Deemed Custody Orders—S. 57.1 of the Child and Family Services Act

Since an amendment to the Child and Family Services Act in 2006, the court has been able to make custody orders as part of child protection proceedings in many cases.

Section 57.1 allows, among a few other useful items, a court presiding over a child-protection matter to make a custody/access order, if it is in the children’s best interests.

The central benefit of this is finality. Until s. 57.1 came into force, parties in CFSA proceedings had only two options for finality: Crown Wardship or withdrawal/termination of Society involvement. These are the two extremes of the range of options under the CFSA, and are not appropriate in many cases. Even where termination/withdrawal could be appropriate, it cannot be used where the situation would suddenly return to an unsafe situation because of an existing custody/access order.

Most obviously, consider a situation in which a child is apprehended from a parent with legal custody under a Children’s Law Reform Act order. If that parent cannot safely care for the child going forward, but the other parent can, Crown Wardship is certainly not appropriate. However, neither can the Society withdraw or terminate because the existing CLRA order would then take over, placing the child back at risk.

In the past, such cases have been stayed to allow the parents to reopen their domestic file and seek variation of the custody/access orders. While this functions adequately, it places a substantial burden on both the parents and the court. S. 57.1 allows that variation to take place under the CFSA heading, with the resulting order deemed to have been made under the CLRA (hence the common phrase “deemed custody order” to describe orders made under s. 57.1).

Parents with a Divorce Act custody or access order already in place at the commencement of the child protection matter are not eligible for a 57.1 order. This can be a frustration, especially for parents who are in child-protection court for multiple years. In order to get a final order, they have to return to Superior Court and get a variation—otherwise, they could be trapped in Status Review after Status Review, with no prospect of finality unless the matter is suitable for Crown Wardship or withdrawal/termination.

Additionally, orders for custody/access made by a Superior Court, even if under the CLRA (eg, by a unified court) cannot be varied under s. 57.1 by an Ontario Court of Justice.

Section 57.1 orders are available, where appropriate, to litigants who have either no custody/access orders or who have custody/access orders made under the CLRA, as long as those orders were not made by a Superior Court and being varied by an Ontario Court.

In many cases, pushing for a s. 57.1 order can help ensure finality and limit the length of CFSA proceedings. Rather than arguing summary judgments for supervision orders—leading to the need for a further summary judgment for a s. 57.1 order on Status Review, and potentially a further year in court, there is a prospect of finality at the Protection Application level. It is not the correct call in every case, but is an important tool for many.

Analyzing Financial Statements

Analyzing financial statements is more of an art than a science. It’s one of the most common chances lawyers have to pretend to be accountants, which some of us love and some detest. (I’m closer to group one.)

First and foremost, the overall financial picture has to add up. This is advice I give clients almost daily: the income/expenses and assets/debts ratios should match. More income than expenses should result in assets and little or no consumer debt. More expenses than income usually goes with few or mortgaged assets and plenty of consumer debt.

In other words: a litigant claiming income of $10,000 and expenses of $30,000, but who has $5.00 in the bank and no debts, isn’t believable. I’ve seen many people look at financial statements of that kind and shrug: sure, they’re broke. Well — yes, but there’s a bigger story hiding there. Either they’re confused about their expenses, there’s unreported income (parental contributions? Cash work?), or they’ve neglected to list some meaningful debts.

Alternately, a litigant claiming income of $200,000, expenses of $100,000, and no meaningful assets? Either they’ve got a very skewed idea of their own spending, or you should start seriously poking around for undisclosed investments and accounts.

Of course, there’s always the possibility that the income/expenses situation is new, and the assets/debts reflect an older situation. But if something raises flags, it’s well worth following up on them!

Another variation on these mismatches is when the litigant attempts to make the overall numbers work, in a way that makes the statement obviously false. I’ve seen this most often as: reported income of $40,000 (or $30,000, or $50,000); mortgage on massive, expensive house of $3,000 per month (or $2,500, or $3,500); then groceries $20 per month, cell phone $10 per month, few or no other expenses listed. Often, this represents the attempt of a person with a high unreported income to make their income/expense numbers “work.” Since the mortgage is a documented number, they can’t lie about it easily; instead, they lie about other, more fungible expenses, and hope no one notices. Have fun examining their bank statements — it shouldn’t be hard to show that $20 on groceries isn’t so accurate.

Individual expenses can also be revealing in this way. If under the expenses section, $1000 per month is going to pay debts, but no debts are listed, that’s a flag.

Comparing past financial statements, when you’ve been provided with a few, can be a delicious exercise. Many people slip up between one and the next, if they weren’t telling the truth in the first place. It’s hard to keep lies straight, particularly over the course of a two- or three-year proceeding.

For cases of failure to pay support (or costs), FRO has examination of financial statements down to a science. Watch FRO counsel at court, and you quickly see their technique: find every non-obligatory expense they list, and point out that those monies could go to support. Vacations? Not while you’re in arrears, buddy. Alcohol and cigarettes? Not so much. Gifts? Start hand-making them.

Legally, they’re quite right, particularly when it comes to child support, and there’s something remarkably compelling about pointing out that the children are being fed and housed without any (or enough) help from the payor while the payor is reporting spending twice the support amount on booze, restaurant meals, and clothes.

Finally — for this post, at least, as there’s much more to be said on the subject — don’t neglect the tax returns. There’s so much in there — not just the reported income but the source, for instance: “How and why did this person get a T4 for $1?” and “The sole proprietorship grossed $600,000 but only netted $15,000?”

Better yet are the schedules. Here’s a particular favourite from a past version of the tax return forms. I was acting for FRO at the first appearance of a default hearing. The payor, who had experienced counsel, reported years of income of only $1,200 per year, but was not on social assistance. “How does he survive?” I asked counsel.

“You know, I think he couchsurfs. He’s basically homeless,” he told me, empathy in his voice.

“Ah, that would make sense,” I said. “Except that he’s applied for the housing credit, and he’s told CRA he pays $1,100 a month in rent. Here’s his landlord’s name and number.”

“I … need a minute with my client,” counsel said, and we shortly reached agreement about voluntary payments.

Financial statements are a treasure trove. Spend time with them, and they often reward it with new avenues for proving your client’s case. Spend more time drafting, and you can help prevent your client’s case from being easily disproven.

Molly Leonard