COURT FILE NO.: FC-09-33997-00 DATE: 20121231
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
HEDY BEATRICE WARSH
Applicant
Self-Represented
- and -
IAN GARRY WARSH
Respondent
Mark Greenstein, for the Respondent
HEARD: December 3-7, 10-12, 2012
REASONS FOR DECISION
LAUWERS J.:
[1] The applicant and the respondent were married on June, 6 1978. The date of separation is agreed to be February 6, 2009. They have three adult children: Joel, born May 10, 1984, Erica, born June 6, 1987, and Steven, born April 4, 1991. For convenience I sometimes refer to the Warshes by their first names.
[2] The applicant seeks a divorce and other ancillary relief. The issues for determination are:
Spousal support to address the applicant’s concern about the termination of her disability pension at the age of 65;
Child support for the couple’s three children;
The equalization of net family property, including the appropriate allocation of post-separation expenses related to the disposition of the matrimonial home; and
The allocation of credits for payments made by the spouses before and after separation.
I will address each issue in turn after setting out some background facts.
Background Facts
[3] The parties were once employed by Bell Canada. They earned well and saved well. The applicant had back surgery for a herniated disk and complications led to her disability in 1998, for which she is on a disability pension. By the time of the separation in 2009 their home was paid off and they each had RRSPs.
[4] The respondent was laid off by Bell in 2003 and was unemployed for a lengthy period of more than one year before he started work at his current employer, where he earns less than he did at Bell. The termination of the respondent’s employment led to financial stresses for the couple.
[5] Until mid to late 2008 the couple ran their finances in a pooled fashion. They had a joint chequing account at the Canadian Imperial Bank of Commerce branch at Yonge and Queen in Toronto. They had a CIBC Visa account for which the respondent was the primary account holder and the applicant had a card. They also had a CIBC joint line of credit at the Richmond Hill branch, which was initially set up to reduce interest costs on borrowing to acquire vehicles since the interest rate was lower than the imputed interest on lease payments; the respondent asserts that he hates paying interest. The various accounts were not automatically linked. The parties used the internet to move money among the accounts.
[6] The applicant complains that the respondent unilaterally changed the way that the family handled its finances, from a cooperative and sharing approach, to a separation of finances in late 2008 and early 2009. The change is evident in documentary record, which is largely consistent with the applicant’s testimony. The applicant testified that the respondent’s change in attitude had to do with her decision to separate and her refusal to commit her personal resources and those of the family to finance Joel’s medical school education. The respondent says that the change in his approach to family financing had to do with the applicant’s spend-thrift ways and his attempt to preserve assets. There is a measure of truth in both complaints.
[7] In mid to late 2008 relations in the home worsened considerably. The respondent testified that he became alarmed about their financial situation when he discovered that the applicant was overspending and that the balance in the joint line of credit was steadily increasing. The parties were not getting along, they were not communicating in any meaningful way despite living in the same house, and they were deeply suspicious of each other.
[8] The applicant became concerned that the respondent would take money out of the joint line of credit to the detriment of the family finances. This led her to remove $40,000.00 from the joint line of credit in July. The respondent remonstrated with the applicant who returned the funds about a month later.
[9] Towards the end of 2008, the respondent decided to move the various accounts from the CIBC Toronto branch at which the parties had banked for years to the CIBC branch in Richmond Hill closer to their home, on the basis that borrowing costs there would be lower. This required the closing of the joint chequing account. The applicant warned the respondent not to close the account until certain cheques had cleared, but the respondent did not listen and countermanded the applicant’s re-opening of the account to accommodate the cheques. As a result, the applicant was forced to make some personal payments and incurred NSF charges.
[10] The applicant’s first paycheque for December was paid into the old Toronto joint chequing account. But the account was then closed, and her second December paycheque was not deposited into the new Richmond Hill joint chequing account; arrangements had not yet been made for the direct deposit. The respondent formed the view that the applicant did not intend to continue to deposit her paycheques into the new joint account. For her part, the applicant believed that the respondent had effectively not deposited his paycheques into the account because he had transferred the equivalent amounts out of the joint chequing account to a separate account controlled by him.
[11] The respondent decided to cap the joint line of credit at $70,000.00; the applicant agreed with this decision because she thought that it protected the family finances. In addition, while previously the parties could each access the line of credit separately, in about January 2009 the arrangement changed so that the signature of both parties was required before money could be taken from the line of credit.
[12] The respondent testified that while he approved family expenditures made by the applicant, the applicant unreasonably refused to approve his family expenditures. As a result, the smooth operation of the joint line of credit became impossible.
[13] The joint line of credit was subsequently revived at a four-way meeting on August 19, 2009 and worked well for September and October of 2009 for common expenses, but in November the respondent balked by amending a direction to the bank which would have authorized the payment to Hedy of $2,039.27. The respondent added the following: “Also included is $16,430.15 to Ian’s personal account. This is to compensate a portion of Ian’s family expenditures.” Hedy did not agree with the change to the direction and the use of the joint line of credit ended.
[14] The chaotic family finances led to a number of unnecessary disputes which this trial must resolve.
Assessment of credibility
[15] I found Hedy’s narrative evidence to be largely credible. The applicant’s level of recall of events and documents is impressive and was usually quite accurate. By contrast, the respondent often said that he did not recall, in instances where one would expect a witness to recall. For his part, Ian professed to have a terrible memory. Put bluntly, he remembered as little as possible. He deferred to Hedy with respect to the narrative. She effectively cross-examined him on a number of matters, reminding him of pertinent facts about an event, to which he readily then acceded.
[16] The respondent is still very angry with the applicant and with his daughter Erica. As will be noted, his emails and actions throughout have a vengeful tinge and were intended to cause emotional distress. The respondent’s negative feelings towards the applicant were evident in his courtroom demeanour, both while giving testimony and while listening to testimony being given. This affected the reliability of his evidence. By contrast the applicant was calm and measured. She gave her evidence in a straightforward fashion even while she was in considerable pain from her disability and under the influence of pain medication. I found her to be honest throughout.
[17] On balance I generally prefer the applicant’s version of events when there is a conflict with the respondent’s version. Her evidence was more consistent with the overall scenario that was established by documentary evidence, the testimonial evidence, and common sense; it was inherently more plausible.
[18] By contrast, with respect to the financial issues, I found Ian’s evidence to be largely more credible than Hedy’s. His record-keeping was better organized. While Hedy had volumes of material, she did not organize the financial information very well and was largely unable to contradict Ian’s evidence on the numbers. In cross-examination, it became clear that Hedy’s estimate of what she had spent on the children could not be right in light of her net after-tax income.
[19] Consequently, I prefer Hedy’s narrative evidence, on the one hand, and Ian’s financial evidence, on the other hand, subject to certain exceptions as will become evident.
First Issue: Spousal Support
[20] The applicant has been on an indexed disability pension since 1998 and now earns about $49,000.00 per year, an amount that increases annually with the cost of living. The pension will terminate when she turns 65 on May 4, 2024. The respondent is an employee of a stable company and now earns $53,500.00 per year. He will be 65 years of age on March 9, 2020. The applicant asserts that the respondent makes more money than she does and that he has hidden sources of income which he has not disclosed; she submits that the court should impute his income to be $75,000.00 at minimum.
[21] Section 15.2 of the Divorce Act governs the spousal support issue. It authorizes a court to make a spousal support order and to order that the paying spouse provide security for the payment. The factors and objectives to be considered by the court are set out in subsections (4) and (6):
(4) In making an order under subsection (1)…, the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(6) An order made under subsection (1)…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.
[22] In Yemchuk v. Yemchuk, 2005 BCCA No. 406 Prowse J.A. observed at para 28:
…I turn to the objectives of a spousal support order set out in s. 15.2(6) of the Act. While the authorities are clear that all objectives must be considered in determining whether an order of support is warranted, the most relevant factors in this case are: (a) the economic advantages or disadvantages to the spouses arising from the marriage or its breakdown (a provision described in Moge [Moge v. Moge, [1992] 3 S.C.R. 813] as "expressly compensatory in character"); and (c) relieving any hardship of the spouses arising from the breakdown of the marriage (described in Moge as not being exclusively compensatory.)
[23] During the marriage both parties contributed relatively equally. Their incomes continue to be roughly equivalent. I find that the hardships from the breakdown of the marriage are being shared equally. While I sympathize with the applicant’s concern about her future when the disability pension runs out, I note that there is no certainty that the respondent, who is four years older, will still be working then. Further, she will have her share of the proceeds of sale of the matrimonial home to use and invest in the meantime.
[24] In Homsi v. Zaya, 2009 ONCA 322, 2009 CarswellOnt 2068 Epstein J.A. stated at para. 28 that, "The onus is on the person requesting an imputation of income to establish an evidentiary basis for such a finding." Hedy points to some evidence to support her argument that additional income must be imputed to Ian. She notes that in his loan application to Toyota dated March 30, 2010 Ian stated his annual income to be $75,500.00. His explanation is that he was drawing down RRSPs. His notice of assessment for 2009 stated that his total income was $77,609.00 and for 2010 stated that it was $74,717.00. I do not consider the RRSP withdrawals to be income for spousal support purposes. The drawdown of RRSPs is clearly not sustainable. Hedy relies on Ian’s email to Joel dated July 1, 2008 in which he predicted that his income would soon be about $80,000. She also points out that he made some money during his period of unemployment that is not reflected in his tax returns, so he has no compunction about understating his income.
[25] Ian is now a T4 listed full-time employee of a firm that he does not own, so his scope for income manipulation is limited. I am unable to find on the balance of probabilities that his income is understated on his current income tax returns, or that he is deliberately underemployed so as to warrant the imputation of additional income. In the circumstances I therefore decline to impute additional income to him or to make a spousal support order in favour of the applicant. The termination of her disability pension would be a material change in circumstances that may allow her to bring a new application.
Second Issue: Child Support
[26] By order dated January 25, 2012 Nelson J. ordered child support for Erica and Steven in the amount of $794.00 commencing January 25, 2012, leaving “the issue of child support owed, if any, prior to this date [to be] a trial issue.” The applicant seeks retroactive child support for Erica and Steven to the date of separation on February 6, 2009.
[27] The child support issue largely concerns post-secondary education. The parents are highly intelligent. They value post-secondary education. The most expensive question in this case is whether the applicant should be responsible for paying any of Joel’s expenses for medical school in the United States. A related question is the extent to which the couple should be required to assist Erica and Steven.
[28] In the context of this divorce proceeding, section 7 of the Federal Child Support Guidelines applies. It provides:
- (1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation:
(e) expenses for post-secondary education; and
(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child.
[29] Section 2 of the Federal Child Support Guidelines defines a “child” to mean, “a child of the marriage”. This definition invokes section 2 of the Divorce Act itself:
2.(1)… “child of the marriage” means a child of two spouses or former spouses who, at the material time, …(b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life.
[30] In a nutshell, the respondent submits that Joel and Steven are each properly understood to be “a child of the marriage”, but Erica is not. I begin with Erica.
Erica’s education and other expenses
[31] Erica is now 25 years old. At the date of separation she was attending York University. She changed her focus from kinesiology to urban planning and as a result took five years to complete her first degree. To finance her education she worked and took out OSAP loans, and the family helped with living expenses. Erica lived at home and had the use of a Visa card, a family plan cell phone, car insurance, and so on, all paid from the joint resources. She lived in the matrimonial home until February 2010 when she left with Hedy and moved into the home of Sidney Cohen, Hedy’s brother. Erica graduated from York in 2010.
[32] Erica has just completed a Master’s program at Waterloo University in urban planning. To finance that program Erica got a grant, used her summer job savings, and also took out a CIBC loan that is guaranteed by Hedy. In her second year Erica took out an OSAP loan. She worked as a teaching assistant and did other part time work. Hedy has helped with her incidental expenses. Since Justice Nelson’s order of January 2012, the respondent has been paying child support for Erica.
[33] Ian and Erica no longer have an active father-daughter relationship. On August 31, 2010 the respondent sent her an email that, Hedy asserts, left Erica in great distress. The email stated: “You are leaving Toronto and have a Toronto cell phone. Obviously I will not want to be paying long distance for that phone and would prefer to cancel the phone and pay the penalty since you clearly will not be communicating with me any longer. I will be contacting Rogers to cancel the phone. I assume you leave in September. Have a great life, I guess I can now do the Yiskadal [a Jewish memorial prayer for the dead], as I no longer have a daughter.” On the basis that he and Erica no longer have a filial relationship, Ian asserts that he should have no responsibility to pay child support for her. He has been paying $794.00 monthly support order towards Erica and Steven. Ian seeks the return of funds paid for Erica after she turned 25 on June 6, 2012.
[34] Mr. Greenstein argues that since Erica has repudiated the father-daughter relationship, she is no longer a “child of the marriage” entitled to support from Ian. He relies on Apthorp v. Shearing (1998), 42 R.F.L. (4th) 287 per Campbell J. at para. 14:
With regard to Melanie, the court was referred the cases of Anderson v. Anderson (1997), 27 R.F.L. (4th) 323 (B.C. S.C.) per McKinnon J.; Farden v. Farden (1993), 48 R.F.L. (3d) 60 (B.C. Master) per Master Joyce, and Law v. Law (1986), 2 R.F.L. (3d) 458 (Ont. H.C.) per Fleury J. These cases all support the proposition that an adult child who has terminated any relationship with a non-custodial paying-parent "for no good cause" loses his/her status as a "child of the marriage". As Fleury J. observed:
...A father-child relationship is more than a simple economic dependency. The father is burdened with heavy financial responsibilities and the child has very few duties in return. It seems reasonable to demand that a child who expects to receive support entertain some type of relationship with his or her father in the absence of any conduct by the father which might justify the child's neglect of his or her filial duties.
Since separation, Melanie has refused any relationship whatsoever with her step-father. He was not advised of Melanie leaving her mother's home in 1995, nor of her return in 1996. As far as Melanie is concerned, other than as an income source, Mr. Apthorp has ceased to exist. See also Choicoine v. Choicoine (1992), 89 D.L.R. (4th) 604 (Ont. Gen. Div.) per: deP. Wright J.
[35] A similar result occurred in Farden v. Farden (1993), 48 R.F.L. (3d) 60 (B.C.S.C.) on the basis that the child had unilaterally terminated a relationship with the parent from whom support was sought. Master Joyce listed a number of factors, since often cited by other courts, to assess such a claim at paragraph 15:
Whether or not attendance in a post-secondary institution will be sufficient cause for a finding that the child is still a "child of the marriage" requires examination of all of the circumstances. It is not a conclusion which follows automatically from proof of attendance at the institution [McNulty v. McNulty (1976), 25 R.F.L. 29 (B.C. S.C.)]. In my view, the relevant circumstances include:
(1) whether the child is in fact enrolled in a course of studies and whether it is a full time or part time course of studies;
(2) whether or not the child has applied for, or is eligible for, student loans or other financial assistance;
(3) the career plans of the child, i.e., whether the child has some reasonable and appropriate plan or is simply going to college because there is nothing better to do;
(4) the ability of the child to contribute to his own support through part-time employment;
(5) the age of the child;
(6) the child's past academic performance, whether the child is demonstrating success in the chosen course of studies;
(7) what plans the parents made for the education of their children, particularly where those plans were made during cohabitation;
(8) at least in the case of a mature child who has reached the age of majority, whether or not the child has unilaterally terminated a relationship from the parent from whom support is sought.
[36] In Lampron v. Lampron (2006), 29 R.F.L. (6th) 307 (Ont. S.C.), Manton J. held at paragraph 5: “If the father is not to occupy part of their lives and his children who have attained the age of majority will not speak to him they do not deserve to be supported by him. They said themselves that they can support themselves and that is what they will have to do from now on.”
[37] Mr. Greenstein cites Lawrence v. Mortensen (1999), 8 R.F.L. (5th) 133 (Ont. S.C.) per Snowie J. at paragraph 17:
The court may reduce, cancel or suspend support if a child is old enough to accept the consequences of his/her actions and unreasonably refuses to communicate with a parent. A parent should not be “a wallet” for an adult child’s needs.
This reasoning, Mr. Greenstein submits, applies to Erica.
Erica’s status
[38] Ian gave evidence that he was closest to Erica before the split. He was obviously hurt when Erica sided with Hedy and left to live with her. While Erica was on her witness list, Hedy finally decided not to call her so as not to require her to testify against her father. Hedy expressed the hope that Ian and Erica could re-establish a relationship after the trial is over. Ian, for his part, did not say that a future relationship with Erica is out of the question.
[39] I must assess the behaviour of Ian and Erica in relation to the proposition made by Campbell J. in Apthorp: “[A]n adult child who has terminated any relationship with a non-custodial paying parent “for no good reason” loses his/her status as a “child of the marriage.””
[40] I do not find the breakdown of the relationship between Ian and Erica to be the result of a unilateral decision on her part to terminate it. If anything, the decision was Ian’s. The email in which he effectively tells Erica that he will be treating her as though she is dead was shocking and outrageous. Ian tried to slough off the email as an angry and impulsive act, and effectively asks the court to ignore it. Ian made, however, no apology to Erica immediately or later. Frankly, I found his statement of regret to be hollow, especially in light of the financial advantage he is hoping to gain from terminating the support obligation towards her and in recovering the amounts that he has paid for her support thus far. Putting it in terms of Apthorp, in my view there was “good cause” for Erica to respond as she did to Ian’s repudiation of the father-daughter relationship. The lack of communication seems to be mutual. While I am hopeful that Ian and Erica can reconcile, I find that the rupture in their relationship did not deprive her of status as a “child of the marriage” for support purposes.
Steven’s education and other expenses
[41] At the date of separation Steven was a high-school student living at home.
[42] There was a fight on June 23, 2008 involving the respondent, Erica, and Steven. It culminated in a corrosive email from the respondent to Steven dated June 24, 2008. Whereas before Ian had accompanied Steven during his athletic activities as an elite baseball player, he terminated that role based on what he conceived to be certain irresponsible behaviour on Steven’s part. The email states:
I am no longer handling your baseball.
Erica & mum will have to deal with this.
Until they see for themselves, I will never have their support in trying to correct things I do not feel you are handling correctly. I no longer have to treat you like a 2 yr old…I am cancelling all my hotel rooms…
[43] In Hedy’s view, this fight was the beginning of a major breakdown in the respondent’s relationship with both younger children.
[44] After completing high school, Steven enrolled at McGill University and is now in his final year. His education has been financed by a loan from OSAP; as of November 24, 2011 Steven owes $31,269.00. He also obtained a bursary for $8,730.00. He earns income in the summer and during the year.
[45] Ian occasionally gave Steven money in the form of cash but ceased doing so after the support order came into effect in January, 2012. According to Ian, the tuition credit for Steven is split between him and Hedy for income tax purposes.
[46] Ian has an elaborate accounting system in which he enters his expenditures almost daily. That system records that he gave Steven $10,637.24 before the support order took effect. He seeks credit from Hedy for half that amount.
Joel’s education and other expenses
[47] Joel is now 28 years old. His first degree was from York University. He graduated in 2006 with a degree in kinesiology and health sciences. To pay tuition fees and incidental expenses, Joel received some scholarships, and he worked. He lived at home and the family helped with other living expenses such as car insurance, fuel, cell phone and other incidental expenses. Joel had a Visa card. These expenses were paid from the couple’s joint bank facilities including a chequing account and a line of credit. It appears that the couple also paid for a course at Athabaska University for Joel.
[48] At the date of separation, Joel was attending Queen’s University and was pursuing a Master’s degree in epidemiology. He was on a full scholarship that included his residence. His incidental living expenses were paid by the family in the same way as for his undergraduate degree.
[49] After graduating with his Master’s, Joel applied to medical schools in Canada and the United States. The applicant helped Joel with his applications and the application expenses. He was accepted in July 2009 by the medical school at Thomas Jefferson University in Philadelphia and started in August 2009. This is a four-year program and he is set to graduate in 2013.
[50] Joel’s attendance at medical school began after the separation date. There was a family discussion about how Joel’s medical education would be financed, but Hedy was not involved. This discussion involved the extended family including Joel’s grandfather, Irwin Warsh, and Ian’s younger brother, Monty Warsh, who is a lawyer. Irwin owns a company known as Warsh & Warsh Building Contractor Ltd, which holds residential rental properties. Irwin now suffers from a progressive form of dementia. The company is run by Monty and his wife and Ian does the bookkeeping.
[51] Irwin initially said that he would be willing to pay for Joel’s medical school. The precise amounts and the nature of Irwin’s commitment were not clear. However, in 2009 a number of his company’s units were vacant and the cash flow was reduced. Irwin changed his contribution from a gift to a loan. There is a loan agreement dated August 13, 2009 by which Ian became obliged to pay Irwin $100.00 a month on a loan of $40,000.00 at an interest rate of 3 per cent. Irwin made a second loan in the amount of $60,000.00 as of June 1, 2010 to be paid at the rate of $150.00 a month at an interest rate of 3 per cent. Monty believes that the shift in the nature of the financing from gift to loan on Irwin’s part may be attributable both to the lack of cash flow over a period of time and to Irwin’s progressive dementia.
[52] The initial loan from Irwin to Ian was matched by a loan agreement between Ian and Joel dated July 31, 2001. Joel promised to repay the $40,000.00, interest free. Ian did not ask Joel to enter into other such agreements on the basis, he testified, that Joel is his son and will do the right thing and repay the loans when he is practising medicine and can afford to do so.
[53] Ian’s friend and co-worker, Fred Korman, loaned him $10,000.00 in July 2011 bearing interest at the rate of 4 per cent per year, on which Ian pays $33.00 per month. On November 30, 2011 and again on April 20, 2012 Monty loaned $50,000.00 to Ian under a promissory note interest-free. On October 4, 2012, Ian’s mother Frances loaned him $50,000.00 without interest. Joel also took out a “CIBC Professional Edge Student Line of Credit or Loan,” guaranteed by Ian, which has been disbursed over time on an annual basis, and the principal amount will be $150,000.00. It bears interest at prime while it is current and while Joel is still enrolled. Ian testified that Joel was not permitted to work while in the United States and was therefore unable to contribute anything towards his education.
[54] Once Joel was admitted to medical school, Ian set about trying to get Hedy to contribute from her personal and the family resources. She refused to agree that locked in RRSP’s could be unlocked to use the funds for this purpose. Despite this refusal Hedy continues to have a good relationship with Joel, who visited her in the weeks before the trial and stayed over.
[55] Ian claims that the capital cost of Joel’s medical school education will be $350,000.00 and the interest expense on various loans as of the date of trial is over $16,000.00. The additional costs for Joel including cash, gas, car expenses, and the U.S. cell phone amount to about $9,000.00. Ian submits that Hedy should pay half of the capital cost of the loans and half of the interest expenses together with half of Joel’s incidental expenses.
Discussion Regarding Child Support
[56] The basic legal principles in relation to post-secondary degrees are set out by McDermot J. in Lo v. Lo, [2011] ONSC 7663, [2011] O.J. No. 6120 at para. 153 and on 158, 177, 187, and 193:
153 The onus to prove that child support remains payable for an adult child lies with the proponent of the s. 7 expense: see Jarzebinski v. Jarzebinski, [2004] O.J. No. 4595 (S.C.J.) at para. 18. Moreover, a measure of whether a post-graduate degree is to be paid for by the respective parents is subject to a number of criteria; those criteria include the family's financial circumstances, the child's educational and career plans considering the capability, age and academic performance of the child, the family's educational expectations and the parent's involvement in the decision making process: see Albert v. Albert, [2007] O.J. No. 2964 (S.C.J.) at para. 50 and Jarzebinski v. Jarzebinski, supra at para. 19.
158 Furthermore, although education is important to this family, the obtaining of a post-secondary degree is not necessarily within the ambit of what this particular family would otherwise support. This becomes important where one member of the family is expected to pay a portion of this expense and has not been consulted on this point, as in the present case. The family history thereupon becomes important: the post-secondary education of an older sibling can provide the "benchmark" against which the reasonableness of another child's post-secondary expenses can be measured: see Oates v. Oates, [2004] O.J. No. 2984 (S.C.J.) at para. 30 where the fact that a family had paid for a master's degree for one child established that benchmark; a claim by another child to proceed to obtain a Ph.D. was disallowed.
177 It is apparent to me that the case law requires a child to make a contribution to his or her own education. However, the courts take a balanced approach. There is ample authority that a child will not be required to exhaust his or her savings in order to obtain a post-secondary degree: see Lewi v. Lewi, 2006 CarswellOnt 2892 (C.A.) at para. 39 and Roth v. Roth, 2010 CarswellOnt 2918 (S.C.J.) at para. 16(c). This does not mean that a child does not have to contribute, far from that, but regard must be had to the means of the parents and the family's pattern of spending prior to separation. Certainly, there is no obligation to force a child to utilize every cent of his or her savings: Lewi v. Lewi, supra, at para. 67.
187 As noted above, the "benchmark" for a child's educational expenses may be the practice that has been followed by the family for an older child: see Oates v. Oates, supra.
193 It is correct that I can take judicial notice of the costs of a university program: see Oates v. Oates, supra, at para. 59. However, in that case, the amount that the justice took judicial notice of was the cost of a Canadian university; he took judicial notice of this not for the purpose of calculating the expenses; it was for the purposes of responding to the budget setting out the costs of the child attending at an American university and in order to lower the claim to the amount that it would cost were the child to attend at a Canadian university. It is not authority which would excuse a party from meeting his or her onus to prove the s. 7 expenditures are reasonable and have been paid (Jarzebinski v. Jarzebinski, supra); this onus becomes especially important where one parent has been excluded from the decision making process regarding post secondary expenses. This onus has not been met by the respondent, who has neither proven these expenses nor proven that he paid them. Accordingly, I disallow the second part of this s. 7 claim of $15,000 per year of Sarah's attendance at university.
[57] Mr. Greenstein urges me to adopt the approach in C(J) v. M(A.M.) (2007) 48 R.F.L. (6th) 60 (Ont. S.C.), in which Mazza J. found that the child continued to be a child of the marriage while attending medical school. He stated at paragraphs 29-30:
In the case before me, E.C. has now, in fact, graduated from university and is currently in post graduate studies, specifically, medicine. Although case law suggests that a child finishing his/her first undergraduate degree can lose his/her status as a child of the marriage, I find that the case law does not oblige the court to apply that principle rigidly.
In the case before me, I accept Mr. Schmidt's submissions that the parties, given their successful, lucrative legal careers, would have similar high expectations of their children. Also, given the fact that they both attended post graduate studies from which evolved their respective professions, it stands to reason, in my view, that they would expect and encourage the same kind of level of achievement from their children if they demonstrated such a capacity. In the case of E.C., her education has been uninterrupted and continuous and her graduation to medical school within the context of her academic capacity appears to be a logical evolution. I am persuaded by the case of Farden v. Farden, supra, which provided a list of eight criteria which the court should consider, some of which I have previously referred to in this decision and which I find applicable to the facts before me.
[58] There is no avoiding the fact that the Warshes do not have “successful, lucrative” careers rooted in their own successful post-graduate studies. They are persons of modest means and I must take this into account.
[59] Mr. Greenstein also referred the court to a decision of the British Columbia Court of Appeal in N (W.P.) v. N (B.J.), 2005 BCCA 7, 2005 BCCA. 7, in which the father was obliged to continue to pay child support for his adult daughter to attend medical school. Levine J.A. referred to the Farden factors at paragraph 20, and concluded:
J. will likely need further training after obtaining her M.D. which will limit her ability to repay loans on graduation. She should not be put in the position of having to incur large amounts of debt to achieve what is agreed to be a realistic, achievable educational goal. The second alleged error is that the chambers judge overemphasized the fact that the parents had always planned that J. would go to medical school and "follow her father into the family career". The father claims that by finding this factor to be "particularly compelling", the chambers judge failed to address the "core inquiry" of whether she was unable to withdraw from her parents' charge.
In this case, the evidence is that the father has sufficient income to support J.'s achievable, realistic and legitimate educational goals, and there is no evidence that anything about his age or health would limit his ability to assist her. Nothing in the separation agreement precluded post-graduate education.
The Court recognized at paragraph 29 that the higher the child’s age and scholastic attainment, the heavier the onus of proving dependency.
[60] The critical findings in N (W.P.) v. N (B.J.) are that the child was encouraged by both parents to attend medical school, and that the father, himself a doctor, could afford to support her. The issue of affordability is the real bone of contention between the Warshes.
[61] As I said during argument, in my view both parties are taking a principled position with respect to Joel’s medical school expenses. Ian believes strongly that it is his parental duty to provide assistance to Joel regardless of the personal cost or the risk, and believes that Hedy should contribute equally.
[62] Hedy is proud of Joel’s achievements and wants him to succeed in his medical school education and in his career. I accept Hedy’s evidence that the family did not pay for any tuition expenses for any of the children but only provided assistance for living expenses, especially when the children lived at home, but also when they went away, for the first and second degrees for both Joel and Erica. The sole exception appears to be the payment of a small Athabaska tuition expense on Joel’s behalf.
[63] Hedy is adamant that her refusal to use her personal financial resources to finance Joel’s medical school education was based on her assessment that the family could not and she cannot afford to do so. This, in my view, would be a sound assessment even if the Warshes were still together as a couple, and it is certainly true that she cannot afford to do so now on her limited financial resources. She believes that the modest support that the family gave to Joel in his first two degrees is his fair share, that the same level of family contribution should apply both to Erica and to Steven, and that there is not enough money to pay for Joel’s education and to continue to assist Steven, since Erica is just now graduating.
[64] Ian acknowledges the risk that Joel might not repay the expenses; this is a risk that he, as an able-bodied man, is prepared to take, but it is not a risk that Hedy can prudently take. Picking up a half-share of Joel’s expenses would substantially reduce her share of the proceeds of sale of the matrimonial home, leaving her, as a disabled person, especially vulnerable.
[65] As a less costly alternative, Mr. Greenstein submits that Hedy should be obliged to make a contribution calculated as though Joel were attending a lower-cost medical school in Ontario. He cobbled together a list of university expenses in Ontario which was marked as an exhibit for identification using the Internet, and calculates that the cost of medical school in Ontario, taking into account tuition, residence, and meal plan comes to an average of about $117,000.00. Even if those costs were proven in an acceptable way, I find that Hedy’s share would still be too much. Ian is free, of course, to do what he likes with his own assets.
[66] Applying the reasoning of McDermot J. in Lo v. Lo, I find that the family’s financial circumstances are determinative. The family history of limited support for living expenses while a child attends for two university degrees, which has been taken with respect to both Joel and Erica, is a reasonable benchmark. It sets the standard for Steven, but it also excuses the applicant from financial contribution to Joel’s medical school expenses. This is affordable for the parties, even given the increased expense of running two households rather than one.
[67] I find that Joel is not a child of the marriage for the purposes of the Federal Child Support Guidelines or the Divorce Act over the periods in question in this case. I find that Erica was a child of the marriage but ceased to be so on her graduation from Waterloo University. I find that Steven was and continues to be a child of the marriage for those purposes.
[68] Since Erica has now completed her master’s program, it is appropriate for the support order of Nelson J. in relation to her to terminate at the end of December, 2012. Steven continues in attendance at university. Accordingly, a support order in relation to Steven should continue. Mr. Greenstein advises that the table amount for one child with the respondent’s income level of $53,500.00 is $538.00 each month. This will continue from January 2013 until Steven graduates from university with an undergraduate degree or he quits school, and, if he continues with a master’s program or some other educational program of a similar nature, then to the end of that program. A support deduction order shall issue. Hedy will provide Ian with proof of Steven’s continued registration in October of the year that he graduates from his first degree program and yearly thereafter until completion of the succeeding educational program.
Retroactive Child Support
[69] As noted, Nelson J. fixed child support for Steven and Erica at $794.00 each month. That figure was not challenged by the parties. From my calculation, the arrears would date from the date of separation on February 6, 2009 up to and including December 31, 2011; that is 35 months. I adopt Nelson J’s monthly support amount of $794.00. The retroactive child support maximum would therefore be $27,790.00.
[70] Hedy concedes that Ian ought to be given credit for money that he paid on behalf of Steven and Erica so that he is not obliged to pay twice.
[71] I accept Ian’s evidence, as set out in the spreadsheet, that over the arrears period he gave Steven $10,637.24. He also paid cell phone bills for Erica in the amount of $1,450.15. Subtracting these two amounts from the maximum possible arrears leaves a maximum balance of $15,702.61.
[72] Mr. Greenstein argues that the amount of child support arrears should be adjusted downwards to reflect the fact that Steven is outside of Ontario for a good part of the year attending university, and that Erica lived outside of the home while at university. He argues that the child support obligation should be reduced for the periods when they were gone.
[73] It is open to me to abandon the table calculation and move to an alternate calculation. Such a calculation would be based on a budget method. There is no evidence before me on which I could prepare a reasonable budget for either Erica or Steven, taking into account their expenses and their needs.
[74] I note, however, that the table amount is relatively modest and is designed to capture the reasonable living expenses of the children, which would be ongoing whether they were living at home or not. No effort is being made to pay their tuition expenses. Further, each of the children has contributed to their education costs by earning income and by taking out loans for which they are personally liable; they are making the sort of personal contribution that is appropriate; see Roth v. Roth, [2010] O.J. No 1934 (S.C.J.) per Ricchetti J. at para 16.
[75] In the overall constellation of this family, I see no reason to discount the retroactive child support obligations of the respondent. I therefore find that the respondent is obliged to pay to the applicant retroactive child support payments for Erica and Steven in the amount of $15,702.61. This approach excuses the court from having to assess Hedy’s contributions to Erica and Steven which were real but not well proven.
The Equalization of Net Family Property
[76] Subsection 5(1) of the Family Law Act, sets out the general rule for the sharing of property when a marriage ends:
5(1) When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.
[77] Subsection 5(6) of the FLA sets out the very limited circumstances under which the court has discretion to depart from the general rule. In my view none of the provisions apply to require unequal shares in the case of the Warshes.
The Matrimonial Home
[78] The largest asset owned by the parties is the proceeds of sale of the matrimonial home, which was sold in April 2011 for $558,000.00.
[79] There was a dispute between the parties over whether monies should be spent to repair the house and get it ready for sale. The order of Nelson J. on January 12, 2011 authorized Ian to borrow $12,000.00 to make the repairs. Payments out of the proceeds were made to retire that loan, municipal taxes and incidental fees leaving about $420,000.00 as the balance, which is now being held in trust by the lawyer who closed the transaction awaiting the outcome of this case and has been invested. That balance is to be paid in equal shares to the parties, subject to adjustments as set out below.
[80] In his endorsement, Nelson J. did not mince words. The photographs of the house are in the evidence. He described the condition of the home as “deplorable”. In their anger and bitterness, the parties lived in squalor. Hedy and Erica left in March 2010. Ian continued to live there and apparently took no active steps to improve the condition of the premises.
[81] Hedy’s expectation was that the home would be sold quickly, but Ian was not so keen. And the result, the home was not sold until the spring of 2011 with a closing date of April 13, 2011. Ian lived in the house and finally moved out just ahead of the closing date. He then effectively abandoned the house and its contents.
[82] Hedy had wanted to sell the contents and had arranged to have a firm that provides such services to attend at the house but Ian sabotaged the effort so that it was too late to recoup anything from the contents. Hedy donated them to charity. She kept some items for herself, mostly of sentimental value, and the children’s furniture. Ian took a large TV set, a chair, and some other contents of the house. Hedy asserts that the value of the remaining contents of the house was about $10,000 and seeks $5,000 as her share of the value thrown away by virtue of Ian’s conduct; there is no evidence to support this assertion. Both parties took what they wanted and effectively left the rest. While at the valuation date the contents might well have had some modest value, in my view that value was almost entirely squandered by the parties and ought to play no role in the determination of net family property for equalization purposes.
[83] Hedy seeks rent from Ian for his occupation of the house after she and Erica left. This was a late claim, not referred to in the application and there is no evidence to substantiate any rental figure. Despite the absence of evidence, it seems to me that the rental value of a house in Richmond Hill in reasonable condition would not be less than $2,000.00 a month. Of course, half of that, if awarded, would go to Hedy, and not the full amount.
[84] I have decided not to award rent, but to approach the issue from a slightly different perspective. Ian stayed in the home for over a year and delayed the sale of the home. The fair and equitable consequence is that he should be obliged to pay the related costs entirely.
Adjustments
[85] Ian says that he paid a number of house bills on which he seeks 50 per cent contribution:
Enbridge Gas
$3,572.78
Water & Sewage
$ 666.92
Powerstream
$ 879.14
Rogers Cable
$ 617.27
Total
$ 5,736.11
[86] This number is adjusted slight downward, $5,304.53 in Exhibit 55. I am not able to determine what accounts for the difference. However, taking into account the record of payments in Ian’s cash flow table marked as Exhibit 23 and the time at which payments were made, I calculate that Ian paid $1,898.56 towards the maintenance of the house, utilities and so on before Hedy and Erica left the house. That amount ought to be paid jointly. Deducting it from the costs specified in Exhibit 55 of $5,304.53 leaves a balance of $3,405.97. These expenses were paid during the time that Ian lived in the house until it was sold and transferred. In my view, it would be fair and equitable for Ian to absorb those expenses entirely and I decline to order Hedy to contribute.
[87] Ian paid a Sears bill for the installation of a garage door opener in the amount of $560.95. He also seeks to recoup $3,850.00 plus another small amount for cleaning the property up before it was sold, over and above the $12,000.00 joint line of credit authorized by Nelson J., who left the allocation of the amount to trial. Ian takes the position that the extra expenditures helped fetch $75,000 more than the listing price. No doubt the repairs and cleanup played a role. One wonders what the house would have fetched had it been properly cleaned and maintained throughout. In his latest estimate filed at trial, Ian states that the cost of the additional home repairs was actually $3,510.00, and not the higher figure. In my view, given his continued occupancy and his role in permitting the house to continue to deteriorate, it would be fair and equitable for Ian to absorb those expenses as well. The sum of the figures in this and the preceding paragraph is $6,915.97; I note that Ian’s notional half share of these expenses would be considerably less than he would have paid for rented accommodation over the period.
[88] I have considered the amounts paid by each of the parties on various items and conclude that the following are expenses that should be shared jointly, taking into account the lower figures Ian provided in Exhibit 55:
The amount paid by Ian for household expenses (see above)
$1,898.56
Power Stream payment made by Hedy
$600.59
Richmond Hill Water paid by Hedy
$186.98
Home insurance paid by Hedy
$1,325.00
Sears bill paid by Ian for repair of garage door
$614.64
Balance of Visa paid by Ian that was not matched by an equal payment by Hedy
$5,972.21
NSF cheque charges incurred by Hedy because Ian closed the chequing account prematurely
$123.86
Cell phone bills paid by Ian for the family, further deducting the amount paid for Erica which is picked up elsewhere
$4,192.25
Interest payment made by Ian on the family line of credit, subject to my comments below
$1,257.79
The items are largely self-explanatory. I note that Ian neglected to include the VISA debt that he was claiming from Hedy on his financial statement. It was very much an active issue in this litigation. I am persuaded that the amount owing is not $7,201.84 as Ian claimed in Exhibit 55, but $5,972.21, having reviewed the evidence as to how the bill was finally paid. The omission was, in my view, an error in the preparation of Ian’s financial statement and he is entitled to appropriate credit.
[89] These joint expenses were paid by one party or the other, and therefore require credits to be given. In totality, I calculate the credits owed to Ian to be $13,935.45 and the credits to Hedy to be $2,236.43, for a net to Ian of $11,699.02 divided by two = $5,849.51.
Financial assets
[90] I attach as an appendix a reconciled net family property statement which I have assembled from the financial statements provided by the parties supplemented by the evidence that I heard. While it is largely self-explanatory, some details require explanation.
[91] I have entered the value of the 2002 Honda CRV as $8,500, because that is the amount that Ian was paid when he sold it, and not the $7,175 figure that was on his net family property statement. I have removed the 2006 Yaris. Although Ian has the ownership, that was for insurance purposes. It is Erica’s car and I order that it be transferred to her. I have also removed the value of the 2000 Toyota Celica that was owned by Ian and used by Joel. It has been sold and the amounts used in Joel’s education. I have removed the values attached to bank accounts belonging to Erica and Joel. I have removed values attached to the worthless Nortel shares. Hedy agreed in cross-examination that the value of her various loyalty points was about $1,000. The other amounts need no further explanation.
Conclusion
[92] An order for divorce shall issue.
[93] I provided above at paragraph 68 for ongoing child support to be paid to Hedy for Steven.
[94] Apart from ongoing child support payments, any amounts to be paid by one party to another under the terms of this judgment will be paid out of that party’s respective share of the net proceeds of sale of the matrimonial home.
[95] The following table sets out the calculation of the amounts to be paid to the parties out of the net proceeds of sale of the matrimonial home, taking into account the decisions that I made in this judgment.
| Item | Paragraph of Decision | Credit to Hedy | Credit to Ian |
|---|---|---|---|
| Proceeds of sale of the matrimonial home | 79 | Half plus interest earned | Half plus interest earned |
| Child support arrears | 75 | $15,702.61 | |
| Equalization and financial assets | Appendix | $49,353.47 | |
| Other adjustments | 89 | $5,849.51 |
[96] The amount to be paid out of the proceeds of sale of the matrimonial home to Hedy will be increased by $59,206.57 to be paid from Ian’s share, which shall be reduced accordingly.
[97] I acknowledge the hard work that the parties put into the preparation of this case. I am grateful to Mr. Greenstein for conducting himself in the best traditions of the bar, both as an advocate for his client Ian and as an officer of the court in providing the court with information upon request and without spin. I must also acknowledge the good work of Hedy’s brother, Sid Cohen, who assisted Hedy in court as she contended with the physical issues that her disability creates for her.
Costs
[98] In the evidence and the argument in this case, I requested the respondent, represented by Mr. Greenstein, to go first so that the basic legal structure of the case would be more clearly outlined for the court and for Hedy, and would assist her in framing her case.
[99] I take the same approach to the argument of costs. I do not know if there was an exchange of offers between the parties that might influence the disposition of costs. However, in order to give some structure to the cost submissions, and without in any way presupposing that the respondent has been more successful than the applicant, I direct Mr. Greenstein to provide me with written costs submissions not more than three pages in length, apart from any bill of costs and written offers to settle that he might wish to put forward, or caselaw, within ten days of the date of this decision. The applicant will have another ten days in which to respond, also with a written position not more than three pages in length, together with any bill of costs for legal assistance that she obtained in the course of this application and written offers to settle, or caselaw. Mr. Greenstein will then have another ten days in which to file a written reply, again not more than three pages in length. The parties should alert me to any orders reserving costs to the trial judge. After receiving material from the parties I may yet require oral submissions.
Justice P.D. Lauwers Released: December 31, 2012