CITATION: Harrison v. Harrison, 2015 ONSC 2870
COURT FILE NO.: FC-11-1624-00
DATE: 20150501
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: NELSIE FLORES HARRISON, Applicant
AND:
WILLIAM HARRISON and GEORGIAN COACH LINES INC. and GEORGIAN EMERGENCY MANAGEMENT ASSOCIATES INC., Respondents
BEFORE: The Hon. Mr. Justice R.E. Charney
COUNSEL: Counsel, for the Applicant Peter M. Callahan
Self-Represented, for the Respondent William Harrison
HEARD: April 29, 2015
ENDORSEMENT
Introduction
[1] This motion is brought by the Applicant, Nelsie Harrison, for judgment in her favour against the Respondent, William Harrison, in relation to the amount she alleges is owed pursuant to the Final Order of Justice Wildman, made on Consent, dated January 10, 2013 (“Wildman Order”). This claim is referred to as the “severance payment debt”. She also seeks an Order granting the Applicant a Charge on the Matrimonial Home for the purpose of securing the amount owing to her by the Respondent with respect to the Wildman Order and a subsequent Support Order of Justice McDermot dated January 15, 2015 (“McDermot Order”), together with various costs orders made against the Respondent. The Respondent has brought a cross-motion seeking judgment in his favour or set-off against the Applicant in relation to a different amount he alleges is owed pursuant to the Wildman Order (referred to as the “Maila debt”).
[2] For the reasons set out below, there shall be an order on the following terms:
(a) The Applicants claim for judgment for $24,000 pursuant to the Final Order of Justice Wildman dated January 10, 2013 is allowed.
(b) $40,570 will be a charge on the Matrimonial Home at 23 Old Hickory Lane, Wasaga Beach, (Lot 61, Plan 51M-761; S/T ease over PT 6 51R32458 IN 184541; Wasaga Beach) and paid in Trust to the Applicant’s lawyer when the property is sold to pay the retroactive support, severance payments and costs owed to the Applicant. If the property is closed within 60 days from the date of this order, the Applicant’s counsel shall hold back $8,126.19 from the payment made to the Applicant until the Respondent’s motion in relation to the Maila debt is dismissed or a different Order is made by this Court..
(c) This Order may be registered on the title of the Matrimonial Home at 23 Old Hickory Lane, Wasaga Beach, (Lot 61, Plan 51M-761; S/T ease over PT 6 51R32458 IN 184541; Wasaga Beach)
(d) The Respondent’s motion with respect to the “Maila debt” is adjourned for 60 days to give Mr. Harrison a final opportunity to present evidence to support this part of his claim. If he can come up with the evidence, he should provide it first to Mr. Callahan to see if they can settle this matter. If they are unable to reach an agreement the motion can be brought back before me on notice. If he is unable to come up with such evidence within 60 days his motion in this regard is dismissed.
(e) The Applicant shall have her costs of the motion in the amount of $4,312.00 inclusive of HST and disbursements. Costs shall be payable to the Applicant within 30 days.
Background
[3] The background facts relating to this motion are summarized in paras. 4 to 9 of Justice McDermot’s Endorsement of January 15, 2015. For ease of reference these are reproduced below:
These two motions arise out of complex property and support litigation between the parties which began in December, 2011 and which was settled on a final basis in January, 2013. Nelsie married William in 2001 and Mark is her adult son by from a previous relationship. The parties have a child together, Christopher, who is 13 and who lives with Nelsie. During and after cohabitation, William and Nelsie together operated the respondent, Georgian Coach Lines Inc. (“GCL”), a company that had the transit contract in Wasaga Beach for a number of years. The parties separated in July, 2009, and William says that they initially had a good post-separation relationship.
The dispute between the parties was complicated by corporate governance issues; for several years after separation, William was in Abu Dhabi and Nelsie, along with her son and an individual named John Beattie operated GCL in his absence. William returned to Canada in 2011 and immediately terminated Nelsie from her position at GCL along with her son; Nelsie and Mark responded with an application against William and GCL which included claims for oppression remedies under the Business Corporations Act.[^1] In addition to claims for custody, support and equalization, Nelsie sought a constructive trust interest in GCL while William alleged that Nelsie and Mark had misappropriated funds from GCL during their operation of the business.
The litigation was long and difficult, but the parties finally settled all issues with the assistance of Wildman J. through a consent final order dated January 10, 2013 (the “Wildman order”); it purports to settle all issues, financial and otherwise, between all of the parties including the corporate parties. The order specifically states that “the parties’ property has been divided to their mutual satisfaction” and further that it represents a “full and final settlement.” Finally, it states that, “All remaining property claims and claims to equalization are hereby dismissed.” The settlement binds all parties to the litigation, including the corporate parties.
Pursuant to the settlement, Nelsie remained in the matrimonial home (owned by William) which was to be sold pursuant to the Wildman order. William also agreed to pay the mortgage on the home; Nelsie agreed to pay the utilities. William and GCL agreed to pay Nelsie a salary of $2,000 per month pending the sale of the home but GCL also was being wound up as of July 31, 2013 (in fact, it continued operations subsequent to August, 2014). It was assumed that, by July, 2013, the home would be sold, but if it was not, then Nelsie was given the right, under paragraph 28 of the Wildman order, to bring a motion on an “urgent basis” for temporary child and spousal support. A case conference was necessary, and the order stated that “the Respondent Father may request any court consider his ongoing payment of the Matrimonial Home mortgage in establishing his interim spousal support and child support obligations.” Once the home was sold, Nelsie was to receive child support and spousal support as set out in paragraphs 12 and 18 of the Wildman order; child support was to be Guideline support based upon William’s income of $98,002 and spousal support was set at $1,600 per month for year one, and $1,200 per month in subsequent years for the next five years. Spousal support was “not reviewable or variable, regardless of a change in income for either party.”
Based upon the settlement and in order to obtain a divorce, William withdrew all of his claims in his answer other than his claim for a divorce. The divorce was granted on July 19, 2013.
Nelsie says that she never received payment of the salary under the Wildman order. William disputes that, and says it was paid, although he provides no proof of payment. The home was not sold; William blames Nelsie for this, filing an affidavit by the realtor stating that, on at least one occasion, the home was filthy and was not fit for viewing by prospective purchasers. Nelsie blames William and the realtor for not actively marketing the home. The listing expired in October, 2013 and has not been renewed in over a year, and Nelsie says that William is delaying the sale of the home in order to also delay the onset of spousal support while, at the same time, not paying the severance pay that he owes her under the Wildman order.
[4] Justice McDermot made the following Order:
There shall therefore be an interim order on the following terms:
a. The respondent’s motion for payment of the Maila debt is dismissed without prejudice to being renewed if:
i. William providing documentary proof of payment of the Maila debt through garnishment by CRA;
ii. William providing documentary proof of payment of the entire severance to Nelsie as alleged in his affidavits of March 5, 2014 and November 9, 2014.
b. The remaining claims by the respondent including the claims for contempt are dismissed;
c. William Harrison to pay Nelsie Harrison temporary spousal support of $1,000 per month commencing November 1, 2014.
d. Based upon his income of $98,002 as set out in the final settlement, William Harrison to pay Nelsie Harrison temporary child support of $864 per month in respect of Christopher commencing November 1, 2014; and
e. The balance of the applicant’s motion is dismissed.
[5] Another issue before Justice McDermot was the Applicant’s claim for the $24,000 she claims was the “severance payment” ordered in the Wildman Order. Justice McDermot refused to grant an order for “judgment” in relation to this alleged debt because such relief was not specifically requested by the Applicant. Justice McDermot stated (paras. 78 and 79):
The request in the motion is for an order for “payment” of $24,000. Nelsie already has, to her benefit, an order that requires William to pay her the severance payment. I am not going to repeat a court order that is already in effect; that would “guild the lily” to no purpose.
When speaking to the motion, Mr. Callahan on behalf of Nelsie asked for judgment in the amount of $24,000; he says that this is in the spirit, if not in the wording of the request for relief in the motion. Had the applicant asked for a motion for judgment, I would consider granting it; however she did not do so, and I am not going to give relief that was not requested in Nelsie’s motion. Had Nelsie asked for judgment, William may have provided more particulars than he did or actual proof that the severance payment was made; he may have, in other words, put his best foot forward. This is especially important in light of the fact that each party is stating exactly the opposite regarding payment of the debt and there are obviously credibility issues regarding this issue.
[6] As a result Justice McDermot dismissed the motion for “payment of $24,000”, but declined to decide the issue of “judgment in the amount of $24,000”. I understand that the dismissal of the claim for “payment”, which Justice McDermot considered redundant, was without prejudice to the Applicant’s right to bring a motion for judgment.
[7] The Applicant and Respondent have now returned to Court to deal with the issues left unresolved by Justice McDermot’s decision, and I must continue where Justice McDermot left off.
(i) Wildman Order
[8] The Wildman Order was made on the consent of all parties. Various provisions of that Order have not been followed or complied with in accordance with the schedule contemplated by that Order. In setting out these reasons I will endeavour to meet the intent and purposes of that Order, and put the Order back on track.
(ii) Matrimonial Home
[9] The Wildman Order appears premised, in part, on the understanding that the Matrimonial Home would be listed as “quickly as possible” and no later than February 28, 2013, (see paras. 25, 26, 28 and 33). This did not happen. Each party blames the other for the past failures to sell the home in a timely manner. For the purposes of these reasons it does not matter who was responsible, although I note that Justice McDermot did comment on this issue in his decision at para. 65, and I agree with his observations in this regard.
[10] Moving forward on this issue, the parties have both indicated to me that they want to list it for sale, and have agreed that it will be listed with Mark Rattan at Remax Realty of Wasaga Beach. Notwithstanding the abortive efforts to sell the home in the past, I will take both parties at their word that the property will be listed, and my reasons and this decision are based on the assumption that the parties will make good faith efforts in this regard.
(iii) Severance Payment
[11] The paragraphs of the Wildman Order relevant to this issue are as follows:
Until the Matrimonial Home is sold, as provided for in this order, the Applicant Mother shall continue to receive a salary from GCL (or severance pay if it is more convenient to GCL to define it as such) of $2000.00 per month. This payment is in lieu of any interim spousal support and child support obligations the Respondent Father may owe the Applicant mother pending sale of the Matrimonial Home.
Upon the closing of the sale of the Matrimonial Home, GCL shall cease all salary or severance payments to the Applicant Mother under paragraph 25 and the Respondent Father will begin to pay the time-limited spousal support set out in paragraph 18 and child support as per paragraph 12.
GCL is presently scheduled to cease operation as of July 31, 2013. If the sale of the Matrimonial Home has not closed by that time, interim spousal and child support (pending the closing of the sale and commencement of the time limited support set out in para. 18 and child support set out in para. 12) shall be established by the Court on an urgent basis if the parties cannot otherwise agree. However the parties shall attend a case conference before any motion is brought …
a. On any motion before the court pursuant to this paragraph, the Respondent Father may request the Court consider his ongoing payment of the Matrimonial Home mortgage in establishing his interim spousal support and child support obligations.
- Pending the sale of the Matrimonial Home, the Applicant Mother shall pay all utilities associated therewith. The Respondent Gather shall pay the mortgage, insurance and municipal taxes.
[12] Two things are apparent from a review of these paragraphs. First, the “severance payment” from GCL was “in lieu of any interim spousal and child support obligations”. This means that the severance payment was not simply an obligation of GCL, but was a convenient vehicle by which Mr. Harrison sought to fulfill his support obligations. Second, the mortgage payments were in addition to these support payments and not instead of them. This view is confirmed by endorsement of Justice McDermot where he states at paras. 66 and 67: “[T]he intent of the order was always to provide Nelsie with cash flow pending the sale of the home, and beyond… And I disagree with William that the fact that he pays the mortgage means that Elsie has no need.” On this basis Justice McDermot, after taking into account the fact that the Respondent is paying the mortgage (para. 75) ordered the Respondent to pay the Applicant spousal support in the amount of $1000 per month in addition to his obligation to pay the mortgage, insurance and taxes on the home, and that support was retroactive to November 1, 2014 (para. 76). He also ordered the Respondent to pay $864 per month child support from the same date (para. 73). There is no basis for me to interfere with either of those orders. To date none of the support payments ordered by Justice McDermot have been made, and the Applicant is in arrears in the amount of $9,320.00 plus $6,000.00 costs ordered by Justice McDermot on March26, 2015 (payable within 60 days).
[13] That brings me back to the “severance payments” which Justice McDermot declined to deal with. It is agreed by both parties that the Respondent/GCL did make these “severance payments” until July 31, 2013. It is also agreed that GCL did not cease operations until July 31, 2014.The Respondent’s position is that, even if the Matrimonial Home was not sold, the Wildman Order contemplated that these payments would cease on July 31, 2013 because that was the date they anticipated GCL would cease operations (see para. 28). The Respondent’s position is that GCL did not cease operation until July 31, 2014, and therefore, if the Matrimonial Home did not sell before that date, these “severance payments” should have been made by GCL until it ceased operations. The Applicant therefore claims an additional $24,000.00 ($2,000 per month from August 2013 until July 2014). Justice McDermot agreed with the Applicant’s interpretation of the Wildman Order. At paragraph 66 he sates: “There was a provision for the payment of a severance pending sale of the home and up to when GCL ceased operations (that actually occurred apparently in August, 2014). I agree with Justice McDermot’s interpretation. The Wildman Order does not say that the severance payments are to cease on July 31, 2013. It states that the GCL severance payments are to cease “upon the closing and sale of the matrimonial home”, and if GCL ceases operation before the home is sold, the Applicant can apply for interim spousal and child support (which she did on October 14, 2014). The key is that the GCL severance payments were to continue until, as Justice McDermot stated, “when GCL ceased operations”, which all parties agreed was July 31, 2014.
[14] On this basis I conclude that the Applicant is entitled to judgment for $24,000 for the “severance payments” between August 2013 and July 2014. These payments were in lieu of support payments, and I find that the Respondent is personally liable for this debt.
(iv) The Maila Debt
[15] The “Maila Debt” relates to para. 42 of the Wildman Order, which states that “The Applicant Mother shall indemnify the Respondent Father for any debt in respect of the caregiving services provided by Maila Flores to the parties, including, for greater certainty, any claims by the Canada Revenue Agency in respect of unpaid employee remittances.” There is no indication what amount was owing to CRA as of the date of the Wildman Order.
[16] This paragraph was the subject of an Order by Justice Olah dated August 6, 2013 (para. 6), which was in turn the subject of Justice McDermot’s Order of January 23, 2015 (see paras. 47 – 51). Mr. Harrison claims that the Applicant owes him $8,126.19 for this debt that he claims he paid to CRA. This issue was canvassed by Justice McDermot, who, as indicated above, dismissed the motion for reimbursement of the Maila debt without prejudice to it being renewed “upon Mr. Harrison providing documentary proof of payment of the Maila debt through garnishment by CRA.”
[17] In his affidavit on this motion the Respondent has provided a computer printout from CRA. It is a Statement of Account with an account number and his name as the employer. It does not have the name of Maila Flores anywhere on it, and I am unable to determine whether it relates to Maila Flores. It does not indicate if there was an outstanding debt or unpaid employee remittances as of January 2013 when the Wildman Order was made. It does not indicate, as far as I can tell, that any payments were made with respect to unpaid remittances after January 2013. Mr. Harrison was unable to explain to me how this printout was evidence that he paid this debt to CRA.
[18] As I indicated above, one of my goals is to ensure that the Wildman Order is followed as nearly as possible given the passage of time. Clearly, as Justice McDermot noted at para. 50 of his decision, if Mr. Harrison paid the Maila debt on behalf of the Applicant he is entitled to repayment pursuant to para. 42 of the Wildman Order. That debt should be set-off against any debt the Respondent owes to the Applicant. Mr. Harrison was unrepresented at the proceedings before me, and I have tried to explain to him that he requires the following evidence to demonstrate that he paid the Maila debt. He needs evidence to show what was owing to CRA as of January 1, 2013, when the Wildman Order was made. He needs evidence to show that any payments he made to CRA, through garnishment or otherwise after that date related specifically to the Maila debt.
[19] Accordingly I am going to adjourn this part of the motion for 60 days to give Mr. Harrison a final opportunity to present evidence to support this part of his claim. If he can come up with the evidence, he should provide it first to Mr. Callahan to see if they can settle this matter. If they are unable to reach an agreement the motion can be brought back before me on notice. If he is unable to come up with such evidence within 60 days his motion in this regard is dismissed.
(v) Charge on the Matrimonial Home
[20] The Respondent is the sole legal owner of the Matrimonial Home. In her affidavit the Applicant has provided a printout of the title search for this property, which indicates that the Respondent has recently registered two charges against the property, one for $22,000 in October 2014, and one for $12,000 on January 16, 2015, which was the day after Justice McDermot’s Order.
[21] The Respondent currently owes the Applicant the following:
(1) Retroactive support pursuant to Justice McDermot’s Order of: $9,320.00 plus $6,000.00 costs
(2) “Severance Payments” pursuant to Justice Wildman’s Order and this decision of: $24,000.00
(3) Costs from the March 12, 2015 Order of Justice Mulligan of: $750.00
(4) Costs from the November 13, 2014 Order of Justice McCarthy of: $500.00
[22] For a total of $40,570 not including interest. The Applicant has raised a legitimate concern that if the Matrimonial Home is sold she may never be able to recover any of the money owing. It is possible that future support payments may be garnished from the Respondent’s pension income (a Support Deduction Order has been issued), but I share her concern regarding the substantial amounts owed to the date she brought this motion. Section 34 of the Family Law Act grants the Court broad remedial power to make interim or final orders to enforce support orders, including “requiring the securing of payment under the order by a charge on property or otherwise”. In my opinion this is an appropriate case in which to exercise that power to ensure that the Applicant receives the support she is owed when the Matrimonial Home is sold.
[23] Accordingly, I Order that $40,570 will be a charge on the property and paid in Trust to the Applicant’s lawyer when the property is sold to pay the retroactive support, severance payments and costs owed to the Applicant. This does not extinguish the Respondent’s obligations to the Applicant, but it will ensure that the Applicant will receive the debt owed to her to date. If the house is closed within 60 days from the date of this order, the Applicant’s counsel shall hold back $8,126.19 from the payment made to the Applicant until the Respondent’s motion in relation to the Maila debt is dismissed or a different Order is made by this Court.
Costs
[24] Both parties have made submissions on costs. The Applicant, who was successful in this motion, claims costs of $7,462.54 inclusive of disbursements and HST. Costs are determined under Rule 24 of the Family Law Rules.[^2] which provides that costs follow the event and a successful party is presumed to be entitled to costs. The claim for costs includes 7 hours for the March 12 hearing date before Justice McCarthy, who ordered $500 for costs thrown away when that hearing date was adjourned to today. The Applicant is not entitled to additional costs for that day. Accordingly I would reduce the award for costs to $4,312.00 on a substantial indemnity basis, which, taking into account the various factors set out in Rule 24(11), is reasonable given the issues involved and the time spent on this case.
ORDER
[25] This Court Orders as follows:
a) The Applicants claim for judgment for $24,000 pursuant to the Final Order of Justice Wildman dated January 10, 2013 is allowed.
b) $40,570 will be a charge on the Matrimonial Home at 23 Old Hickory Lane, Wasaga Beach, (Lot 61, Plan 51M-761; S/T ease over PT 6 51R32458 IN 184541; Wasaga Beach) and paid in Trust to the Applicant’s lawyer when the property is sold to pay the retroactive support, severance payments and costs owed to the Applicant. If the property is closed within 60 days from the date of this order, the Applicant’s counsel shall hold back $8,126.19 from the payment made to the Applicant until the Respondent’s motion in relation to the Maila debt is dismissed or a different Order is made by this Court..
c) This Order may be registered on the title of the Matrimonial Home at 23 Old Hickory Lane, Wasaga Beach, (Lot 61, Plan 51M-761; S/T ease over PT 6 51R32458 IN 184541; Wasaga Beach)
d) The Respondent’s motion with respect to the “Maila debt” is adjourned for 60 days to give Mr. Harrison a final opportunity to present evidence to support this part of his claim. If he can come up with the evidence, he should provide it first to Mr. Callahan to see if they can settle this matter. If they are unable to reach an agreement the motion can be brought back before me on notice. If he is unable to come up with such evidence within 60 days his motion in this regard is dismissed.
e) The Applicant shall have her costs of the motion in the amount of $4,312.00 inclusive of HST and disbursements. Costs shall be payable to the Applicant within 30 days.
CHARNEY J.
Date: May 1, 2015
[^1]: R.S.O.1990, c. B.16
[^2]: O.Reg. 114/99