Lauzon v. Fortier, 2018 ONCA 1086

Court of Appeal for Ontario

Date: 2018-12-28 Docket: C64865

Judges: Rouleau, van Rensburg and Roberts JJ.A.

Between

Julie Lauzon Appellant

and

Lionel Fortier Respondent

Counsel

J. Summers, for the appellant

Y. Guilbault and Jessica Houle, for the respondent

Heard

December 13, 2018

On Appeal

On appeal from the judgment of Justice M.P. Shelston of the Superior Court of Justice, dated December 21, 2017.

Reasons for Decision

Introduction

1This is an appeal of a judgment after trial following marriage breakdown. The appellant contends that the trial judge erred in ordering that the respondent pay her an equalization payment of $166,674.64 by way of pension rollover, and in ordering that she pay the respondent the sum of $128,560 plus interest for his interest in the matrimonial home. The parties had agreed to the transfer of the matrimonial home after separation. In October 2016, the court ordered the transfer of the home further to the agreement and dispensed with the requirement for the respondent's signature. The appellant asserts that the trial judge ought to have set off the value of the respondent's interest in the matrimonial home against the equalization payment that was owed, with the balance payable by pension rollover. Her position is that the trial judge's order to the contrary was made without jurisdiction. In the alternative, she asserts that even if the order could have been made, it should not have been since the trial judge failed to consider all relevant factors.

2For the reasons that follow we dismiss the appeal.

Relevant Facts

3The relevant facts are as follows.

4The parties separated in October 2014 after 15 years of marriage. By mid-April 2015 the respondent had moved out and the appellant was paying all expenses associated with the matrimonial home. The respondent commenced his application at that time, seeking various relief, including equalization of net family property and the immediate sale of the matrimonial home. The appellant asked for the equalization of net family property and exclusive possession of the matrimonial home and its contents. She also specifically asked that she have exclusive possession of the matrimonial home and its contents until the equalization of net family property and until she could obtain refinancing of the matrimonial home to pay the respondent for his share.

5A temporary consent order on October 21, 2016 provided for child support, access and that the children would reside with the appellant at the matrimonial home.

6On June 9, 2016 the parties signed interim minutes of settlement which were incorporated into an interim order of the same date. Among other things they agreed as follows:

5. The matrimonial home shall be transferred to the mother on the following conditions:

(a) the father shall obtain an appraisal with Independent Appraisers at his cost. The father shall be allowed to attend with the appraiser, but he shall not bring any one with him. The mother may have any third-party present. The father will not communicate with the mother during the appraisal. The appraisal will be either on the weekend or in the evening after 5:30 p.m.

(b) The mother shall forthwith apply to the bank for approval to remove the father from the mortgage;

(c) Subject to the ability of the bank to comply and the consent of counsel, should the mother not be approved within 30 days of the minutes, the home shall be listed for sale by Mario Lemieux on the following conditions:

(i) the listing price will be as recommended by Mario Lemieux; and

(ii) the parties shall accept any offer that is at least 95% of the listing price.

(d) Provided the mother is approved, the house shall be transferred into the mother's name alone within 60 days of the appraisal. The cost of the transfer shall be shared by the parties.

6. The equalization of the net family properties shall be addressed at a later date.

7The parties subsequently agreed that the equity in the matrimonial home was $256,519 and that the respondent's share for his equity was $128,260.

8On October 13, 2016 the parties were in court, each seeking a finding of contempt against the other. The appellant sought an order that the respondent was in contempt for failing to transfer to her his interest in the matrimonial home. The respondent alleged that the appellant was in contempt for failing to obtain the necessary financing to purchase his interest or to sell the matrimonial home. Labrosse J. dismissed both motions. He granted summary judgment in favour of the appellant to dispense with the respondent's consent to transfer his interest in the matrimonial home. At that time Labrosse J. identified that the respondent wished to satisfy the equalization payment by way of a pension transfer but that that issue should be reserved for the trial judge.

9The respondent's half-interest in the matrimonial home was transferred to the appellant on November 3, 2016.

10By the time the application proceeded to trial in September 2017, the parties had settled the issues of custody, access and support on a final basis, and the trial judge incorporated the terms of their settlement into his final order.

Issues at Trial

11The central issues at trial were as follows:

• The respondent's claim for occupation rent from April 2015 until November 3, 2016 when title to the home was transferred;
• Equalization of net family property;
• The respondent's claim for payment for his interest in the matrimonial home;
• The amount of the equalization payment owed by the respondent to the appellant and how equalization would be satisfied; and
• Whether the respondent was entitled to an order for the sale of the matrimonial home.

12The respondent's claim for occupation rent was dismissed. The parties disagreed about the value of a savings account in the appellant's name. The trial judge accepted the appellant's evidence that the account was joint with her father, and included only one half the value of the account for equalization purposes. Neither of these conclusions is challenged by the respondent in the appeal.

Trial Judge's Decision on Equalization

13The trial judge then calculated the equalization payment owed by the respondent to the appellant as $144,934.47. He observed that the question of how the equalization payment was to be made was disputed between the parties. The appellant submitted that the equalization payment should be satisfied by the respondent receiving a credit of $128,260, representing his equity in the matrimonial home, and that the balance be paid by a transfer from the respondent's pension plan grossed up by 15% for income tax. The respondent sought an order that he be paid the equity in the matrimonial home and that if the appellant was unable to make the payment, that the home be sold. The respondent proposed that the equalization be satisfied by a pension rollover.

14The trial judge had to determine how the equalization payment was to be made. The appellant's position was that the parties had agreed that the respondent would receive a credit against equalization for his interest in the matrimonial home. The trial judge noted that this was denied by the respondent, who was consistent in his position that the appellant should buy out his interest in the matrimonial home.

15The trial judge observed that, although the parties were represented by counsel at the time, the interim minutes of settlement did not address how the respondent was to be paid his equity or how equalization was to be determined. The parties did not agree on the effect of the transfer on the equalization calculation and payment or on how the equalization payment was to be made.

16In the absence of an agreement, the trial judge determined the issue after considering the provisions of the Family Law Act and relevant jurisprudence. He noted that he had considered the following factors:

• the respondent's pension comprised 59% of his assets at the date of separation;
• at separation the two largest assets were the matrimonial home with equity of $256,519 and the respondent's pension valued at $331,759;
• at separation, the parties' total net liquid assets were $9,063.38;
• the respondent has always requested that he be bought out of his interest in the matrimonial home;
• the respondent had purchased his own residence post-separation;
• the interim minutes of settlement do not assist either party in their position that either there is to be a credit for the respondent or that the appellant owes the respondent a payment for his equity in the home;
• the maximum transferable amount under the terms of the respondent's pension plan was $180,529.48 accumulated from July 19, 1999 to October 11, 2014.

17After referring to the preamble of the Family Law Act, its primary goal as a division of assets that is fair to both spouses, the fact that the parties worked hard throughout their marriage, and that their largest asset, other than the respondent's pension, was the matrimonial home, the trial judge concluded that it would be unfair to the respondent to leave the marriage after 15 years with what amounted to a single asset – his pension – that he could not access for many years. He therefore ordered that the equalization payment be made by a pension rollover, a decision he observed was in keeping with the primary goal of the Family Law Act that the division of assets be fair to both spouses.

18The trial judge held that the appellant owed the respondent the sum of $128,560 for his share in the matrimonial home. After reviewing the relevant statutory provisions, he concluded that he could not order the sale of the matrimonial home to enforce the payment of this post-separation adjustment as it was not related to the equalization payment which the respondent, not the appellant, was required to make.

19The final order therefore required the respondent to pay an equalization payment of $166,674.64 (which included a 15% gross-up for income tax) by way of rollover of his pension, and the appellant to pay the respondent $128,560 for his share in the matrimonial home, with interest at 3% effective the date of the transfer.

Appeal Issues

20On appeal there is no dispute about the amounts owed by way of equalization or the value of the respondent's interest in the matrimonial home. The sole question is whether the trial judge erred in refusing to address the respondent's entitlement as a set-off against the equalization payment he owed to the appellant.

Analysis

Jurisdiction Issue

21First, the appellant asserts that the trial judge did not have jurisdiction to make the order he did. The appellant contends that the effect of the interim minutes of settlement is that the parties had reached a final agreement on the transfer of the home and that the only financial issue left to be determined was equalization. The appellant argues that under the FLA it is not open to the court to order the payment for the transfer of an asset that does not directly satisfy equalization. That is, her position is that the only question for the court is how the equalization payment is to be satisfied by the payor.

22We disagree. The appellant's jurisdiction argument is based on an interpretation of the parties' agreement that was not accepted, and was specifically rejected, by the trial judge. The trial judge concluded that the parties were not in agreement as to how the equalization payment was to be made or as to how the respondent was to be compensated for transferring his interest in the matrimonial home to the appellant. The inclusion of the words "the equalization of the net family properties shall be addressed at a later date", without more, did not mean that the respondent would be entitled to payment for his share of the matrimonial home only by way of set-off against the equalization payment, once the amount was determined. As the trial judge noted, if the parties intended that result, the minutes should have said so. He concluded that the parties agreed to defer that issue to trial.

23Indeed, the appellant's position at trial was not that the parties had reached a final agreement about the transfer of the matrimonial home, so that the only issue left to be determined was equalization. The agreement was silent as to how the respondent was to be compensated for the transfer of his equity in the home which had occurred between the date of separation and the trial. And since the appellant rightfully acknowledged that the respondent was entitled to some form of compensation for the transfer (whether by payment or by set-off), both parties effectively agreed that there was an issue beyond the value of the equalization payment – always calculated as at the date of separation – that was left to be resolved. That is, for the court to grant either party's request an order was required that went beyond the value of the equalization payment owing at the time of separation and how it was to be paid.

24When looked at this way, it is clear that the court had jurisdiction to make the order it did. Both parties had requested orders beyond what was required only to equalize their net family properties. And the court routinely makes such orders to account for post-separation adjustments. In the absence of an agreement between the parties to that effect, the trial judge was not obliged to order the payment to be made by way of set-off against the equalization payment owed to the appellant by the respondent. It was open to him to make the order that he did.

Discretionary Factors

25As the second ground of appeal, the appellant asserts that even if there was jurisdiction to make the order, the trial judge did not consider all relevant factors when he refused to set off the respondent's value in the matrimonial home against the equalization payment that was owed. In particular, she points to the trial judge's reference to the respondent having "always requested that he be bought out of his interest in the matrimonial home", which was included in his list of enumerated factors and his failure to mention in the same list the fact that she had always requested a set-off against equalization. She also contends that the trial judge failed to take into consideration the fact that ordering her to pay the respondent for his share would require her to sell the home in which she lives with the children and from which she operates a home day-care.

26We do not give effect to this ground of appeal. We are satisfied, on a review of the record, that the trial judge was aware of these circumstances, and took them into consideration when he balanced the parties' interests. We note that the trial judge was only presented with options at two extremes: that the entire value of the respondent's interest in the house be set off against the equalization payment he owed, or that the equalization payment be satisfied entirely by a pension rollover. The result does not reflect an unreasonable exercise of discretion, and there is accordingly no basis to interfere.

Disposition

27For these reasons the appeal is dismissed. The respondent shall have his costs of the appeal in the sum of $3,500, inclusive of disbursements and HST. The appellant owes the respondent the net amount of $2,500 after setting off the costs awarded in favour of the appellant in the sum of $1,000 in respect of the respondent's unsuccessful motion to this court.