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December 14, 2009

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PAGE 2 NEWS December 14, 2009 • Law Times Record spousal-support ruling raises eyebrows A BY TIM SHUFELT Law Times record spousal-support award re- flects a growing trend towards a "wealth-sharing" approach to ali- mony assessments rather than one based on needs and means, says the recipient's lawyer. An Ontario Superior Court judge has awarded a 61-year-old Toronto wom- an a staggering $110,000 per month, an amount that family lawyer Julie Han- naford believes sets a new high in Canada. But the added fact that the monthly award was imposed on an interim basis and is meant only to cover the period between separation and divorce has many observers astonished, Hannaford says. "That's the thing that's fussing a lot of commentators." After 33 years of marriage, Carol Ann Elgner separated from Claude Elgner, a highly successful Toronto business owner. Her husband's businesses supplying plastic fixtures used in auto interiors grew exponentially over the course of the marriage, ultimately supplying an annual income of $3 million to $4 million. Carol Ann, on the other hand, forsook a career and spent her marital years raising the couple's three children. Now with no employable skills, she can't be expected to work to earn money, Hannaford says. "At age 61, she can't work. She doesn't have the skill set." Since the pair separated in 2007, Carol Ann has been living off of her own capital. "In order to have a house of her own and furnish it, she had to go through all of her capital," Hannaford says. The judge considered that an indication of her economic situation and its disparity with that of her husband. "It's a very interesting way of judging it," Hannaford says, noting that the wealth- sharing approach is resulting in higher sup- port payments than in the past. "In the olden days, interim support was thought of [as] just enough for the bare ne- cessities, enough to keep the lights on and gas in the car." The principles for wealth sharing were set out by the Supreme Court of Canada in Moge v. Moge, Hannaford says. "Great disparities in the standard of liv- ing that would be experienced by spouses in the absence of support are often a reveal- ing indication of the economic disadvan- tages inherent in the role assumed by one party," the court said. "As marriage should be regarded as a joint endeavour, the longer the relation- ship endures, the closer the economic union, the greater will be the presump- tive claim to equal standards of living upon its dissolution." So despite the headlines that the El- gner ruling has spawned, Hannaford says the award merely reflects modern principles of spousal support. "The heart of the matter is this whole approach to spousal support is not so new," she adds, noting that Moge dates back to 1992. "If there is sufficient income, parties should be able to uphold their standards of living." And although the Elgner award appears to set a new high-water mark, the prec- edent for it was established in Lebovic v. Lebovic in 2001, Hannaford says. In that case, the wife claimed a hefty Earn Up To...16 CLE Credits 1.5 Ethics Credits | 3.5 Complimentary CLE Credits WHERE CAN YOU... Hear from industry leaders on the hottest topics? Test the newest products in the industry? Network with your peers? Earn CLE credits? THE MOST IMPORTANT LEGAL TECHNOLOGY EVENT OF THE YEAR! FEBRUARY 1-3, 2010 | THE HILTON NEW YORK FEBRUARY 2 FEBRUARY 1 OPEN TO ALL Don't Build Your eDiscovery Program on a Digital Landfill Russell Stalters Information Technology & Services (IT&S) Head, Information & Records Architecture BP America Inc. 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The award to Carol Ann is comparable to other recent cases in terms of percent- age of income, Hannaford says. The monthly payments have to be taken in context given the husband's income of more than $300,000 a month, she adds. The couple's assets also include a $1.5-million house in Toronto, a home in Muskoka worth $2.6 million, another property in Florida valued at $3.5 mil- lion, a condominium in Whistler, B.C., and several time-shares. "It was undisputed that the family cumstances" that entitle the Ministry of the Attorney General to assess the $1.2 million in legal fees lawyers Munyonzwe Hamalengwa and Raj Napal charged Legal Aid Ontario to defend Wills during his trial for murdering his mistress. Following public outrage over the fees, the Superior Court ordered an assess- ment earlier this year. Now, the appeal court has rejected a bid to overturn the order. "The attorney general was required under the term of the Fisher order to pay the appellants' legal bills," the court wrote in its Dec. 4 ruling. "That order also provided that Legal Aid Ontario would 'vet and approve' the L bills. In our view, that provision, obviously introduced into the order because the attorney general could not review the bills during the criminal prosecution, does not preclude the operation of s. 9 of the Solicitors Act, which contemplates assessments of bills at the request of 'third party' payors." — GK Follow us on Twitter at #LTNY & join the LegalTech Linkedin group head." Claude Elgner is appealing the award ruling, Hannaford adds. LT Province can review Wills' bills: court awyers for Richard Wills will be subject to an accounting of their legal aid bills, the Ontario Court of Appeal has ruled. In a recent judgment, the court said the case amounted to "special cir- enjoyed great wealth," Hannaford says. She argues a wealth-based approach is inherently more fair, particularly when dealing with very long marriages that pro- duce close financial ties and significant economic disparity upon separation. Awards based on needs are simply too objective, she says. "That just gets us into these really loaded questions. What is some- one's reasonable need? And who says?" But the advisory guidelines used by the courts both for spousal- and child-support awards are producing some extraordi- nary figures, prompting some to wonder whether they're becoming unreasonably high, she says. Further, wealth-sharing guidelines might be less appropriate when dealing with the dissolution of shorter marriages. "These questions are all coming to a OPEN TO ALL FROM THE PUBLISHERS OF: LegalTech_LT_Nov23_09.indd 1 www.lawtimesnews.com 11/16/09 10:37:05 AM KEYNOTE ADDRESSES

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