ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
LEITCH, RSJ, LANE AND HAMBLY JJ.
B E T W E E N:
VIVIAN YOUNG
Bryan Delaney, for the Applicant (Appellant)
Applicant (Appellant)
- and -
DAVID MCCURDY
Kurt W. Anders, for the Respondent (Respondent)
Respondent (Respondent)
HEARD: April 4, 2007
REASONS FOR DECISION
Hambly J.
Introduction
1This is an appeal from an order of a motions judge, denying a motion to set aside an order amending an order made on consent during a trial. It is our view that the motions judge “made a palpable and overriding error” (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235) of fact in denying the motion. We would set aside the order of the motions judge, allow the motion and restore the order of the trial judge.
Background
2The Appellant, Vivian Young, was married to the Respondent, David McCurdy, on May 21, 1971. They had two children who are now adults. They separated between 1981 and 1984. They separated finally on December 1, 1995. They have subsequently divorced. Ms. Young remarried on September 28, 1996.
3Ms. Young was a teacher. Mr. McCurdy was a small businessman. He did not have a pension. They each sought a division of net family property in the divorce action.
4The trial commenced before Mr. Justice G. Morin on May 1, 1997. After one half day of trial the parties entered into a settlement. They agreed that the value of Ms. Young’s pension for the purpose of calculating net family property was $154,768.00. Ms. Young was required to pay Mr. McCurdy $60,000.00 to equalize net family property. To accomplish this she agreed to the following term being incorporated as paragraph 2 of the order of Justice Morin dated May 1, 1997:
THIS COURT ORDERS AND ADJUDGES that the Petitioner (Wife) shall forthwith transfer Sixty Thousand Dollars ($60,000.00) of her pension credits in the Ontario Teachers’ Pension Plan to the credit of the Respondent (Husband).
5The Teachers’ Pension Plan Board (T.P.P.) stated that they could not transfer pension credits in a teacher’s pension by reason of the fact that a teacher’s pension being a defined benefit plan did not contain pension credits. They could assign a portion of the pension pursuant to a Court order. By letter dated July 9, 1999 Anne Slivinskas, legal counsel of the T.P.P., stated that it would honour Justice Morin’s order of May 1, 1997 so far as it could by deducting $934.35 per month from Ms. Young’s pension and holding it in trust for Mr. McCurdy until a limit of $60,000.00 was paid. What they required was an order amending Justice Morin’s order by stating a specific monthly amount to be assigned to Mr. McCurdy to a limit of $60,000.00.
The Ex Parte Order of Justice Binks dated October 26, 1999
6Ms. Young retired in August 1999. Mr. Anders on behalf of Mr. McCurdy sent the T.P.P. a draft order by covering letter dated September 20, 1999 which stated the following:
THIS COURT ORDERS that the Petitioner Vivian Ellen McCurdy, shall assign 38.78 percent of the pension accrued during the time of marriage, namely May 21, 1971 until June 1, 1995, with the Teachers’ Pension Plan Board to the Respondent David Wayne McCurdy
THIS ORDER shall take effect as of the date of retirement of the Petitioner Vivian Ellen McCurdy (Young).
7The period of May 21, 1971 to June 1, 1995 was the period that the parties cohabited absent the period of separation between 1981 and 1984. Sixty thousand dollars is 38.78 percent of $154,768.00. Sixty thousand dollars was the amount Ms. Young agreed to pay Mr. McCurdy to equalize net family property and $154,768.00 was the value of Ms. Young’s pension on valuation day as agreed by the parties. Ms. Slivinskas, legal counsel for the T.P.P. responded by letter dated September 23, 1999 as follows:
Re: Vivian McCurdy v. David McCurdy – Draft Order
Thank you for your letter dated September 20, 1999 as well as a copy of the Draft Order. The Ontario Teachers’ Pension Plan Board would be able to administer the assignment of 38.78% of the pension accrued between May 21, 1971 and June 1, 1995.
The Order, should however, clarify that it is an amendment of the Order dated May 1, 1997 and should also clarify at what time the assignment will cease. Specifically, the original Order stated that Mr. McCurdy was entitled to $60,000.00 while the draft Order does not specify an upper limit or a triggering event.
Please do not hesitate to contact me directly at (416) 730-6339 with any further questions. (emphasis added)
8Ms. Young was at this stage unrepresented by counsel. Mr. Anders who has represented Mr. McCurdy throughout sent her a letter enclosing the draft order, which he had sent to the T.P.P. plus a consent. The letter dated September 28, 1999 stated the following:
Re: Teachers’ Pension Plan
As you will recall, the original Order as given by Justice Morin in the matrimonial proceedings between yourself and your ex-husband did not meet the requirements of the Teachers’ Pension Plan.
An actuarial valuation of the Order calculated your ex-husband’s interest in your pension at 38.78%. In view of the fact that you are now retired and in receipt of your pension, we wish to finalize this matter once and for all. Therefore, we intend to return to Court to have 38.78% of the pension accumulated during marriage assigned to your ex-husband.
I enclose herewith duplicate copies of a Consent and a draft Order for your review. If you agree to this Court Order, please sign the Consent and approve the Order as to form and content where indicated and return one copy of each to us in the self-addressed stamped envelope. If this is not the case, we shall be applying to Court for the Order as enclosed herewith. In such eventuality, we will of course ask the Court to award costs.
We thank you for your cooperation in this matter.
9Ms. Young has consistently taken the position that any payments to Mr. McCurdy from her pension must be limited to $60,000.00. In a letter to Mr. Anders dated January 19, 1998 she stated the following:
In response to documents received December 29, 1997:
I agree to assign 38.78% of my pension accrued during my marriage to Mr. McCurdy, to Mr. David McCurdy, the amount not to exceed $60,000.00, which is the amount agreed to by Mr. McCurdy and myself, and handed down in Mr. Justice G. Morin’s judgment on May 1, 1997.
I will not acquire nor maintain a life insurance policy with Mr. McCurdy or his estate as beneficiary. (emphasis added)
10In response to Mr. Anders’ letter of September 28, 1999 she sent a letter to him dated October 1, 1999 in which she stated the following:
Dear Mr. Anders,
I received documents mailed September 28, 1999. As stated in the original court order signed by Justice G. Morin of May 1, 1997 I agree to pay $60,000.00 to Mr. McCurdy or 38.78% of the pension accumulated during the spousal period. According to the letter from the Teachers’ Pension Plan Board dated September 23, 1999 it is necessary that the dates of the start and the cessation of the payments to Mr. McCurdy and the upper limit are stated in the amendment of the order. Thus, the order should state that:
Payments begin on July 30, 1999.
Payments cease when: a) the $60,000.00 limit is reached. (The Board keeps account of the total paid out) or
b) Mr. McCurdy dies, or
c) I die.
Please forward the documents when they contain the require information for my signature.
Thank you for your attention to this matter. (emphasis added)
11Mr. Anders responded to Ms. Young by letter dated October 4, 1999 as follows:
Re: McCurdy and Young
I acknowledge herewith receipt of your facsimile transmission dated October 1, 1999. Unfortunately, your interpretation of Justice Morin’s Judgment is wrong.
At the time of the divorce, you were ordered to transfer $60,000.00 of pension plan credits. You could have at the same time paid the sum of $60,000.00 in cash. Your ex-husband is still prepared to accept the sum of $60,000.00 plus applicable interest in cash as of the present time.
In view of the fact that you were not prepared to pay said sum, a proportionate division of the major asset, ie. your pension plan, was agreed upon in the amount of $60,000.00.
It was only after the pension plan informed us that they were unable to transfer such pension plan credits that a further pension evaluation was completed and whereby actuarial evidence it was established that the $60,000.00 represented 38.78% of your pension.
Therefore, we take the position that your ex-husband is entitled to 38.78% of your pension. This is a division of assets and therefore, whatever pension income that 38.78% amounts to, belongs to your ex-husband. This is 38.78% should be paid irrespective of his lifetime and has nothing to do with the $60,000.00.
Obviously, your pension plan is no longer payable should you die. In this particular eventuality, the Teachers’ Pension Plan is no longer payable and a different plan in relation to survivor’s benefits kicks in. Survivor’s benefits can only be paid to spouses and therefore Mr. McCurdy would have no claim to those survivor benefits. That is why the payments in this matter have been secured by means of a life insurance for which Mr. McCurdy is paying the premiums.
Please return the documents as forwarded to you previously with your consent noted thereon. In the alternative, we shall be forced to bring the appropriate motion. In such eventuality, we shall ask the Court to award costs against you because we feel that the costs of bringing such proceedings are totally unnecessary.
12Ms. Young responded by letter dated October 7, 1999 to Mr. Anders as follows:
Dear Mr. Anders,
In response to your letter received October 5, 1999:
The court order of May 1, 1997 states ‘the petitioner shall transfer Sixty Thousand Dollars ($60,000.00) of her pension credit in the Ontario Teachers’ Plan to the credit of the respondent.’ According to Pension Valuators of Canada calculations, sixty thousand dollars represents 38.78% of the amount of pension credit earned while I was married to Mr. McCurdy. Mr. McCurdy received all of our property (our home and rental unit and his business and the estate lot) plus 38.78% of my pension which totalled 50% of our combined marital assets and I received the balance of my pension of 61.22% of the pension earned while we were together. Since I taught for seven years before, and four years following the marriage, the pension credits earned during those eleven years are solely mine. Mr. McCurdy is eligible to receive 38.78% of the pension credit earned during the spousal period, not of my whole teaching career.
13Mr. Anders responded to Ms. Young by letter dated October 14, 1999 in which he stated the following:
Dear Madam:
I acknowledge herewith receipt of your letter dated October 7, 1999. You are absolutely correct in stating that Mr. McCurdy is not entitled to any portion of your pension after the date of separation or prior to your marriage. If you will read the draft Court Order which we provided to you, it specifies that you shall assign 38.78% of the pension accrued during the time of marriage, namely May 21, 1971 until June 1, 1995.
On the basis of your letter consenting to the assignment of your pension as hereinabove indicated, we shall obtain a Court Order and provide you with a copy thereof.
14Mr. Anders then applied for an order ex parte before Justice Binks. The order of Justice Binks stated the following:
THIS MOTION, made by the Respondent, was heard on the day of 26 October, 1999, at the Court House, 161 Elgin Street, Ottawa, Ontario K2P 2K1.
ON READING the Judgment given by the Honourable Mr. Justice G. Morin on the 1st day of May, 1997, and the letter of consent of the Petitioner dated October 7, 1999;
- THIS COURT ORDERS that paragraph 2 of the Judgment given by the Honourable Mr. Justice G. Morin on the 1st day of May, 1997 be and the same is hereby replaced by the following:
THIS COURT ORDERS AND ADJUDGES that the Petitioner Vivian Ellen McCurdy, shall assign 38.78 percent of the pension accrued during the time of marriage, namely May 21, 1971 until June 1, 1995, with the Teachers’ Pension Plan Board to the Respondent David Wayne McCurdy.
- THIS ORDER shall take effect as of the date of retirement of the Petitioner Vivian Ellen McCurdy (Young). (emphasis added)
15This order was then sent to the T.P.P. Mr. Anders sent a covering letter, which stated the following:
Pursuant to our various telephone conversations in relation to the above-mentioned matter, please be advised that we have now finally resolved this matter, hopefully to your satisfaction. We enclose herewith for your information a copy of a Court Order dated the 26th of October 1999 wherein:
“THIS COURT ORDERS AND ADJUDGES that the Petitioner Vivian Ellen McCurdy, shall assign 38.78 percent of the pension accrued during the time of marriage, namely May 21, 1971 until June 1, 1995, with the Teachers’ Pension Plan Board to the Respondent David Wayne McCurdy.”
As you will note from paragraph 2 of the Order, same takes effect as of the date of retirement of Vivian Ellen McCurdy (now known as Vivian Ellen Young).
It is my understanding that Ms. Young retired in July and that therefore, 38.78 percent of her pension entitlement attributable to the time of marriage as indicated in the Court Order should be paid to Mr. McCurdy. We would furthermore like to point out that there is no dollar value limitation and this Order will quite simply continue for so long as Ms. Young is entitled to receive her pension.
For your information, we enclose herewith a letter dated November 26, 1997 from Pension Valuators of Canada outlining the actuary’s calculations of Mr. McCurdy’s entitlement. November 26, 1997 from Pension Valuators of Canada outlining the actuary’s calculations of Mr. McCurdy’s entitlement.
The other matter of contention between the parties was what would happen should Mrs. McCurdy (now Young) die during this time period of her pension entitlement. We understand that Mrs. McCurdy (now Young) has a life insurance policy in the approximate amount of $75,000.00. We understand furthermore that Mr. McCurdy (her ex-husband) has been designated as the beneficiary of said life insurance policy and indeed, that he is making the payments due on said life insurance policy. Please be advised that Mrs. McCurdy (now Young) is not entitled to change the beneficiary of said insurance policy and we are therefore putting you herewith on notice that should she attempt to change, cancel, alter, or in any other way deal with said policy, Mr. McCurdy should be given notice so that the appropriate steps such as Court applications if necessary may be taken.
Should you have any further questions or comments regarding this matter, please do not hesitate to contact us.
16The Teachers’ Pension Plan made monthly payments to Mr. McCurdy from Ms. Young’s pension pursuant to the order of Justice Binks.
The Order of Justice Brennan dated September 2, 2006
17Ms. Young brought a motion that was heard before Justice Brennan on August 28, 2006. He denied the motion in Reasons dated September 2, 2006. She was represented on the motion and on the appeal before this Court by Mr. B. Delaney. She sought on the motion the following:
The assignment of 38.78% of Vivian Young’s pension (to the respondent David McCurdy) shall cease, effective immediately.
All monies received by the respondent over and above the amount of $60,000.00 shall be paid to the applicant forthwith within 60 days.
18In her affidavit sworn January 16, 2006 in support of the motion, she stated Mr. McCurdy had received by December 23, 2005 $60,740.98 from her pension. In her factum in support of the motion she stated that Mr. McCurdy had received by May 31, 2006 $64,977.06 from her pension. In oral submissions before us Mr. Delaney said that he had received over $70,000.00. These figures were not disputed by Mr. Anders for Mr. McCurdy.
19In denying the motion Justice Brennan stated in his Reasons the following:
The settlement embodied in the consent order of Morin J. reflected the intention of the parties that pension credits of a value of $60,000.00 should be transferred to Mr. McCurdy. Had that transfer been possible, he would have received as part of the equalization of net family property, a stream of income after Ms. Young’s retirement.
While it would have been prudent and preferable to obtain her consent in the form of consent Mr. Anders had provided for her signature. I decline to set aside Justice Binks’ order as having made without notice. In my view it carried into effect the intention of the parties, to settle the equalization of family property, in part, by assigning 38.78% of Ms. Young’s pension. That provision replaced the $60,000.00 worth of pension credits contemplated in the 1997 consent order.
Analysis
20Ms. Young consistently took the position that what she intended to transfer to Mr. McCurdy was the capital sum of $60,000.00 to satisfy the equalization payment. She sought to do this by transferring to him $60,000.00 in pension credits. The parties agreed to this and the term was used in the order of Justice Morin dated May 1, 1997 made on consent. Mr. McCurdy also understood that he was to receive a capital sum of $60,000.00. This is reflected in the letter of Mr. Anders to Ms. Young dated October 4, 1999. Mr. Anders states on behalf of his client that, “your ex-husband is still prepared to accept the sum of $60,000.00 plus applicable interest in cash as of the present time.”
21Ms. Young has a Teachers’ Pension. It did not contain pension credits. The order of Justice Binks dated October 26, 1996, which assigned 38.78% of her pension during the time of the marriage between May 21, 1971 and June 1, 1995 to Mr. McCurdy without a limit of $60,000.00 was made without notice to Ms. Young. Her letters to Mr. Anders dated October 1, 1999 and October 7, 1999 read together make it clear that if she had been given notice of the motion before Justice Binks that she would have consented to it only with the qualification that the payments from her pension to Mr. McCurdy would be made only until the limit of $60,000.00 was reached. The preamble to the order of Justice Binks refers to “the letter of consent of the petitioner dated October 7, 1999”. This is not a letter of consent to the order at all. This letter can only be understood with Ms. Young’s letter of October 1, 1999 to Mr. Anders in which she states that the order must state that the payments cease when “the $60,000.00 is reached”. Justice Brennan’s finding that the parties intended to transfer a stream of income beyond $60,000.00 from Ms. Young’s pension to Mr. McCurdy is unsupported by the evidence.
Result
22The order of Justice Brennan dated September 2, 2006 is quashed. The order of Justice Binks dated October 26, 1999 is set aside. Mr. McCurdy has been paid an amount from Ms. Young’s pension well in excess of $60,000.00. No further payment should be made.
23Counsel for Ms. Young shall make written submissions on costs within 15 days of the receipt of this judgment and counsel for Mr. McCurdy shall respond within 15 days of receipt of Ms. Young’s submissions.
Hambly J.
Leitch R.S.J.
Lane J.
Released: 2007/04/12
COURT FILE NO.: 06-DV-1254
DATE: 2007/04/12
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
VIVIAN YOUNG
Applicant (Appellant)
- and –
DAVID MCCURDY
Respondent (Respondent)
REASONS FOR DECISION
Hambly J.
Leitch R.S.J.
Lane J.
Released: 2007/04/12