COURT FILE NO.: FS-11-0208
DATE: 2012-05-16
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Judy Cecile Flear
Ms. K. Costa for Applicant
Applicant
- and -
Raymond Scott Flear
Raymond Scott Flear not appearing
Respondent
HEARD: April 18 and 19, 2012 at Thunder Bay, Ontario
Mr. Justice J.S. Fregeau
Decision on Uncontested Hearing
Introduction
[1] The applicant, Judy Cecile Flear (“Ms. Flear”), issued this application on July 14, 2011. The application and Ms. Flear’s financial statement were served on the respondent, Raymond Scott Flear (“Mr. Flear”) on July 16, 2011. Mr. Flear has not filed an answer or a financial statement. A limited amount of financial documentation has been produced by Mr. Flear, either voluntarily or pursuant to various temporary court orders.
[2] Ms. Flear set this matter down for an uncontested hearing on April 18, 2012. The matter proceeded on that date without the attendance of Mr. Flear. For the purposes of the hearing, Ms. Flear filed an Affidavit for an Uncontested Trial, dated April 18, 2012. Ms. Flear also testified at the hearing and various exhibits were filed during her examination.
Background
[3] Ms. Flear was born on January 29, 1957 and is 55 years old. Mr. Flear was born on December 23, 1956 and is also 55 years old. The parties married on June 23, 1978. They did not reside together prior to marriage. Mr. and Ms. Flear separated on August 1, 2010, at which time Ms. Flear moved out of the matrimonial home. Mr. Flear has resided in the matrimonial home since separation. There have been no attempts at reconciliation and there is no possibility of reconciliation in the future.
[4] Mr. and Ms. Flear have two children, 33 and 30 years of age. The parties lived in Schreiber, Ontario from 1981 to 1999. In 1999, the parties moved to Thunder Bay, Ontario and purchased a home in Kaministiquia, Ontario. Ms. Flear was a full time homemaker and parent when the children were young. As the children grew older, Ms. Flear began to work outside of the home on a part-time basis. Soon after the parties moved to Thunder Bay, Ms. Flear obtained employment with a local greenhouse. She has had this employment continuously for the last 12 years. Ms. Flear’s employment is full-time from September until approximately mid-June, when she is laid off.
[5] Mr. Flear began employment with the Canadian Pacific Railway (“CP Rail”) on March 24, 1976. Mr. Flear has been employed continuously with CP Rail to date, subject to some recent absences from his employment as a result of an alcohol dependency issue.
[6] Between August 1, 2010 and March 31, 2011, Mr. Flear paid $350.00 per month in spousal support to Ms. Flear. Between April 1, 2011 and September 30, 2011, Mr. Flear paid $1,500.00 per month in spousal support to Ms. Flear.
Terms of the Order sought by Ms. Flear
[7] Ms. Flear is requesting an order for the following:
A divorce;
Retroactive Spousal Support;
Shared time with the family pet;
An unequal division of Net Family Property, or, in the alternative, an equalization of Net Family Property; and,
Costs of this hearing.
[8] The issue of property equalization includes several specific issues to be addressed, including the matrimonial home, Air Miles accumulated during the marriage, a “Topaz” travel trailer and Mr. Flear’s employment pension with CP Rail.
The Divorce
[9] The parties have been living separate and apart for almost two years. The marriage certificate and required Clearance Certificate have been filed. A Divorce Order shall issue.
Retroactive Spousal Support
[10] Ms. Flear is asking that an order issue requiring that Mr. Flear pay to her spousal support from August 1, 2010, the date of separation, until December 31, 2011. Ms. Flear is not asking for spousal support after this date, on the assumption that Mr. Flear would be drawing pension income from this date or shortly thereafter and that his employment pension will be equalized pursuant to an equalization of Net Family Property.
[11] Ms. Flear is requesting this retroactive spousal support be set at the mid-point figure as set out in the Spousal Support Advisory Guidelines, based on the party’s respective incomes during the relevant time periods. Ms. Flear acknowledges that Mr. Flear should receive credit for support actually paid during this period of time.
[12] In 2010, Ms. Flear’s employment income was $19,211.45. Ms. Flear also redeemed RRSPs in the amount of $2,500.00 in 2010. In 2011, Ms. Flear’s employment income was $17,721.40. She also had Employment Insurance income in 2011 in the amount of $3,523. Ms. Flear redeemed RRSPs in 2011 in the amount of $12,661.00.
[13] Ms. Flear testified that the only reason she redeemed her RRSPs was to maintain the mortgage payments on the matrimonial home and to pay other costs of the home.
[14] Mr. Flear’s recent income history is as follows:
2008 Total Income $83,930.00;
2009 Total Income $77,633.00;
2010 Total Income $87,684.00.
[15] This evidence as to Mr. Flear’s income for 2008, 2009 and 2010 is derived from Canada Revenue Agency tax summaries filed by Ms. Flear. Ms. Flear was limited in the evidence she was able to provide as to Mr. Flear’s more recent employment income situation due to his inability or unwillingness to engage in the litigation process.
[16] Ms. Flear testified that Mr. Flear has had a serious alcohol dependency problem since approximately 2005. It has recently interfered with his employment. Ms. Flear’s evidence as to this issue was supported by a letter from CP Rail, dated November 18, 2011 and filed as an exhibit at this hearing.
[17] This letter confirmed that Mr. Flear’s year to date earnings, presumably up to November 18, 2011, were $53,090.00. CP Rail advised that Mr. Flear’s employment status since January 1, 2010 has been as follows:
January 1, 2010 – October 31, 2010 actively employed;
November 1, 2010 – November 19, 2010 unpaid sick leave;
December 14, 2010 – May 29, 2011 Short Term Disability;
July 19, 2011 – September 24, 2011 Long Term Disability;
September 25, 2011 to date unpaid sick leave.
[18] CP Rail further confirmed that the November 18, 2011 year to date income figure provided by them ($53,090.39) included all short and long term disability income received by Mr. Flear in 2011. There is no evidence before the court as to whether the short and/or long term disability benefits were received tax free by Mr. Flear. As a result, I am assuming the $53,090.39 was taxable income.
[19] Ms. Flear provided evidence as to the reasons for Mr. Flear’s recent absences from employment. Ms. Flear testified that Mr. Flear was suspended from his employment on November 1, 2010 pending his attendance at and completion of a residential alcohol treatment program. Ms. Flear testified that CP Rail facilitated Mr. Flear’s admission to such a program in Elliot Lake, Ontario but that Mr. Flear declined to attend then or at any time since. Ms. Flear testified that Mr. Flear would be able to return to his employment immediately upon the successful completion of such a program, but that he has simply chosen not to attend.
[20] Ms. Flear submits that income, for the purposes of calculating spousal support, should be attributed to Mr. Flear, for the period September 24, 2011 to December 31, 2011 at an amount equivalent to his Long Term Disability income, namely 66% or 2/3 of pre-disability income. The basis for this submission is that Mr. Flear would have been entitled to this level of income if he simply attended and completed the alcohol rehabilitation program arranged for him by CP Rail. Ms. Flear submits that Mr. Flear’s actions in failing to attend the program amounts to voluntary unemployment.
[21] Ms. Flear submits that the money she received from her RRSPs in 2010 and 2011 should not be included in her income for support purposes. She submits that it was not earned income and was used solely to maintain the mortgage payments and other costs of the matrimonial home, which is jointly registered and therefore a joint obligation.
Discussion
[22] The objectives of spousal support are set out in Section 15.2(6) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) as amended, as follows:
(6) OBJECTIVE OF SPOUSAL SUPPORT ORDER – An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
a) Recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
b) Apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
c) Relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
d) In so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[23] I am satisfied, based on the evidence of Ms. Flear as to her income, her standard of living since separation and her general financial situation, that she has suffered economic hardship as a result of her marriage and its breakdown. I am satisfied of this despite the fact that Ms. Flear worked on an equivalent to full time basis during this period of time. Ms. Flear is therefore entitled to spousal support for the period in which she asks for it, namely from the date of separation until the end of 2011, with the exception of the period October 1, 2011 to December 31, 2011.
[24] I do not accept the submission that Mr. Flear was voluntarily unemployed for the last 3 months of 2011. Ms. Flear provided evidence that Mr. Flear is an alcoholic who has struggled with his dependency since at least 2005. The evidence of CP Rail is that Mr. Flear qualified for both Short and Long Term Disability as a result of his addiction. He failed to attend a treatment program in the fall of 2011 resulting in the termination of his benefits. I feel I am able to draw the inference that his failure to attend the treatment program offered to him was the result of his addiction. In these circumstances, I am not prepared to attribute any income to him for the period of time after Sept 24, 2011.
[25] I accept the submission of Ms. Flear that the money she received in 2010 and 2011 as a result of redeeming her RRSPs should not be included in her income when calculating spousal support. The net funds received were used by her exclusively to maintain the mortgage payments and other costs associated with the matrimonial home. The home is registered to the parties jointly and Mr. Flear was in occupation of it at the time. It would be inequitable to require Ms. Flear to include this money in income for spousal support purposes.
[26] For the period August 1, 2010 to December 31, 2010, I find it is appropriate to use the actual 2010 incomes of both Mr. and Ms. Flear to calculate retroactive spousal support. Mr. Flear’s 2010 income was $87,684.00. Ms. Flear’s 2010 income, without including her RRSP income, was $19,211.00. The Spousal Support Advisory Guidelines suggest a range of spousal support, given these income figures, of between $2,140.00 and $2,755 per month, with a mid-point figure of $2,496.00. I find it is appropriate to use the mid-point figure of $2,496.00 per month.
[27] An order shall issue requiring the respondent to pay to the applicant spousal support in the amount of $2,496.00 per month for the months of August 2010 to December 2010 inclusive. The respondent shall receive a credit for the spousal support he actually paid during this period, this being $350.00 per month, or a total credit for the period August 1, 2010 to December 31, 2010 in the amount of $1,750.00.
[28] For the period January 1, 2011 to September 30, 2011, I again find it is appropriate to use the actual 2011 incomes of both Mr. and Ms. Flear. In the circumstances, I do not accept the submission of Ms. Flear that Mr. Flear’s 2010 income be used to calculate his spousal support obligation for the first 9 months of 2011. Mr. Flear had some employment income and some disability income in 2011. There were periods of time in 2011 when he had no income. I feel it would be inequitable to order spousal support based on past, rather than actual income.
[29] I am cognizant of the fact that a Temporary Order dated August 12, 2011 required Mr. Flear to pay spousal support of $1,500.00 per month and that he paid this amount from April to September 2011. However, this was based on income of $80,000.00 for Mr. Flear, which I presume came from past tax returns. I find this income figure to be high, based on the evidence filed at the hearing.
[30] The only evidence before the court as to Mr. Flear’s actual 2011 income is the November 18, 2011 year to date income figure of $53,090.00. Ms. Flear’s 2011 income, including Employment Insurance income, but excluding RRSP income, was $21,244.00. The Spousal Support Advisory Guidelines suggest a range of spousal support, given these income figures, of between $995.00 and $1327.00, with a mid-point figure of $1161.00. I find it is appropriate to use the mid-point figure of $1161.00 per month.
[31] An order shall issue requiring the respondent to pay to the applicant spousal support in the amount of $1161.00 per month for months January 2011 to September 2011 inclusive. The respondent shall receive a credit for the spousal support he actually paid during this period. The respondent paid the applicant $350.00 per month in January, February and March 2011. The respondent paid the applicant $1,500.00 per month for the months April to September 2011 inclusive. The respondent shall therefore receive a total credit of $10,050.00 for this period of time.
The Family Pet
[32] The applicant testified that she and the respondent are the joint owners of an unregistered and unlicensed female Lab/Husky cross breed dog called “Blondie”. The respondent has been in possession of the dog since separation. The applicant is content that the respondent retains possession of Blondie on a permanent basis. The applicant requests that she be allowed time with Blondie as reasonably requested by her. An order shall issue that the applicant shall have possession of Blondie for reasonable periods of time if and when she requests.
Property Issues
The Matrimonial Home
[33] The applicant and respondent are the joint registered owners of the matrimonial home located at 212 Alppila Road, Kaministiquia, Ontario. The respondent has resided in the home since separation.
[34] By Temporary Order of Shaw J. dated January 26, 2012, this home was ordered listed for sale with a licensed realtor at a price recommended by that realtor. The applicant testified that the home has not yet been listed. The applicant has retained Mr. R. Agarwal, Broker of Record with Avista Realty Group Ltd. to list the home. The applicant filed correspondence from Mr. Agarwal, dated April 17, 2012. This realtor advised that the home is in a “severely poor state of repair”, with a current market value of $82,000.00 to $85,000.00. The applicant testified that the respondent has let the home fall into this state of disrepair since separation. The home is subject to a mortgage with a current principal balance of $167,672.68.
[35] The applicant requests that the matrimonial home be ordered listed for sale with Mr. Agarwal at a price recommended by him. The applicant is content that the respondent remains in possession until the home is sold.
[36] I am satisfied that the matrimonial home should be listed for sale immediately. While a sale of the home at a price sufficient to discharge the outstanding mortgage balance is highly unlikely, the applicant is prepared to use her best efforts to do so.
[37] An order shall issue that the matrimonial home located at 212 Alppila Road, Kaministiquia shall forthwith be listed for sale with Mr. Agarwal of Avista Realty Group Ltd. at the price recommended by Mr. Agarwal. Should Mr. Agarwal decline to accept the listing, the applicant shall list the home with any other realtor of her choice at a listing price recommended by that realtor. The signature of the applicant alone shall be sufficient for the purposes of listing the home, accepting any offer to purchase and executing any and all conveyancing documents necessary to transfer the interests of the parties in the home to a purchaser.
[38] The proceeds of sale shall be applied firstly to discharge any encumbrance on the home and thereafter to pay any real estate commission and legal fees owing on the sale.
[39] Neither the value of the matrimonial home nor the balance on the mortgage shall figure into the calculation of the parties’ Net Family Property.
The Air Miles Account
[40] The applicant testified that she and the respondent established an Air Miles account which was put in the respondent’s name alone. As a result of normal, everyday purchases made by one or the other of the parties during the period of cohabitation there was, at the date of separation, 5048 accumulated Air Miles. The applicant requests that this account be equally divided at source, that one-half the miles be placed in an account in her name and that the respondent pay any cost to accomplish this.
[41] An order shall issue that the Air Miles account held in the name of Raymond Scott Flear be divided at source and that 2524 air miles be transferred into the name of Judy Cecile Flear. Should there be any cost to accomplish this, the respondent shall pay same. As the value of this asset will be divided at source, it need not be included in an equalization calculation.
The Topaz Travel Trailer
[42] Pursuant to a Temporary Order of Fitzpatrick J. dated August 12, 2011, and on consent, the personal property of the applicant and respondent was to be divided according to a schedule attached to that order. The applicant testified that the agreed upon division has been completed but for the transfer of the registration of a “Topaz” travel trailer. The applicant testified that she has possession of the trailer and the registration form, but that the respondent will not execute the transfer portion of the registration.
[43] An order shall issue confirming that the applicant is the legal and beneficial owner of the “Topaz” travel trailer and that the relevant registration shall be re-issued in the applicant’s name alone, without the necessity of the respondent signing the registration transfer form.
The Respondent’s CP Rail Employment Pension
[44] As of both the date of marriage and the valuation date, the respondent was a member of the CP Rail Pension Plan. According to a “Pension Estimate Request”, dated September 14, 2011 obtained by the applicant and filed as evidence in these proceedings, the respondent entered this pension plan on March 24, 1976, prior to the date of marriage. This document suggested an anticipated retirement date for the respondent of December 31, 2011, at which time he would be 55 years old with 35 years of pensionable service.
[45] Based on these facts, the Pension Estimate Request suggested the respondent was entitled to either an estimated lifetime monthly pension amount or a lump sum payment with respect to his entitlement under the pension plan in the amount of $880,266.00. Of this sum, the respondent would be required to transfer $465,898.00 to a “locked-in vehicle” and could receive the balance of $414,368.00 in cash, less withholding taxes.
[46] The Pension Estimate Request filed by the applicant is not a valuation of the respondent’s interest in the pension plan prepared by the plan administrator, nor is it an actuarial valuation of the plan prepared by an actuary. The applicant provided no other evidence in relation to the respondent’s interest in this pension plan, other than testifying that the respondent was employed continuously with CP Rail between the date of marriage and the date of separation.
[47] The applicant submits that the figure $880,266.00 should be entered as the value of the respondent’s pension when calculating his net family property. Given the modest value of all other assets owned by the parties on the valuation date, this would result in an equalization payment of more than $430,000.00 owing from the respondent to the applicant. In the alternative, the applicant suggests her spousal interest in the respondent’s pension plan be realized by a division of the respondent’s pension benefits at source.
[48] It would be inappropriate to include the suggested value of the respondent’s pension as an asset to be included in the calculation of his Net Family Property. I am not satisfied that this figure represents an accurate valuation of this asset. Further, and in any event, this would result in an order for a very substantial equalization payment to be paid by the applicant to the respondent, which the respondent would be unable to pay and which order the applicant would be unable to enforce. It would be a substantial disservice to both parties to deal with the pension in this fashion.
[49] The respondent’s employment pension is by far the most significant asset owned by the parties on the valuation date. The vast majority of its value accrued between the date of marriage and the date of separation. The applicant is entitled to an equalization of the increase in the value of the respondent’s pension plan between the date of marriage and the valuation date. The only method by which the applicant will realize her entitlement in the respondent’s interest in his CP Rail Pension is by way of a court ordered division of his pension benefits at source, pursuant to sections 25(4) and (5) of the Pension Benefits Standards Act, 1985, R.S.C. 1985, c. 32 (2nd Supp) (the “PBSA”), and I so order.
[50] An order shall issue providing for a division of Raymond Scott Flear’s benefits in the CP Rail Pension Plan as follows:
The applicant, Judy Cecile Flear, and the respondent, Raymond Scott Flear, were married on June 23, 1978;
The applicant and respondent separated on August 1, 2010 and August 1, 2010 is the valuation date for the purpose of an equalization of their net family properties, including the equalization of Raymond Scott Flear’s benefits in the CP Rail Pension Plan;
The applicant shall be entitled to receive 50% of the pension benefits accumulated by the respondent in the CP Rail Pension Plan between the date of marriage (June 23, 1978) and the valuation date (August 1, 2010). It is ordered that the applicant has an interest in the CP Rail Pension Plan to the extent of her entitlement. The total value of the benefits assigned to the applicant, plus the value of the remaining benefits to the respondent after the division occurs, must not exceed the value of the respondent’s pension as if the division had not occurred;
The CP Rail Pension Plan is hereby ordered and directed to assign to the applicant, Judy Cecile Flear, 50% of the pension benefits accumulated by Raymond Scott Flear in the CP Rail Pension Plan between the date of marriage (June 23, 1978) and the valuation date (August 1, 2010), as permitted under sections 24(4) and 24(5) of the PBSA, 1985;
The applicant shall provide a copy of this court order to the CP Rail Pension Plan together with her written request to complete a division of the respondent’s pension benefits as ordered herein.
[51] Subject to the terms of the CP Rail Pension Plan and of the PBSA, 1985, the applicant may, subsequent to a division of the respondent’s pension benefits, direct CP Rail Pension Plan to transfer her pension benefits, or the commuted value thereof, into her Registered Retirement Savings Plan or another allowable locked-in savings vehicle.
[52] As a result of the respondent’s pension being divided and equalized at source, it shall not form part of the respondent’s Net Family Property.
Equalization of Remaining Property
[53] Once the assets referred to above have been divided as ordered, there are several remaining assets and debts that were owned by the parties on the valuation date which have to be equalized.
[54] The only other asset held by the respondent on the valuation date that this court has heard evidence of is 650 shares of Noront Resources Ltd. The applicant testified that she was told the respondent retained these shares on the valuation date. The respondent filed evidence that these shares were trading at a high of $1.38 on the valuation date, resulting in an asset value of $897.00.
[55] There is no evidence of other assets or debts of the respondent on the valuation date. The respondent’s Net Family Property is therefore $897.00.
[56] The applicant owned RRSPs with the CIBC on the valuation date. The applicant’s RRSPs had a gross value of $26,020.00 on the valuation date. Applying a tax discount rate of 25%, these RRSPs had a net value of $19,515.00 on the valuation date. This is the only asset owned by the applicant on the valuation date, other than those dealt with above.
[57] The applicant had two debts on the valuation date, totalling $14,679.00. The applicant’s Net Family Property is therefore $4,836.00. The net equalization payment which would be owing by the applicant to the respondent, subject to consideration of the applicant’ s request for an unequal division of net family properties, would be $1,969.50.
An Unequal Division of Net Family Properties
[58] The applicant submits that this is an appropriate case for the court to order an unequal division of net family properties. The applicant submits that equalizing the net family properties would be unconscionable having regard to the fact that the applicant redeemed a large portion of her RRSPs after separation in order to pay joint debts of the parties, namely the mortgage on the matrimonial home and other costs of this joint asset.
[59] The applicant testified that she redeemed $2,500.00 from her RRSP in 2010 and $12,660.00 from her RRSP in 2011. The applicant filed T4RSP slips to confirm this fact. The applicant testified that she gave some of these funds to the respondent to pay the mortgage on the home, in which he resided. The applicant then began to make these and other payments relating to the home directly. She continued to do so until advised not to by a financial advisor.
[60] The applicant therefore reduced her RRSP holdings by $15,160.00 after separation to pay debts that were the joint responsibility of her and the respondent. This represents approximately 80% of the net value of the only asset owned by the applicant on the valuation date which is subject to equalization.
[61] Pursuant to section 5(6)(h) of the Family Law Act, R.S.O. 1990, c. F-3, I have jurisdiction to order an unequal division of net family properties if I am of the opinion that equalizing the net family properties would be unconscionable, having regard to “any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property”. I find that this is an appropriate situation to exercise that discretion. It would be unconscionable to order the applicant to pay an equalization payment to the respondent when she has had to substantially deplete her property after separation in order to pay joint debts that the respondent refused to pay, despite his significantly larger income.
[62] In the circumstances, there shall be no equalization payment ordered in this case.
Costs
[63] The applicant seeks costs of this hearing and has filed a Bill of Costs suggesting fees of $1,340.00 plus disbursements of $447.00. I have no difficulty with the suggested costs. The hearing took place over two days. The applicant was put through extra time and work because of the respondent’s refusal to engage in the process.
[64] The respondent shall pay to the applicant costs in the amount of $1,787.00, plus H.S.T. in the amount of $232.00. These costs shall be paid within 30 days.
[65] The respondent has, to date, failed to pay costs ordered to the applicant pursuant to two interim orders. In addition to the above costs award, the respondent shall pay to the applicant costs of $423.75 inclusive of H.S.T., plus 3% post judgment interest from January 26, 2012, and costs of $525.45, inclusive of H.S.T., plus post judgment interest of 3% from September 22, 2011.
[66] The applicant shall prepare a draft order and file the draft order for my approval prior to it being issued.
[67] Once issued, the final order shall be served personally on the respondent and proof of service filed.
The Hon. Mr. Justice J.S. Fregeau
Released: May 16, 2012
COURT FILE NO.: FS-11-0208
DATE: 2012-05-16
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
July Cecile Flear
Applicant
- and –
Raymond Scott Flear
Respondent
DECISION
Fregeau J.
Released: May 16, 2012