SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: FC-11-038757-00
DATE: 20120504

RE: Olga Benvenuto, Applicant

• and -

Richard Whitman, Respondent

BEFORE: The Honourable Madam Justice H. McGee

COUNSEL: A. McNeely, for the Applicant

A. Di Nardo, for the Respondent

HEARD: May 2, 2012

ENDORSEMENT

Background

[ 1 ] This is the Applicant wife’s (the “Applicant”) motion for et alia child and spousal support commencing April 1, 2011; and the Respondent husband’s (the “Respondent”) motion for a preservation order, payment of sale proceeds, to amend his Answer, to issue a certificate of pending litigation and for table child support for the parties’ 26 year old son.

[ 2 ] The parties separated on November 18, 2010 and have three children: Kory aged 26, Justin age 23 (24 in August) and Emily age 17. The family continued to live together in the matrimonial home until its sale at the end of March 2011.

[ 3 ] No support or voluntary payments have been made to, or for the benefit of the Applicant since April 1, 2011. The respondent has paid incidental expenses for the children from time-to-time. Since October 1, 2011, he has voluntarily paid the amount of $978.00 per month in child support.

[ 4 ] The parents agreed to furnish their children with certain amounts of money from the sale proceeds to assist them in their education. After these and other payments, there remains approximately $152,672.00 in trust from the proceeds of sale of the matrimonial home.

Child Support

[ 5 ] There is an issue today as to which, or whether both of the adult children are eligible for table child support. Each parent seeks table support for the child in his or her care. Section 3(2) of the Federal Child Support Guidelines states that:

(2) Unless otherwise provided under these Guidelines, where a child to whom a child support order relates is the age of majority or over, the amount of the child support order is,

( a ) the amount determined by applying these Guidelines as if the child were under the age of majority; or

(b ) if the court considers that approach to be inappropriate, the amount that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.

[ 6 ] Kory resides with his father and Justin with his mother. Neither is under a disability.

[ 7 ] Both young men have had an uneven course of post-secondary education, interspersed with periods of employment. In 2009 and 2010 Justin earned respectively $20,781.00 and $16,813.00 per annum. Kory earned $6,639.00 and $16,567.00 in those same years. Neither has reported taxable earnings for 2011. Both are enrolled in university programs this past year, although it is unclear whether Kory’s program is full-time. Both are commended for continuing their education, and attempting to better themselves and their prospects.

[ 8 ] It is the experience of many parents that adult children in their twenties cycle in and out of the family home on the journey to financial independence. Parents in family court proceedings should not be penalized for offering the benefits of home to an adult child. At the same time, neither should a parent be over, or under funding the financial reality of a separation; that the prior single family home, has now evolved into two homes.

[ 9 ] The Family Law Act and the Divorce Act apply different approaches to the support of adult children. The former looks to whether a child is enrolled in a full-time course of study. The latter asks whether a child is unable to withdraw from parental control.

[ 10 ] There is a wide range of factors to be considered in the determination of whether a child is a "child of the marriage." Individual factors will be of varying importance in different cases. I encourage counsel to review what is referred to as the Farden factors, in Farden v. Farden, 1993 2570 (BC SC), 48 R.F.L. (3d) 60 and to consider the four-step procedure fashioned by Justice Martinson, in Wesemann v Wesemann, to determine support for an "adult" child.

[ 11 ] I have very little evidence in this proceeding to determine whether Justin and Kory continue to be children of the marriage as defined by either the Divorce Act and/or the Family Law Act. If one or both do, I have an insufficient evidentiary basis to determine whether table support, or a different amount is appropriate per section 3(2) of the Child Support Guidelines.

[ 12 ] I am not prepared at this time to award to either the mother or the father the amount requested for table child support.

[ 13 ] Neither counsel has provided me with a budget for post secondary expenses, or seeks an award of section seven expenses.

[ 14 ] I do make an order for Emily’s support and find that her father’s income to which the table amount is to be applied is $132,000.00. I am not prepared to include a 2011 redemption of RRSPs in his income for support purposes. Nor am I prepared to include the benefit of a company vehicle in the absence of any evidence as to the value of the vehicle. [1]

[ 15 ] Table child support for Emily is payable in the amount of $1,129.00 commencing April 1, 2011 with credit for the payments of $978.00 received to date.

Spousal Support

[ 16 ] In Kowalski v. Grant 2007 MBQB 235, 2007 CarswellMan 422 (ManQB), the court set out the following principles in dealing with temporary spousal support motions:

1. Interim [temporary] support is to provide income for dependent spouses from the time the proceedings are instituted until trial.

2. The court need not conduct a complete inquiry into all aspects and details to determine what extent either party suffered economic advantage or disadvantage as a result of the relationship. That is to be left to the trial judge.

3. Interim support is a holding order to maintain the accustomed lifestyle if possible pending final disposition as long as the claimant is able to present a triable case for economic disadvantage.

4. Interim support is to be based on the parties’ means and needs assuming that a triable case exists. The merits of the case in its entirety must await a final hearing.

[ 17 ] In Robles v. Kuhn 2009 BCSC 1163, the court added the following considerations:

1. On interim support motions, needs and ability take on greater significance;

2. On interim motions, the need to achieve self-sufficiency is of less importance;

3. Interim support should be ordered within the Spousal Support Advisory Guideline (SSAG) range unless exceptional circumstances dictate otherwise;

4. Interim support should only be ordered where a prima facie case for entitlement has been set out.

[ 18 ] I find that there is a prima face case for spousal support. The parties were married for 27 years and are the parents of three children. The starting point for any analysis of spousal support is the Spousal Support Advisory Guidelines, (SSAG) Fisher v. Fisher (2008), 2008 ONCA 11, 88 O.R. (3d) 241 (Ont. C.A.) To conduct that analysis, I must first determine the Applicant’s income.

[ 19 ] Much time was spent on the issue of the Applicant’s income. She earned no taxable income up to and including the taxation year of 2010. She did not qualify for any damages for wage loss within a personal injury settlement received in January 2011. She acknowledges non taxable earnings of $8,400 in her most recent Financial Statement which was earned primarily from rent, and minor engagement for home decorating.

[ 20 ] The Applicant is making efforts to work towards a meaningful contribution to her self-sufficiency. Those efforts include purchasing housing that affords her rental income, and working one day a week in an office. I am prepared to impute a modest amount of non-taxable income to her, being $12,000 per annum.

[ 21 ] On incomes of $132,000 and $12,000; with table support of $1,129; the range of spousal support is $1,975 (low) $2,403 (mid) and $2,885 (high.)

[ 22 ] In reviewing the objectives of an order for spousal support, and the principles to be applied on motions for temporary support, I find the following factors to be relevant in considering the range of support:

1. The marriage is of long duration;

2. The AW purchased housing from her personal injury proceeds of approximately $300,000. She earns rental income from the home;

3. The RH has a vehicle available to him through his employment which is not a taxable benefit and is wholly available to him for personal use;

4. Both parents are maintaining homes suitable to house adult children, and each is providing assistance to an adult son;

5. Neither party should retain a disproportionate share of combined net disposable income;

6. Both parties are maximizing their income.

[ 23 ] Both parties have filed after-tax expense budgets that well exceed the available joint income to fund: $151,875.00 for the Respondent and $86,137.00 for the Applicant. Both budgets are wholly unrealistic and ought not engage the Court’s attention. Each party must appreciate at the earliest stage possible the need to financially reorganize.

[ 24 ] A spousal support payment of $2,424.00 per month would equally divide net disposable income inclusive of the payment of table support for one child.

[ 25 ] However, such a payment would not recognize the reality that the Applicant has three people in her household and the Respondent has two people in his household. I am thus making an order that rounds up this figure to $2,600.00 per month to recognize this disparity. This payment results in 51% of net disposable income lying with the Applicant and 49% with the Respondent. Attached to this endorsement is the applicable Divorcemate calculation.

[ 26 ] Support shall be effective as of April 1, 2011, but because tax relief can only be granted on monies received, I am making an order that $23,400.00 [2] be paid from the Respondent’s share of the sale proceeds to the Applicant in full satisfaction of my order for spousal support for the taxation year of 2011. Each party will need to re-file their income tax returns. Upon refilling of his return, the Respondent ought to receive a significant tax refund. The Applicant is cautioned to retain adequate funds to pay any resulting tax liability.

[ 27 ] The Support Deduction Order shall therefore provide for payment of the table support from April 1, 2011 to present, less credit received; and spousal support from January 1, 2012.

Preservation Order

[ 28 ] The respondent moves for a preservation order per Rule 12 of the Family Law Act :

Orders for preservation

12. In an application under section 7 or 10, if the court considers it necessary for the protection of the other spouse’s interests under this Part, the court may make an interim or final order,

(a) restraining the depletion of a spouse’s property; and

(b) for the possession, delivering up, safekeeping and preservation of the property. R.S.O. 1990, c. F.3, s. 12.

[ 29 ] In Lasch v. Lasch (1988), 13 R.F.L. (3d) 434 (Ont. H.C.), Granger J. held that any restraining order under section 12 should properly be restricted to specific assets, and there should be an onus on the party seeking the restraining order to show prima facie that he or she is likely to receive an equalization payment equal to the value of the specific assets.

[ 30 ] As discussed by Justice Sachs in Bronfman v. Bronfman, there are certain cases in which the trier of fact has a clear record with respect to the payment of an equalization, and others in which it is far less certain. Within the latter category, the court will give serious consideration to the other factors, such as the balance of convenience and the risk of dissipation prior to trial.

[ 31 ] The respondent’s claim for a preservation order most certainly fails within the latter category. Although she has lived above her means during the past period – as has the Respondent - there is no evidence that the Applicant has or will dissipate assets. Indeed, the contrary is indicated. She has invested her personal injury proceeds in a manner that provides shelter and security, and produces an income which relieves the Respondent of some of his obligation to provide support.

[ 32 ] In the former category set out by Justice Sachs, it is not certain that an equalization payment is owing to the Respondent. His net family property statement shows no payment of equalization owing to him; unless the Applicant’s net family property is increased by a one third interest in her late mother’s home. Her mother’s estate includes a home which was discovered to have been held in the title of her three children on the Applicant’s date of separation. The Applicant states that she was not a beneficial owner and that title was placed in her name for estate planning purposes only.

[ 33 ] In the course of submissions, the Respondent’s counsel withdrew a claim for a preservation order on his former mother-in-law’s home. Costs for that withdrawal are dealt with below. Rather, the respondent stated that he seeks a preservation order per section 12 of the Family Law Act on the home that the Applicant bought subsequent to separation with her personal injury proceeds.

[ 34 ] I am not satisfied that the Respondent has a prima facie entitlement to an equalization payment, nor if he does have such a claim, that there is a reasonable or likely prospect that the Applicant will dissipate her assets in a manner that will prevent him from realizing on his claim. In the course of submissions, it became clear to me that the Respondent’s best claim for equalization as currently evidenced can be satisfied from available proceeds of sale of the former matrimonial home now held in trust.

[ 35 ] The respondent’s claim for a preservation order is dismissed.

Summary of Orders

[ 36 ] Order to go as follows:

On Consent

(a) The Applicant’s counsel is at liberty to complete the cross examination of the Respondent.

(b) The Respondent shall maintain the Applicant and any eligible children on his health, medical and dental benefits.

(c) The Respondent may amend his Answer within 30 days. The Applicant may file, or amend her Reply 30 days thereafter.

(d) The Respondent’s motion for a Certificate of Pending Litigation is withdrawn.

Not on Consent

(e) Table support for Emily shall be paid in the amount of $1,129.00 by the Respondent commencing April 1, 2011.

(f) The amount of $23,400.00 shall be paid from the sale proceeds to the Applicant forthwith in satisfaction of spousal support for 2011. This amount is taxable to the Applicant and deductible to the Respondent.

(g) Spousal support shall be paid by the Respondent commencing January 1, 2012 in the amount of $2,600.00 per month.

(h) The Respondent’s motion for a preservation order is dismissed.

Costs

[ 37 ] Neither party served an Offer to Settle in accordance with Rule 18. The Applicant’s Offer was served yesterday, not a full day before the hearing. The Respondent served no Offer. Had a party served an Offer more favourable than the result on motion, a full recovery of costs would be available.

COSTS CONSEQUENCES OF FAILURE TO ACCEPT OFFER

18 (14) A party who makes an offer is, unless the court orders otherwise, entitled to costs to the date the offer was served and full recovery of costs from that date , if the following conditions are met:

1. If the offer relates to a motion, it is made at least one day before the motion date.

2. If the offer relates to a trial or the hearing of a step other than a motion, it is made at least seven days before the trial or hearing date.

3. The offer does not expire and is not withdrawn before the hearing starts.

4. The offer is not accepted.

5. The party who made the offer obtains an order that is as favourable as or more favourable than the offer. O. Reg. 114/99, r. 18 (14).

[ 38 ] Such costs can be considerable. The Applicant’s counsel tallies up $48,126.00 in costs of questioning, transcripts preparation of this motion, disbursements, today’s attendance and HST. The Respondent’s counsel counts her costs to date to $17,700.00.

[ 39 ] Modern cost rules are designed to foster three fundamental purposes:

(a) to partially indemnify successful litigants for the cost of litigation;

(b) to encourage settlement; and,

(c) to discourage and sanction inappropriate behavior by litigants: Serra v. Serra, 2009 ONCA 395, [2009] O.J. No. 1905 (ON CA).

[ 40 ] Neither party was wholly successful in this proceeding, although the mother was more successful on the balance of the relief sought. In my view today’s proceeding, which took the whole of a lengthy day was wildly disproportionate to the scope and value of the issues. Both parties appeared to be “caught up in the fight” and neither appeared to be presenting a manageable plan consistent with actual family finances.

[ 41 ] In reviewing each of the claims made on this motion and the manner in which they were presented by counsel, the court’s attention is drawn to one aspect that plainly invites an award of costs.

[ 42 ] This was a marriage of 27 years. The entitlement to temporary spousal support is absolute. No effort was made by the Respondent to meet this claim on a reasonable basis. No Offer to Settle was made. The Respondent’s attempt to impute $50,000 to $75,000 of income to the Applicant in these circumstances wholly lacked merit. It excited a disproportionate response by the Applicant’s counsel which can be measured in a two three inch volumes of the continuing record.

[ 43 ] The Applicant will have her costs for achieving appropriate amounts of spousal and child support, but in an amount that is consistent with a reasonable range of costs for a temporary motion in these circumstances.

[ 44 ] I am prepared to make an award of $5,000 in costs to the Applicant, also to be paid forthwith from the Respondent’s share of the house sale proceeds. This award is in accordance with rule 24(10), but addresses the costs of preparation for and attendance at this motion only. The Applicant’s costs for questioning and transcripts remain open for consideration by the trial judge.

Costs to Garfin Zeidenberg LLP

[ 45 ] Garfin Zeidenberg LLP is counsel for the estate of the Applicant’s late mother. The administration of that estate involves the deceased’ home, which upon her death was discovered to be held in the title of the Applicant and her two siblings. The estate is not a party to this action. A claim for a CPL has not been plead.

[ 46 ] At the commencement of today’s motion, the court understood that counsel for the Respondent sought to charge the deceased’ home with a preservation order, and/or a Certificate of Pending Litigation. On April 26, 2012 she served Garfin Zeidenberg LLP with a copy of the Respondent’s Notice of Motion. No advance notice of the motion was provided. No dates were canvassed in advance. Mr. P. Grunwald attended today on behalf of the firm.

[ 47 ] About 3:00 p.m. in the afternoon, in the course of her submissions in the main, Ms. Di Nardo stated that she was not seeking to encumber title to the deceased’s home, only the Applicant’s current residence. At that admission, Mr. Grunwald jumped to his feet and asked to be released from today’s attendance, and to be compensated with $3,000.00 in costs.

[ 48 ] A full recovery of his fees is appropriate. Order to go that the Respondent pay to Garfin Zeidenberg LLP forthwith the amount of $3,000.00 in costs.

[ 49 ] In the course of awarding costs, the court surmised whether these costs ought to be considered per rule 24(9)

COSTS CAUSED BY FAULT OF LAWYER OR AGENT

(9) If a party’s lawyer or agent has run up costs without reasonable cause or has wasted costs, the court may, on motion or on its own initiative, after giving the lawyer or agent an opportunity to be heard,

(a) order that the lawyer or agent shall not charge the client fees or disbursements for work specified in the order, and order the lawyer or agent to repay money that the client has already paid toward costs;

(b) order the lawyer or agent to repay the client any costs that the client has been ordered to pay another party;

(c) order the lawyer or agent personally to pay the costs of any party; and

(d) order that a copy of an order under this subrule be given to the client. O. Reg. 114/99, r. 24 (9).

[ 50 ] The Respondent is at liberty to raise by motion, or at conference the issue of whether he ought to be relieved of his costs to Garfin Zeidenberg LLP. A motion must be on 30 days notice, with 15 days right of reply.

McGee J.

RELEASED: May 4, 2012

[1] The only taxable benefit shown for the car is a nominal sum of approximately $100 per annum.

[2] $2,600 x nine months (April – December 2011)