In the 2003 decision of Walsh v. Walsh, the wife asked the judge to order her ex-husband to pay a shortfall of child support in the sum of $43,000 for the past few years because his income rose.

In 1997, the court ordered her ex-husband to pay child support pursuant to the Child Support Guidelines based on an income of $175,000. In 2002, the wife discovered that her ex-husband’s income ranged between $214,000 and $376,000 per year for the past few years resulting in a shortfall of approximately $43,000, which her ex-husband should have paid in child support.

The court held that her ex-husband knew that his child support obligation was based on his income, but chose not to disclose his income voluntarily. In the court’s view, he could not now hide behind the defence that the children should not have the benefit of his increased income for this period because his wife did not request his income tax returns until 2002. The ex-husband was ordered to pay the entire shortfall in child support within 45 days.

When spouses decide to separate, joint family assets are usually liquidated and divided. The family home is often the most valuable asset that needs to be addressed. However, of all the assets, the home is the one that often carries the most sentimental value and triggers the strongest emotional response. In many cases, the separation is not mutual and, in those instances, the spouse who did not initiate the separation may not be willing to vacate or sell the family home. That is, the spouse may not want to undergo the upheaval of changing residences, changing the children’s school, leaving close neighbours or settling into a new community – all valid reasons to not want to sell the home. Alternatively, the spouse may wish to oppose, delay or obstruct the sale of the home because of feelings of hurt and anger or other reasons not considered valid. In some cases, one spouse may wish to purchase the other spouse’s interest in the family home. With any joint asset, because both spouses are the legal owners, neither has a superior right to purchase the asset from the other. Thus, in cases of a jointly owned family home, if one spouse wishes to remain in the home and purchase the other spouse’s interest, the spouses must agree on a process to determine its value and buy-out. In most cases, this is simple. The spouses retain an accredited real estate appraiser to perform an analysis of comparable homes in the neighbourhood, assess their sales history, adjust for differing characteristics such as lot size, garages, square footage and the condition of the structure, in arriving at an expert opinion on the market value of the home. This often is the best evidence of the value of the family home which the spouses can use to negotiate a buy-out.

But what happens if one spouse does not agree with the appraised value, or even multiple appraisals ? Some spouses believe that the only way to determine the true market value of a home is to expose it to the public marketplace of potential buyers. In major cities throughout Canada, homes have been sold for prices far above the listing price due to competing offers to purchase from desperate buyers. Stories of “bidding wars” and “sold over ask” have covered the real estate section of newspapers for years. Some realtors who are competing for new business may make exaggerated representations to home-owners to “get the listing” with promises of a high sale price.

In the field of divorce, it is not uncommon for the spouses to distrust one another and harbour suspicions that any agreement that is negotiated is unfair and otherwise favourable to the other spouse. This emotional state makes it easy to be persuaded by a real estate agent who is eager to obtain a new listing by promising a sale price much higher than its appraised value. In these cases, the otherwise simple process of an appraisal and buy-out is replaced with divorce lawyers, litigation and judges. Tens of thousands of dollars can be spent on interlocutory motions to compel a sale of the jointly owned family home, including contested hearings on who the real estate agent should be, whether monies should be spent on repairs and improvements, if costs are to be incurred for staging the home, orders for home inspections, vacant possession of the home to permit open houses and showings and a protocol for the collection and acceptance of an offer. In these cases, the spouse who wishes to purchase the home is to be treated the same as any arm’s length buyer. That is, that spouse is not permitted to have any advantage over any other buyer in order to ensure a fair and transparent process leading to a sale at fair market value. In the case of multiple offers, the court can order that either spouse cannot view the offers before submitting his/her own offer. For this to operate smoothly, the sale and offer process must be firm and defined in advance.

The following are 10 tips to help counsel manage the forced sale of a jointly owned family home where one spouse wishes to buy the home:

1. Get a home appraisal by an accredited real estate appraiser (AACI or CRA) and make an offer at, or higher than, its appraised value, minus a discounted sum for the real estate commissions.

2. If that offer is rejected, agree to a listing on the open market. Don’t resist such a motion but rather negotiate a process to permit a purchase by one spouse.

3. Ensure that the real estate agent retained is responsible, ethical and trustworthy so that dealings with both sides are fair and transparent.

4. Negotiate the Listing Agreement to exempt or discount the real estate commission in case of a purchase by the joint owner.

5. Set a timetable for showings including a date for a real estate agent open house, a date for public open houses and a date for the submission of offers.

6. Obtain a home inspection and make the report available to all potential buyers so as to eliminate this as a condition of sale.

7. Establish the protocol for acceptance of offers and signing back counter-offers, such as only considering offers without any conditions.

8. Consult the listing agent (before being retained) for what repairs, improvements and staging, if any, are recommended and then negotiate the sharing of these expenses, either at the time incurred or at closing.

9. Maintain communication with the listing agent by monitoring the progress of sale, collecting feedback on the response from the showings and form an understanding of the possibility of competing offers.

10. Participate in the sale process by assisting the spouse to make an offer, reviewing any offers presented and advising on the signing back of any offers and counter-offers; this may involve a real estate lawyer to also advise on terms or conditions attached to the sale such as closing dates, pre-closing viewings, chattel inclusions and exclusions, adjustments and vacant possession.

Following these steps, the sale of a family home, even in the higher conflict divorce cases, could be achieved with much less cost and aggravation than caused by a court-ordered sale.

In the 2010 case of Dishman v. Dishman, the husband accepted an early retirement buyout from General Motors which had the effect of decreasing his income from approximately $85,000 to $38,000 per year.

The Dishmans were married for 20 years later. After they separated in 2000, a final order required Mr. Dishman to pay his wife $750 per month in spousal support.

Nine years later in 2009, when Mr. Dishman was 52 years, his employer General Motors announced that it was closing its plant where he worked for 28 years. He was offered an early retirement incentive. Mr. Dishman could have continued to work for a few more years. However, if General Motors went bankrupt before that date, then the offer would no longer be available. Mr. Dishman accepted the offer and retired on June 1, 2009.

To convince Madam Justice Nolan to terminate spousal support, Mr. Dishman explained that his pension with General Motors had already been equalized with his wife when they settled their affairs in 2001. Mrs. Dishman kept the matrimonial home. The amount owed by Mrs. Dishman to Mr. Dishman for his share of the matrimonial home was off-set by the value of Mr. Dishman’s pension at the time. In calculating the amount of Mr. Dishman’s pension at that time, the parties valued it based on a retirement age of 59 years, as opposed to the 52 years when he actually retired. Stated another way, Mrs. Dishman argued that a significant portion of her husband’s pension was not equalized at the time of the agreement or court order.

Madam Justice Nolan relied on a series of past decisions such as Moffatt v. Moffatt (2003) that established that where there is early retirement that will severely prejudice the recipient spouse, the court may assign income as though the person had not retired. The judge also considered Bullock v. Bullock (2007) which held that a support payor cannot choose to be voluntarily underemployed, whether by retirement or otherwise, and therefore avoid his or her spousal support payment obligations.

Her Honour found that Mr. Dishman’s retirement was considerably earlier than anticipated, and Mrs. Dishman had good reason to rely upon support being provided for several more years. She stated that there is no reason why Mr. Dishman might not and cannot be expected to seek new employment opportunities and that Mrs. Dishman was in need and had a limited ability to earn more income.

In conclusion, the court found that this was a long marriage, that spousal support was payable because Mrs. Dishman was in need and should not be expected to bear all of the negative financial consequences of Mr. Dishman’s early retirement and, accordingly, the spousal support payments of $750 per month were to continue until 2016.