Law Times

PAGE 6 COMMENT Law Times Group Publisher ....... Karen Lorimer Editorial Director ....... Gail J. Cohen Editor .................. Glenn Kauth Associate Editor ......... Robert Todd Copy Editor ......... Heather Gardiner CaseLaw Editor ...... Jennifer Wright Art Director .......... Alicia Adamson Account Co-ordinator .... Catherine Giles Electronic Production Specialist ............. Derek Welford Advertising Sales .... Kimberlee Pascoe . . . . . . . . . . . . . . . . . . . . . . . . . . Kathy Liotta Sales Co-ordinator ......... Sandy Shutt ©Law Times Inc. 2009 All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Law Times Inc. disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Editorial Obiter Stopping white-collar crime involves multiple targets J ustice Minister Rob Nicholson has a new target in the Conservative government's long-running bid to clamp down on crime. After tackling conditional sentences and, more recently, announcing plans to introduce "truth in sentencing," Nicholson is now turning his attention to the latest justice issue Canadians are talking about: white-collar crime. He offered few specifics but said the reforms would include both manda- tory minimum jail terms and longer sentences for fraudsters. The comments come, of course, amid revelations of another alleged Ponzi scam that bilked investors out of millions of dollars. Last week, po- lice announced they had charged two Alberta men, Gary Sorenson and Milowe Brost, in a scheme that alleged- ly took in more than $100 million from thousands of people. Already, observers expressed concerns over another case involving Montreal investment dealer Earl Jones, who faces fraud charges over an alleged Ponzi arrangement that also cost people millions. Those cases have rekindled con- cerns that Canada is lax in stopping fi- nancial crimes. But while Nicholson's vow will be sure to revive the familiar debate about whether tougher sen- tences deter crime, critics will likely have a hard time getting the public on- side. Certainly, the fact that our parole laws often allow white-collar criminals to serve what end up being relatively short periods of time in jail is a con- cern that longer prison terms would go some way to addressing. Nevertheless, this is an area where Canadians need to look beyond the usual rhetoric. Already, reports have surfaced showing that in the Alberta case, the province's securities commis- sion had been on it for years and had in fact levied an administrative fine against Brost in 2007. Despite those investiga- tions, the scheme continued while the RCMP looked into criminal charges. It took until now for that to hap- pen, a fact that highlights the need for new procedures and resources so the Mounties can speed up their investi- gations. It has been acknowledged for years that our national police force has found itself hampered in laying criminal charges in fraud cases due to everything from a high vacancy rate in its commercial crime units to the challenges of collecting documentary evidence from sources such as banks. The Conservative government has said it's working on the issue, but the Alberta case makes it obvious that au- thorities continue to struggle in investi- gating fraudsters. Of course, given that people with money have a particular interest in protecting their reputations, this is one area where the certainty of prosecution can be an especially ef- fective deterrent. So, while it's fine to toughen sentences, Nicholson should think more broadly. — Glenn Kauth veball comes our way. This past June, the B.C. J Court of Appeal came out with an important decision in cases where the payor's income ex- ceeds the spousal support advi- sory guidelines cap. In the case, Bell v. Bell, the par- ties were married for most of their roughly 20-year relationship. The husband, John Peter Bell, was a retired diplomat who met his wife while serving as the Canadian ambassador to the Ivory Coast. Yvette Holland Bell, who was in the fashion industry, had mini- mal assets while John was worth approximately $4 million. Yvette left her career to raise the parties' two children and to perform the many duties that go along with being a diplomat's wife. After separating in 2004, the parties reached an agreement that then became a consent order. John was in his late 60s and Yvette in her late 40s at the time. Through the separation pro- cess, the pair split the matrimonial assets, totalling about $12 million, equally. The parties agreed that ust when we thought spou- sal support issues were be- coming clearer, another cur- B.C. court throws curveball on spousal support Family Yvette would receive $10,000 in monthly spousal support and $5,000 per month in child support. A review clause in fa- vour of John was incorporated into the agreement allowing him to have spousal support reviewed when he turned 70, an age he reached last year. The judge of first Law By Marta Siemiarczuk instance reviewed John's income and de- termined that it had dropped to approximately $350,000 from the $1.2 million he was earning at the time of the agreement. The court further found that Yvette's income was $180,000 plus $30,000 in imputed income that she admitted she could earn if she went back to work. As a result, the court ordered im- mediate termination of spousal support. Yvette appealed. In reviewing John's income, appeal court Justice Peter Lowry, speaking for a unanimous panel of judges, found it was actually $650,000 for the purposes of calculating support. He then continued to discuss the basis for awarding spousal support to Yvette, noting there is a com- pensatory element. While Yvette received a very lucrative property settlement, she was entitled to those assets regardless of any spousal sup- port. The compensatory element stemmed from the disadvantage she would suffer from the break- down of the marriage given that she would face a lower standard of living following the separa- tion. Lowry held that in order to maintain a similar quality of life to what she enjoyed during the marriage, Yvette would have to deplete her capital, a result not in keeping with the compensatory principles of support. Placing much weight on the significant discrepancy between the litigants' incomes, Lowry re- versed the lower court's decision to terminate spousal support. What is interesting, however, is that notwithstanding the sig- nificant focus by the appeal court on the need to maintain similar standards of living, the judges www.lawtimesnews.com did not reinstate the previous amount of $10,000 per month. Instead, Lowry cut the amount in half, finding that the parties had agreed to the $10,000 pay- ments based on a much higher income for John. Now that his income was approximately half of what it had been previously, the court lowered Yvette's spou- sal support from $10,000 to $5,000 per month. Why this is interesting is that with this award, Yvette's income would still only be $270,000 annually. Meanwhile, John en- joyed an income of $650,000, an amount that falls to $590,000 annually after paying support. That still leaves a $320,000 dif- ference notwithstanding the 20- year relationship and the very high standard of living the couple enjoyed before separation. That's not exactly a balancing of stan- dards post-separation. In making their ruling, the judges placed much weight on the original agreement and on what the parties had deemed as fair. While on the face of it, this approach makes sense, it lends itself to asking what would have happened if John had September 21, 2009 • Law timeS Law Times Inc. 240 Edward Street, Aurora, ON • L4G 3S9 Tel: 905-841-6481 • Fax: 905-727-0017 www.lawtimesnews.com President: Stuart J. Morrison Publications Mail Agreement Number 40762529 • ISSN 0847-5083 Law Times is published 40 times a year by Law Times Inc. 240 Edward St., Aurora, Ont. L4G 3S9 • 905-841-6481. lawtimes@clbmedia.ca CIRCULATIONS & SUBSCRIPTIONS $141.75 per year in Canada (GST incl., GST Reg. #R121351134) and US$266.25 for foreign addresses. Single copies are $3.55 Circulation inquiries, postal returns and address changes should include a copy of the mailing label(s) and should be sent to Law Times Inc. 240 Edward St., Aurora, Ont. L4G 3S9. Return postage guaranteed. Contact Kristen Schulz-Lacey at: kschulz-lacey@clbmedia.ca or Tel: 905-713-4355 • Toll free: 1-888-743-3551 or Fax: 905-841-4357. ADVERTISING Advertising inquiries and materials should be directed to Sales, Law Times, 240 Edward St., Aurora, Ont. L4G 3S9 or call Karen Lorimer at 905-713-4339 klorimer@clb- media.ca, Kimberlee Pascoe at 905-713-4342 kpascoe@clbmedia.ca, or Kathy Liotta at 905- 713- 4340 kliotta@clbmedia.ca or Sandy Shutt at 905-713-4337 sshutt@clbmedia.ca Law Times is printed on newsprint containing 25-30 per cent post-consumer recycled materials. Please recycle this newspaper. simply gotten a good deal on spousal support in the original agreement. What if Yvette had agreed to the amount simply to avoid litigation, not because she thought it was fair? Can it still be said that cutting her support in half was appropriate given that John could certainly afford to continue paying the higher amount and in light of the court's finding on balancing standards of living? Had the original amount continued, John would still have enjoyed a much higher standard of living than his ex-wife. As a result, it would be interesting to know whether the decision would have been the same had the original payments been the result of a trial judgment rather than an agreement. Consider- ing this decision, then, it may be prudent to put more emphasis on purpose and intention clauses in agreements. LT Marta Siemiarczuk is a lawyer practising family law litigation and collaborative family law at Kath- leen Chapman & Associates in London, Ont. She can be reached at msiemiarczuk@gmail.com.

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