COURT FILE NO.: FS-11-5001
DATE: 2012-06-25
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
NUALA REID,
Tyler Johnson, for the Applicant
Applicant
- and -
DAVID HUGH EDGAR REID,
The Respondent being self-represented
Respondent
HEARD: May 22, & 23, 2012,
at Kenora, Ontario
Mr. Justice F. Bruce Fitzpatrick
Reasons For Judgment
[1] This is a matrimonial dispute. Nuala Reid and David Reid were married on June 29, 1996. They had cohabitated since 1989. It was David’s third marriage and Nuala’s second marriage. They separated in May 2008. There were no children of this marriage. At the outset of trial, the parties agreed that a divorce order should be granted.
[2] At the trial, the issues were as follows:
(1) designation of pension survivor benefit in respect of David’s pension;
(2) division of the net proceeds of the sale of the parties’ matrimonial home;
(3) Mr. Reid’s claim for $1,000.00 for rent that was earned from the matrimonial home from April 2008 until November 2008;
(4) Mr. Reid’s claim for $20,000.00 for an alleged depletion of family assets by Nuala; and,
(5) a claim for spousal support by Mr. Reid.
Background
[3] David is a retired teacher and Nuala now works as an occupational therapist. Both parties are sophisticated in financial matters. As both had experienced prior matrimonial breakdowns, they had the wisdom and foresight to enter into a marriage contract on the eve of their marriage. The marriage contract was prepared with the benefit of counsel and both parties had independent legal advice in executing the agreement. I find as a fact that the marriage contract was valid and binding on the parties.
[4] It was also agreed that as of the date of marriage in 1996, David had substantial assets, including a home located at 1415 Rosebank Road, Pickering, Ontario, and a property located in Hastings County which the parties referred to as the “Gunter Estate Property”. Nuala did not have substantial assets upon marriage.
Issue 1: Survivorship Benefits
[5] During his working years, David was a school teacher. He decided to retire in 1999. Upon retirement, he designated Nuala as the beneficiary of a survivor benefit for his pension. As a result, he was, and is now, in receipt of a monthly pension amount that is less than what he would have received had he not chosen to designate Nuala (or anyone else for that matter) as his beneficiary. In Nuala’s notice of application, she asked this court to make a declaration that David’s 1999 designation was “irrevocable”. David’s pleading opposed that relief.
[6] During the trial, no evidence was put forward by the parties as to the precise terms of the pension contract, nor was the wording or the actual contract documents concerning the designation placed into evidence. In argument, David indicated that he simply thought it was “unfair” that if he died before Nuala, she would get the benefit of the survivor benefit and nothing would go to David’s children from his previous marriages. In argument, Nuala’s counsel conceded that there was no real legal or factual basis for the Court to declare the designation “irrevocable”. Both David and counsel for Nuala advised that they had received information from the pension administrator that nothing could be done at this point respecting the designation as it had been made at the time of retirement.
[7] I find, based on the evidence, that I am unable to make any ruling with respect to this particular aspect of the applicant’s claim. The parties have dealt with this matter by the provisions of the pension contract prior to their separation. The marriage contract did not expressly deal with this issue. Accordingly, I can make no finding with respect to it. Therefore that aspect of Nuala’s claim is dismissed.
Issue 2: Division of Net Proceeds of the Sale of the Matrimonial Home
[8] As of the date of separation, David and Nuala jointly owned a matrimonial home located at 103 McLean Street in Keewatin. The house was sold on October 1st, 2009. The net proceeds of the sale were $41,055.08. Since the time of the sale, the funds have been held in the trust account of Nuala’s solicitor pending the decision of this Court.
[9] David claims a priority of $40,000.00 in respect of the net proceeds. His claim arises from the following circumstances. Prior to marriage, the parties had cohabited in David’s home at 1415 Rosebank Road in Pickering. Nuala left the relationship in 1995 for a period of six months. As part of the reconciliation process, the parties got married and entered into the marriage contract, noted previously. In the contract, both David’s and Nuala’s pre and post marriage property was expressly excluded from any claims by the other. Paragraph 6(a) of the marriage contract provided as follows:
(a) All property owned by David or Nuala, whether acquired before or after the date of this agreement, shall be and remain the separate and exclusive property of the owner. Neither party will make any claim to an interest in property which is owned by the other. In the event that the parties later marry, no property of either party shall be included in determining “Net Family Property” within the meaning of the Family Law Act, R.S.O. 1990, Chap. F.3, or any successor legislation thereto. Neither party will claim any interest in or right to the property of the other, or any right to compensation for any contribution to the property of the other, pursuant to any principal of trust law or other law.
[10] Importantly paragraph 8 of the marriage contract entitled “joint property” reads as follows:
If at any time property is held by or in the names of David and Nuala jointly, whether by title document or otherwise, they shall be deemed to be joint tenant of such property with a right of survivorship, unless they agree in writing that this shall not be the case.
[11] The parties experienced a second separation in 2001. From June to December 2001, Nuala lived alone in Kenora. As part of the reconciliation efforts David sold the Pickering home in September of 2001. The net proceeds of that sale were $186,507.07.
[12] As a further part of the reconciliation process, the parties considered whether or not they should purchase or rent another property. The parties sat down and David made out a very detailed handwritten budget. From this budget, the parties made a determination that it would be more economical for them to purchase a property rather than to rent a property. In early 2002, they bought a matrimonial home located at 103 McLean Avenue in Keewatin. The house was purchased in joint tenancy. Unfortunately, Nuala did not have any money to contribute to a down payment. At the time, David offered to use $40,000.00 from the sale of the Pickering property to fund the down payment and to purchase various items for the home. David contributed $31,065.97 from the proceeds of his Pickering property to the purchase price. The balance of the sum of $40,000.00, namely $8,934.09, was placed in a joint bank account. These funds were used for purchasing various items for the matrimonial home.
[13] David testified that at the time he made this contribution, he expressly told Nuala that it was a “loan”. Nuala denied this and said that no such conversation took place. David testified that prior to their marriage, the parties had entered into a formal loan agreement in regard to other monies. This loan was for monies in the order of $26,000.00. It was documented with an amortization table and David repaid it in 1995.
[14] David admitted that no such “paper trail” existed which would document the alleged loan at issue in this trial. Nuala denied that David loaned the monies. On this basis, I find that David made no loan to Nuala in respect of the purchase of the matrimonial home. David therefore has no priority over the net proceeds of sale. In this respect, I am persuaded by the decision of our court in Vandeuyvery v. Vandeuyvery, [1999] O.J. No. 5278. In that decision, the court held that property which had been expressly excluded by a marriage contract, when contributed to a joint partnership arrangement, lost its quality of being excluded property. I find David’s contribution to the purchase of the home to be analogous to the contributions referred to in the Vandeuyvery decision.
[15] I find that the proceeds from the Pickering home lost their quality of being “excluded property” under the terms of the marriage contract once they were contributed to a new jointly owned asset. Paragraph 8 of the marriage contract clearly provides that if title to property is held jointly then the parties are deemed to be joint tenants. This reinforces the clear legal effect of the title to 103 McLean: it was held jointly and the proceeds are to be divided on an equal basis. David and Nuala were sophisticated people who had resorted to a marriage contract to govern their affairs. Despite the past history of these parties where a loan between them had been evidenced by an amortization schedule, David did not see fit to “paper” the transaction at issue nor to obtain Nuala’s written agreement that the proceeds should be repaid in priority to Nuala’s claim for half the value of the asset upon sale. It was the parties’ evidence that they contributed jointly to the payment of regular bills for the upkeep of the property such as the utilities, property taxes and the mortgage. Accordingly, there will be an order that the proceeds of the sale of 103 McLean which are presently being held by the solicitors for Nuala, be divided equally net of any other dispositions that this order will make (see below).
Issue 3: Claim For Rent
[16] After the parties separated, David returned to live full time in Southern Ontario. Nuala also left the matrimonial home. As a humanitarian gesture, Nuala allowed another family to live in the 103 McLean property from April of 2008 until November of 2008. At that time she received rent for the property out of which monies she paid the carrying costs of the property. It was David’s evidence, which was not disputed, that the net amount of income received for that period was $2,000.00. I find that Nuala should have shared that money with David and accordingly there will be an order that she pay him the sum of $1,000.00 with respect to that rent. This amount is to be taken from her share of the proceeds of the matrimonial home.
[17] It was also agreed that the sum of $346.27 be reimbursed to Nuala for tax arrears that she paid for the property. These will be paid first to her from the proceeds of sale and then the balance shall be divided between the parties.
Issue 4: Claim for Reckless Depletion of Assets
[18] David claims that, from 2002 to 2005, he did not agree that Nuala could take $400.00 a month out of the couple’s joint bank account. Nuala’s evidence was that she used the $400.00 per month to “pay bills”. In section 11 of the marriage contract, the parties agreed as follows:
“The household expenses incurred by David and Nuala during their cohabitation before and after their marriage shall be divided between them in such manner as they may agree upon from time to time.”
[19] David alleges a breach of this section because he claims that Nuala did not tell him she was taking an additional $400.00 a month out of the account. When David made this discovery in December of 2005, the parties were no longer contributing to a joint bank account. However, David did not pursue this claim until he filed his Answer in this litigation in May of 2011. Neither party provided me with any authorities with respect to the disposition of this particular issue. Section 5(6) of the Family Law Act provides as follows:
“(6) Variation of share – The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,
(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of marriage;
(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;
(d) a spouse’s intentional or reckless depletion of his or her net family property;
(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
(g) a written agreement between the spouses that is not a domestic contract; or
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.” (emphasis added)
[20] David did not provide any evidence that the money was used for anything other than paying bills, but he simply contended that he did not “agree to it”. David also admitted that he did nothing about it from the time he discovered the situation until the date he filed his Answer. In my view, based on the facts of this case, there is no basis for the court to make any award to David in respect of those monies. David’s evidence does not persuade me that I should disbelieve Nuala’s assertion that she used the money to pay bills. David’s claim also has a limitations problem in my view. He knew about the alleged breach in 2005. He did not do anything about it until May 2011. I find that he has not proven a breach of the marriage contract, but even if he did, his claim would be statute barred by the provisions of section 4 of the Limitations Act, S.O. 2004, c. 24 as amended, as his claim is being made more than two years from the date it was discovered.
Issue 5: Claim for Spousal Support
[21] David makes a claim for spousal support. The evidence of the parties was that their incomes were at all times during their marriage essentially equal. For the majority of the marriage David was in receipt of his pension. At the time of trial, the parties’ annual incomes are relatively the same, David’s income as reported on his most recent financial statement being $61,316.43 and Nuala’s 2011 T-4 income being $63,238.16. Their incomes were also relatively equal throughout the later years of the marriage. The marriage contract expressly provided that Nuala would not make a claim for spousal support from David upon marriage breakdown. I find this indicates the parties’ intention that had a separation occurred, they contemplated that potentially it would be Nuala, and not David, who would be in need of support. This to me indicates that the economic positions of the parties were such that David certainly never contemplated that he would need support from Nuala. His financial circumstances based on the evidence appear to have been the same from the date of marriage until the date of separation and to the date of trial.
[22] There was no evidence put forward by either party that would permit me to find that there was either a compensatory basis, a contractual basis or non-compensatory basis for David to receive spousal support from Nuala as per the decision of the Supreme Court of Canada in Bracklow v. Bracklow, 1999 715 (SCC), [1999] S.C.J. No. 14. Further, pursuant to the judgment of the Supreme Court of Canada in Moge v. Moge, 1992 25 (SCC), [1992] S.C.J. No. 107, there is no evidence of economic hardship that has resulted to David from the marriage or its breakdown. David has not proven that the objectives of spousal support, as set out in the Divorce Act in s. 15.26, have been met. Accordingly, David’s claim for spousal support is hereby dismissed.
[23] Accordingly there will be an order to go as follows:
(1) Divorce granted;
(2) the proceeds of the sale of the matrimonial home will be divided equally less $1,000.00 to David for rental arrears and $346.00 to Nuala for payment of tax arrears;
(3) the balance of the parties claims are hereby dismissed.
[24] As far as costs go, David’s lack of organization and pursuit of irrelevant issues delayed and unnecessarily lengthened this trial in my view. At the outset of the trial, I asked him if he was content to represent himself and he said he believed he was and wished to proceed.
[25] David’s claim for spousal support was particularly unmeritorious. Absent any evidence of offers to settle by the parties, I am prepared to award costs of the trial to Nuala on a partial indemnity scale. If the parties cannot agree as to the amount of costs to be paid, they may make written submissions of no more than two pages. Nuala may make her submissions on or before July 27th, 2012. David may then make his submissions on or before August 10th, 2012. If the parties agree on costs I ask they advise the Court in writing. If I have not received submissions or an indication the parties have settled costs by August 10th, I will simply fix costs in a separate judgment. Any costs awarded to Nuala will be deducted as a first charge from David’s share of the net proceeds of sale of the matrimonial home.
___________”original signed by”
The Hon. Mr. Justice F. Bruce Fitzpatrick
Released: June 25, 2012
COURT FILE NO.: FS-11-5001
DATE: 2012-06-25
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
NUALA REID,
Applicant
- and –
DAVID HUGH EDGAR REID
Respondent
REASONS FOR JUDGMENT
Fitzpatrick J.
Released: June 25th, 2012
/mls