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It seems like Parental Alienation Syndrome is in full bloom these days. Just this past week we read the story of
The Supreme Court of Canada returned to domestic contracts and their enforceability in the case of Rick v. Brandsema, 2009 SCC 10 (Can LII). The Court once again considered the competing policy goals of:
The Court sought to balance these interests in its decision. There’s really nothing new here in terms of law. The Court simply reaffirmed the principles set out in its decision in Miglin v. Miglin, 2003 SCCC 24 (CanLII).
The Court’s message was this:
A ‘hard bargain’ imposed on a vulnerable spouse is not good for either party if it results in a protracted and expensive court dispute about whether the agreement is valid and enforceable.
In the Rick case, the SCC overturned the British Columbia Court of Appeal and affirmed the trial judge’s decision to award the wife “equitable compensation” of $650,000.00.
At trial, the judge found that the husband had deliberately breached his duty to fully and honestly disclose his assets during the negotiation of the separation agreement. The trial judge also found that the husband had exploited his wife’s “profound mental instability” in the negotiation process.
As a result of the husband’s exploitative conduct, the trial judge found the wife received almost $650,000.00 less than her entitlement under B.C.’s Family Relations Act. In the circumstances of the case, the trial judge found the separation agreement to be unconscionable and ordered the husband to pay to the wife “equitable compensation” representing the difference between the “equalization payment” she received under the unconscionable agreement and her entitlement under B.C.’s Family Relations Act.
The B.C. Court of Appeal had reversed the trial judge’s findings and upheld the separation agreement. The appeal court found that the wife had failed to use the professional advice (her lawyers) that was available to her, through no fault of the husband. The appeal court noted that the husband was under no obligation to act contrary to his own best interests. The appeal court relied on the SCC decision in Miglin v. Miglin, 2003 SCCC 24 (CanLII) and held that the wife’s vulnerabilities were presumptively compensated for by the professional assistance available to her.
The Court of Appeal also discounted the trial judge’s findings about the wife’s mental health vulnerabilities, and made its own finding that although the wife was “troubled” , she was not mentally incapable, and had not entered the agreement under duress.
The SCC said the BC Court of Appeal was wrong in its reading of Miglin. The court said it was up to the trial judge to make a finding that the wife’s vulnerabilities were, in fact, not compensated for by the presence of legal counsel. Her mental instability, together with the husband’s breach of his obligation to make full and honest financial disclosure, as well as the agreement’s substantial non-compliance with the legislative objectives, made the agreement unconscionable.
The trial decision of the Ontario Superior Court in A.G.L. v. K.B.D., 2009 CanLII 943 (ON.S.C.) has created a lot of discussion about Parental Alienation Syndrome (PAS). The case is a sad one, and reminds us how upsetting and complex these disputes can be.
After 17 days of trial the court found that the mother had alienated the parties’ 3 daughters – aged 14, 11 and 9 – from their father. The court granted custody to the father despite an 8 year status quo in which the children were in the primary care of their mother. It did so after finding that the mother had engaged in an outrageous course of conduct which had alienated the children from their father. The trial judge found the mother’s conduct to be child abuse.
A cautionary note: the mother’s conduct in this case was so outrageous, and the father’s behaviour was beyond reproach, so there was little discussion about “realistic estrangement” – alienation that is reasonable or warranted between a child and parent. Given the dysfunctions faced by many families undergoing separation, “realistic estrangement” may arguably be more common than PAS.
PAS is not new. The term was coined in the mid-1980s by Richard Gardner. There is much debate about its meaning, and it appears to be more of a “phenomenon” than a disorder. Nonetheless, the court accepted the expert evidence of Dr. Barbara Jo Fidler regarding the warning signs of behaviours of “pathological alienation” (at pages 13-15 of the decision). The court relied on Dr. Fidler’s evidence that children are more susceptible to alienation in certain age ranges:
The court accepted Dr. Fidler’s evidence that there was a broad range of effects of this type of alienation on a child:
With the economy in a free fall, the Ontario Court of Appeal’s (OCA) decision in Serra v. Serra could not be more timely. The OCA decision reversed the trial court’s judgment and replaced it with an order requiring the husband to make a lesser payment to his wife to resolve the property claim under Ontario’s Family Law Act.
The decision allows litigants to pursue an unequal division of net family property where market driven forces cause a decrease in the post separation value of assets.
Modern family law reflects a social policy of recognizing spouses equal contributions towards marriage by dividing family property equally. Ontario’s family property law differs from many jurisdictions because it uses a fixed date valuation approach to achieve that underlying policy. For most purposes, that date is the separation date.
Ontario courts had been reluctant to look beyond the separation date by either valuing assets ‘in hindsight’ or considering a post-separation value in an application for an unequal division. They did so because of the desire for certainty in resolving cases.
In the Serra case:
The OCA has clarified that a non-fault, market driven decline in the value of equalized assets is sufficient for the courts to consider making an award for an unequal division of property.
In one part of the decision, the OCA suggests that a temporary market decline of shares or securities would not meet the test of unconscionability. However, does this apply to a spouse’s RRSP savings, especially where it is not uncommon to see a loss of value exceeding 30 percent in this market? These are expensive issues for spouses that separated in 2007 or earlier, but who are only now effecting equalization payments.
The Court of Appeal relied on section 5(6)(h) of the Family Law Act, which says:
5(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to…
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. R.S.O. 1990, c. F.3, s. 5 (6).
Up until the Serra decision, the titled spouse was largely the insurer of the other party’s equalization claim in the face of market driven reductions. Now, market driven forces are “other circumstances” relating to the acquisition, disposition, preservation, maintenance or improvement of property.
In the face of declining markets, will the propertied spouse rush to make a transfer of assets vulnerable to reduction in value? Should he or she do so? The Family Law Act does not permit trial judges to make specific transfers of property in satisfaction of equalization payments.
Before making an order for an unequal division, a trial court must be of the opinion that an equalization will be “unconscionable”. The Court of Appeal noted the standard is more than simply “unfair”, “harsh”, or “unjust” alone but must “shock the conscience of the court”.
Of interest in the Serra decision:
The OCA really did not touch upon an interesting element of the trial. The fact that the husband had admitted the wife’s claim for a one-half interest in the business, that she subsequently withdrew on the eve of trial. Had the trial court allowed the admission, the wife would have been saddled with one-half of the decline in the business value, as she would have owned half of it.
Many practitioners feel there is enough in the Serra decision to allow litigants to pursue post-separation swings in the value of assets. Whether that will be applied to upswings in value will likely not be seen for years (given the recent market trends), and the extent to which trial judges will allow such claims is yet to be seen.
Thomas J. MacLennan brings a sense of calm and rationality to challenging legal issues. Contact The Law Office of Thomas J. MacLennan through our online form or call 416-591-1354 to arrange a consultation.