CITATION: Egan v. Burton, 2013 ONSC 3063
COURT FILE NO.: FC-3091-1
DATE: 2013-05-27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Catherine Agnes Egan
Applicant
– and –
Warren William Burton
Respondent
Rodney Cross, for the Applicant
Graeme Fraser, for the Respondent
HEARD: May 21-23, 2013
T.D. RAY, J
[1] The parties have resolved many of the issues that arose out of the failure in 2009 of their twenty year marriage. The issues left unresolved include the Net Family Property (NFP) of the parties including a valuation of the respondents survivors pension benefit, and the applicants visa debt; and whether a cottage property owned by the respondent before their marriage had become a second matrimonial home by virtue of their frequent use, requiring that the cottage property be valued now as opposed to at the time of separation; and further requiring that the respondent not be credited with his equity of $125,000 as at their date of marriage.
[2] The respondent claims occupation rent from the applicant for her exclusive period of occupation of the matrimonial home from September 2009 to the present. In the event that the cottage is found to be a second matrimonial home, it is his position that an equal division of NFP would be unconscionable.
[3] An agreed statement of fact was filed. The applicant and the respondent are seventy-two and sixty-nine respectively, and were married May 13, 1993. This was a second marriage for both of them. Each party has two adult children from their respective previous marriages. They have no children together. At the time of their marriage, the respondent owned a cottage in Constance Bay, free and clear, valued at $125,000. On April 30, 1993, two weeks prior to their marriage, the parties jointly purchased the matrimonial home located at 1498 Chatelain Avenue, in Ottawa. In January, 2007 the mortgage was paid off.
[4] The parties separated April 21, 2009. Since then, the applicant has resided at the matrimonial home and the husband has resided at the cottage. The cottage has been valued by both parties at $375,000, while an updated valuation of the Chatelain house is $390,000. This valuation is not in issue.
[5] Just before the parties were married in May, 1993, they purchased jointly the home on Chatelain St. in Ottawa. It is a three bedroom two storey home with a finished basement. They lived there together until the final separation in May 2009, except for a two and a half year period from 1999 to 2002, when the respondent lived exclusively at the cottage and the applicant lived exclusively in the matrimonial home. I note that the applicant obtained an order for her exclusive occupation of the Chatelain house during their period of separation.
[6] The applicant retired from her occupation as a nurse in 1996. Her sole source of income since then has been her pension income which is currently $3600 per month. The respondent retired in 1999 from his occupation as a lab technician. His sole income is his pension which is currently $3200.
[7] The cottage at Constance Bay (which is on the Ottawa River in the outskirts of Ottawa) is a two bedroom single storey house with a deck. It has had several upgrades since the parties were married in 1993 and is suitable for year round use. All were paid for by the respondent. He paid all the expenses, utilities, and all repairs or upgrades for the cottage. The respondent purchased the cottage jointly with his first wife in 1973, and following the division of assets from the first marriage, he became sole owner. It had been used by his family including his children as the family cottage prior to the respondent’s marriage to the applicant. He purchased it in 1973 for $75,000. Its value in 1993 was $125,000. Since the parties separated for the last time in 2009, the respondent has lived at the cottage. During the marriage, and except for the 1999 to 2001 period it was the practice of the respondent and the applicant to “pack up everything and move to the cottage” from May until September. The applicant said the power and gas were shut off. The respondent said only that the hot water heater was turned down, since they returned to the Chatelain house from time to time during the summer.
[8] A great deal of the evidence from the parties was devoted to trying to establish who paid for what in connection with the Chatelain house. The applicant’s evidence was that she essentially paid for everything, and he paid very little. His evidence was that in fact he paid for virtually everything and she paid very little. All of this evidence was apparently intended to show or disprove, as the case might be, that in the event the cottage were found to be a second matrimonial home, that an equal division would be unconscionable as against the respondent. For example the applicant said that she paid most of the mortgage and property payments from 1993 to 2009; and pointed to her monthly banking records as proof. However, the respondent’s evidence was that he gave her cheques or cash every month for one half of the payments, in order that she could make the payment. As he said –“it needed the two of us to pay the mortgage”. He also described significant cash payments to ‘pay down’ the mortgage from his RRSP’s. The applicant denied that he paid her every month as he described, but conceded that he may have paid the lump sum payments to reduce the mortgage principal. It is not in dispute that as a result of the respondent’s significant payments, the mortgage was paid off at an early date so that the Chatelain property is now free and clear. I accept the respondent’s evidence that the arrangement between them was that they would each contribute one half of the mortgage and property payments, she would pay for the utilities and he would pay for the groceries. It is likely that agreement was breached from time to time, and probably caused stresses between them. The respondent was only cross-examined on his contribution to the mortgage and property payments. He was not cross-examined on what he said was the agreement between the parties that he paid for the groceries and she paid for the utilities. He did not produce all of his cheques to the applicant as evidence that he paid her but produced ‘examples’ only. I am satisfied that it was the respondent’s very significant payments from his RRSPs to reduce the mortgage principal that enabled the mortgage to be discharged in 2006. By that time his RRSP’s had been completely depleted. I am also satisfied that the respondent paid for the vast majority of the appliances, furniture and basement upgrades (including the fireplace and air conditioning). He produced invoices and receipts. While that is disputed by the applicant, she produced no contradictory documentary evidence. Even after the separation, the respondent paid for a new roof on the house at a cost of approximately $3500.
[9] If the cottage is found to be a second matrimonial home, as is submitted by the applicant, then the respondent fails to get credit for the value of the cottage at the time of their marriage ($125,000) in the NFP calculation.
[10] A second matrimonial home such as a cottage may be found to exist within the rubric of section 18(1) of the Family Law Act[^1]. The applicant relies on the decision of my sister, MacKinnon, J, in MacFarland v. MacFarland,[^2] 2009 26349 (ON SC), [2009] O.J. No. 2149, 70 R.F.L.(6’”) 196 (S.CJ.) as authority for the reasoning that ought to be applied in this case. In that case, at the time of marriage, the cottage was owned by the husband’s mother and was not conveyed to the husband by her until seven years later even though the parties used the cottage exclusively from the time of their of marriage. The wife’s evidence was that she was not in favour of spending a lot of money on renovations because they didn’t own it. Once the cottage was transferred to the husband, then extensive renovations were undertaken and paid for from a line of credit secured against the jointly owned matrimonial home. The cottage was used regularly by the parties, as well as their children, right up to the date of separation, although the wife’s use was more infrequent as the separation date approached. Justice MacKinnon considered Spinney v Spinney[^3], and Ledrew v Ledrew[^4]; and distinguished them both on the basis that in those cases the court found both parties had not used the cottage as at the date of separation. She adopted the reasoning in a headnote to Ledrew v Ledrew by Professor James G. MacLeod[^5] that there is nothing in the section that requires that the parties occupy a residence together. Instead it “simply provides that both must be occupying it as a family resident at the date of separation. Neither the words “together” nor “simultaneously” is included.”
[11] Consistent with the language of section 18 of the FLA, Professor MacLeod poses two questions which he says emerge from the decided cases: firstly, Is the property ordinarily used by the spouses?; and secondly, if so, is it used as a family residence?
[12] The cases referred to me by the applicant deal only with the first question. In his submissions he conflated the two questions to one – is the property ordinarily used by the spouses, and argued that if they were married at the time, then the answer was self-evident? He contends impliedly that the second question is unnecessary. The evidence before me clearly shows that the cottage was used by the parties when they were spouses. The answer to the first question is – yes.
[13] However, the second question concerning ‘family residence’ must mean something more than two spouses using the cottage. I consider that evidence of the intention of the parties, at the time of their user, must be part of the analysis. To do otherwise would be to undermine the purpose of the section which is remedial and intended to achieve a fair result where the parties have treated a cottage or second home as a family residence with both parties contributing in one way or the other as one would expect of a family home - which was registered only in the name of one of the parties- and after separation for the other party to be told you have no interest.
[14] Here, the applicant never treated the cottage as a family residence. While the evidence is that the parties annually packed and moved to the cottage for the summer months, the evidence also shows the applicant treated the cottage very differently from the matrimonial home on Chatelain. Aside from ordinary housekeeping, she made no contribution to the operation or maintenance of the cottage. She showed none of the interest in the cottage that she showed in the Chatelain home. She knew the cottage was his, knew that he had owned it for a very long time and well before she knew him, and knew that it was his after a settlement with his first wife. She knew that the respondent paid all of the expenses for its upkeep and paid for all of the improvements. Whereas she did not. These were two people who were living on retirement income of roughly equivalent value. If she had been asked prior to the separation about her intention regarding the cottage, I am satisfied that she would have said that it was his cottage and his alone. This is not a case where they purchased the cottage together and put it in his name or the name of a numbered company.[^6] Neither is it a case where the one party transferred a joint interest to the other party after marriage.[^7] And neither is this a case where the parties used the cottage together, planned the improvements, and then after the cottage was transferred to the one party alone, the jointly owned matrimonial home was used to finance the improvements on the cottage. In Debora v Debora, in upholding the trial judge’s decision that a cottage was a matrimonial home, Weiler, J.A explicitly referenced that “it was maintained from the joint bank account”[^8].
[15] In all of those cases there was evidence, quite aside from the parties’ use, of the intention of the parties to treat the cottage as a family residence either by way of active participation in the planning and upkeep, or material contributions. I find that the answer to the second question – was it used as a family residence? – to be ‘no’.
[16] I find, therefore, that the cottage is not a matrimonial home as defined in the Family Law Act. The appreciated value of the cottage from the date of marriage to the date of separation ($250,000) will therefore go into the NFP of the applicant. The value of the cottage as at the date of marriage ($125,000) will not.
[17] Having decided that the cottage is not a matrimonial home, it is unnecessary for me to address the respondent’s unconscionability argument.
[18] The applicant claims that the respondent must show, in his NFP, as an asset, a valuation of his survivor’s pension benefit. He is designated a survivor in her pension. An actuarial report values the benefit at $47,567.00. The respondent relies on Birce v Birce[^9] as authority for a trial judge to exercise his discretion to give it no value. Both parties are apparently in good health. In Birce, they were not. Such a valuation must be evidence based. I am satisfied that the actuary’s valuation based on life expectancy considerations is reasonable.
[19] The applicant’s evidence was that her visa debt was $19,000. She did not know how it came to be stated at $20,441.10 in table 2 of her statement. Accordingly, that item will be changed to $19,000.00.
[20] The respondent asserts a claim against the applicant for occupation rent from the date of separation in 2009 to the present based on a written opinion of average rents in the area for an equivalent property of between $15- $1600 per month. He totals the rent claim at $26,950 plus interest. I find that the amount being claimed is reasonable, but am not prepared to award occupation rent. The factors to be considered in family situations are to include the timing of the claim for occupation rent, the duration of the occupancy, the inability of the claimant to realize on his equity, and reasonable credits against the claim, and any other competing claims.[^10] The respondent’s claim is fairly recent and was not part of his original Answer. There is no evidence that the respondent’s failure to have access to his equity had been a hardship. He had made no requests that the property be sold. Aside from the new roof which he voluntarily paid himself for after the separation, he was not called on to make any contribution to carrying the Chatelain property. Having considered all of the factors, I do not consider this an appropriate case for an award of occupation rent.
[21] Counsel advise that it is the intention of the parties that the applicant purchase the respondent’s interest in the Chatelain home. That would be one half of the appraised value of $390,000 or $195,000. They advise that it is not necessary that I order the property to be transferred after payment of the re-calculated equalization payment, and that will be dealt with by counsel.
[22] I will leave the calculations of the equalization payment to counsel. I can be available through the trial coordinator’s office in the event there is a disagreement in the calculations. If I have made an error in the calculations, the parties may bring a motion to settle the terms of the order.
[23] If the parties are unable to agree on costs, they may make written submissions through the trial coordinator in Ottawa within 14 days and a further 5 days for reply.
Honourable Justice Timothy Ray
Released: May 27, 2013
CITATION: Egan v. Burton, 2013 ONSC 3063
COURT FILE NO.: FC-3091-1
DATE: 2013-05-27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Catherine Agnes Egan
Applicant
– and –
Warren William Burton
Respondent
REASONS FOR JUDGeMENT
Honourable Justice Timothy Ray
Released: May 27, 2013
[^1]: 18 (1) Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home. Family Law Act (R.S.O. 1990,c.F.3,as am.)
[^2]: 2009 26349 (ON SC), [2009] O.J. No. 2149, 70 R.F.L.(6’”) 196 (S.CJ.)
[^3]: 1996 CarswellOnt 2192 (Gen.Div.).
[^4]: 1993 16082 (ON SC), 1993 CarswellOnt 312 (Gen.Div.)
[^5]: McFarland, supra, paragraph 26.
[^6]: DeBora v. DeBora, 2006 40663 (ON CA), 2006 CarswellOnt 7633, (OCA);
[^7]: Spinney V. Spinney, 1996 CarswellOnt 2192 (Gen.Div.)
[^8]: Note 6, @ paragraph 11 and 29.
[^9]: Birce v Birce, 2001 8607 (ON CA), 2001 CarswellOnt 3481, 56 O.R. (3d) 226 (OCA)
[^10]: Griffiths v Zambosco, 2001 24097 (ON CA), 2001 CarswellOnt 1899, 146 O.A.C. 83, 19 R.F.L (5th) 135. (OCA)