COURT FILE NO.: FC-07-027797-00
DATE: 20140103
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Silvana Papasodaro
Applicant
– and –
Onofrio Papasodaro
Respondent
J. Feldman
A. Pascuzzi
Heard: May 21, 22,23,24,29,30,31,
October 29 (Conference Call) November 25, 27th, 2013
JUDGMENT
McGee H.A.
Background
[1] In the summer of 1988 two young people fell in love while vacationing in the Dominican Republic. Both were Italian, one raised in Canada, and the other in Italy. They corresponded for over a year before the young man travelled from Milan to Canada for a visit in January of 1990. They married in Canada on March 12, 1990. They created a home just north of Toronto. Three and a half years later they welcomed their first child. Twins followed three years later.
[2] The paternal grandparents in Italy were very generous to the young couple. They often sent funds to help them with various costs, and provided their 25% down payment on a home jointly purchased in 1992. They delighted in the family’s annual visits to Italy. The maternal Canadian grandparents were available and helpful.
[3] The new family of five made its way in the world. And then they lost it.
[4] Today, the three children are not speaking to the father – at least – not within the knowledge of the mother. The mother is not speaking to the father. The father is not speaking to the mother. Their finances have been ruined. There will be no vacations for the parents, nor will there be for the children, for some time.
[5] How did this happen? Were there extraordinary events? Complex legal issues?
[6] The parties begin their dispute over the date of separation. The mother claims a date of January 27, 2007 following on an argument that evening. The father does not recall such an argument. He deposes that if there were tensions that day, they were no different from the everyday arguments that seem to plague the couple during the latter half of their marriage.
[7] He claims that the date of separation was July 10, 2007. It was only then that they separated the joint bank account and he began looking for an apartment. He vacated the home effective September 1, 2007.
[8] I find the date of separation to be July 10, 2007.
[9] Around the time that he moved out there was an agreement that he would pay child support for D born October 4, 1993; for M born September 3, 1996; and for S born September 3, 1996. That support was paid voluntarily until negotiations broke down the following April. There were other periods of payment, but the frequency has not been reliable. Throughout, the mother has been understandably exercised over the lack of stable child support.
[10] At the same time, the father has been understandably exercised over the unreasonableness of the mother’s positions on the balance of issues and tragically – her passive, if not irresponsible view of whether the kids kept up a relationship with their father.
[11] This was a marriage that failed as a result of clashing personalities, dramatically different approaches to life, the mother’s need to control all aspects of family life and the usual financial stresses on two working parents of three children in the greater Toronto area.
[12] In better times, these were parents who each had special gifts, and offered good modelling for their children. Together, very little was available. And since separation, the mother has been determined that only one way forward be open to the children. Until trial, none of the three children had seen their father since October 2008.
[13] The mother has been employed by the Bank of Montreal throughout the marriage, albeit in various positions. Her current income is $102,181. The father secured a position as a school custodian in the last few years of the marriage and currently earns $48,300. In the face of their 17 year marriage, the mother vigorously resists the father’s claim for spousal support.
[14] For a brief period post separation the father received proceeds from a home insurance policy[^1] which the mother’s counsel asks be considered as income, or alternatively a bar to the receipt of spousal support.
[15] At the time of separation the parents each held an employment pension, were joint owners of an encumbered matrimonial home, carried consumer debt and held modest savings.
[16] In the ordinary course, terms of a separation agreement ought to have been concluded by the following summer or earlier, with either a sale of the home, or the mother’s purchase of the father’s interest. By the summer of 2008 however, it became clear that the mother’s rigid expectation of settlement was to keep the home and to receive child support; irrespective of whether such terms would result in an equal division of assets acquired during the marriage, or provide a fair division of income between the spouses. Equality was not an operating principle - on any level.
[17] As the mother’s expectations were not met, a gradual cooling evolved between the children and the father. Telephone messages were not returned. Visits were cancelled. Information ceased. Valid reasons were offered: their busy teenage children were occupied by their studies, their activities and their friends. And throughout, the mother held no expectation that they would spent time with their father. As she testified at trial, “it was up to them,” and “I did not know it was important.”
[18] Much of this litigation, the efforts of the Court and the intervention of the Office of the Children’s Lawyer has been borne of the father’s efforts to see the children. His approach has been reasonable. Throughout he has remained hopeful that circumstances will improve, the matter will settle and that he will again have a relationship with each of his children.
[19] The mother voices the same goals of settlement and peace; but her actions demonstrate otherwise. As the financial realities of the separation devolved, she chose to ignore her obligations and focus on her gains. She rightly pressed for child support and costs. But at the same time, she avoided the purchase or sale of the home, resisted any notion of spousal support, and fashioned a nonsensical case for an equalization payment.[^2] And the children did not see their father.
[20] Six years of litigation, nine days of trial, and tens of thousands of dollars[^3] in litigation costs – primarily as a result of one party’s unreasonable expectations.
Conduct of the Litigation
[21] The court record of this matter chronicles 35 attendances from the time of the application being issued: August 20, 2007, to the commencement of trial on May 21, 2013.
[22] The October 13, 2011 endorsement of the trial management conference Justice best summarizes the lengthy, twisted, and occasionally bizarre history of the litigation arising from the separation of Silvana and Onofrio Papasodaro. Within that endorsement, Justice Kaufman prioritized the matter being heard within the November 2011 trial sittings and pressed within his endorsement the importance of the matter proceeding.
[23] The highlights of the litigation to that date included:
i. A full day Case Conference on December 3, 2007 during which the case management justice notes her efforts to recommend comprehensive resolutions and procedural directions.
ii. A reserve decision resulting in the removal of the husband’s counsel of record for conflict of interest – and a punishing April 14, 2008 award of $20,232 in costs to the wife.[^4]
iii. Failure of the mother to complete the Intake forms for the Children’s Lawyer when it was first ordered on consent.
iv. Four settlement conferences.
v. A hard fought motion for child support to the mother, spousal support to the father and access to the children resulting in an October 8, 2009 order for a temporary, reduced amount of child support, and access.[^5]
vi. Three trial management conferences.
vii. A divorce.
viii. No father – child contact after October 2008.
ix. Mother’s counsel at the time, Mr. Simon Zucker, meeting with the three children to ascertain their views and preferences outside the knowledge of their counsel from the Office of the Children’s Lawyer.
x. Mr. Zucker challenging the issuance of a 2009 order 30 months after it was ordered.
xi. Both Mr. Zucker and Mr. Pascuzzi (father’s counsel) not being ready or available for trial on different occasions.
xii. The mother insisting on keeping the home, yet never obtaining an appraisal upon which an offer for purchase could be fashioned.
xiii. The mother’s refusal to engage the children in reunification counselling with the father in breach of two court orders, or to make them available for meetings with the OCL.
xiv. A Final Order on July 29, 2011 granting the father direct access to medical and educational documents and any other documents those touching on the welfare of the children.[^6]
[24] Following Justice Kaufman’s lengthy endorsement, the mother brought a motion on November 21, 2011 to remove the matter from the November trial list. She deposed that her work commitments prevented her from instructing counsel. Her counsel, Mr. Zucker proposed that should the adjournment be granted, the mother would now be prepared to abide by the prior order and make the children available for counselling. He offered to drive the children to the counselling himself.
[25] The motion was denied, and costs of $1,500 were ordered in favour of the father.
[26] Counsels requested an exit pretrial and attended for a full day on November 24, 2011, with an anticipated return the following day with Minutes. Comprehensive Final Minutes were ultimately executed November 29th, 2011 and provided in summary:
a. Custody to the mother, alternate weekend access to the father.[^7]
b. Reunification counselling with a local practitioner who was authorized to share information with the OCL.[^8]
c. Unlimited contact between father and children with specific and direct obligations on the mother to facilitate contact, foster positive relationships and abstain from negative views of the father-child relationships.[^9]
d. Unlimited access to child related information by the father.
e. Absolute release of spousal support payable to the father, with a dismissal of the claim.
f. Dismissal of the mother’s claim for child support, arrears of child support, past and future special expenses.
g. Should the mother seek child support[^10] and/or special expenses including post-secondary costs, the issue of spousal support is reinstated.
h. The matrimonial home is to be listed by December 7, 2011 at the price of $580,000 with terms for sale noted, and to be reviewed from time to time. The mother is solely responsible for any ongoing costs of the home.
i. The father to receive 50% of the net sale proceeds, plus an equalization payment of $15,000.
j. Release against respective pensions. Release against further equalization. Each keeps their own pensions.
[27] And that appeared to be that. Until March of 2012.
[28] New counsel for the mother sought an order setting aside the Final Minutes of Settlement citing primarily, the incompetence of prior counsel. Leave was granted for a full motion on May 17, 2012. The sale of the home, currently underway, was to proceed.
[29] The motion was not reached on May 17th, or on the rescheduled date of July 18, 2012. The motion was adjourned to the November trial sittings. It was not reached.
[30] The motion came before me on January 23, 2013. I noted the attendance of counsel for LawPro, and that the motion was in an unorganized state. The parties asked for a recess and later that day resolved the issues as follows:
a. The November 29, 2011 Minutes of Settlement were set aside.
b. $15,000 of the monies held in trust was released to the mother’s counsel in trust: Ms. Feldman.
c. The trial was to proceed, but absent the OCL whose retainer had been earlier extinguished.
d. “Neither party shall oppose support motion on basis of failure to comply with a cost order pending trial.’
e. Prior order for temporary child support was reinstated.
f. Matter to proceed to trial, estimate 2-3 days.
[31] The case was called for the May 2013 sittings of the Superior Court of Justice, Newmarket. The applicant mother brought two pre-trial motions on the first day of trial: to strike the father’s pleadings (primarily for non-payment of child support – despite the support only being reinstated four months earlier,) and to amend her pleadings to include a trust claim on the father’s one half interest of the sale proceeds of the matrimonial home.
[32] For oral reasons given, the motion to strike was dismissed, and the motion for an amendment of pleadings was allowed with the obligatory admonition on the payment of costs in the event the new claim was not made out.
Midtrial Ruling reflecting a Final Order for Parenting on Consent
[33] By the 6th day of trial it was clear to the court that Onofrio and Silvana Papasadaro agreed on little: not the date of separation, not their roles within the marriage, and certainly not the reason why the children were not seeing their father.
[34] As the evidence progressed, it also became clear to the court – as it had on prior occasions before other Justices,[^11] that the mother was the cause of the father being unjustifiably estranged from the children. It was also clear that this was by far, the most important aspect of trial – the financial issues being fairly straightforward.
[35] Unrequested, and unanticipated, the mother brought the three children to court the next day, on Friday May 31, 2013. Counsel conferred and then requested that I meet with them.
[36] It was agreed that the parents would first enter into Final Minutes of Settlement regarding the parenting of the children, and only thereafter would I meet with the children to discuss the terms of the agreement and any particulars of implementation. Those Minutes became the terms of a Final Order of that date. The reader is referred to my reasons of May 31, 2013.
[37] The balance of the issues – being financial - was expected to be resolved, failing which the trial would continue on only those issues in November of 2013.
[38] I then met with D, M and S in chambers with court staff present. It was a rewarding experience, enhanced by learning later in the day that there had been a heartfelt reunion between the father and the children.
[39] It was a good day to be a family court judge.
[40] In hindsight, the positive sentiments proved to be premature. The children broke off contact with their father within weeks of May 31st, 2013. The financial issues were not resolved. The trial continued in November.
[41] When the trial resumed, mother’s counsel was opposed to any evidence being tendered, or relief being considered with respect to the parenting issues post May 2013. She argued that the May 31st Minutes were Final and that no Motion to Change had been issued.
[42] She is not incorrect. And the children are now 20 and 17. These reasons will not further touch on custody, access or parenting. The final order of July 29, 2011 stands with respect to the father’s access to information. The minutes of November 29, 2011 being set aside, there is no final order as to custody. My order on consent dated May 31, 2013 stands until varied.
[43] The issues to be determined within these reasons are: Child and Spousal Support, Section 7 Expenses, Equalization and the Trust Claim. The father’s claim for Occupational Rent was withdrawn during closing submissions.
Child and Spousal Support
Commencement Date
[44] The parties agree that the father vacated the home in late August 2007 and that any child support and spousal support commence September 1, 2007.
Receipt of Insurance Proceeds - As to Income for Determining Child Support
[45] The father rented premises which flooded in late summer 2009. From September 2009 to May 2009 he received insurance proceeds to replace damaged and lost furniture, clothes and personal effects. He was given a monthly housing and food allowance which he used to pay for accommodation at a motel.
[46] The mother seeks a finding that the receipt of the funds constitutes a form of income, or alternatively is a bar to the receipt of spousal support.
[47] There is no question that home insurance proceeds can form part of a spouse’s net family property: Katz v. Katz, 2010 ONSC 158; and Boutilier-Stonehouse v. Stonehouse, 2008 NSSC 74. A person’s income per ss. 16 to 20 of the Child Support Guidelines is determined by the “Total income” entry on the spouse’s T1 tax return, subject to the enumerated adjustments. Home insurance claims are not considered taxable income per the Income Tax Act. Further, home insurance proceeds are not listed as a form of income that may be inputted under s. 19 of the CSG. While the list under s.19 is non-exhaustive, I can find no basis, or precedent for deeming insurance proceeds to be income for support purposes.
As to Determining Spousal Support
[48] The husband’s means have not increased. The insurance serves only to put him back in the same position that he was in prior to the flood. However, he has been saved the monthly expense of food and rent during the applicable period.
[49] In Leksun v. Leksun, 2006 SCC 25, “means” when determining need for spousal support includes all pecuniary resources, capital assets, income from employment or earning capacity, and any other source from which gains or benefits are received. I am satisfied that the receipt of home insurance proceeds so far as it relieved the father of the monthly expenses of food and rent (not for replacement of chattels or personal effects) can be considered while assessing his need for spousal support during that specified period.
Child Support
[50] It is not disputed that the father is to pay table child support for the minor children S and M. D is engaged in fulltime study at the University of Toronto and is residing with her mother. [^12] So long as D resides with her mother and is in fulltime studies, table support for three children continues.
[51] Thus, child support owing is as follows:
Period Income [^13] Table Amount (3) Total
Sept /07 to Dec /09 $42,739 $831 $ 3,324
Jan /08 to Dec /08 $45,341 $888 $10,656
Jan /09 to Dec /09 $47,028 $925 $11,100
Jan /10 to Dec /10 $49,151 $970 $11,640
Jan /11 to Dec /11 $52,798 $1,040 $12,480
Jan /12 to Dec /12 $58,424 $1,138 $11,304
Jan /13 to Dec /13 $49,179 $942 $11,772
Jan/14 forward $48,300 $925
Total to Dec 2013 $72,276
Less amounts received to date $17,994[^14]
Total $54,282
Entitlement to Spousal Support
[52] The father seeks spousal support without identifying whether his claim is compensatory or based on need (non-compensatory.) In Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420 (S.C.C.), McLachlin J. explained the three conceptual grounds upon which entitlement to spousal support might rest. Those conceptual grounds, namely, compensatory, contractual and non-compensatory, are all recognized in both the Divorce Act and the Family Law Act. She noted that in determining entitlement, the court's task is not to select from one of these conceptual models but rather to decide the issue on the basis of the governing legislation with all models in mind.
[53] The mother opposes any finding of entitlement to spousal support. Her counsel presses the court that income disparity alone is not sufficient for an award of spousal support. She argues that the father has suffered no economic disadvantage resulting from the marriage.
[54] Justice L'Heureux-Dubè J. in Moge v. Moge, (1992) 1992 25 (SCC), 43 R.F.L. (3rd) 345 (S.C.C.) contemplates a marriage in which there would be no entitlement to spousal support at para. 75:
Presumably, there will be the occasional marriage where both spouses maximize their earning potential by working outside the home, pursuing economic and educational opportunities in a similar manner, dividing up the domestic labour identically, and either making no economic sacrifices for the other or, more likely, making them equally. In such a . . . scenario there might be no apparent call for compensation. The spouses are able to make a clean break and continue on with their respective lives. Such cases would appear to be rare.
[55] I do not find that the marriage of Silvana and Onofrio Papasodaro is one in which the parties can make a clean break, or continue on respectively. While both parties are in need, I find that those of the husband are greater. He has a very modest budget. After payment of child support as set out later in these reasons, his ability to fund groceries and household expenses will be below a reasonable standard. He will have no monies for incidentals and he will not be able repair his vehicle.
[56] The standard of “need” is relative. It varies according to the circumstances of the parties: Chutter v. Chutter, 2008 BCCA 507, 60 R.F.L. (6th) 263 (B.C. C.A.), and is not limited to the basic necessities of life. The ultimate determination is a highly discretionary and individualized undertaking by the trial judge who must consider the various factors and objectives set out in section 15.2(4) and (6) of the Divorce Act in light of the particular circumstances of the case.
Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), 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
(c) any order, agreement or arrangement relating to support of either spouse.
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) 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.
[57] Each of the spouses in this case have achieved their current employment position through a progression of employment[^15] and self-employment positions during their 17 years of marriage – while raising three children. Those journeys have resulted in the mother having a substantially higher income, which in most years has been double that of the father. Both are employed to their maximum potential. The mother has the opportunity of a small annual bonus. The father has no ability to increase his income but for the rare chance to temporarily cover a higher rated position within the school board.
[58] I do not accept the mother’s evidence that the father played no role in raising the children. For all the relevant years, the parents clearly strived to organize their work and household schedules around the mutual needs of each other and the children. The father’s contribution in the early years was slowed by his lack of facility in English, a handicap quickly overcome. The spouses built joint equity in their home, assisted by the father’s parent’s generous down payment.
[59] The Divorce Act does not measure individual contribution as much as it measures financial connectedness and the resulting circumstances when the marriage ends. Provided that need is found, the basis for non-compensatory support is firmly mandated by the Act.
[60] In this case, the father has a clear need for spousal support, and I am satisfied that he is so entitled. I do not find that a case has been made for compensatory support.
Quantum of Spousal Support
[61] Both parties held the same employment positions throughout the post separation period. The father’s income increased moderately over a period covering 2011 and 2012 thanks to a temporary placement during which he covered a position at a higher pay level. He then returned to his regular pay. The mother has had the same base pay, but for cost of living adjustments and annual bonuses.
[62] As Justice Lang held in Fisher v. Fisher (2008), 2008 ONCA 11, 2008 CarswellOnt 43 (Ont. C.A.) at para. 97, the Guidelines must be addressed by the court when considering the quantum of spousal support. The object of the Spousal Support Advisory Guidelines is to bring certainty and predictability to spousal support awards under the Divorce Act.
[63] The Guidelines produce a range of awards based on the formula applied. In this case, the appropriate formula is the Custodial Payor model. This formula takes into account the payor’s reduced ability to meet the expense of spousal support given the costs of dependent children. As a result, the payor’ after tax disposable income falls within a range of 70% of the parties’ combined earnings, rather than the usual 45-55 %. The court must then compare the results to the parties’ respective means and needs, and consider additional factors such as the assumption of joint debt.[^16]
[64] Spousal support is calculated as a pre-tax amount, to be deducted by the payor and included in the taxable income of the recipient. Retroactive spousal support awards thus provide an additional dilemma: what reduction to apply to funds no long eligible for tax deductibility – that of the payor, or the recipient? Neither party made submissions on this point.
[65] For the calculations below, I have used the net benefit to the recipient. No voluntary spousal support has been paid by the wife and I see no juristic reason, or mitigating circumstances as to why the husband ought not to be placed in the position he ought to have been in, were support properly paid.
[66] Absent submissions from counsel, and for ease of calculation, I have averaged the parties’ post separation income from 2007 to 2013. Thus, the husband’s averaged earnings are $49,129 and the wife’s are $99,092. Applying the custodial payor range for spousal support with three children results in a range of spousal support of $579 - $675 - $772 (net to husband $399 - $465 - $532.)
[67] For the period of September 1, 2007 to December 31, 2013 I have chosen to use the midpoint of net spousal support: $465, which results in just under 30% of combined household income to the father, and just over 70% to the mother.
[68] In reviewing these amounts against the financial statements of the parties, and in the absence of submissions to the contrary, I find that the mid-range within the custodial parent formula represents the most appropriate finding for the quantum of spousal support.
[69] The custodial formula can be a harsh result to recipients. It recognizes the increased costs of raising children to the payor in a manner that is not always reciprocated within the recipient as custodial parent formula (i.e. the with child formula.)
[70] Using this approach, the relative figures are:
Period RH Income AW Income Table MidRange CP[^17] Annual
Sept /07 to Dec /09 $42,739 $98,235 $831 $ 465 $ 5,580
Jan /08 to Dec /08 $45,341 $99,247 $888 $ 465 $ 5,580
Jan /09 to Dec /09 $47,028 $90,905 $925 $ 465 $ 5,580
Jan /10 to Dec /10 $49,151 $99,997 $970 $ 465 $ 5,580
Jan /11 to Dec /11 $52,798 $99,997 $1,040 $ 465 $ 5,580
Jan /12 to Dec /12 $58,424 $101,284 $1,138 $ 465 $ 5,580
Jan /13 to Dec /13 $49,179 $101,535 $942 $ 465 $ 5,580
Total to Dec 2013 $39,060
Less Sept 09 to May 10 during which home insurance
proceeds paid for housing and food (9 x $465) $ 4,185
Total $34,875
Payment of Spousal Support Going Forward
And Proportionate sharing of Section 7 expenses
[71] As above, the custodial payor is a harsh formula for non-custodial parents. It never results in more than 30% of net disposable income, compared to that of a custodial parent at 70%.
[72] Going forward, Silvana and Onofrio Papasodaro will shortly have three children in post-secondary education. Counsels have asked for a mechanism to determine proportionate sharing of those costs – although whether such costs are within their means per section 7 (1) of the Federal Child Support Guidelines remains to be determined. [^18]
[73] The custodial payor formula for spousal support on 2014 incomes : $101,535 for the mother and $48,300 for the father produces a Guidelines range - after payment of $925 in table child support for three children of:
-$623 (27.6% net to father,)
-$727 (28.3%) and
-$831 (29.1 %.)
All amounts are included in the father’s taxable income and deducted from the mother’s income. The proportionate sharing of section 7 expenses is 37.2%, 38.1% and 38.9% respectively.
[74] Payment of child support of $925 and spousal support of $1,000 results in 30.2% of net disposable income to the father, and an obligation to pay 40% of section 7 expenses. After reviewing the father’s need for spousal support, and the request for a workable approach to post-secondary expenses, I find these percentages to be appropriate to the ongoing circumstances of the family.
[75] Order to go as follows:
The respondent father shall pay table support of $925 for three children based on income of $48,300 commencing January 1, 2014. Arrears of child support are fixed at $54,282 as of December 31, 2013.
The applicant mother shall pay spousal support of $1,000 (taxable) to the respondent father commencing January 1, 2014. Arrears of spousal support (net of tax) are fixed at $34,875 as of December 31, 2013.
So long as a child is entitled to support, and the cumulative expenses of the children’s education are reasonable to the means of the parties, they shall share the cost of special and extraordinary expenses, including the after tax cost of post-secondary expenses in the proportionate shares of 60% by the mother and 40% by the father.
Both parties shall maintain the children on any group medical drug and/or dental coverage plan that is available through his or her employment. They shall cooperate in the coordination of benefits.
The mother shall immediately notify the father when any child stops going to full time school and/or ceases to be a “child of the marriage”. The amounts of child and spousal support shall thereafter be reviewed.
For so long as child support is payable on behalf of the children, each party shall provide the other party with true copies of his or her income tax return and supporting documentation by no later than May 15th of each year, and notices of assessments/reassessments within 10 days of receiving same.
Past Post-Secondary Expenses for D, and Tutoring for M
[76] The mother claims a proportionate sharing of post-secondary expenses for D and past tutoring expenses for M. The latter was only disclosed at the trial continuation in November and does not include appropriate receipts. I decline to make an award for the amount sought.
[77] The mother has not paid any expenses for D, but for a $200 monthly transportation pass.[^19] D received a small bursary in 2011. D is now in her third year of studies at the University of Toronto. An OSAP loan of $16,176 was placed into evidence in May of 2013. No budget for this school year was tendered, nor evidence of Danielle’s earnings. I can make no order on the evidence submitted, but for the monthly transportation pass.
[78] I fix the father’s contribution for D’s transportation costs to December 31, 2013 as follows:
Estimated after tax cost of monthly pass to mother $ 150
Multiplied by 20 months (8 months a year Sept-April) $3,000
Proportionate share prior to 2014 (rounded) 30% $ 900
[79] Order to go as follows:
- The father shall pay the amount of $900 to the mother for his proportionate share of D’s transportation expense to date. He shall pay the ongoing amount of $60 per month. [^20] So long as D purchases a monthly transportation pass.
Equalization
[80] I find the net family property of the parties to be as follows, with comments following:
Applicant Wife Respondent Husband
Net Matrimonial Home proceeds[^21] $220,102 $220,102 Contents and vehicles divided
Bank accounts closed and divided
Pensions $ 80,500[^22] $10,035[^23]
Less:
BMO line of credit assumed $ 7,714
Date of Marriage deductions:
1988 Acura (Red Book) $ 13,500
Net Family Property $279,388 $230,137
Equalization payment to respondent husband: $24,626
[81] The cross examination of the mother effectively removed her listed date of marriage assets. All proved to have portions double counted, or were for assets held but not listed within the NFP; or was applicable to a later date. The larger amount of a proposed $14,000 Sears account is demonstrative of the first two of the three common errors. $3,000 of the account was double counted and the balance was offset by assets owned. An OHOSP/ RHOSP was an example of a proposed date of marriage deduction that actually dated from a later period. Some of the debts claimed were paid with money from the husband’s parents.
[82] The value of the wife’s vehicle on date of separation was equally tenuous. Little evidence was available regarding its value, condition and whether financing was held at the time. I have reduced the plead amount of $20,000 to $13,500 to reflect the black book value on date of marriage, assuming it to be in reasonable condition without financing.
[83] The husband also overreached on portions of the net family property, proposing in closing submissions that the cumulative value of the contributions from the father’s parents should be characterized as a gift, deductible to the father.
[84] I was surprised at trial that counsel effectively ignored the value of the two employment pensions held by the parties. The trial record contained valuations completed in 2009 by certified valuators. Neither was called at trial, and neither counsel addressed the provisions of section 10.1 of the Family Law Act.
[85] Almost as an afterthought, counsel for the father asked for an order that the pensions be divided at source. I am not prepared to do so. Having observed the parties over the last year of litigation, I have no confidence that the task of dividing credits at source will ever be accomplished. The process will cause more conflict, more follow-up and potentially further intervention of the court to enforce. The values of the respective pensions have been addressed competently by certified actuaries in reports filed in the trial record. The reports have been known, and unopposed by the parties for the past four years.
[86] Mother’s counsel suggested for the first time in closing that there had been an earlier agreement to waive the division of pensions, eliciting a howl of disagreement from father’s counsel. There is no written agreement to that effect before the court. Nor could either produce such an agreement. The pensions are included.
[87] Prejudgement interest was pleaded by the respondent father, but no submissions on this point were received from counsel. In the absence of submissions, and given that the father did benefit from the mother maintaining the financing on his one half interest in the home (albeit having exclusive use) I will not add a calculation – only round the equalization payment to $25,000.
[88] Order to go as follows:
- The applicant shall forthwith pay to the respondent an equalization of $25,000.
Trust Claim of the Applicant Mother
[89] Per the trial amendment to her pleadings sought on the first day of trial, the wife seeks “an equitable interest” in the husband’s one-half interest in the sale proceeds of the jointly owned home.[^24] Alternatively, she seeks to recover one half of the principle paid down on the joint mortgage between September 2009 and May 2012 in the amount of $11,148.
[90] The applicant claims to have entered into a verbal agreement with the respondent some time prior to the purchase of the matrimonial home, that should they separate, she would be given title upon payment of a fixed amount. The husband not only denies any such agreement, he denies such a thing was ever raised. The wife confirms that there was never a written agreement, nor was it discussed with a lawyer.
[91] To be enforceable, an agreement must meet the requirements of section 54 of the Family Law Act. Absent a written agreement, signed by each of the parties, there are no terms capable of application.
[92] The wife’s alternative argument addresses her continued occupancy of the home until its sale in 2012. She states that she had no intention of maintaining his half of the mortgage on the home, but was required to do so by reason of her continued occupation, and employment with the Bank.[^25] She cites the case of Thomas v Wales 2013 ONSC 794 as authority on the applicable principles, but that case is easily distinguished as it does not involve spouses, or a jointly owned property.
[93] The matrimonial home was jointly purchased prior to separation, and continued in joint ownership at all times until its sale. The attached mortgage was jointly charged throughout. The parties’ finances were intertwined until separation.
[94] After September 2007, the wife had the sole use of the home. No offer was ever made to purchase the husband’s one half interest. No advance payment was made against its equity. No significant repairs or capital was invested in the property post separation. The wife was at all times on notice of the claim for sale, per the husband’s pleadings. In fact, the wife claimed for partition and sale in her application. The wife was at all times at liberty to sell the home or purchase the husband’s interest in the home.
[95] I can find no basis for a claim for trust in these circumstances: resulting or constructive. The husband was never under any obligation to return his own half ownership to the wife – it was his.
[96] The husband has not been unjustly enriched. Indeed, he was deprived of the use of his equity for a significant period. He paid $800 a month in rental fees, plus additional costs of living outside the jointly owned home. The home was not sold until 2012 and only after exhaustive litigation.
[97] The wife has not been correspondingly deprived. At best, for the 32 months in which she solely paid the mortgage, she paid an additional amount of $348 per month ($11,148 divided by 32) for the exclusive use of the husband’s share of the property. If the $348 is considered as the additional amount paid to maintain housing for the children, it was funded throughout by operation of the custodial parent formula. As above, she had use of 70% of their joint incomes from which she maintained the mortgage.
[98] Finally, there is juristic reason for the equal division of the sale proceeds. The property was placed into joint title by the parties on purchase with a right of survivorship to each. At no time was the joint tenancy severed.
[99] I can make no sense of the wife’s claim for an “equitable trust” but as an expression of her personal expectation that she would in some manner retain the home post separation.
[100] The wife’s claim for an equitable interest in the husband’s share of the sale proceeds is dismissed.
Costs
[101] The applicant wife has a costs award of $1,500 outstanding from November 21, 2011.
[102] Costs of this trial, and those reserved to the trial judge by the trial management justice may be addressed by written submissions to be filed in the continuing record within 30 days of release of this decision. A letter is to be forwarded to my judicial secretary to confirm when submissions are filed. Submissions are limited to three pages exclusive of any Rule 18 Offers to Settle and Bills of Cost.
[103] Within 20 days of release of this decision, the parties are to exchange Offers to Settle the costs arising from this decision.
Justice H.A. McGee
Released: January 3, 2014
[^1]: Resulting from the flooding of his rental accommodation.
[^2]: By constructing pre-marriage assets, and wholly ignoring the employment pensions.
[^3]: I have yet to hear submissions for costs, and can only imagine what has been spent on legal fees.
[^4]: These costs represent almost half of the father’s after-tax annual income. They were paid much later after they were ordered and with considerable hardship to the father. The failure to make timely payment also created hardship for the mother. The court genuinely questions whether the responsibilities of counsel were fully explored in the creation of such costs over an issue of counsel of record for parties of modest means.
[^5]: The access never happened.
[^6]: This was also contested – the mother previously not wanting the father to have access to the children’s medical records.
[^7]: The alternate weekend access never occurred.
[^8]: This was first agreed to in May of 2011 as a condition to adjourning the trial then scheduled for hearing on the May sittings. The mother took no steps. It then became a term within this consent. As the reader will learn, no steps were taken by the mother – nor have they ever been.
[^9]: It never happened.
[^10]: Recognizing that the release of child support is not within the jurisdiction of the court to order.
[^11]: For example, Justice Gilmore wrote in the decision released October 8, 2009 that the mother “had blatantly breached” the access orders. On November 21, 2011 I found that the mother was in breach of the most important aspect of the May 3, 2011 trial management endorsement – that she makes the children available for reunification counselling. The case conference Justice Kaufman frequently endorsed his frustration at the mother and her counsel’s (Mr. Zucker) failure to abide by access terms and to respect the role of the OCL.
[^12]: The father only learned this at trial in May 2013.
[^13]: Line 150 income less union dues
[^14]: Agreed figure
[^15]: Although the wife was always employed by the Bank of Montreal, she has moved through various positions with her employer.
[^16]: The mother serviced the joint line of credit post separation – for which credit is given in the equalization.
[^17]: Mid-range custodial parent spousal support, determined on an averaging of incomes for each party 2007 to 2013, the value listed being the net of tax value to the recipient.
[^18]: And cannot be determined in advance. The parties are encouraged to consider an effective process in which to determine which future post-secondary expenses can be funded by the parents.
[^19]: For which the mother would be eligible for a tax deduction – no evidence was offered of the after tax cost.
[^20]: Calculated as 40% of $150.
[^21]: No date of separation value was provided by either party. Lacking any other evidence of value, I have used the net sale proceeds.
[^22]: 2009 Valuation of D. Townsend of after tax value of pension (less premarriage service) on earliest date of retirement with an undiscounted pension: age 60. Note Townsend report uses tax reduction rate of 20.9% and valuation date of January 27, 2007. Amount of $79,806 in report rounded to $80,500 to reflect valuation date of July 10, 2007.
[^23]: 2009 Valuation of P. Martin of after tax value of pension on earliest date of retirement with an undiscounted pension: age 65. Martin report applies a 8.3% tax discount to value of $12,687. Rate of 20.9 used to reflect parity of rate applied to Townsend report.
[^24]: Already distributed following the sale of the home in 2012.
[^25]: Her employer held the mortgage.