Drawing The Line: Extended Families May Face Conspiracy Claims In Assisting Child Support Evasion ' Leitch v Novac 2020 ONCA 257

• Published date: 12 September 2022
• Subject Matter: Litigation, Mediation & Arbitration, Family and Matrimonial, Family Law, Trials & Appeals & Compensation, Divorce
• Law Firm: Devry Smith Frank LLP
• Author: Ms Zakiya Bhayat

When a couple divorces, it is common for extended family to provide support for their loved ones. Some families get involved and assist with finances while others provide emotional support for the separated spouse. While most families are invested in the outcome of a couple's divorce, some families take extreme measures to ensure that the separated spouse reduces his or her financial obligations for support or property. In the past, when a spouse hides income or assets with the assistance of extended family, the court's sanctions have largely been limited to an order of costs against the offending spouse or a finding of contempt. While claims against extended family members have been made in the past, these claims were uncommon and were largely unsuccessful.

In recent years, the Ontario Court of Appeal changed the landscape on conspiracy in permitting a conspiracy claim against a spouse's family for assisting him to divert income payable for child support. In Leitch v Novac 2020 ONCA 257, the wife sued her husband, her husband's parents, a family corporation, and several trusts and trustees, alleging that her husband's family and entities conspired to defeat her family law claim and conceal her husband's assets and income. After the couple separated, the husband's father incorporated a company to provide management services to a casino operation. The father and husband agreed orally that the husband would receive 40 percent of the management fees over the life of the contract. Before the contract ended, the casino owner bought out the contract for nearly $6 million and the lump sum was paid to the father's corporation. Instead of providing the husband's 40 percent share for spousal and child support, the husband's father kept all the income from the buyout.

The father, the corporations, and the trusts brought a motion for partial summary judgment to have the claims of conspiracy dismissed before trial. The motion judge awarded partial summary judgment, concluding that there was no unlawful conspiracy and that the wife did not establish damages but that the wife could still pursue a claim to impute additional income for the purpose of determining support. The wife appealed the summary judgment order, the costs award and the order for security for costs and preservation of assets to the Ontario Court of Appeal.

The Court of Appeal was asked to consider whether the motion judge erred in law in awarding partial summary judgment and in her analysis of the tort...