Court File and Parties
COURT FILE NO.: 272/16 DATE: 20190304
ONTARIO
SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
Patricia Marie Zacher Applicant
Mark A. Shields, for the Applicant
- and -
Robert Gerald Zacher -and- Nichola Nadene Zacher Respondents
William R. Clayton, for the Respondents
HEARD: October 22, 29, 30, November 1 and December 3, 2018
GARSON J.
Introduction
[1] This is a sad case. Patricia Zacher and Robert Zacher are both in their eighties. Robert is in the early stages of dementia. Nichola is their dependent adult daughter. An otherwise prosperous and successful union has unwound.
[2] Although in agreement on the amount of equalization, the parties disagree on three main issues:
(i) ownership of 14 Steeplechase, St. Thomas, Ontario; (ii) divisibility of Robert’s in-pay CN pension; and (iii) spousal support for Patricia.
[3] These reasons explain why I conclude that:
(i) 14 Steeplechase is both legally and beneficially owned by Nichola; (ii) Patricia is not entitled to division at source of the in-pay CN pension of Robert; and (iii) Patricia’s interim spousal support order shall end December 31, 2019.
[4] Much of the evidence is not disputed so I need not review it in great detail.
Background
The parties
[5] Patricia and Robert were both born in 1936 and are both 82 years old. They met in 1957, began cohabitating in 1958 and were married on January 22, 1960.
[6] There are two children of the marriage, Steven, born in 1958, and Nichola, born in 1969. The applicant also has a daughter, Sandy, from a previous marriage, born in 1955.
[7] Robert spent his career working for CN as a Brakeman. This work required him to often travel out of town and the family moved regularly as a result of opportunities through his career to make more money.
[8] As best the applicant could recall, the family resided in the following cities during the course of Robert’s career at CN and after his retirement:
(i) 1957-1968 – St. Thomas, Ontario (ii) 1968-1984 – Kitchener, Ontario (iii) 1984-1990 – Windsor, Ontario (iv) 1990-1995 – Calgary, Alberta (v) 1995-present – St. Thomas and other parts of Ontario
[9] Patricia, who was working at the time she met Robert, held a series of primarily part-time jobs while they moved towns. She would often quit her job to either stay home with the children or to accommodate another move by Robert.
[10] Patricia and Robert were both resourceful and entrepreneurial. Throughout their travels, they bought and sold a series of homes that they would fix-up, renovate and re-sell for a tidy profit. Robert was the handyman and Patricia, the designer/decorator and sometimes realtor. By all accounts, this side business was very successful and allowed them to enjoy vacation properties in the U.S. and a very comfortable way of life.
[11] Sadly, Nichola was born with a fused skull which required surgery in London, which according to Patricia, did not go well. Complications from the surgery have led to both learning and independent living challenges for Nichola who attended special classes throughout her education to assist her with these learning challenges.
[12] Other than a short period of time when Nichola lived with and worked for Sandra and attended night classes for ECE, Nichola has always lived with her parents.
[13] When Robert retired from CN in 1990, the family moved to Calgary to be closer to their son Steven, who works as a realtor. Patricia and Robert continued to buy and sell properties in Calgary and also began buying and selling vacation properties in Florida.
[14] Not surprisingly, Patricia and Robert found Calgary weather pretty cold and returned to Oakville in 1995 before acquiring a property in Port Dover. They sold the Port Dover property in March 2003, and acquired 14 Steeplechase in St. Thomas where Robert and Nichola currently reside.
The purchase and sale of the Port Dover property
[15] The parties agree that the monies used to acquire, maintain and dispose of the Port Dover property came solely from Patricia and Robert.
[16] Patricia and Robert also agree that they put the Port Dover property in Nichola’s name, partly because of tax purposes related to avoiding probate fees and partly, because as a first time home buyer, she would be entitled to a GST rebate.
[17] Patricia testified that Nichola did not know that the Port Dover property was in her name until an issue arose at Town Council who advised Patricia they would only deal with the owner of the property and she accordingly told Nichola at that time that she was the owner of the property.
[18] Nichola recalled things differently. She testified that she became aware of her ownership of the Port Dover property right after her parents bought the home.
[19] When the Port Dover property was sold, Patricia and Robert received all of the proceeds from the sale. None were shared with Nichola. In order to facilitate the sale, Nichola, who was in Florida with Robert at the time of the sale, executed a limited Power of Attorney authorizing Patricia to sell the property.
The purchase of 14 Steeplechase
[20] Patricia submitted an offer for 14 Steeplechase in her name. However, when it came time to transfer title to this property, the transfer deed once again showed Nichola as the owner of this property.
[21] Patricia testified that Nichola was again unaware that her parents had put this property in her name. Patricia believed Nichola became aware of this when Robert was being pressed by his son Steven to create a will and advised Nichola at that time that this property was in her name. Patricia testified that Nichola always knew she would never own this property.
[22] Nichola recalled things differently. She testified that she became aware of her ownership of 14 Steeplechase right after her parents bought the home. She testified that her mother wanted her to put the property back into her parents’ names but that she would not do so behind her father’s back. When she discussed this with her father, he told her not to do it.
[23] Nichola was well aware that the proceeds from the Port Dover property would be going towards 14 Steeplechase because of discussions she had with her parents at that time.
The beginning of the end
[24] Somewhere around 2010, Patricia and Robert acquired a property in Arizona to be closer to their son Steven, who had a winter property in Palm Springs, and Sandy, who had a winter property in Arizona.
[25] The family Christmas gathering did not go well that year. The relationship between Patricia and Nichola began to sour. Patricia testified that Nichola was mean to Patricia’s sister, and was always undermining her and lying.
[26] Sometime in 2012, the Arizona property was sold and after a short stint in Windsor and then St. Thomas, Patricia moved to Oakville where her daughter Sandy lived. A Port Stanley cottage was also sold around the same time and another Florida property was acquired by Patricia.
[27] Patricia remained in Oakville through to 2015 when she agreed to move back to 14 Steeplechase to help plan and put on a wedding for Nichola, which ultimately did not take place.
[28] Around the time that Patricia returned to 14 Steeplechase, Robert’s memory was beginning to fade and he was having trouble with his emotions. According to Patricia, an always generous and kind Robert was becoming anxious, mean and easily frustrated and agitated.
[29] Matters took a drastic and devastating turn for the worse when Robert, who loved to drive, had his licence taken away by the family doctor. He blamed Patricia and told her to leave the home. She did so on July 12, 2016.
[30] Patricia returned on the Labour Day weekend that same year with Sandy to get some of her belongings. She testified that during this visit Nichola was told she could bring an end to all of the problems by turning over 14 Steeplechase to her parents and Nichola responded again that she would only do so if her father told her to. He did not.
[31] Things deteriorated further and Robert became agitated when Patricia went to leave the property with a couple of lawn chairs. Sadly, Patricia later wound up in hospital suffering from a heart attack. A second heart attack followed in May 2018.
The parties’ comparative incomes and capital
Patricia
[32] Patricia’s 2017 gross income was $44,154.57. She now lives in a retirement home in Bronte Village known as Amica, with her daughter Sandy (for part of the year). She pays $4,297 per month for her room, three meals a day and cleaning. She estimates her monthly expenses at just over $6,000 per month.
[33] From 2013 to 2017, her income went up each year. As of September 26, 2018, the value of her investments or capital was $820,819.37.
[34] She testified to concerns about her future sources of income since interest rates remain low and she intends to stay at Amica, which may well cost more money as her health declines over time and she requires more services and support.
Robert
[35] Robert’s 2017 line 150 income was $73,430.43 of which $49,722.78 came from his CN pension.
[36] His income from 2013 to 2016 is as follows:
2013 - $68,335.92 ($48,538.13 from pension) 2014 - $67,427.66 ($49,126.92 from pension) 2015 - $71,075.26 ($49,980.65 from pension) 2016 - $70,796.19 ($48,332.00 from pension)
[37] The current value of his investments or capital is $445,539.14 as of October 17, 2018.
Nichola’s testimony
[38] Nichola is 49. She is currently on a leave of absence from her part-time job as an ECE supply teacher. Save and accept a brief stint living with Sandy, she has never lived apart from at least one of her parents. Her wages when working are approximately $14 per hour or minimum wage.
[39] The purpose of her leave of absence is to provide more care and assistance to her father such as cooking, cleaning and taking him to errands and appointments.
[40] She readily accepts that almost all of the money she has comes from her parents.
[41] The last time she spoke with Sandra was her father’s 80th birthday party. She also has not spoken with her mother for two years. She is very close with her father.
[42] She applied for disability benefits after being pressured to do so by her mother and especially by her brother Steven. Her application was denied.
[43] She described her life as always being sheltered, supported and protected by her parents. She has never gone against either of them.
[44] All of her current expenses are paid for by her father although she testified both her parents put money into her accounts. She described her father as always being fair with her.
[45] She agreed that she did not put any money towards either of the two properties that were put in her name but noted that she was not asked to do so. She paid no expenses at either of the properties.
[46] She insisted that the two properties were put in her name for her security and that her father always told her this. She has always known that her mother also cares for her security. She testified that her mother had open discussions with the family where she acknowledged that 14 Steeplechase was Nichola’s and this was not a secret. She believed that her mother wanted her share of the estate to go to Sandy and for Sandy to manage it for Nichola.
[47] She acknowledged that if something were to happen to her father, she would have difficulty maintaining 14 Steeplechase and would likely have to sell the property and use the proceeds for her security. She was never expected by her parents to maintain 14 Steeplechase on her own.
[48] She agreed that she has been very well taken care of and provided for by her parents throughout her life.
[49] I now turn to my assessment of the credibility of the parties which instructs my findings of fact.
Discussion
Credibility findings
Patricia Zacher
[50] Patricia came across as a respectful, polite and personable witness. However, there were a number of areas of her testimony that caused me concern.
[51] Her anger and displeasure towards Nichola was palpable. After describing a child who endured a very difficult struggle in her early years and had significant challenges moving forward, she readily referred to Nichola after the Arizona incident as a liar and someone who was always undermining her and constantly talking behind her back. It defies common sense to understand why she would leave an otherwise happy and peaceful existence in Oakville, to return to St. Thomas to put on a wedding for a daughter she both disliked and distrusted.
[52] She bought and sold at least twenty-five properties, all for profit over her life, yet suggested she had little understanding of the potential implications of putting Nichola’s name solely on title to a property. She was not an unsophisticated buyer or seller of real estate.
[53] She repeatedly referred to a number of clear understandings within the members of the family, including that 14 Steeplechase would be sold and not form part of the estate, yet called no other evidence from other family members and more specifically, Steven and Sandra, to support this clear understanding.
[54] She appeared frustrated that when the parties were in Florida on one occasion (without Nichola), Nichola called her father every night and he eventually returned home and brought Nichola back to Florida. Yet she also testified that Nichola had never lived alone and had never been independent. In her view, Nichola did not need to be dependent but simply wanted to be so.
[55] She repeatedly referred to the fact that both Steven and Sandra told her they would look after and take care of Nichola, but they would have to handle her finances. In her words, “they would make sure she is not on the street”. She suggested that Sandra and Steven are very good to Nichola, even though she felt Nichola resented Steven.
[56] She testified that she has no one to take care of her. Yet, she then went on to speak about how generous both Steven and Sandra are to her and how much Sandra does for her. In fact, part of the year, Sandra lives with her.
[57] She believed that her capital should be increasing, not decreasing or being encroached upon as she ages.
[58] She was adamant that Nichola did not provide any care for her father and criticized the cleanliness and state of 14 Steeplechase. Yet she insisted that Nichola could easily look after herself if she makes her mind up to do so.
[59] She made clear that both Steven and Sandra have done very well financially and have been very generous to her and that neither needs any help. Only Nichola needs financial help in the future.
[60] I find her evidence to be internally inconsistent and inconsistent with the evidence of Nichola. I reject much of her testimony specifically as it relates to:
(i) any conversations and the timing of those conversations with Nichola about placing Nichola on the deed for the two properties; (ii) her description about the good relationship enjoyed between Nichola and Steven and Nichola and Sandra; and (iii) her intentions at the time she placed the two properties in Nichola’s name.
[61] As I will set it in more detail when I speak to Nichola’s credibility, I reject Patricia’s evidence where it contradicts or conflicts with that of Nichola on a number of key issues. I now turn to Nichola’s credibility.
Nichola
[62] I found Nichola to be a credible and trustworthy witness. She was straight-forward, sincere, responsive, and ready to admit when she was mistaken or confused. An overall impressive witness.
[63] More specifically, I accept her evidence on the following key issues:
(i) that she did apply for, and was turned down for ODSP after being aggressively urged to do so by both Steven and Patricia; (ii) that she never received a transfer of money from her father in the sum of $220,000; (iii) that she became aware of the ownership of the two properties right after her parents acquired them; (iv) that her mother asked her to transfer 14 Steeplechase back to the parties without telling her father and that Nichola refused to do so behind his back; (v) that she does not get along with either Steven or Sandra at the present time and has not spoken with her mother for two years; and (vi) that she currently makes meals for and drives her father around town to various appointments and activities.
Robert Zacher
[64] Robert presented as a pleasant yet confused witness. At times, his evidence was focused yet at other times he appeared scattered and difficult to comprehend.
[65] Much of his examination-in-chief was done by way of leading questions and counsel for the applicant acted with immense respect and restraint in light of Robert’s obvious mental impairments.
[66] In short, beyond accepting that he has unconditional love and concern for the well-being of Nichola, it would be unsafe to place much weight on any of Robert’s testimony.
[67] I now turn to the three issues to be decided.
(i) Ownership of 14 Steeplechase
Positions of the parties
[68] Patricia argues that the gratuitous transfer of 14 Steeplechase to Nichola triggers the presumption of a resulting trust that Nichola has failed to rebut. She relies on the fact that:
(i) Nichola contributed nothing to acquire or maintain the property; (ii) The transfer was done to avoid probate fees and GST which she submits does not alone invalidate or rebut the presumption; and (iii) Nichola was prepared to transfer the property with her father’s support on the understanding that Steven and Sandra would manage the property and the monies resulting from any sale for the benefit of Nichola.
[69] The respondents counter that the focus needs to be on the intent of the transferors, at the time of the actual transfer and not at some later date when circumstances have changed and the applicant finds herself separated from Robert and spiteful towards Nichola.
[70] The respondents further suggests that Nichola would have to be both the legal and beneficial owner of 14 Steeplechase to give effect to the stated intent of avoiding probate fees or saving the GST.
[71] They argue that the fact that the parents paid and pay for all expenses relating to the acquisition and maintenance of 14 Steeplechase is not relevant to the actual intent of Patricia and Robert at the time of the transfer.
The Law
[72] The starting point for my analysis is that the gratuitous transfer of title to Nichola by her parents triggers the presumption of a resulting trust. In other words, the law presumes that the legal owner holds the property in trust for the beneficial owners who paid for it. The onus rests with Nichola, (the transferee), to demonstrate on a balance of probabilities that her parents (the transferors) intended to gift her the property. What is critical is the intention of Patricia and Robert at the time of the transfer: see Pecore v. Pecore, 2007 SCC 17 at paras. 24-25; and Holtby v. Draper, 2017 ONCA 932 at para. 32.
[73] Essentially, I must look to the substance of the transfer and determine whether the parents intended to gift their daughter Nichola the property or intended to have her hold it for them in trust and retain beneficial ownership.
Discussion
[74] I note that 14 Steeplechase was the second property placed in Nichola’s name. Her parents were seasoned, experienced and sophisticated buyers and sellers of real estate. They knew what they were doing. No conditions or restrictions were imposed upon Nichola as a result of her parents contributing the full purchase price of 14 Steeplechase.
[75] Having made my earlier findings of credibility and more specifically having rejected the applicant’s explanation for when and how Nichola came to learn that these two properties were in her name. I have little difficulty finding that the intent of Patricia and Robert in putting 14 Steeplechase in Nichola’s name was to gift her the property as opposed to have her hold 14 Steeplechase in trust for their benefit.
[76] I find that events post-Arizona caused the applicant to see Nichola in a different light and led to a sense of post-transfer regret. Negative feelings intensified when the disability application failed. In my view, this amounts to a self-serving change of heart by Patricia for no other reason than the passage of time and the beginning of an adverse and hostile relationship with Nichola.
[77] In 2003, the parties were both 67 and clearly contemplating the issue of care for Nichola after their demise. It makes eminent sense that they would want to provide for her care in the future in a manner that is more generous and different from that of either Steven or Sandy, who have been fortunate to be independent of their parents for many years.
[78] I reject the suggestion that Sandra and Steven would manage the monies from the sale of 14 Steeplechase for Nichola’s benefit. She currently does not get along with either of them and has not spoken with either of them lately. This makes no sense.
[79] Nichola’s lack of involvement in the purchase of the property does not negate the intent of the parents. In fact, given her limitations and her parents’ expertise of acquiring real estate, it is little wonder that they chose not to involve her directly in the acquisition.
[80] The fact that Nichola was prepared to transfer the property back into her parents’ name if her father supported the idea does not change the intent of the transferors at the time of the transfer. Rather, it speaks to a young woman desperate to avoid alienation and conflict and eager to please her parents, especially her father.
[81] The applicant relies on Schwartz v. Schwartz, 2012 ONCA 239 where a jointly held property was transferred to one spouse and found not to be a gift but to be held in trust for the benefit of both spouses. At para. 47 of that decision, the Court of Appeal determined that it was untenable that a person of few assets who had made a significant contribution to the property would entirely divest herself of such an interest in the property.
[82] On the facts before me, I have a person with significant assets, a dependent and challenged daughter, an unexpected late in life separation and a change of heart as to how she wants to have Nichola cared for going forward. There is a clear distinction between cases involving two spouses and cases involving parents and dependent adult children with special needs. These facts are readily distinguishable from the facts in Schwartz.
[83] The applicant also relies on the case of Lazier v. MacKay, 2012 ONSC 3812 where legal title to a home and to Lazier’s parents’ farm was transferred from the Lazier’s family alone into the joint names of both Lazier and MacKay at MacKay’s request. Despite assuming a mortgage and making significant contributions to the farm operation, equipment and home, MacKay was unable to overcome the presumption of a resulting trust.
[84] However, unlike the facts in the Lazier case, Nichola did not request or ask her parents to transfer either property into her name. Further, I find a clear, understandable and compelling reason and intention for such an outright transfer of beneficial and legal ownership – namely the need to help out the one child who has always and will always struggle financially. There is no evidence before me of any intent to clearly impose any restrictions or conditions of Nichola’s ownership of 14 Steeplechase.
[85] After weighing all of the evidence, I find that Nichola has demonstrated to me, on a balance of probabilities, that her parents’ actual intent at the time of the transfer of 14 Steeplechase was to gift the property to her to ensure her financial well-being going forward.
[86] As clearly contemplated by the Supreme Court of Canada at para. 37 of Pecore, I am entitled to consider the evidence relating to the “quality of the relationship” between the transferors and the transferee to determine if the presumption of a resulting trust has been rebutted.
[87] The fact that GST savings would arise on the Port Dover property being put in her name is secondary to her parents concern for her financial well-being and the need for her to have both legal and beneficial ownership of 14 Steeplechase. In any event, the applicants wish to avoid probate fees does not assist in a finding of a resulting trust but instead contradicts such a finding: see Holtby v. Draper, 2017 ONCA 932 at para. 69. In other words, the stated intent to avoid paying these fees supports the finding of an implied intent by the parents to deprive themselves of beneficial ownership of the property in favour of a gift to their daughter.
[88] I must only consider the intent at the time of the transfer. Subsequent actions and intentions are only relevant to the extent they go to intent at the time of the transfer. The fact that Patricia and Robert have always and continue to always pay all expenses related to 14 Steeplechase is of no consequence. It does not alter their intent to gift the property. It makes sense in these circumstances that they would want to continue to be responsible for all expenses associated with the property.
[89] I am convinced that but for the separation of Patricia and Robert, this matter would not have arisen. Instead, the applicant now regrets her earlier decision to convey legal ownership to Nichola and is trying to undo her earlier transfer.
[90] Why would the applicant, Sandra and Steven pressure Nichola to convey the property back to her parents if she were holding the property in trust for them? The applicant wanted Sandra and Steven to control the property and wanted Nichola on ODSP and was determined to apply pressure on Nichola to pursue both of these outcomes. Regrettably for the applicant, ODSP was denied. I have little hesitation concluding that the parties intended at the time of the transfer to have Nichola own 14 Steeplechase in the event of their demise and to maintain the property and be responsible for the expenses until then.
(ii) and (iii) Divisibility of the respondent’s pension and spousal support
[91] As these matters are admittedly linked and related, I will address them jointly. Simply put, the issue is whether or not Patricia is entitled to further encroach upon Robert’s in-pay CN pension or to have it considered as part of his income for the purposes of spousal support.
Positions of the parties on the pension
[92] The applicant, relying on s. 10.1(5) of the Family Law Act, R.S.O. 1990, c. F3 (“FLA”) and ss. 25(1) and 25(7) of the Pension Benefit Standards Act, R.S.C. 1985, c. 32 (“PBSA”) seeks to divide at source Robert’s CN pension, over 97% of which was earned during the marriage. The applicant argues that she supported Robert’s many moves throughout Ontario and gave up many lucrative and promising job opportunities to bolster both his career and his income.
[93] Relying on the Dilks Jeffrey Valuation report filed, Patricia seeks a payment of $121,124. The applicant contends that I have jurisdiction to divide the pension at source and that it is just and equitable in the circumstances to do so.
[94] Robert counters that s. 10.1(5) of the FLA does not apply in these circumstances and since no further equalization payment is to be made there is no basis for dividing the pension under s. 10.1(5).
[95] Robert submits that it would be inequitable to permit Patricia to recoup the benefit of the pension twice and that the FLA has already provided for the fair and full consideration of the pension by including it in the equalization framework under ss. 4 and 5 of the FLA.
Positions of the parties on spousal support
[96] Patricia, while acknowledging that her claim for on-going spousal support is interwoven with her claim for a division of his pension, seeks mid-range spousal support in the amount of $1,067 per month based on the differences in their Line 150 incomes. Simply put, she relies on the differences in their incomes and 58 years of cohabitation to create entitlement and her more than $6000 per month in expenses to establish need.
[97] Robert counters that Patricia is almost 83 and has over $800,000 in capital and no debts. Her capital alone would cover almost 12 years of expenses at the current rate. Simply put, she does not need support. Further, he submits that the majority of his income comes from his pension which was already dealt with through equalization.
[98] Her claim amounts to double-dipping. Patricia does not need the money and has not established any financial hardship. She is not entitled to continue to preserve the entirety of her capital at her age and stage of life.
[99] Robert argues that he maintains financial responsibility for Nichola and her expenses and is suffering both physical and mental health decline at a rate that exceeds that of the applicant.
The Law
Division of pension
[100] Sections 25(1) and (2) of the PBSA provide that pension benefits are subject to the applicable provincial legislation for the purposes of equalization. Both the PBSA and the Pension Benefits Division Act, S.C. 1992, c. 46 (“PBDA”), provide for a structure and circumstances to permit payments out of an existing pension plan. However, this mechanism or route to the potential division of a pension is separate and distinct from the equalization mechanism under ss. 4 and 5 of the FLA where a pension is subject to being included as part of net family property for the purposes of calculating equalization. In other words, the PBSA and PBDA do not exclude the operation of the FLA provisions, dealing with equalization of net family property: see Johnson v. Johnson, 2012 ONSC 1000 at paras. 21-26.
[101] Section 25(7) of the PBSA permits a pension to be split into two separate pensions, one for each of the spouses.
[102] Section 10.1(5) of the FLA may allow for an in-pay pension to be divided if payment commenced before the valuation date. However, as will become clear in my discussion, I need not make this determination as I am satisfied that a division of the in-pay pension is neither just nor appropriate in the circumstances.
Spousal support
[103] Section 15.2 of the Divorce Act and Section 33 of the FLA set out the factors I must consider when determining entitlement to spousal support. I need not set out those sections in their entirety. I have considered them. However, I am specifically mindful in these circumstances of the following factors:
(i) the conditions, means and needs of the parties; (ii) any economic hardship arising from the breakdown of the marriage; and (iii) that the parties must share the burden of the marriage breakdown equitably.
Discussion
[104] Patricia seeks two routes to Robert’s in-pay CN pension. She asks for an increase in her equalization payment of $121,124 reflecting her 50% interest net of taxes and less her survivor benefit, or alternatively, spousal support that takes his pension income into account. I cannot ignore the considerable financial resources available to the applicant in determining whether she is entitled to any further spousal support.
[105] I also cannot ignore that Robert’s pension was subject to valuation and equalization and therefore much of what is being sought amounts to a “double-dip”. It is this principle that instructs the outcome and therefore I next turn to the meaning of “double-dip” and its application to the facts before me.
Double-dip
[106] In Boston v. Boston, 2001 SCC 43, the Supreme Court of Canada explained the concept of double-dip at paras. 34-37:
34 The term “double recovery” is used to describe the situation where a pension, once equalized as property, is also treated as income from which the pension-holding spouse (here the husband) must make spousal support payments. Expressed another way, upon marriage dissolution the payee spouse (here the wife) receives assets and an equalization payment that take into account the capital value of the husband’s future pension income. If she later shares in the pension income as spousal support when the pension is in pay after the husband has retired, the wife can be said to be recovering twice from the pension: first at the time of the equalization of assets and again as support from the pension income.
35 Double recovery appears inherently unfair in cases where, to a large extent, the division or equalization of assets has addressed the compensation required. In equalizing the spouses’ net family properties, the husband or wife as the case may be must include the future right to the pension income as “property” on his or her side of the ledger. This means that the pension-holder must, on separation or divorce, transfer real assets of equal value to the pension to the other spouse in order to retain the pension under the property accounting.
36 The pension-holder cannot divide the actual pension as it cannot be accessed until retirement. The pension entitlement cannot be sold or transferred. The apparent unfairness arises when the other spouse receives support payments from the pension income after the pension-holder retires. Professor James G. McLeod stated in his annotation to Shadbolt v. Shadbolt (1997), 32 R.F.L. (4th) 253, at p. 253: “Put another way, [the pension-holding] spouse receives nothing in return for the real assets transferred to his or her partner in order to retain his or her pension under the property accounting.”
37 The double recovery issue here arises if the wife is permitted to seek further support from her former husband where the ability to pay support is determined by including the same pension, the value of which was previously used to determine the value of the husband’s net family property, and to calculate the equalization payment owing to the wife. It is this issue which remains unsettled.
[107] Given that almost the entirety of the pension (more than 97%) was earned before the date of separation and was therefore included in the equalization of the net family property, it would be both unfair and unjust to require Robert to include that same pension in his income for the purposes of determining spousal support.
[108] I am mindful that there are limited circumstances where a previously equalized pension can still be the subject of double recovery or double-dip where the payor has the ability to pay and the recipient, despite reasonable efforts to generate income from the equalized asset, still can demonstrate economic hardship or need: see Boston at para. 65.
[109] This is not a case for double-dipping or double recovery. The reasons are many and include:
(i) At the age of 82, and with over $800,000 in capital, the applicant has an obligation, where necessary to encroach upon her capital to create for her support if need compels her to do so; (ii) The payor spouse is also 82, retired, in the throws of dementia, supporting his dependent adult daughter and has much less capital than the applicant; and (iii) The applicant has fallen woefully short of establishing need. As best I can tell, she enjoys a lifestyle and standard of living that surpasses both that of Robert and the lifestyle she enjoyed before the breakdown of the marriage.
[110] The applicant neither deserves nor needs the second dip. She argues that she may require more services and expenses in the future and that her rate of return on her capital may go down. This is speculation and those concerns at least equally apply to Robert. She has demonstrated no economic disadvantage and no hardship arising from the breakdown of the marriage. She has no debts. She has not established entitlement to spousal support.
[111] Her suggestion that Nichola is capable of working and being independent defies a lifetime of dependence to date and reflects a complete lack of empathy and compassion for the declining mental status of Robert and the difficult plight Nichola has faced her entire life.
[112] Life is full of uncertainties. I cannot predict the market, interest rates, returns on investments or bond yields. However, the applicant’s concerns about the ebbs and flows of the market apply to almost every retiree relying on fixed investments. The time has come for each spouse to move forward on their own. Their respective assets and incomes permit self-sufficiency. She accepted an equalization of almost 100% of the imputed value of the pension and should not be entitled to a further claim to the pension. As they say on the rails, this is the end of the line.
[113] There will be no order for spousal support and the interim order of February, 2018 for spousal support at the rate of $950 per month shall continue until December 1, 2019. This extension will permit Patricia sufficient time to arrange her financial offers going forward and to benefit from almost two full years of support.
[114] My earlier comments regarding the inequality and unfairness of a double-dip equally apply to the request to split the pension. The pension has already been split through the NFP equalization calculation whereby Patricia received credit for 50 percent of the valuation of $311,165, taking into account the net value of her 55 percent survivor pension benefit of $68,917. She is neither entitled to nor in need of a second kick at the pension.
[115] I am mindful of Patricia’s limited ability to take further steps towards self-sufficiency in light of her age. However, when I take into account the financial resources currently available to her coupled with the fact that she is the payor in the equalization agreed to by the parties, I arrive at the inescapable conclusion that treating the CN pension as property is just and equitable in the circumstances and obviates the need to determine whether s. 10.1(5) of the FLA permits pension division for Robert’s in-pay CN pension. At the age of 82, it is not unreasonable to expect a spouse to encroach on capital if need compels them to do so. If not now, then when.
Conclusion
[116] The parties have already agreed on a figure for equalization - $47,200.76.
[117] Patricia’s application for division of Robert’s CN pension at the source is dismissed as is her request for any further encroachment on the pension funds.
[118] Interim spousal support shall end with the last payment of December 1, 2019.
[119] Nichola Zacher is declared the beneficial and legal owner of the property known municipally as 14 Steeplechase Court, St. Thomas, Ontario.
Costs
[120] In the event that the parties cannot agree, I will receive and consider written submissions on costs, not to exceed five pages (exclusive of Bills of Costs and Offers to Settle) from the respondents within 21 days and from the applicant within 21 days thereafter.
“Justice M.A. Garson”
Justice M.A. Garson