CITATION: Peters v. Peters, 2015 ONSC 5741
COURT FILE NO.: D21118/07
DATE: 2015-Oct-2
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Bernhard Peters, Applicant
- and -
Adriana Maria Peters, Respondent
COUNSEL:
- Tina Mangiacasale, for the Applicant
- J. Leigh Daboll, for the Respondent
HEARD: March 30, 31, April 1, 2 and April 7, 2015
BEFORE: The Honourable Justice R. J. Harper
REASONS FOR DECISION
Issues
[1] The issues to be determined are:
Entitlement and quantum of Spousal Support.
Child Support.
Both support issues to be determined on a retroactive and go forward basis.
Net Family Property and Equalization was agreed to at the outset of this trial. The only issue remaining is whether the payment of the equalization can be delayed and, if so, for what period of time.
The parties agreed that the equalization payment owing from the Respondent to the Applicant is $90,000.00.
All of the parenting issues were settled at the outset of the trial. I endorsed that there was to be an order to go in accordance with the agreement of the parties with respect to parenting.
Marriage Background
[2] The Applicant (Bernhard) and the Respondent (Adriana) started to cohabit in or about the month of October 1996. They married on May 4, 1998. They separated on November 5, 2009. A total period of 13 years of cohabitation with 11 of those years being married to each other. They have been separated for almost 5 years.
[3] They had two children of the marriage, namely Natasha Maria Peters, born February 27, 1999 (16) and Brian Peters, born February 19, 2001 (15).
[4] Upon separation of the parties in November of 2009, the children mainly resided with their father, Bernhard. The mother was given specified access to the children by the Order of Justice Tucker dated December 2, 2009. The children resided primarily with the father from the date of the order until the parties entered into a consent joint custody agreement in November 2010. This agreement provided that the children alternate week about residency with each parent. There was a lengthy period in 2012 when the child Natasha resided at a school in Ottawa in order to deal with certain special needs the child had.
Adriana’s Background
[5] Adriana is 47 years old. She was born in Columbia. She came to Canada in 1983. She became a Canadian Citizen in 1989. Adriana had not completed high school at the time that she started to cohabit with Bernhard. She had been married before and she and her previous husband managed properties that included large apartment buildings in the Niagara area.
[6] At the time the parties met, Adriana was a cleaner at Casino Niagara.
Bernhard’s Background
[7] Bernhard was a licensed electrician operating his own business when the parties started to cohabit in 1997. Bernhard is presently 51 years of age and has lived in Canada all his life. At the time of cohabitation of the parties, Bernhard was still working as an electrician and he had incorporated a company, 1211990 Ontario Inc. (121 Co.). At this time, he was the sole shareholder of this company.
The Nature of the Family and Economic Relationships within the Marriage
[8] From the time that Adriana and Bernhard started to cohabit, they also started to work together. Bernhard gave evidence that both he and Adriana worked hard during the first part of their relationship. She continued to work at the Casino as a cleaner and he continued to work as an electrician.
[9] Bernhard started to purchase properties and do renovations for others. Adriana started to help him with that portion of the business. This business became known as: “Family Rentals”. Properties would be purchased, renovated, rented out and flipped at a profit. Both Adriana and Bernhard worked as a team. Adriana would do much of the property management which included landscaping and cleaning. They both collected rents and made deposits. It was Bernhard who was responsible for most of the financial operations. The roles that they played seemed to be working. Bernhard gave Adriana half of the shares of 121 Co.
[10] Adriana was comfortable doing the property management as she did that very same job with her first husband. According to Adriana, she took little time off work for the birth of their 2 children. She would take the children to work, even when they were breast feeding. She claimed that she not only did all of the care of the children, she continued to do the same amount of work in what she called “the family business”.
[11] According to Bernhard, as the property purchases, renovations, rentals and property management work increased the work of Bernhard’s electrical business decreased.
[12] In or about 2007, the parties owned substantial properties that earned income for them. Bernhard stated that their company activities were doing so well that “we lived high off the hog”. He stated that he and Adriana would go on holidays for months at a time. He stated that they could do this because the business was still making money while they were away.
[13] This family and business activity continued until things started to get acrimonious between Adriana and Bernhard in or about 2007. Bernhard claimed that Adriana would go away for lengthy periods. According to him she started to struggle with alcohol and other substance. He claimed that she was an alcoholic and that impacted on her ability to continue to work as she did before. The parties separated in 2007 and Adriana started a Divorce Application. However, the parties reconciled in 2008 and continued their family and business life together until their final separation November of 2009.
[14] The first temporary order of Justice Tucker dated December 2, 2009 provided that Bernhard was to continue to make the payments to Adriana in the amount that he represented was one half of the available income from their corporation 121 Co. He has made those payments since the date of the Order.
[15] Since the separation, Bernhard has lived in a home that is owned by him and Adriana has lived in a home that was purchased by the parties as part of their buying and selling business. According to Bernhard, the property that was in Adriana’s name was adjoining 2 other properties that they owned and it was an investment for both Adriana and him. The home that Bernard lived in was also a home that was purchased from the family business. It was intended to be the matrimonial home. Before separation that home was refurbished in order to make it comfortable as a matrimonial home.
Circumstances Following Separation
[16] The separation was acrimonious. As a result of an altercation, Adriana was charged with assaulting Bernhard. For a period of time, she was not allowed to communicate with Bernhard and a more restricted access scheme was put into place. This changed in November of 2010 when a week about shared parenting was put into place.
[17] There was a lot of evidence that related to the custody issues concerning allegations brought forward by Bernhard relative to his concerns for substance abuse and mental health issues of Adriana. During the trial I ruled that as the custody and access issues were settled much along the lines of the November 2010 agreement, I would not allow evidence concerning the mental health issues and substance abuse claims unless it related to the issues that remained before me. The only issue that might make that relevant was with respect to Adriana’s ability to work if she suffered from the disease of alcoholism or any limiting mental health issue.
[18] The facts that are not disputed with respect to the circumstances of the parties after separation are as follows:
The parties had week about residence with their children from November 2010
From December 9, 2009 until November 2010, the children primarily resided with their father Bernhard.
The parties continue to own 121 Co. equally.
Bernhard solely operated 121 Co. from the date of separation.
Both parties received from 121 Co. the monthly sum of $1,875 from the Order of Tucker J. date December 2, 2009.
Position of Adriana
[19] Adriana claims that Bernhard makes large sums of money that he does not declare. However, despite her claims, as I alluded to above she has not provided any evidence that I find credible that would allow me to impute income to Bernhard substantially in excess of what the accounting evidence that was placed before me reasonably demonstrates.
[20] In addition to the unsupported claims that he was defrauding 121 Co., she claimed that he was receiving substantial cash that he did not declare. As an example of this, Adriana testified that she personally witnessed Bernhard taking huge payments for electrical work that he did by way of cash. She gave one example that she claimed that Bernhard was paid $80,000 in cash for one job that he did. She claims that she was present when Bernhard was given this large sum of cash in a bag. At first she stated the money came from someone who was building townhouses on Drummond Road in Niagara, at the time. In cross examination counsel stated that he was confused as she was asserting that one of the biggest builders in Niagara of paying his trades in cash. She then stated that she was confused and then stated it was someone else named Cosomo.
[21] Adriana claimed that she personally counted the $80,000. She asserted that she did that “one bill at a time”. According to Adriana, Bernhard took the bag of cash and went to the home of an individual who owns an exotic dancing club. He then paid that person the cash and in turn he received title to a certain property on Stanley Street.
[22] I find that her evidence in this regard lacks any credibility. Adriana attempted to demonstrate that her story about the $80,000 cash payment was accurate by obtaining and filing abstracts of the title to certain property. These abstracts were never provided prior to trial. Nor was this property even referred to prior to trial. I allowed counsel for Bernhard to cross examine on the abstracts filed. In this cross examination, Adriana changed her evidence for a third time. She was now stating that the $80,000 came from the sale of the property on Stanley Ave and it was Bernhard who told her he received cash. The transfer was in 1998. Adriana’s testimony, in all respects, was long and rambling and lacked truthfulness on all of the material issues.
Alleged Stolen Credit Card
[23] Another example in Adriana’s evidence of her lack of credibility is her testimony about a debt of $12,000. She stated that the $12,000 was owed to her by a person named John Potter. She testified that John Potter stole her credit card and spent the $12,000 on that card. She claimed that she was making him promise to pay the money back. She claimed that she made him sign a document that he must pay her back. Counsel for Bernhard suggested in cross examination that she used $12,000 to buy a boat in 2013 at the very same time that she was claiming that she had no money.
[24] In cross examination, she admitted that Mr. Potter was in a romantic relationship with her, although she denied that she purchased a boat for Mr. Potter.
[25] I find that Adriana’s evidence on all of the material issues cannot be given any credence. She was inconsistent, in major ways, about events even while she testified about them. She changed her testimony relative to material issues from direct examination and through cross examination.
[26] In contrast, Bernhard testified in a straight forward manner on most material issues. He denied that he was paid in cash for his work as claimed by Adriana. This was supported to some extent by a fellow electrician who testified that he never saw Bernhard being paid in cash. I also find that Adriana’s assertions that Bernhard was paid $80,000 cash to be a complete fabrication. The story she gave was incredulous and ever changing. I reject her evidence in this regard. However, as I refer to later in this judgment, I will impute income to Bernhard as a result of his inability to explain how his expenses could be approximately $40,000 in excess of his income. He testified that he never defrauded anyone nor did he divert funds in order to avoid paying support. This was corroborated by the forensic analysis and report. I accept his evidence in this regard.
Adriana’s Employment Efforts
[27] Adriana has not worked full time since the parties separated in 2009. She testified that she had a lot on her mind and could not devote the time to finding work. She also claimed that she was making her best efforts to look for a job but no one would hire her. At the same time she claims that her health limits her ability to work.
[28] Adriana stated that she gave medical letters from Dr. Roldan, Dr. Yu, her family doctor, a Chiropractor, an OBGYN, Dr. Cheena and a Psychiatrist, Dr Wright to her lawyer. She did not know why they were not filed. She stated that one of the letters stated that she had a missing bone in her shoulder and a hernia between her ribs and her lung. She stated that the condition was always there but she did not know it until 3 years ago. She states that she has arthritis in her knee. There were no medical reports filed despite her claims that she gave all of these medical reports to her lawyer. Adriana never pled any medical conditions prevented her from working nor did she put Bernhard on notice that she was claiming any of these medical conditions. She stated that “all of her proof” was in her drawer at home.
[29] In direct examination, Adriana stated that she was always looking for a job since separation. In cross examination, she changed that testimony to state that her medical condition and her child care duties prevented her from looking for a job. Adriana did not provide any pre-trial disclosure of her job efforts despite that being requested. Her testimony in this regard was not believable. She stated that she merely went into hospitality institutions and asked the person on the desk if they were hiring and sometimes whether they would give her an application. I find that Adriana is underemployed. She has extensive background in real estate property management. She also has a diploma in hospitality. There is no reason that she cannot maximize her work efforts to earn an income. I impute income to her at a minimum of $24,000 per annum in addition to what she is earning from her half ownership in 121 Co.
The Forensic Review
[30] Despite the fact that Adriana did not plead fraud, she continuously made allegations that Bernhard was diverting money and lying about the amount of income he had for the purposes of support. The parties came to an agreement that they would retain the services of a forensic accountant to determine whether or not Bernhard was diverting or hiding any money. That agreement was made into the Order of Justice Brown dated January 18, 2012. Each party was to pay for the accountant equally. The order further provided that Bernhard immediately provide $10,000 to retain Durward Jones Barkwell and Company to conduct the forensic review. Bernhard made this payment. The amount that remains owing is $8,397.90. The agreement further provided that the trial judge was determine the complete costs of the input from the forensic accountant and assess the responsibility for the payment when considering the issue of costs. As a result of the unfounded allegations of diversion and hiding of assets made by Adriana, I assess the total costs of Durward Jones Barkwell report against Adrianna.
[31] Durward Jones Barkwell and Company LLP, conducted a forensic accounting of two companies, 121 Co. and 17886555 Ont. Inc. Durward Jones Barkwell and Company LLP provided a report that set out the nature of their review and their conclusions. The report concluded that there was no evidence of any diversion or hiding of funds. The parties filed his report on consent at the beginning of the trial.
[32] Adriana claimed that Bernhard transferred property into the names of family members and others. The forensic report found that none of the company transfers or any other activity demonstrated fraud, diversion of or hiding of assets.
[33] I accept the evidence of Bernhard that he had a mortgage approval to refinance in order to prevent the company from going bankrupt. Adriana refused to sign the mortgage. He stated that as a result of her actions, he was forced to sell the properties and convert the real estate assets into mortgages. The company holds all of the mortgages and both Bernhard and Adriana own equal shares and receive equal draws from the company. I find that there is no evidence presented that would support her allegations of fraud, diversion of any other form of deceit by Bernhard.
[34] Despite the forensic review not demonstrating any evidence of fraud or diversion of funds, Adriana continued to pursue this during the trial. She did this irrespective of my continued direction to her that she was exposing her to substantial costs consequences. As a result of my findings in this case, regardless of any other costs assessment that I might make, I order that Adriana shall pay the full costs of this forensic review and Bernhard shall be credited with any amount that he has paid to Durward Jones to date for this review.
[35] I find that part of the income that Bernhard receives is from the operation of 121 Co. Both Bernhard and Adriana are receiving one half the available incomes from that company. I find that Bernhard must have access to additional income. His financial statement shows that although his income is $22,500, his expenses amount to $67,000. His testimony with respect to income that he received from doing work as an electrician was not consistent nor was it believable given that his expenses were $67,000. At first he stated that his mother helped him out with those expenses. He later changed that testimony when confronted with his sworn statement that his mother did not contribute to his living expenses. In addition, he had no other increasing debt of reducing assets. Given all of the above I assess his income for support purposes at $67,000. This consists of $22,500 from 121 Co. and the balance imputed at $44,500.
[36] I find that Adriana has not maximized her ability to earn income. She has done nothing since the parties separated in 2009. She took a course at Niagara College in event planning and hospitality. Once she completed that course she decided she did not want to pursue that career. She has a long history in working in the real estate and property management field. Although she claimed to have medical limitations, she did not provide any evidence to substantiate such limitations. I impute total income to her at $22,500 from 121 Co. and $30,000 from Real Estate and property management. Her total income for support is $52,500.
Entitlement to Spousal Support – The Law and Analysis
[37] The Divorce Act R.S.C 1985, c.3 (2nd Supp.), provides that an order for support should recognize, among other things, the advantages and disadvantages arising from the marriage or its breakdown and relieve any economic hardship of the spouses arising from the breakdown of the marriage. The objectives are set out in section 15.2(6):
An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(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.
The Supreme Court of Canada has directed that these four objectives must be considered together in establishing an equitable sharing of the economic consequences of marriage breakdown. The courts have been repeatedly urged to not concentrate on one factor to the exclusion of the others. The factors are cumulative, not alternative.
In Moge v. Moge, [1992] 3 S.C.R. 813, the court established the compensatory model of support. This was followed by Bracklow v. Bracklow, [1999] 1 S.C.R. 420, which formally recognized compensatory, non-compensatory, and contractual entitlements to support. Generally speaking, compensatory support focuses on the advantages and disadvantages flowing from the marriage or its breakdown, while non-compensatory support focuses on need.
The application of these principles makes the determination of spousal support highly individual and discretionary. As Professors Rogerson and Thompson state in their introduction to the Spousal Support Advisory Guidelines (Ottawa: Department of Justice, 2008) (SSAG):
Bracklow emphasized the highly discretionary, individualized nature of spousal support decisions. The Court was clear that the Divorce Act endorses no single theory of spousal support and must retain flexibility to allow judges to respond appropriately to the diverse forms that marital relationships can take. The Court presented spousal support determinations as first and foremost exercises of discretion by trial judges who were required to “balance” the multiple support objectives and factors under the Divorce Act and apply them in the context of the facts of particular cases.
[38] The parties cohabited for a period of 13 years. They were married for 11 of those 13 years. They had two children of their marriage. I find that Adriana was the primary care giver of the children during the marriage. Adriana became an equal owner of the family rental business in or about 2007. From the date of separation, she no longer worked in the business, however, she received one half of the income available from the family business without performing any of the work.
[39] I find that Adriana’s entitlement to support has been satisfied by the payment of $22,500 from the business she received from the date of separation for a period of approximately 5 years. On the basis that she continues to receive one half of the income for the company until the mortgages in the company become due then she will no longer be entitled to spousal support from that date.
[40] The SSAG calculations based on the above income is at the mid-range, no spousal support and $296 per month child support.
[41] Adriana did not contribute anything to Bernhard during the period from the date of separation in 2009 until the shared custody in 2010. I find that Bernhard should have paid child support based on the above imputed income from January 1, 2011. That amounts to child support arrears from 2011 through to December 3, 2014 in the sum of $3,564 per annum or a total of $14,256. From January 1, 2015 to August 31, 2015; a further sum of $2,376 is owed. Total arrears of child support are fixed at $16,942.
Summary of Order
[42] Applicant to pay equalization payment of $90,000.
[43] Applicant to pay child support arrears in the amount of $16,942.
[44] Applicant to pay continuing child support in the amount of $297 per month commencing September 1, 2015.
[45] From the equalization payment, the total amount of the account of Durward Jones’ forensic accounting report shall be deducted from the equalization owed to Adrianna. Bernhard shall be responsible to pay the balance of the account totaling $8,387.90.
[46] The balance of the equalization and child support arrears are to be paid out of the Applicant’s share of his interest in 121 Co. This payment is to be made upon the only assets of the company, mortgages become due and paid or within 3 years from the date of this order whichever shall be the earliest date.
[47] If costs cannot be settled, brief written submissions may be filed by counsel within 30 days. Any cost order shall be an adjustment to the equalization payment set out above.
Harper J.
Released: October 2, 2015
CITATION: Peters v. Peters, 2015 ONSC 5741
COURT FILE NO.: D21118/07
DATE: 2015Oct2
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Bernhard Peters Applicant
- and –
Adriana Maria Peters Respondent
REASONS FOR DECISION
Harper J.
Released: October 2, 2015