Law Times

Law Times • march 12, 2018 Page 13 www.lawtimesnews.com up for tax. The support set out in the agreement was already based on DeRose's full monthly structured settlement. "There was no basis to gross it up; it's not income," says Gordner. "This was the agreement they reached, and it should have stayed at the amount set out in the agreement. Although, I was arguing that it's not income, and the parties agreed to use it as though it was income for the purposes of support." Davies says that if they could prove the breakdown in the structured settlement between income loss and general dam- ages, it would have been possible to impute the income under s. 19 of the Child Support Guide- lines. Nathalie Boutet of Boutet Family Law & Mediation in To- ronto says it was surprising for a lot of lawyers that the court had the power to include income from excluded assets for child and spousal support purposes. "The definition of income is so wide that courts find them- selves lumping a lot of things into income," says Boutet. "Courts will want to find ways to ensure that children are protected; though, in this case, I was surprised that they were also very quick to say that this [definition] applies to spousal support." Boutet also notes that be- cause the structure pre-existed the marriage, there was a histo- ry of DeRose using the annuity to support the family. "The court was placed in a difficult situation," says Boutet. "When you read these cases and you look at the pain and suffering that the person has gone through and the reason for the award, you feel for them and ask, 'Shouldn't we do everything we can to protect what they have because they have very little ability to earn?'" Boutet says that, despite that sensitivity, a client such as De- Rose has financial responsibili- ties, which is where the courts will come down on the side of children. Other lawyers who have ar- gued support cases involving a settlement fund have noted that they are not surprised by the outcome. Katherine Robinson, as- sociate lawyer with Shulman Law Firm PC in Toronto, says that in one case she argued, the judge said that if the majority of a structured settlement an- nuity goes toward expenses, then it should be determined as income regardless of how the settlement was structured. "They're looking at it from a practical basis of what is the actual use of that money once it's in the person's hands," says Robinson. "They recognize that per- sonal injury settlements are go- ing to be structured in a way to have certain advantages going forward." Erin Lepine, partner at Nel- ligan O'Brien Payne LLP in Ot- tawa, notes that there wasn't any indication in the decision that DeRose was using the funds for attendant care, mobility devices or other such supports. "When I look at that in com- parison to the other law on these issues, I think the court did the right thing," says Lepine. "All of the other facts meet all of the other tests that it should be grabbed for income." Boutet wonders if this will have an impact on litiga- tors who are arguing for these awards, which would then be invested into a structure, which is echoed by Cheryl Hodgkin of The Family Law Firm in Wind- sor, Ont., who argued on behalf of Ridley in this case. Hodgkin says that counsel will have to be careful when set- tling any action going forward. She recommends examining support obligations or poten- tial support obligations when a settlement is reached. "The client is going to have to be made aware [that], if they take it as a structured settle- ment, it is going to be money available as income for support purposes," she says. Hodgkin says this may create a tendency for lump sum pay- ments outright instead of struc- tures. She also notes that DeRose's structure was set up when in- terest rates were around 20 per cent and that he did very well as a result of it. A notice of appeal has been filed in the case, but Gordner says he will not be arguing it. "It's an interesting point whether a structured settlement based on pain and suffering and future care can be considered as income for the purposes of sup- port," says Gordner. "I'm sure that will be a major issue on appeal." LT STRUCTURED SETTLEMENTS Nathalie Boutet says 'courts will want to find ways to ensure that children are pro- tected.' Instrumental in conducting change. CANADA & USA 1.800.265.8381 | EMAIL info@mckellar.com | www.mckellar.com Advocacy—it's what leaders do. Our dialogue over the last year with the Ministry of Community and Social Services in Ontario helped to orchestrate progressive change in the way the Ontario Disability Support Program (ODSP) treats personal injury settlements. Contact us to find out more. Untitled-6 1 2018-01-03 10:47 AM Continued from page 12 'The court was placed in a difficult situation' CanadianLawyerMag.com Fresh Canadian legal news and analysis available on any device. Get More Online

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