CITATION: Cowan v. Cowan, 2016 ONSC 2316
COURT FILE NO.: 38343/15
DATE: 2016 04 05
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Maria Emilia Cowan
AND:
John William Cowan
BEFORE: Trimble J.
COUNSEL: C. Haber, Counsel for the Applicant
A. Stoner, Counsel for the Respondent
ENDORSEMENT
Background:
[1] The Wife brings this motion for an interim order for number of things. At the hearing of the motion, the relief sought was exclusive possession of the house and spousal support of $25,259/month. The Husband opposes, saying that the Wife is entitled to spousal support of $5,000/month retroactive to December 1, 2015 in accordance with a Marriage Contract the two signed in November 2008. He also seeks an order for exclusive possession, for production of the Wife’s lawyer’s files regarding advice the lawyers gave to the Wife at the time the Marriage (and other) Contracts were signed, and the right to question or examine the lawyers.
[2] The motion was brought, originally, on January 21, 2016. I was sitting in motions court that day. The parties adjourned the motion to a long date, to permit the Husband to respond, and because the motion as framed would take more than an hour. The motion was returnable before me on February 22, 20916.
Preliminary Issue:
[3] The parties reserved 2 hours for this long motion. Over the Husband’s objection, I adjourned his motion to obtain production from, and to examine the Wife’s lawyers, because a) it had not had a case conference, and b) his motion could not be argued in two hours. As it stood, it took 2 ¼ hours to argue the Wife’s motion, alone.
Marital Facts:
[4] The parties began cohabiting in September, 2002. They married on November 20, 2008 and separated September 28, 2015. The pair will be 50 years old each in 2016. The Wife had three children, now all adults, but were between 6 and 12 years at the time of cohabitation, and whom the Wife says the Husband treated as his own. The youngest two are attending University.
[5] The Wife is not seeking child support.
Spousal Support:
[6] The parties entered into the following agreements:
a) Cohabitation Agreement – March, 2007 (negotiated but never executed);
b) Co-Ownership Agreement – March 28, 2007 (re principle residence); and
c) Marriage Contract – November 11, 2008.
[7] Both were represented during the negotiation of all three, and signing of the latter two agreements.
[8] In her Application, the Wife seeks to set aside the two executed agreements for various reasons, although I am not asked to rule on this issue. The Husband says that the contracts are binding.
[9] With respect to spousal support, the Wife says that the marriage contract should be set aside as the Husband coerced her into signing it, and did not give full disclosure to her in the discussions leading up to the contract’s signing. For interim support purposes, however, she says that the Marriage Contract should apply.
[10] The Wife says that she is entitled to support as she gave up her career at the Husband’s request, at the time of marriage. She says that during the marriage, the Husband has been financially, verbally, psychologically and physically abusive, requiring her to take psychological counselling. The Wife says that she suffered significant economic disadvantage during the marriage, in that the Husband has increased his net worth to $7.5 million, but she to only $543,658.
[11] The Wife says that the Marriage Contract preserves her right to spousal support in an amount “…in accordance with the standard of living enjoyed by the parties during their relationship.” The Husband’s income for support purposes in s. 1(1)(m) of the agreement is “… all forms of income from employment that may be received by John from John’s business interest, including period salary, bonuses and dividends, but does not include repayment of loans, capital gains, investment income or other forms of income not paid to John from John’s business interests.”
[12] The Wife submits that the Husband’s income for support should be the “average of the husband’s true income in the last three years preceding the separation….” (factum para. 48), which she puts at $1,443,370. In reaching this figure, she has imputed back to the Husband income split to the children and her, money “diverted” to his two corporations and to the family trust, and money paid by the corporations or family trust for family expenses. The Wife spends a great deal of time examining the husband’s income, but no expert evidence was available to the Court to assist with support calculations, even on a preliminary basis.
[13] The Husband has paid spousal support of $5,000/month since December 1, 2015, and made a payment of $2,200 in November, 2015. The Husband says that $5,000/month is the correct calculation for support for three reasons. First, his income will suffer a steep decline because of regulatory changes in the wholesale hydro market, the maximum annual payor income ceiling, and the definition of what constitutes the Husband’s income for support purposes. He says that his support obligation should be based on his salary (as defined in s. 1(1)(m) and s. 7(5) if the Marriage Contract) plus split income given to the Wife and Children, totaling $350,000 for 2014, $335,000 for 2015 and $292,911 for each of 2016, 2017 and 2018.
[14] He says that the Wife has grossly over-calculated his income by including capital gains, investment income and loan income.
[15] It is appropriate to award interim support based on the Marriage Contract, which I presume to be valid, given that the parties signed it, with the aid of legal advice (Balsmeier v. Balsmeier, para 35). Since the Husband’s income is derived from non-T4 employment income, under Schedule 3 to the Child Support Guidelines using a three year average of his income is appropriate to determine support in any year.
[16] Given, however, the highly contradictory evidence of both the parties as to what the Husband’s income is in any year and given that expert evidence is required to determine his income for support in any detail, I am unable to quantify support except in the most arbitrary way.
[17] Section 7(5) of the Marriage Contract says that support for the Wife will be calculated using the Husband’s “salary” which is defined in section 1(1)(m) of the Marriage Contract as the income from employment from the Husband’s business interests, excluding income from capital gains, loans, or investment income. Therefore, for interim support, it is appropriate to use the Husband’s line 150 CRA Assessed income. The Husband’s 2012 CRA Assessment breaks out capital gains income. The Assessments for 2013 and 2014 do not.
[18] It is also appropriate to attribute to the Husband income split to the Wife and Children.
[19] Using the line 150 amount from the Husband’s CRA Assessments, then attributing to him income split to the Wife and the three children, the Husband’s income’s incomes are as follows:
2012 $662,524
2013 $1,080,783
2014 $358,164
2015 Not yet assessed.
[20] There are difficulties relying on these incomes. 2013’s and 2014’s line 150 income may include investment income. According to the Husband’s 2012 CRA Assessment, his income included almost $500,000 in dividend and or capital gains. The same breakdown of income source does not appear on 2013’s and 2014’s CRA Assessments.
[21] With respect to income split to the Wife and Children, the source of that money is not clear. Was is from a source excluded from or included in the Husband’s salary as defined in section 1(1)(m) of the Marriage Contract? Was it from the family trust referred to in the evidence?
[22] Further, it is not clear at this stage what personal or household expenses were paid by either of the Husband’s two corporations or the family trust, which should be brought back into his income.
[23] With these uncertainties, assessing the Husband’s income on an interim basis, even under the Marriage Contract, is difficult, if not arbitrary. Until further order is made, I fix the Husband’s income for support at $400,000 per year. Spousal support at this income is $7,500/month.[^1] The Husband shall pay the Wife spousal support of $7,500 per month, beginning December 1, 2015. Support arrears from December 2015 to March 30, 2016 total $10,000[^2]. All other issues of past support, if any, I leave that to the Trial Judge.
Exclusive Possession of the Home:
[24] Each party seeks exclusive possession of the Matrimonial Home. Neither party is asking for sale of the Matrimonial Home. The Matrimonial home is in the Wife’s name, however, there is an agreement concerning the home which designates the equity at 80/20% in the Husband’s favour, which agreement the wife challenges.
[25] Under s. 19 of the Family Law Act, each spouse has and equal right to occupy the Matrimonial Home, unless under s. 19, exclusive possession is awarded. In addressing exclusive possession, the Court must consider a number of factors under s. 24(3), at least one of which must be met in order to obtain interim exclusive possession (Aston v. Matwee). The relevant factors here are:
The needs of the children;
The financial position of both parties;
Any written agreement between the parties;
The availability of other suitable and affordable accommodation;
Any violence committed by a spouse against the other spouse or the children.
[26] Some of the more significant factors are which spouse will be the least inconvenienced by finding alternate accommodation, which has the greater resources, and which is the lesser continuous user of the home (Hill v. Hill, 1987 CarswellOnt 238)
[27] The onus is on each party to prove his or her right to have exclusive possession, since each claims it.[^3] Since both parties claim exclusive possession, I treat the matter as a balancing of the relevant s. 24 factors, to which I now turn.
[28] The youngest two children are in University. They still list the Matrimonial Home as their home. This factor favours the Wife.
[29] The Husband, clearly, is in a more substantial financial position. With spousal support at $7,500/month, the Wife can afford rental accommodation. There is no evidence, however, as to what the cost of “suitable” accommodation is which reflects the lifestyle of the parties. This factor favours the Wife.
[30] There is a written agreement concerning ownership of the home, which provides that the Husband has an 80% interest in the home and the Wife, 20%, notwithstanding that she holds legal title. The parties signed this agreement after each received independent legal advice. The Wife seeks to set this agreement aside. Therefore, the agreement is a neutral factor. What favours the Wife’s claim to exclusive possession is that she holds title to the property.
[31] For the most part, the Wife bases her claim for exclusive possession on the abuse that the Wife suffered at the hands of the Husband. This, however is highly contested, and therefore a neutral factor. The Husband admitted to being verbally abusive on some occasions, although he tried to explain and justify his conduct. This favours the Wife.
[32] Based on the relevant factors from section 24(3) of the Family Law Act, interim exclusive possession is given to the Wife. It appears that both spouses are living in the Matrimonial Home. The husband shall vacate the premises not later than June 1, 2016. Until that date, the Husband shall continue to pay all household related expenses. Effective June 1, 2016, and subject to any further order, the Husband shall pay 80% of the expenses incident on ownership (which are taxes and insurance on the home, there being no mortgage). The Wife shall pay 20% of those expenses, and 100% of all other household expenses. Expenses up to the date of these reasons are left to the Trial Judge for determination. Any claim for occupation rent is also deferred to the Trial Judge.
Costs:
[33] The parties may make written submissions as to who should pay costs to whom and in what amount. Costs submissions shall not exceed 3 pages (excluding bills of costs and cases). The Wife’s shall be delivered and filed by 15 April, 2016 and the Husband’s by 29 April, 2016.
Trimble J.
Date: April 05 , 2016
CITATION: Cowan v. Cowan, 2016 ONSC 2316
COURT FILE NO.: 38343/15
DATE: 2016 04 05
ONTARIO
SUPERIOR COURT OF JUSTICE
Maria Emilia Cowan
AND:
John William Cowan
ENDORSEMENT
Trimble J.
Released: April 05, 2016
[^1]: The DivorceMate range is $6,500 to $8,667, with a midpoint of $7,583.
[^2]: ($7,500/mo - $5,000) x 4 = $10,000.
[^3]: The Husband says that he is not claiming exclusive possession, but said that ‘if the Court were inclined to grant it’, he wanted it. I consider this to be a request for exclusive possession.