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In today’s globalized world, it is not uncommon for individuals to have legal ties to multiple countries. When a marriage breaks down, one spouse may initiate divorce proceedings in a foreign jurisdiction, whether for convenience, speed, or other personal reasons. However, accepting and participating in a divorce proceeding initiated outside of Canada can have significant legal consequences. It may result in the loss of rights under Ontario’s Family Law Act and Canada’s Divorce Act, potentially impacting financial support, property division, and parenting arrangements.

Understanding Foreign Divorce and Its Recognition in Canada

Canada does recognize foreign divorces under specific conditions. According to the Divorce Act, a foreign divorce will generally be recognized if one of the spouses was “ordinarily resident” in the jurisdiction that granted the divorce for at least one year immediately preceding the commencement of the proceeding. However, even if a foreign divorce is recognized, it does not necessarily mean that all associated legal rights are preserved under Canadian family law.

Potential Loss of Rights Under the Family Law Act (Ontario)

The Family Law Act governs the division of property and spousal support for married couples in Ontario. Accepting a foreign divorce could mean losing rights under this legislation, including:

•               Equalization of Net Family Property: In Ontario, spouses are entitled to an equal division of the increase in value of assets accumulated during the marriage. If a divorce is obtained in another country, there is a risk that Ontario courts will not have jurisdiction to enforce property division rights, leaving a spouse without their fair share of marital assets.

•               Spousal Support: Ontario law allows a spouse to seek financial support following a divorce. A foreign divorce may eliminate the ability to claim spousal support in Canada, especially if the foreign court’s decision does not address it or provides inadequate support.

Implications Under the Divorce Act (Canada)

The Divorce Act provides for spousal support and child-related matters. Participating in a foreign divorce could have serious consequences, such as:

•               Parenting and Decision-Making Rights: Canadian courts prioritize the best interests of the child when making custody and parenting orders. A foreign divorce decree may not align with these principles, potentially putting one parent at a disadvantage if they attempt to seek modifications in Canada.

•               Spousal Support Claims: Under the Divorce Act of Canada, a spouse may be entitled to claim support based on factors such as financial dependency and economic disadvantage caused by the marriage breakdown. Accepting a foreign divorce could eliminate the possibility of making such claims under Canadian law.

Should You Accept or Challenge a Foreign Divorce?

Before participating in a foreign divorce, individuals should seek legal advice from an experienced Ontario family lawyer. Options to consider include:

·      Challenging the Jurisdiction of the Foreign Court – If the foreign court does not have proper jurisdiction, the divorce may not be recognized in Canada.

·      Seeking Relief in Canada Before Accepting the Foreign Divorce – If a spouse intends to claim property or support in Canada, it may be beneficial to initiate legal proceedings before the foreign divorce is finalized.

·      Ensuring the Foreign Order Protects Your Rights – If proceeding with a foreign divorce, it is crucial to ensure that any settlement or judgment aligns with Canadian legal principles.

Conclusion

A foreign divorce may seem like a simple solution, but it can lead to significant unintended consequences, including the loss of rights under Ontario’s Family Law Act and Canada’s Divorce Act. Before making any decisions, it is essential to consult with a knowledgeable family lawyer to protect your interests.

Legal Assistance

At Hashmi Law Group, we specialize in guiding clients through complex international family law issues. If you are considering or facing a foreign divorce, call 905-503-1486 or 647-772-8187, or visit www.nhashmilaw.com to schedule a consultation.

We have offices in Toronto and Mississauga. We have more than 15 years of legal experience, nationally and internationally. In addition to regular business hours, we offer weekend and after-business-hours appointments if required. For more information about our legal services, please visit our website https://nhashmilaw.com

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(Waiver: This article or blog is not intended to offer legal advice. You should not rely solely on the information provided here without consulting a lawyer. It is important to seek legal advice from a qualified attorney in Ontario, Canada, to fully understand your rights and obligations before taking any action)

Directors' Liability Under the Ontario Not-for-Profit Corporations Act (ONCA)

The Ontario Not-for-Profit Corporations Act (ONCA), which came into force on October 19, 2021, provides a legal framework for not-for-profit (NFP) organizations incorporated in Ontario. A key aspect of the ONCA is the responsibilities and liabilities of directors who govern these organizations. Understanding these obligations is essential for directors to minimize personal risk and ensure compliance.

Duties of Directors Under ONCA

Directors of Ontario NFP corporations have several fundamental duties:

1. Duty of Care – Directors must act with the care, diligence, and skill that a reasonably prudent person would exercise in similar circumstances.
2. Duty of Loyalty – Directors must act honestly and in good faith, prioritizing the best interests of the corporation over personal interests.
3. Duty to Comply with the Law – Directors must ensure that the organization complies with ONCA, other applicable laws, and its own governing documents (bylaws and articles of incorporation).
4. Fiduciary Duty – Directors must act in the best interests of the organization and avoid conflicts of interest.

Personal Liability Risks for Directors

While directors are generally protected from personal liability when acting in good faith, there are circumstances where they may be held personally liable:

1. Breach of Fiduciary Duty

Directors who fail to act in good faith, act in their own interest over the corporation's, or misuse funds may face legal consequences.

2. Employment-Related Liabilities

Directors may be personally liable for unpaid employee wages, vacation pay, and other employment-related obligations under Ontario's Employment Standards Act, 2000 (ESA).

3. Unpaid Taxes and Payroll Deductions

Under the Income Tax Act and Excise Tax Act, directors may be held liable for unpaid corporate taxes, including HST and payroll remittances.

4. Environmental Liabilities

If an NFP corporation causes environmental harm, directors may be held personally responsible under provincial and federal environmental protection laws.

5. Misrepresentation or Fraud

Directors can be personally liable if they knowingly make false statements in financial reports or misrepresent the corporation’s financial position.

Protections for Directors

1. Due Diligence Defense

Directors can avoid liability if they can prove they exercised due diligence by taking reasonable steps to prevent a legal breach. This includes staying informed about the corporation’s activities and seeking professional advice when needed.

2. Indemnification and Insurance

Most NFP corporations provide indemnification for directors in their bylaws, protecting them from legal costs incurred while acting in their official capacity. Additionally, Directors’ and Officers’ (D&O) liability insurance can provide further protection against financial risks.

3. Compliance with ONCA Requirements

To reduce liability exposure, directors should ensure the organization complies with ONCA requirements, including maintaining proper records, holding required meetings, and filing necessary reports.

Conclusion

Serving as a director of an Ontario not-for-profit corporation comes with significant responsibilities. While ONCA provides a structured framework for governance, directors must be aware of their duties and potential liabilities. Implementing good governance practices, staying informed about legal obligations, and securing appropriate insurance coverage can help directors mitigate risks and serve their organizations effectively.

Legal Assistance

For legal advice on NFP governance and director liability, contact Hashmi Law Group at 905-503-1486 or 647-772-8187, or visit www.nhashmilaw.com.

We have offices in Toronto and Mississauga. We have more than 15 years of legal experience, nationally and internationally. In addition to regular business hours, we offer weekend and after-business-hours appointments if required. For more information about our legal services, please visit our website https://nhashmilaw.com

To receive updated news and notifications on our legal services, please 

-       Like & follow our #Facebook page, HASHMI LAW GROUP https://www.facebook.com/Nhashmilawgroup

-       Follow us on #Linkedin 

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(Waiver: This above discussion is for informational purpose only and not intended to offer legal advice. The above discussion is not an exhaustive discussion of the entire process. You should not rely solely on the information provided in the above discussion without consulting a lawyer. It is important to seek legal advice from a qualified attorney in Ontario, Canada, to fully understand your rights and obligations before taking any step)