Court File and Parties
Court File No.: 76-2015 Date: 2016/04/20 Ontario Superior Court of Justice
Between: Lexy Lynn Langlois, also known as Lexy Lynn Le Capelain, Applicant – and – Glenn Le Capelain, Respondent
Counsel: James W. Jeffcott, for the Applicant Self-Represented, for the Respondent
Heard: March 18, 2016 (at L’Orignal)
Reasons for Judgment
Kane J.
[1] This application proceeded today as an uncontested trial pursuant to the order of this court dated September 10, 2015.
[2] The respondent was not in attendance today and failed to comply with paras 2, 3 and 9 of the order dated September 10, 2015.
General Background
[3] The applicant is currently 39 years old. The respondent is 43 years old.
[4] The parties lived together commencing in July 2002. They married one another on June 17, 2006 and separated on February 11, 2013. The respondent moved out of the matrimonial home June 13, 2013, which the applicant and the two daughters continued to occupy until its sale in August 2015.
[5] The two daughters of the parties are currently 8 and 5 years of age and have continued to live with the applicant within this judicial district since separation of the parties.
[6] The respondent moved to the Windsor area in September 2014.
[7] The children since separation of their parents have never lived 40% of the time with their father.
[8] This application was issued in April 2015 and contains a claim for past and ongoing child support including contribution towards s. 7 expenses.
Relief Granted at Trial
[9] The court granted the applicant the relief upon conclusion of this trial as contained in its endorsement dated March 18, 2016, and including:
(a) A Decree of Divorce to be issued upon filing of requisite documentation as required by the Registrar;
(b) An order amending this style of cause identifying the applicant as Lexy Lynn Langlois, also known as Lexy Lynn Le Capelain;
(c) Sole custody of the two children to the applicant;
(d) Reasonable access to the respondent;
(e) That child support be enforced by the Director of the Family Responsibility Office [“FRO”] and to include a support deduction order; and
(f) That the Registrar complete paragraph 12 as to the insertion of the rate of post-judgment interest or re-issue the order of this court dated September 10, 2015, including such interest rate.
Application Amendment
[10] The court grants the request of the applicant to amend the Application by adding her claim for an unequal division of net family property.
Annual Exchange of Income Tax Returns and Notices of Assessment
[11] By June 1 of each year during which child support is payable and commencing June 1, 2016, the applicant and respondent shall give one another a copy of their previous years’ income tax return including enclosures and their Notice of Assessment. On June 1, 2016, this requirement includes that documentation for the years 2015 and 2014.
Income of the Parties as to Child Support
[12] The annual line 150 income of the parties since separation on the evidence is as follows:
APPLICANT 2012 - $126,818 2013 - $108,830 2014 - $92,290 2015 - $96,000 (exhibit 1, tab 1)
RESPONDENT 2012 - $38,777 2013 - $47,726 2014 - $53,729
[13] Given the respondent’s failure to file further financial information as ordered including current financial information, the court as to his income will use his declared 2014 declared line 150 income of $53,729 from and after January 1, 2014.
[14] The respondent accordingly was and is required to pay the applicant monthly child support for these two children as follows:
(a) 2013 - $698; (b) 2014 - $798; (c) 2015 - $798; and (d) 2016 and ongoing until further order - $798.
[15] Ongoing monthly child support is payable on the first day of each month in the amount of $798.
Arrears of Child Support
[16] Based on the allegations in paras 4 and 16 of the applicant’s trial affidavit, the respondent’s obligation to pay such support commenced July 1, 2013. The accumulated liability using $698 and $798 respectively from July 1, 2013 to and including March 31, 2016 is $26,532.
[17] The respondent was ordered to pay interim monthly child support of $773 by order dated July 21, 2015, which was then increased to $798 by order dated September 10, 2015.
[18] To be deducted from the above liability is the child support paid by the respondent.
[19] The respondent paid monthly child support:
(a) of $490 between September 1, 2014 until the end of February 2015, totalling $2,940; (b) of $773 in July and August 2015 and $798 in September to December 2015;
making a combined credit of $7,678.
[20] The applicant states in her affidavit that the Director of FRO is enforcing payment of child support against the respondent.
[21] The unpaid arrears of child support owing hereby awarded to March 31, 2016, are $18,854, less any other payments collected in the interim by FRO beyond those recorded above.
[22] The above arrears of child support are to be paid by June 1, 2016.
Extraordinary Expenses
[23] Applicant’s counsel states the applicant’s annual income in 2015 has decreased from $96,000 in 2015 to $88,000 currently. Exhibit 1, tab 4 however indicates current accumulated 2016 income of $29,248 to March 16, 2016. That rate per week since January 1 results in a projected 2016 annual income of $96,190 with no decrease from 2015. That is the income level I will use for proportionate share of s. 7 expenses. This is corroborated as the applicant states the parties’ proportionate shares for s. 7 expenses in 2015 and 2016 are 64% and 36% which I accept and which will continue to apply until production of the next prior year’s Notices of Assessment and any adjustment if required thereto.
[24] The applicant has proven the s. 7 expenses claimed for 2015 and to date in 2016 for day care, dance, swimming plus reimbursement of a dental insurance refund improperly retained by the respondent.
[25] The respondent according to paras. 30 and 31 of his affidavit owes the applicant arrears of his share of s. 7 expenses and is hereby ordered to pay such to her in the amount of:
(a) $505 for 2015; and (b) $546 to date for 2016;
being a total of $1,051, which is payable no later than June 1, 2016.
[26] The respondent commencing April 1, 2016 in addition shall pay the applicant $98 per month towards his share of ongoing and anticipated s. 7 expenses which shall be accounted for by the applicant to the respondent by January 31st of each year commencing January 31, 2017.
Equalization of Property
[27] The respondent’s failure to file a Financial Statement has negatively impacted the financial analysis of this couple which includes significant past joint debts which the respondent has and is avoiding. The level of those debts, the respondent’s avoidance of contribution towards those debts and his failure to pay child support have led the applicant to file a proposal to creditors under the Bankruptcy Act, the status of which currently remains undecided.
[28] The evidence establishes that the applicant to a great extent has been left to pay and deal with joint creditors of the parties during the past two to three years on her own.
[29] The applicant’s statement calculates she owes the respondent an equalization payment of $32,977, largely as a result of her pension including the notional tax attributable to that.
[30] The applicant’s Net Family Property Statement is impaired by the respondent’s failure to disclose and file such a statement.
[31] The applicant paid all carrying costs since separation of the former matrimonial home and the net costs of the St. Joachim investment property as well as payments to joint creditors for things like joint lines of credit and credit cards, other than the respondent’s $180 monthly payments towards such joint debts for the months between September 2014 and January 2015.
[32] Pursuant to s. 5(6)(a)(f)(h) and s. 5(7), it would be improper to reward the respondent for this conduct in awarding an equal division of net family property: Ahern v. Ahern, 2007 ONSC 37672, paras 19-20; and Li v. Zhao, 2012 ONSC 2121, paras 32-35.
[33] I accordingly make an adjustment to the net family property calculations of the applicant. The net family property of the parties is adjusted to be equal. Neither party shall be required to pay any property equalization to the other.
St. Joachim Property
[34] The evidence of the applicant is that this investment property is owned by the parties as joint tenants. It was rented in the past but is no longer. It is subject to a mortgage which rental of the property was paying until it recently became vacant.
[35] The opinion letter as to value of the St. Joachim property indicates the net equity upon sale of this property will be small. RBC holds an execution registered against this property and exercisable upon sale for the RBC joint line of credit and judgment thereof against both parties in the amount of $44,455 and the two judgments against the respondent only, totalling $12,961 plus interest thereon of 19.9% and 22%.
[36] The parties signed an agreement on February 20, 2014, pursuant to which the respondent agreed to:
(a) Transfer title of his interest therein to the applicant; (b) Each were to pay one-half or $22,549 of the then total joint liability they owed on the RBC line of credit, Scotia line of credit, RBC Visa and their joint account at Home Depot and totalling $45,098; and (c) For the transfer of his interest in the property, the applicant agreed to be responsible for $12,993 of the respondent’s share of the above total joint debt, with the respondent to pay the balance of his share thereof to such creditors, namely $9,556, which he has failed to do.
[37] Transfer of his title to the applicant was to but never took place. Presumably with its execution against both parties for their joint and his independent debt, RBC will not lift that execution upon sale until payment of its full judgment, including the separate judgments against the respondent in paragraphs 2 and 3. That will effectively defeat the parties’ agreement of February 20, 2014.
[38] This property is to be listed for sale immediately with a registered real estate agent. The applicant as between the parties has exclusive authority to:
(a) Select the real estate agent; (b) Execute the listing agreement which shall be in the amount of $179,900; (c) Negotiate and accept any written offers of purchase; (d) Retain and instruct a solicitor on the sale of this property; and (e) Execute any documents to sell and transfer full title of the property to a purchaser, including the respondent’s interest therein.
[39] The net proceeds of sale, after payment of encumbrances, executions, adjustments, the costs of sale including real estate and legal fees shall belong to and are to be paid to the applicant only in light of their above agreement and the respondent’s breach of that agreement.
Joint Debts
[40] The applicant seeks judgment for payments she has made to their joint debts since separation totalling $59,574 after crediting the respondent $900 he paid towards such joint debts.
[41] The nature and amount of the debts for which the applicant seeks judgment are:
(a) $7,567 for mortgage payments she paid on the matrimonial home; (b) $3,835 for municipal taxes she paid for the matrimonial home; (c) $8,007 for mortgage payments she paid on the St. Joachim property; (d) $6,429 for municipal taxes she paid on the St. Joachim property; (e) $12,966 for debts of the respondent assumed by the applicant; (f) $15,805 for joint debts paid by the applicant on behalf of the respondent; (g) $8,900 for the remainder of the car loan which the applicant has assumed; (h) $7,841 for car payments paid by the applicant on behalf of the respondent; and (i) $2,090 being one-half of the respondent’s tax refund which by agreement was to be applied against joint debts just as the applicant applied her refund that year to such joint debts.
[42] As can be seen, the amount sought includes payments already made by the applicant, payments she as a debtor is jointly liable for and the respondent’s past failure to apply an income tax refund towards their joint debts as agreed to and as done by the applicant.
[43] This claim raises several issues.
[44] The court decreased to zero the applicant’s calculation of her obligation to pay the respondent an equalization payment of $32,977 for reasons including her assumption of payment of joint debts since separation to the benefit and credit of the respondent beyond his $900 contribution. The court cannot use the applicant’s payment of joint debts to the credit of the respondent in order to reduce her net family equalization obligation and then grant her judgment for the same debt payments she made which justified the elimination of her equalization obligation.
[45] The applicant had exclusive possession of the matrimonial home from June 2014 until the sale of that property in July 2015. Due to the absence of a defence, there is no cross claim in the form of an occupancy credit to the respondent regarding the mortgage and tax costs claimed against him. It is appropriate to consider the likely entitlement to such a credit in determining the costs claimed in relation to that property. I am unable however to quantify that credit as there is no evidence thereon.
[46] The lawyer’s trust statement regarding the matrimonial home sale indicates payment of the then outstanding municipal taxes in the amount of $7,625 prior to the equal division of the net proceeds of sale. That represents some two years, or 2013 and 2014 taxes based on the taxes to July 31, 2015. A full year of taxes therefore were some $3,878. Prior years’ tax arrears were paid from the proceeds of sale and therefore paid equally by each party. That defeats the $3,835 claim for past unpaid taxes for this property.
[47] The applicant in her affidavit states the rental income on the St. Joachim property paid all expenses in relation thereto until it recently no longer had a tenant. That undermines her claim for payment of past mortgage payments and municipal taxes paid.
[48] The applicant’s BIA proposal to creditors is not in evidence. It is understood that all or some of the joint debts remaining now are included in that proposal. An email from the Trustee indicates the proposal is to seven creditors and quantifies the debt owing to them totals $72,543, plus an unspecified shortfall in the case of Scotia Dealer Advantage car shortfall. The proposal to creditors if accepted will reduce these listed unsecured debts to $31,200 payable over time being a 57% reduction, excluding any reduction in the car shortfall. The financial benefit of a successful proposal if accepted is not factored into the amounts claimed against the respondent.
[49] The proposal email lists current indebtedness to RBC at $31,000. The indebtedness owed jointly by the parties to RBC at the time of separation on a line of credit was $30,000 and some $5,400 on a RBC Visa account. RBC now holds a judgment for the full amount of its line of credit against both parties. RBC is showed as being owed $31,000 in the proposal email at tab 37 of exhibit 1 which I understand to be the joint line of credit which if accepted as part of the proposal will be reduced by at least 57%.
[50] The court is asked to award judgment to the applicant without knowing whether the proposal will be accepted, and if not accepted, whether the applicant upon bankruptcy will be fully relieved of those debts.
[51] The car loan includes loans to buy two cars prior to separation. One of those vehicles was sold or traded in. The remaining vehicle on the car loan was used by the applicant post separation. She then traded the Buick to purchase her present vehicle in March 2015. The respondent apparently separately purchased another vehicle post separation for his own use which is not part of the car loan.
[52] The above joint TD car loan balance in June 2013 was some $41,000. The applicant made monthly payments thereafter of some $441 but retained and used the remaining of the two vehicles. She paid off this loan by financing her purchase of a new car in March 2015 which she states includes $17,800, being the then car loan balance of which she seeks one-half or $8,900. The point is she then received the trade in value of this vehicle which should be factored into her claim as to one-half of this loan balance.
[53] The actual trade in value received for the Buick is not disclosed. One-half of the average black book value evidence at tab 18 of exhibit 1 is $13,225 which exceeds the amount of this claim. This is not a valid claim.
[54] There are other difficulties with the documentation in exhibit 1 in considering some of the claims made.
[55] There were 44 car loan payments between June 12, 2013 and February 18, 2015 according to tab 30. One-half thereof totals $9,718 and not the $7,841 claimed.
[56] The interest calculations at tab 39 for RBC Visa, BMO Mastercard, Home Depot, and Scotia line of credit, calculates interest on the full principal owing since February 11, 2013 to date and totalling some $51,609 combined. Logically, the applicant is jointly liable and should only be claiming one-half thereof.
[57] BMO Mastercard balance as per exhibit 3 as of February 10, 2013 was $13,892, not the $33,892 stated in exhibit 1, tab 39, upon which interest was calculated.
[58] The applicant is not entitled to judgment against the respondent for the $9,556 he failed to pay against their joint debts as agreed in February 2014. That liability owed the applicant plus interest is consideration for transfer to the applicant of the respondent’s interest in the St. Joachim property to her.
Valid Claims
[59] RBC via execution effectively can collect interest from the applicant for paragraphs 2 and 3 of its judgment which the respondent alone is responsible for as between the parties. The applicant should be entitled to judgment against the respondent for the combined $13,734 principal and interest owed to RBC pursuant to paragraphs 2 and 3 of its judgment against the respondent.
[60] The applicant should be entitled to judgment for the respondent’s failure to apply his 2012 tax refund as promised against their joint debts in the amount of $4,179.
[61] Judgment against the respondent for his share of these past joint liabilities paid for him by the applicant is hereby granted in the amount of $22,355, plus post judgment interest thereon.
[62] The remainder of the applicant’s claim as to joint debts is dismissed for the reasons above indicated.
Costs
[63] The applicant is awarded costs of this proceeding based on the factors in R 57.01(1) in the amount of $16,000, including HST and disbursements payable forthwith.
[64] There should not be full indemnity as claimed given the level of success.
Kane J.
Released: April 20, 2016
ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Lexy Lynn Langlois, also known as Lexy Lynn Le Capelain, Applicant – and – Glenn Le Capelain, Respondent
REASONS FOR JUDGMENT Kane J.