COURT FILE NO.: 11-1045
DATE: 2014/09/29
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Joelle Marie Berthe Regnier Applicant
– and –
Francois Joseph Remi Regnier Respondent
Robert Coulombe, counsel for the Applicant Walter R. MacLean, counsel for the Respondent
HEARD: June 23, 24 and 27, 2014 Final written submissions received: August 7, 2014
REASONS FOR JUDGMENT
PELLETIER, J.
[1] Mr. and Mrs. Regnier were married in 1992 and separated on July 21, 2011. They have 3 children; Kassia (18), Danika (16), and Micha (15). In the present case, certain post-separation issues were resolved by the parties, however 4 issues required litigation; Mr. Regnier’s claim for spousal support, a factual determination of the children’s residency post-separation in order to determine respective child support obligations, a determination of Mr. Regnier’s share of extra-ordinary expenses relating to the three girls, and a calculation of the equalization of family property, largely in relation to various bank accounts and savings.
[2] As certain facts were in dispute at trial, and given that both parties testified, a determination of their credibility and reliability as witnesses is essential in the fact-finding process. Simply stated, Mrs. Regnier presented as a truthful and sincere witness, relying on her recollection of events to the limits possible and generally making no effort to embellish aspects of the case favourable to herself or understate aspects of the case favourable to Mr. Regnier.
[3] For instance, she acknowledged Mr. Reginer’s support of her professional goals and his contributions in time and effort during her studies. Her testimony relating to financial issues is supported by the documentary evidence.
[4] The same cannot be said of Mr. Regnier. While the Court did not consider Mr. Regnier to be deliberately deceitful at trial, his pattern of persistently withholding information and only capitulating when directly confronted renders his testimony on financial issues unreliable unless confirmed by an independent source.
[5] Mr. Regnier did not disclose the existence of his employee savings program. It is a substantial asset of over $30,000.00. This was not an oversight. Mr. Regnier took great pains to uncover and present several post-separation expenses, requiring considerable thought and effort. He failed to do so, deliberately I have concluded, in the assets ledger of his presentation.
[6] Mr. Regnier also failed to disclose, until very late in the proceedings, the existence of an account containing significant funds of over $13,000.00 excluding a $4,200.00 withdrawal 2 days prior to separation.
[7] The Court is mindful that errors will occur in any exercise involving post-separation accounting, particularly in cases where significant assets, income, debts and liabilities are involved. I am however unable to attribute these oversights to innocent explanations.
[8] Similarly, Mr. Regnier neglected to reveal the existence of shares he owned with Kraft, his employer. In his written submissions, at the end of the trial, Mr. Regnier presented unsworn and unchallenged information concerning the shares, which tended to prove that they were acquired post-separation. In her reply submissions, Mrs. Regnier, despite the peculiar manner in which this evidence was presented, conceded that the Kraft shares should not be part of the equalization process, demonstrating, in my view, her practical and realistic approach to the present litigation.
[9] The Court is asked to resolve a dispute where the parties are unable to do so themselves. The Court must therefore rely on the parties to provide the factual underpinnings of the case if a fair and just result is to be achieved. Through his conduct, Mr. Regnier has attempted to induce the Court into arriving at a result that is unfair and unjust and in his favour. The Court cannot countenance such an approach. The appropriate remedy is to discount Mr. Regnier’s evidence on financial issues, where uncorroborated and at odds with the position taken by Mrs. Regnier.
[10] Having concluded therefore that Mrs. Regnier’s testimony is credible and reliable and having further concluded that Mr. Regnier’s evidence on financial issues can only be relied upon where corroborated, the present Reasons for Judgment are premised largely upon the description of events and their significance as related by Mrs. Regnier. That is not to say that Mr. Regnier’s evidence is rejected. Rather, factual disputes, mostly in relation to financial issues, requiring a determination by the Court are resolved in favour of Mrs. Regnier unless Mr. Regnier’s testimony is supported by material and objective evidence.
Spousal Support
[11] Mr. Regnier amended his pleadings to include a claim for spousal support upon discovering that Mrs. Regnier’s income had increased by near 75% post-separation. In the years prior to separating, both Mr. and Mrs. Regnier made in the area of $100,000.00 each. They enjoyed a very comfortable lifestyle, as evidenced by the home they owned, high end vehicles and travel. Mr. Regnier is a maintenance supervisor at Kraft in Ingleside. He is a qualified millwright and oversees the activities of over 25 tradespeople and subcontractors. He is considering a promotion to maintenance manager which would involve more stable working hours and less travel. The change in responsibilities would however involve, according to his evidence, a fixed income in the mid $80,000.00 range and no opportunity for overtime. At the time of trial, the position had not been filled, although he was optimistic about his prospects.
[12] Since the sale of the matrimonial home in 2012, Mr. Regnier has occupied a home which he leases from a family member, for $1,600.00. There is no written lease or independent evidence of rent being paid. Mr. Regnier’s financial statement tends to show that despite his income, he operates at a slight deficit.
[13] Mrs. Regnier is a nurse practitioner currently earning $172,000.00 a year. She is employed by the Mohawk Council of Akwesasne. She obtained this position one year after the separation. Prior to being so employed, Mrs. Regnier worked in various nursing capacities and related contract work which resulted in income levels of $115,000.00 in 2010, $124,000.00 in 2011, $133,000.00 in 2012 and currently $172,000.00.
[14] Mrs. Regnier presently has the principal care of the three girls and at the time of trial was contemplating a move to more modest accommodations with a monthly rental cost of $1,500.00. Her financial statement similarly reveals a slight monthly deficit.
[15] Mr. Regnier’s claim for spousal support is compensatory in nature. In his view, Mrs. Regnier’s career advancement and increased earning potential arose from a 20 month masters’ program consisting of off-site studies and occasional in class training between 2006 and 2008. Mrs. Regnier’s evidence was that she continued to work full-time at the Cornwall Community Hospital during her studies in the masters program. The masters program was funded by the University of Ottawa, where she also worked as a professor.
[16] Mrs. Regnier testified that during her studies, her priority was her children, resorting to the babysitting services of her mother when required. Mrs. Regnier’s mother, Suzanne Mailhot, testified to the same effect. Mrs. Regnier stated that she would occasionally begin her days at 3:00 a.m. in order to fulfill her parental obligations, her professional commitments, and her academic endeavours. Mr. Regnier did not dispute this evidence, stating rather that Mrs. Regnier’s schedule occasionally required him to take on additional responsibilities, in relation to the girls or housekeeping work. More significantly, Mr. Regnier did not advance any evidence tending to show that he suffered any prejudice to his employment opportunities or aspirations. His complaint was mostly related to unrealized purchases he had hoped for, such as a sports car to work on.
[17] In all of the circumstances, I have concluded that Mr. Regnier’s spousal support claim must fail, for the following reasons. Compensatory spousal support is intended as a means of indemnifying a spouse who suffers economic disadvantage flowing from the marriage and its breakdown, as a branch of ss. 15.5(6)(a) of the Divorce Act. Typically, the disadvantage relates to foregone employment opportunities, promotions, transfers and in some cases an actual departure from the work force in order to facilitate the other spouse’s advancement. The disadvantage must be economic in nature. Mr. Regnier’s evidence does not establish that Mrs. Regnier’s studies, conducted largely from the home, created conditions which resulted in economic disadvantage for Mr. Regnier. The effort was considerable on Mrs. Regnier’s part. The entire family was required to commit to her endeavours. Mr. Regnier no doubt performed certain tasks he was not otherwise accustomed to. In the end, the entire family was intended to benefit. Indeed, Mrs. Regnier now enjoys a much greater income and this enures to the benefit of the girls, but it was not achieved through any financial sacrifice by Mr. Regnier. On that basis, compensatory spousal support cannot be awarded.
[18] This conclusion is supported by Mr. Regnier’s continued success at work and prospects for promotion. If Mr. Regnier chooses at this point to reduce his income in favour of better working conditions, he does so of his own volition and cannot expect compensation from Mrs. Regnier. Mr. Regnier suggests that his financial situation is difficult. A voluntary reduction in income motivated by a personal choice cannot be borne by Mrs. Regnier more than three years after separation. The spousal support claim is therefore dismissed.
Child Support
[19] Child support is a statutorily specified function of income and number of children in the recipient parent’s care. There are very few variables. In the present case, the calculation of child support is made more complicated by the changes in principal residency of the girls over the 36 months since separation. The parties are content with a simple set off based on income levels and number of children in their principal care over the period in question. The residency of the girls is however disputed. Mrs. Regnier has testified that Kassia has been in her primary care since separation, that Micha was with her mother following separation until early December 2011 and has since returned in her primary care as of late April 2013, and that Danika was with her father following separation and with her mother since December 2011. In sum, the girls have been, according to Mrs. Regnier, in her primary care since separation safe for a period of 16 months in Micha’s case (December 2011 to April 2013) and a period of 4 months in Danika’s case (August 2011 to December 2011).
[20] Mr. Regnier takes a slightly different view. Concerning Kassia, Mr. Regnier states that she remained with him in August and September 2011 before leaving for her mother’s residence where she has remained since, resulting in a net difference in Kassia’s case of two months, considering the parties’ respective positions. Concerning Micha, Mr. Regnier’s position is that Micha was indeed with her mother following separation until December 2011, as stated by Mrs. Regnier, but that she remained with her father until September 2013, and not April 2013, resulting in a net difference of 4 months in Micha’s case.
[21] Finally, in the case of Danika, there is no dispute that she initially remained with her father following separation. While Mrs. Regnier suggests that Danika came to live with her in December 2011, Mr. Regnier maintains that she was with him until March 2012, resulting in a net difference in Danika’s case of 4 months. The total disputed time is therefore 2 months concerning Kassia, 4 months in Micha’s case, as 4 months as well as it relates to Danika’s primary residence. The three girls are all presently with their mother.
[22] There is very little in the way of corroboration concerning the principal residency of the girls since separation. Certain incidents are suggested to be confirmatory of the parties’ positions. For instance, Mrs. Regnier points out that in Micha’s case, her school records would tend to show that she was living with her mother in April 2013.
[23] This issue cannot be determined by considering whether the party advancing a certain position has met his or her onus as both parents bear the burden of establishing the time-lines in relation to child support. For the purpose of the present calculations it is assumed that the children changed principal residences at various time for various durations and that where set off calculations are required, the disputed periods are divided in half, on the basis that as the dispute cannot be factually determined, neither parent has met their evidentiary burden and therefore they share in equal measures. Accordingly, it is assumed that Kassia was with her mother but for 1 month of the two months in dispute, that Micha with her mother but for 2 months of the disputed 4 months and that Danika was similarly with her mother but for 2 months of the disputed 4 months.
[24] The child support calculations are therefore as follows:
Kassia - retroactive child support payable by Mr. Regnier September 1, 2011 to September 1, 2014, and ongoing child support;
Micha – retroactive child support payable by Mr. Regnier August 1, 2011 to November 30, 2011, and July 1, 2013 to September 1, 2014, and ongoing child support;
Danika – retroactive child support payable by Mr. Regnier February 1, 2012 to September 1, 2014 and ongoing child support.
These amounts are to be set off by the retroactive child support obligations of Mrs. Regnier on the following basis:
Kassia – August 2011
Micha – December 1, 2011 to July 1, 2013
Danika – August 1, 2011 to February 1, 2012
[25] Mr. Regnier’s retroactive child support obligations are to be further set off by the amount of child support paid resulting from the interim order of child support, November 29, 2013.
[26] Mr. Regnier has argued, in submissions, that table amount child support would result in undue hardship taking into consideration a significantly reduced lifestyle and his purported inability to provide additional benefits for the children.
[27] This position did not form part of the pleadings and was not specifically examined in testimony. The principles of trial and procedural fairness as well as the objective of timely resolution and finality in the Family Law Rules prevent Mr. Regnier from advancing such a claim at the end of the proceedings. In any event, with income or earning potential of over $100,000.00 annually, and in consideration of Mrs. Regnier’s income and principal child care responsibilities for the three girls, an undue hardship claim is not tenable.
[28] The parties are directed to prepare calculations of child support payable based on the preceding findings. In the event that the amounts are disputed, the issue may be brought before me, in the form of a basket motion to be determined in chambers based on further submissions and calculations not to exceed 2 pages.
Section 7 Special or Extraordinary Expenses
[29] Mrs. Regnier has had to cover considerable expenses in relation to a variety of the girls’ needs and activities. She has done so without contribution by Mr. Regnier. The expenses include:
− Glasses for Kassia, not covered by medical insurance ($295.00);
− Driving lessons for Kassia ($798.91);
− Kassia’s graduation expenses ($524.95, excluding a $100.00 deposit on a dress not purchased);
− A school trip to Guatemala, considered to be an educational/humanitarian activity ($1,869.66);
− Swimming fees and expenses for the children in 2011 and 2012, post-separation 2011 - $2,108.50
2012 - $4,082.92
− Cell phones for the children
2012 - $905.00
2013 - $3,915.00
2014 - $1,150.00 to date.
[30] During the marriage, the family enjoyed a very comfortable lifestyle due to a substantial family income. The lifestyle included several activities and expenses that benefitted the children. I would conclude that the extraordinary expenses listed are neither frivolous nor exorbitant and that they meet the definition of necessary and reasonable expenses having regard to the best interest of the children, the means of the parents and the spending patterns established during the marriage.
[31] Mr. Regnier has advanced the position that he was not consulted prior to the extraordinary expenses being incurred. The parties could not communicate due to bail conditions that bound Mr. Regnier. Be that as it may, the expenses, as I have already observed, are reasonable and consistent with the activities that the girls have come to expect and benefit from.
[32] More particularly, Kassia’s prescription glasses are a matter of necessity. Her graduation expenses are reasonable and well within the means of the parties. The trip to Guatemala, while somewhat costly and certainly not typical, can only be of great benefit to Kassia academically and in terms of her personal development. There is little doubt that these expenses would have been readily accepted by the parties had it arisen during the marriage.
[33] Similarly, the swimming activities, initially begun during the period of cohabitation, provide the girls with exercise and discipline. While not inexpensive, they are activities that are very beneficial and consistent with expenses reasonably incurred given the levels of income of the parents. Finally, the cell phone expenses are reasonable given the ages of the girls, the amounts involved and the ability it provides for Mr. Regnier to communicate frequently with his daughters.
[34] I would therefore conclude that a pro-rated sharing of the extraordinary expenses is consistent with the principles set out in section 7 of the Child Support Guidelines.
Equalization
[35] At issue in the net family property calculations are:
The adjusted values of the parties’ pensions and tax considerations as the pensions are not divided at source;
Shares in Kraft held by Mr. Regnier;
A G.I.C. claimed by Mr. Regnier to be a pre-marriage property;
Mr. Regnier’s Employee Savings Accounts, the existence and details of which remained undisclosed until late in the proceedings;
A credit union account held by Mr. Regnier, the details of which were similarly not disclosed until late in the proceedings;
A jointly held line of credit and account activity since separation;
A joint account and account activity since separation.
[36] Items 1) and 2) are essentially resolved as a result of the trial process and submissions made by counsel. It is agreed that with regards to the pension valuations and tax consequences, item 1, the pension of Mrs. Regnier, valued at $213,390.00 must be reduced by 23% to account for future tax consequences, and therefore represent an asset valued at $163,310.00. Similarly, Mr. Regnier’s pension, valued for family law purposes at $128,483.21, and subject to a 23% reduction represents an after tax asset of $98,932.07. These values are to be incorporated into a final equalization calculation.
[37] As previously mentioned, the shares in Kraft, item 2), has been determined to be an asset acquired post-separation and must therefore be excluded from the net family property equation.
[38] Item 3, the G.I.C. with a purchase value of $7,500.00 is slightly more complicated. The evidence at trial did not deal specifically with this issue. Mr. Regnier, in his submissions, suggests that this item has never before been disputed by Mrs. Regnier as excluded property, and has in fact been included in her NFP calculations. No independent documentary evidence has been produced to identify the details of the original G.I.C. account or its treatment since the date of marriage. The Court has already expressed its reluctance to rely solely on Mr. Regnier’s testimony, unless corroborated, on financial issues. That said, given Mrs. Regnier’s tacit acceptance of the existence of certain investments by Mr. Regnier pre-marriage, and the absence of any examination in-chief or cross-examination on this subject at trial, I have concluded that this asset is to be excluded from the equalization process.
[39] Concerning Mr. Regnier’s employee savings account, item 4, this account was only revealed at trial. In cross-examination, Mr. Regnier estimated the balance to be some $33,000.00 at the time of separation. It has since been determined that the account balance was $30,767.46. It is not now contested by Mr. Regnier that this amount must be added to the equalisation calculations. The non-disclosure of this asset has already been considered as a primary reason for examining Mr. Regnier’s evidence very cautiously.
[40] Mr. Regnier’s credit union account, item 5, must also be added to his net family property calculations. This account, undisclosed in two financial statements, sworn to and filed, reveals a balance at separation of $13,101.34, $4,200.00 having been withdrawn just prior to separation. Mrs. Regnier submits that $4,200.00 must be accounted for on the basis of deliberate depletion of family assets at or just prior to the marriage breakdown. On this particular issue, the Court found somewhat compelling Mr. Regnier’s evidence that he was taken by surprise when he received a telephone call, on August 3, 2011, from Mrs. Regnier, informing him that the relationship was over. This evidence would tend to rebut the inference that Mr. Regnier deliberately depleted the account in order to reduce his assets at separation. That said, I am not at all convinced that subsequent withdrawals were made in order to finance renovations to the family home. This claim rests solely on Mr. Regnier’s evidence, which suffers from the late disclosure of this account to begin with. There are no documents to his claim that the funds were used to make renovations as improvements to the home. At one point, he claimed that renovations were partially funded by family members. In all of the circumstances, I have concluded that the balance $13,101.34 at separation, must be added to Mr. Regnier’s net family property calculations.
[41] Items 6 and 7 are slightly more perplexing. Items 1 to 5 related to assets held at separation and therefore frozen in value. Items 6 and 7, the joint line of credit and the joint account, saw significant balance fluctuation in the months following separation. On the evidence, I agree with submissions made by Mrs. Regnier that she contributed a net $6,196.02 to the line of credit, excluding payments from a joint account, and that Mr. Regnier withdrew $1,823.48, resulting in a net difference of $8,020.40 in Mrs. Regnier’s favour, or $4,010.20 for equalization purposes as both were and continue to be jointly accountable for the balance.
[42] Similarly, the joint account was increased, post-separation, by Mrs. Regnier, largely from the deposits of her pay cheques, to a net $7,323.40. Her claim on the equalization of these two accounts is a total of $11,333.60. This apparent contribution, post-separation, to the parties jointly held debt and asset cannot however be considered in a vacuum. Finances following separation are typically turbulent and irregular. Sudden expenses, unforeseen prior to separation, and a reduction in available funds by both parties, from a previously combined basis, inevitably results in financial obligations being met in an improvised, and occasionally, poorly accounted for fashion. On one hand, Mrs. Regnier was required to fend for herself, financially, from early August 2011 onward. The evidence also establishes that Mrs. Regnier made two mortgage payments to avoid defaulting. She is not claiming occupation rent against Mr. Regnier. On the other hand, Mr. Regnier, who continued to occupy the home, assumed the accelerated mortgage payment, arranged prior to separation, and the cost of maintaining the residence until its sale in June 2012. In my view, it is unfairly convenient to simply credit Mrs. Regnier for her entire post-separation contributions to these two accounts. There are too many variables, unforeseen circumstances and financial arrangements, often improvised, which are not necessarily agreed upon at the time, and which render a detailed accounting very difficult, in terms of equalization. This is in contrast to the values of certain fixed assets which crystalize precisely as at the time of the date of separation. I am nonetheless of the view that Mr. Regnier did receive an unequal benefit from Mrs. Regnier’s contributions to the credit line balance and the joint account which exceeds what could normally have been expected in the months following separation as the parties wound up the financial partnership which the marriage represented until the end of July 2011.
[43] I would fix the amount to be used for the purposes of equalization at $5,000.00 in Mrs. Regnier’s favour in relation to both the line of credit and the joint account as a fair approximation of the contributions she made post-separation from which Mr. Regnier benefitted. This figure also takes into account the financial obligations imposed upon Mr. Regnier as a result of the present Reasons for Judgment.
Conclusion
[44] In the result, Mr. Regnier’s claim for spousal support is dismissed for the reason above. Child support calculations, retro-active and ongoing are to be recalculated taking into consideration the Court’s findings at paragraph 24, 25 and 28. Section 7 expenses incurred to date are to be shared on a pro-rata basis, and are expected to be incurred in a manner consistent with the means of the parties and the needs of the girls. As there is no mechanism presently for the parties to consult each other prior to the extraordinary expenses being incurred, they will need to develop a means by which Mr. Regnier can be informed of the anticipated activity or medical costs. It may be that a probation variation will be necessary. The equalization payment shall be recalculated on the basis of paragraphs 35 to 43 of the Reasons for Judgment, all of which shall be either approved by counsel for Mr. Regnier or submitted together with a draft order for my consideration.
[45] The parties may exchange and file written cost submissions, not to exceed 2 pages in addition to accompanying documents within 30 days of the release of the judgment herein.
Justice Robert Pelletier
Released: September 29, 2014
COURT FILE NO.: 11-1045 DATE: 2014/09/29
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Joelle Marie Berthe Regnier Applicant
– and –
Francois Joseph Remi Regnier Respondent
REASONS FOR JUDGMENT
Justice Robert Pelletier
Released: September 29, 2014