COURT FILE NO.: FS-10-4874
DATE: 2015-07-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
STEPHEN DANIEL VENTON
Applicant, Self-Represented
Applicant
- and -
CAROLINE MARIE VENTON
Thomas J. Carten, for the Respondent
Respondent
HEARD: June 1, 2 & 3, 2015,
at Kenora, Ontario
Madam Justice H.M. Pierce
Reasons for Judgment
Introduction
[1] The parties were married on April 4, 1992, after cohabiting from about 1989 or 1990. They raised two children, Conall and Karlyne, who are now independent. The parties separated on November 18, 2008, when the wife left the matrimonial home. At that time, the parties’ children were still at home.
[2] There are currently no claims for on-going child support. The husband was ordered to pay child support for Karlyne effective August 1, 2013, until October 1, 2014. There are no arrears of child support under that order. As Karlyne intends to attend college in September, she may require support at that time. However, that claim is not presently before the court.
[3] The husband claimed a divorce in these proceedings but did not tender a marriage certificate at trial. The grounds for divorce based on one year’s separation are proven. The husband may apply for divorce upon filing the marriage certificate at the Registrar’s office.
[4] The remaining issues in this case are:
(1) retroactive child support claimed by both parties;
(2) retroactive spousal support claimed by the wife;
(3) on-going spousal support claimed by the wife;
(4) orders securing spousal support and increasing it annually in accordance with the Consumer Price Index;
(5) securing spousal support by designating the wife as his life insurance beneficiary;
(6) unequal division of net family property claimed by both parties;
(7) an order for payment of the equalization by transfer to the wife from the husband’s pension fund;
(8) prejudgment interest; and
(9) costs.
[5] The wife seeks compensatory spousal support. The husband submits that the wife has lived in a common law relationship since a few months after separation and is not in need of support; he also argues that he cannot afford to pay support as he continues to pay surplus income to his trustee in bankruptcy. The husband commenced cohabiting with a new partner in 2011 whom he supports. His partner also brought a child into the relationship; Mr. Venton is supporting her as well.
[6] The wife argues that she is entitled to an unequal division of net family property in accordance with s. 5(6)(d), (f), and (h) of the Family Law Act, R.S.O. 1990, c. F.3. She argues that, as a result of the husband’s bankruptcy, she has been left to pay all of the parties’ joint debts. The matrimonial home was sold as a result of power of sale proceedings instituted when the husband defaulted on the mortgage.
[7] The husband contends that he should have credit for the amount by which he reduced the principal on the mortgage on the matrimonial home and improved its value prior to sale. He also claims that the wife refused to pay him child support when the children were primarily in his care after the parties separated, and thus he is owed retroactive child support.
Retroactive Child Support
[8] Both parties claim retroactive child support from the date of separation, November 18, 2008. Ms. Venton submits that, based on the parties’ respective incomes, the husband owes her $39,538 for retroactive child support. The husband argues that the wife owes him child support in the amount of $7,806. The application was not commenced until March 2010. Although both parties were initially represented, the first evidence of a demand for child support appears in the application. No motion for child support was brought until well into 2013.
[9] On September 18, 2013, the parties agreed to an order that Mr. Venton would pay Ms. Venton child support for Karlyne commencing August 1, 2013, until a subsequent order terminated her support effective October 1, 2014. There are no arrears under that order. The parties agree that Conall had left their respective homes sometime in the summer of 2011.
[10] Section 9 of the Guidelines deals with the financial consequences of shared custody. It states:
- Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account
(a) the amounts set out in the applicable tables for each of the spouses;
(b) the increased costs of shared custody arrangements; and
(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.
[11] In this case, there was no evidence called about the increased costs of shared custody arrangements. Mr. Venton made an assignment in bankruptcy in about April 2013. He testified that he paid the family debts until that time. The bankruptcy court granted the wife leave to pursue her equalization claim.
[12] When the parties separated, the children remained at the matrimonial home with the husband until the wife got situated and the children began to spend time with her. Mr. Venton claims that the children were primarily resident with him following separation until they became disentitled to child support and that Ms. Venton paid no child support. Ms. Venton argues that the children were in her home at least 40 per cent of the time and, pursuant to s. 9 of the Child Support Guidelines, she is entitled to child support.
[13] The parties and even the children disagree on the extent of the time the children spent with their respective parents following separation.
[14] Mr. Venton testified that after separation, the children remained with him in the matrimonial home and were bussed from there to school. He stated that Ms. Venton did not want the children initially and saw them sporadically. He states that he regularized their schedule by scheduling them to stay two weeks with him and one week with her until Karlyne began going to her mother’s on an equal time basis in March 2012, following Karlyne’s request to the Children’s Lawyer.
[15] Ms. Venton testified that following separation, she stayed temporarily with a girlfriend then moved to a trailer park where she rented a three bedroom mobile home. She stated that initially she didn’t see the children, often due to conflicts with their father; however, she retained counsel and the children began to come two weeks on/two weeks off, an arrangement that carried on until they grew up.
[16] Mr. Venton called Conall Venton to testify about the frequency with which the children spent time with each parent. Conall stated that once his mother got settled in the trailer park, he spent two weeks with his father and one week with his mother. He indicated that he never spent more than one week at a time with his mother. The transition day varied between Friday and Sunday.
[17] During the summer school breaks in 2009 - 2011, Conall lived and worked at a provincial park outside of Dryden, returning to his parents’ homes on his two days off each week. During other vacations, he stated that the children split their time between the parents and their extended families.
[18] Ms. Venton called Karlyne Venton as a witness. Karlyne testified that once her mother got settled at the trailer park, she divided her time equally between her parents’ homes on a continuous basis. She described this as a two week rotation.
[19] Of interest is a document Mr. Venton filed as part of his case. It is a letter from counsel for the children, appointed by the Office of the Children’s Lawyer. The letter, addressed to Ms. Venton’s lawyer states:
As per your request, we can advise that following separation until March 5, 2012, we estimate that Karlyne spent 60% of her time in her father’s care and 40% of her time in her mother’s care.
Following the Office of the Children’s Lawyer Disclosure/Settlement Meeting on March 5, 2012, parenting time was divided 50/50 on a two week on/two week off basis.
[20] Despite having filed this document as part of his case, Mr. Venton insisted that the children were with him for two weeks and with their mother one week until Karlyne’s time was equalized in March 2012. In other words, he contends that the children were with him 66.7% of their time with him and 33.3% of their time with her. Of course, 40% is the threshold to claim shared custody child support under the Guidelines.
[21] This is not the kind of day-to-day concern that family members would document. They were simply living their lives, going to school and to work. Nor is it the sort of calculation that would impress itself on the mind of Mr. Venton’s new partner, Ms. Korolenko, who moved into Mr. Venton’s home in July 2011, after dating long-distance for a year. The children were not always there when she visited on weekends. She had no opportunity to observe between the date of separation and the summer of 2010, and had limited opportunity in the year following. Most of her information came from Mr. Venton and thus is hearsay.
[22] For the following reasons, on a balance of probabilities, I conclude that the children spent 40% of their time with their mother and 60% of their time with their father, as the children’s counsel suggests, until Karlyne’s time was equalized.
[23] Counsel for the children was at arms’ length from the parties. She had no stake in the threshold issue because it relates to child support, not to custody and access. But I conclude that the Children’s Lawyer was aware of the issue because Karlyne lobbied to spend more time with her mother.
[24] Conall agreed that the transition time between the households varied between Friday and Sunday, and he also stated that holiday times were split between the parents; thus it is probable that the children spent more than 33.3% of their time with their mother. By 2011, Conall was spending progressively more time with his girlfriend until he ultimately moved out of his parents’ homes in the summer of 2011, after he turned 18.
[25] During the summers of 2009 – 2011, Conall was also out of both parents’ homes most of the time when working and living at the provincial park near Dryden. His time spent on days off during the summer was equalized. He testified that his mother usually drove him to work, which suggests that she assumed a certain amount of his care during those summers. However, Conall’s opportunities to observe Karlyne’s living arrangements would have been more limited.
[26] I do not accept that the children equally divided their time between the parents’ homes following separation. There would have been no need for Karlyne to negotiate equal time with her mother in March 2012 if she was already spending 50% of her time with her.
[27] Should an order of retroactive child support be made? If so, to whom is it payable?
[28] The parties agreed that their respective incomes were as follows:
Year Husband Wife
2008 $74,815.00 $17,628.00
2009 $74,808.00 $23,163.00
2010 $85,574.00 $19,933.00
2011 $85,990.00 $22,162.00
2012 $85,082.00 $22,422.00
2013 $85,692.00 $24,996.00
2014 $91,861.59 $24,868.00
[29] The troubling aspect of this case is that, despite both parents having counsel, and despite the parties exchanging financial statements, there is no evidence of a demand for child support made by either party until the application was issued in March 2010. No motions for child support were served until the wife moved for support for Karlyne in 2013. The husband intimates it was because he was carrying the family debt for 4.5 years following separation.
[30] The leading case on retroactive child support is D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37. In that case, the court emphasized that the trial judge’s discretion to award retroactive child support should be exercised holistically, in accordance with the governing statute. Of particular application to this case is the appeal, D.B.S., in which a claim was made for retroactive child support where there was no previous court order. In the case at bar, the parties are seeking retroactive child support for the period before support was ordered for Karlyne. The facts in D.B.S. are set out succinctly in the headnote:
In D.B.S. v. S.R.G., the parents had three children in the course of their 10-year common law relationship. Following their separation in 1998, the father had sole interim custody, but the parties subsequently entered into an informal shared custody arrangement. Neither party paid support to the other, although the father’s income substantially exceeded the mother’s. In 2003, the mother brought proceedings under Alberta’s Parentage and Maintenance Act for retroactive and ongoing support.
[31] In the first instance, the court ordered ongoing child support but refused to order retroactive support. The chambers judge concluded that the household incomes were approximately the same and the father had contributed to the children’s support since the separation. The chambers judge was also not satisfied that a retroactive award would benefit the children.
[32] The principles relevant to retroactive child support awards where the court is not varying a previous award and child support is not being paid are discussed by the Supreme Court in paras. 80 – 130. As the Supreme Court points out at para. 83, s. 15.1 of the Divorce Act, R.S.C. 1985, c. 3, gives the court jurisdiction to make a retroactive order. As the Venton children were “children of the marriage” in accordance with the Divorce Act at the time the application was issued, I am satisfied that the court retains jurisdiction to order retroactive support for them: see paras 88 – 89.
[33] At paras 94 – 117, the Supreme Court discusses the following factors to be considered when determining whether a retroactive child support order should be made:
(1) Is there a reasonable excuse for the failure to apply earlier for child support?
(2) Did the payor parent engage in blameworthy conduct such that he or she preferred his or her own interests over that of his or her children?
(3) Do the present or past circumstances of the child justify making a retroactive award?
(4) Will a retroactive award create hardship for the payor?
[34] When considering the delay in bringing an application for child support, the court notes that recipient parents should not be encouraged to delay such applications as “from a child’s perspective, a retroactive award is a poor substitute for past obligations not met:” para. 103. There is an obligation on recipient parents to act promptly and responsibly to ensure the appropriate amount of child support is paid.
[35] However, the court recognizes that there may be reasonable excuses for a parent’s failure to make timely application for child support: for example, where a parent fears the payor parent will react vindictively to a child support application, to the detriment of the family. Other possible excuses may include inadequate legal representation, or a lack of financial or emotional means to bring the application: para. 101.
[36] The court remarked that a payor parent who discloses his or her income to the recipient parent in a timely manner and who does not pressure or intimidate the recipient parent may well argue that the delay in bringing an application is unreasonable. The court observed, “In this context, a recipient parent who accepts child support payments without raising any problem invites the payor parent to feel that his/her obligations have been met:” para. 102.
[37] The court next considered the conduct of the payor parent. Is he or she guilty of blameworthy conduct? In its broadest terms, the court held that a payor parent is blameworthy if he or she preferred his or her interests to the children’s rights to appropriate support: para 106.
[38] Blameworthy conduct might include hiding increases in income, intimidating the other parent in order to discourage bringing a child support application, misleading him or her into believing that appropriate child support is being paid, or avoiding or diminishing the parent’s support obligation: paras. 106 - 107.
[39] Next, the court should consider the present and past circumstances of the child when deciding whether a retroactive award is justified: para. 101. Did the child suffer hardship because the support obligation was not fulfilled? See para. 113.
[40] Finally, the court considered whether a retroactive award will create hardship. At para. 115, the court pointed out the ways in which hardship might occur:
There are various reasons why retroactive awards could lead to hardship in circumstances where a prospective award would not. For instance, the quantum of retroactive awards is usually based on past income rather than present income; in other words, unlike prospective awards, the calculation of retroactive awards is not intrinsically linked to what the payor parent can currently afford. As well, payor parents may have new families, along with new family obligations to meet. On this point, courts should recognize that hardship considerations in this context are not limited to the payor parent: it is difficult to justify a retroactive award on the basis of a “children first” policy where it would cause hardship for the payor parent’s other children. In short, retroactive awards disrupt payor parents’ management of their financial affairs in ways that prospective awards do not. Courts should be attentive to this fact.
[41] Once a court has determined that an award of retroactive child support is warranted, the court must determine the date the award should commence. At para. 118, the court held that, generally, a retroactive award should commence at the date of effective notice that child support was being sought. At para. 121, the court clarified that “effective notice” is the date at which the recipient indicates that child support is being sought. Formal legal notice is not required.
[42] The court held that usually, support awards should not be made retroactive to more than three years before formal notice was given to the payor parent: para. 123.
[43] In this case, there is no evidence that either parent put the other on notice that he or she intended to seek retroactive child support until the formal application was issued. Thus, notice was given when the application was served in or about March 2010.
Application of the Facts to Claims for Retroactive Child Support
[44] In this case, each parent claims for retroactive child support; the court must therefore consider the respective merits of each parent’s claim.
[45] As I have commented, there is no evidence that either parent made a demand for child support before the husband’s application was issued in March 2010. Do the parents have a reasonable excuse for their failure to seek child support earlier? Neither parent offered an excuse. Even after the application was launched in 2010, no motion was brought for child support until late in 2013.
[46] Both parties were represented by counsel. No complaint was made about the adequacy of legal advice. There is no evidence that either party refused to make financial disclosure or that the financial disclosure wasn’t accurate. Nor is there any evidence of intimidation toward either party. The wife commenced a new relationship within a few months of separation and had financial assistance from her new partner to make ends meet. The parties were able to resolve custodial arrangements concerning the children without the need for a court order. Although a custody order was eventually made in 2013, it was for joint custody and made on consent.
[47] While there were two orders requiring the husband to make certain financial disclosure, these orders were not made until 2014 and did not relate to the husband’s income for purposes of assessing child support obligations. Virtually all of the interim motions initiated by the wife, including interim spousal support, resulted in consent orders.
[48] Is there any evidence that either parent engaged in blameworthy conduct? Neither parent has accused the other of such conduct. Each parent assumed a substantial burden of caring for the children. Initially, the husband cared for the children 2/3 of the time and the mother 1/3. In the year following Conall’s withdrawal from his parents’ care, the parties shared equally the responsibility for Karlyne’s care. Following separation, the husband assumed responsibility for paying the parties’ joint debts until his assignment in bankruptcy in 2013.
[49] Do the present or past circumstances of the child justify making a retroactive award?
[50] There is a significant disparity in the parties’ incomes from the date of separation to the present. Nevertheless, Ms. Venton testified that her deficit is made up by the contribution of her partner, Mr. Hoard. There is no evidence that the children experienced any hardship as a result of the financial arrangements their parents adopted. As both of the children are now independent, it is doubtful that the children will benefit from a retroactive award of child support.
[51] Will a retroactive award of child support create hardship for the payor? I conclude that there will be financial hardship if either parent is ordered to pay retroactive support. Each parent has structured his or her finances on the premise that no child support will be paid. The mother’s income is very modest. She relies on her partner to make ends meet. Her wages are being garnished for a joint debt that the husband assigned in bankruptcy.
[52] While the husband is supporting his current partner and her child on significantly more income than the wife, he is also paying his trustee in bankruptcy $450 per month toward his creditors, which payments will continue for another three years. He also pays $500 per month on account of legal fees. In my view, if there are inequities between the spouses’ financial positions, these are better addressed in claims arising out of their personal relationship, such as spousal support or property claims, rather than by way of child support, especially now that the children are independent and would not benefit from such an award. In these circumstances, an award of retroactive child support would amount to a wealth transfer between the parents, rather than address the purposes for which child support is intended.
[53] In my view, the parents either decided not to proceed with child support claims in a timely way or acceded to the status quo, that each would pay the children’s expenses when the children were in their care. Accordingly, the claims of the applicant and the respondent for retroactive child support are dismissed.
Retroactive Spousal Support
[54] The wife claims for retroactive and on-going compensatory spousal support, commencing at the date of separation. An interim consent order for her support was made on January 21, 2015, in the amount of $700 per month, commencing February 1st. The order is being enforced by the Family Responsibility Office. Unhappily, by the time of trial, no payments had been made to the wife.
[55] The leading case with respect to retroactive spousal support is Kerr v. Baranow, 2011 SCC 10. In that case, the court applied the principles from D.B.S. dealing with retroactive child support by considering the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support, and any hardship resulting from a retroactive award: para 207. However, the court noted that, unlike with child support, there was no presumption that a spouse is entitled to spousal support. Therefore, concerns about notice of a claim, delay in pursuing spousal support, and misconduct of the payor spouse generally carry more weight: para. 208.
[56] At para. 209, the court observed that two concerns underpin a payor spouse’s complaint that spousal support could have been sought earlier. The first concern is that a retroactive award makes it difficult for the payor spouse to plan his or her affairs and may result in hardship by forcing the payor to pay an award for which he had not planned. The second concern is that a recipient spouse should be encouraged to proceed with spousal support claims promptly.
[57] The court commented that commencement of proceedings provides clear notice to a payor spouse of the claim for retroactive and current spousal support: para. 210.
[58] In claims for retroactive child support, the courts have differed on whether there is a three year limitation on retroactive spousal support. In Rivard v. Rivard, 2011 ONSC 2988, Wright J. noted that it would be unusual for a court to order retroactive spousal support further back than three years. However, in Donnelly v. Descoteaux, 2011 ONSC 5796, Ellies J. held that there was no three year limitation.
[59] In this case, the wife served her answer in April 2010, which contained notice of her claim for spousal support retroactive to the date of separation. The significant disparity in the parties’ incomes has existed since separation, as set out above. She claims total retroactive spousal support of $59,050 from November 2008, based on the mid-point of the Spousal Support Advisory Guidelines, using the “with child support” calculation. I note that the parties didn’t separate until November 18, 2008, and yet support for the full month is claimed.
[60] The husband disputes that any retroactive spousal support should be ordered. He says that at separation, both spouses were “broke and in debt” and that the first notice he received of his wife’s claim for spousal support was in her answer.
[61] In this case, the wife had minimal income compared to the husband. The highest annual income she earned between 2008 and 2014 was $24,996. Her lowest income for the same period was $17,628. By contrast, the husband’s highest income for the same period was $91,861; his lowest was $74,808. I conclude that the wife had need during the period following separation.
[62] An order was necessary to force the husband to obtain from his trustee in bankruptcy his 2013 tax return and disclose it; however, there was no other blameworthy conduct by the husband relative to the spousal support claim. There is no explanation why the wife did not claim for interim spousal support earlier. When the wife’s counsel thought it necessary to move for interim relief, he did so, and costs were awarded accordingly. In fact, there were five interim motions. The wife obtained an order for support of Karlyne for the period from August 1, 2013, to October 1, 2014, in the amount of $616 per month. However, interim spousal support was not pursued until 2015.
[63] Will there be hardship to the husband if retroactive spousal support is ordered? In my view, there was some reluctance on the part of the wife to seek interim spousal support following separation, recognizing that the husband had assumed a significant burden of the family debt after separation. The wife was not in a financial position to pay this debt and has elected not to go bankrupt. I conclude that the wife accepted this arrangement, and did not press the husband. In the early years, he also assumed a significant amount of care of the children until about March 2012.
[64] However, the arrangements for care of the children altered, and relieved the husband of some financial burden for their care. In the summer of 2011, Conall became independent, moving in with his girlfriend. In March 2012, Karlyne began to divide her time equally between her parents’ homes.
[65] The financial tipping point also changed when the husband made an assignment in bankruptcy in April 2013, reducing his debt burden. After that, there was no financial advantage to the wife in acceding to the husband paying the family debts in lieu of spousal support. In fact, his bankruptcy prompted their mutual creditors to look to her for payment. I have dealt with some of these consequences in the consideration of equalization of the parties’ net family property, below.
[66] In my view, the wife is entitled to an award of retroactive spousal support from the point of the husband’s bankruptcy, forward.
[67] The wife’s financial statement, sworn May 31, 2013, declares annual income of $24,996. By comparison, her annual expenses were $34,163, leaving her with an annual deficit of $9,167 or about $764 per month. Her budget is modest in the extreme, with the exception of $200 per month for alcohol and tobacco.
[68] The husband’s income for 2013 was $85,692. The only financial statement filed that post-dates his bankruptcy, was sworn on May 25, 2015. In 2014, the last year for which the husband’s yearly income is confirmed, his income was $91,861. The financial statement indicates that his spouse contributes a mere $300 per month to the cost of the household. As the husband’s income has risen consistently since 2008, I conclude that he will earn at least the same in 2015, as he did in 2014.
[69] The husband’s expenses are overstated in several respects: income tax by about $378 per month; Canada Pension deductions by $140 per month; clothing for his partner’s child of $65 per month. As well, his claim for alcohol and tobacco is $320 per month, $120 per month more than the expense claimed by the wife. He also claims to be paying legal fees of $500 per month for services of a former lawyer.
[70] Based on his 2014 income, Mr. Venton has surplus income of about $12,037 per year or approximately $1,000 per month when his partner’s contribution to household expenses is factored in. His financial statement does not show the interim spousal support payment he is currently ordered to make in the sum of $700 per month, commencing February 1, 2015. The Family Responsibility Office had not yet begun to deduct that amount at the time of trial. Payment of that order will provide the husband with another tax deduction, further reducing his expense for income taxes.
[71] I conclude that the husband had the ability to assist the wife with spousal support, had she made the claim following his bankruptcy, and she had need of extra support. The parties had a long-term marriage in which the husband was the principal earner in later years. However, I have concluded that the low range of the Spousal Support Advisory Guidelines is appropriate, because the wife was also receiving assistance from her new partner.
[72] Accordingly, the husband is ordered to pay to the wife retroactive spousal support calculated as follows:
May – December 2013, with the husband’s income of $85,692 and the wife’s income of $24,996, based on the low range, 8 x $546 = $4,368.
January - September 2014, with the husband’s income of $91,861 and the wife’s income of $24,868, based on the low range, 9 x $684 = $6,156.
October, 2014 – January 2015, with the husband’s income of $91,861 and the wife’s income of $24,868, based on the low range, 4 x $1,449 = $5,796.
The total retroactive spousal support owed by the husband to the wife is $16,320.
Spousal Support
[73] The wife also claims compensatory and on-going spousal support of $1,690 per month. As I have said, the husband is presently ordered to pay interim spousal support of $700 per month.
[74] This is a case in which the wife assisted the husband in launching a more lucrative career than he had when they first began their relationship. When they first lived together, the husband worked in the auto body business, for which he had training, and the wife worked waitressing at the Valhalla Hotel in Thunder Bay. Ms. Venton has a grade twelve education. She took maternity leaves when the children were born, but otherwise worked full time until the parties left the Thunder Bay area. She assumed the principal burden of child care and home-making prior to separation, assisted in Thunder Bay by the paternal grandparents or a babysitter when she worked.
[75] The husband lost his employment in the auto body shop and took a cooking course at Confederation College. He never pursued cooking, but did auto body jobs at home for a few years. It does not appear that this occupation produced much income. He returned to Confederation College to obtain power engineering credentials. The parties struggled financially, sometimes borrowing from their parents to make ends meet.
[76] When the husband was offered employment in Dryden, Ontario, the wife gave up her job at the Valhalla and relocated. As they were not immediately able to sell their home, the wife remained behind with the children for an additional year until the home was sold.
[77] Mr. Venton had problems with alcohol. He lost his driver’s licence as a consequence, and Ms. Venton drove him around for at least three years.
[78] From a financial point of view, the family unit was better off with the husband’s new employment, but the wife gave up health and dental benefits and seniority associated with her thirteen years of employment at the Valhalla when the family moved. Initially, she could not find work in Dryden. She drew Employment Insurance and stayed at home, running the household and caring for the family, while Mr. Venton worked 12 hour shifts. After a time, the wife obtained another waitressing job in Dryden where she worked for 2 – 3 years. Later, she took a job at a printing company where she worked at the time of trial.
[79] Ms. Venton testified that the husband has a benefit plan and pension at work, whereas she has none.
[80] Apart from the period of unemployment, I am not persuaded that she gave up significant income because of the move. However, her efforts in supporting the husband both during his periods of unemployment and under-employment, and while he re-trained, in caring for the children and the home, in chauffeuring him, and in giving up her employment so that he could relocate to take a better job, made a significant contribution to the advancement of his career and his increase in income and benefits. The wife is therefore entitled to compensatory support.
[81] The wife’s financial statement, sworn June 2, 2015, shows monthly income of $2,273.25 or annual income of $27,279. She claims monthly expenses of $3,602.28, leaving her with a deficit of $1,329.03. This budget includes a garnishment for the judgment against her as a result of the parties’ joint debts with the Royal Bank. Apart from an expense of $200 per month for alcohol and tobacco, her budget is modest.
[82] She testified that her partner made up the deficit with his income. I conclude that her need is ameliorated by her current partner, with whom she has been cohabiting for about six years.
[83] As I indicated above, Mr. Venton has surplus of about $1,000 per month when his partner’s contribution is factored in.
[84] Notwithstanding the wife’s entitlement to compensatory support, I am not persuaded that the wife needs support to meet her needs to the extent of $1,690 per month. She has established a new partnership of six years’ standing. The court should take care not to make support orders that are so burdensome that they are unenforceable or to ignore the reality of re-partnering that is often a feature of couples’ separations, as in the present case.
[85] The husband will continue to pay his creditors in bankruptcy for a further three years. He is relieved of the burden of supporting his children, unless they return for post-secondary education. His commitments to his new partner and her daughter are self-imposed and do not trump his obligations to Ms. Venton. He will have income tax credit for spousal support payments ordered by the court, while she will pay tax on spousal support received. Having regard for the contribution the wife’s current partner is making to her expenses, the husband shall pay to the wife spousal support of $900 per month, commencing August 1, 2015.
Indexing Spousal Support
[86] Sections 34(5) and (6) of the Family Law Act permits a court to order that a support payment be indexed to increase annually on the order’s anniversary date by the percentage change in the Consumer Price Index for Canada for prices of all items since the same month of the previous year, as published by Statistics Canada. In this case, the husband has enjoyed incremental increases in his income since he began his current employment and he can afford to pay indexing. An order for indexing may well deter the parties from returning to court to seek a variation, a process that is expensive and time-consuming, especially for minor changes.
[87] The spousal support ordered effective August 1, 2015, shall be indexed in accordance with s. 34(5) and (6) of the Family Law Act.
Securing Support Payments
[88] An order will issue that the husband forthwith designate the wife as irrevocable beneficiary of his life insurance policy with a face amount of not less than $100,000 in order to secure payment of current and retroactive spousal support. This designation is ordered for so long as the husband is obligated to pay spousal support, including retroactive spousal support. The husband is ordered to verify this beneficiary designation within thirty days of the wife’s request for verification, not to be made more than once a year, unless the husband is deceased.
Equalization of Net Family Property
[89] Evidently, during marriage, the parties lived beyond their means and financed their lifestyle by resort to debt.
[90] In their pleadings, both parties seek an unequal division of net family property. The husband pleaded that such an order should be made because the parties have significantly more debt than assets. His bankruptcy has now dealt with his liability for debts at the date of separation. As most of his debt payments addressed interest rather than principal, I am not persuaded that he significantly reduced the parties’ debt load following separation. Nor is there any evidence that the actions of the husband improved the value of the matrimonial home.
[91] The wife also seeks an unequal division of net family property award of $36,851, pursuant to s. 5(6)(d), (f) and (h) of the Family Law Act. These subsections of the Act provide:
5(6) The court may award the 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,
(d) a spouse’s intentional or reckless depletion of his or her net family property;
(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; or
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance, or improvement of property.
[92] The test for ordering an unequal division of net family property is whether a payment equal to one-half would be “unconscionable.” This is a very high test. It is a higher test than whether an equal division would be inequitable.
[93] Before determining whether an unequal division of net family property is ordered, the court must first determine the net family property of each spouse at valuation date: see Serra v. Serra, 2009 ONCA 105. Next, the court determines the equalization payment. Finally, the court determines whether the equalization would be unconscionable, in accordance with the factors set out in the Act. The grounds on which the wife relies are set out above.
[94] The calculation of the parties’ net family property and the equalization due is set out in Schedule “A” to these reasons. The actual sale value has been adopted for the matrimonial home, minus expenses charged.
[95] No appraisal of chattels was obtained. In instances where estimates of value differed, I have averaged the values. For purposes of equalization, the wife’s net family property is a negative number and is deemed zero. An equal division of net family property would require the husband to pay the wife the sum of $12,073.53.
[96] Is an equal division unconscionable?
[97] Following separation, the husband remained in the matrimonial home. In about April 2013, more than four years after the parties separated, the husband made an assignment in bankruptcy. His assignment included unsecured debts valued at $70,536 and secured debts (the matrimonial home) stated to be $92,467.
[98] In January 2014, the husband’s then lawyer consented to an order that the matrimonial home be sold. As well, he consented to an order granting the wife leave from the Bankruptcy Court to advance her claim for equalization of net family property. The orders were issued on February 19, 2014.
[99] Despite having consented to an order for sale of the home, and before it could be listed for sale, the husband defaulted on payment of the mortgage on February 3, 2014, and vacated the property. The wife testified that the residence was left in such poor condition that it was necessary to mount a vigorous effort to clean and dispose of garbage the husband left behind.
[100] Power of sale proceedings swiftly followed. In addition to paying the mortgage and usual expenses of sale, the parties were charged $5,902 for legal fees, much beyond what fees would be for an ordinary sale; $2,492 for property management costs as a result of the husband vacating the property; and $150 for taxes, arrears, and penalties. As a result of the husband’s defaults, the parties paid approximately $7,500 more than they would have if the property had simply been listed for sale, as the court order required. In my view, this conduct amounts to intentional or reckless depletion of the husband’s net family property.
[101] What is not before the court is evidence as to the balance of the wife’s Legal Aid lien that was presumably discharged from her share of the proceeds of sale. The burden is on the wife to prove this amount; as she has not done so, an adverse inference may be drawn. I conclude that the amount of her Legal Aid lien is equivalent to one half of the $7,500 that the husband squandered by triggering power of sale proceedings, or $3,750. I find that the lien attached to the wife’s share of the equity offsets what she would otherwise be entitled to in an unequal division of property.
[102] After these unnecessary deductions of sale, a balance of $15,728 remained: exhibit 6. The record is not clear as to what became of these proceeds. In the absence of evidence, I have attributed one-half of the sum to each of the parties.
[103] The default and power of sale meant that the parties were unable to access about $30,000 in equity in the home to pay down the outstanding debt owed by the parties.
[104] As well, the parties were jointly indebted to the Royal Bank for two lines of credit and a Visa loan, which the husband paid for about four years. Unfortunately, the husband made interest only payments, and the balances on these accounts were not significantly reduced. After he declared bankruptcy, the Royal Bank sued the wife for the outstanding balance, leaving her to pay a judgment of about $37,000. Her pay cheques are now being garnished.
[105] In my view, the financial irresponsibility of the husband in abandoning the matrimonial home, triggering a power of sale, and diminishing the parties’ equity in the home that would have been available to pay down joint debt, constitutes an intentional or reckless depletion of his net family property in a manner that is unconscionable. Had he not done so, the parties would have been left with a manageable level of debt that could have been addressed by refinancing or a proposal to creditors.
[106] While the husband will have to pay $24,823 to his trustee in bankruptcy on account of surplus income, the consequences of his financial irresponsibility for joint debts should not be transferred to the wife, who takes her own debt burdens out of the marriage. The husband shall compensate the wife for one-half of the $30,000 lost equity in the home in the amount of $15,000, as well as the equalization payment she is owed. Had he not mismanaged the family finances, she would not have been saddled with the husband’s share of the joint debt and would not have lost her additional equity in the home to additional legal fees and costs. The husband shall therefore pay to the wife an unequal division of net family property in the amount of $27,073.53.
[107] The Family Law Value of the husband’s pension is $33,930.64. It is an asset that is exempt from attachment by other creditors in the bankruptcy. The maximum assignable value of the pension is $16,965.32. An order will issue pursuant to s. 9(1)(d) of the Family Law Act, transferring the sum of $16,965.32, plus interest pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43, to the respondent wife in partial satisfaction of the unequal division of property owed to her.
Costs
[108] If the parties cannot agree on costs, either may apply to the trial coordinator within thirty days of the release of these reasons for an appointment to argue costs, failing which costs will be deemed to be settled. Costs submissions are not to exceed five pages. The parties have leave to appear by video or teleconference, if so advised.
“original signed by”_
Madam Justice H.M. Pierce
Released: July 22, 2015
SCHEDULE “A”
Asset: Husband Wife
House; net proceeds: $15,738.38 $7,864.19 $7,864.19
Contents: 2,500.00 280.00
Wife has couch, TV,
BBQ, Lawn Mower
Truck, trailer, riding mower (average) 9,000.00
’97 Taurus (average) 2,750.00
Tools (average) 1,400.00
Jewellery 500.00
Beer Stein 300.00
Knife Collection 300.00
Pension $33,930.64 – 18% tax 27,823.12
RRSP $2,537.36 x 18% tax 2,080.63
Freedom 55 2,657.81
London Life 3,349.77
51,937.08 16,732.63
SCHEDULE “A” (cont’d)
Debts: Husband Wife
MasterCard, joint 6,330.80 ÷ 2 3,165.45 3,165.45
Canada Trust,
Line of Credit, joint 7,758.46 ÷ 2 3,879.23 3,879.23
CIBC Visa 5,604.00
RBC Visa, joint 14,863.78 ÷ 2 7,431.89 7,431.89
RBC Line of Credit, joint 20,006.90 ÷ 2 10,003.45 10,003.45
RBC Line of Credit, joint 5,000.00 ÷ 2 2,500.00 2,500.00
Legal Aid Lien (estimate) 3,750.00
MasterCard 810.00
_______ ___________________
27,790.02 36,334.02
No date of Marriage property
No Excluded Property
Assets – Debts 24,147.06 -19,601.39
Deemed Ø
Equalization (24,147.06-Ø) ÷ 2=$12,073.53
COURT FILE NO.: FS-10-4874
DATE: 2015-07-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
STEPHEN DANIEL VENTON
Applicant
- and -
CAROLINE MARIE VENTON
Respondent
REASONS
Pierce J.
Released: July 22, 2015
/cs