Does Shared Custody Mean No Child Support?

In Canada, child support obligations are usually dictated by the federal child support guidelines.  The guidelines work on the principle that both parents should share the same portion of their income with their children as if they lived together.  The guidelines set out monthly child support amounts in a table that uses the paying parent’s level of income and the number of children eligible for child support.

In almost all cases, judges are required to follow the guidelines when determining the amount of child support.  There are however exceptions one of which is when the parents have split or shared custody of the children.

Split custody refers to a child custody arrangement in which one parent has sole custody of one or more children while the other parent has sole custody of the remaining siblings.

In split custody situations the child support is guided by s.8 of the guidelines which states:

Where each spouse has custody of one or more children, the amount of a child support order is the difference between the amount that each spouse would otherwise pay if a child support order were sought against each of the spouses.

In other words, if parent A’s obligation to parent B for the children in B’s care is $1,000 per month, and that parent B’s obligation to parent A for the children in A’s care is $250 per month, A would pay $750 per month in child support, the difference between A’s obligation and B’s obligation, and B would pay nothing.

Shared custody refers to a child custody arrangement where a child spends about an equal amount of time in the care and home of each of the two separated parents, and the parents share the legal rights in regards to the child.

In shared custody situations the child support is guided by s.9 of the guidelines which states:

Child support must be determined by taking into account the amounts set out in the applicable tables for each of the spouses, the increased costs of shared custody arrangements and the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.

The analysis starts by determining each parent’s income, finding each parent’s support obligation amount under the applicable Guidelines tables then offsetting the two numbers to come up with a figure that the higher earning parent owes the other. If parent A would pay $940 per month under the guidelines, and parent B would pay $1,040 per month under the guidelines, then the set-off amount is $100.

Shared or split custody does not mean no child support but a different formula is used to determine what the child support obligation should be.

 

British Columbia is the First Canadian Province to Introduce Benefit Corporations

 

In May 2019, British Columbia amended its Business Corporations Act (BCA) to allow for the inclusion of “benefit corporations.”[1] This new business entity provides an intermediary position between the existing non-profit and for-profit options. Specifically, it allows new and existing companies to include a benefit provision within their articles of incorporation. This provision alters the corporate executives’ responsibilities by including a non-shareholder interest that must be factored into all major business’ decisions. In this respect, it differs from the traditional corporate structure where the corporation’s executive body is principally tasked with maximizing shareholders’ interests. The amendment was introduced as a private member’s bill by Andrew Weaver, the B.C. Green Party Leader. In his address to the legislature, Mr. Weaver explained that the introduction of benefit corporations would “provide…companies with the legal framework to operate in an environmentally sustainable and socially responsible way and to pursue public benefits, in addition to pursuing profits.” [2] While British Columbia is the first Canadian province to authorize benefit corporations, this new corporate structure has been widely recognized throughout the United States. In June 2018, 33 States, plus the District of Columbia, had passed similar legislation.[3]

 

What function does the benefit corporation serve? Similar to third-party certification programs which label a company as environmentally sustainable, committed to fair-trade practices, or otherwise, the designation of being a benefit corporation signals to prospective clients, investors, and businesses that a company is committed to a broader social, cultural, or environmental purpose. As Mr. Weaver argues, “by incorporating as benefit companies, businesses would achieve clarity and certainty for their directors and investors about their goals and mandate, thus enabling them to attract capital investment while staying true to their mission as they grow.”[4] That is, the benefit provision can serve to stabilize a company’s activities by ensuring it adheres to broader principles over the long-term. This may assist some companies in attracting new owners, investors, or clients, but simultaneously, it ensures that these new business participants cannot fundamentally alter the company’s foundational purpose. This stability can preserve a company’s brand by ensuring its reputation is not undermined by fundamental changes to its value-based practices, e.g. sourcing materials from certified supply-chains.

How do benefit corporations differ from Canada’s existing Community Contribution Company (C3) designation? The C3 framework is a share-capital corporate structure that incorporates both for- and not-for-profit elements. These companies adhere to market principles related to growth; however, they are subject to restrictions regarding their distribution of assets by dividends or dissolution. Benefit corporations, by contrast, have no such restrictions. Instead, a benefit corporation’s adherence to their beneficial purpose will be monitored by new transparency and accountability requirements that will be assessed against an independent, third-party standard. This structure is commonly observed in existing certification programs such as: Clean Marine B.C., The Forestry Stewardship Council, Leadership in Energy and Environmental Design, et cetera.

 

By special resolution, a majority of shareholders may alter a company’s articles of incorporation to become a benefit corporation. This requires the addition of a benefit statement. What is this statement? Under the Act, all participating corporations must include the following statement within its articles:

“This company is a benefit company and, as such, has purposes that include conducting its business in a responsible and sustainable manner and promoting one or more public benefits.”[5]

To clarify, all participating corporations must commit to responsible and sustainable business practices generally. This means that the company will “take into account the well-being of persons affected by the operations of the benefit company, and endeavour to use a fair and proportionate share of available environmental, social, and economic resources and capacities.”[6] Thereafter, companies must select a specific public benefit. Under section 51.991(1) of the amended Act, this benefit can include “artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological” objectives. However, the benefit must accrue to a class of persons, communities, or organizations other than the shareholders qua shareholders. That is, shareholders may indirectly benefit from an improved community, environment, etcetera, but they cannot be the class of person for whom the benefit is directed. Due to these provisions, benefit corporations cannot amalgamate with regular corporations, unless the amalgamation results in a benefit corporation.[7] Alternatively, a majority of shareholders may discontinue a corporation’s beneficial designation by simply removing the above provisions via a special resolution.

 

 

Once established a benefit corporation’s public commitment is assessed through annual benefit reports. These reports are to be published along with the corporation’s existing financial auditing obligations under the BCA.[8] As mentioned, these reports must be accompanied by and be evaluated against a third-party standard, e.g. a standards-setting body such as the Forestry Stewardship Council.[9] While the company may select this third-party comparator, there are various restrictions on this selection process to ensure the evaluation’s independence. For example, a standard-setting body is not independent whenever “a person who beneficially owns shares of the benefit company, or an associate of such a person, is a member of the governing body of, or controls the operation of, or otherwise controls, the third-party standard-setting body.” In other words, there can be no relationship between the principle company and its third-party comparator when that comparator is a standard-setting body (i.e. a charity or non-profit organization).[10] The report itself must specify what activities the company took to pursue its general and specific benefit provisions and any impediments experienced therein over the previous year.[11] It must be approved by the directors, signed by one or more of them, and published on the corporation’s website.[12]

 

The benefit corporation model could advantage entrepreneurs looking to gain market-share or attract capital investments by espousing a societal benefit. Should they fail to adhere to their self-selected third-party standard, their liability is limited. Under section 51.994(2)(b), stakeholders are barred from pursuing legal action against a company simply because it failed to realizes its espoused benefits. This limitation is supported by section 51.994(2)(a) which excludes persons “whose well-being may be affected by the company’s conduct, or … who [have] an interest in the public benefit specified in the company’s articles.” As for shareholders, their remedies are limited with regards to the company’s benefit provisions. Directors and officers cannot be found to have breached their fiduciary duty under section 142(1) simply because they failed to meet their beneficial duties under section 51.994(1). Should shareholders of a public corporation seek a remedy against their directors or officers for failing to adhere to the company’s third-party standards, they must—in aggregate—represent at least the lesser of 2% of issued shares or their shares must have a fair-market value equal to or greater than $2,000,000. Finally, shareholders are precluded from pursuing a monetary award under section 51.994(5). Rather, they are limited to injunctive relief.

 

In summary, the benefit corporation model introduces a legislative framework for third-party certification programs which enables companies to integrate a beneficial purpose into their articles of incorporation. This may strengthen a company’s brand by solidifying its value-based practices over time and over ownership arrangements. It may also help attract ethically motivated consumers and investors. To ensure compliance, participating companies are required to evaluate and publish their beneficial activities against independent third-party standards. Should directors or officers fail to abide by these standards, shareholders may seek injunctive relief. This limitation on directors’ and officers’ liability ensure that corporations can pursue their benefit provisions without facing onerous financial liabilities from their shareholders. If your company is interested in becoming a benefit corporation, please call our office for further information.

 

[1] Business Corporations Amendment Act, 2018, BC Legislature, Canada.

[2] Weaver, Andrew, “Introducing a bill to enable BC companies to be incorporated as benefit corporations.”

[3] Fitzpatrick, Sarah: “B.C. Considers Benefit Corporations,” Miller Tompson Blog

[4] Supra, note 2.

[5] Ibid., s. 51.992(2)

[6] Iibd., s. 51.991 (1)

[7] Ibid., s. 51.998

[8] Ibid., s. 51.996(1)

[9] Ibid., s. 51.996 (3)

[10] Ibid., s. 51.991(1)

[11] Ibid., s. 51.996 (2)(d)

[12] Ibid., s. 51.996 (4)-(5)

When dealing with a divorce or separation from a spouse, determining the date of separation could be crucial.  For example, if the value of an asset is being divided as of the date of separation (a bank account, for example), then the date of separation could be crucial if the balance goes up or down significantly.  However, the date of separation may not be agreed upon by the spouses, and it can significantly affect property division, child and spousal support, and even the ability to bring a family law claim.

If the spouses disagree on the date of separation, the Court may look at several factors to determine which separation date is accurate:

  • Whether the spouses lived in the same house or slept in the same bedroom;
  • Whether the spouses vacationed together;
  • How the spouses participated in joint social activities and the manner in which the spouses presented themselves to others;
  • Plans for the future, including estate planning;
  • The absence of sexual relations;
  • The absence of communication between the spouses;
  • Attempts to reconcile the relationship;
  • The performance of household tasks and changes to routines;
  • Economic support and dependency between the spouses;
  • How the spouses conducted their financial affairs, including how they filed their taxes; and
  • How the spouses engaged with their children.

The Court may consider factors beyond those in this list, and the presence or absence of any particular factor is not determinative.  For instance, spouses may be separated but remain in the same house because of financial circumstances.  It only requires one spouse’s intention to terminate the relationship.  Both spouses do not need to agree that the relationship is over.  The Court will objectively assess all of the evidence and determine if or when one spouse intended to separate and communicated that intention through words or conduct to the other spouse.

If you would like to book an appointment with any of our family law lawyers, please contact Heath Law LLP at 250-753-2202 or toll free: 1-866-753-2202.

Estate Planning – Considerations when Adding a Child as Joint Tenant to your Property

Many parents put their children on title to their residence as a form of estate planning. While this can help avoid probate fees and possibly assist with ease of administration of an estate, the case of Gully v. Gully, 2018 BCSC 1590 [Gully], demonstrates that parents must be careful when adding children onto title to their residence.

In Gully, a mother added her son as a joint tenant on title to her Burnaby property. She did so based on legal advice she received, including that her estate could avoid probate fees. She did not tell her son that he had been added as a joint tenant to title of the property.

In August of 2017, the son, and his company, consented to a judgment of $800,000.00 in favour of Ledcor Construction Limited (“Ledcor”). Ledcor discovered that the son was on title to the property and registered their certificate of judgment on the son’s undivided half interest in the property.

The mother sought a declaration, amongst other things, that the son held the property on a resulting trust for her estate. The court found that the son did not hold the property on a resulting trust for the estate and permitted Ledcor to retain their judgment on title, ultimately stating:

 [24]        Ms. Gully took a risk in registering her son as a joint tenant on her property. Whether she was properly advised of that risk is not before me. However, once she made the decision to register an interest in the Burnaby Property in Mr. Gully’s name, third party creditors of Mr. Gully became entitled to register judgments against Mr. Gully’s interest in the Burnaby property.

If you would like to book an appointment with any of our estate planning lawyers, please contact Heath Law LLP at
250-753-2202 or TOLL FREE: 1-866-753-2202.

After a motor vehicle accident it is very important to gather the appropriate information in case of a he said/she said battle over legal responsibility or liability.

Assuming that you do not need emergency medical attention after the motor vehicle accident you should look at and record the other driver’s licence number, the licence plate of the vehicle that hit you as well as their insurance information. It is worth stressing the importance of verifying the other driver’s licence number and not just asking for their name. This will remove the chance of the other driver providing you with a phony name. Take a picture of the other vehicle (and licence plate), the other driver and the other driver’s licence.

Also, take pictures of the scene of the accident, which would include any damages to vehicles as well as the position of the vehicles after the accident. If there are any 3rd party witnesses, their information and identity should be recorded to provide their account of the accident if there is a battle over liability.

After the accident there are also different entities that you should contact. Right after the accident you should contact ICBC. At this initial contact you should provide ICBC with the information that you gathered at the scene of the accident. Also, it may be necessary to call the police after the accident. If it is a hit-and-run accident you must contact the police; by calling the police you create a record of the accident which can be of assistance later on in the ICBC process. Finally, you should contact a personal injury lawyer. The lawyer will act on your behalf, guide you through the legal process and ensure that you are appropriately compensated from the accident.

If you or someone you know has been in a car accident contact Heath Law LLP.

On your usual commute to work something unusual happens. While driving to work, a wild animal darted across the road which resulted in you colliding with another vehicle and injuring the other driver. The other driver has sued you and the liability for the accident has currently been assigned to you at 100%. You are thinking that this is extremely unfair as there was nothing that you could have reasonably done to avoid the accident. This situation is governed by the defence of inevitable accident (the “defence”).

The defence places an onus on the person asserting the defence to prove that the exercise of reasonable care while driving could not have prevented the accident. The circumstances of the accident must have been beyond the driver’s control.

The defence has been pled in a few different scenarios in which the defendant has claimed that the accident was entirely out of their control. For example, defendants have pled the defence when a rogue bee has flown into their car, when a wild animal darts across the road and when the driver loses consciousness while driving.

For the defence to be successful the court must be satisfied that the inevitable accident was indeed inevitable and that the circumstances causing the accident were not reasonably foreseeable.

The court must be satisfied that there was nothing that the driver could have done to avoid the accident. For example, the defence may not be successful every time an animal crosses the road as the amount of time to react, the driver’s attentiveness and the type of animal will be considered. A driver’s evasive or lack of evasive action must be deemed by the court to have been reasonable in the circumstances.

The court must also be satisfied that the circumstances which caused the accident were not reasonably foreseeable. For example, if the road you were travelling on was frequented by darting deer, it would make a deer appearing on the road and causing an accident reasonably foreseeable. Also, if you have a health condition that may cause you to lose consciousness, losing consciousness on the road and causing an accident could be also be considered reasonably foreseeable. Lastly, if you know that the outdoor temperature was going to cool below freezing after a rain, slipping on ice would be reasonably foreseeable.

Not every attempt to make a valid Will is successful. The Wills Estates and Succession Act (WESA) of British Columbia has certain requirements that must be established and proven if the Will is to be deemed valid.

There is an age requirement that is designated by s. 36 of the WESA. S. 36 states that a person who is 16 years or older and is mentally capable may make a Will. A Will that is made by someone under 16 is therefore presumptively invalid.

There are other somewhat more technical requirements needed to make a valid Will found in s. 37 of the WESA. For a Will to be valid it must be (a) in writing, (b) signed at its end by the Will-maker or the signature at the end must be acknowledged by the Will-maker as his or hers, in the presence of 2 or more witnesses present at the same time, and (c) signed by 2 or more of the witnesses in the presence of the Will-maker. S. 40 of the WESA provides the age requirements for witnesses to a Will. Signing witnesses to a Will must be 19 years of age or older.

Once the technical requirements for making a Will are met there are also limitations to the type of property that can be gifted in a Will. S. 41 of WESA states that a person may by Will, make a gift of property to which he or she is entitled at law or in equity at the time of his or her death, including property acquired before, on or after the date the Will is made. This effectively means that one is only able to gift property that the Will-maker actually has or is entitled to.

Creating a Will is a significant life event that needs to be attended to with the proper diligence and care. If you would like to create your first Will or have any questions regarding your existing Will please contact Heath Law LLP at 250-753-2202.

Once liability (or legal responsibility) for a motor vehicle accident has been determined the remaining question is the quantum or amount of damages to be awarded.  There are 5 different heads of damages that must be considered in arriving at the final amount: past wage loss, future wage loss, non-pecuniary damages, costs of future care and special damages.

The legal principle that governs the entire process of awarding damages is that, insofar as is possible, the plaintiff should be put in the position he or she would have been in but for the injuries caused by the defendant’s negligence.

Past wage loss deals with the victim’s lost earnings from the accident up until the point of trial.  This amount is determined through employment records, medical records and any other relevant materials.

Future wage loss is a much more involved process.  Once again employment records and medical records will be relevant.  In addition, high school records, university records and your family history will be reviewed.  The Judge must consider how long you likely would have been able to work as well as how much money you likely would have earned but for the incident.  The Court must consider variables such as the likelihood of your early death, economic downturns and likelihood of another debilitating injury.

Non-pecuniary damages compensate a plaintiff for their pain, suffering, and loss of enjoyment of life up to the date of the trial and in the future. The essential principle derived from the jurisprudence is that an award for non-pecuniary damages must be fair and reasonable to both parties and should be measured by the adverse impact of the particular injuries on the individual plaintiff.  This valuation is completely up to the discretion of the Court. Awards vary a great deal depending on the type of injury and the type of person that was injured.

Costs of future care are awarded on the basis of what is reasonably necessary to promote the mental and physical health of the plaintiff having regard to the medical evidence.  To determine the appropriate award the Court must be satisfied that there is a medical justification for claims of future care and the claims must be reasonable.

Special damages cover a person’s reasonable out-of-pocket expenses they incurred as a result of an accident.  The expenses claimed must be limited to those expenses which are restorative rather than putting the injured person in a better position than before the accident.

In British Columbia, all of the above heads of damages are added together and paid out to the injured party as a lump sum.

Change of Business Name

Approximately 30 years ago, you started a masonry business.  You decided to call this company “Smith’s Masonry Services”.  Business was good so you started to look at adding different business lines.  You found that there was a need for masonry in the assembly of fireplaces.  Things further evolve and you notice that there is a demand for the installation of the fireplaces.  As years pass on your firm is capable of installing fireplaces.  Business is booming, in fact there are so many requests for the installation of fireplaces, that your original masonry business is almost inactive.  Because of this change in business your company’s name may be somewhat misleading.

How does a business change their Company’s name?

In British Columbia, there are two steps.  The first step is to request a name approval.  This step is to ensure the public is not confused or misled by similar corporate names.  New corporate names must be approved by the Corporate Registry.  Before making application for the name approval, one should conduct an online search of the registered BC companies and organizations database on BC Online to ensure that new business name is not already taken.

The second step is file a change of corporate name.  In order to submit the application through Corporate Online you will need your incorporation number, company password and Customer Profile ID.  If you do not have a Customer Profile ID, you need to create one on Corporate Online before you can file the change of the company name.  Also, companies must be in good standing with all filings up-to-date before altering the company name.

As per the Government of British Columbia Website, these are the 3 most common reasons why names are not approved:

  1. Name is too similar to an existing corporate name within the same industry.
  2. Research was not conducted before applying to make sure the name wasn’t already in use.
  3. Name lacks a distinctive and/or descriptive element.

 

The Civil Resolution Tribunal is designed to provide affordable access to justice in BC.  As stated in the Supreme Court of Canada in Hryniak v Mauldin, 2014 SCC 7, “Ensuring access to justice is the greatest challenge to the rule of law in Canada today.  Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial”.

The Civil Resolution Tribunal has attempted to combat the access to justice problem by making the process cheaper, expedited, easier to understand and more navigable.  One of the more interesting facets of the Tribunal is that it is Canada’s first online tribunal.  The entire process from initiating a claim, negotiations and the final decision of the tribunal is done online.

The Tribunal started off as a forum for strata property disputes but has expanded into facilitating small claims disputes of $5,000.00 and less.  Interestingly, the Tribunal is going to expand further into Motor Vehicle Accidents and certain Societies Act and Cooperative Associations Act disputes.  Motor Vehicle Accident disputes are expected to begin being heard by the Tribunal in April of 2019 but there is no specified date yet for the Tribunal to start hearing issues related to disputes under the Societies Act and Cooperative Associations Act.  It is likely that the Tribunal will only hear matters related to Motor Vehicle Accidents that are fairly simple in nature with damages capped at around $50,000.00.

The Tribunal contemplates active participation by those who will actually end up being effected by the dispute, namely the plaintiff and defendant.  The Tribunal will only make a decision for the parties if the parties are unable to agree to a solution on their own.  The Tribunal is available 24 hours a day, seven days a week from a computer or mobile device that has an internet connection.

The Tribunal’s online dispute resolving program is ground-breaking, being the first of its kind in Canada.  It is likely that the jurisdiction of this Tribunal will continue to expand within BC once the public gains more confidence in the process.