McGaughey v. McGaughey, 2015 ONSC 399

COURT FILE NO.: 2670/12

DATE: 2015-02-05

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROCHELLA McGAUGHEY

Applicant

– and –

ROBERT McGAUGHEY

Respondent

For Self

For Self

HEARD: January 5 and 6, 2015

varpio, j.

REASONS FOR DECISION

INTRODUCTION

1Mr. and Mrs. McGaughey (whose maiden name is Ms. Robson) had a short-term marriage with no children (Ms. Robson has an adult child from a previous relationship). The parties’ financial situation worsened during the course of the marriage and, when the parties broke up on September 30, 2012, it appears that the mortgage on the matrimonial home was worth more than the home itself.

2This Application deals with two issues:

(1) Property disputes including an NFP Equalization calculation; and

(2) Mr. McGaughey’s claim for spousal support.

3With respect to the property issues, the parties submit that the only real issue to be determined is the division of an outstanding $35,000 mortgage debt currently in Ms. Robson’s name. Although the quality of the evidence was somewhat confusing as meaningful financial information was not provided by either party, it is clear that the parties treated the house as a joint venture, albeit a failing one.

4The NFP calculations in this case would typically demand that Mr. McGaughey would owe Ms. Robson a $22,500 equalization payment. This quantum is, however, unconscionable. In determining the quantum to be paid by Mr. McGaughey, I note that the house has already been sold via power of sale and that Ms. Robson has assets (a Harley-Davidson and a possible pension) that were not properly valued for the purposes of the NFP calculations. Also, I note that the parties paid expenses for the house on a 2/3 vs. 1/3 basis. Given the foregoing, I order Mr. McGaughey to pay $7,500 in equalization as per s. 5(6) of the Divorce Act.

5With respect to spousal support, Mr. McGaughey’s claims do not meet any of the criteria as outlined by ss. 15.2(4) and (6) of the Family Law Act. Further, Mr. McGaughey indicated that he regularly turns down jobs in the towing field. Ergo, as will be explained below, Mr. McGaughey’s support claim is dismissed.

FACTS

Documentation

6This was a brief, self-represented trial where the parties were the only witnesses. It represented the second trial date. There was very little documentary evidence provided to me to support the parties’ contentions despite the fact that the first trial date was put over to ensure that the parties, and Mr. McGaughey in particular, had their documentation in order.

Ms. Robson

7Ms. Robson testified first and indicated that she met Mr. McGaughey in February 2009 on Plenty of Fish, which is, presumably, a singles website. They texted back and forth and finally met in person in May 2009. They married in June of 2010 and resided in Ms. Robson’s home. Ms. Robson sold her home and the couple jointly purchased a home on Trunk Road in April of 2011 for $42,000. Ms. Robson indicated that she paid for part of the Trunk Road home - and at least part of Mr. McGaughey’s work truck - from proceeds of her initial home sale. She could not provide specifics or documentation regarding the initial home sale.

8Ms. Robson financed the Trunk Road home and ultimately obtained a mortgage in the amount of $125,000 secured against the Trunk Road residence. Mr. McGaughey did not sign the mortgage documents since he had no credit rating. The monies obtained were spent on a variety of things including home improvements.

9The marriage had its problems and, on September 30, 2012, Ms. Robson moved out of the Trunk Road residence. The parties had no hope of reconciliation. The mortgage went into default and both parties agreed that the home was sold in June 2013 for approximately $90,000 (documentation was not provided to prove the sale price) leaving a shortfall of approximately $35,000 on the mortgage (mortgage documentation was provided).

10Ms. Robson testified that the parties made arrangements after September 30, 2012 to have Ms. Robson come and retrieve her personal property. Ms. Robson testified that she had several friends help her remove her belongings but they found that several of her personal items were not in the home. Ms. Robson believes that these items were taken by Mr. McGaughey. The allegedly stolen property includes wall hangings, Christmas wrapping paper, patio stones with the Ford emblem emblazoned upon them, a pink cowboy hat and other such things. Ms. Robson could not provide me with receipts or any real idea of how much these items were worth.

11Ms. Robson also could not tell me how much money she earned. She indicated that her most recent Form 13.1 Financial Statement included her 2011 Notice of Assessment. This document showed that Ms. Robson earned $42,460 in 2011. Ms. Robson testified that she currently earns about the same as she did in 2011. I note that Ms. Robson’s Financial Statement also contains a cheque stub dated November 22, 2012 wherein the deductions portion itemizes payments to OMERS, an Ontario pension fund. Presumably, this means that, Ms. Robson (who works for Algoma Public Health) has a pension of sorts. Said pension was not included in her financial calculations with respect to NFP equalization payments.

12Ms. Robson indicated that she was not living particularly well on her salary despite the fact that she had purchased a late model Harley-Davidson in March 2012. She indicated that she amortized the motorcycle over 15 years and that, as a result, she has very little equity in the motorcycle. She provided no documentary evidence to support these positions.

13Ms. Robson also indicated that she currently rents a premises for herself and her adult child. On cross-examination, she objected to being asked the name of her landlord but, when forced, admitted that she leased the domicile from her father. She also admitted that her father loaned her a car for personal use.

14Curiously Ms. Robson indicated in cross-examination that she could not recall whether Mr. McGaughey seriously hurt his back on their wedding night. I would think that one would remember a spouse’s serious wedding night injury. Further, Ms. Robson could not recall whether or not Mr. McGaughey used the Trunk Road home for business purposes or whether he worked for a delivery company out his “shops”. She did, however, remember that the parties split the household expenses 2/3 vs. 1/3 with Ms. Robson paying the greater share (Mr. McGaughey agreed with this statement). She also agreed that Mr. McGaughey worked on the house doing a considerable portion of the home renovation himself.

Mr. McGaughey

15Mr. McGaughey indicated to the Court that he suffered brain trauma as a child which affects his ability to recall certain short-term events (up to a few days previous) but that his long-term memory was not particularly affected by the injury. Mr. McGaughey also indicated that he suffered from Tourette’s Syndrome. During the course of the trial, it appeared to me that these conditions did not affect the substance of his evidence.

16When the parties married, Mr. McGaughey testified that he helped Ms. Robson out of a “financial pickle”. Mr. McGaughey was working at a delivery company doing custodial work earning approximately $20,000 per year. Shortly after the marriage, management changes made his job obsolete and Mr. McGaughey no longer had employment. During the course of the marriage, Mr. McGaughey testified that he renovated the matrimonial house as a form of employment which helped Ms. Robson disproportionately, although he did not explain how his efforts helped Ms. Robson more than himself.

17Mr. McGaughey indicated that Ms. Robson’s adult child had drug problems and would steal his tools in order to fund her habit. Ms. Robson denied this assertion.

18Upon dissolution of the marriage, Mr. McGaughey indicated that, when Ms. Robson’s friends came to pick up her personal belongings, thirty bikers attended the house and vandalized the residence. Further, Mr. McGaughey indicated that the bikers took his collection of over 6000 die cast cars which were worth over $10,000, although he could provide no estimate of any sort to justify that value. Mr. McGaughey also indicated that, as of September of 2012, his work truck has been vandalized mysteriously on several occasions with brake lines being cut and other dangerous occurrences taking place. Mr. McGaughey thus claims to be fearful of Ms. Robson’s friends.

19With respect to support, Mr. McGaughey indicated that he currently has a towing business but that the business became relatively unprofitable in 2012 when Ms. Robson cut off his cellphone. Mr. McGaughey did not, however, indicate why he did not have the phone reconnected. Mr. McGaughey indicated that his towing business currently earns very little if any money and that his truck requires considerable repair.

20Mr. McGaughey also testified regarding his ownership of other pieces of property including older automobiles whose condition and market value were uncertain. Accordingly, I cannot make any findings in this regard.

21Mr. McGaughey indicated to the Court that he hoped to have a full-time job this summer. He indicated that he lives on a job site and effectively acts as a night watchman for said site. The company/land owner lets Mr. McGaughey live on site in exchange for free rent. In his submissions, Mr. McGaughey indicated that he has received several job offers from local towing companies since separation but that he prefers working for himself.

22Mr. McGaughey submitted that there were no real assets of any worth for either party upon dissolution of the marriage (save for the motorcycle) and that the NFP portion of the case effectively involved deciding who was responsible for what portion of the outstanding mortgage debt.

THE LAW

Net Family Property Calculations

23The division of matrimonial property in Ontario is governed by sections 4 and 5 of the Family Law Act:

4(1) …“matrimonial home” means a matrimonial home under section 18 and includes property that is a matrimonial home under that section at the valuation date; (“foyer conjugal”)

“net family property” means the value of all the property, except property described in subsection (2), that a spouse owns on the valuation date, after deducting,

(a) the spouse’s debts and other liabilities, and

(b) the value of property, other than a matrimonial home, that the spouse owned on the date of the marriage, after deducting the spouse’s debts and other liabilities, other than debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of the marriage;

“property” means any interest, present or future, vested or contingent, in real or personal property and includes,

(a) property over which a spouse has, alone or in conjunction with another person, a power of appointment exercisable in favour of himself or herself,

(b) property disposed of by a spouse but over which the spouse has, alone or in conjunction with another person, a power to revoke the disposition or a power to consume or dispose of the property, and

(c) in the case of a spouse’s rights under a pension plan, the imputed value, for family law purposes, of the spouse’s interest in the plan, as determined in accordance with section 10.1, for the period beginning with the date of the marriage and ending on the valuation date; (“bien”)

“valuation date” means the earliest of the following dates:

1. The date the spouses separate and there is no reasonable prospect that they will resume cohabitation.

Excluded property

(2) The value of the following property that a spouse owns on the valuation date does not form part of the spouse’s net family property:

1. Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage.

2. Income from property referred to in paragraph 1, if the donor or testator has expressly stated that it is to be excluded from the spouse’s net family property.

3. Property, other than a matrimonial home, into which property referred to in paragraphs 1 to 4 can be traced.

4. Property that the spouses have agreed by a domestic contract is not to be included in the spouse’s net family property.

5. Unadjusted pensionable earnings under the Canada Pension Plan.

Net family property not to be less than zero

(5) If a spouse’s net family property as calculated under subsections (1), (2) and (4) is less than zero, it shall be deemed to be equal to zero. R.S.O. 1990, c. F.3, s. 4 (5).

Equalization of net family properties

Divorce, etc.

5. (1) When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them. R.S.O. 1990, c. F.3, s. 5 (1).

Variation of share

(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(e) The fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f) The fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.

Purpose

(7) The purpose of this section is to recognize that child care, household management and financial provision are the joint responsibilities of the spouses and that inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6).

Powers of court

9. (1) In an application under section 7, the court may order,

(a) that one spouse pay to the other spouse the amount to which the court finds that spouse to be entitled under this Part;

(c) that, if necessary to avoid hardship, an amount referred to in clause (a) be paid in instalments during a period not exceeding ten years or that payment of all or part of the amount be delayed for a period not exceeding ten years; and

Support

24Spousal support is governed by Section 15.2 of the Divorce Act:

Spousal support order

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

Terms and conditions

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

Factors

(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

(c) any order, agreement or arrangement relating to support of either spouse.

Spousal misconduct

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

Objectives of spousal support order

(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;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

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

25In looking at short-term marriages, the Courts have denied claims for spousal support where the objectives of support orders would not by met by imposition of same: Maclaren v. Maclaren, [2004] O.J. No. 1473 (Ont. S.C.); Merko v. Merko, 2008 ONCJ 530, [2008] O.J. No. 4273 (Ont. C.J.).

ANALYSIS

Divorce

26If it has not already been so Ordered, I hereby Order that Ms. Robson and Mr. McGaughey are divorced.

NFP Calculation and Equalization Payment

27The first thing I must do is determine the value of the properties entering the marriage. Both sides filed Financial Statements under Form 13.1 and testified that the contents unto which they swore were true. However, during the course of their evidence, it became clear that neither party had any real grasp on the value of their property. For example, Ms. Robson testified that her Harley-Davidson had very little equity given the fact that she amortized the loan for same over 15 years but she failed to provide any loan documentation or valuations for the motorcycle. Further, when testifying regarding the value of her property, Ms. Robson’s evidence was replete with the terms such as “about” and “approximately”. Her evidence was also occasionally less than forthright with respect to issues regarding the identity of her landlord and her memories of her husband`s serious wedding night injuries. As such, I have concerns with respect to her testimony generally, and as it relates to the value of her property.

28For his part, Mr. McGaughey’s testimony was also difficult to accept. He made bald statements regarding the destruction of his property by Ms. Robson’s associates but did not furnish the court with any real specifics. His estimates with respect to the value of his property (i.e. his die cast car collection) were not accompanied by any expert evidence but were instead rough estimates for considerable amounts of money. I would have difficulty accepting Mr. McGaughey’s evidence as a result.

29Nonetheless, the parties agreed with respect to certain crucial portions of the evidence. The parties appeared to generally agree upon who owned what pieces of property. For example, it was clear that Ms. Robson owned the “Mickey Mouse Toaster” while Mr. McGaughey owned certain tools. They generally disagreed with respect to whether or not these pieces of property were taken by the other party.

30Given both parties’ differing evidence with respect to who took what, and given the issues described above regarding the parties’ credibility, it is almost impossible for me to determine whether the impugned property was lost innocently, was taken by either Ms. Robson or Mr. McGaughey out of spite, or was otherwise disposed of. As such, I hereby Order that, if Ms. Robson or Mr. McGaughey is in possession of the other person’s property, they are to return same forthwith. If not, the parties are entitled to keep the property that they currently possess. Further, it is also apparent that the value of the impugned property is not – nor has ever been - great. Both parties have conceded as much since they have attempted to define the case as an Application to divide outstanding mortgage debt.

31Mr. McGaughey has indicated to the Court that he believes that Ms. Robson has money hidden with her father and disputes Ms. Robson’s claim that she lives meagrely. While I note that she is permitted to drive her father`s vehicle, lives in a residence owned by her father, and rides a late model Harley-Davidson, I have no credible evidence before me to suggest her father possesses any of Ms. Robson’s money or that Ms. Robson is attempting to hide money from Mr. McGaughey in this manner. I thus reject that submission.

32Ms. Robson appeared to argue that some funds should be excluded from an NFP calculation as they came from the sale of her first house. She did not, however, provide me with any documents outlining the amounts received from the sale of that house. While she provided me with some receipts for work done at the Trunk Road house, she did not explain to me how the funds used to pay for the improvements originated from the sale of her first home. Accordingly, I cannot trace any of these funds and any arguments in this regard do not have sufficient supporting evidence to be successful, irrespective of any possible legal grounding therefor.

33The parties have effectively advised me that the only real issues with respect to property is the division of the mortgage debt currently in Ms. Robson’s name. Although the valuation of the parties’ property is nebulous at best, it is clear that, as of September 30, 2012, the parties had two meaningful financial considerations - a house and a mortgage. Accordingly, I make the following findings regarding the parties’ property:

1. The value of the parties’ personal property did not change over the course of the brief marriage. Insufficient evidence was proffered to show that there was any material difference in the value of the chattels or personalty.

2. Although no exact figure was provided to the Court, I find that the Trunk Road house was worth $90,000 on valuation date. I make this finding because the parties assured me that the house was sold for this sum shortly after separation. Further, I have no other possible value to ascribe to the property on the date of valuation given the lack of evidence proffered.

3. Equally, I find that the value of the mortgage on the date of valuation is $125,000. I make that finding for the same reasons that I found the house to be worth $90,000 on the valuation date; and

4. I have no basis (or documentation) to make any findings regarding the value of Ms. Robson’s equity in her pension, her motorcycle or the home she brought into the marriage, or Mr. McGaughey’s die cast cars.

34Given the aforementioned findings, the parties’ NFP calculations are as follows:

1. The value of Ms. Robson’s personal property remained unchanged during the marriage. She added a 50% interest in the Trunk Road house [$45,000] and acquired a $125,000 debt. Accordingly, her NFP value is zero [$45,000 - $120,000 = - $75,000. There can be no negative NFP values; ergo her NFP value is zero].

2. The value of Mr. McGaughey’s personal property remained unchanged during the marriage except that he acquired a 50% interest in the new home, or $45,000. Thus, his NFP value is $45,000.

3. Given points (1) and (2), Mr. McGaughey would normally owe an equalization payment of $22,500 [$45,000 ÷ 2= $22,500] given sections 4(s) and 5(1) of the Family Law Act.

35Despite the NFP calculations undertaken above, it would be unconscionable for Mr. McGaughey to make an equalization payment of this size. First, I am concerned that Ms. Robson has assets that increased in value during the marriage (pension, motorcycle) but have not been valued. She may be receiving an unfair benefit as a result of the fact that she has not valued these items. Secondly (and most importantly) Mr. McGaughey’s only meaningful asset (his share of the Trunk Road house) has been sold under power of sale. To order him to pay $22,500 in an equalization payment would ignore the fact that he has no assets to pay said debt. Further, this would leave him effectively responsible for the majority of the $35,000 outstanding mortgage debt.

36Courts have, in appropriate circumstances, found that post-separation factors can affect the unconscionability analysis as discussed in section 5(6) of the Family Law Act: Serra v. Serra, 2009 ONCA 105, [2009], O.J. No. 432 (Ont. C.A). In this case, the house was truly a joint venture in that Ms. Robson financed the home while Mr. McGaughey worked on it. The fact that the parties dealt with the home as a joint venture would normally demand, in my mind, that neither party should pay for more than half the mortgage shortfall. However, I also note that Ms. Robson has assets (Harley-Davidson and possibly a pension) that were not valued for trial and that the parties split the cost of the home’s upkeep 2/3 vs. 1/3. Equally, it is important to note that the marriage was of short duration and the equalization payment is relatively large compared to their assets. Thus, in light of the foregoing facts and the application of ss. 5(6)(e), (f) and (h) of the Family Law Act thereto, I order that Mr. McGaughey owes Ms. Robson an equalization payment of $7,500. Given Mr. McGaughey’s financial situation, I give him 36 months to pay as per s. 9(c) of the Family Law Act.

Spousal Support

37As indicated earlier, an Order under s. 6 of the Divorce Act for spousal support 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;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

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

38The ordering of Spousal Support is thus discretionary and s. 6 of the Divorce Act outlines the factors that underlie the basis for granting support orders. In this case, I order that no support ought to be awarded because of the following factors:

1. The marriage was of short duration;

2. An award of spousal support will thwart Ms. Robson’s attempts at self-sufficiency;

3. Mr. McGaughey’s economic hardship was not caused by the marriage in that his job was terminated because of changes to the company;

4. Neither party is particularly affluent;

5. Mr. McGaughey has received several job offers that he has turned down these job offers would, presumably, put Mr. McGaughey back in the same position he was prior to the marriage; and

6. Mr. McGaughey ought to become self-sufficient given the aforementioned job offers.

COSTS

39In light of the split result, I hereby order that no costs are owed by either party.

Varpio J.

Released: February 5, 2015

CITATION: McGaughey v. McGaughey, 2015 ONSC 399

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROCHELLA McGAUGHEY

• and -

ROBERT McGAUGHEY

REASONS FOR DECISION

Varpio J.