COURT FILE NO.: FC-11-039097-00

DATE: 20120725

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

DONNA CATHERINE BOND Applicant – and – JOEL DAVID BOND Respondent

Kevin D. Zaldin, for the Applicant
Jason K. Allan, for the Respondent

HEARD: June 6-8, 2012

reasons for judgment

boswell j.

1.0 INTRODUCTION:

[ 1 ] The twenty-six year long marriage between Joel and Donna Bond concluded with a do-it-yourself separation agreement signed August 15, 2011. It provided for the care and support of the parties’ two daughters, the division of their assets and support for Mrs. Bond for a period of 18 months. Mrs. Bond asks the Court to set the agreement aside. She asserts that it is unconscionable and, moreover, that the spousal support provisions do not satisfy the objectives of the Divorce Act , R.S.C. 1985, c. 3. Mr. Bond seeks to uphold the agreement and to enforce its terms.

2.0 THE FACTS:

[ 2 ] As I set out the facts, it will become clear that many of them were not disputed. In some instances, however, I have had to make factual determinations on disputed areas of evidence. Generally, I found both parties to be well-intentioned witnesses, who each did their best to answer questions honestly and completely. It is quite common for two people to live through, and witness, the same events, but to perceive them and remember them differently. This is particularly true when events take place in an emotionally charged atmosphere.

[ 3 ] As is the case with any witness, when it comes to the evidence of each party, the Court is free to accept some, none or all of what each testified to. As indicated, I generally found each party to be a credible witness. My factual determinations generally reflect a consideration of which party’s evidence on a given disputed issue appears more consistent with the facts, circumstances and probabilities of the case on the whole and, in some instances, which is the more reliable. It is important to remember that credibility and reliability are not the same thing. Credibility has to do with truthfulness. Reliability has to do with a witness’s ability to accurately perceive, remember and recount evidence. In any event, in each area of dispute, I have done my best to concisely indicate what evidence I accept and why.

[ 4 ] With those general comments in mind, I will begin my review of the facts with the history of the parties’ relationship.

2.1 Family History

[ 5 ] Mr. and Mrs. Bond are both 52 years old. They married on October 23, 1983. At the time of marriage, they were each working full-time and they were making similar incomes. Mrs. Bond worked in the accounting department of a taxi company. Mr. Bond was working for Canadian Tire at a gas bar. He later took a course in construction at George Brown College and worked for a brief period in the construction industry. By the late 1980’s he was employed by Standard Pest Control, where he continued to work at the date of separation, earning about $60,000 per year.

[ 6 ] The parties have two daughters. The oldest, Alexandra is 22. The younger, Victoria, is 18. Alex is autistic and epileptic. She attended school until age 20 and since then has been in a special needs day program. She needs help with most aspects of daily living. While she can dress herself, she needs help picking out weather-appropriate clothing. She needs to be dropped off and picked up at the bus stop. She needs help preparing meals for herself. Mrs. Bond has been providing the assistance and support that Alex needs. Alex receives a monthly allowance from the Ontario Disability Support Program and she is not the subject of any support provisions in the parties’ agreement.

[ 7 ] Victoria has just completed high school and has been accepted into a science program at Western University commencing in September 2012.

[ 8 ] Mrs. Bond has been a stay-at-home mom since about the time when Victoria was born. There was some minor disagreement in the evidence about when exactly she ceased working outside of the home, but nothing turns on it. By the time Victoria came along, Mrs. Bond remained at home to care for the children and has been a stay-at-home mother ever since. There was some further disagreement about whether it was a mutual decision for Mrs. Bond to stay at home, or whether she made that decision unilaterally. I find that regardless of how the original decision came about, there was, at the very least, acquiescence in an 18 year status quo, whereby Mrs. Bond stayed home to provide care for the children.

2.1 Mrs. Bond’s Income

[ 9 ] In 1994, when Victoria was about 6 months old, Mrs. Bond began to operate a daycare service from her home in order to earn income. The number of children in her care has varied from time to time. Presently she cares for eight. One is full time and the others receive before and after school care.

[ 10 ] Mrs. Bond’s evidence was that her gross income in 2011 was $18,780. It was $19,380 in 2010, $21,422 in 2009 and $18,076 in 2008. Mrs. Bond testified that she always provides receipts to her customers. Two of those customers testified and confirmed that, indeed, they received receipts from Mrs. Bond for tax purposes.

[ 11 ] Mr. Bond contests the income that Mrs. Bond earns from daycare. He testified that he used to assist her in completing her tax returns. He said that she would tell him what figures to put into her Statements of Business Income, but that she confessed to him that they were not accurate. More to the point, that they were understated. As an example, she might claim $19,000 in income, but actually have made $25,000.

[ 12 ] Mr. Bond suggested that Mrs. Bond earned cash that was not reported. Apart from his assertion that she admitted to him that she was understating her income to Canada Revenue Agency, he had no direct evidence that she was bringing in unreported cash. He nevertheless maintained that her evidence as to her gross business income was not credible for the following reasons:

(i) She allegedly overstated her business expenses on her tax returns every year;

(ii) In 2004, she filed a credit application with the Royal Bank of Canada stating that she earned $25,000 per year;

(iii) In 2007 she completed a credit application for a car loan, indicating that she earned $25,000 annually;

(iv) In September 2011, when applying for a new mortgage at Scotiabank she indicated monthly income of $3,000; and,

(v) She allegedly entered $36,000 as her annual income into an online support calculator, when the Bonds were trying to sort out how much support Mr. Bond should pay.

[ 13 ] Mr. Bond’s counsel spent considerable time challenging Mrs. Bond’s claimed business expenses. There was little profit in the challenge. Mrs. Bond was prepared to concede, for the purposes of calculating support, that no business expenses should be deducted from her gross income. In other words, her gross business income would be treated as her net income and then, moreover, grossed up for income taxes. Despite this concession, Mr. Bond still takes the position that the historical overstatement of expenses reflects badly on his wife’s credibility generally. I am not prepared to find that Mrs. Bond’s trial testimony was less than credible on the basis that she maximized her business expense claims on her income tax returns each year. For one thing, people generally do take advantage of all of the expenses they have available. For another, it is clear that Mr. Bond assisted in the preparation of the tax returns and his current complaints about their lack of accuracy are a little weak, in my view.

[ 14 ] I am similarly unmoved by the fact that Mrs. Bond may have slightly overstated her income in credit applications. Again, it is a common phenomenon for people to enhance their creditworthiness a little on applications for credit. Furthermore, any of the statements of income referred to by Mr. Bond were not made under oath. The 2011 credit application to Scotiabank included child and spousal support income of $1,000 per month, so the non-support income reported is consistent with that reported on the other credit applications.

[ 15 ] I quite honestly don’t understand what figures were used in any online support calculator or why. I have no doubt, however, that Mrs. Bond was not earning $36,000 per year from her daycare business.

[ 16 ] In my view, the income claimed by Mrs. Bond is consistent with her occupation generally, with the number of children she cares for and with the rates she charges. Her position in terms of the treatment of expenses (i.e. ignoring them) appears more than fair to me. Her counsel provided Divorcemate calculations indicating that her present income, grossed up for taxes is $21,508. I accept that figure and find it to be her income for support purposes.

2.3 The Separation

[ 17 ] The date of separation is a matter of some minor disagreement. Mrs. Bond said that Mr. Bond told her on December 4, 2009 that he was unhappy and wanted to separate. She said that when she pressed him, he admitted that he had been seeing someone else for 2 years. Mr. Bond said he told her on December 6, 2009 that he was unhappy and wished to separate. He denied that he was involved with anyone else. They both agreed that they decided to wait until January 2, 2010 to tell the girls so that Christmas wouldn’t be ruined. This is not a case where anything turns on the date of separation, as might be the case if there was a material change in someone’s fortunes between one suggested date and another. I find that the date of separation was December 6, 2009. Mr. Bond provided a very detailed description of when, how and why the ultimate discussion occurred in which he expressed his desire to separate. I accept his evidence on this point, though frankly the parties were largely consistent in their dates. The reason for the separation is, in the circumstances of this case, irrelevant.

[ 18 ] Mr. Bond moved out of the family home on January 2, 2010. The parties’ finances remained intertwined for a considerable period of time thereafter – in fact, until the separation agreement was completed in August 2011. Until then, Mr. Bond continued to deposit his paycheques into the parties’ joint account, which they used to cover their day-to-day living expenses. He continued to come by the matrimonial home regularly, including every Thursday for a family dinner. He assisted with maintenance around the house.

[ 19 ] From time to time the Bonds would discuss how they might settle their financial affairs, but the talks became serious only in the summer of 2011.

2.4 The Agreement

[ 20 ] The agreement at the center of this dispute is a rather simple document. It is dated August 8, 2011, but was signed August 15, 2011. It is eight pages in length, mostly double spaced. Of those eight pages, one is a cover page, another a signing page and a third is simply a short list of the parties’ assets. In other words, the substance of the agreement is set out in five pages. The substantive portions of the document provide as follows:

(i) Mr. Bond shall transfer his interest in the matrimonial home to Mrs. Bond and she will in turn transfer her interest in the family cottage to Mr. Bond;

(ii) Mrs. Bond will be solely responsible for the mortgage registered against the matrimonial home. Each party shall otherwise be responsible for any debts in his or her own name;

(iii) Mrs. Bond shall pay an equalization payment to Mr. Bond of $25,000;

(iv) Personal property shall be deemed to have been divided satisfactorily;

(v) Mr. Bond will pay Guideline [1] child support for Victoria in the amount of $557 per month;

(vi) Mr. Bond will pay $443 per month in spousal support for a period of 18 months commencing September 1, 2011; and,

(vii) Mr. Bond is to maintain life insurance of $100,000, naming Mrs. Bond as the sole beneficiary until February 18, 2015 (Victoria’s 21 st birthday).

[ 21 ] The manner in which the separation agreement was concluded is the area in which the parties most differ in their recollections. I will set out, in turn, each party’s evidence about how the separation agreement was completed, beginning with Mrs. Bond’s testimony.

(continues exactly as in the provided HTML…)

Boswell J.

Released: July 25, 2012

APPENDIX “A”

Equalization of Net Family Property

Mrs. Bond Mr. Bond

Date of Separation Assets

$250,000 Matrimonial Home

Cottage $90,000

40,000 RRSPs 40,000

3,000 Vehicles 3,000

$293,000 SUBTOTAL $133,000

Date of Separation Liabilities [3]

$128,567 Mortgage

12,027 Line of Credit

($140,594) SUBTOTAL

Exclusions [4]

½ Cottage $45,000

Net Family Property

$152,406 $88,000

Wife pays to husband ½ of the difference ($152,406 - $88,000 = $64,406 x .5) being $32,203

[1] Federal Child Support Guidelines (SOR/92-175)

[2] The second stage involves an assessment of whether an otherwise unimpeachable agreement continues to reflect the original intentions of the parties and whether it remains in substantial compliance with the objectives of the Divorce Act , notwithstanding a change in circumstances not otherwise contemplated.

[3] This calculation utilizes the balances owing on the date of separation in December 2009. To be fair, the parties, for their purposes, used balances outstanding at the time they executed their agreement in August 2011. At that time, the line of credit had increased to $36,910 and the mortgage had decreased to $106,762. The total of these encumbrances in August, 2011 was $143,672. The total at the date of separation was $140,594. The difference is not material in terms of the Court’s ruling.

[4] There was no reliable evidence of any date of marriage assets. The parties’ evidence was consistent, however, that Mr. Bond inherited money from his mother’s estate after the date of marriage and used it to acquire the cottage in the parties’ joint names. Having done so, the law is clear that he loses an exemption for one-half of the asset, but retains it for the other one-half: Spikula v. Spikula , [2008] O.J. No 3931 (S.C.J.)