ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
James William Bentley
Applicant
– and –
Patricia Gillard-Bentley
Respondent
Richard Noll, for the Applicant
Richard Van Buskirk, for the Respondent
HEARD: November 27, 28 & 29, 2012
The Honourable Mr. Justice G. E. Taylor
1James Bentley and Patricia Gillard-Bentley were married on May 16, 1992. They began cohabiting in April or May 1991. He is 52 years of age having been born on August 30, 1960. She is 54 years of age having been born on May 2, 1958. They have a son, Samuel who was born on June 11, 1991. They own a home in joint tenancy located at 24 Wellington St. N., Kitchener, Ontario. Patricia and Samuel have continued to live in the matrimonial home since James moved out in January, 2008. James is employed as a teacher with the Waterloo Region District School Board. Patricia is qualified as a hairstylist and is employed in various capacities in the arts community. The issues to be decided in this case are:
a) date of separation;
b) the value of the matrimonial home at the date of separation;
c) the value of James’ pension at the date of separation;
d) the amount of James’ indebtedness to his mother at the date of separation and date of marriage;
e) calculation of Net Family Property and Equalization Payment;
f) occupation rent for Patricia’s continued occupation of the matrimonial home subsequent to the date of the separation;
g) retroactive and prospective spousal support;
h) retroactive child support.
2I propose to deal with the facts relevant to each issue as I deal with the respective issues.
Date of Separation
3James’ position is that the parties separated on January 1, 2006 although they continued to reside together at the matrimonial home until January 2008. Patricia says the parties did not separate until January 2008 when James left the matrimonial home.
4The date of separation is relevant to the determination of the value of James’ pension for equalization purposes. However, the only evidence as to the value of James’ pension is the report of K-W Actuarial Services Inc. dated May 2007 which was filed, on consent, as an exhibit. In that report the pension is valued based on the January 1, 2006 separation date. No evidence was presented regarding the value of the pension as of January 1, 2008.
5Although both parties gave evidence in support of their respective positions as to the date of separation, I find that the resolution to this issue is in the pleadings. In his Application, James stated that the date of separation was January 1, 2006. In her Answer, Patricia agreed that the Family History section of the Application was factually correct. This includes the date of separation. Significantly, in my view, in the penultimate paragraph of her Answer, Patricia stated: “Most of the bills that the Respondent had his wages garnished to pay for, were incurred by him, past the January 1 2006 “Separation Date”.”. There were no steps taken either prior to or during the trial to withdraw Patricia’s admission that the separation date was January 1, 2006.
6I therefore conclude that the date of separation was January 1, 2006. Furthermore, in my view, the outcome of the equalization calculation would not be affected even if I were to choose January 2008 as the separation date because no evidence was presented regarding the value of the pension as of that date and accordingly the only evidence on which I could determine a value of James’ pension is that contained in the report of K-W Actuarial Services Inc. the effective date of which was January 1, 2006.
Value of the Matrimonial Home
7During the course of the trial the parties agreed that the value of the matrimonial home for the purpose of calculating the Net Family Properties of the parties and determining the Equalization Payment was $200,000.
Value of James’ Pension
8James became a member of the Ontario Teachers’ Pension Plan on September 1, 1992. According to the plan, normal retirement age is 65. There are provisions for early retirement. James’ earliest retirement date would be at age 58.4 years. Valuations were provided based on assumptions that he would retire at age 58.4, 61.7 and 65 years of age. The three values were reduced to account for the impact of income tax.
9In his Financial Statement sworn April 23, 2012, which is contained in the Trial Record, James valued his pension at $84,223 which is the value assuming the midpoint retirement age of 61.7 years. James testified that he enjoys his teaching job and finds it rewarding. He testified that he does not know what the future will hold with respect to working until age 65 but he pointed to some health problems experienced by his brother, who was also a teacher, which required his brother to retire early. In re-examination, he testified that he expects to continue working for a year or two beyond his earliest retirement age.
10Based on this evidence, I conclude that James will likely retire at 61.7 years of age and therefore the value of his pension for equalization purposes is $84,223.
Debts Owing to James’ Mother
11James testified that at the date of the separation, he owed his mother $35,699. No documentation to support that indebtedness was presented at trial (I ruled inadmissible certain documentation sought to be introduced as an exhibit in support of this indebtedness). James’ mother was deceased as of the date of the trial. Patricia was not prepared to concede the amount of the debt owed to James mother at the date of the separation although she was prepared to acknowledge that, at the date of the marriage, he owed his mother a considerable sum of money which she had loaned to him for university expenses. She testified that she thought the debt to James’ mother at the date of the marriage was approximately $35,000. James testified that he owed his mother $25,000 at the date of the marriage for university related expenses. No documentation to support the amount owing at the date of the marriage was produced.
12No evidence was presented to suggest that James repaid any portion of the debt owing to his mother. I infer that the debt was not repaid and was forgiven when James’ mother passed away.
13James did not prove the indebtedness to his mother at the date of the marriage. Therefore he will not be allowed a deduction for $35,699. Although Patricia apparently was prepared to admit that James owed at least $25,000 to his mother at the date of the marriage, in my view it would not be fair to James to disallow him a deduction for the debt which he claimed he owed to his mother at the date of the marriage but to charge him with a debt owing at the date of the marriage on the basis that Patricia admitted the latter debt. Accordingly, neither debt will be included for the purpose of calculating James’ Net Family Property.
Calculation of Net Family Property and Equalization Payment
14Patricia claims a deduction for a debt owing to Royal Bank Visa in the amount of $5137. This was the amount owing on Patricia’s Royal Bank Visa card as of January, 2008. No evidence was presented as to what amount, if any, was owing at the date of the separation. Therefore, Patricia will not be allowed a deduction for this debt.
15Patricia also claims a deduction for property tax arrears totalling $2895 owing at January 1, 2008. According to a Property Tax Statement dated January 2006, there were no property tax arrears at that date. According to the Property Tax Reminder Notice dated October 12, 2010, property tax was owing for 2007 and prior years in the amount of $2895. Patricia says that she should be entitled to a deduction for the amount of this debt when calculating her Net Family Property because James was supposed to be paying all household expenses between January 1, 2006 and December 31, 2007.
16As of November 2012, property taxes and utilities for the matrimonial home were in arrears in the amount of $37,287. Patricia testified that, because of her financial circumstances, she has been unable to pay the property taxes and utilities since James moved out. The amount owing for taxes at January 1, 2008 is included in the total owing for property taxes and utilities as of the date of the trial.
17I have decided not to allow Patricia a deduction for the purpose of calculating her Net Family Property for the property taxes owing at January 1, 2008. Firstly, this is not a debt that was owing at the date of the separation. Secondly, I have decided to adopt the approach suggested by James which is to treat the total amount owing at the present date for property taxes and utilities as a joint debt of the parties. The total amount owing will be subtracted from the agreed-upon value of the matrimonial home when determining its present equity.
18The remainder of the assets and liabilities of the parties were either agreed-upon or were uncontested.
19I therefore calculate the Net Family Properties of the parties as follows:
James
Patricia
ASSETS
Matrimonial Home
$100,000
$100,000
Lincoln
$1000
Royal Bank #5031919
($510)
Credit Union #1077155
($4825)
Royal Bank
$201
CIBC
$200
Pension
$84,233
RRSP- Sun Life
$1027
TOTAL ASSETS
$179,898
$101,428
DEBTS
Mortgage
$49,883.50
$49,883.50
Credit Union
$24,057
TOTAL DEBTS
$73,940.50
$49,883.50
NET FAMILY PROPERTY
$105,957.50
$51,544.50
EQUALIZATION PAYMENT
$27,206.50 owing by James to Patricia
Occupation Rent
20James rented an apartment and moved out of the matrimonial home in January 2008. From that date forward, Patricia and Samuel have continued to reside at the matrimonial home. When James left the matrimonial home there was $24,057 owing to the Education Credit Union. This was a joint debt. James was willing to pay support provided the matrimonial home was sold. The sale of the matrimonial home would have resulted in the indebtedness to the Credit Union being discharged. Patricia was not willing to sell the matrimonial home.
21The parties retained lawyers in early 2008 and proposals were exchanged to resolve all outstanding issues. Patricia’s proposal was that the equity in the matrimonial home be offset against the value of James’ pension and title be transferred to her. Patricia proposed that James pay child support of $700 per month and spousal support of $800 per month.
22James’ position was that he could not pay off the joint indebtedness to the Credit Union, pay support of $1500 per month and pay rent for his apartment along with other expenses in relation to living on his own. When Patricia refused to agree to a sale of the matrimonial home, James continued to pay the joint indebtedness but did not pay child or spousal support (the Credit Union obtained judgment against James and then garnished his teacher’s salary).
23Patricia has continued to make the mortgage payments since January 2008. She has not paid the property taxes or the utilities. At the date of the trial the amount owing for property taxes and unpaid utilities was $37,287. Patricia has been responsible for all other expenses in relation to the matrimonial home since James moved out. Patricia rented a room in the matrimonial home to a university professor for approximately one year. She charged rent of $500 per month.
24During the course of the trial, the parties agreed that the fair lease value of the matrimonial home since January 1, 2008 would be between $950 in $1050 per month. James seeks credit for occupation rent of $500 a month for 58 months for a total of $28,500.
25In a number of cases including Foffano v. Foffano, [1996] O.J. No. 3284 and Higgins v. Higgins, 2001 28223 (ON SC), [2001] O.J. No. 3011 it has been held that a claim for occupation rent by one spousal co-tenant against the other will be granted only in the exceptional circumstances.
26In Higgins, Quinn J., at paragraph 53, listed a number of relevant considerations when determining the appropriateness of an order for occupation rent as follows:
a) the conduct of the non-occupying spouse, including the failure to pay support;
b) the conduct of the occupying spouse, including the failure to pay support;
c) delay in making the claim;
d) the extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;
e) whether the non-occupying spouse moved for the sale of the home and, if not, why not;
f) whether the occupying spouse paid the mortgage and other carrying charges of the home;
g) whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;
h) whether the occupying spouse has increased the selling value of the property;
i) ouster is not required, as once was thought in some early decisions.
27In the present case, James did not pay spousal or child support although he did continue to pay off the joint debt owing to the Credit Union. James did not pursue a sale of the matrimonial home prior to commencement of the present action nor did he seek to obtain an order for sale in advance of the trial. Samuel continued to reside in the matrimonial home with Patricia. Although Patricia made the mortgage payments she did not keep the property taxes and utilities current. The matrimonial home did not increase in value in any significant amount between the date of separation and the date of trial.
28As I indicated to counsel during the course of final submissions, it is my view that James and Patricia implicitly agreed that she would continue to reside in the matrimonial home with Samuel and James would not be asked to pay temporary support. I conclude both parties were aware of the potential risks if either sought to obtain a temporary order. It has always been Patricia’s wish to continue to reside in the matrimonial home. James has always wanted the matrimonial home to be sold. Patricia would have liked to have received support from James. James was content to continue to pay the amount that was jointly owing to the Credit Union as long as he did not also have to pay support. Patricia was aware that if she sought an order for support in Superior Court, James in all probability would counter with a motion for an order for sale of the matrimonial home. On the other hand, James was aware that if he sought an order for immediate sale he would likely be ordered to pay temporary support. Accordingly, I find that both accepted the status quo.
29I therefore conclude that it would not be appropriate to require Patricia to pay occupation rent for the period subsequent to January, 2008 when James vacated the matrimonial home.
Child Support
30James continued to pay the majority of the family expenses from January 1, 2006 until he vacated the matrimonial home in January 2008. As of January 2008 Samuel was 17 years old and attending high school. Samuel completed high school in January 2011. Patricia seeks a retroactive child support order for the period January 2008 until January 2011.
31James’ income from line 150 of his income tax returns for the years 2008 to 2010 was as follows:
2008 $81,906
2009 $84,919
2010 $89,866.
32In his income tax returns, James deducted union or professional dues and “other employment expenses” (line 229) in the following amounts respectively:
2008 $1172 $4544
2009 $1233 $5320
2010 $1307 $4314.
33No evidence was presented as to what was included in the “other employment expenses”. James seeks to deduct both the amounts for union or professional dues and “other employment expenses” for the purpose of determining his income pursuant to section 16 of the Child Support Guidelines. James relies on Schedule III section 1 (g) of the Guidelines. Section 1 (g) makes reference to section 8 (1) (i) of the Income Tax Act which permits a deduction from employment income for “the cost of supplies that were consumed directly in the performance of the duties of the office or employment and that the officer or employee was required by the contract of employment to supply and pay for”. In the absence of evidence which would justify a conclusion that the “other employment expenses” deducted by James on his income tax returns qualify as a deduction pursuant to section 8 (1) (i) of the Income Tax Act, I decline to allow these deductions for the purpose of determining James’ income.
34Therefore, I find that James’ income for the purpose of calculating the appropriate amount of child support is as follows:
2008 $80,734
2009 $83,686
2010 $88,559.
35Accordingly, James’ obligation to pay child support determined in accordance with the Child Support Guidelines in effect between 2008 and 2010 was as follows:
2008 $725 monthly or $8700 for the year
2009 $748 monthly or $8976 for the year
2010 $787 monthly or $9444 for the year
36Based on these calculations, the total amount owing for child support is $27,120 for the period January 1, 2008 until January 2011 when Samuel completed high school.
37In D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231 the Supreme Court of Canada addressed the issue of retroactivity of child support orders. At paragraph 89 the Court stated:
An adult, i.e., one who is over the age of majority and is not dependent, is not the type of person for whom Parliament envisioned child support orders being made. This is true, whether or not this adult should have received greater amounts of child support earlier in his/her life. Child support is for children of the marriage, not adults who used to have that status.
38This observation would apply to the present case as Samuel, having completed his education, is no longer a dependent.
39The Court in DBS also suggested at paragraph 123 that generally speaking retroactive child support orders will be limited to three years before the date when formal notice was given to the payor parent that child support would be sought. While this three-year limitation would not strictly apply to the present case, the reasoning behind the three-year limitation seems to me to have some application.
40In exercising my discretion with respect to an award of retroactive child support, I take into consideration that the obligation to pay child support is important and voluntary compliance ought to be encouraged. On the other hand, I am mindful that an award of retroactive support ought not to, in effect be, a redistribution of assets as between spouses.
41Taking all factors into consideration, I find that the appropriate amount of retroactive child support that James should be responsible to pay is approximately the equivalent of the child support that he should have paid in 2008 and 2009. I fix this amount at $17,500.
Spousal Support
42As stated previously, James assumed responsibility for continuing to pay the bulk of the family expenses until January 2008. For that reason, Patricia seeks an award of spousal support retroactive to January 1, 2008. James’ original position was that there should be an award of retroactive spousal support to January 1, 2008 but this was tied to his claim for occupation rent from the same date. During the course of final submissions after I had made it clear that I was not inclined to order occupation rent, James through his counsel, then amended his original position and said that there ought to be an order for retroactive spousal support but commencing at a date between January 1, 2008 and the date of trial.
43I have previously made reference to the evidence about Patricia retaining a lawyer in early 2008 who asserted a claim for spousal support on her behalf. When James did not agree to the terms proposed by Patricia’s lawyer the issue of spousal support was not pursued. Patricia testified that she commenced proceedings in the Ontario Court of Justice in August 2010 seeking child and spousal support. This action was commenced by James in November 2010, I conclude in response to the Ontario Court proceeding commenced by Patricia. In January 2011, the parties executed a Consent to a dismissal of the case in Ontario Court. Again, as I previously indicated, Patricia did not move for a temporary support order in Superior Court.
44James testified that he made the last payment on account of the joint indebtedness to the Credit Union in October 2011.
45The Supreme Court of Canada recently had occasion to address the issue of a retroactive order of spousal support in the case of Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. In that case, the Court held that similar considerations apply to an award of retroactive spousal support as have been held to apply to an award of retroactive child support pursuant to D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231. At paragraph 207 the Court stated:
Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse.
46And further, at paragraph 209:
Where, as here, the payor's complaint is that support could have been sought earlier, but was not, there are two underlying interests at stake. The first relates to the certainty of the payor's legal obligations; the possibility of an order that reaches back into the past makes it more difficult to plan one's affairs and a sizeable "retroactive" award for which the payor did not plan may impose financial hardship.
47In this case, I have already referred to the implicit agreement between James and Patricia that she would not seek support and he, in return, would not seek an order for sale of the matrimonial home. Patricia made a formal application for spousal support in August 2010 but she consented to a dismissal of that proceeding in January 2011. On the other hand, James, in my view, could not justify his continued refusal to pay spousal support beyond October 2011 when the joint debt to the Credit Union was discharged. It is also relevant, in my view, that a retroactive award of spousal support will impose a significant financial burden on James considering the retroactive award of child support. In my view, it is appropriate to impose an obligation on James to commence spousal support payments effective November 1, 2011.
48James did not suggest that Patricia is not entitled to spousal support. He submitted however that there ought to be $30,000 of annual income attributed to Patricia and the award of spousal support ought to be such as to encourage Patricia to become financially self-sufficient.
49Patricia testified about her past and present employment. She is qualified as a hairstylist but more recently she has found great enjoyment in employment in the arts community. Unfortunately her income has suffered because of her admitted passion for the arts. Based on Patricia’s evidence, I conclude that she is both able and anxious to secure more remunerative employment. She is hopeful of obtaining a permanent position at the Stratford Festival. She also testified that she is confident she could obtain a position as a hairstylist if she is able to upgrade her qualifications. Based on Patricia’s evidence, I am satisfied that it is appropriate to impute an income to her of $30,000 annually.
50Counsel for James provided me with calculations pursuant to the Spousal Support Advisory Guidelines. In those calculations James’ income was slightly lower than what it should have been as a result of the claimed deduction for employment expenses which I have found not to be appropriate. Nevertheless, the range of spousal support justifies an award of approximately $1000 per month. The Spousal Support Advisory Guidelines also suggest a duration of support of between 6.5 and 13 years from the date of separation.
51I find that James should have paid spousal support of $1000 per month commencing November 2011. That support should continue until varied based on a material change in circumstances but it is also premised on the assumption that Patricia will take reasonable steps to secure remunerative employment earning at least $30,000 per year. With respect to the award of retroactive support, in reliance on the case of Murray v. Murray, 2003 64299 (ON SC), [2003] O.J. No. 3350, I propose to reduce the amount somewhat in order to attempt to make the retroactive award tax neutral. I note however that no evidence was presented with respect to James’ marginal tax rate. I therefore fix the amount of support owing for the period November 1, 2011 to January 31, 2013 at $9000.
Implementation and Adjustments
52I have found that Patricia is entitled to an equalization payment of $27,206.50 that is on the assumption that the matrimonial home is sold and the mortgage and tax arrears are paid from the proceeds. Patricia wishes to have the title to the matrimonial home transferred into her name alone. She should have that opportunity. Patricia will have 60 days from the date of these Reasons to make arrangements to have James released from any liability with respect to the mortgage on the matrimonial home and the arrears of property taxes and utilities. Assuming these arrangements can be made, James will convey his interest in the matrimonial home to Patricia. For ease of reference, I have re-created below the Net Family Property calculation but with the matrimonial home, mortgage and tax and utility arrears being treated as debts of Patricia’s for the purpose of calculating Net Family Property.
James
Patricia
ASSETS
Matrimonial Home
$200,000
Lincoln
$1000
Royal Bank #5031919
($510)
Credit Union #1077155
($4825)
Royal Bank
$201
CIBC
$200
Pension
$84,233
RRSP- Sun Life
$1027
TOTAL ASSETS
$79,898
$201,428
DEBTS
Mortgage
$99,767
Property Tax and Utility Arrears
$37,287
Credit Union
$24,057
TOTAL DEBTS
$24,057
$137,054
NET FAMILY PROPERTY
$55,841
$64,374
EQUALIZATION PAYMENT
$4266.50 owing by Patricia to James
ADJUSTMENTS
Retroactive child support
$17,500
Retroactive spousal support
$9000
FINAL PAYMENT
$22,233.50 owing by James to Patricia
Summary and Conclusion
53For the foregoing reasons, there will be an order as follows:
James shall pay Patricia spousal support in the amount of $1000 per month commencing February 1, 2013;
spousal support will be variable based on a material change in circumstances;
James shall pay Patricia retroactive child support in the amount of $17,500;
James shall pay Patricia retroactive spousal support in the amount of $9000;
there shall be an order for sale of the matrimonial home located at 24 Wellington St. N., Kitchener, which sale shall be delayed for a period of 60 days to allow Patricia the opportunity to obtain a release in favor of James from any liability in relation to the mortgage and the arrears of property taxes and utilities upon receipt of which release James shall execute the necessary documentation to transfer his interest in 24 Wellington St. N., Kitchener to Patricia.
54For greater certainty, upon Patricia providing James with a release of liability in relation to the mortgage and the arrears of property taxes and utilities, the amount owing by James to Patricia will be $22,233.50 plus ongoing spousal support.
55If I have made any arithmetical errors, counsel may arrange through the trial coordinator to attend to make further submissions with respect to my calculations.
Costs
56If the parties are unable to agree as to the appropriate disposition of costs they may make written submissions. The written submissions of any party seeking costs are to be delivered to my office on or before February 15, 2013. Responding submissions are to be delivered on or before March 1, 2013. The written submissions are not to exceed three pages exclusive of a Bill of Costs and a Costs Outline. Any relevant Offers to Settle should also be included with the written submissions.
G. E. Taylor J.
Released: February 1, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
James William Bentley
Applicant
– and –
Patricia Gillard-Bentley
Respondent
REASONS FOR JUDGMENT
G. E. Taylor J.
Released: February 1, 2013
