Law Times

Law Times • February 27, 2017 Page 7 www.lawtimesnews.com Case highlights retirement and spousal support BY MARTA SIEMIARCZUK H igh-income earners, long-term marriages resulting in compen- satory support claims and retire- ment were the focus of the Court of Appeal decision in Schulstad v. Schul- stad, 2017 ONCA 95. The decision was released earlier this month. In this case, the parties had been in a long-term (24-year), traditional marriage. Campbell Karl Schulstad was a surgeon and Diann Borden Schulstad was a stay-at- home mother. They separated in 1990. Dur- ing the initial years of the marriage, Diann Schulstad worked outside the home and put her husband through medical school. The couple then relocated to Ottawa so that Campbell could complete his residency. After their child (now independent) was born, Diann Schulstad left the workforce to care for their son and home, while Camp- bell Schulstad worked as a surgeon. At the time of these proceedings, Camp- bell Schulstad had been paying $10,000 per month in spousal support, which had been indexed since the initial order. He also had maintained life insurance as security, at a cost of approximately US$300 per month. Campbell Schulstad lived in the United States and Diann Schulstad continued to live in Canada. The basis of Diann Schul- stad's spousal support entitlement was rooted in both needs-based and compen- satory principles. Approaching the age of 70, Campbell Schulstad took steps toward retirement. This included starting a proceeding to terminate his spousal support and corres- ponding life insurance obligation to Diann Schulstad, in anticipation of his income being drastically reduced following his re- tirement. The issues before the court were whether he commenced his proceedings prematurely, as he had not yet retired, whether the appli- cation judge erred in finding Campbell Schulstad's retire- ment a "material change in circumstances" and whether the application judge erred in finding that the parties' post-retirement financial cir- cumstances would be similar, warranting a termination of Campbell Schulstad's spousal support and insurance obligation. Quite rightly in my view, the judge of first instance and the Court of Appeal for Ontario both found that Campbell Schul- stad's proceeding was not premature, and that the impact of his impending retirement was a material change in circumstances. On the issue of prematurity, cases where payors propose to retire often create a very real and practical quandary. Campbell Schulstad was nearly 70 years old when he began to take steps toward retirement. Having such a significant support obligation makes it impossible to take any concrete steps to- ward retirement without prior approval of the court to do so. Very problematic results could ensue if our courts were to say, "No, we will not hear you unless and until you have completed the act of retiring." One can easily imagine a support payor working in a given field until well into their sixties, retir- ing and then having a court determine that they ought not to have retired and must maintain their sup- port payments. People in this age bracket would undoubted- ly find it difficult, if not impos- sible, to become re-employed in order to once again earn at the level they were earning in order to meet a support obliga- tion. The old employer would likely have replaced the person, and many new employers do not want to invest in new em- ployees who are at what's con- sidered to be "retirement age." As a result, allowing support payors to have this issue determined before retirement actually takes effect seems to be the most appropriate way of dealing with these cases. Naturally, however, the evidence has to be present before the court that the pro- posed retirement is actually going to hap- pen and the Court of Appeal for Ontario makes clear that speculative cases will not succeed. But in this case, Campbell Schul- stad had already taken some steps with his employer to wind up his practice with a concrete end date in sight. Simply put, it was clear to the court that retirement was going to happen imminently. With respect to the ultimate result, the Court of Appeal had outstanding ques- tions as to what Campbell Schulstad's actu- al post-retirement financial circumstances would be in comparison with those of Di- ann Schulstad. In this regard, the court of appeal found that the application judge er- roneously concluded there was no need to assess his finances based on the equivalent value of his income and income-generating capital converted from U.S. to Canadian funds and the percentage return that could be generated by his capital. Both the judge of first instance and the Court of Appeal, however, accepted the fact that at a certain point in time, the parties would be expect- ed to draw down on their capital savings and investments in order to fund their fu- ture. Given the outstanding financial com- parison questions, the Court of Appeal re- mitted the matter back to the court of first instance for determination on those issues and to assess the level of support payable (if any) within the parameters of the Spousal Support Advisory Guidelines. What is clear from this case is that in- come reduction as a result of retirement will be a sufficient factor to reassess ongoing support obligations, but it will not neces- sarily result in an altogether termination of support. Instead, clear evidence of future post-retirement income generation has to be put forward and the ongoing quantum of support will be assessed against the sup- port ranges found in the Spousal Support Advisory Guidelines, which may result in no further support owing or some smaller amount. However, with the right evidence of a clear, impending retirement, support payors will not be forced to wait until af- ter the act of retirement is complete before seeking recourse from the courts. LT uMarta Siemiarczuk is a lawyer practis- ing family law litigation and collabora- tive family law at Nelligan O'Brien Payne LLP in Ottawa. She can be reached at marta.siemiarczuk@nelligan.ca. COMMENT Hidden camera has implications for privacy law BY ROLAND HUNG L ate last year, the Ontario Superior Court of Justice released Patel v. Sheth, the next in a series of cases following the 2012 recogni- tion of a tort of intrusion upon seclusion in Jones v. Tsige. While Patel is deeply rooted in a messy matrimonial context, including issues involving support payments and equalization of property, as well as allegations of assault and battery, the case is important for Ontario lawyers to consider when it comes to the analysis and finding of an invasion of privacy. I believe the novelty of the tort and its potential impact on modern business means lawyers can learn from the case about how to ap- proach intrusion upon seclusion cases with a business risk perspective. The proceedings arose out of the breakdown of the brief marriage between husband Pravinchandra Patel and wife Annely Sheth. After a few short years of mar- riage, Patel and Sheth had separated (for roughly a year), reconciled and then separated once more for good. Dur- ing the reconciliation, when Sheth began to gradually move back into the family home, Patel surreptitiously installed a camera inside of a BMW keychain sitting on an armoire in the bedroom. The camera looked across the bedroom and into the bathroom. The impetus for the initial separation was an argu- ment that occurred, where Sheth claimed Patel assault- ed her. The charge was withdrawn on the condition that Patel enter into a peace bond. After this incident, Patel had put the camera in Sheth's bedroom. After the camera was found, Patel denied knowing about the camera's existence during the discovery process. Later in the proceedings, Pa- tel claimed that he had placed the camera as a defence against future claims of assault. Drawing on previous decisions, the court laid out the test for intrusion upon seclusion (or invasion of pri- vacy) and distinguished its key features. These are: • The defendant's intrusion must be intentional (or reckless); • The defendant must have invaded, without lawful jus- tification, the plaintiff 's private affairs or concerns; and • A reasonable person would regard the invasion as high- ly offensive causing distress, humiliation or anguish. The court found that the evidence had successfully satisfied the test for intrusion upon seclusion. Patel ad- mitted to secretly planting a camera, his explanation for doing so made no sense and he repeatedly lied about his actions under oath. Furthermore, the bedroom and bathroom are very private rooms. While the photos did not depict anything explicit, the potential to have done so was real, and Sheth was embarrassed and shocked by the incident. As established by Jones, damages for intrusion upon seclusion are modest and generally capped at $20,000. Punitive damages are not outlawed, but they require exceptional facts. In Jones and Patel, the court listed factors identified in the Manitoba Privacy Act as a "useful guide" for determining the range of damages. These were: • The nature, incidence and occasion of the defendant's wrongful act; • The effect of the wrong on the plaintiff 's health, wel- fare and social, business or financial position; • Any relationship, whether domestic or otherwise, be- tween the parties; • Any distress, annoyance or embarrassment suffered by the plaintiff arising from the wrong; and • The conduct of the parties, both before and after the wrong, including any apology or offer of amends made by the defendant. While Sheth did not plead punitive damages, she submitted that the court should grant them anyway, given the exceptional nature of the invasion. She asked for $50,000. In contrast, Patel argued that no harm was caused and thus no damages should arise from his role in installing the camera. In its analysis, the court determined that puni- tive damages were not supported on the facts and awarded $15,000 in damages based on a balancing of the following factors: • The nature of the intrusion: It took place in a bedroom and bathroom, where the privacy interests of Sheth were significant; • The intrusion took place within a domestic relation- ship; • Although Sheth was embarrassed and shocked, there was no medical information filed to support any sig- nificant effect on her health or welfare; • The conduct of Patel in lying about the intrusion at his discovery (and blaming Sheth for the camera) was "extremely aggravating and demonstrate[d] a lack of any insight into what he did as being wrong." While Patel is situated in the matrimonial context, any analysis of this tort is valuable insight from a busi- ness risk perspective. Notably, proof of harm to a recog- nized economic interest is not an element of the cause of action. Assuming the test for the tort of intrusion upon seclusion has been met, a court could award damages without proof of further harm. The evolution of this tort has significant implica- tions for organizations that use, curate or store personal data, especially in large quantities. A serious breach af- fecting many individuals has the potential to create li- ability even without concomitant economic loss. As Justice Robert Sharpe noted in Jones, "The ques- tion of whether the common law should recognize a cause of action in tort for invasion of privacy has been debated for the past one hundred and twenty years." The debate in Canada is clearly far from over, and it will be interesting to see whether other jurisdictions will adopt a common law cause of action (as in On- tario), enact a statutory cause of action (as in British Columbia) or both. LT uRoland Hung is a lawyer in Osler Hoskin & Harcourt LLP's Toronto office, practising technology and privacy law. u SPEAKER'S CORNER Family Law Marta Siemiarczuk

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