scenario based on several real cases

BUSINESS AND FAMILY LAW ASSIGNMENT 2FW 2023-2024
WORTH: 15 MARKS
GROUP ASSIGNMENT1
DUE: ON OR BEFORE 4 DECEMBER 2023
The following is a scenario based on several real cases I have encountered over the years.
It is exactly the kind of thing – complete with the sort of jumbled order – you might encounter in
a narrative from a separating client who wants to know what the future looks like.
I have highlighted what may be relevant. Or not.
This may be done in point form, and might be easier if it is.
Good luck.
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Scenario:
Gram and Emmylou met at law school.
They dated for 4 years, lived together for 3 years after that, and then got married. They were
married for 17 years and had two children, Ethel, and Julius. Ethel was 14 when they separated,
on 1 March 2019. Julius was 12. Gram and Emmylou had been married for almost 19 years.
When they married, Emmylou had a bank balance of $25,000, Gram owed $2,500 on a line of
credit.
At the date of separation, Gram was self-employed, practicing law part-time and doing freelance
writing for both legal news outlets and for a small literary magazine that he and his friend Jane
founded. The magazine was surviving, but did not turn a profit. He did not earn any income from
it.
Emmylou was a partner at a downtown law firm, where she defended doctors from malpractice
suits. At the time of separation, she had made $450,000 the previous tax year.
Over the past five years, Gram’s income fluctuated, in part because his legal work was very
specialized. The result was there was not a steady stream of it, even though he was recognized as
an expert in his field. In the 2018 tax year, his taxable income was $26,400.
Gram worked from home. He was the one who chauffeured the children around, walked them to
school in the early days, and took them to various activities. He also did most of the cooking.
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Groups of no more than 3. If you are more than 3 people, or need to do it alone, please get my
permission in writing via derek.ground@sympatico.ca.
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Gram also had a drinking problem, which sometimes affected his ability to work. Not that he
was an addict (or so he said) or drunk at work; he would just skip out from time to time during
the workday and go to his favourite bar, either with some of his friends, or just by himself. In
the five years before separation, his gross revenue had fluctuated between $50,000 and $150,000.
Because of the write-offs he enjoyed as a self-employed person, including entertainment
expenses, his taxable income fluctuated between $17,500 and $80,000 in the five years before
separation.
Emmylou had an aunt who died and bequeathed her $200,000 in her will. The aunt died two
years to the day before Emmylou and Gram got married. Emmylou was a great athlete, and
immediately bought a ski chalet in Collingwood. The chalet was purchased for $300,000, so she
had a $100,000 mortgage on it at the date of marriage. Emmylou was the only person on title to
it.
On the date of separation, the chalet was worth approximately $600,000. The amount is an
approximation because two weeks before the date of separation, Gram – who did not go to the
chalet very often because he was not a great skier, had bad knees, and did not like the whole
scene – decided that he would take the children for a ski weekend. Gram did not intend to
actually ski with them; he was just going to sit in the lodge and drink, at least for the afternoons.
Thankfully, the chalet was only about 2 kilometres from the hill, so he did not really worry about
driving drunk.
The reason he was taking them skiing – something Emmylou usually did – was because
Emmylou was going on a work retreat, even though both children had the Friday and Monday
off, as their private schools gave the students a generous break. As she was leaving, Emmylou
told Gram not to bother going to the chalet, as she had sold it a couple of weeks previous.
It was the first Gram had heard of it. He only knows the approximate value because when
Emmylou eventually disclosed her financials there was a deposit for $570,000 into one of her
accounts on February 24th 2019.
Emmylou was from a very wealthy family. Her mother gave her $250,000 as a downpayment on
a house that she bought in 2002. She paid $500,000 for it, and was the only one on title. It was
the matrimonial home. At the date of separation, it was worth $1,000,000. When the divorce
was granted, on April 26th 2022, it was worth $1.400,000 because of an unusual spike in home
values in the real estate market.
Ethel is involved in competitive figure skating at a cost of about $10,000/year, for which
Emmylou always paid. In the summer she went to camp, for which Gram always paid, at a cost
of $5,000. She also takes Mandarin classes year-round, which cost $4,000, a cost that Gram and
Emmylou split evenly.
Her private school tuition is $30,000/year, paid by Emmylou.
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Julius has special needs, and attends a private school that can usually meet them. That school
costs $40,000/year. Gram pays for one quarter of that amount. Julius hates organized sports, but
Gram – who was a very good rugby player in high school – insists that Julius play the sport.
Julius hates it. Gram pays $5,000 a year for him to be on the team, but Julius is usually kicked
off the team halfway through the season because he never plays.
At separation, Emmylou had investments in her own name in the amount of $2,000,000. When
her mother dies (her father died several years before) she will inherit approximately
$150,000,000.
She also owned one automobile – a BMW that she purchased for $60,000 in 2016. At
separation, the book value of the car was $30,000.
Emmylou and Gram each paid half the mortgage, which was paid in full at the end of November
2018.
Gram also paid for the day-to-day running of the household – gas, hydro, phone/internet/TV,
groceries, car maintenance – some of which he was able to write-off as business expenses
because he had a home office in his basement man cave.
Gram has no investments. On separation, Gram had $1,486.34 in his chequing account. He had a
credit line of $7,000, credit card debt of $10,000 and owed $68,000 in back taxes.
He owned his own car, which he had at law school when they met: a 68 red convertible Mustang,
with which he tinkered constantly. He bought it from a friend of a friend just before first year
law school for $2,000 (cash under the table) but fixed it up himself. A person on the street was
admiring it, and told him it was probably worth $20,000.
Gram’s father was a teacher; his mother an artist. They amassed quite an art collection, which
the gave to Gram in bits and pieces. When he and Emmylou married, his collection was worth
$40,000. His parents kept giving him more art throughout the marriage. At separation, his
collection was worth $200,000.
Despite Emmylou’s great wealth, there was no prenuptial agreement, although Gram always said
that “I promise you: what’s mine is mine, what’s yours is yours.”
QUESTIONS
1. Do a NFP calculation for each partner and show who pays what to whom. Show how you
have taken the revenant facts into consideration. (6 Marks)
2. Does Gram’s promise change anything? Why (not)? (1Mark)
3. What is the value of the matrimonial home to each spouse? (1 mark)
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4. What are the children’s section 7 expenses and how would those expenses normally be
apportioned? Who would pay what amount? Might that change in light of family
spending patterns pre-separation? How? Come up with a number. (5 Marks)
5. The children will live with Emmylou. Advise Gram on how his support obligations may
be calculated and what the court may take into consideration? Come up with a number. (2
Marks)
NOTE: The numbers will not necessarily be correct (no right – or wrong – answer), I just
want to know what you will tell your client.
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