Court File and Parties

COURT FILE NO.: D-19,363/11 DATE: 2012-03-28

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DEBRA LYNN CRAIG Applicant

– and –

ALAN MARK CRAIG Respondent

Counsel: Réjean Parisé, for the Applicant. Matti E. Mottonen, for the Respondent.

HEARD: March 21, 2012

BEFORE: Gauthier, J.

Overview:

[1] On March 21, 2012, I heard the Respondent Husband’s (“Husband”) motion for the following relief:

1. An Order directing the Applicant Wife (“Wife”) to immediately sign the Listing Agreement for the sale of the matrimonial home municipally located at 82 Stacey Crescent, Garson, Ontario with Re/Max Crown Realty (1989) Inc. in accordance with paragraph 7 of the Order of the Honourable Madam Justice P.C. Hennessy dated November 30, 2011; and further that the Listing Agreement be immediately submitted to MLS and that the Applicant be required to allow any and all showings requested for the home.

2. An Order requiring the Applicant to pay to the Respondent, Alan Craig, occupation rent for the matrimonial home in the amount of $2,000 per month commencing December 1, 2011.

[2] The Husband’s Motion contained a request for two other heads of relief, but they were consented to by the Wife and I made the Order agreed to by the parties.

[3] Also on March 21, 2012, I heard the Wife’s Motion for the following relief:

1. For an Order that the Husband comply with the Order of Gareau J. of April 14, 2011, and provide a full actuarial valuation of his employment pension accrued from the date of the marriage until the date of separation;

2. Direction for the sale of the matrimonial home with the following specifics:

(i) That the home is valued at $282,000, in accordance with the appraisal of Johannsen Appraisal Services dated November 29, 2011;

(ii) That the Wife pay to the Husband his equity interest in the home based upon the outstanding mortgage of $187,000, with the Royal Bank of Canada, and after deducting the Wife’s one half interest in the Respondent’s employment pension and securities with Doyon Financial; and

(iii) That upon payment being made to the Husband, he execute a Transfer of his interest in the property to the Wife.

3. That the Husband pay the sum of $528 per month for the day care costs of the children commencing May 1, 2011, being 66% of the total cost of $800 per month; and

4. That the Husband pay the sum of $1,815.90 being the total amount of unpaid utilities.

[4] I received no submissions regarding #4 above, and therefore will make no order regarding utilities.

[5] After having heard initial submissions from the Wife’s counsel regarding #2 above, which essentially was a request for an Order allowing the Wife to purchase the Husband’s interest in the matrimonial home, I advised counsel that I would not grant such relief, in the face of the Order of Hennessy J. of November 30, 2011, and in view of the Ontario Court of Appeal’s decision in Martin v. Martin (1992), 1992 7402 (ON CA), 8 O.R. (3d) 41, where, at page 47, the Court said this:

There is nothing in the Family Law Act to suggest that, absent consent, one spouse should have a special right to purchase the matrimonial home. As a matter of general principle, while a matrimonial home occupies a special and separate place in the statutory scheme established by the Family Law Act, once the matrimonial home is ordered to be sold, each spouse is entitled to receive fair market value for his or her interest in it.

[6] In accordance with the principles set out in Martin, if one spouse wishes to purchase the interest of the other spouse, then he or she must compete with any other interested purchaser.

[7] Counsel for the Wife consented to the following Order:

That the matrimonial home is to be sold and immediately listed for sale with Re/Max Crown Realty at a listing price of $329,000 or higher as the realtor determines, and the listing terms to be in accordance with the terms of the Listing Agreement attached as Exhibit “D” to the Affidavit of the Respondent, sworn on January 30, 2012.

[8] I endorsed the record granting an Order in accordance with the above Consent.

[9] I heard complete submissions from both counsel on the balance of the issues raised in both motions and I reserved my ruling.

Facts and History of the Proceedings:

[10] The Wife and the Husband, who are 41 and 36 years of age respectively, were married to each other on January 25, 2003. The Wife had one child from a prior union, Brody Robert Sisson, born July 30, 1993.

[11] Two children were born to the parties, Maisie Craig on July 21, 2003, and Mia Craig, on February 2, 2005.

[12] The parties separated, but continued to both reside in the matrimonial home with the children until May 2011, when the Husband left. There is disagreement regarding the date on which the parties actually formed the intention to live separate and apart. The Wife says the date is October 31, 2010, and the Husband says the date is December 22, 2010. For purposes of the motions before me, not much turns on whether the valuation date is October or December 2010.

[13] During the marriage, and to date, the Wife is employed with Community Living of Greater Sudbury as a case worker. Her current income is $52,000 per year.

[14] The Husband was and continues to be employed by Vale. He was off work, but receiving WSIB benefits during the Vale Inco strike. He underwent three surgeries for his knees. He resumed employment with Vale in October 2011, albeit with modified duties due to his physical condition. He earns $67,000 per year.

[15] On November 25, 2010, the Husband forged the Wife’s signature on mortgage refinancing documents, increasing the mortgage apparently to consolidate the family’s debts. The Wife notified the police and the Husband was charged and ultimately convicted of forgery.

[16] The Wife initiated these proceedings by Application dated February 11, 2011, seeking the following relief:

(a) A divorce;

(b) Spousal support from February 1, 2011;

(c) Custody of and support for the children, effective February 1, 2011;

(d) An order for the special expenses for the children’s schooling and extra- curricular activities;

(e) Exclusive possession of the matrimonial home and its contents;

(f) Freezing assets;

(g) Sale of family property; and

(h) An Order for sale of the matrimonial home, pursuant to the Partition Act, R.S.O. 1990, c. P.4.

[17] The Wife filed the Affidavit in Support of Claim for Custody or Access with the Application, indicating that the children Maisie and Mia would be attending the Teddy Bear Day Care after school program.

[18] Also on February 11, 2011, the Wife brought a motion, returnable on February 24, 2011, for custody of the children, exclusive possession of the home, and for leave to have the motion heard in advance of a Case Conference being held, based on urgency.

[19] On February 23, 2011, the Husband delivered an Affidavit in which he indicated his intention to pursue custody of the children and in which he took issue with the children being in a day care program when he was available to care for them after school until supper time. He further indicated his intention to remain in the matrimonial home.

[20] On February 24, 2011, a Consent Order was made as follows:

(a) The status quo shall prevail until the issues of interim custody and interim exclusive possession and sole ownership are ultimately determined by the court;

(b) Pending the adjournment, the children are to continue to reside in the matrimonial home; and

(c) Pending the adjournment, the Husband shall continue to pay all expenses relating to the matrimonial home including the mortgage; the Wife will continue to pay the cable television and telephone bills.

[21] On March 18, 2011, the Husband delivered an Answer, claiming, among other things, custody and support for Maisie and Mia, an Order requiring the Wife to pay her proportionate share of extraordinary expenses incurred for the children, and for occupation rent.

[22] A Case Conference was held on April 14, 2011, at which time the Husband was ordered to provide his pension information to the Wife, and the parties were ordered to exchange income tax documents and current income information.

[23] The Husband was charged with fraud and forgery on May 26, 2011, and, as a condition of his Recognizance of Bail, he could no longer continue to occupy the matrimonial home.

[24] The Husband brought a motion, returnable on June 30, 2011, seeking custody of the children, or, alternatively, generous access, an Order for the immediate sale of the matrimonial home, occupation rent, and an order to have the Wife pay all expenses relating to her occupation of the home. The Husband was off work at the time, due to stress. He was awaiting four surgeries and had no income. The Affidavit he filed in support of his motion indicated that, once he resumed his employment, he would be working from 7:00 pm to 5:30 am, and would be available to care for the children after school, thus eliminating the need for day care. The Husband further indicated that, from December 2010 to May 26, 2011, he picked up Maisie and Mia every day after school.

[25] On June 30, 2011, Del Frate J. made a Consent Order, on an interim interim basis, dealing with access to be exercised by the Husband. The balance of the issues raised by the parties could not be addressed due to time constraints and were to be argued on a special fixed date.

[26] The Husband remained off work until October 2011. He continued to dispute the need for Maisie and Mia to attend day care.

[27] On November 30, 2011, a further Temporary Order was made on consent. That Order provided that:

(a) the parties have joint custody of Maisie and Mia, with their principal residence being with the Wife;

(b) the Husband continue to have the court ordered access to the girls;

(c) the Husband pay child support for Maisie and Mia, in the amount of $1,006 per month, commencing December 1, 2011, based on the Husband’s income of $67,392. The commencement date reflected that the Husband had paid the mortgage on the matrimonial home until the end of November 2011;

(d) the Wife have exclusive possession of the matrimonial home until it is sold;

(e) the home was to be listed for sale at a listing price agreeable to both parties, and ultimately to be sold at a sale price agreeable to both parties. The sale, if necessary, shall be subject to Directions from the Court; and

(f) the Wife was to assume responsibility for payment of all expenses relating to the matrimonial home.

[28] On November 30, 2011, the Wife signed a Listing Agreement authorizing the listing for sale of the matrimonial home for a price of $329,700. The Husband signed the Listing Agreement on December 1, 2011.

[29] Subsequently, the Wife refused to allow the home to be shown to prospective purchasers or to have the listing submitted to MLS. The Wife proposed instead to purchase the Husband’s one half interest in the matrimonial home to ensure that the children continued to reside in their home, attend their present school, and sustain their routine. I have already addressed the matter of the sale of the matrimonial home.

Issues:

[30]

(A) Whether the Wife should pay to the Husband occupation rent, and if so, in what amount, from December 1, 2011, until such time as the matrimonial home is sold;

(B) Whether the failure of the Husband to obtain a valuation of his employment pension should be considered in the context of the Husband’s request for occupation rent;

(C) Whether the fact that the Husband did not include in his Financial Statements the existence of investments with Canada Life, Manulife, and TransAmerica, totalling $21,332.61, should attract the negative inference that the Husband was deliberately not disclosing those assets, with the result that his claim for occupation rent should be denied or discounted;

(D) Whether the Husband should pay a share of the day care expenses for Maisie and Mia, based on his income of $67,392; and

(E) Whether it be a condition of the sale of the matrimonial home that the closing date be no earlier than June 29, 2011.

(A) Occupation Rent:

[31] Notwithstanding her consent to the November 30, 2011 Order that the matrimonial home be listed for sale, and notwithstanding having signed the Listing Agreement, the Wife decided that she would not sell the home. She decided that she was going to buy out the Husband’s interest in the home. She thwarted efforts to comply with the November 30, 2011, Order.

[32] The Wife’s conduct in relation to the matrimonial home should attract occupation rent, according to the Husband.

[33] Occupation rent will be ordered where it is reasonable and equitable to do so. As Quinn J. explained in Higgins v. Higgins, 2001 28223 (ON SC), [2001] O.J. No. 3011 (S.C.), at para. 54,

the courts are attempting to balance the equities when dealing with a claim for occupation rent. Thus, occupation rent is merely a tool used to achieve justice in the circumstances of each case.

[34] In a family law context, the following are among the relevant factors to be considered when assessing a claim for occupation rent: (a) the timing of the claim, (b) the duration of the occupancy, (c) the inability of the non-resident spouse to realize on the equity in the property, (d) reasonable credits to be set off against the rent, and (e) other competing claims: see Griffiths v. Zambosco (2001), 2001 24097 (ON CA), 54 O.R. (3d) 397 (C.A.).

[35] In Higgins, Quinn J. expanded this list of factors to include the following:

(a) the conduct of the non-occupying spouse, including the failure to pay support;

(b) the conduct of the occupying spouse, including the failure to pay support;

(c) whether the non-occupying spouse moved for the sale of the home and, if not, why not;

(d) whether the occupying spouse paid the mortgage and other carrying charges of the home;

(e) whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support; and

(f) whether the occupying spouse has increased the selling value of the property.

[36] Only certain of the above factors are engaged in the case at bar.

[37] Timing of the Claim: The Husband brought his Motion for occupation rent in June 2011 (although the matter was not dealt with until November 30, 2011) and again within two months of the Wife thwarting the Listing Agreement. There was no delay in advancing the claim.

[38] Duration of the Occupancy: The Wife has continued to occupy the matrimonial home since the date of separation. The Motion however only seeks occupation rent from December 1, 2011.

[39] Inability of Husband to Realize on the Equity: This factor is relevant from November 30, 2011. The Husband’s earlier Answer disputed the claim by the Wife that the home be sold, and the Husband was seeking to buy out the Wife’s interest in the home. Like the Wife, the Husband sought sole possession and ownership of the home. His position changed later.

[40] Mortgage and Other Carrying Costs: The Husband paid the mortgage and associated household expenses until November 30, 2011, at which time the Wife assumed same. He paid no child support during that time. The child support ultimately ordered was less than the carrying costs of the home.

[41] The Children: The primary residence of the children has been with the Wife in the matrimonial home and the Order of November 30, 2011, reflects this. The Husband’s court ordered obligation to provide child support arose on the same date.

[42] Of these factors, the most compelling is the conduct of the Wife in the face of the Order of November 30, 2011. She deprived the Husband of the opportunity to realize his equity in the property and did so contrary to a court order. Such conduct should attract occupation rent.

[43] Although decided under the Family Law Reform Act, 1978, the decision in Irrsack v. Irrsack (1978), 1978 2158 (ON SC), 22 O.R. (2d) 245 (H.C.), is instructive on the issue of quantifying occupation rent if it is found to be properly payable.

[44] In that case, the Husband was in possession of the matrimonial home which was jointly owned by both spouses. Lerner J. found that the Wife was entitled to be compensated for the sole use and occupation by the Husband, which included the Wife’s half interest. At page 249, he outlined the approach to be used in quantifying the occupation rent:

The equitable approach is to allow her one-half of the rent, to this date, that these premises would attract less one-half of the taxes and insurance for the same period.

[45] The evidence establishes that 82 Stacey Crescent, Garson, could yield rental income of $1,700 to $2,000 per month, net of utilities.

[46] Even if I use the higher amount, the net result is that the quantum of occupation rent properly payable in this case is zero.

[47] In keeping with Irrsack, one half of the taxes and insurance would be credited against the rental amount. Logically, as well, one half of the mortgage payment would attract a credit.

[48] Relying on the Husband’s Financial Statement of November 24, 2011, one half of the monthly expense for the mortgage, property taxes, and insurance, would be $1,084.83. This exceeds one half of the rent.

[49] Thus, although in principle the Husband had a tenable claim for occupation rent, the reality is that, where there is a significant mortgage against the property, the quantum of occupation rent will frequently be minimal or nil.

(B) The Pension Valuation:

[50] The Wife’s position is that the Husband failed to comply with the Order of Gareau J. He therefore does not come before the court with clean hands and should be denied the claim for occupation rent. (Given my finding in A above, this issue becomes moot.)

[51] The Husband’s position, put forward through his counsel, is that the failure to make a timely request to the Husband’s employer for a valuation of the pension is that of his counsel.

[52] There is no question that there was a delay in taking the necessary steps to obtain the information, however, steps are now being taken to obtain the value of the Husband’s pension.

(C) The Investments:

[53] The Wife suggests that the Husband was attempting to hide assets because he did not include the investments referred to above in either of his Financial Statement.

[54] The Husband’s response, through his counsel, is that, once again, counsel is responsible for this oversight. He further points out that the asset is a joint asset that the Wife herself included in her Financial Statement. Therefore, there was no attempt to hide assets or to mislead.

[55] Indeed, page 6 of the Wife’s Financial Statement, sworn February 11, 2011, sets out the joint Doyon Financial Group asset, valued at $32,948.33. This is the value as at “11-sept-09”; see the Investment Summary attached as exhibit “F” to the Wife’s Affidavit of February 2, 2011.

[56] The asset is jointly owned. The Wife reflected this joint asset in her Financial Statement. The failure of the Husband to include the asset in his Financial Statement does not lead to the conclusion that the Husband was attempting to hide the existence of the joint asset.

(D) Day Care Expenses:

[57] The Wife seeks reimbursement for the Husband’s proportionate share of the $800 per month day care expense incurred, since May 2011 when the Husband ceased to occupy the matrimonial home. The Wife’s most recent Affidavit iterates that the parties utilized day care during the relationship, and therefore, the Husband cannot reasonably say that he was never advised of the cost of the service.

[58] The Wife relies as well on her counsel’s letter of December 20, 2011, which requested that the Husband contribute his proportionate share of the $800 per month day care expense.

[59] The Wife further states that, although the Husband suggests his Mother as the logical alternative to day care, the reality is that the Husband’s Mother does not reside in the City of Greater Sudbury. She lives in Whitefish Falls, which is some distance (perhaps an hour) away from Sudbury, and therefore is not available as a viable alternative to day care.

[60] As well, the Wife suggests that, for the period from June to October 2011, the Husband was dealing with stress which prevented him from working, and was awaiting a number of surgeries. He was therefore not realistically available for the care of the children.

[61] Additionally, it is the Wife’s position that the family utilized the day care “previously” (I take that to mean prior to the separation), and it was and still is important to continue the routine that Maisie and Mia were used to.

[62] Finally, the Wife points out that she had to maintain the day care spots for the girls from June to October because she knew that the Husband would be going back to work, and she did not want to lose the day care service which she would require once the Husband did in fact go back to work.

[63] For his part, the Husband maintains that he was ready, willing, and able to provide child care to Maisie and Mia from June to October while he was off work. Therefore day care was not required for that period of time.

[64] In addition, he says that his work schedule can be adjusted to ensure that, together with his Mother, he can provide care to the girls so that ongoing day care costs need not be incurred.

[65] Although there is some contradictory evidence on the issue of the necessity for the day care, I find the following, based on the record before me:

(a) the girls were attending the day care program prior to the Husband leaving the matrimonial home, and this arrangement was put in place by the Wife, without consultation with or agreement by the Husband;

(b) the Wife’s Application requested contribution to cover the special expenses for the children’s schooling and extra-curricular activities. This is pursuant to s. 7(1)(d)(e) and (f), but made no claim for child care expenses incurred as a result of the custodial parent’s employment, etc., (day care expenses) pursuant to s. 7(1)(a);

(c) the Wife assumed responsibility for the day care and did not look to the Husband for any contribution until her counsel’s letter of December 20, 2011. The Wife’s Affidavit of September 30, 2011, specifically paragraph 11 suggests that the Wife, at that point in time at least, was content to bear the entire cost of the day care expenses;

(d) the November 30, 2011, Order, although dealing with custody, principal residence of and support for the children, is silent with regard to s. 7 expenses;

(e) while the Husband may have been available to care for the children from June to October 2011, thereby obviating the necessity for day care, such was not ordered by the Court. The access order was made on the consent of the Husband;

(f) the evidence does not establish that the Husband’s current situation makes continued use of day care unreasonable or unnecessary.

[66] The above facts lead me to the conclusion that the Wife’s request for a retroactive sharing of the day care costs should be denied, for the period ending December 31, 2011.

[67] However, the facts further lead me to the conclusion that the day care expenses incurred from January 1, 2012, forward are necessary and reasonable, and the Husband should be contributing his proportionate share. I will make an Order to that effect. The Husband will be responsible for 56% of the $800 per month day care costs, effective January 1, 2012.

(E) Requested Restriction on Closing Date:

[68] The Wife’s Motion did not request any relief in connection with a possible immediate listing for sale of the matrimonial home. At the hearing of the Motions, her counsel raised the issue of the closing date for any sale of the home, and suggested that it would be less disruptive for the children if any sale of their home occurred after the end of their school year.

[69] These are young children in grades one and three respectively. They are not facing difficult or challenging end of year exams, and there is no evidence that they would be negatively affected by any move occurring before the end of the academic year.

[70] Additionally, there is no other valid reason to put any restriction on the terms of any possible offer to purchase.

[71] The Wife’s request for this condition or restriction on any agreement of purchase and sale is denied.

Conclusion:

[72] The Husband’s claim for occupation rent is dismissed.

[73] The Husband shall pay his proportionate share of the day care expenses for Maisie and Mia, that share being 56% of the total day care cost of $800 per month, in the amount of $448 per month, commencing January 1, 2012.

[74] If counsel are unable to agree on the costs of this motion, they are to communicate with the Trial Coordinator, within twenty (20) days of this Ruling, in order to set a date and time to argue costs, failing which there will be no costs ordered.

Madam Justice L. L. Gauthier

Released: March 28, 2012