SUPERIOR COURT OF JUSTICE
CITATION: Davidson v. Davidson, 2015 ONSC 1061
COURT FILE NO.: FS-27/09
DATE: 2015-02-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BLAINE ROBERT DAVIDSON
Michael Harris, for the Applicant
Applicant
- and -
MICHELLE KIM DAVIDSON (ALEXIUK)
Respondent is self-represented
Respondent
HEARD: October 21, 2014,
at Thunder Bay, Ontario
Mr. Justice T.A. Platana
Reasons
Background
[1] This is an Application filed by Mr. Davidson seeking divorce, custody, child support and costs. The parties were married in 2000. At the commencement of the hearing, counsel for Mr. Davidson advised that the Applicant’s claims for divorce, custody and child support had been dealt with. The outstanding issues remained the Respondent’s claim in her Answer for spousal support, equalization, and possession of the matrimonial home.
BACKGROUND
[2] The file indicates that a series of trial management/settlement conferences were held beginning April 7, 2014. Directions were given to both parties with respect to the material to be filed to be relied upon at trial. A second trial management/settlement conference was scheduled for May 28, 2014. The Respondent, and then counsel, were not prepared to proceed. No financial information had been filed by the Respondent.
[3] A third conference was scheduled on June 10, 2014. The Respondent did not appear. As the Respondent had agreed to a divorce in her Answer, a viva voce hearing was held on that issue, and a divorce was granted. The matter was scheduled for trial at Assignment Court on June 11, 2014, and a further trial management/settlement conference was scheduled. That conference was held on August 28, 2014. The Respondent’s then counsel requested an adjournment of the trial which had been fixed to proceed the week of October 20, 2014. No motion for adjournment was brought despite an endorsement that any motion for adjournment had to be brought by September 11.
[4] On September 29, the Respondent did not attend a trial management conference, despite the fact that the date had been requested by the Respondent. The trial management judge noted that a divorce had been granted and the issue of custody and access had been settled. The matter was fixed for trial commencing on October 21, on the Respondent’s outstanding claims of spousal support and equalization of Net Family Property.
[5] The file indicates that two previous counsel represented the Respondent, however, she appeared at the hearing representing herself. I gave her an opportunity for an adjournment. At the opening of the hearing, the Respondent had not filed any materials or productions despite the earlier endorsements to do so. Mr. Harris, for the Applicant, after consideration, agreed that she could reference documents shown in her Affidavit of Documents. Relying on directions given to her by the trial management judge to produce all records she would rely on, and not having received any documentation from her, he indicated that he would object to any business records being produced where no notice had been given, and no copies provided.
THE EVIDENCE
[6] The Respondent testified on her own behalf, and relied exclusively on what she believed to be the Applicants income and financial situation over the years. Her evidence is that the Respondent was involved in what were either interrelated companies, or companies controlled by him. She also stated that while many of his assets were in the name of a corporation, they were actually personal assets.
[7] She produced, and on consent, filed documents which had been produced by him. A 2009 T4 (Exhibit 1) shows that Mr. Davidson earned $12,000.00 from Eva Lake Mining Ltd. She also filed a document showing work performed between January – August 2009, for a total of $18,620.00, (Exhibit 2A). Exhibit 2B, filed on consent, shows monthly payments from Eva Lake Mining for the months of September, October and November 2009, in the amount of $2,384.20 net. Her evidence was that these documents together showed his 2009 income to be approximately $30,000.00.
[8] She stated that the family lifestyle included such items as new bikes every year for the children, a fifth-wheel trailer, frequent vacations, new vehicles and snow machines. She stated that personal family bills were paid through a company.
[9] The parties were not married when the house at 19 Birch Road was purchased in May 1997. She put no money into the purchase, and her name was never on title. She states that it was put in the name of his mother, and a mortgage given in order that he could satisfy a tax reassessment. Exhibit 4 is an approval of mortgage loan document showing Mr. Davidson as applicant. She planned and had carried out all renovations and decorating, which were paid for by his business. The home was transferred into his mother’s name when he was first re-assessed by the Canada Revenue Agency (CRA) in July 1997. She states that her claim on the home is because “it was supposed to be our home” and “the children grew up there”.
[10] Her evidence is that while his Financial Statement says he owns a 1997 Ford F-350 which he purchased before the marriage, it was purchased in 2007 in the name of Eva Lake Mining. His Financial Statement, in Part 4(b), shows the truck as an asset owned prior to marriage. No documentation was produced as to the purchase date.
[11] In cross-examination, she acknowledged that in 2001, his company began to have financial problems and his income decreased. She was aware of Canada Revenue reassessments, both for his corporation and personally.
[12] She agreed their lifestyle had been funded mainly by his company, and that income virtually “dried up.” She acknowledged that she had the benefit of his use of company money for their personal use, but that all of the significant tax liability for the reassessments is his alone.
[13] She testified that Mr. Davidson is the owner of several mining claims. He has produced a list of four claims. She claims that “people told her that” he owns more. She referenced certain other claims locations, which had been “auctioned off,” however, no documentation was provided of the existence of any beyond the four he produced. She has no evidence to establish the value of any claims, and acknowledged that she has no personal knowledge of other mining claims.
[14] She has also testified that he personally owns gravel pits from which he derives income from the sale of gravel. She states that in 2008, when he claimed he was not working, he worked for Eagle Lake Mining. She claims that he sold 110,000 cubic yards of gravel at $11.00 a cubic yard, and that this was never claimed as income. She prepared the numbers and put them into the books. She states that today she sees him hauling gravel in a truck in the name of Eva Lake Mining. She says “she knows this gravel is from pits he owns”.
[15] No documents giving effect to the above were in evidence.
[16] Despite nothing have been filed previously by the Respondent, I permitted her, with the Applicant’s counsel consent, to enter a Financial Statement sworn October 14, 2014 and produced just prior to the commencement of the hearing. Her income is shown as $2,547.00 per month, ($30,564.00 per year.) She shows monthly expenses of $2,855.24 ($34,262.88 yearly.)
[17] She claims Net Family Property of $184,000.00, which includes a value for the matrimonial home, and a corporate owned vehicle.
[18] The Respondent did not testify.
[19] Tammy Lynn Caron is Mr. Davidson’s current partner. She produced Exhibit 6, a Rental Agreement, showing that she and Mr. Davidson are tenants in a home owned by Marlene Davidson.
[20] She does the invoicing for Eva Lake Mining, Mr. Davidson’s employer. Her evidence is that he earns $36,000.00 per year, and that Eva Lake is his only source of income. He does have signing authority on cheques from Eva Lake Mining. She handles all household finances and is aware that he has an outstanding tax liability of $180,194.30, which at the time of this hearing was just over $200,000.00.
[21] She has no knowledge of Mr. Davidson personally owning any mining claims.
Position of the Respondent
[22] At the time of this hearing, the Applicant was paying, $350.00 per month in child support, based on his earnings, determined as at the date of the divorce. In addition, he continues to pay $575.00 per month as spousal support. The Respondent asks that income be attributed to him based upon her position that his true income is being hidden in corporations owned and controlled by him, or that his mother holds assets in trust for him, including the matrimonial home.
[23] She further asks for a declaration that proceeds of a settlement received by the husband’s corporation in a civil law suit be included in determining the division of Net Family Property, as being a contingent interest at the date of separation. She further seeks a declaration that he holds a beneficial interest in a corporation, which is held in trust for him, and a declaration that she has entitlement to the matrimonial home.
[24] The unfortunate aspect of this case is that, having been previously represented by two different counsel, she appears before me self-represented. A significant portion of her written submissions consists of what can only be described as evidence, which was not adduced at trial.
[25] Her argument is that while he claims to have limited mining income, he continues to operate his previous company B.R. Davidson now under a different name, Eva Lake Mining, and that he owns personal assets specifically a gravel pit.
[26] What I can accept is that, while there was a point in their relationship when the parties appeared to have had a comfortable lifestyle, she acknowledges that as a result of Canada Revenue Agency reassessments of both personal and corporate tax liability, his financial situation has significantly diminished.
Position of Applicant
[27] It is the Applicant’s submission that the Respondent has completely failed to prove her claims on a balance of probabilities and therefore they should be dismissed.
[28] Mr. Harris references the evidence that neither of the parties held an interest in the home during the time that the parties were married. Accordingly, the home is not a matrimonial home and, therefore, the Respondent has no right of possession in the home. He further argues that a divorce was granted on June 10, 2014, and the parties ceased to be spouses at that time. There was no corresponding Order that gave the Respondent the right to exclusive possession, and as she ceased to be a spouse, she is no longer entitled to exclusive possession.
[29] With respect to the Respondent’s claim, in seeking an equalization payment, Mr. Harris notes that Respondent appears to be taking the position that there is property that should be included in the calculation as follows:
(a) the value of the home the parties lived in and the value of an interest in Eva Lake Mining as they are being held in trust for the Applicant by his mother;
(b) the proceeds from a settlement in a defunct company; and
(c) cash and shares allegedly received by the Applicant.
[30] The Applicant argues that in order to include the value of the home and the alleged interest in Eva Lake Mining, the Respondent would have to show that the Applicant’s mother, Mrs. Marlene Davidson, held those assets in trust for the Applicant. Mr. Harris references Green v. Green, [2013] O.J. No. 6396, where the court spoke at length about resulting trusts and noted that in order for a resulting trust to arise, there would have to be a transfer of property with no consideration. Also, evidence would have to be lead to establish the intention of the transferor at the time of the transfer. He argues there is no such evidence here.
[31] With respect to the home at 19 Birch Road in Atikokan, Mr. Harris notes that the evidence provided by the Respondent sets out that the property was transferred in 1997 from the Applicant to his mother, shortly after the Applicant had purchased the property. The transfer was made as a result of a tax reassessment by Revenue Canada which resulted in a significant tax liability to the Applicant. He notes that the transfer of the home took place 3 years before the Applicant and the Respondent married and they lived there only as tenants of Mrs. Davidson.
[32] Mr. Harris submits that in the circumstances of this case, the Respondent also does not have a trust claim against the home under the principle of constructive trust. The only contribution that the respondent made to that property was that when the house was being renovated she “designed the majority of renovations and was on site daily”. By her own admission, she did not contribute monetarily to the home. With respect to Eva Lake Mining, Mr. Harris submits there was no evidence of any transfer of shares from the owner to the Applicant that would give rise to a resulting trust, nor was there any evidence led from which it could be presumed that there was or is a beneficial trust.
[33] He submits that the Respondent led no evidence with respect to B.R. Davidson Mining & Development Ltd., which is now defunct nor did she lead any evidence with respect to the alleged Option Agreement.
[34] Further, Mr. Harris notes the Respondent is also alleging that the Applicant has an ownership interest in some gravel trucks. Again, she failed to provide any evidence to substantiate.
[35] It is the Applicant’s submission that both parties’ Net Family Property value is zero and therefore there is no equalization payment owing from one party to the other.
[36] With respect to the issue of spousal support, the Respondent says that she is now earning approximately $18,000.00 per year. Her Financial Statement sworn on October 14, 2014 shows income of $30,564.00. The Applicant is currently paying $575.00 per month in spousal support pursuant to an Order dated October 19, 2010. In addition to the spousal support payment the Applicant pays $350.00 per month in child support. Mr. Harris relies on Lahar v. Lahar, [2014] O.J. No. 621 Ont. Sup. Ct. at paragraphs 36, 37 and 38, where the court discussed the requirement to provide full financial disclosure and that the onus was on the person seeking to impute income to establish that it is appropriate and what amount should be imputed. He submits that none of the factors set out in that case are applicable to this case.
[37] Mr. Harris argues that the evidence relied on by the respondent with respect to the imputation of income is that the parties enjoyed a particular lifestyle while they were married. However, it is clear that this lifestyle was financed through the Applicant’s now defunct company and as a result of financing that lifestyle the Applicant now has a serious and substantial income tax liability. Beyond the pure speculation of the Respondent, he submits that she has failed to provide any evidence that the Applicant is underemployed; that he receives income from sources other than the one he has disclosed; or that he is diverting income. Further, that she has also failed to provide any evidence as to what she asserts the Applicant’s income is for the purposes of having the court impute income on the Applicant.
[38] The Applicant submits that spousal support should be based on the Spousal Support Advisory Guidelines on the basis of the Applicant earning $36,000.00 per year, paying $350.00 per month in child support, and the Respondent’s income of $18,000.00 per year. Mr. Harris argues that the SSAGs show that there is no spousal support payable by the Applicant in these circumstances. He cites Fisher v. Fisher, 2008 ONCA 11, [2008] O.J. No. 38 O.C.A. at paragraphs 98, 100 and 103, where the Ontario Court of Appeal discussed the utilization of the Spousal Support Advisory Guidelines and determined that they were a useful tool in determining the quantum and duration of spousal support to be paid. They further decided that if a court determines that the Guidelines should not be used, that court has to explain why the Guideline amount is not appropriate.
DISCUSSION
[39] This case demonstrates once again the difficulties facing a trial judge where a self-represented party pursues a claim against a party represented by counsel. It further demonstrates the problem of proving a claim when there is no documentary evidence to rely upon and, in this case, despite the Respondent having been told in trial management conferences about the importance and necessity to do so.
[40] With respect to the Respondent’s claim for an equalization payment, I have only her evidence that the Applicant owns other assets personally. He has produced all documentation requested of him by her previous counsel. I cannot rely on her evidence that “she believes” he owns a gravel pit personally, or that he owns mining claims other than what he has disclosed, to include those in her claim to calculate no Family Property.
[41] Neither can I accept her claim with respect to any interest she has in the matrimonial home when the evidence indicates that it was purchased prior to the marriage and is registered in his mother’s name.
[42] With respect to her claim to his interest in B.R. Davidson, the Applicant’s company, the evidence is that company is defunct. I further accept Mr. Harris undertaking as an officer of the court, that neither Mr. Davidson, nor his defunct company realized any benefit from such settlement after payment to the creditors, including the Canada Revenue Agency reassessment.
[43] Further, although the Respondent claims that he has a beneficial or trust interest in Eva Lake Mining, there is no evidence to substantiate that claim.
[44] On all of the evidence before me, or the lack thereof, I cannot find that the Respondent is entitled to an equalization payment.
[45] I accept the Respondent’s evidence with respect to their lifestyle at an earlier point in their marriage. The clear evidence of a reassessment by Canada Revenue Agency is indicative that much of the Applicant’s income was significantly higher than what he currently states that he earns.
[46] There was no evidence of how the Applicant was unjustly enriched and what the corresponding deprivation was to the Respondent that would give rise to a constructive trust.
[47] She asks me to impute income above the $36,000.00 he currently earns. However, she has provided no evidence beyond what she believes to be income denied from his ownership of gravel pits, or any interest in Eva Lake Mining.
[48] Courts must have evidence upon which to impute income. The Respondent acknowledges that the Applicant has suffered a significant change in his financial circumstances, both personally, and in his now defunct corporation. She relied on the fact that his defunct corporation received a settlement from a legal proceeding. Although the amount was not disclosed as a result of a non-disclosure clause in the settlement, I accept counsel’s undertaking that any and all monies received were paid to creditors, and the Applicant personally received no benefit from the settlement.
[49] The evidence I have with respect to his income is in his financial sworn September 19, 2014, filed as Exhibit 8, showing income of $36,000.00 per year. As noted in these reasons, he has a personal liability to CRA in excess of $200,000.00.
[50] I further have considered the evidence of Ms. Alexiuk who has acknowledged that despite the lifestyle she described in the earlier years of their relationship, when his company ran into financial difficulty, and ceased to operate, his income declined significantly. The evidence shows that all money he earned was from B.R. Davidson, now defunct, as confirmed by the significant CRA reassessments.
[51] In addition to evidence before me, I note that at the divorce hearing on June 10, 2014 which the Respondent did not attend, the court was satisfied that the Child Support Guidelines, based on his income, called for a payment of $230.00 per month. The court was satisfied that the S. 11(b) requirement of the Divorce Act had been met. In fact, child support of $350.00 was ordered. That can only mean that the court at that time was satisfied as to the income of the Applicant.
[52] I accept Mr. Harris argument that based on her current income of $18,000.00 per year, and his current income of $36,000.00, the Spousal Support Advisory Guidelines, “with child support”, shows no spousal support payable.
[53] The Respondent’s claim in her Answer are dismissed. In all of the circumstances of this case, there will be no order as to costs.
_______________”original signed by”
The Hon. Mr. Justice T.A. Platana
Released: February 17, 2015
CITATION: Davidson v. Davidson, 2015 ONSC 1061
COURT FILE NO.: FS-27/09
DATE: 2015-02-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BLAINE ROBERT DAVIDSON
Applicant
- and –
MICHELLE KIM DAVIDSON
Respondent
REASONS
Platana J.
Released: February 17, 2015
/cs