SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FC-11-1694-00
DATE: 20130308

RE: SAMANTHA NANCY WEESE, Applicant

AND:

CHRISTOPHER CHARLES MacDONALD, Respondent

BEFORE: THE HON. MR. JUSTICE J.P.L. McDERMOT

COUNSEL: R. McNeely, for the Applicant
Respondent Self-Represented

HEARD: February 7, 2013

ENDORSEMENT

[1] This was a Form 23C uncontested trial brought before me at motions court on February 7, 2013. Mr. McNeely made submissions before me regarding his relief requested in this matter.

[2] There is a finding by Boswell, J. made on November 23, 2012 that the Respondent’s income is $100,000 per annum, which for the purposes of this uncontested trial, I adopt.

[3] Ms. Weese requested retroactive and ongoing child and spousal support, calculation of her equalization entitlement and a vesting order. The material filed addresses the deficiencies recognized by Boswell, J. in his endorsement dated November 23, 2012.

Child and Spousal Support

[4] Regarding child support, the Applicant has provided a calculation of child support payable at para. 16 of her affidavit. As of the date of the affidavit, base guideline child support from the date of separation at $1,415 per month totalled $35,400 (25 months @ $1,416 per month). Added to this would be the amount of $1,416 due February 1, 2013 and accordingly child support arrears are in the amount of $36,816. Boswell J. determined that child support would commence as of the date of separation as requested by the Applicant. Child support arrears are therefore fixed in the amount of $36,816.

[5] Regarding spousal support, the Applicant requests that it be fixed in the amount of $882.00 per month, the highest range payable under the Spousal Support Advisory Guidelines (the “SSAGs”). The Applicant has proven a compensatory entitlement to support; she gave up a career as a social worker to take care of her children and now works as a receptionist at a substantially lower income. However, she does work and this was not, strictly speaking, a completely traditional marriage as the Applicant left the marriage with a job rather than being a homemaker without employment. Although as a compensatory claim for support it should be fixed in the mid to upper level of spousal support under the SSAGs, support at the highest level is inappropriate. I am fixing retroactive and ongoing support in the amount of $600 per month, commencing at the date of separation.

[6] As discussed with counsel, it is my understanding that the spousal support for calendar years prior to this year does not carry with it tax consequences; a party may only claim or deduct retroactive spousal support during the year in which it is ordered. I am therefore deducting a further 25% for the tax consequences from this retroactive award. Therefore spousal support to December 31, 2012 is calculated as being75 % of $14,400 ($600 x 24 months) being $10,800. Ongoing periodic support is payable at $600 per month, commencing January 1, 2013.

[7] Regarding s.7 expenses the Applicant has provided evidence of the following extraordinary expenses of the children:

i. Annual daycare expenses of $10,745 – (average of cost for 2011 and 2012);

ii. Lunch program: $273; and

iii. Extraordinary extracurricular activities including summing camp: $1,225

[8] Past expenses are calculated in para. 17-24 of the Applicant’s Form 23C affidavit as being $12,563. That calculation accounts for the tax consequences of the day care cost and I cannot find fault with that. Section 7 expenses to January 31, 2013 are found to be $12,563.

[9] Regarding ongoing s.7 expenses, this must be fixed taking into account the spousal support payable in this matter. That is because under the Child Support Guidelines, spousal support is accounted for in determining s.7 expenses. The SupportMate document provided by the Applicant at Exhibit “J” does this, at the higher range of spousal support, the Respondent pays s.7 expenses of $695 per month. At the mid-range, this increases to $746. Based upon this calculation, I find that ongoing s.7 expenses are payable by the Respondent in the amount of $700 per month commencing February 1, 2013. As the youngest child will be leaving full time kindergarten in September 2014, s. 7 expenses may be reviewed and adjusted based on the parties’ respective incomes and anticipated day care expenses as of September 1, 2014.

[10] Finally regarding arrears, the Applicant acknowledges payments made by the Respondent in the amount of $31,100 to be credited to any support arrears found to be owing in this matter.

[11] Support arrears can therefore be calculated as follows:

i. Retroactive child support to February 28, 2013 $36,816

ii. Retroactive spousal support to December 31, 2012 $10,800

(non tax-deductable)

iii. Spousal support payable from January 1, 2013 to $ 1,200

February 28, 2013 (tax-deductible)

iv. Retroactive s.7 expenses to January 31, 2013 $12,563

(para. 17-24 of Applicant’s Form 23C)

v. Payment for s.7 expenses for February 2013 $ 700

vi. Less: payments made by Respondent since separation ($31,100)

vii. Total arrears $ 30,979

[12] Ongoing payments of child support are as set out in the order of Justice Boswell made November 23, 2012. Ongoing payments of spousal support and s.7 expenses are as determined above, being $600 per month and $700 per month respectively.

Equalization

[13] The Applicant requests equalization of property according to the Net Family Property Statement at Exhibit “K” of her affidavit. The major issue is the valuation of the business as being $100,000 as set out in the draft Net Family Property Statement.

[14] The Respondent owns a publishing business which he has not valued. The Application has suggested a value by capitalizing the earnings of the business as formed by Boswell J. by a multiplier of one which counsel stated would be the minimum multiplier for income valuation purposes assuming the business would be valued using the capitalization of income method.

[15] Certainly it is unfair to attribute a zero value to the business when the lack of a number is responsibility of the Respondent who has failed to value his asset (as is his obligation to do so) or, for that matter, file any sort of financial statements whatsoever. Despite the absence of any real evidence as to value, it is only fair and just that I attribute a value to his asset as the Respondent has failed to fulfill his onus to provide financial disclosure or to value his asset.

[16] The only facts that I have to rely on are the income of the business (imputed by Boswell J.) and the fact that the business publishes several prominent magazines. I am accordingly going to accede to counsel’s suggestion that the found net income of the business results in a calculation of the value of the Respondent’s business based on a multiplier of one, and that I use the capitalization of income approach in determining the value of the business. As no business financial statements have been provided showing, for example, the value of the assets of the business or the shareholder’s equity in that corporation, I have little choice but to use that business valuation approach. I find the value of the business to be $100,000 for equalization purposes.

[17] There are some issues with the Net Family Property Statement as attached. Firstly the Saturn Vue motor vehicle has been placed as an asset on the Respondent’s side of the ledger when it should be on the Applicant’s. The wedding ring is shown as excluded, but it in fact was presumably a gift from the Respondent and therefore should not be excluded: see s.4(2) 1 of the Family Law Act.

[18] Taking those changes into account, the Applicant then has net family property of $38,796.54 ($31,607.54 + $5,189 + $2,000) and the Respondent has net family property of $142,599.67 ($147,784.67 - $5,185). One half of the difference between these two amounts is $51,901.54 which I find to be the equalization payment owing by the Respondent to the Applicant.

Costs

[19] It is unquestioned that the Applicant is entitled to her costs of this proceeding: see Rule 24 of the Family Law Rules which confirms that costs should follow the event.

[20] As well as the Applicant’s success, the Respondent is also guilty of misconduct which can be taken into account in fixing costs: see Rule 24(11)(b). The Respondent arbitrarily stopped paying support in March 2012 and has failed to engage in these proceedings or file a financial statement necessitating these default proceedings.

[21] The Applicant claims costs of $30,057 as set out in the Bill of Costs attached as Exhibit “L” to the Form 23C affidavit; that included disbursements and HST and estimated costs for counsel’s appearances on January 31 and February 7, 2013.

[22] I am going to firstly deduct from this amount the costs of the case conference before Justice Olah on June 12, 2012; a consent was entered into on that date, and costs of the conference were not reserved, in which case they are not claimable as costs in the proceeding: see Rule 24(10) and Islam v. Rahman, 2007 ONCA 622, [2007] O.J. No. 3416 (C.A.).

[23] I am not awarding full indemnity costs; those should only be awarded in the rarest of circumstances (i.e. a finding of bad faith or an offer to settle not accepted): see Hunt v. TD Securities Inc. (2003), 2003 3649 (ON CA), 66 O.R. (3d) 481 (C.A.). Assuming those full indemnity costs to be $22,284.01 ($30,057 - $7,772.99), and taking into account the finding of unreasonable conduct by the Respondent, I find the costs to be payable by the Respondent to be $17,500.

Vesting Order

[24] The Respondent and the Applicant are the joint owners of the matrimonial home located at 72 West Park Avenue, Bradford, Ontario. The Applicant has filed evidenced that the home is worth $360,000. The outstanding balance under the mortgage is $279,539.51 (see Exhibit “F”) leaving net equity in the home of $80,460.49. I note that the Applicant stated in her affidavit that the value of the home was $379,000; in fact the realtor’s letter sets this out as a listing price; the home has a market value of $355,000 to $365,000. The Respondent’s share of that equity is $40,230.25.

[25] A party is entitled to a vesting order where the court is satisfied that the previous behaviour of the payor spouse indicates that he or she is unlikely to comply with the payment terms of the order being made: see Lynch v. Segal, 2006 42240 (Ont. C.A.). I am satisfied that the Respondent will not voluntarily comply with the payment terms of this order. In any event, the Respondent owes more to the Applicant than his share of the equity in the home.

[26] Therefore there will be an order vesting the matrimonial home into the name of the Applicant. This will be applied firstly to the support arrears of $30,979; the remaining equity will be applied to the equalization payment owing of $51,904.54. The equity remaining after the support arrears are paid is $9,251.25 ($40,230.25 - $30,979); accordingly after application of this amount, the Respondent still owes a remaining equalization payment of $42,653.29.

Order

[27] Therefore, a final order shall go as follows:

i. The matrimonial home described as Lot 92, Plan 51M-875 Bradford West Gwillimbury (PIN 58013-0933LT) is vested in the name of the Applicant;

ii. The Applicant shall have judgment against the Respondent in the amount of $42,653.29 plus costs of $17,500;

iii. The Respondent shall pay spousal support to the Applicant in the amount of $600 per month commencing March 1, 2013;

iv. The Respondent shall pay s.7 expenses for the children in the amount of $700 per month commencing March 1, 2013, reviewable by either party upon the youngest child commencing full time kindergarten in September 2014; and

v. Based upon the vesting of the home into the name of the Applicant, there are no support arrears under this order or the order of Boswell J. dated November 23, 2012 as of the date of this final order.

McDERMOT J.

Date: March 8, 2013