Barker v. Barker, 2011 ONCA 447

DATE: 20110610

DOCKET: C51708

COURT OF APPEAL FOR ONTARIO

BEFORE: Rosenberg, Moldaver and Feldman JJ.A.

BETWEEN

James Anthony Barker

Applicant (Appellant)

and

Hi-Sook Barker

Respondent (Respondent in Appeal)

COUNSEL: Kenneth J. M. Coull, for the appellant Amelia Yiu, for the respondent

HEARD: March 18, 2011

On appeal from the order of Justice A. W. Bryant of the Superior Court of Justice dated January 15, 2010.

By The Court:

[1] This appeal involves a dispute over a matrimonial home between a husband and wife who separated in 1994 and divorced in 1995.

[2] In October 2008, the husband brought an application for Partition and Sale of the matrimonial home under the Partition and Sale Act, R.S.O. 1990, c.P. 4 and Rule 66 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The wife resisted the application and Bryant J., the application judge, refused to grant it. Instead, pursuant to an earlier interim order made by MacLeod-Beliveau J., he considered what it would cost for the wife to pay out the husband’s share of the equity in the home, taking into account various set-offs the wife was claiming against his share. That exercise resulted in the husband owing the wife more than his share of the equity. Accordingly, the application judge ordered the husband to transfer his 50 percent interest in the home to the wife for $1. In return, the wife was to release him from all her claims against him.

[3] The husband appeals from that order. He raises various grounds of appeal in an effort to have it set aside and replaced with an order requiring that the matrimonial home be sold and that the net proceeds from the sale be divided equally between him and his ex-wife. For reasons that follow, we would dismiss the appeal.

Background

[4] The husband and wife married in 1977. They had two children who are no longer dependants. One was born on May 3, 1978 and the other on April 19, 1983.

[5] On December 31, 1987, the husband and wife purchased the matrimonial home for $246,490. They took title as joint tenants. The husband made a down payment of $31,490 and the couple assumed a mortgage in the amount of $215,000. The property was refinanced in August 1990 and the couple entered into a new mortgage in the amount of $225,000.

[6] The marriage was a traditional one. The husband worked for an insurance company and took responsibility for the finances. The wife stayed at home and raised the children.

[7] On January 8, 1994 the couple separated. The wife and children remained in the matrimonial home and the husband moved out. The husband and wife were divorced on March 23, 1995 and the husband remarried later that year.

[8] The husband retained counsel who prepared various draft separation agreements in 1995. The wife refused to sign these agreements and the couple never did enter into a formal separation agreement. They did, however, trade correspondence back and forth and eventually settled on an agreement which saw the husband pay the wife $2,500 per month from 1994 to January 1998 and $2,000 per month thereafter until June 2001, when he unilaterally terminated the payments.

[9] In September 1995, the husband, now remarried, moved to England. In 2001, the husband wrote to the wife and told her that he could no longer keep up the payments. He asked her to sell the house and share the proceeds with him; in the alternative, he suggested that she could buy out his 50 percent interest. The wife replied that she was not willing to sell the house. She planned to remain in it and pay off the mortgage over the next ten years. She would then sell the home and the proceeds would be available for his and her retirement. Notably, she did not relieve the husband of his financial obligations to her and the children.

[10] The husband did not respond to the wife’s letter. Indeed, she did not hear from him again until 2008 when he commenced the application for Partition and Sale, almost a year after he had returned from England to Canada.

Issues and Analysis

[11] On the application, the husband and wife disagreed as to how the payments previously made by the husband should be characterized. The wife claimed that they were solely for child support; the husband maintained they were for child and spousal support and that they were to be used in part by the wife to make the mortgage and tax payments on the matrimonial home.

[12] The application judge sided with the wife on this issue and found that the payments made by the husband to the wife from 1994 to 2001 were for child support only.

[13] In light of that finding and the husband’s failure to make any payments to the wife after 2001, the application judge concluded that the husband was “not entitled to share in the capital appreciation of the property because he did not make any contributions to preserve the asset after 1995”.

[14] The husband submits that the trial judge erred in law in concluding that he was not entitled to share in the capital appreciation of the property. He further submits that the trial judge failed to give adequate reasons for finding that the payments he made to the wife were for child support only. In support of this, he points out that the trial judge effectively ignored his evidence on the subject and gave no reason for rejecting his testimony in which he explained various items of evidence that he claimed only appeared, on their face, to contradict his position and support the wife’s position.

[15] We think there is much to be said for the husband’s position on both of these issues.

[16] We are also troubled by the manner in which the application judge disposed of the husband’s claim for occupation rent. The husband complains that the application judge erred in drawing on the equitable doctrine of laches to defeat his claim. Whether he is right or not on this is something we need not finally decide.

[17] On our view of the case, occupation rent and the other two issues raised by the husband – the proper characterization of the payments and his entitlement to share in the capital appreciation of the property – have no bearing on the outcome of the appeal. In so concluding, we do not disagree with the outcome reached by the application judge; we simply approach the case from a different perspective.

[18] Based on the record, it is apparent to us that in 1995, after the wife and husband separated, they entered into an agreement whereby the husband agreed to pay the wife $2,500 per month. Obviously, this amount would decrease as the children became self-sufficient.

[19] For present purposes, we are prepared to accept the husband’s position that the payments made by him were meant to include child and spousal support and that the wife was to use the funds, in part, to pay the mortgage and taxes on the matrimonial home. In return, the wife could continue to reside in the home rent free and at some future time, when the home was eventually sold, the couple would share equally in the net proceeds.

[20] In preparation for the application, the husband had the home appraised in October 2008 and it was valued at $380,000. At that time, it was encumbered by a mortgage in the amount of $101,658 which the wife had carried on her own since 2001. Hence, on a sale of the home, the gross proceeds would have been approximately $278,000. Taking real estate commissions, solicitor fees and other expenses into account, the net proceeds would likely have been somewhere in the vicinity of $265,000 to $270,000.

[21] On that scenario, all other things being equal, the husband would have been entitled to receive approximately $135,000 on the sale for his share of the equity.

[22] But all other things were not equal. The husband breached the agreement when he unilaterally stopped making monthly payments to the wife in 2001. By the time he brought on the application for Partition and Sale in 2008, assuming that after 2001, he was only required to pay $1,500 per month, he owed the wife at least 7 years’ worth of payments plus interest. Interest aside, that comes to $126,000. With interest, the amount owed by the husband would exceed the $135,000 he was entitled to receive for his share of the equity.

[23] It follows, in our view, that the application judge came to the right result and we would not interfere with his disposition.

[24] In approaching the matter as we have, we have not ignored the other grounds of appeal raised by the husband. In particular, we have considered his submissions regarding the down payment he made on the home and the mortgage payments he made prior to 1994, the estoppel issue emanating from the wife’s second marriage, contributions made to the property by third persons and the application judge’s refusal to order Partition and Sale.

[25] Of those grounds, the only one that may have had an impact on the outcome is the ground relating to the down payment on the home and the mortgage payments made by the husband prior to 1994, when the couple separated. The application judge found however that those payments were gifts from the husband to the wife and we see no basis for interfering with that finding.

Disposition

[26] In the result, the appeal is dismissed. In the circumstances, we believe the parties should bear their own costs of the appeal. Accordingly, there will be no order as to costs.

Signed: “M. Rosenberg J.A.”

“M. J. Moldaver J.A.”

“K. Feldman J.A.”

RELEASED: “MR” June 10, 2011