minicounsel

COURT FILE NO.: FC-11-2274

DATE: 20150324

BETWEEN:

Rod A. Vanier, Counsel, for the Applicant

Denis Paul Laframboise

Applicant

– and –

Patricia Mary Laframboise (also known as Patricia Mary Nesrallah)

Graeme B. Fraser, Counsel, for the Respondent

Respondent

HEARD: January 19, 20, 21, 22, 23; February 24, 25, 2015

1The applicant and respondent commenced cohabitation in November 1999. They married on July 7, 2001 and separated on March 24, 2009.

2The respondent has two children from her prior marriage, David, born March 13, 1992, and Jessica, born March 23, 1995. Their father is Peter Nesrallah. Mr. Laframboise had not previously been married. He had no children of his own. There were no children born of this marriage.

3When the parties met, each was employed or self-employed. Ms. Laframboise was in the process of finalizing her divorce with Mr. Nesrallah. They had parted on good terms. He paid agreed upon child support and saw the children frequently pursuant to a joint custody arrangement. Mr. Nesrallah had transferred ownership of their home to her, in return for which she assumed all of their liabilities. Mr. Laframboise also owned his own home.

4Prior to marriage, the parties decided to purchase a home together on Richmond Road. Mr. Laframboise paid the deposit and down payment totalling $48,815. A mortgage of $135,000 covered the balance of the purchase price. They took possession in November 1999. Their other homes were rented out and were eventually sold. Mr. Laframboise had thought they had an agreement whereby both would apply their proceeds of sale towards reduction of the Richmond Road mortgage. Ms. Laframboise denies any such agreement. In any event, when her sale closed in January 2002, she retained all the proceeds of $62,000. She repaid her sister a loan of $9,000. She testified that she depleted the remaining funds over the intervening years for various expenses for herself and her children. In November 2004, Mr. Laframboise took all of his proceeds of sale topped up from his savings, and paid off the balance of $115,874 then remaining on the Richmond Road mortgage.

5Up until then, Mr. Laframboise had paid the mortgage, taxes and utilities; Ms. Laframboise had paid the groceries, house insurance and used the balance of her income to cover her personal expenses and the children’s expenses. This expense paying arrangement remained in place except that after November 2004, there was no mortgage left to pay.

6As noted, the marriage took place in July, 2001. Both spouses continued to work throughout their relationship. In March, 2009, there was a disagreement between Mr. Laframboise and David which resulted in David moving to his father’s home on March 24. The decision to separate was taken that same day. Both spouses and Jessica remained in the home. Jessica moved out in early November, to her father’s home. The respondent subsequently moved out on November 15. Since then, Mr. Laframboise has continued to occupy the home on his own. It has not been listed for sale.

7The application was commenced on September 22, 2011. The answer and claim by the respondent was issued on October 28, 2011. Both parties asked for a divorce. It is granted and in view of the long period of separation, and with their consent, it shall take effect, and the Divorce Certificate shall issue, immediately.

8The issues before the court are equalization of Net Family Property, determination of the applicant’s income, whether the applicant stood in place of a parent to the respondent’s children, in which case, the respondent claims child support, spousal support and occupation rent.

Equalization of Net Family Property

9The parties disagree on the equalization payment owing between them. The applicant says the respondent owes him $641. The respondent says the applicant owes her $54,604. There are a number of valuation issues relevant to this determination.

KCS 1384489 Ontario Inc.

10The applicant is the sole owner of KCS. The parties agreed to value his interest in it at the date of separation by prorating to the date of separation the change in retained earnings as shown on the 2008 Financial Statement and as shown on the 2009 Financial Statement. They also agreed to include the due to shareholder amount of $668 as a date of separation value. The parties also agreed to a date of marriage deduction for the due to shareholder account achieved by proration. They disagreed as to the amount to enter at the date of marriage for retained earnings. The applicant chose the year end figure for 2001, whereas the respondent took the prorated approach between the amounts shown on the 2000 and 2001 Financial Statements. Consistency supports her approach which establishes a date of marriage deduction of $14,698.

Household contents

11The applicant asks the court to find that he has retained $10,000 of household contents and that the respondent has twice that value. The respondent’s submission is that the court should find that the household contents have been divided equally. There is no appraisal before the court. The applicant and his sister prepared a list of contents as distributed between the parties. The values they inserted were actual purchase prices for items for which the applicant still had the receipt. For items without a receipt, his sister went online and looked for an average price to use. Through inadvertence, the kitchen appliances, all of which had been retained by the applicant, were left off the list.

12The respondent relied, in part, on an earlier version of this list, also prepared by the applicant which attributed lower values to both parties. The earlier version showed him with about $8,400 of contents and her with about $12,000. In her view, these values were more accurate, subject to not including any value for the appliances.

13The court’s obligation is to determine the value of the household contents at the date of separation. The values relied on by the applicant are purchase prices. I do not have evidence of resale value at date of separation. In addition, his figures leave out of account the kitchen appliances which he retained. On this record, I find the household contents have been divided equally.

2006 Uplander

14The applicant purchased this vehicle for $15,000 in 2007. He produced an appraisal prepared by the dealership where he had purchased it. The appraisal note is dated in 2014 and states the value as of the date of separation in 2009 as having been $1,200. This value reflects the applicant’s recollection that the vehicle had almost 200,000 kilometres on it at that time. The respondent submits it is unlikely the vehicle dropped in value so quickly in the approximately two and one half years after purchase. I agree this is a considerable drop in value. However, the respondent did not ask to have the individual who prepared the appraisal note attend trial to be cross examined. There was no contrary evidence of value. I am not prepared to simply accept the respondent’s view that the vehicle must have been worth $10,000. For these reasons, I accept the value of $1,200.

Savannah Van

15This vehicle was purchased in February, 2001 in the applicant’s name but paid for by a company cheque. The purchase price was $31,465. The applicant claims this amount as a deduction at the date of marriage five months later. In November, 2001, on advice from his accountant, he signed a Nominating Agreement whereby he nominated the ownership of the vehicle to the company. The applicant relies on this Agreement as proof he owned the vehicle in his personal capacity up until November, 2001.

16The respondent’s position for the purpose of calculating the applicant’s Net Family Property is that the value of the vehicle has been included in the value of the company at the date of marriage, such that he should not also be entitled to deduct it as a personal asset.

17I agree. The approach taken to determine the applicant’s date of marriage value in the company clearly did include some amount for the Savannah van. The balance sheet included in the 2001 year-end Financial Statement clearly includes a net book value for the Savannah van. No submissions were made as to how I might back the van out of the balance sheet in order to adjust the date of marriage corporate value claimed by the applicant and to allow him to claim the van in full as a personal date of marriage deduction; nor was there evidence of resale value at the date of marriage. The issue, as presented to me, was whether the applicant had entered two dates of marriage deductions for the van. I find that he has. He is not entitled to both. Accordingly, I find that having included the value of the vehicle in his corporate date of marriage deduction, he is not also entitled to deduct it as a personal asset.

18In so finding, I also note that the respondent had good reason for questioning the legitimacy of the entire transaction. The van was paid for by a company cheque. Prior to year end, ownership was nominated to the company on the accountant’s advice. The applicant’s claim to have had an amount charged to his personal income on which he had paid income tax in relation to the original purchase of the van was not proven. I find that the Nominating Agreement reflected the reality of the transaction from inception, namely, that the van was a corporate asset, not a personal asset.

1990 Z24 Cavalier

19The applicant purchased this vehicle for $18,000 in 1990. He still owned and operated it at the date of marriage. He says it had 400,000 kilometers on it at that date. In 2004, he scrapped it for junk. These few facts are not disputed. The applicant says he guesstimated that, since it was worth nothing in 2004, it was worth $3,000 in 2001. He says he based his guesstimate on what he was told by a few dealers. None of them put anything in writing for him. Other than the applicant’s testimony, there is no other evidence of value. The respondent submits I should find the value unproven and not allow any date of marriage deduction. I agree.

Due to CRA

20I am satisfied from her Notice of Assessment dated May 11, 2009 that the respondent owed Canada Revenue Agency the sum of $140.42 at the date of separation.

Account Receivable

21The applicant submits that the court should find that the applicant had an account receivable owing to her at the date of separation equal to one twelfth of her annual earnings. The theory is that she would have completed a month of work and not yet been paid for it. The respondent testified that she and the applicant had been in Florida for two of the weeks in issue so that she had not performed any billable services during that time. She stated that there may have been payments earned and due from two of her clients which I have calculated in the amount of $1,660 to be included as an asset at the date of separation.

Cash on Hand

22The respondent asks the court to find that the applicant had $43,500 cash on hand at the date of separation. Her testimony was that he did as much cash work as opportunity presented. However, she admitted she had never seen anyone pay him in cash. She says he initially kept his cash in VCR cases, but when several were full, he purchased a safe of about the size of a bread box. The applicant described it as a fire box. In April, 2008, he made a cash loan to his sister of $16,500. The respondent was present when he opened the fire box and removed what she described as stacks of cash. She says he counted it out on the coffee table. The $16,500 was put into an envelope to give to his sister. The balance was returned to the box. The respondent did not actually count any of the money. She based her dollar figure on what the $16,500 “looked like” in comparison to what the money returned to the box “looked like.”

23Her original estimate was that there was $60,000 in cash; however, she allowed that as the sister’s loan came out of that amount, $43,500 would be the amount she sought to include in the applicant’s Net Family Property. This figure is, at best, a guesstimate, and a loose one at that. Nor did she see the contents of the fire box after April, 2008, a date almost one year prior to the date of separation.

24The applicant denies doing any cash business. His testimony was that most of his clients were corporations or institutions such that invoices and receipts were always required. He denies the allegation that he referred to the contents of the box as the “Pat and Denis retirement fund.” He does acknowledge making the cash loan of $16,500 to his sister in April, 2008. He explained having the cash in the box by saying that when he returned home from vacations, he would place any unspent cash in it.

25I do not believe the applicant amassed $16,500 in this way. I find that he did have opportunities for cash transactions in the business. As will be discussed below, only 80 to 85 percent of his top 25 percent of clients were corporations. He did not produce the credit card or bank statements that would have enabled an analysis of whether cash transactions probably had occurred. I note that he did not offer testimony as to how much cash remained after the loan to his sister. I accept the respondent’s testimony that there was money left over, and that it looked to her to be bulkier than the amount loaned. In these circumstances, I have concluded that the applicant probably had cash on hand at the date of separation and I have inferred from the omissions noted that it was probably equal to the amount he loaned his sister the year before. For these reasons, I have added $16,500 to his Net Family Property as cash on hand.

Equalization Payment

26On the basis of the agreed upon entries to the Net Family Property statements and with the findings made here, I have calculated that the applicant owes the respondent an equalization payment of $35,374.

Determination of Applicant’s Income

27The applicant takes the position that his income is as reflected in his personal income tax returns. The returns for the years 2005 to and including 2008 report incomes that average out to $60,660. The actual incomes reported range from a high of $84,000 to a low of $19,000. In the years 2009 to and including 2012, the average of the incomes reported fell to $45,399. However, for the last two of those years, the income was dividend income; the amounts of the actual dividends before the gross up for tax purposes were $50,000 and $34,000. In those two years, the corporate pre-tax income was nil. The dividends were paid out to some extent from prior year’s pre-tax income, but primarily from funds borrowed by the company.

28The applicant explains the decline in his business in two ways. First, he says that most of KCS’s revenues came from government contracts which he obtained directly from Public Works. More recently, the government has outsourced these contracts to large companies which then issue subcontracts to smaller companies such as KCS. This has meant that the longstanding relationships KCS had with Public Works are no longer useful. The tenders go to the lowest bidder. The applicant says he has lost a significant amount of work as a result. He also says that several other companies from which he had previously obtained contracts have now either hired their own employees or changed products, and no longer require the services of KCS.

29The second explanation given is by reference to a general decline in the geothermal business from 2007 forward. The applicant says competition increased and the government removed an eco-grant that had been available for geo-thermal heat pumps. Then, in 2012, a new provincial rule was introduced requiring a geoscientist to inspect any system installed which costs approximately $10,000 per project. At the same time, the province also made a contractor working on an existing system liable for any future problems associated with the entire system. For these reasons, the installation work has fallen off and KCS stopped providing service work on existing systems in 2012.

30The applicant retained Mr. Savage at BDO to prepare a limited critique report on an income determination report obtained by the respondent. Mr. Savage concluded that KCS had been a stable business in the 2005 to 2008 years but was a business in decline thereafter. He said the explanation given by the applicant for the decline seemed reasonable, but the scope of his retainer did not include verification; nor was he retained to do a report to determine the existence of unreported cash income. Mr. Savage identified KCS’s top 25 percent of clients and estimated between 80 to 85 percent of those were corporations and institutions from which payment in cash would not be likely.

31The applicant testified business was coming back somewhat. In 2013, he reported income of $27,500. He thought his income in 2014 would be around $38,000.

32The respondent retained Steve Pittman, CA CBV to prepare an Income Determination Report with respect to the applicant’s income. He was provided with the general ledgers for KCS for 2005 to 2008, but not for 2009 to, and including 2012. Mr. Pittman testified that it is standard to request general ledgers. He reviews them and selects some high dollar transactions in particular categories. By asking and obtaining the underlying documents, he can test their validity as a reflection on the overall accuracy of the reporting in the ledgers. Mr. Pittman also requested bank and credit card statements for the company which were not provided. His testimony was that they are the recommended starting point in looking for whether there are cash transactions.

33The applicant said he could not produce the general ledgers for 2009 forward because they had been destroyed by a virus. I do not accept this explanation. The virus was said to have occurred in March, 2013. The disclosure was requested by Mr. Pittman in June, but the applicant did not report the virus to his counsel until October, 2013. Between June and October, his counsel provided other reasons for not making the requested disclosure. Most importantly, Mr. Savage had the general ledgers for 2009, 2010, and 2012. He received them from the applicant’s accountant, who told Mr. Savage the 2011 general ledgers were not available due to an IT issue. Mr. Savage also had the summary of credit card activities for KCS for 2010, 2011, and 2012, the KCS 2013 Financial Statements and a letter dated December 6, 2013 from the accountant with additional information.

34Despite the demands for disclosure that had been made of him, when the applicant received Mr. Savage’s report dated June 4, 2014, he did not take any steps to deliver to Mr. Pittman the information that Mr. Savage had, and that Mr. Pittman had been requesting for a year.

35In submissions, the applicant maintained that it was up to the respondent, her counsel or Mr. Pittman to have made a fresh demand for disclosure after their receipt of Mr. Savage’s report. I concur with Justice Czutrin where he stated in Blaney v. Blaney 2012 ONSC 1777, 19 R.F.L. (7th) 491 at para 35: “I find this incredible. The obligation was on him and the need to have the wife retain experts was dependant on disclosure and a review of the husband’s expert’s reports.”

36In Blaney, Czutrin J. also held at para. [5]:

Particularly where a party is self-employed, or is a shareholder of a company and works for that company they should know that, for support purposes, their Income Tax Returns may not be enough to establish income and that the value of their interest in a company will need to be established by the use of and need for experts in many instances. The obligation and onus to satisfy the court as to income and the value of assets and debts is on the person whose income or asset or debt is called into question. Here the respondent (husband) had that obligation. His obligation existed prior to any court orders, conferences or court attendances.

37The applicant also submitted that the material requested was not useful; he suggested the respondent was on the proverbial fishing expedition. I disagree. The applicant’s own expert used and relied on the general ledgers.

38Mr. Pittman agrees there are many omissions in his foundational information. He listed them in his report. It is a considerable weakness to his opinion that the foundation he had to rely on with respect to potential personal expenses run through the business was provided by the respondent. She took the general ledgers that were available for the years prior to separation and highlighted the expenses that she, from her knowledge and belief, thought were personal. The respondent testified she knew some of the expenses were personal because she had been present when they were incurred, other expenses the applicant had told her about, and still others she knew of because she had done some of the bookkeeping work up until 2006. Mr. Pittman did not personally examine these identified expenses.

39The respondent had identified an average of $36,325 of personal expenses run through the company on an annual basis. To account for any personal bias on her part, and to provide a good margin for error, Mr. Pittman established a range by using 30 percent and 50 percent of that numeric total. He candidly acknowledged there was no magic to either percentage; they were purely illustrative. In this way, he formed the opinion that for the 2005 to 2008 period, that is prior to separation, the applicant had earned on average $ 97,150 each year and that this average had dropped after separation to $50,385, for the years 2009 to 2012.

40The applicant criticized Mr. Pittman’s decision to use the pre-separation average of personal expenses for the years following separation, because in fact, in some of the categories, no expenses were actually incurred post-separation. Mr. Pittman’s response was that the average number may well remain applicable since lower expenditures in one area could have been offset by higher ones in another. He also pointed out that using the average number was all he could do, given that he had not been provided with the general ledgers for those years. To the suggestion that he could have used a percentage of revenue rather than the pre-separation average, he responded that personal expenses are not usually tied to revenue the way legitimate business expenses are.

41Mr. Pittman also provided a bench mark for employment income the applicant could earn. He provided average incomes from Statistic Canada for employees in related areas of work in Ontario. The average income was $72,500 in 2005 which Mr. Pittman adjusted for the CPI to equate to $81,745 in 2012.

42Mr. Pittman acknowledged he had been under the incorrect impression that the applicant was deducting expenses for two offices, whereas in fact, there was only one. He agreed that the office expenses he had added back to the applicant’s income should be removed.

43Both parties testified in support of what they held to be personal or business expenses. I have concluded that the applicant did pay some personal expenses through the company. I base this on the testimony of several witnesses. BDO’s review of the general ledgers found air travel for a personal trip to Florida in 2009, all of the cleaning lady expenses charged as business, whereas only 20 percent ought to have been, and one purchase at the Brick confirmed by the applicant as having been personal. Mr. Pittman identified a 2008 subcontract cheque written by the company to the applicant which did not appear to have been included in his personal return for that year. He also gave the opinion, based on his experience, that allocating only 10 percent of vehicle use as personal seemed low.

44I also note the applicant’s own testimony that he expensed the hardwood flooring in the dining room on the basis that he used it as a boardroom fairly regularly. I formed the impression he may have taken a broad brush approach in his allocation of home improvements as business related. I also accepted the respondent’s evidence that on occasion, when they were dining out as a couple, the applicant would ask her a business related question, smile, and say words to the effect, now dinner is a business expense.

45Mr. Savage reviewed the general ledgers and the expense categories identified in Mr. Pittman’s report. He discussed various expenses with the applicant. Mr. Savage said the applicant was able to provide the name of the supplier/customer for all of the entries in the general ledger in relation to Home Depot and other similar outlets, during the three years he reviewed. Mr. Savage did not find any cheques to the applicant entered under labour or subcontracts in those three years. He did make some adjustments to income for what he considered probable personal expenses. He added back 25 percent for meals. There was no log book for the vehicle use; he decided to treat as personal 10 percent of the entire amount for both vehicles. Mr. Savage’s review of the general ledgers did not disclose any personal aspect to the professional fees charged to the company. He reviewed the summaries of the company VISA credit card statements. He checked some items with the applicant but did not look at any specific invoices. Indeed, he did not do any underlying document review.

46The incomes determined by the two experts were as follows:

YEAR

Mr. Savage

Mr. Pittman

30 %

50 %

2009

$63,521

$67,957

$77,044

2010

$63,521

$67,177

$77,556

2011

$6,189

$16,266

$26,795

2012

$6,410

$11,065

$20,146

47Mr. Pittman’s determinations need to be amended on account of the home office. My review of the two reports leads me to conclude that this would result in a reduction in income of say $1,000 per year. Normally, the fact that Mr. Pittman’s foundational information came directly from the respondent would be a weakness of significant weight. Here, knowing the content of Mr. Pittman’s’ report, the applicant chose both to limit the scope of Mr. Savage’s work on his behalf, and not to provide the respondent with all of the documentation provided to Mr. Savage. These circumstances support an inference that the applicant’s incomes available for support purposes were closer to those determined by Mr. Pittman. For these reasons, I find that the applicant’s income for support purposes was $75,000 in each of 2009 and 2010, $25,000 in 2011, and $20,000 in 2012. I find that 2009 is a comparable year to 2013 and 2014. In 2009, the applicant declared income of $34,000. In 2013, he declared income of $27,500. He estimated income of $38,000 for 2014. Having regard to the ranges provided by the opinion evidence for 2009, I find that the applicant had $60,000 of income available for support purposes in 2013 and would probably be back up to $75,000 for 2014.

In the Place of a Parent

48 Section 2(2) of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) defines child of the marriage as:

(2) For the purposes of the definition “child of the marriage” in subsection (1), a child of two spouses or former spouses includes

(a) any child for whom they both stand in the place of parents; and

(b) Any child of whom one is the parent and for whom the other stands in the place of a parent.

Section 5 of the Federal Child Support Guidelines provides:

Where the spouse against whom a child support order is sought stands in the place of a parent for a child, the amount of a child support order is, in respect of that spouse, such amount as the court considers appropriate, having regard to these Guidelines and any other parent’s legal duty to support the child.

49Counsel also drew my attention to the comparative provision in the Family Law Act, section 1(1) of which defines a child to include a person whom a parent has “demonstrated a settled intention to treat as a child of his or her family.” Although the language differs from that used in the Divorce Act, it is not suggested that a court should reach a different outcome depending upon which statute was engaged.

50The respondent submits that the applicant did stand in the place of a parent to David and Jessica. She seeks an award of child support for both children from the date of separation up to the date of the trial.

51Both parties referred to the Supreme Court of Canada decision in Chartier v. Chartier 1999 CanLII 707 (SCC), [1999] 1 S.C.R. 242. The issue there was whether a person who stands in the place of a parent to a child within the meaning of the Divorce Act can unilaterally give up that status and escape the obligation to provide support for that child after the breakdown of the marriage. The Supreme Court answered, no, to that question and went on to provide other comments touching on the issue here, namely, the factors to consider in determining whether a spouse did stand in the place of a parent. The Court held at para 32 that those words must be given a meaning that is independent of the common law concept of loco parentis, and that is reflective of the purposive and contextual approach to statutory interpretation. The Supreme Court also noted at paras 38, 39 and 40:

What then is the proper test for determining whether a person stands in the place of a parent within the meaning of the Divorce Act? The appellant argued that the test for whether or not a person stands in the place of a parent should be determined exclusively from the perspective of the child. I cannot accept this test. … The opinion of the child regarding the relationship with the step-parent is important, but it constitutes only one of many factors to be considered. In particular, attention must be given to the representations of the step-parent, independently of the child’s response.

Whether a person stands in the place of a parent must take into account all factors relevant to that determination, viewed objectively. What must be determined is the nature of the relationship. … The court must determine the nature of the relationship by looking at a number of factors, among which is intention. Intention will not only be expressed formally. … The actual fact of forming a new family is a key factor in drawing an inference that the step-parent treats the child as a member of his or her family, i.e., a child of the marriage. The relevant factors in defining the parental relationship include, but are not limited to, whether the child participates in the extended family in the same way as would a biological child; whether the person provides financially for the child (depending on ability to pay); whether the person disciplines the child as a parent; whether the person represents to the child, the family, the world, either explicitly or implicitly, that he or she is responsible as a parent to the child; the nature or existence of the child’s relationship with the absent biological parent. The manifestation of the intention of the step-parent cannot be qualified as to duration, or be otherwise made conditional or qualified, even if this intention is manifested expressly. …

Nevertheless, not every adult-child relationship will be determined to be one where the adult stands in the place of a parent. Every case must be determined on its own facts and it must be established from the evidence that the adult acted so as to stand in the place of a parent to the child.

52Some of the basic facts on this issue are not in dispute. David and Jessica were 7 and 4 years of age when the parties moved in together. David was 17 years old when he moved out of the home. Jessica was 14 when she moved out. Neither has had any contact with the applicant since the day each left the home. Now, they are 23 and 20 years old. Neither testified at trial. There was no evidence of any cards exchanged between the children and the applicant. Nor were there any photographs depicting either or both of the children together with the applicant.

53The children always referred to the applicant as Denis. If an explanation was called for, they introduced him as their step-father. The children referred to the applicant’s mother and step father as “Nanny and Papa”. They called his sister “Aunty Michelle.”

54The children’s father, Peter Nesrallah, was always very involved with the children. The children enjoyed a very good relationship with their father at all times. At the outset of the parents’ separation, he took both children on Tuesday and Thursday evenings, plus every Saturday after his work, overnight until Sunday evening. Later, he started to take one child on Tuesdays and the other on Thursdays, and then have them both for the weekend. His testimony was that from the beginning, he had the children with him most weekends. The parents were flexible; additional access arrangements were made for summer and other holidays. In general, the parents attended the parent teacher interviews for both of their children together.

55The separation between the Nesrallah’s had been amicable and their post-separation co-operation, communication and flexibility was textbook. There was no evidence of conflict or tension between them as separated parents. The applicant’s mother testified that the respondent had told her that Mr. Nesrallah had come over to paint the children’s bedrooms and that on another occasion they had gone shopping together for bedroom furniture for the children.

56Mr. Nesrallah paid the child support required by their Separation Agreement without fail. The amount had been set in 1999 based on his income at the time. Although his income had changed upwardly over the intervening years, an increase in child support was neither asked for nor offered.

57After the parties commenced their cohabitation, Mr. Nesrallah still attended many of the children’s activities. He saw the applicant at some, but not all of these. Mr. Nesrallah explained that at such opportunities, he spent as much time as he could with his one child while watching his other child perform.

58Witnesses for both parties, including the applicant’s mother, agreed that in the early years, they had looked like a family unit. Of course, these witnesses would be on the outside looking in, with limitations on their ability to observe.

59The applicant’s mother also testified as to occasions when she had spoken to her son about some of the children’s mis-behaviours, encouraging him to intervene. He told her that discipline was done by the parents, who did not want him involved. Nor did she observe affection demonstrated between her son and the children. For example, she had never seen Jessica sitting on the applicant’s lap. The applicant’s sister also testified she saw little interaction or affection between the applicant and the children.

60The respondent’s friend, Susan, described seeing the applicant at school functions, such as the school book fair, the welcome back barbeque, and David’s graduation. Susan and her family went to the Laframboise house for “movie nights.” She testified that on these occasions, she sometimes saw Jessica on the applicant’s lap. She also said she saw him give Jessica a hug at a dance recital. In terms of meeting parental obligations to the children, she advised that the applicant had picked them up a couple of times from her home when she was babysitting them.

61The respondent testified that she told the applicant, on their first date, that she came as a package deal with her children. She would not have proceeded with the relationship if she had thought this was not a common foundation. I am not sure how much relevance her intentions have to my finding about his intentions, or about his subsequent actions in relation to her children. For his part, the applicant had never wanted children. He had a vasectomy at a young age and had put off marrying until he was 40 years of age.

62The respondent describes various children’s activities she says the applicant attended and things he did for the children. She says he did attend many of David’s baseball games, however, this predated cohabitation. She said he did watch David’s basketball games. He took him skiing twice. The respondent said there were times the applicant attended Jessica’s dance recitals. Her testimony was that he bought the children fishing rods and took them fishing. She says he put up a tire swing for them, but later admitted she had not seen him do this. He put up a basketball net that she and Mr. Nesrallah had bought the children. He made a skate board ramp for David. He built the platform for a tree house for them, which David completed. It is agreed he tried once, unsuccessfully, to put in a skating rink on the lawn.

63The applicant acknowledges he attended some of the children’s events, as one of many people who did so. He says the respondent asked him to help with the basketball net and the skate board ramp, and he did. He agrees he put in the platforms for a tree house and took down the tire swing when the rope broke. But his testimony was that David had hung the swing in the first place. There was little evidence that he participated with the children in playing basketball, using or supervising the swing or skate board ramp. Further, although there was some dispute about whether he had taken David skiing once or twice, it was no more than that, and the applicant says he did so at the respondent’s request and expense.

64The applicant did attend school social events with the respondent, but it was the parents who attended the formal meeting with the teachers. The applicant denies that he did regular homework with the children. This was not strenuously challenged. He did help them with two special projects at their mother’s request. The applicant testified that he had never even seen a report card for either child. This statement was not challenged.

65The respondent testified that in 2000, the applicant attended a 6 week long parenting course with her. The applicant denies this. Unfortunately, the respondent was unable to remember where the course was held, the name of the organization, or of the individual instructor.

66She described the applicant as staying home with the children if she had to be out in the evening. She said one of them read to each child each night, and switched the next night. It was unclear how long this may have continued as the respondent also said that David read to himself by age 8 or 9 and Jessica was not really a book person. The applicant denies reading to the children or participating in their bed time routine. He acknowledged there were times when the respondent was out during an evening and he was home with the children, but he maintained this was when they were of an age to essentially look after themselves.

67The respondent’s testimony was that the applicant did discipline the children occasionally, but not often.

68Trips were taken to visit the applicant’s mother at home in North Bay, and a couple of times in Florida. Another trip was taken to Quebec City where they joined up with Mr. Nesrallah. These expenses were shared between the parties, subject to some gifts of money from his mother.

69Financially, the applicant says he spent little money directly on the children. The respondent took care of the children’s expenses. The one exception to this is that the applicant paid for the housing costs for everyone. The respondent suggested that the applicant had contributed more to the support of the children than he acknowledged, because on a few occasions he advanced her, say, $1,000 for a credit card payment, when she was between pay cheques. She says the applicant would have known the balance due included expenses for the children. My finding is that other than the housing costs, the respondent and Mr. Nesrallah covered their children’s expenses.

70The parties both made Last Wills and Testaments. They each left half of their estate to the other. The applicant’s Will made no provision for David or Jessica, nor did he cover them on any benefits or contribute to their RESP accounts.

71The respondent submits that there is no reported case where after a cohabitation/marriage of ten years’ duration, a person has not been found to stand in place of a parent to his spouse’s children. She relies heavily on the length of cohabitation and the fact that it encompassed the children’s most formative years. Further, the act of marriage is submitted as being recognition by the applicant that they were a family. If the relationship between the applicant and children had deteriorated by the end of the cohabitation that alone is not sufficient to undo the parental role she says he assumed during the cohabitation.

72I have concluded that the relationship the applicant had with David and Jessica was derivative from his relationship with their mother. There was very little evidence of a direct, individual relationship between him and either child. In comparison to the significant duration of the cohabitation, the examples given of his direct involvement with the children or either of them are few. There was very little evidence that he had assumed important parental obligations to or responsibilities for these children. Homework and discipline are two important categories where he had very little involvement.

73There was no testimony from either David or Jessica, now 23 and 20 years of age, as to their views of the nature of the relationship. Neither contacted the applicant after they moved out. Equally striking was the lack of oral or documentary evidence that would demonstrate a level of affection or attachment between the applicant and the children commensurate with a parental relationship. I agree with the court in Lewcock v. Natili-Lewcock 2001 CarswellOnt 1932 (SCJ), at para 26:

…The case-law makes it clear the court must try to distinguish step-parents who merely maintain an amiable and positive relationship with step-children from those who truly assume a parental role transcending the spousal relationship. In this case, the boys maintained a continuing relationship with their biological father. ... There was no evidence of any “psychological bonding” between Mr. Lewcock and the boys. The boys did not testify, though now 20 and almost 17 years old. The law is clear that once a parent/child relationship is established for the purposes of a support obligation under the Divorce Act, the parent is not at liberty to unilaterally withdraw from that status. However, with older children, such as in this case, the fact they chose to have no relationship whatsoever with Mr. Lewcock after the separation tends to confirm his version of the evidence, that no lasting, long-term relationship was ever established, independent of the boys’ mother…

74As stated in Chartier, “Not every adult-child relationship will be determined to be one where the adult stands in the place of a parent. Every case must be determined on its own facts and it must be established from the evidence that the adult acted so as to stand in the place of a parent to the child.” In my view, the applicant’s actions are far more consistent with a husband occupying a role well below that of a parent to his spouse’s children. The independent, direct relationship between the applicant and either child that is one hallmark of a parental relationship is absent.

75In my view, it is not sufficient that the applicant married the respondent and lived with her and the children for ten years. Rather, the court is required to assess the adult–child relationships within that unit. Longevity is not necessarily indicative of the quality of the relationship. The presence of Mr. Nesrallah as a highly involved biological father is an important factor to consider in terms of the nature of the relationship between the applicant and these children. Dovicin v. Dovicin, 2002 CanLII 49522 (Ont.Sup.Ct) is another case where the court focused on the nature of the relationship, at para [30]:

In this assessment the Court must be careful to distinguish those situations in which there is a clear, permanent loving relationship formed with the child while operating within a family unit, distinguished from the party from whom child support is claimed, having demonstrated kindness to the child or children while operating within the family unit.

76My assessment of the relationship between the applicant and the children is that it did not take on the quality of a parent-child relationship. Rather it was derivative from and flowed through the relationship between the two adults, one of whom was the parent and the other of whom was the parent’s spouse. For these reasons I find that the applicant did not stand in the place of a parent to David and Jessica. The respondent’s claim for child support is dismissed.

Spousal Support

77 Section 15.2 (4) and (6) of the Divorce Act provide as follows:

15.2 (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

15.2 (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;

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

78The parties’ cohabitated for ten years. Both spouses worked throughout the marriage. The applicant was the higher earner. In some years of the marriage, he earned almost double the respondent’s salary. He undertook to cover all of the housing expenses for the family except for the insurance which the respondent paid. The applicant also assisted the respondent on some occasions by advancing her money for credit card bills to tide her over between pay cheques. In this way, the respondent did become financially dependent upon him.

79At the same time, the respondent did benefit from the fact that the applicant made the down payment and then later paid off the mortgage on the parties’ jointly owned matrimonial home. By comparison, she used the proceeds from the sale of her previous home for her own use.

80When the respondent left the matrimonial home, she stayed temporarily with her former spouse, and then moved in with her sister and brother-in-law. She was there for four months. In March, 2010, her sister and brother-in-law advanced funds for the respondent to purchase a home. Title is registered in all three names in order to protect their investment. The respondent pays the full monthly mortgage of $945 per month. The current total remaining balance on the mortgage is $141,000.

81In my view, the financial dependency established over a decade of cohabitation entitles the respondent to spousal support. I find she needed support at and for a period of time after the marriage breakdown, a time when the applicant had the ability to pay. In my view, in the circumstances of this marriage, her entitlement is to a transitional award which might be expressed as a lump sum or as a time limited periodic order. The respondent seeks a lump sum of $38,905.

82In Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221, the Court of Appeal ruled that such awards need not be limited to unusual circumstances. A lump sum may be suitable where it is affordable and will terminate ongoing ties between the spouses, where there may be a real risk of non-payment of periodic support, or where a lack of proper financial disclosure has made income determination problematic, or to satisfy a retroactive award.

83In terms of need, it is conceded that there must be some error in the expense portion of the respondent’s Financial Statement since it shows an annual deficit of about $32,500 which is not actually accruing. The child support received from Mr. Nesrallah accounts for some of the discrepancy. I noted that the amounts entered for income taxes and CPP were overstated in comparison to the actual amounts reflected in her 2013 income tax return. Given the admission that some numbers must be incorrect, without more specificity, I was only able to find on balance that the respondent’s actual need post-departure from the matrimonial home was to replace the housing costs that the applicant had previously covered, and for debt payments, for which she borrowed from her sister.

84The need / ability to pay analysis in this case points toward a shorter duration than the length of the cohabitation might indicate. It was only in the first two years of the separation that the applicant’s income outstripped the respondent’s. In 2009 and 2010, she earned $33,000 and $43,000 respectively, compared to his income of $75,000 in each of those years. She earned more than he did in 2011 and 2012 ($46,420 and $52,116 to his $25,000 and $20,000). Their incomes were virtually identical in 2013. In her Financial Statement filed for trial, the respondent estimates her 2014 income at $66,800, whereas I have found his will be $75,000 in 2014.

85The lump sum the respondent sought was based on the with child support formula for a duration of eight years, at the high end of the Spousal Support Advisory Guidelines. That approach is not appropriate given my finding that the applicant is not obliged to pay child support for her children, nor is the duration supported by my findings with respect to the incomes of the parties and the short lived needs based non-compensatory nature of the claim. Additionally, the changing income positions of the parties since separation are important if unusual factors.

86My assessment of the spousal support claim is that the award should provide the respondent with transitional assistance based on her requirements to provide her own housing which would then impinge on her debt management ability. Having regard to their income patterns I concluded that the support should be referable to the date of her departure from the home until the end of 2010, when her income started to increase and his to decrease. I also considered the SSAG using annual incomes of $75,000 for him and $40,000 for her. A lump sum of $18,000 represents the low end of quantum and duration. I find that to be an appropriate award for lump sum spousal support in the circumstances here.

87The award is a retroactive one. The respondent did not claim spousal support and retroactive support until delivery of her answer and respondent’s claim in October 2011. I find the retroactive award warranted here in view of the incomes the applicant reported in 2009 and 2010, of $34,000 and $42,598 respectively. These figures are significantly less than the incomes calculated by both experts for those years, and as determined by me. The respondent underwent financial hardship after November 2009 in the form of significant borrowing and dependency on relatives. She ought not to be prejudiced by the necessity in this case to obtain income disclosure and expert advice in order to be in a position to establish that she did in fact have a provable claim for spousal support. And, although there was not a formal claim, the applicant did describe discussions the parties had about resolution of their marital issues at the time of separation; he was certainly aware then that her expectations of what would be reasonable were far in excess of his own.

Occupation Rent

88The respondent also claims occupation rent from the date she left the matrimonial home. The respondent relies on Higgins v. Higgins, 2001 CarswellOnt 2719 S.C.J. where the court listed the factors to consider at para 53:

From the cases I have reviewed, I note that the following may be relevant considerations when determining the appropriateness of an order for occupation rent:

(a) the conduct of the non-occupying spouse, including the failure to pay support;

(b) the conduct of the occupying spouse, including the failure to pay support;

(d) the extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;

(e) whether the non-occupying spouse moved for the sale of the home and, if not, why not;

(f) whether the occupying spouse paid the mortgage and other carrying charges of the home;

(g) whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;

(h) whether the occupying spouse has increased the selling value of the property;

(i) ouster is not required, as once was thought in some early decisions.

89Although ouster is not a requirement for occupation rent, nonetheless, the respondent had good reason to vacate the home. Both her children had already done so as result of conflict with the applicant. The applicant’s use of surveillance cameras in the home, and in particular, sharing the video link with his mother and sister, invaded the respondent’s privacy. On the day she left, which was spontaneous, not a pre-planned decision, there had been a confrontation between the parties commencing with the applicant putting a pad lock on the master bedroom door. The facts are disputed but the police were called to the house. The police had already been called on two other occasions.

90After the respondent moved out, the locks were not changed and she was not prevented from moving back in, but I find it was clear to both of them that she would not do so. There is no evidence of a demand for occupation rent or for the sale of the house prior to the answer and respondent’s claim delivered in October, 2011.

91The house was, at all relevant times, mortgage free. The applicant did pay the other costs associated with the house except for the insurance which the respondent continued to pay. The value has increased by $28,000 since November, 2009, by reason of market forces.

92I have also considered Casey v. Casey, 2013 SKCA 58, 32 R.F.L. (7th) 1. That court held that occupation rent is an exceptional remedy “to be utilized cautiously to obtain justice and equity” in the particular circumstances of a case. Further, Casey also ruled, at para 48, that all of the relevant factors must be considered and balanced “to determine whether occupational rent is reasonable in the totality of the circumstances of the case.”

93Here, I am mindful that while the applicant did not pay support after the respondent left the home, a lump sum of transitional spousal support has been awarded to her. I also note that the applicant lived alone in the jointly owned, mortgage free home for almost two years before the court case started; a benefit to him, yet a period for which no award of occupation rent will be made. Although the respondent did not move for the sale of the house, the applicant knew from at latest October, 2011 that he would have to buy her out or sell the home, yet took no steps to do either. Whereas he lived mortgage free, the respondent lived with relatives, borrowed from them and incurred significant mortgage payments to obtain housing for herself and her children. An award of prejudgment interest at prevailing rates would fall far short of compensating her for the financial difficulties experienced as a result of being deprived of her equity in the house.

94Other than the delay until October 2011 in making the demand, and the lump sum spousal award now made, all of the considerations support the conclusion that there should be an award of occupation rent in this case.

95I have also considered that a short period of grace after notice was given is appropriate. I have concluded that the respondent is entitled to occupation rent from January 2012, to date, for a total of 39 months.

96The parties agreed that if occupation rent is awarded, it should be based upon a rental value of $1600 per month. After taking into account the expenses each incurred with respect to the property, the applicant says, if allowed, the occupation rent should be set at $675 per month, whereas the respondent claims $750 per month. The difference between them relates to the insurance costs paid by the respondent. I find her figure to be accurate.

97In the result, occupation rent is awarded to the respondent fixed in the amount of $29,055.

Prejudgment Interest

98The respondent is awarded prejudgement interest at the rate of 1.3 percent on the equalization payment of $35,374. I have chosen that rate rather than the rate for the first quarter of 2009, which was 2.5 percent, because the date of separation was very close to the end of that quarter, and because 1.3 percent is the rate that has prevailed throughout most of the intervening period.

Order

99The matrimonial home shall be listed for sale on or before April 15, 2015, unless the parties execute a mutually satisfactory Purchase and Sale Agreement between themselves prior to that date. The respondent is entitled to her ownership equity in the house, and from the applicant’s share of the proceeds shall be paid to her the amounts awarded her for equalization of Net Family Property, spousal support, occupation rent, and prejudgment interest.

Costs

100Counsel are invited to agree on the issue of costs. If they are unable to do so, they may forward written submissions to me. These should not exceed five pages in length plus attachments, including of a Bill of Costs and any Offers to Settle. Counsel should agree on a timetable for the exchange of their submissions so that they are completed and in my hands by April 27, 2015.

J. Mackinnon J.

Released: March 24, 2015

CITATION: Laframboise v. Laframboise, 2015 ONSC 1752

COURT FILE NO.: FC-11-2274

DATE: 20150324

ONTARIO

SUPERIOR COURT OF JUSTICE