issue of costs is set out in supplementary reasons.

After succeeding at trial, the court allowed the acting in person mother her costs of $90,000.00.  That sum included  accounts from lawyers who had provided ‘unbundled legal services” of about $65,000.00 at different parts of the proceeding.

In addition to allowing all of the mother’s lawyer’s fees,  the Court allowed costs for part of her preparation for trial.  Her claims for loss of income and a counsel fee for herself were not accepted by the Court.

The $90,000.00 was small compared to the father’s legal fees.  Those exceeded $400,000.00.

The  case took almost two weeks of trial followed by a full day costs hearing.  The trial was a David and Goliath battle, featuring a self-represented mother up against a team of 3 lawyers and a law clerk.

Both parties claimed to be the successful party.  After a full day of argument the Court delivered supplementary written reasons finding the mother was the successful party.  The presiding judge said he would have awarded the mother costs even if she had not been the successful party.  The Court found the father was motivated by a desire to do harm the mother and the child in spending vast sums of money well in excess of the economic benefit to him. In such contentious cases, seeking guidance from a skilled medical malpractice lawyer in Michigan can be crucial to navigate the complexities and ensure fair resolution.

Justice Czutrin accepted the mother’s claim for the costs of obtaining legal services for part of the case, known as “unbundled legal services” and directed that she receive costs sufficient to pay her lawyers’ accounts.

Justice Czutrin noted my involvement as follows:

“Mr. MacLennan also prepared a Bill of Costs for work he did for the mother from September 7, 2012 to April 3, 2013 totaling $15,520.56. The description of his services includes trial preparation, discussion of issues that arose during the hearing before me, and discussions .. raised by father’s counsel.”

The decision is significant given recent changes to the Law Society’s by-laws allowing lawyers to provide legal services for part of proceedings.


Same sex couples from abroad who have married in Ontario face a one year residency requirement before seeking a divorce in the Province.  Under Canada’s Divorce Act, an applicant must meet a residency requirement of one year in the Province in which before the remedy is requested.

The issue has been challenged in the Courts.


Justice Brownstone of the Ontario Court of Justice recently wrote on the state of law on joint custody in Ontario.  In the case of Hsiung v. Tsioutsioulas, Justice Brownstone wrote:

[17]                  I am acutely aware that an order for joint custody should not be made in cases where the parents have been unable or unwilling to demonstrate the capacity and willingness to communicate and to co-operate with each other and make decisions together in a civilized, child-focussed way…..  However, courts are increasingly prepared to order joint custody, even in high conflict cases, where satisfied that the parents have insulated the children from the conflict and sufficient protective factors are in place to ensure that the joint parental authority will be workable…  Moreover, in recent years, there has been more willingness to grant joint custody where such an order is necessary to preserve the balance of power between the parents, especially where one parent has been primarily responsible for the conflictual relationship… consider this to be such a case.

The Elgners separated in 2007 after 33 years of marriage.  Their children were grown.  They were successful and  had accumulated a lot of assets over their marriage.

The former couple gained notoriety in 2009 when Justice Greer made the highest temporary spousal support order in Ontario.  The Court ordered the husband to pay the wife $110,000 per month, plus retroactive spousal support of $3,360,000 for the two years preceding the order.  That’s a lot of money.

Since the temporary support order of Greer, the husband has lost 3 separate appeals stemming from the same order. The procedural issues in the husband’s appeals have taken on their own life. The husband has argued that he has an automatic right under Canada’s Divorce Act to appeal any support order, temporary or final, made under the authority of that Act.  The husband pursued that argument despite the prevailing judicial authority in Ontario, that the appeal of temporary orders (whether made under the federal Divorce Act or the provincial Family Law Act) required leave from the Divisional Court.  The test for leave is an issue of public importancerounded on either the principle of public importance or conflicting decisions.

A single judge of the Divisional Court refused the husband’s first appeal because he failed to establish that th importance of the appeal was a public one that transcended the issues between the parties.  was a dismissed because he failed to obtain leave to appeal a temporary order.  He was unable to pursued the appeal court that the matter of the appear went beyond the parties’ immediate interests, an Despite well established case law that interi

He first appealed to single judge of the


In Gagne v. Gagne, the Court of Appeal set aside the trial judge’s decision and made its own child and spousal support order after finding that the trial judge had failed to determine the support payor’s income.  As a result there was no basis in his decision for the amounts ordered.

The Court of Appeal found that the husband had not made “fair disclosure” in the lower court.  Nonetheless, the trial  record showed  that the husband disclosed an average annual income of $230,000.00 over a 5 year period. The Court of Appeal upheld the trial judge’s finding that the husband failed to disclose income from other sources and imputed an additional $20,000.00 to him, increasing his income to $250,000.00.

The Spousal Support Guidelines (“SSAGs”) produced the following range of monthly spousal support: Low – $3349; Mid – $3968; and High – $4597 (based on the “with child formula”, the length of the parties’ marriage, their ages and incomes).  The Court of Appeal ordered the husband to pay the higher range figure because of his failure to make fair disclosure.

Unfortunately, there is nothing in the SSAGs to suggest that the ranges are to be used to penalize a party for financial disclosure that is not fair.  The SSAGs state in chapter 4:

The Advisory Guidelines do not generate a fixed figure for either amount or duration, but instead produce a range of outcomes that provide a starting point for negotiation or adjudication.

Ranges create scope for more individualized decision-making, allowing for argument about where a particular case should fall within the range in light of the Divorce Act’s multiple support objectives and factors. Ranges can also accommodate some of the variations in current practice, including local variations in spousal support cultures.

And at Chapter 8:

The ranges allow the parties and their counsel, or a court, to adjust amount and duration to accommodate the specifics of the individual case in light of the support factors and objectives found in the Divorce Act

It would have been nice to see an appellate case where the Court was more instructive on the use of the ranges.  Maybe some other time.