ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: F1771/11
Date: 2014/06/19
B E T W E E N:
Shannon Noreen Virgo
Debra Anne Bertolo, for the Applicant
Applicant
- and -
Cornelius Alexander Virgo
Self-represented
Respondent
Heard at Hamilton, Ontario:
June 5 & 6, 2014
The Honourable Justice C. A. Tucker
ENDORSEMENT
Overview
[1] The parties started living together in September 1992. They were married on September 1, 2001 and separated on August 14, 2011. There are two children of the marriage, Vanessa and Olivia, who reside with the applicant and enjoy access to the respondent. No child support was paid by Mr. Virgo until the consent court order of September 2012.
Issues
[2] The issues are:
(i) What is the proper quantum of ongoing child support for the two children of the marriage; Vanessa (12) and Olivia (10)?
(ii) What is the appropriate amount owing for retroactive child support? A consent order for child support in the amount of $540 per month was made on September 12, 2012 based upon imputed income of $37,900 to the respondent. These payments have been paid from funds held in trust from the sale of the matrimonial home collected by the Family Responsibility Office. The parties separated in August 2011 and no support was paid for the time from the date of separation until the September 2012 order. Accordingly, the issue of child support from August 2011 to August 2012 remains outstanding.
(iii) What is the appropriate amount of s.7 expenses both ongoing and retroactive? The parties appear to agree that such expenses should be split 50/50 but the respondent objects to the quantum of the same, given that he is not working, and to the purchase of clothes being included.
(iv) What is the proper figure for equalization of net family property?
(v) What costs, if any, should be ordered?
[3] Partial Minutes of Settlement dated February 20, 2014 were entered into settling the issues of custody and access leaving only the issues outlined above.
[4] The major problem in reaching a decision in this matter is the failure of the respondent to provide any financial statements or any net family property statements. He has not filed any income tax returns since the date of separation claiming, albeit to my finding without any merit, that without a statement of his 2011 mortgage payments he could not file any returns. He says he was denied this information from the applicant and/or the lawyers who acted for the mortgage company, but again this does not ring true for the court. He was an owner/mortgagor and is entitled to this information. He was represented by a lawyer until February of this year. He could have filed his return. But even if he did not, he could have provided a statement of his earnings and expenses for the past two years. Nothing prevented that and he failed to do so. The court is left with no financial information as to the income of Mr. Virgo. As such, I am left with making a final decision based only upon the verbal evidence of the applicant and respondent on all the financial issues in this case unsupported by any third party verification.
[5] The respondent, although he was employed at a steel company for over 25 years, failed to provide any information as to his pension claiming he had no income and, as such, was unable to obtain a valuation. He cited no reason for not being employed. He has no medical evidence that he is unhealthy nor does he reasonably explain why, as he claims, he was terminated with cause from employment of long duration without a severance. Mr. Virgo has much of the landscaping equipment he utilized during the marriage which resulted in gross sales of over $80,000 in the year of separation but reports a negligible income for the past two years from that source. Frankly, I find he was totally incredible. He suggests that issues will resolve in the future, without any acceptance that separation has occurred and the trial has heard all the evidence it will hear in this matter and will make a final decision on all issues based upon this evidence. He denies the assault upon the applicant for which he has been convicted. My empathy with his position that he owned the house prior to marrying the applicant and only added her to their mortgage to give her a credit rating fails quickly in the face of his total lack of disclosure of his present and past financial situation.
Matrimonial Home
[6] The parties agree that each of them is entitled to one half of the net proceeds of the matrimonial home. The respondent argues that the applicant was residing in the home and should have paid all the bills prior to its sale and as such his share should be increased, while the applicant points out that the respondent paid no bills, or spousal or child support, and utilized the line of credit for his benefit and business both before and after separation and, as such, she should receive unequal equalization or a greater share of the proceedings of the matrimonial home to be compensated. Mr. Virgo testified that the line of credit was used for the home and renovations and operating costs as well as for acquisitions to his business equipment. There is consensus between the parties that the respondent paid the mortgage, line of credit and utilities for the home during the marriage from his income and/or the line of credit. I find there is no reason to order an unequal division of the proceeds of the matrimonial home based upon the noted arguments. I will however order payment out of the respondent’s half share to cover certain claims discussed before.
Pension
[7] During the trial the parties agreed on consent that their respective pensions shall be divided at source. In the event the respondent fails to apply to do so and/or to pay for his pension to be valued, the applicant may do so and pay for such valuation from the respondent’s one half share of the proceeds of the matrimonial home.
Divorce
[8] On consent, at the end of the hearing I conducted a divorce hearing and granted the parties a divorce on June 6, 2014, to take effect 31 days from that day.
Child Support
[9] The respondent in September 2012 consented to an order for child support based upon an imputed income of $37,000. It is the applicant’s position that the respondent is capable of earning much more than the $37,000 and, as such, I should impute a higher level of income. The respondent claims that he has done a few landscaping jobs since separation but provides no details of his income from such work or invoices at all. He provides no explanation for not working and has no issue with his health. He provided no details of any job searches or interviews. Mr. Virgo suggested that for some time the union did try to have his employment reinstated at the steel company but that attempt was unsuccessful, again this evidence without any third party verification or paperwork. No evidence was provided as to the cause of termination and/or any severance payout made.
[10] According to the respondent’s income tax returns he earned from his employer and his landscaping business $58,693.16 in 2008, $69,700.00 in 2009 and $55,653.00 in 2010. Mr. Virgo testified that the landscaping business was pursued by him due to the uncertain income from the steel industry and that when work was limited at his place of employment he could spend more time doing landscaping.
[11] The applicant said the respondent did not advise her of the finances of the family, nor involve her in them. She was aware of a joint line of credit but believed it to be in an amount of $32,000 and found post-separation the quantum exceeded $60,000. It is her position that she should not be responsible for the line of credit as it was used for her husband’s business. At a minimum, she believes she should not be liable for the post-separation increase in the line of credit as the respondent was using it, albeit she acknowledged that she also accessed it.
[12] The respondent’s position is the line of credit was not only used for the business, but also for improvements to the home including a bathroom in the basement. There was no valuation completed of the respondent’s business. I do not agree that the respondent should bear an unequal portion of the joint line of credit. There is no evidence that the monies were used only for the respondent, and there was evidence that his income from that employment was used to pay all the bills of the home so the applicant benefited from that business as much as the respondent. Post-separation, from the evidence, I find that both parties accessed the line of credit so I find they are jointly responsible for the same.
[13] I find the base figure for imputation of income to the respondent is the amount he agreed to in 2012 in the amount of $37,000. Separation issues may have caused the respondent up to that date a limited amount of time or the emotional ability to earn more than that amount from the date of separation until the consent order was entered into. Accordingly, I would find the appropriate amount of child support to be based upon an income of $37,000 from the date of separation until the end of 2013. It is now 2014, three years post-separation. In 2009 his gross income from his business was $82,250.32, albeit his net income was $22,311.21. Through his company, according to his tax return, he was able to write off expenses including some $7,594.64 for his home office. In 2010 he had a gross income from landscaping of some $23,000. During the trial he explained he was able to put more time into landscaping when he had less time at work. I find that once he lost his employment he should have been able to devote his full time to the landscaping business. If he could earn a gross income of $82,000 in 2009 working part-time, he could earn at least that in 2014. In all the circumstances I find that with his employment income and business income from 2008 to 2010 he made an average of $60,000. It is therefore logical, and I do so find, that he could earn at least $50,000 in 2014. Accordingly, I impute that level of income to him. Accordingly, child support commencing January 1, 2014 based upon the $50,000 income shall be in the amount of $743 per month. The parties shall exchange income tax returns and notices of assessment by June 1st of each year in the future.
Section 7 Expenses
[14] The applicant earns in the mid-$50,000 range, although she claims that with her requirement to complete a certain pharmacy certification and a reduction of work to meet child care obligations her income will be reduced this year. The parties agree that the s.7 expenses shall be borne on a 50/50 basis, however the respondent does not agree that the expenses claimed by the applicant are appropriate in his view. Mr. Virgo says that he could have looked after his children, reducing the babysitting costs. He further argues that the “bills” submitted by the babysitter are not sufficient in form. Given his total lack of disclosure this is an interesting assertion. In addition, he disputes the clothes costs claimed for the girls and the expenses of soccer, which he believes are excessive given the parties’ income.
[15] The applicant, to avoid issues in the future, suggests a monthly amount be paid by the respondent for her to apply to s.7 expenses with a year-end accounting to him resulting in a credit or debit position for the following year. The applicant suggests that $150 per month commencing January 1, 2014 be paid by the respondent. The respondent wants input on the expenses prior to them being incurred. For the past expenses since date of separation, the applicant seeks 50% payment by the respondent or $6,000 in total. I agree with the respondent that clothes, other than school uniforms, should not be considered s.7 expenses. However, even if I exclude the costs of those clothes, the applicant has expended over $13,000 in extraordinary expenses. The respondent cannot argue that babysitting is not a proper expense given that it has been incurred. Overall, given the “income” of the parties and given the imputed income to the respondent, the amounts claimed for extracurricular activities are not excessive.
[16] I find the respondent is responsible for $6,000 of the s.7 expenses up to the end of 2013 to be paid from the net proceeds of his share of the matrimonial home held in trust. I acknowledge it may be difficult to collect s.7 expenses from the respondent, and I agree it is hard to predict and/or budget for these costs. In all the circumstances I order that on a go forward basis the applicant shall provide a quarterly statement to the respondent with written notice of the proposed expenses and consider his written comments on the same prior to her expenditure of the same. The respondent shall pay $100 per month toward such expenses and the applicant shall provide a yearly accounting of these expenditures.
Net Family Property/Equalization
[17] The applicant seeks an equalization payment from the respondent. As noted, we have no information from Mr. Virgo, although he gave evidence that the values attached to the vehicles, equipment and household contents and the value of his business were excessive. Neither party provided any valuations from third parties in regard to any of these items nor were any appraisals provided to the court. The applicant provided “internet” values of the same, while the respondent provided his personal opinion.
[18] During submissions, the applicant filed two further net family property statements, one in which she removed the value of contents of the home entirely and reduced the “value” of the business from the entire line of credit to $10,000 for the hard assets of the business. I would further reduce the value attributed to the vehicles and bow flex attributed to the applicant by $15,000 resulting in an equalization payment of $24,884.08 to be paid by the respondent to the applicant by my calculation. I make this finding given that the evidence of the respondent would suggest that the internet value may not have been properly or accurately garnered, I have no third party valuations, and all of the assets are used, some to the point of being unusable.
[19] The respondent may have brought assets into the marriage, however he provided no evidence of the same. And without any evidence I have nothing to consider. This equalization payment shall be paid from the share of Mr. Virgo’s proceeds from the matrimonial home to the extent there are sufficient amounts to do so.
Costs
[20] If the parties are unable to agree upon costs, I may be spoken to.
Tucker J.
Released: June 19, 2014
COURT FILE NO.: F1771/11
DATE: 2014/06/19
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Shannon Noreen Virgo
Applicant
- and –
Cornelius Alexander Virgo
Respondent
ENDORSEMENT
Tucker J.
Released: June 19, 2014