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If you receive child or spousal support, and you spent money obtaining a court order to get child or spousal support then the money spent to get the order may be tax-deductible to you. Calculating the amount of the deduction is usually estimated by the lawyer who provided the service and may be based on the number of issues dealt with by the lawyer during the case.

The following conditions are generally necessary before legal fees and disbursements can be tax-deductible:

  1. The fees were paid by a support recipient to obtain, or enforce, or increase an order for child or spousal support, or to defend a reduction of child or spousal support;
  2. The tax deduction is used by the support recipient in the year the fees and disbursements accrued; and
  3. If you are awarded costs by the court and they are received in the same year you are making your tax deduction claim, then the amount received for costs must be offset against the amount claimed as a tax deduction. For example:
  4. Legal fees and disbursements claimed $1,000
    Costs received in same year – $500
    Tax deduction allowed = $500

If the costs are received after the tax deduction is claimed, then the money received as costs will be considered taxable income in the year received.

A payor of support cannot deduct his or her legal fees or disbursements.

Taxpayers cannot deduct legal fees incurred to establish custody or access of children, obtain a divorce, negotiate a separation agreement, or to collect lump-sum spousal support.

Whether or not your legal fees are tax-deductible can only be accurately answered by someone proficient in tax law. Having a family lawyer who has tax and other lawyers close by to consult is a definite advantage.

By Patrick M. Gaffney, practicing family law at Pushor Mitchell
Edited by Melodie Lind, practicing tax law at Pushor Mitchell


The information in this article is not to be taken as legal or tax advice and is provided for information purposes only.

One of the more difficult issues in contractual disputes is sorting out what rights and obligations continue to exist when a party to a contract breaches the terms of the contract.

Broadly speaking, the party that is in breach of a contract is refusing to perform duties or obligations under that contract and, as a result, is “repudiating” the contract. Repudiation can be established both at the time of refusal to perform obligations and can also be anticipatory in nature when a party clearly indicates by its words or actions that it intends to not perform its contractual obligations.

In the recent case of Reddy v Bhullar, 2018 BCSC 1935 (CanLII) the plaintiff entered into five contracts to purchase different properties. The contracts required two deposits of $165,000 and $327,000 respectively. An agreement was reached for the contracts to be assigned to Mr. Bhullar and for Mr. Bhullar to pay the two deposits. A part of the deal was that the plaintiff and Mr. Bhullar would market the contracts for further assignment and share in the profits from doing so.

Mr. Bhullar paid the first deposit and negotiations took place to further assign the contracts to a third party, Mr. Biniaz. The negotiations for the further assignment collapsed, resulting in the parties facing a situation where Mr. Bhullar was going to be unable to pay the second deposit of $327,000.

The plaintiff wrote to Mr. Bhullar advising of his intention to pay the second deposit and alleging that, as a result, Mr. Bhullar would have no right to share in the profit from the properties. The plaintiff also wrote to Mr. Bhullar advising that he was attempting to pay the second deposit and suggesting that Mr. Bhullar had repudiated the contract which assigned the purchase contracts to Mr. Bhullar.

The effect of the Plaintiff’s communications became the central issue as Mr. Bhullar was able to enter an agreement to assign the contracts to a Mr. Biniaz at a lower price and in exchange for the Mr. Biniaz repaying the $165,000 deposit. There was also a third assignment by Mr. Biniaz to his own numbered company which triggered a $50,000 payment which was to be shared with the plaintiff.

The plaintiff, unhappy with the deal with Mr. Biniaz and presumably the modest profit he would enjoy as a result, sought to undo the assignments to Mr. Biniaz and his company on the basis that the Plaintiff had accepted Mr. Bhullar’s repudiation of the first assignment. If this position was accepted, Mr. Bhullar would have had no ability to further assign the purchase contracts as a result of the repudiation of the assignment contract between Mr. Bhullar and the Plaintiff.

The court held that the plaintiff’s communications affirmed assignment contract to Mr. Bhullar rather than having communicated an acceptance of Mr. Bhullar’s repudiation. The court found that there was not a clear and unequivocal statement by the plaintiff to Mr. Bhullar that Mr. Bhullar had repudiated the assignment contract and the plaintiff accepted such repudiation; rather, there were negotiations to attempt to salvage the contractual relations between the parties and to not lose the first, $165,000 deposit.

The plaintiff attempted to keep all options open to himself by asserting that Mr. Bhullar’s was required to perform his contractual obligations and by also attempting to assert that the plaintiff had accepted Mr. Bhullar’s repudiation of the assignment contract. In doing so, the plaintiff took an equivocal position contrary to the legal maxim that requires accepting repudiation of a contract to be by an unequivocal act or words of acceptance.

Reddy v Bhullar is illustrative of the need to be clear as to what rights a non-breaching party to a contract is asserting in the face of another party breaching the contract. The non-breaching party must make a decision as to whether it is going to require performance of the contract a accept repudiation of the contract and bring the contract to an end a as a result. Different rights and remedies flow from a decision to accept or reject a repudiation of a contract and it is crucial to appreciate the consequences of decisions, communications and actions which occur in the face of another party breaching a contract.


Jeremy Burgess is a litigation associate at Pushor Mitchell who frequently assists clients in contractual disputes. If you have any questions about contractual disputes, we’d be happy to assist you. Feel free to contact Jeremy in a confidential manner toll free at 1-800-558-1155 or at burgess@pushormitchell.com. You may also contact our litigation group.

The foregoing is for informational purposes only and is not legal advice, nor should be construed as such.

Whenever I have clients that have Canadian property and assets in a foreign jurisdiction, I always recommend that they consult with a lawyer in the jurisdiction where they hold those foreign assets (Mexico for example – and sometimes multiple foreign jurisdictions). If a client has a Will in another jurisdiction, or jurisdictions, to govern their foreign assets, then their Will here becomes their Canadian Will and we typically use clauses such as the following:

“This Will (sometimes called my “Canadian Will”) deals only with all of my property of every kind situated in Canada at my death (both moveable and immovable), including but not limited to, any interests in land(s), and all of my bank accounts, investments, Registered Retirement Savings Plans and / or Registered Retirement Income Funds (where the designated beneficiary is my Estate), held with any and all institutions located in Canada (my “Canadian Property”).  I may have also prepared other Wills that deal with my property of every kind situated in jurisdictions other than Canada (my “Foreign Property”), to be applicable as at the date of my death (sometimes called my “Foreign Will(s)”).  In this regard, it is my express wish that my Canadian Will govern the distribution of my Canadian Property, and that my Foreign Will(s) govern the distribution of my Foreign Property, as may be applicable.  In the absence of any Foreign Will(s), it is my further wish that the provisions of my Canadian Will shall apply as to the distribution of my Foreign Property to the extent this may be possible.”

If you have assets in multiple jurisdictions then your Estate Planning immediately becomes more complicated and it will be very important to consult appropriate lawyers who are qualified in each jurisdiction where you hold your assets, and have them work together to liaise on your Estate Plan.


This is provided as information ONLY; it should NOT be construed as legal advice. You should consult with a lawyer to provide you with specific advice for your own situation. For more information real estate matters or estate planning, and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or dedominicis@pushormitchell.com Vanessa practices in the area of Real Estate and Wills & Estates at Pushor Mitchell LLP in Kelowna and would be more than happy to assist you!

The Central Okanagan Economic Development Commission (COEDC) has released its 2018 fourth quarter economic indicators report. The report, and previous reports, can be found here.

Some of the exciting highlights include:

  • the unemployment rate being down to 5.0% from 5.5% in same quarter the previous year;
  • a 49.3% increase in job postings; and
  • a record 2,080,372 passengers at YLW in 2018, making it Canada’s 10th busiest; and
  • business licenses seeing a 4.5% increase in 2018 with Peachland leading the way at a 14.2% increase.

Please also see some of the infographics below excerpted from the report.

The statistics all point to an exciting future and continuing growth in the Okanagan. They also point to some challenges the Okanagan will be facing and the opportunities that come with approaching and resolving such challenges.

We are excited by the growth the Central Okanagan has experienced and look forward to assisting our clients with respect to challenges and opportunities the future foretells. We are also proud to have our own Jeremy Burgess and Keith Inman representing the professional services sector on the COEDC advisory board and the expertise and insight their participation in the COEDC provides.

Note the COEDC collects the above third party statistical data from BC Stats, Statistics Canada, CMHC, and local governments in the Central Okanagan. Caution should be used in the interpretation of month-to-month statistics, in particular the Labour Force Survey, a monthly sample survey which provides unemployment rates of the Canadian labour market.

Thank you to the COEDC and Corrie Griffiths for preparing the economic indicators report and much of the content of this article.

We often see cases in our office where an employer has to deal with an employee who has behaved in outrageous fashion. Examples are: drinking or consuming recreational drugs at work; assaults of other employees or customers; and extended absence without prior explanation.

The gut reaction of most employers is to terminate the employee in question without much inquiry into the background of the conduct. The employer is more likely to dig into the reason behind the bad conduct if the employee has a sterling employment record.

Judges, adjudicators, and arbitrators in enforcing our employment and human rights laws expect employers to treat all employees as they would the employee with the sterling record. In other words, the law does not allow an employer to seize upon an incident in an unquestioning way to justify a termination.

The reason for this development in our law is that much of the conduct described above can be caused by a momentary lapse of judgment or be directly related to a disability on the part of the employee. It is rare that any of the conduct described above is intentional and/or premeditated.  Consider the example of a long-term employee who upon receiving news of the death of his best friend consumes too much alcohol and then makes an error in judgment like engaging in an abusive verbal attack on a co-worker. This would be an example of a momentary lapse in judgment which would not necessarily justify an immediate termination. The more appropriate response would likely be to investigate the circumstances behind the verbal assault and either offer assistance to the employee to overcome his grief or what might be an alcohol problem (disability).  A warning might also be appropriate.

Another example may be an employee who one day “snaps” in the workplace and assaults another employee.  The employee unbeknownst to the employer has a bipolar disorder and the aberrant behaviour resulted from the employee deliberately or inadvertently ceasing his or her medication. Rather than terminating this employee, the employer has a responsibility to reasonably investigate and likely accommodate the employee by working with him or her to prevent such an occurrence in the future.

Employees who unreasonably refuse to participate in an accommodation process will not be protected by the law. In the examples above if either employee unreasonably refused to take part in measures designed to assist them and to prevent the aberrant behaviour termination may be justified.

Employers who jump the gun and terminate an employee without proper investigation may be liable for damages under human rights legislation or our common law.  In some cases the terminated employee would be entitled to reinstatement in addition to damages.

The bottom line is that employers should take reasonable steps to understand an employee’s motivation and the circumstances leading to the bad behaviour before making the decision to terminate the employee. This is particularly true where the employee’s conduct is unusual or unexpected in relation to their history with the employer.

The Registered Disability Savings Plan (“RDSP”) is a savings plan provided by the federal government to help parents and others save for the long-term financial needs of a disabled individual. The RDSP is a rather complicated program and the intent of this article is to briefly describe the requirements to qualify for an RDSP and the benefits of the program.

Qualification:

An individual is eligible as a beneficiary of an RDSP if he or she is a Canadian resident under the age of 60 and is qualified for the Disability Tax Credit (“DTC”).

The DTC is non-refundable tax credit that people with severe and prolonged impairment may be eligible for. A medical practitioner must certify that the individual has such impairment. In general, a person must meet one of the following criteria:

  • be blind,
  • be markedly restricted in at least one of the basic activities of daily living,
  • be significantly restricted in two or more or the basic activities of daily living (can include a vision impairment), or
  • need life-sustaining therapy.

In addition, the person’s impairment must meet both of the following criteria:

  • be prolonged, which means the impairment has lasted, or is expected to last for a continuous period of at least 12 months, and
  • be present all or substantially all the time (i.e. at least 90% of the time).

A beneficiary can have only one RDSP at any given time.

Benefits of an RDSP:

The funds in an RDSP grow tax-free and up to $200,000 can be contributed to the account without affecting the beneficiary’s disability benefits. Anyone can contribute to an RDSP and such contributions can be withdrawn without being included in the income of the beneficiary. Unlike a RRSP, however, contributions are not tax-deductible.

The primary benefit of an RDSP is that they may allow the holder of the RDSP to qualify for two federal government programs: the Canada Disability Savings Bonds (“Bonds”) and Canada Disability Savings Grants (“Grants”), which are both paid directly into the RDSP. The amount of Bonds or Grants that a beneficiary of an RDSP may qualify for depends on the his or her family income.

The government will pay a Bond of up to $1,000 a year to a beneficiary of an RDSP with a family income of less than $30,450. This amount is reduced as the beneficiary’s family income exceeds that amount and no Bond is paid if the family income exceeds $46,605. No contributions to the RDSP must be made to get the Bond and the lifetime Bond limit is $20,000. A Bond can be paid into an RDSP until the year in which the beneficiary turns 49.

The Grant operates by matching contributions into the RDSP. If the beneficiary’s family income is less than $93,208:

  • on the first $500 contributed into the RDSP, the beneficiary will receive $3 for every $1 contributed (i.e. a maximum of $1,500), and
  • on the next $1,000 contributed to the RDSP, the beneficiary will receive $2 for every $1 contributed (i.e. $2,000 maximum).

The maximum Grant for any one year is $3,500.

If the beneficiary’s family income is greater than $93,208, on the first $1,000 contributed to the RDSP, the beneficiary will receive a Grant of $1, with a maximum Grant for any one year of $1,000.

The maximum lifetime amount that a beneficiary can receive in Grants is $70,000 and Grants can be received on contributions made until the beneficiary turns 49.

Long-Term Savings

The purpose of the RDSP is to provide benefits to disabled individuals for long-term savings. If funds are withdrawn from the RDSP before the beneficiary turns 60, penalties could apply such that the last ten years of federal government contributions may need to be returned.

The Bonds, Grants and investment income earned in the RDSP are included in the income of the beneficiary when they are withdrawn and taxed accordingly; however, they are excluded for the purpose of calculating Old Age Security (OAS) and the Guaranteed Income Supplement (GIS).

The rules for RDSPs are quite complex. However, an RDSP can provide some significant benefits to a disabled individual who qualifies for the plan, with total government contributions of up to $90,000 in both Grants and Bonds that the individual would not otherwise qualify for without an RDSP.

We are happy to help if you have questions about RDSPs. Please contact Zach or another member of our Tax Law Team.

The following article is part one of a series of articles that document some key considerations about franchising including some of the pitfalls and opportunities which our firm has seen and advised upon over the past two years. For a full .pdf version of this article, please click here.

On February 1, 2019 two years will have passed since the British Columbia Franchises Act came into force. Since the enactment of the legislation, our Franchise Law Team at Pushor Mitchell has assisted both franchisors and franchisees in working with and ensuring they are compliant with the Franchises Act. This article is the first in a series of articles that documents some key considerations about franchising that we have seen over the past two years.

One of the main features under the Franchises Act has been the implementation of a Franchise Disclosure Document. The Franchise Disclosure Document is intended to summarize all material facts regarding the franchise. A material fact is defined as any information about the business, operations, capital or control of the franchisor or franchisor’s associate, or about the franchise that would reasonably be expected to have a significant effect on the value or price of the franchise to be granted or on the decision to acquire the franchise. The Franchises Regulation specifically sets out the requirements of the type of information that must be included in a Franchise Disclosure Document. This includes, but is not limited to:

  • financial statements of the franchisor;
  • business information about the franchisor and its directors; and
  • a summary of the franchisee’s costs and obligations.

The rationale behind a Franchise Disclosure Document is to ensure a prospective franchisee has all the information deemed necessary to make a fully informed decision on whether to proceed with the purchase of the franchise. The Franchise Disclosure Document must be provided by a franchisor to a franchisee at least 14 days before the parties enter into a franchise agreement.  A Franchise Disclosure Document can be delivered personally or by email. However, it is important to emphasize that a Franchise Disclosure Document must be delivered as one complete document and delivered at one time. Legally, it is not adequate for a franchisor to provide the Franchise Disclosure Document to a prospective franchisee and then follow up with attachments and additional information at a later time. This is a common pitfall for franchisors, who will sometimes provide the Franchise Disclosure Document to a prospective franchisee and then follow up (sometimes days later) with the financial statements or other schedules that should have originally been included.

The Franchises Act provides that the failure to provide a complete Franchise Disclosure Document may grant franchisees with a right to rescind the franchise agreement within 60 days after receiving a Franchise Disclosure Document if the contents did not meet the requirements under the Franchises Act. If a franchisor never provided the franchisee with a Franchise Disclosure Document the franchisee has the ability to rescind the franchise agreement within two years.

We are happy to help franchisors prepare their Franchise Disclosure Document to ensure that the document meets the requirements under the Franchises Act and Regulation. We can also assist prospective franchisees in reviewing a Franchise Disclosure Document to determine if the document contains the appropriate information to make a fully informed decision about the franchise.  Please contact Patrick or another member of our Franchise Law Team.


Patrick Bobyn is a business and real estate lawyer at Pushor Mitchell LLP who acts for both franchisors and franchisees.  You can reach Patrick at 250-869-1286 or bobyn@pushormitchell.com.  For more information on our Franchise Law Team, please visit http://www.pushormitchell.com/service/franchising

When a builders’ lien is filed, it can cause all manner of disruptions to financial, contractual and business relations and there can often be urgency in getting a lien discharged while, at the same time, ensuring the right to dispute the underlying claim giving rise to the lien is preserved.

The Builders Lien Act (BLA) provides different mechanisms for discharging and dealing with builders’ liens and this article focuses one of those remedies found in s. 24 of the BLA. S. 24 of the BLA provides that a land owner, contractor, subcontractor or any other person liable on a contract or subcontract can apply to have the court cancel a builders’ lien on the giving of sufficient security for the payment of the claim. The key question that then arises in a s. 24 application is what sufficient security is.

The question of what constitutes sufficient security for the purpose of s. 24 of the BLA was at the heart of the decision in Westurban Developments Ltd. v Forged Construction Ltd., 2018 BCSC 2354 (CanLII).

In that case, Westurban Developments was a general contractor who had retained Forged Construction as a subcontractor. Forged Construction filed a builders’ lien for $568,986.26, claiming that such an amount was due or was going to become due in respect of a $689.433.00 fixed price contract.

The Court held at para. 4 that s. 24 of the BLA establishes a two-prong test: (1) the Court must determine whether the amount of lien claimed is sustainable and (2) if so, to determine what is sufficient security.

On the first prong, the Court held that Forged Construction could only claim for work actually performed. The evidence before the Court established that Forged Construction had only completed 64% of its work. As such, the capped value of work performed was $441,237.12, being 64% of the total fixed price of $689.433.00. Notably, a party cannot lien for anticipated lost profits in the face of a wrongfully terminated or performed contract; such losses are claimed through a legal action, not by a lien.

The Court went on to find that Forged Construction had already been paid $272,253.02. Accordingly, the paid amount was subtracted from the capped value of the work performed ($441,237.12) leaving $168,984.10 as the total lienable amount. The Court noted this amount to include the holdback on the work performed.

The Court then went on to the second prong of the analysis; determining what amount of security was appropriate. Westurban Developments urged the Court to find that $1.00 was sufficient security, essentially amounting to a claim that Forged Construction’s lien was invalid. The Court did not go that far; instead, finding that there was evidence of significant deficiencies in the work performed by Forged Construction. While there is limited discussion of the Court’s reasoning, based on the finding that there were significant deficiencies in the work performed by Forged Construction, the Court found that sufficient security would be 85% of the total lienable amount of $168,984.10, being $143,636.48. Upon posting of the $143,636.48, Westurban Developments would be able to discharge Forged Construction’s lien.

Westurban Developments Ltd. v Forged Construction Ltd. is illustrative of some of the issues that arise when a party seeks to discharge a lien by posting of security. Westurban Developments was found to have demonstrated that the face value of the lien was substantially inflated and advanced further, supported arguments that the lienable amount ought to be further reduced. This resulted in substantially less security being posted than the face value of the subject lien. While not addressed in the decision, it also appears to be the case that, since Forged Construction’s lien greatly exceeding the amounts that were properly lienable, Forged Construction was exposed to substantial damages and costs including a fine under s. 45 of the Act at a later date.

It is likely that with well-informed legal advice, Forged Construction would not have filed such an excessive lien. It likewise could have avoided the significant exposure to damages and costs that flow from its excessive liens and potentially the loss of credibility and having to continuously acknowledge its excessive lien in the remaining fight over what amounts were owed and to which party.


Jeremy Burgess is a litigation associate at Pushor Mitchell who frequently assists clients in contractual disputes and builders’ liens issues. If you have any questions about contractual disputes or builders liens’ issues, we’d be happy to assist you. Feel free to contact Jeremy in a confidential manner toll free at 1-800-558-1155 or at burgess@pushormitchell.com. You may also contact our litigation group.

The foregoing is for informational purposes only and is not legal advice, nor should be construed as such.

British Columbia’s new Employer Health Tax came into force on January 1, 2019. The Employer Health Tax is an annual payroll tax payable by British Columbia employers. As previously reported here, the tax will offset the loss in revenue from medical service plan (MSP) premiums which are being phased out on January 1, 2020.

The Employer Health Tax applies incrementally to companies with payrolls over $500,000, increasing at $250,000 intervals. The below chart summarizes the impact of the new tax on businesses.

Annual BC Payroll Annual Tax Tax as a percent of Payroll
  $500,000 or less $0      0.00%
  $750,000 $7,313      0.98%
  $1,000,000 $14,625      1.46%
  $1,250,000 $21,938      1.76%
  $1,500,000 $29,950      1.95%
  over $1,500,000 $29,250 plus 1.95% of payroll over $1.5 million      1.95%

Charitable and non-profit employers are subject to a higher exemption amount and pay the Employer Health Tax at a reduced rate.

Employers required to pay the new tax must register for an Employer Health Tax account using eTaxBC. Below is a list of important dates employers will want to keep in mind to ensure that they meet their new obligations.

Date Action
January 7, 2019 Registration to pay the Employer Health Tax opens
May 15, 2019 Registration deadline for employers required to pay instalments in the 2019 calendar year
June 15, 2019 First instalment payment due date
December 31, 2019 Deadline to register for all other taxable employers
March 31, 2020 Deadline for employers to file and pay their first return

Although the tax came into force on January 1st, MSP premiums will not be eliminated until next year. Instead, MSP premiums are reduced by 50% for the 2019 calendar year. As such, employers who pay a portion of their employees’ MSP premiums remain responsible for paying their share of MSP premiums in addition to the new Employer Health Tax.

In a recent Supreme Court of British Columbia case the court confirmed that if you are injured by a hit and run driver, you do not need to do everything conceivable in order to identify the driver of the hit and run vehicle; you only need to take reasonable efforts to identify the driver (Ghuman v. ICBC 2019 BCSC 3). You may be asking yourself, where does this arise and why might this be important to me?

Picture this, while you are stopped at a stop sign, another vehicle slams into your vehicle and then hastily speeds away. In the seconds and minutes that follow you are likely in shock and potentially in pain. Once you determine, however, that you are not catastrophically injured, you may get out of your vehicle and look around only to find that there is no one around, including the vehicle that collided with you. Who do you hold accountable for this hit-and-run?

That is the scenario Mr. Ghuman found himself in when his vehicle was struck by another vehicle in Surrey in 2014.

Section 24 of the Insurance (Vehicle) Act says that ICBC will be responsible for compensation, even if you don’t know the identity of the driver that hit you, as long as you can establish that you have made all reasonable efforts to identify the owner and driver of the vehicle. In this case, Mr. Ghuman looked around at the scene of the accident but was unable to identify any witnesses, he reported the incident to the police the following day, he put up flyers in the area asking for anyone with information to come forward, and he retained a lawyer who helped him with a second round of flyers and posted an advertisement in the newspaper.

ICBC took the position that because Mr. Ghuman waited until the following day to phone the police, because he did not follow up with them after that initial report and because he did not interview surrounding businesses in the days following the accident that he had not done enough and that they should be allowed to deny him compensation he was otherwise entitled to.