In Ontario, domestic contracts, such as separation agreements are governed by the Family Law Act, and pursuant to s.54 “Two persons who cohabited and are living separate and apart may enter into an agreement in which they agree on their respective rights and obligations, which include but are not limited to ownership in or division of property and support obligations”.

Therefore, while Katy and Russell were well within the boundaries prescribed by the law in Ontario when drafting their separation agreement, what recourse would they have if, in a couple of years, they decided that they were unhappy with same and wanted to somehow set aside either the whole agreement or a provision therein?

They would need to look to s.56(4) of the Family Law Act which states the following:

“A court may, on application, set aside a domestic contract of provision in it,

(a)  If a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

(b)  If a party did not understand the nature or consequences of the domestic contract;or

(c)  Otherwise in accordance with the law of contract.”

The above factors create a very difficult test to meet and set a high standard for the party who wishes to set aside their domestic contract.  Some examples of situations that could result in the setting aside of a domestic contract are the following:

• If one party failed to produce sufficient financial disclosure to the other side thereby misrepresenting the value of their assets and liabilities and then allowed the party to sign the contract to his or her detriment;
• If one party did not obtain independent legal advice while the contract was being negotiated and as such did not have his or her rights fully represented or protected during said negotiation and then signed the domestic contract again to his or her detriment;
• If one party was forced to sign the domestic contract by the other party exerting pressure or undue influence; or
• If the contract was not properly in writing, signed or witnessed.

Therefore, if Russell wants to re-negotiate his voluntary waiver of spousal support or if Katy is unhappy with the division of property and they resided in Ontario then they would have to meet the above mentioned stringent test.

Whether it was dealing with adultery, dividing assets, or negotiating separation agreements, Kobe was there to give us the content we needed to keep you, the reader, entertained.  He was back at it this week, on Valentine’s Day no less, reconciling with Vanessa at a Lakers’ game in Los Angeles.

TMZ.com has reported and since confirmed that Kobe and Vanessa are working on reconciling, despite the fact that Vanessa filed for divorce in December.  The two were spotted near the hard court on Tuesday and several pictures of them embracing each other and kissing surfaced on the web shortly thereafter.

Interestingly, a property deal between the parties had already been executed whereby Vanessa received three estates – yes, you are reading that correctly – three, in Newport Beach.  Can this deal be undone?  What about the divorce process?  Can it be halted?

The divorce was scheduled to become final as of mid-June (six months from the filing date in California).

In Canada, the couple must be living separate and apart for one year before a divorce can be finalized.  If at any time during that year, the parties stop living separate and apart and attempt to reconcile, they may not be able to continue to pursue a divorce on the grounds that there has been a breakdown in their marriage.

Section 8 of the Divorce Act deals with defining the grounds for divorce in Canada and it outlines how the separation period is calculated.  Section 8 (3) reads as follows:

Calculation of period of separation

(3) For the purposes of paragraph (2)(a),

(a) spouses shall be deemed to have lived separate and apart for any period during which they lived apart and either of them had the intention to live separate and apart from the other; and

(b) a period during which spouses have lived separate and apart shall not be considered to have been interrupted or terminated

(i) by reason only that either spouse has become incapable of forming or having an intention to continue to live separate and apart or of continuing to live separate and apart of the spouse’s own volition, if it appears to the court that the separation would probably have continued if the spouse had not become so incapable, or

(ii) by reason only that the spouses have resumed cohabitation during a period of, or periods totalling, not more than ninety days with reconciliation as its primary purpose.

Presuming that the Bryants were residents of Ontario, if the current resumption of their relationship lasted anywhere from 1 to 90 days, they could continue to pursue their divorce without the period of living separate and apart having to be restarted.  Once they have been reconciled for more than 90 days, they are no longer deemed to be living separate and apart.

Given the history between Kobe and Vanessa, nothing would surprise me.

Since then, the couple has been working towards fully and finally resolving the issues stemming from their separation on an amicable, peaceful and private basis with the assistance and guidance of their lawyers. 

On January 21, 2012, People.com reported that yet another issue in their divorce is nearing full and final resolution as the couple has voluntarily divided their assets.  According to property records, Kobe’s and Vanessa’s three mansions, valued at an estimated $18.8 million, have been transferred entirely to Vanessa.

Typically, when spouses decide to separate and property is involved, the division of property must be dealt with fairly and reasonably.  If spouses are able to cooperate and discuss the division of their assets in a mutually agreeable manner, then they can choose to proceed by way of mediation or negotiation, similarly to the Bryants.  In so doing, they would avoid all of the unduly and burdensome fees associated with litigation.

If, on the other hand, the spouses are highly litigious and adversarial, then mediation and/or negotiation may not be best suited for them and so proceeding to a court action would be their only recourse.

What would happen if Vanessa and Kobe were dividing assets in Ontario?

Pursuant to s.7 of the (Ontario) Family Law Act, the court may, on application by a spouse, former spouse, or deceased spouse’s personal representative, determine any matter respecting the spouse’s entitlement to an equalization payment under s.5.

For clarification, an equalization payment is a payment made by one spouse to another after their respective net family properties have been calculated and it is determined that one spouse has a net family property of higher value than the other.  When this occurs, the spouse with the net family property of lesser value is entitled to one-half the difference.

In order to determine a spouse’s net family property a calculation must be done whereby the spouses’ liabilities are deducted from his or her assets on the date of separation, and then any assets and/or liabilities owned on the date of marriage are deducted from that amount.

There are numerous ways for a spouse to satisfy his or her obligation relating to an equalization payment.  For example, he or she may make a direct payment to the other in the amount required.  However, the Bryants chose another method as Kobe transferred his interest in three properties to Vanessa.

This method of satisfying an obligation pursuant to a division of property is not a remedy limited to negotiations or mediation.  In Ontario, and pursuant to s. 9 of the Family Law Act, a court may order under subsection (d)(i) that, if appropriate to satisfy an obligation imposed by the order, property may be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years.

This remedy would be useful in a situation where, for example, a direct payment in an extensive amount would not be feasible given a spouse’s limited financial means, or when there are multiple properties that can be easily and fairly divided between the spouses through the transferring of interest such that any equalization payment owing would be satisfied.

According to Forbes Magazine, it is unclear whether or not there is a pre-nuptial agreement between the parties.  This can certainly make distributing millions and millions of dollars between these two quite difficult.  One would like to think their presumably high-priced lawyers had the common sense to make them sign one. 

As happy as a couple as they may have been, we all know the divorce rate between celebrity couples is astronomically high.  So high in fact, it necessities a weekly blog!

The parties were married for seven years.  According to Forbes Magazine, over the past 10 years Ms. Klum’s earnings were approximately $108.7 million, plenty of which was earned via her contract with Victoria’s Secret.  She now has a lucrative contract with New Balance.  Forbes’ estimations indicate that Ms. Klum’s net worth is significantly higher than Seal’s – $50 million to $70 million versus $10 million to $15 million.

Perhaps the sales of Seal’s new album can help rectify that?  Regardless, it wouldn’t have an impact on any equalization payment he may be entitled to.

In Canadian law (and let’s assume for a minute that the parties are Canadian), any money earned post-separation does not have an impact on equalization.  Post-separation income is, however, relevant to spousal and child support payments.

If we also assume each of the parties’ Net Family Properties is reflective of their estimated net worth, then how would the division of their finances play out?

Section 5 of the Family Law Act, which applies to married couples going through the divorce process, reads as follows:

Equalization of net family properties
Divorce, etc.

5.  (1)  When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.

Assuming the estimates in Forbes Magazine are accurate, then how much money would Seal be entitled to?  According to the Family Law Act, he could receive anywhere from $17.5 million to $30 million.  From an outsiders perspective, it may seem absurd that someone with a net worth of $10 million+ could be entitled to many more millions of dollars, but under typical circumstances (i.e. when the numbers aren’t staggeringly high) entitlement to half of the difference of each parties’ Net Family Property seems more “fair.”

For Ms. Klum’s sake, let’s hope that pre-nuptial agreement does in fact exist.

The couple married on May 10, 2005 and since then their family has steadily grown.  Currently, they have 3 biological kids in addition to Heidi’s eldest daughter from a prior relationship with Flavio Briatore, a notorious Italian ladies’ man.

The breakdown of their relationship will require the resolution of many issues, which include custody and access to the children.

However, will the fact that Seal is not the biological father of Heidi’s eldest daughter impede his ability to parent her post-separation and maintain the relationship formed over the past 7 years?  In Ontario, the answer to this question would be a resounding “no”.

Once Seal effectively adopted Heidi’s daughter, he gained all the same rights and obligations with respect to her care and well-being as a biological parent would have.  Therefore, if this matter were to be heard in Ontario, when making a determination with regards to the custody of and access to the children, there would be no distinction between the factors considered for Seal’s three biological children and those considered for his adoptive daughter.

To clarify, the parent who is granted custody of the children is endowed with the authority to make any important decisions about the care and upbringing of the child with regards to religion, school and educational programs, and medical treatment.  Whereas, the parent who is granted access has the right to visit with the children as well as the right to obtain information regarding the children’s health, education and welfare.

When attempting to come to a determination as to which parent should be granted custody of the children, the courts in Ontario will defer to “the best interests of the child”.

This concept is somewhat defined under s. 24 of the Children’s Law Reform Act which states that when attempting to determine which custodial arrangement would be in the best interests of the children, Ontario courts will consider the love, affection and emotional ties between the child and the person claiming custody as well as other family members who reside with the child and other persons involved with the child’s upbringing; the child’s views and preferences; the length of time the child has lived in a stable home environment; and the ability and willingness of the person applying for custody to provide the child with guidance and education, the necessities of life and any special needs of the child.

In Ontario, various court judgements suggest that when making a determination regarding custody and access, judges tend to prefer maintaining the status quo.

Parents who have throughout the couple’s relationship acted as the primary caregiver to the children are commonly awarded custody of the children.  In the case of Heidi and Seal, TMZ.com reports that Heidi made a whopping $20 million dollars in 2011 with her various reality shows, modelling shows, photo shoots, and cameo appearances. Seal’s net worth is estimated at between $15 million to $20 million.

If her work-related commitments forced her to stay away from the home for prolonged periods of time, leaving Seal to care for the children in her absence, then the status quo created could favor Seal.

Mr. Salahi is claiming that his soon to be ex-wife had an extra-marital affair with Neal Schon – the lead guitarist for Journey.  Perhaps Mr. Schon can encourage the band to remix their most infamous track and change the chorus to “don’t start believing.”

This isn’t the first time, and it certainly won’t be the last, that a marriage is riddled with infidelity.  The twist here is that in the state of Virginia, adultery is a crime.  It is only a misdemeanour punishable by a maximum $250 fine, but it is a crime no less.

In her court documents, Ms. Salahi has elected to “plead the 5^th” in this regard and she is refusing to comment on the alleged adultery.  According to TMZ.com, this is likely because the pre-nuptial agreement in place between the couple states that if it is proven that Ms. Salahi committed adultery then she loses all entitlement to spousal support.

Interestingly, Ms. Salahi and Mr. Schon are dating openly, and have been doing so for over four months according to TMZ.com.  The question now is: when did they start their affair?

Insofar as the law of Ontario is concerned, can a clause erasing someone’s entitlement to spousal support as a result of adulterous behaviour be built into a separation agreement or marriage contract?

Section 52 of the Family Law Act reads as follows:

Marriage contracts

52.  (1)  Two persons who are married to each other or intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation, on the annulment or dissolution of the marriage or on death, including,

1. ownership in or division of property;
2. support obligations;
3. the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and
4. any other matter in the settlement of their affairs.

A simple reading of this section on marriage contracts would suggest that the clause regarding infidelity found in the agreement between the Salahis would be enforceable in a marriage contract drafted and executed in Ontario by two Canadian residents.  Not so fast!

Section 56(2) is an exception to the above, which reads as follows:

Provisions that may be set aside or disregarded
Clauses requiring chastity

(2)  A provision in a domestic contract to take effect on separation whereby any right of a party is dependent upon remaining chaste is unenforceable, but this subsection shall not be construed to affect a contingency upon marriage or cohabitation with another.

To my knowledge, no such law exists in Virginia, so Mr. Salahi may successfully protect himself from any spousal support obligation.  Too bad for Ms. Salahi that they don’t live in Ontario.

I’m curious to know what you think.  Is Section 56(2) of the Family Law Act reasonable?  Or do you believe couples should have the right to draft clauses related to remaining faithful to their spouses?

Approximately 18 days later, the world was once again shocked by the singer-songwriter, when on December 26, 2011; she announced that she would be ending her marriage to Herridge as a result of pressures placed upon him by individuals in his life who did not want to see the couple together.

The singer was deeply hurt and revealed on her website and twitter that she was still enamored of Herridge, like her 1990 global hit “Nothing Compares 2 U.”  O’Connor and Herridge were spotted together, walking arm-in-arm on January 4, 2012, after leaving an Irish pub.  In addition, O’Connor has once again taken to the “twitterverse” to profess her undying love and devotion to her husband.  On January 3, 2012 she posted: “[…] Yay!!! We decided to be boyfriend and girlfriend again and stay married […].”

Throughout her life, her music has been a critical success while her personal life has been marked by difficulty and scandal.

O’Connor’s past includes shoplifting and truancy in her teenage years. Her mother was killed in a tragic car accident when O’Connor was 15. She has been diagnosed with fibromyalgia, bipolar disorder, and attempted suicide on her 33^rd birthday. She has been married three times prior to her marriage to Herridge.

On Friday, January 13, 2012 the troubled artist ended her marriage to Herridge a second time.

What effect, if any, will O’Connor’s and Herridge’s on-again, off-again marriage have on any future claims she may make for a divorce?  Has the clock stopped running?  Will their date of separation change?

If the couple were married in and resided in Ontario, the following laws would apply:

Firstly, Sinead O’Connor could bring an application under s. 8(1) of the Divorce Act for an Order for Divorce.  Provided she satisfied the elements under s. 8 (2) regarding breakdown of marriage the court would be at liberty to grant said Order.  Breakdown of marriage would be established if O’Connor could establish any of the following:

1. Her and Herridge lived separate and apart for one (1) year;
2. Adultery; or
3. Physical or mental cruelty

If she were to bring her application and state one (1) year separation as the reason for the breakdown of her marriage, she would then have to look to s. 8(3) of the Divorce Act for the calculation of the period of separation.  Based on s. 8(3) a couple will be deemed to have satisfied the one (1) year period if:

1. Either of them had the intention to live separate and apart from the other; and
2. The spouses did not resume cohabitation for a period exceeding ninety (90) days.

Therefore, since O’Connor and Herridge’s brief reconciliation did not meet or exceed the ninety (90) day period then when filing her Application for Divorce and other necessary and relevant documents, she would be at liberty to state that December 26, 2011 was her effective date of separation.

By the state law of California, where the unhappy couple filed for “no fault” divorce, Brand could be entitled to half of Katy’s fortune.

Unfortunately for Ms. Perry – one of the world’s biggest musical artists – the duo did not enter into any form of pre-nuptial agreement, and her less famous, but still relatively rich soon-to-be-ex, stands to gain up to $40 million in a lump sum, 50/50 settlement.  This is all according to the Daily Star, a British entertainment news source. We all make mistakes, but $40M is a pretty big mistake.

It was kind of a somber way to spend the holiday season, but Mr. Brand and Ms. Perry spent Christmas thousands of miles apart, as Katy made her way to Hawaii while Mr. Brand was back home in England.  According to TMZ.com, the source of the sourness between this celebrity couple was Ms. Perry’s desire to party and Mr. Brand’s more laid back idea of weekend entertainment.

In spite of that, there is apparently no ill will between the parties and they both agreed that filing for divorce was the right move.

There are rumours swirling to the contrary, however, some even suggesting that Mr. Brand “blind-sided” Ms. Perry with the divorce because he was the one who filed the papers.  TMZ.com has since reported that Mr. Brand did the filing because Ms. Perry was afraid that initiating the proceedings on her own would upset her staunchly religious parents.

The most-talked about issue surrounding this separation is the potentially large payout that Mr. Brand may receive.  For a marriage of such short duration, it seems ludicrous that an already wealthy person would be entitled to half of the couple’s combined fortune.

A few weeks ago, I wrote about Jennifer Lopez and Marc Anthony and how equalizing net family property works in Ontario.  The same formula and procedure may apply to Russell Brand and Katy Perry; however there is a mechanism in place to protect Ms. Perry from having to make a gargantuan equalization payment.

Section 5(6)(e) of the Family Law Act reads as follows:

Variation of share

The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years.

The laws of California may not contain a similar clause, but given the extremely short duration of their marriage and imagining for a minute that Mr. Brand and Ms. Perry were residents of Ontario, a judge has the discretion to decide that giving Mr. Brand upwards of $40 million would be unconscionable.

Hopefully, this information puts all the extremely wealthy engaged people out there at ease.  There are never any guarantees when you walk into a courtroom, but the legislation above would certainly make it difficult for someone in Ontario to get a divorce within the first five years of their marriage and secure a half interest in the assets of their spouse, wealthy or otherwise.

According to TMZ.com, Bryant’s soon to be ex-wife Vanessa was given an abundance of information from the wives of other players around the league to whom Kobe had bragged about his many sexual exploits.  Ms. Bryant was well aware that her husband has not always been faithful or even a gentleman  (you may recall that Kobe was charged with sexually assaulting a 24-year old Colorado woman in 2003), but apparently his extra-marital activities have increased to new, unbearable levels.

The divorce papers were filed on Friday December 16, 2011, and Ms. Bryant cited “irreconcilable differences” as the grounds for the divorce.  The couple married on April 18, 2001.  Ms. Bryant has asked for joint custody, but would like the children to reside with her most of the time.  Ms. Bryant has also asked for child and spousal support, which Kobe says he will pay.  In fact, he is still making efforts to save the marriage.  No word on how, but maybe he’s offered a rollback on mistresses now that his salary, too, has been rolled back as a result of the recent NBA labour negotiations.

In any event, Ms. Bryant’s filing gives me the opportunity to draw your attention to some terminology that confuses a lot of people:  joint custody.  What does this actually mean in Canadian Family Law?

To the average person, when they hear the words “joint custody,” the assumption is simply that the child or children affected by the separation spend equal time with both parents and both parents are equally responsible for all matters related to the upbringing of the children.

In reality, having custody over a child differs from access time with a child or joint residency.  The custodial parent has the power to make important decisions about the care and upbringing of the children with regard to things like:  religion, schooling, and medical treatment.

When parents have joint custody, they make decisions of this nature together.

When the children reside equally with both parents, decisions are not made together unless the parents also have joint custody.

Furthermore, it is possible for a parent to have sole custody, but to also spend less time with the children than the other parent.  Frequency of access is not determinative insofar as making important life decisions goes.  The custodial parent(s) make the final decision.

Therefore, if Mr. and Ms. Bryant end up with joint custody, as Ms. Bryant is hoping, then they will have to make decisions about their two children, namely Natalia and Gianna Bryant, together, no matter where and with whom the girls are living.  So, for example, when the time comes to make a decision about what the girls should do after high school, both parents would be involved in that decision, not just the parent they are living with.

Hopefully, the Bryant family will have a speedy separation agreement, because it doesn’t look like a $4 million diamond ring, bought by Kobe as “apology gift,” is going to keep them together this time.

According to the Times of India (I read a lot) Lopez and Anthony, who separated back in July after seven years of marriage are working towards negotiating a settlement before filing for divorce. There’s a lot at stake, but if you have the time and patience (and if you can stand to be in the same room as the person you are separating from) then negotiating a resolution in an amicable fashion, without using the Courts, can be mutually advantageous.

In Ontario, particularly in the Central East Region, the Court are very backed up, so separating couples often need to wait months before they can attend their first substantive Court date – which is usually a Case Conference. In the interim, negotiations and settlement meetings are encouraged to help narrow down the issues between the parties. In the event that the parties do end up in Court, in Ontario anyway, judges look favorably on those who make serious attempts to resolve their issues prior to pursuing litigation.

While there are a lot of assets to deal with in their matter, one big hurdle they have climbed is that they have agreed on their date of separation. That makes dealing with the financial aspects of the divorce a lot easier.

In Ontario, divorcing spouses generally equalize their net family property. The net family property calculation, in simple terms, is as follows: take the value of all assets owned by a party as at the date of separation (other than excluded property, for example a gift received from a third party during the marriage); subtract all liabilities as at the date of separation; and subtract your net worth as at the date of marriage (which does not include the value of the matrimonial home). The balance is an individual’s net family property. The spouse with the lower net family property receives half of the difference between each person’s total net family properties.

With J-Lo and Marc Anthony, we are probably looking at some hefty numbers. They own several homes and businesses, and they are also minority owners of the Miami Dolphins, who recently fired coach Tony Sparano.

Sources say once the former couple works out the property and asset division, they will file for divorce in California, because you can file for divorce there without placing any party at fault—the so-called “no fault” divorce. The divorce would be legally finalized six months after they file.

In Ontario, we also have no fault divorce, but it is just referred to using different terminology. In order to finalize a divorce, a couple has to be “living separate and apart for one year.” The difference then becomes the time it takes to finalize the divorce. In Ontario, you must wait a full year after filing an Application for divorce before it is final.