Court File and Parties

NEWMARKET COURT FILE NO.: FC-14-47180-00 DATE: 20160729 ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT

BETWEEN:

Brian Joseph Barnett, Applicant – and – Jennifer Kim Lindsay, Respondent

Counsel: Sheila Bruce, Counsel for the Applicant Valerie Brown, Counsel for the Respondent

HEARD: February 25, 26, 29 and April 20, 2016

REASONS FOR DECISION

JARVIS J.

[1] The unmarried parties in this case cohabited and two children were born of that relationship. They dispute their period of cohabitation, but agreed before trial on the issues of custody and spousal support. They cannot agree about several other issues, most of them relatively minor in terms of the trial time spent. The principal dispute involves valuing the parties’ contributions in relation to their family realty and, in that regard, engages the concept of joint family venture as expressed by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269.

[2] The applicant father (“the father”) seeks a declaration that he is the sole owner of two properties, both of which are registered in his name. He also seeks to divide their equity according to the parties’ respective contributions, most of which he claims he made. The respondent mother (“the mother”) seeks a declaration that she is 50 percent owner of the properties and an order for their sale.

[3] At the commencement of trial, the parties agreed that they were engaged in a joint family venture. The evidence, as it evolved, clearly demonstrated the Kerr factors of mutual effort, economic integration, actual intent and priority of family, so it is unnecessary, in my view, to consider the application of these factors further. Rather, the trial focused on the contributions linked to the accumulation of wealth and the proper approach for calculating the award sought by each party.

Background

[4] The following background facts are relevant. They were mostly agreed upon by the parties, or at least were not vigorously contested. The others I have found as being the most probable, based on the preponderance of evidence:

(a) when the parties met, the father was working as a labourer for Sky Homes Corporation, a luxury home builder. The mother was also employed but the evidence about her work was unclear. The father was divorced and had a son (“Dylan”) from that relationship, who resided with that child’s mother;

(b) the parties began cohabiting in April 2001, at 311 Simcoe Street, Newmarket, Ontario (“the Simcoe Street property”). This was a duplex owned by the father. The parties lived in one of the units and the other was rented;

(c) the mother did not contribute to the purchase of the Simcoe Street property;

(d) the father paid the expenses for the Simcoe Street property. The mother physically and, to a lesser extent, financially, assisted him with renovations to the property. She contributed to the expenses bi-weekly in cash from her paycheque;

(e) there were periodic, irregular times when the parties separated. In 2005, they agreed to purchase an eight acre rural parcel of land with a residence at 25625 Valley View Drive, Sutton, Ontario (“the Valley View Drive property”);

(f) the purchase price of the Valley View Drive property was $390,000. The father contributed $10,000 to the purchase price and the mother contributed $20,000. The balance was financed by a $380,000 mortgage. Although the purchase agreement was signed by the father, title was registered in the parties’ names as tenants-in-common, each with a 50 percent interest. The transaction was completed on November 25, 2005;

(g) the parties made extensive renovations to the Valley View Drive property between its purchase and July 2008. Essentially, it was “gutted” and rebuilt from the inside out. Some landscaping was performed. There is considerable dispute between the parties as to how much each financially and physically contributed. Both made use of workplace and family help;

(h) while work on the property was underway, the parties continued to reside at the Simcoe Street property until late 2007;

(i) the Simcoe Street property was sold on January 3, 2008. The father’s evidence that the net proceeds of sale, totalling $113,888.85, were used for the Valley View Drive property renovations is not challenged;

(j) the parties began residing at the property shortly before their first child, a son, CJB, was born on July 24, 2008;

(k) the mother took maternity leave from her employment from July 12, 2008 to July 12, 2009;

(l) for a period of several years after the property was occupied, the father performed snowploughing services for a landscaping business owned by the mother’s father. He was initially paid in cash, none of which he declared for tax purposes;

(m) in May 2009, the father transferred his interest in the Valley View Drive property to the mother. She was identified as a spouse in the land transfer documents;

(n) the transfer was done to facilitate a future severance of the property;

(o) the parties’ second child, another son, also with the initials CJB, was born November 22, 2010;

(p) the mother took maternity leave from her employment from November 6, 2010 to September 5, 2011;

(q) there is considerable dispute about the parties’ respective involvement in the severance process: the father testified that he did the work and the mother did not assist. The mother claims that not only did she commence the severance application during her first maternity leave, but also that the parties, either jointly or individually, attended the dozen or so meetings with planners and the Town. However, she admitted that, as between them, the father had greater involvement;

(r) the severance was approved, with conditions, on April 16, 2013;

(s) the costs associated with the severance were $38,149. The father paid $11,152 and the mother paid $6,997. The balance was paid by a $20,000 loan from the father’s father (since deceased), secured by a promissory note signed by both parties in 2012;

(t) there were a number of severance conditions imposed: while the evidence is unclear, they were likely met in early 2014;

(u) the father says that the parties separated in October 2013, but continued to reside in the Valley View Drive residence in a “nesting” arrangement until June 2014, when the mother left;

(v) the mother claims that while the parties initially separated in October 2013, they resumed cohabiting from December 2013 until late June 2014. She has resided elsewhere since then. The father lives at the property now. The parties share custody of their children;

(w) the father’s 2013 Income Tax Return identifies him, as in previous years, as in a common law relationship with the mother. A similar declaration about their relationship was made by the mother in her 2013 Income Tax Return;

(x) the severance process was completed before March 19, 2014. On that date, title to the vacant, severed parcel was transferred to the father. The parties were identified as spouses and the consideration shown for the transfer was “natural love and affection”;

(y) in late May 2014, shortly before their final separation, the parties refinanced the mortgage on the residential lot for $436,799. From the net distributable mortgage proceeds of $63,658, the father was paid $59,495 and the mother was paid $4,163. Both parties applied what they received to retiring credit card and line of credit debt;

(z) on July 7, 2014, the father registered a $675,000 mortgage on the severed parcel. The mother was identified as Guarantor;

(aa) the father commenced this Application on November 24, 2014;

(bb) on April 8, 2015, Kaufman J. made a temporary Order that, among other things, required the father to advance $60,000 to the mother “without prejudice to the parties’ claims… regarding the properties located at 25625 Valley View Drive, Sutton, Ontario”. This Order also provided that the mother was to transfer her interest in the original Valley View Drive property that contained the residence to the father [emphasis added];

(cc) the Order also permitted the father to refinance the outstanding mortgage in an amount not greater than $430,000 and prohibited the father from encumbering “the properties located at 25625 Valley View Sutton…[without] the written consent of the [mother] or Court Order…” [emphasis added];

(dd) on May 13, 2015, the mother transferred title of the residential lot to the father and was paid $60,000;

(ee) on May 13, 2015, the father refinanced the Valley View Drive property on which the residence was situated for $436,799;

(ff) on June 10, 2015, the father registered a $98,000 mortgage in favour of his mother and sister on the severed lot. The mother was not asked her consent beforehand, nor was the transaction authorized by court Order; and

(gg) On November 18, 2015 the parties signed Minutes of Settlement resolving on a final basis their children’s parenting and spousal support. The unresolved issues comprised this trial.

[5] Much of the evidence at trial involved an accounting about what each party argued they had contributed in terms of labour and money to both the Simcoe Street property and, to a greater extent, the Valley View Drive properties. There was considerable conflict in the evidence. The father’s mother prepared a schedule identifying what he purchased and what labour he performed. Not including the vacant lot severed from the main property, he was able to produce receipts for about 60 percent of the work and services rendered ($149,112.40 out of a total $243,423). Many transactions were paid in cash. He also provided estimates for his hourly labour ($19,940 in total). The mother testified that many of her financial records were left at the parties’ residence when she left, and her efforts to retrieve them were unsuccessful.

[6] In addition to the parties, the father’s sister and the mother’s parents testified. The mother’s evidence was led by affidavit and was supplemented by viva voce testimony.

[7] The father challenges the mother’s evidence as exaggerated, unsupported and implausible. The mother contends that the father is not a credible or reliable witness. In my view, the financial issues pivot on determining which party’s evidence is to be preferred on a balance of probabilities.

Credibility

[8] In Christakos v. De Caires, 2016 ONSC 702, at paragraph 10, Nicholson J. adopted MacDonald J.’s following outline in Re Novak Estate, 2008 NSSC 283, 269 N.S.R. (2d) 84:

There are many tools for assessing credibility:

a) The ability to consider inconsistencies and weaknesses in the witness’s evidence, which includes internal inconsistencies, prior inconsistent statements, inconsistencies between the witness’ testimony and the testimony of other witnesses.

b) The ability to review independent evidence that confirms or contradicts the witness’ testimony.

c) The ability to assess whether the witness’ testimony is plausible or, as stated by the British Columbia Court of Appeal in Faryna v. Chorny, 1951 CarswellBC 133 (B.C. C.A.), it is “in harmony with the preponderance of probabilities which a practical [and] informed person would readily recognize as reasonable in that place and in those conditions”, but in doing so I am required not to rely on false or frail assumptions about human behaviour.

d) It is possible to rely upon the demeanour of the witness, including their sincerity and use of language, but it should be done with caution (R. v. Mah, 2002 NSCA 99 (N.S. C.A.) [at paras.] 70-75).

e) Special consideration must be given to the testimony of witnesses who are parties to proceedings; it is important to consider the motive that witnesses may have to fabricate evidence. R. v. Howe, [2005] O.J. No. 39 (Ont. C.A.) [at paras.] 51-56).

There is no principle of law that requires a trier of fact to believe or disbelieve a witness’s testimony in its entirety. On the contrary, a trier may believe none, part or all of a witness’s evidence, and may attach different weight to different parts of a witness’s evidence (See R. v. R. (D.), [1996] 2 S.C.R. 291 (S.C.C.)at [para.] 93 and R. v. Howe supra). [Emphasis in original.]

[9] All of these tools factor in this case.

Father’s Credibility

[10] Where his financial interests were involved, the father was not a credible witness. He breached the Order of Kaufman J. when he mortgaged the severed parcel in June 2015, and he failed to comply with a financial disclosure Order made by McCarthy J. on August 18, 2015. He engaged in what can only be described as a troubling pattern of misrepresenting his income to the Canada Revenue Agency, in particular, and likely also to his former spouse. Wherever possible, he minimized, implausibly, the contributions made by the mother and members of her family. Some background is in order.

Non-Disclosure

[11] The father was not a T4 employee of Sky Home. When he rejoined his employer in 2005/2006 after working elsewhere, he was an independent contractor. His employer paid for his cellphone and provided gas on-site. Until shortly before trial, his employer also paid him an automobile allowance.

[12] The father’s Income Tax Returns were prepared by his mother. His returns for 2012-2014 disclosed an average gross income of about $27,500, from which the father deducted, among other things, telephone and gas expenses. His line 150 income averaged around $27,000 a year. He worked for no one else.

[13] On August 18, 2015, McCarthy J. made an Order on consent, that, among other things, the father produce a statement of business activities and Financial Statements for 2012-2015 and supporting documentation for the deductions claimed in his tax returns. The father did not comply. There is a good reason why none of this information was provided—the tax returns were false.

Canada Revenue Agency

[14] During the years referenced in McCarthy J.'s Order, the father's annual income, on average, exceeded $100,000. In cross-examination, the father professed ignorance about the discrepancy between what he reported as income to Canada Revenue Agency and what he was paid:

MS. BROWN: Okay. Q. So I guess my real question is what are you writing off to get from the income you received from Sky Homes down to $27,000?

A. I don’t view my taxes. It’s not me that does it, so – it would be – my mother does my taxes and Ms. Lindsay’s.

Q. You’d agree with me that historically what you’ve actually received from Sky Homes is in the range of 100, $110,000?

A. Yes.

Q. All right. So we go from that number to $27,000 without explanation. There’s no statement of business activities, as you were required to provide and file, to show where that comes from. What are you writing off? Are writing off the expenses to the home, the carrying expenses?

A. I’m not an accountant, I don’t know. I didn’t do these – my taxes, it wasn’t me.

Q. So 50-or-so-thousand dollars disappears from your income and it’s not a concern.

A. I can’t answer, I didn’t do the taxes. I don’t do them.

Q. And you’d agree that this is the situation for your 2013 and 2014 income as well?

A. Yes.

Q. As well as going back to 2006, 7, and 8?

A. Yes.

Q. Did you approve these tax returns to be filed with Revenue Canada?

A. Yes.

[15] But then he said this in answer to the court:

THE COURT: All right. So the bank records suggest that you earned an income of roughly around $93,600 in 2012 and this particular tax return indicates that your total income for self-employment was $27,000 that you declared to the Canada Revenue Agency. Can you tell me, sir, what happened to the other $64,000 from a tax reporting stand point?

A. I didn’t claim it.

THE COURT: You didn’t disclose that to…

A. Yes.

THE COURT: Canada Revenue Agency?

A. Yes.

THE COURT: Is there some reason why you wouldn’t have disclosed $64,000 in taxable income to Canada Revenue Agency?

A. I was trying to keep up with the payments on the house and the renovations.

THE COURT: How exactly then was the amount of $27,000 calculated?

A. I – I didn’t do these taxes; I don’t know how it works, so I don’t know how to answer that.

THE COURT: Well, presumably, sir, you know what you earned in 2012.

A. Mm-hmm.

THE COURT: And is it your evidence that you have no idea how that $27,000 was calculated?

A. I – I – I don’t – to be honest I really don’t know how the tax system works. I’ve never done it myself, so I don’t – I don’t know.

THE COURT: Well, did you in terms of this particular document being sent in; was this e-filed or did you sign the document?

A. I signed it, I believe.

THE COURT: And with respect to 2013 and 2014 is you ( sic ) evidence with respect to not disclosing this kind of income any different for those years?

A. No, it’s the same, I believe.

Reliability

[16] The father's failure to truthfully report his income to CRA impacts the reliability of his testimony about the nature and extent of the parties’ respective financial and physical contributions to the Valley View Drive property. Wherever possible, he minimized the mother's contributions. A few examples:

(a) when asked when he made the decision to sever the property, the father replied “…[p]robably a year before I started the application process.” The mother signed the application as owner;

(b) when asked who did the work to apply for the severance, the father answered that he did and that the mother did not assist. But she co-signed the $20,000 loan for the severance process and paid $6,997 for the required Official Plan Amendment fee. I accept her evidence in preference to the father’s that she attended more than one Town Council meeting, although it is not possible to conclude that she attended all of them. I also accept her evidence that she was involved with the other professionals in the severance process, although admittedly, not to the same extent as the father; and

(c) despite owning three properties (including Simcoe Street) before the purchase of the Valley View Drive property, the father had no idea or recollection about why title was registered in the parties’ names as tenants-in-common, nor about any discussion with the mother about title. According to him, the mother was not involved in the decision to purchase the property, nor did he consider that the property belonged to her. However, she and her parents viewed the property before its purchase and she borrowed from her father to contribute $20,000 to the down payment. She co-signed the mortgage. The solicitor’s reporting letter was addressed to both parties.

[17] In material respects, the father's testimony about the mother's lack of involvement in the important financial decisions associated with the Valley View Drive property is implausible, self-serving and contradicted by documentary evidence. As will be noted later in these Reasons, this impacts the court's assessment of the parties’ respective contributions.

Mother’s Credibility

[18] Viewed overall, the mother's evidence about the circumstances of the purchase of the Valley View Drive property is more credible than the father’s and, in important respects, is corroborated by documentary evidence and her parents’ testimony. None of her evidence was shaken in cross-examination. The mother acknowledged the father's skillset. She did not, in my view, embellish her physical contributions. What she described about the parties’ allocated responsibilities, including the property and their children's care, made sense.

[19] The father challenged the mother's lack of documentation to support her financial contributions to the property. She testified that soon after the parties separated in June 2014, the father changed the locks on the property. Her financial records were located in the residence. Despite the father consenting to the Order made by McCarthy J. on August 18, 2015, a little over a year after the parties’ final separation, that he produce the mother's documents, none was produced. The father testified that “she took everything when she moved out of the house.” Why, then, would he consent to an Order incapable of being obeyed?

[20] Where, for example, the father dismissed the mother's involvement in the severance as non-existent, she described the process involved and the tax advantaged reasons for the 2009 transfer of title of the Valley View Drive property to her name alone. She also acknowledged that the father was more involved in dealing with the various third parties, due to his work. Unlike the father, the mother was prepared to acknowledge his contributions, even where there was little or no independent corroboration of the father’s evidence and where that was disadvantageous to her financial interests.

Summary on Credibility

[21] What is especially striking about the evidence is that the parties dealt with the Valley View Drive property without any regard about title or ownership or who contributed what in what proportion, until they separated. They acquired a property that was larger than they needed and planned to sever a portion and use those proceeds to enhance the value of their dream home. Registration on title was a means to a common end. But wherever possible, the father minimized the mother’s contributions and their value. He expressed confidence about what he spent, but deflected responsibility about his real earnings and income. In my view, the father tailored his evidence to what he perceived was his financial advantage.

[22] As will be apparent when assessing the parties’ evidence about their respective contributions to the property, the mother's evidence is to be preferred to that of the father where their evidence conflicts.

Assessment of the Parties’ Contributions

[23] It is clear from Kerr that a finding of a joint family venture relationship does not presumptively require that the value of the wealth accumulated be equally shared. Each case must be decided according to its own facts, and each party's contributions must be individually assessed. These contributions must be linked to the generation of wealth. In mandating an holistic approach, the court in Kerr acknowledged its practical challenges:

[69] Relationships of this nature are common in our life experience. For many domestic relationships, the couple’s venture may only sensibly be viewed as a joint one, making it highly artificial in theory and extremely difficult in practice to do a detailed accounting of the contributions made and benefits received on a fee-for-services basis. Of course, this is a relationship-specific issue; there can be no presumption one way or the other. However, the legal consequences of the breakdown of a domestic relationship should reflect realistically the way people live their lives. It should not impose on them the need to engage in an artificial balance sheet approach which does not reflect the true nature of their relationship.

[24] In this case, the father contends that his records evidence that he made substantially greater financial and physical contributions to the Valley View Drive property than the mother. A review of the records for which the father has receipts, together with his trial testimony, reveals the following:

(a) the method of payment of the majority of the account statements is unclear. The father made little or no effort to correlate these payments to his bank, credit card or line of credit accounts;

(b) many of the payments were made in cash. “I was making cash payments a lot. I was doing a lot in cash.” These were not insignificant amounts. Items involved a sanitizing water system ($4,144.88), roof construction ($11,237), an outside deck ($32,544, paid over time) and (likely) roofing shingles ($3,150). Several of these predate the father's receipt of the net sale proceeds from the Simcoe Street property in early January 2008. This list is not exhaustive; and

(c) some account statements name the customer as the father's employer (such as the $32,544 deck) or were paid using a credit card in that employer's name. In this latter example, the father testified that he repaid his employer, although he had no corroborating documentation.

[25] The father testified that he incurred another $94,311 in expenses for which he had no receipts. These were listed in a summary prepared by his mother and included house expenses as well as the garage shop and exterior property work. Apart from listing these expenses, no other evidence was led about them (except that he said he paid them and that the mother contributed nothing). Like those expenses for which the father had receipts or, as in some cases, handwritten estimates, it was not possible to co-relate their payment to the father’s banking or credit records.

[26] The father testified that he used credit cards and a line of credit to help him pay for the renovations.

[27] As already noted, in early January 2008, the father used the net sale proceeds of $113,888.85 from the Simcoe Street property to help pay the renovation costs.

[28] In September 2008, the mortgage on the property was increased to $432,000. Both parties signed the mortgage. Somewhere between $50,000 and $60,000 was paid out to the parties, more likely at the higher end. It was unclear where these funds were deposited but it is reasonable to infer that they were used to repay credit debt and the ongoing renovation costs.

[29] In May 2014, the mortgage was renegotiated. The 2008 mortgage had been reduced to about $372,950. The new amount was almost $437,000, which, after adjustments, resulted in distributable proceeds of $63,658. Most of these proceeds were used to repay the father's credit card and line of credit debt. Both parties signed the mortgage.

[30] The mother testified that when the parties began cohabiting, they agreed that she would contribute to their expenses by making cash payments to the father from her employment income. Initially, these were $800 bi-weekly. This amount decreased during her maternity leave when she was being paid less. This practice continued for only a short time after the Valley View Drive property was purchased, because the mother's contributions “shifted towards more of [the children's] care and daycare and groceries and pets and such.” The records that the mother was able to obtain evidenced many Interac bill payments. That there is no evidence that she was able to acquire significant assets otherwise.

[31] In addition, from time to time, the mother paid the father's child support payments to his former spouse, and contributed funds to Dylan's RESP. She paid all the childcare expenses, which exceeded $46,000. The father declared the allowable portion of these expenses in his tax returns even though, in reality, he enjoyed a higher income.

[32] The mother alleged that the father did not pay for many of the expenses he claimed. Many of the suppliers and trades used provided services to his employer. These, for example, included the tile supplier, deck contractor and property surveyor. Again, this list is not exhaustive. Reviewing the father's summary of the work and expenses incurred, the mother testified that the father “buried” many renovation costs by issuing Purchase Orders to the suppliers and trades, which were then paid by his employer for work not actually done on the jobsite. The father vigorously denied these allegations, claiming that he never had authority to issue such Orders.

[33] The mother's father testified that the father told him that given his position at work, he (the father) was able to leverage favours and get work done more cheaply.

[34] It is not possible on the evidence to determine the veracity of the mother's allegations. There is no question though, nor would it be unreasonable, that the father would use the same suppliers and trades as his employer.

[35] In assessing each party's contribution to the Valley View Drive property, I find the following facts:

(a) the mother contributed more to the purchase price of the property than the father ($20,000/$10,000);

(b) while the father paid the property's operating expenses from his bank account, the mother contributed to those expenses directly and indirectly from her earnings;

(c) both parties, along with family members and friends, were involved in “gutting” the property and its later renovation. The heavier physical work was done by the father. He also performed most of the electrical work;

(d) many expenses were paid in cash. These expenses were most likely paid by the father from employment earnings not declared for tax purposes, from cash given to him by the mother from her earnings and from the brief period that he provided snowplowing services for the mother's father and was paid in cash;

(e) the father used the $113,888.85 from the sale of the Simcoe Street property to help fund the renovation expenses for the Valley View Drive property;

(f) the father used his credit card and line of credit accounts to pay many expenses. About $123,000 of these expenses were rolled into, and paid from, the two mortgage re-financings of the property in 2008 and in 2014, for which the mother was a co-signer and liable (until shortly after the Order of the Kaufman J. dated April 15, 2015);

(g) there was no evidence as to how much of the principal of the $380,688.75 mortgage, registered in 2005, had been repaid before it was refinanced in 2008 (to $432,000); however, taking into account that both principal and interest were being paid, it was likely not less than $8,000. The 2008 mortgage principal was reduced to $372,950 as of March 2014. The total reduction was $59,050. In my view, a not unreasonable figure of $67,500 represents the cumulative mortgage principal repaid between 2005 and 2014. As noted, the actual amount may have been greater, but the evidence was deficient in this regard;

(h) the mother's assumption of primary payment responsibility for the family’s daily living expenses mostly freed the father from contributing to them, and enhanced his ability to fund renovation and severance expenses. She paid all of the children’s daycare costs and, from time to time, helped him pay Dylan’s child support;

(i) the father contributed $11,152.30 to the severance costs and the mother $6,997. Both parties signed the $20,000 promissory note, for which the father now claims $10,000 from the mother, even though that estate has been wound up, and no claim for payment was ever made; and

(j) the mother was advanced $60,000 for her interest in the Valley View Drive properties on May 13, 2015, pursuant to the Order of Kaufman J.

Analysis

[36] Each party had the Valley View Drive properties separately appraised in late 2015. The values differed. Following a suggestion by the court, the parties agreed by the end of the trial that the fair market value of the residential parcel was $790,000, and the severed parcel was $183,500, totaling $973,500 for both. The parties also agreed on a notional realtor’s commission of $29,512, thereby resulting in a value of $943,988 (rounded to $944,000), before taking into account the mortgages on the properties.

[37] The net equity of the properties is $507,201, rounded to $507,200. This figure reflects their combined fair market value, less the $436,799 mortgage registered in May 2014. No reduction is allowed for the $98,000 mortgage registered by the father on the severed parcel in June 2015, well after the parties’ final separation, in contravention of the April 8, 2015 Order of Kaufman J.

[38] The father contends that the value of the mother's contributions is $71,091.86, which, after accounting for the $60,000 advance, leaves him owing her $1,091.86. The mother claims that he owes her anywhere between $216,575.50 and $268,475.50, which after taking the $60,000 advance into account, results in a range of $156,757.50 to $208,475.50 still owing to her. This assumes an equal sharing of the increase in value after accounting for the parties’ direct capital contributions (the lower end of the range) or an equal sharing of the net equity (the higher end of the range). I am unable, however, to accept either party’s calculations. What must be determined is the co-relation between the parties’ respective contributions and the net equity in the property.

[39] The key difference in the parties’ positions is attributable to the different approaches identified in Kerr to quantifying a monetary award. The father's approach is best described as “value received” whereas the mother's is “value surviving.”

[40] In Kerr, the Supreme Court held that the appropriate choice of approach pivoted on whether there was a joint family venture relationship. If such a relationship was found to exist, and the evidence demonstrated a link between contribution and wealth accumulation, then the “value surviving” approach should be adopted:

[A] monetary award for unjust enrichment need not, as a matter of principle, always be calculated on a fee-for-services basis. As I have set out earlier, an unjust enrichment is best characterized as one party leaving the relationship with a disproportionate share of wealth that accumulated as a result of the parties’ joint efforts. This will be so when the parties were engaged in a joint family venture and where there is a link between the contributions of the claimant and the accumulation of wealth. When this is the case, the amount of the enrichment should be assessed by determining the claimant's proportionate contribution to that accumulated wealth (para. 142). [Emphasis added.]

[41] Kerr does not, in my view, go so far as to preclude a “value received” approach in all cases where a joint family venture relationship may be found to exist, or to require a “value surviving” approach to all assets accumulated during a relationship. However, the latter is especially appropriate where, as in this case, there is only one asset involved.

[42] Each party testified about what contributions they contended were linked to the properties’ net equity.

(a) Simcoe Street Property

[43] The mother claimed that when she cohabited with the father at the Simcoe Street property, she helped him paint and decorate the rental unit, even, on occasion, buying items such as paint and related material. She also paid the father about $800 bi-weekly from her employment income. This property had been purchased solely by the father before the parties cohabited, and at all material times until its sale in early 2008, the father was the only registered owner and the only person liable for its mortgage. Periodically, the parties separated; there is no evidence that the mother continued her bi-weekly payments to the father during those times or that anyone other than him paid the property’s operating expenses.

[44] The mother did not seriously pursue this claim by the end of trial. Based on the evidence, there was no connection between her residency at the property and the proceeds of sale paid to the father in January 2008.

(b) Valley View Drive Down Payment

[45] The father shall be credited with $10,000 toward the down payment for the purchase of this property and the mother shall be credited with $20,000.

(c) Simcoe Street Sale Proceeds

[46] The father shall be credited with $113,888.85, representing the net sale proceeds of the property.

(d) Labour

[47] The father claimed $19,940 for his labour. Most of the work involved technical expertise (the father was an electrician) or physical work, which the mother was unable to perform due to her pregnancy. He provided a summary of what he did, and he estimated the value of that work. No similar summary was tendered by the mother. She did, however, work on the interior of the premises and, in my view, was responsible for the garden at the residence. It is impossible to better assess the value of the mother’s contributions, as the evidence is unsatisfactory in this regard. Some set-off is in order though, and, in my view, the father’s claim should be reduced to $12,000. I do not regard the father building a Play Centre for the children ($1,680) as an appropriate claim.

(e) Mortgages #1

[48] There is no evidence about the principal owing on the 2005 mortgage when it was refinanced in 2008, although principal and interest payments were made during that time. The face value of the 2005 mortgage was $380,688.75. It is not unreasonable that when this debt was refinanced in 2008, the principal owing had been reduced. The 2008 mortgage was for $432,000, a difference of about $52,000. The father acknowledged at trial that the parties obtained between $50,000 and $60,000 from this refinancing, more likely at the higher end. It is reasonable to assume that the original mortgage principal had been reduced to at least $372,000.

[49] By March 2014, when the property was remortgaged, the principal owing on the 2008 mortgage had been reduced by $59,500 to $372,500.

[50] In other words, between the purchase of the Valley View Drive property in 2005 and its mortgage refinancing in 2014, the cumulative principal repaid on the mortgages was at least $67,500. How, if at all, should this be allocated and credited to each party?

[51] The father claims credit for all payments made. That is not reasonable. In my view, the financial contributions made bi-weekly by the mother from her employment and by her assumption of the majority of the household operating expenses enabled the father to make these payments. But how to quantify the parties’ respective allocations?

[52] There was little evidence about the parties’ incomes between 2005 and 2010. Notwithstanding his falsely reported income to Canada Revenue Agency during, at least, the 2011 to 2014 period, the father earned about $110,000 a year. This figure includes the allowances and other benefits he received. The mother earned $52,265 annually on average, after taking into account the $18,323 she earned in 2011 while on maternity leave. Using these incomes as historically representative of their ratio, the father’s income represented 68 percent of the total average family income, and the mother’s 32 percent. Accordingly, those percentages should be applied to the $67,500 principal repaid, thereby resulting in an allocated credit to the father of $45,900 and to the mother of $21,600, representing their respective contributions.

(f) Mortgages #2

[53] The parties refinanced the Valley View Drive property twice. Although it is difficult to more precisely determine how much money was actually made available, the evidence is that those proceeds were used to pay for the property’s renovations. Both parties signed the mortgage documents and the mortgage principal owing was factored into the calculation of the $507,200 net equity. The cumulative proceeds totalled about $123,000. The father cannot claim a disproportionate credit for expenses paid from these proceeds because the mother was allocated equal liability when determining the net equity. Each party's allocated contribution is, therefore, $61,500. A party’s assumption of the risks associated with title and mortgage debt is also a relevant consideration in assessing contribution: Thompson v. Williams, 2011 ABQB 311, 97 R.F.L. (6th) 133 at para. 46; Toth v. Lehman, 2011 ONSC 2170 at para. 22; and Geertsma v. Smith, 2011 ONSC 5521 at para. 82.

(g) Household Expenses

[54] The father listed the operating expenses he paid for the household. These included mortgage and realty tax payments, utilities and related expenses. Many of these were claimed for the period after the children were born and, obviously, included them. The mother also paid certain expenses. While the father contributed more financially, the mother contributed more in what may be described as domestic services, such as managing the parties’ household and assuming primary responsibility for childcare, particularly during the 22 months of her maternity leave. Although it is not possible to quantify that value, domestic services qualify as legitimate contributions and there is no reason to treat such services differently from financial and physical contributions: Peter v. Beblow, [1993] 1 S.C.R. 980. Nor would it be appropriate, in my view, to engage in a “minute totting up of the give and take of daily domestic life”, as observed by Goepel J. in McNaughton v. Friedman, 2011 BCSC 524, at para. 69. Mathematical precision must defer to equity between the parties.

[55] Apart from the mortgage principal repaid, which has already been addressed above, I am not prepared to speculate on what each party paid and the relative values to be allocated to what they physically did while cohabiting and raising their sons, nor attempt to link the parties’ daily domestic life and the net equity in the Valley View Drive properties. Neither party was unjustly enriched by the other’s contributions.

(h) Severance

[56] The total cost of the severance was $38,149. As already noted, the father paid $11,152 and the mother paid $6,997. Both parties signed a promissory note for $20,000. In my view, both parties were equally liable, even though the funds were paid to the father and he used them for the severance costs. Accordingly, the father’s contribution is $21,152 and the mother’s contribution is $16,997.

[57] Despite the fact that the estate of the father’s father did not request payment, and I have expressed doubts about the father’s credibility, his sister corroborated his evidence that he received $20,000 less than she did, and so he will be permitted an adjustment of $10,000 in his favour.

(i) Daycare

[58] The mother claimed that she spent $46,374 in daycare costs. The father claimed the allowable portion of these expenses in his tax returns and paid less tax, even though his total income was significantly greater than the mother’s. Her assumption of these expenses freed him from contributing to these costs and resulted in him paying less tax, in both instances enhancing his ability to pay for the work and operating expenses for the Valley View Drive property. Implicit in the father’s answer to the court as to why he failed to report his income (“I was trying to keep up with the payments on the house and the renovations”) is the assumption that the father relied on whatever, and whomever, he could to fund the property’s expenses.

[59] Not every case in which a party assumes primary responsibility for childcare costs necessarily relates to the accumulation of wealth, but in this case, there is an evidentiary link between the mother’s assumption of these costs and the father’s ability to pay for the property’s renovation and related operating expenses. I am not prepared, however, to credit the mother with the entire amount claimed, as there would have been a childcare cost in any event. In the circumstances, it is my view that the mother should be credited with 50 percent of the costs claimed, which shall be rounded to $23,200.

(j) Miscellaneous

[60] The mother also claimed $14,148 for a number of expenses that she paid for the father, the parties and their children. These included tutoring and child support for Dylan, and clothing and gifts for the children. This list is not exhaustive. It includes RESP contributions for Dylan, for which the father has agreed to reimburse the mother (see below “RESP”). These contributions are, in my view, little different from those dealing with the parties’ household contributions. Not everything done, or expense paid, is properly included in an unjust enrichment analysis.

(k) Adjustments

[61] The father is entitled to a $10,000 credit from the mother with respect to his assumption of her liability relating to the promissory note in favour of his late father.

Summary of qualifying contributions

[62] In Kerr, the court eschewed a template for calculating each party’s proportionate share of wealth accumulation, observing that “there may be many ways in which an award may be quantified reasonably” [para 158]. In this case, the father’s direct contributions total $264,352 and the mother’s total $143,297. The ratio is 65 percent (father)/35 percent (mother). But for the Simcoe Street property proceeds, the parties’ contributions are almost equal.

Monetary or Proprietary Remedy

[63] The mother has requested a proprietary remedy in the Valley View Drive properties. In Kerr, the court held that such a remedy was only available where a monetary award was insufficient. In Martin v. Sansome, 2014 ONCA 14, 118 O.R. (3d) 522 at paragraph 58, the Court of Appeal held that there were two prerequisites to imposing any such remedy:

It is only if a monetary award is inappropriate or insufficient, and the plaintiff can also demonstrate a sufficiently substantial and direct link or causal connection between her contributions and the acquisition, preservation, maintenance or improvement of the property, that the court may make a proprietary award by impressing the property with a constructive trust.

[64] Many cases involve a situation where one party holds title or ownership of the asset(s) comprising the relationship’s wealth. Complicating the analysis in this case is the fact that the mother was the owner of both parcels after severance and the owner of the Valley View Drive lot on which the residence was situated when the parties separated. She transferred her interest in the latter well after separation on a “without prejudice” basis pursuant to the Order of Kaufman J.

[65] While the mother has clearly demonstrated the second part of the Martin test, it is my view that a monetary award is appropriate. This remedy must, however, reflect a balancing of that entitlement with the value of her proprietary claim in the event that the father should chose after trial to sell the residential parcel for a net amount greater than the parties have agreed is its’ worth.

[66] Applying the contributions made by each party to the net equity of $507,200 allocates a value of $329,680 (i.e. 65 percent) to the father and $177,520 (i.e. 35 percent) to the mother. Adjusting for the $10,000 she owes with respect to the promissory note and the $60,000 advance, the mother is owed $107,520.

Child Support

[67] Notwithstanding the father’s false tax reporting and his evidence that his employer had recently discontinued his truck allowance, amounting to about $1,300 monthly, the parties agreed that his imputed income for the purposes of calculating his child support obligations was $110,000. The mother’s income is $63,820. The parties agreed that based on a shared parenting arrangement, the father should pay the mother $590 monthly in child support.

[68] The father paid nothing on account of table child support after the parties separated in June 2014 until November 2014, when he began to pay $291 monthly. This was increased to $590 monthly in June 2015 and continues in that amount to date.

[69] The father also paid nothing for the children’s childcare expenses until January 2015, when he began to pay 63 percent of those expenses directly to the care provider. In 2014, the mother paid $11,323.50 for this service.

[70] Based on what the parties have agreed are their incomes, the father owes the mother arrears of child support in the amount of $6,073, calculated as follows:

(a) $2,360 for the period from July 2014 to October 2014 (i.e. 4 x $590);

(b) $2,093 for the period from November 2014 to May 2015 (i.e. 7 x [$590-$291]); and

(c) $1,620 for the father’s net-after-tax childcare costs for the period from September to December 2014 (there was no evidence about the children’s vacation time with their parents in the 2014 summer or the payment arrangements for that period with the childcare provider).

[71] The ratio to be applied to the parties’ respective shares of the children’s special or extraordinary expenses shall be 63 percent (father)/ 37 percent (mother), effective August 1, 2016. This proportion is consistent with the Child Support Guidelines.

Remaining Issues

(a) December 24 - 26 Schedule

[72] The parties dispute their children’s residency schedule for December 24-26. Neither party is particularly religious, but when together, their tradition involved each of their extended families. While both acknowledged that the other should be treated equally, they have been unable to agree on the day and timing specifics.

[73] In my view, there should be an alternating yearly schedule, which disrupts the children as little as possible, respects family traditions and permits the involvement of the parties’ extended families. That schedule should be as follows:

(a) in even-numbered years commencing in 2016, the children shall reside with their mother from no later than 6:00 p.m. on December 24 to Christmas day at 2:00 p.m.;

(b) in even-numbered years the children shall reside with their father from Christmas day at 2:00 p.m. to December 26 at 2:00 p.m.;

(c) the schedule in (a) and (b) above shall alternate yearly commencing in 2017;

(d) the foregoing schedule shall apply regardless of the children’s regular residency schedule even if that should mean that the children will spend a longer period of time with the residential parent than the regular schedule provides; and

(e) except as set out above, the children’s regular residential schedule shall apply.

(b) Monster Truck Rally

[74] The parties disputed the extent to which they and the children attended an event held yearly, described as a “monster truck rally.” This was an event that the father had enjoyed on several occasions with his son Dylan and, more recently, with the parties’ sons (although not, apparently, in 2015). The mother had also attended on one occasion (2014).

[75] There is no reason why the children should not be given the opportunity to enjoy this event with each of their parents and so, starting in 2017 and alternating yearly afterwards, the children shall have the opportunity of attending this event with their father. In even-numbered years, the children may attend this event with their mother. This arrangement shall override the children’s regular schedule in the event of a conflict, and the parent who proposes to have the children attend with him or her, as the case may be, shall provide to the other, not less than 72 hours before the scheduled event, satisfactory proof of ticket purchase, and shall be responsible for picking up and returning the children to the other parent’s residence no later than 9:00 p.m. on the day of the event.

(c) RESP

[76] The mother is the registered owner of a Registered Education Savings Plan, of which Dylan is the named beneficiary. While it is puzzling why this should have been a trial issue, the parties agreed at the start of trial that ownership would be transferred to the father upon his reimbursing the mother for the contributions she made to the plan.

(d) Non-School Day Transfer Location

[77] The parties agree that on school days where the children will be residing afterwards with the other parent, that parent shall pick them up from their school. Not agreed are the non-school day transfer arrangements.

[78] The father proposed that the children be picked up and dropped off at each party’s residence. The mother’s evidence was that due to what she contended was a high level of interpersonal conflict, she was concerned about her personal safety and so preferred a neutral, public transfer location. Neither side objected to that location being the Zehrs plaza in Keswick.

[79] At some point in time, it is hoped that, in their children’s best interests, the parties will set aside their interpersonal issues to facilitate a seamless, conflict-free transfer of their children to each other’s care. Until then, all non-school day transfers shall take place at the Zehrs plaza. The mother shall have a one-time option, exercisable on seven days’ notice to the father, waiving this term, in which event all non-school day transfers shall take place at each party’s residence, the children being picked up by the parent with whom they will be residing that evening pursuant to their regular residency schedule.

Disposition

[80] Accordingly, an Order shall issue in the following terms:

(a) custody and access of the children in accordance with paragraphs 1-45 of the parties’ Partial Final Minutes of Settlement;

(b) within 45 days of the release of this Decision, the father shall pay to the mother the sum of $107,520, failing which the Valley View Drive property on which the residence is located shall be listed for sale and sold. The mother shall be entitled to receive the greater of $107,520 or 35 percent of the net proceeds of sale, those net proceeds being the balance remaining after payment of any outstanding encumbrance on the property (including penalties, realtor’s commission and reasonable legal fees and disbursements associated with the sale). Until payment or sale, the father shall be responsible for all expenses relating to the property without contribution from the mother;

(c) the father shall pay to the mother table support for their children in the amount of $1,538 monthly on the first day of every month effective August 1, 2016 and the mother shall pay to the father table support for the children in the amount of $948 monthly on the same terms and conditions as the father. The $590 difference in the amounts payable shall be enforceable through the Family Responsibility Office. These amounts are based on a shared parenting arrangement and calculated on the father’s annual imputed (and agreed) income of $110,000 and the mother’s annual income of $63,820 a year;

(d) the father shall pay to the mother 63 percent of the children’s special or extraordinary expenses, and the mother shall pay 37 percent of those expenses. Neither party shall incur an expense for which a contribution will be sought from the other parent without first obtaining that parent’s consent in writing;

(e) in 2016 and in future years the father shall be entitled to claim as an eligible dependant the parties’ oldest child and be paid any Canada Child Tax Benefits/ Canada Child Benefits for that child and the mother shall be entitled to claim the parties’ younger child as an eligible dependant and collect any Canada Child Tax Benefits/Canada Child Benefits for that child. In the event that the parties are unable between them to resolve any adjustments needed reflecting payments already made in 2016 before the date of release of this Decision an appointment before me may be made through the trial coordinator;

(f) child support shall be varied annually commencing July 1, 2017 and on July 1 of each succeeding year, so long as child support is payable;

(g) in accordance with paragraph 47 of the parties’ Partial Final Minutes of Settlement, no spousal support shall be paid;

(h) the Christmas schedule for 2016 and alternating years afterwards shall be as set out in paragraph 73 of these Reasons;

(i) the parties shall be entitled to have the children attend with them at the Monster Truck Rally as set out in paragraph 75 of these Reasons;

(j) the mother shall transfer to the father the RESP she owns for Dylan upon the father paying to her the principal contributions she made to the RESP, excluding the CESG and any accrued gains. The father shall pay this amount to the mother when she provides him with the documentation required to effect the transfer. All administrative or other related charges shall be to the father’s account. In the event of any disagreement between the parties, either party may move for relief by way of Form 14B motion to my attention on 10 days’ notice to the other party;

(k) the non-school day transfer location shall be as set out in paragraph 79 of these Reasons; and

(l) neither party shall change the children’s schooling without the consent of the other parent.

[81] A Support Deduction Order shall issue.

[82] An issue arose during the course of the trial relating to the mother being able to retrieve certain of her chattels still remaining at the Valley View Drive property. Counsel indicated that the parties would try to resolve this issue without the court’s intervention but should that have been unsuccessful then arrangements can be made as per paragraph [80] (e) above through the trial coordinator.

[83] In the event that the parties are unable to resolve issues relating to pre-judgment interest and the costs of these proceedings, each party shall file on or before August 19, 2016 their written submissions limited to five double-spaced pages excluding Offers to Settle, Bills of Costs and any Authorities upon which they may rely. The written submissions are to be filed with the filing office and included in the Continuing Record.

Justice D.A. Jarvis

Date: July 29, 2016