COURT FILE NO.: FS 10-7510-00
DATE: 20120802
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: LINDA MIGHTON
Applicant
v.
DAVID MIGHTON
Respondent
BEFORE: Conlan J.
COUNSEL: Ms C. Allen, for the Applicant
Mr. H. Thompson, for the Respondent
REASONS FOR JUDGMENT
Introduction
[1] The lengthy union between Linda and David Mighton has ended, but the property issues between them remain in dispute. How should those property issues be resolved? That is the question that confronts the Court.
[2] This was a relatively short trial which began in Owen Sound on June 20, 2012 and continued on June 21 and June 28, with the parties filing written submissions afterwards. Those written submissions were complete at the end of July 2012.
[3] The only two issues spoken of in the Applicant’s opening statement at trial were the calculations of net family properties and the division of certain personal property items which Mrs. Mighton wants returned to her. The issues were flushed out into four questions outlined in Mrs. Mighton’s written submissions:
(i) is David Mighton entitled to an unequal division of net family property;
(ii) what if any premarital deductions are available to the parties;
(iii) what is the appropriate equalization calculation; and
(iv) what if any chattels ought to be returned to Mrs. Mighton?
[4] During the course of the Respondent’s opening statement at trial, counsel for Mr. Mighton fairly conceded that Mr. Mighton’s unconscionability claim with regard to the equalization of net family property presents an uphill struggle. In his written submissions, Mr. Mighton addresses two major issues:
(i) what should the equalization calculation be; and
(ii) whether Mr. Mighton is entitled to an unequal division of net family property based on unconscionability.
[5] For convenience, I will label the issues largely in accordance with the headings contained in the written submissions filed. Generally speaking, I will not comment on any item that the written submissions make clear is not in dispute, except the Chester Street property under the next heading below.
[6] Before turning to the contentious property issues between the parties, on consent, this Court grants a divorce which shall take effect 31 days after the date of the Final Order.
Deductions - Date of Marriage Assets for Both Parties
Chester Street Property
[7] There is no dispute about the Chester Street property owned by Mrs. Mighton on the date of marriage on August 18, 1986. It was worth $48,000.00 with an outstanding mortgage of $32,000.00, leaving $16,000.00 in equity which shall amount to a deduction for the Applicant.
Cattle
[8] Mr. Mighton alleges that he is entitled to a deduction of $32,000.00 for money or cattle owned on the date of marriage. Mrs. Mighton disputes that. She testified that she knows nothing about the alleged cattle business venture. Mr. Mighton testified that he started the cattle project in 1984. He acknowledged that he never declared any income from the cattle business and has no records of it. He stated further that he paid off the $32,000.00 mortgage on the Chester Street property within one year after the marriage using money from his share in the joint cattle venture.
[9] I am not allowing the deduction sought by Mr. Mighton. I make no finding that the Respondent is concocting something false about having been part of a cattle business. I accept that he was. But the evidence is too weak to find on balance that Mr. Mighton owned the alleged cattle or money from the business on the date of marriage. It seems odd that Mrs. Mighton knows nothing about it. I accept her evidence on that point. Without any independent testimonial or documentary evidence at all to support the claim, and given what were obvious and likely genuine memory difficulties demonstrated by the Respondent throughout his testimony, the claim is disallowed. I will have more to say later in these Reasons about the reliability of Mr. Mighton’s evidence generally.
Mr. Mighton’s Vehicles
[10] The Respondent claims deductions for an old GMC truck, an antique Norton motorcycle and a boat and trailer. Mrs. Mighton does not dispute that these items were owned by Mr. Mighton on the date of marriage, however, she disputes the claims for the deductions because there is no independent proof of their values. Consistent with that approach, the Applicant fairly surrenders any claim by her to deduct the unknown value of the Honda motor vehicle that she owned on the date of marriage.
[11] Mr. Mighton’s claim regarding the 1976 GMC truck is denied. There is no reliable evidence on its value, and further, the denial is consistent with not allowing any deduction to the Applicant for the Honda.
[12] Mr. Mighton’s claim regarding the boat and the trailer is denied for the same reasons.
[13] Mr. Mighton’s claim regarding the Norton motorcycle is allowed. Parties are not obligated to present independent valuations or appraisals for every asset in question. Such an obligation would in some cases be too time consuming and expensive given the estimated value of the item. The economics and practical realities of litigation simply do not support such a blanket position. Mr. Mighton testified that he purchased the Norton brand new in 1974 for $2,000.00. He stated further that it was roadworthy at the time of marriage. His evidence regarding the Norton was much more precise than it was in relation to the other vehicles, and it was apparent that Mr. Mighton has some experience with motorcycles and some knowledge of the value of the Norton brand as an antique. For those reasons his testimony is more reliable than it is for the other vehicles. In these particular circumstances, Mr. Mighton’s evidence alone is sufficient to establish on balance the $2,000.00 value of the Norton motorcycle. That amount shall form part of Mr. Mighton’s net family property calculation as property owned by him on the date of marriage (a deduction).
Excluded Property - GICs
[14] This is the key issue to be decided.
[15] Mr. Mighton asserts that the proceeds of sale of two cabins at Sauble Beach that he owned, $114,243.78, were an inheritance from his parents. Mrs. Mighton denies that assertion and states that the money was joint property.
[16] Mr. Mighton claims exclusions of $63,000.00 and $10,000.00 as the principal amounts of two jointly held GICs at Saugeen Credit Union. He argues that those investments were his property alone, bought from the proceeds of sale of the inherited Sauble Beach properties.
[17] Section 14 of the Family Law Act provides a presumption that the GICs are joint property. It is the burden of Mr. Mighton to rebut that presumption on balance.
[18] The evidence at trial on this issue was fairly straightforward and requires no detailed recitation. Mr. Mighton testified that he never intended for the GICs to be jointly held. He described his visit with Mrs. Mighton to the Saugeen Credit Union in Durham during which, according to Mr. Mighton, he instructed the Manager, Wayne Cargoe, to put $110,000.00 in to a GIC that the Applicant could have access to only if something bad happened to Mr. Mighton such as a heart attack or accident. He testified that he never saw that joint GIC until a week before Mrs. Mighton asked for a divorce. He said that he had nothing to do with the renewals or disposal of any GICs. His evidence on those key points remained steadfast in cross-examination.
[19] Besides the parties, two persons from Saugeen Credit Union testified at trial on this issue - Senior Loans Officer Ms. Lonnie Macdonald and Manager Mr. Wayne Cargoe. Their evidence does not sway the Court either way, to be frank, although I must say that the cross-examination of Mr. Cargoe made Mr. Mighton’s claim at least plausible in that the Manager confirmed that there is nothing on the journal document (Exhibit 13) to suggest that the GIC account was joint; that Mr. Mighton may not have seen both names on the deposit slip; and that from the date of deposit onwards Mrs. Mighton could have done anything with that GIC account without Mr. Mighton’s knowledge, authorization, permission or instructions.
[20] After careful consideration of the totality of the evidence, I find that Mr. Mighton has failed on balance to rebut the presumption that the GICs are joint property. As such, Mr. Mighton’s claim for the exclusions is denied.
[21] I recognize that Mr. Mighton is very unsophisticated in matters of finances. My decision to deny Mr. Mighton’s claim is not based on matters such as the income tax returns showing the interest on the GIC investments being claimed by both parties. Nor is it based on the evidence of the Credit Union personnel. Nor is it necessarily dependent on choosing the testimony of Mrs. Mighton over that of the Respondent. Nor is it simply because Mrs. Mighton used her inheritance for the benefit of both parties, thus, it should be assumed that Mr. Mighton intended the same for his inheritance. Nor does it have much to do with the $20,000.00 loan negotiated with the Saugeen Credit Union.
[22] The determination is based primarily on two findings: that Mr. Mighton’s testimony suffers from reliability and credibility problems, and that his claim is unrealistic given the couple’s finances during the marriage.
[23] On the former issue, I wish to make it clear that the Court does not think Mr. Mighton is a liar or a fraudster. He may have been inappropriate at times throughout the trial, for example, by barking out comments from beside his counsel while Mrs. Mighton was in the witness box, but I did not get the impression that Mr. Mighton was deliberately trying to mislead the Court.
[24] Having said that, several observations are worth noting about his evidence. First, he was frequently rambling and unresponsive in his answers, even in direct examination consisting of very simple questions. I attribute that to uncertainty and a terrible memory as opposed to deliberate evasiveness. In any event, reliability is a concern. Second, in cross-examination, Mr. Mighton was at times sarcastic and at one point refused outright to answer a question posed by Ms. Allen. Again, I think these were mechanisms to mask his uncertainty. An uncertain witness with a terrible memory is difficult to accept as someone whose evidence is generally reliable. Third, stark inconsistencies in his testimony give rise to credibility concerns. For example, in direct examination, Mr. Mighton testified that the materials and labour for the Chester Street property garage were worth no more than $10,000.00 total. Not long later, near the beginning of cross-examination, he said that he put $20,000.00 in to the garage. Another example concerns the cheques from his mother. In direct examination, Mr. Mighton stated that the cheques were generally given to him by his mother and then turned over by him to Mrs. Mighton. He soon after said in cross-examination that the cheques were given by his mother to the Applicant directly. These glaring inconsistencies are difficult to reconcile and fuel concerns about Mr. Mighton’s overall credibility. Fourth, portions of Mr. Mighton’s testimony were just plain incorrect given the facts that we know to be true. For example, he testified in cross-examination that the Sauble cottage sold in 1996; he was eight years off as it sold in 2004. Another example is when he said in cross-examination that his pay cheques were deposited into the joint Saugeen Credit Union Account from the date of marriage, but that is impossible as the account was not opened until a decade later in March 1996 (Exhibit 2, Tab 2, page 29). If these are simply examples of Mr. Mighton being significantly but genuinely mistaken, which I am inclined to think, they are nonetheless further reason to be cautious about attributing much weight to Mr. Mighton’s testimony regarding what transpired at the Credit Union with the $110,000.00 GIC. I find it implausible that Mr. Mighton has any recollection of that visit. Fifth, Mr. Mighton was prone to rather wild and unsupported accusations during his testimony which adversely affect his credibility. For example, I do not believe that Mr. Mighton’s signature on Exhibit 11 was forged as implied by Mr. Mighton. And I do not believe that Mrs. Mighton was involved in some sordid affair or conspiracy with Mr. Cargoe as insinuated by Mr. Mighton.
[25] On the issue of Mr. Mighton’s claim being unrealistic, if indeed the approximate $114,000.00 was not to be touched by Mrs. Mighton and not to be invested in a joint GIC, as Mr. Mighton claims, then it is patently clear that the couple would not have survived economically. Where in the world did Mr. Mighton think the money was coming from to live on? He testified that he assumed the bills were getting paid through his Second Career Choice training. That makes absolutely no sense. He is obviously mistaken as that source of income ceased in September 2009. Mr. Mighton’s assertion that the GIC investment was supposed to be his alone does not jive with the financial circumstances of the couple in the years that followed.
[26] Despite Mr. Thompson’s very able arguments, at the end of the day Mr. Mighton’s position regarding the alleged excluded property is based entirely or nearly so on the testimony of the Respondent, which evidence suffers from the frailties noted above in terms of both reliability and credibility and which appears nonsensical given the economics of the household. The Respondent has failed on balance to rebut the presumption in law that the GICs are joint property. Mr. Mighton’s claim for the said exclusions is denied.
Mr. Mighton’s Unconscionability Argument and his Claim for an Unequal Distribution of Net Family Property
[27] Section 4(6) of the Family Law Act gives the Court discretion to “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…” The section then goes on to list some factors for the Court to consider.
[28] Mr. Mighton advances a claim under that section, particularly having regard to clauses (d), Mrs. Mighton’s alleged intentional or reckless depletion of her net family property, and (h), any other circumstance relating to property.
[29] The parties agree on the law in interpreting and applying this section. One way to pose the issue is as follows: has Mr. Mighton established on balance that equalizing the net family properties would lead to an unconscionable result in that it would shock the conscience of the Court, whether that result flows from fault-based conduct or not? Reference is made to the decision of the Court of Appeal for Ontario in Serra v. Serra, 2009 ONCA 105, [2009] O.J. No. 432.
[30] Mr. Mighton’s claim is denied. In his usual candour, Mr. Thompson concedes in the Respondent’s written submissions that there are some factors that weigh against the claim. Those include the fact that:
(i) the transfer of the Chester Street property by Mrs. Mighton to her son Joshua, although a gift without consideration, was not that extraordinary in that it was an intentional gift of real property of relatively modest value from a mother to her son and eldest child;
(ii) the Respondent, although on a CPP disability pension, is not destitute or at serious risk of being so after making the equalization payment due in that he has valuable assets at his disposal;
(iii) there is no evidence to find bad faith or undue influence or lack of disclosure regarding the transfer of the Chester Street property from mother to son; and
(iv) it appears that Mr. Mighton at least acquiesced in the transfer and supported providing financial assistance to Joshua.
[31] These considerations prevent a determination that Mr. Mighton has satisfied the very high test to be met under section 4(6) of the Family Law Act. Mr. Mighton’s claim to have the equalization payment reduced by $40,000.00 is denied.
Conclusion on Equalization of Net Family Property
[32] Counsel shall determine the quantum of the equalization payment owing by Mr. Mighton to Mrs. Mighton in accordance with both these Reasons and the agreed upon matters as evidenced by the written submissions. This Court Orders that Mr. Mighton shall pay that amount to Mrs. Mighton within thirty days of the date of the Final Order. Assuming that the parties agree, that amount shall be paid out of Mr. Mighton’s share of the proceeds of sale of the matrimonial home currently being held in trust.
Items of Personal Property that Mrs. Mighton Wants Returned to Her
[33] Exhibit 7 at trial is a list of personal property items that Mrs. Mighton says belong to her and which she wants returned to her.
[34] Regarding number one (personal papers from the safe), this Court Orders that Mr. Mighton shall deliver to Mrs. Mighton through her counsel, Ms. Allen, any such papers that are in his possession or in the possession of any other party acting as agent or custodian for Mr. Mighton. That shall be done within thirty days of the date of the Final Order. The same Order is made regarding items number four (bedroom suite night stands), five (wedding rings), eight (granite tea pot), ten (red wine decanter and glasses) and eleven (ornaments limited only to those engraved by or on behalf of Mrs. Mighton’s parents).
[35] Otherwise, Mrs. Mighton’s claim is dismissed. The remaining items listed in Exhibit 7 are either moot or not capable of an Order without more specificity as Mr. Mighton testified, which I accept, that he does not know what is being referred to.
[36] Regarding item number five (wedding rings), the Order applies equally to Mrs. Mighton. She shall, within thirty days of the date of the Final Order, deliver to Mr. Mighton through his counsel, Mr. Thompson, any rings belonging to Mr. Mighton that are in her possession or in the possession of any other party acting as agent or custodian for Mrs. Mighton.
Conclusion
[37] I wish to thank Ms. Allen and Mr. Thompson for their assistance throughout the trial and for their very competent written submissions. They were great advocates for their respective clients.
[38] Counsel shall present to the Court a draft Final Order in accordance with these Reasons for Judgment.
[39] I wish Mrs. Mighton the very best in her future endeavours. For Mr. Mighton, I can see that the tragic passing of his brother continues to have a scarring impact on him. I hope that his health improves. Mr. Mighton is an industrious man who is capable of offering significant betterment to our society.
[40] On the issue of costs, which Mrs. Mighton is entitled to, counsel are to contact the trial Coordinator in Owen Sound to schedule a Court attendance for brief oral submissions in the event that counsel cannot settle the matter.
Conlan J.
DATE: August 2, 2012
COURT FILE NO.: FS 10-7510-00
DATE: 20120802
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Linda Mighton
Applicant
v.
David Mighton
Respondent
BEFORE: Conlan J.
COUNSEL: Ms. C. Allen, for the Applicant
Mr. H. Thompson, for the Respondent
REASONS FOR JUDGMENT
Conlan J.
DATE: August 2, 2012