Court File and Parties
COURT FILE NO.: 36665/14 DATE: 20160712 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Douglas Ross Taylor Applicant – and – Linda Marshall Respondent
Counsel: Self-Represented (for the Applicant) Faryal Rashid, for the Respondent
HEARD: May 10-11, 2016
MILLER J.
1Douglas Taylor brought an Application April 7, 2014 seeking a divorce from Linda Marshall and equalisation of net family properties. In her Answer of May 5, 2014 Linda Marshall agreed there should be a divorce but asked for unequal division of property.
Divorce
2There is no dispute that there should be a divorce. The parties have, on an either party’s evidence, been separated for more than a year with no prospect of reconciliation. The parties who were married on May 24, 2008 shall be divorced. The divorce shall take effect 31 days from the date of this order.
Date of Separation
3Mr. Taylor takes the position that the date of separation is February 4, 2013. He testified that it was on January 29, 2013 that Ms Marshall told him to leave her house and “offered” him $20,000 for a divorce. It is Mr. Taylor’s position that to that point he did not consider himself separated from Ms Marshall.
4Ms Marshall takes the position that the date of separation is September 1, 2010 when she attempted to take her own life due to the deterioration in the relationship.
5As Corbett, J. indicated in Strobele v. Strobele at paragraphs 29 and 30:
As noted in the case of Newton v. Newton, [1995] O.J. No. 519, [1995 CarswellOnt 84 (Ont. U.F.C.)], the principles for fixing a separation date under section 4(1) of the Family Law Act are not necessarily the same as those developed under the Divorce Act for living separate and apart. The goal under the FLA is to fix the date on which the economic partnership should fairly be terminated. The goal under the Divorce Act is to establish the date on which the parties may obtain a divorce. The definition in section 4(1) has two aspects: the date on which the spouses separate, and that there is no reasonable prospect that they will resume cohabitation. The structure of the section links the concepts of separation and cohabitation. These concepts, though assuredly related, are not interchangeable. Cohabitation implies conjugality, as that term is understood by the law. Separation requires more than living under separate roofs to encompass a cessation of the multi-levelled intricate relationship between couples. No one factor determines when the test has been met. The global question is, when was it that the parties knew or, acting reasonably, ought to have known, that their relationship was over and would not resume?
Continuation of a relationship requires two people. Either can end the relationship without the consent of the other. As a matter of common sense, there will be many cases where one spouse knows that there will be no reconciliation and the other does not because the one has decided he or she does not wish to reconcile, but the other does not yet understand this. A fair determination of this issue requires that an objective eye be cast upon the unique circumstances of the couple. Thus it is that there are cases where couples are found to have met the test under section 4(1) even though they both continue to live in the matrimonial home.
6In this case there were other witnesses as to the state of the relationship between Mr. Taylor and Ms Marshall between September 1, 2010 and February 4, 2013.
7Linda Wong has a trailer next door to Mr. Taylor at the trailer park at Gulliver Lake. She has had a trailer there since 1995. She came to know Mr. Taylor first then Ms Marshall after Ms Marshall began accompanying Mr. Taylor to the trailer park. Ms Wong attended the parties’ wedding in 2008. Ms Wong testified that in late 2009 and at the beginning of the season in 2010 Ms Marshall was not coming to the trailer park very often. She noted loud arguments between Ms Marshall and Mr. Taylor over that period of time. Ms Wong testified that on one occasion Ms Marshall came to her asking if she could stay with her overnight as Mr. Taylor had locked her out of his trailer.
8Ms Wong testified that she became aware that Ms Marshall had attempted suicide. After that she noted that Mr. Taylor came to the trailer park each summer on his own without Ms Marshall. Ms Wong testified that she had the impression that the parties were separated at that time although she did not recall whether Ms Marshall said that they were separated. Ms Wong continued to spend time with Ms Marshall and could not recall seeing Mr. Taylor at Ms Marshall’s house in Georgetown in the period between 2010 and 2013. Ms Wong could not recall whether Ms Marshall continued to play horseshoes at the trailer park after 2009. She confirmed that Ms Marshall did visit the trailer park with Ms Wong.
9Kay Ryma also has a trailer in the park at Gulliver Lake and has known Mr. Taylor from about 1995. She described him in her testimony as “a very good friend”. She came to know Ms Marshall through Mr. Taylor when Ms Marshall began coming to the trailer park with Mr. Taylor. She attended their wedding. Ms Ryma testified that three or four years after the wedding she noted Mr. Taylor becoming “nasty” toward Ms Marshall and about her when speaking of Ms Marshall to Ms Ryma. Ms Marshall often came to Ms Ryma in tears because of things Mr. Taylor had said to her.
10Ms Ryma was aware of Ms Marshall’s suicide attempt and was particularly struck on one occasion when Mr. Taylor said to her that he wished Ms Marshall was dead and that would solve all his problems. Ms Ryma noted that before the suicide attempt Ms Marshall was not coming to the trailer park as often. After the suicide attempt Mr. Taylor told her that he would not “allow” Ms Marshall to come to the trailer. Ms Ryma testified that she gave Ms Marshall “heck’ for letting Mr. Taylor come back to live in her Georgetown house each winter. Ms Ryma, who ran the horseshoe league at the trailer park, agreed that Ms Marshall may have played horseshoes in 2009. She could not recall whether Ms Marshall played horseshoes in 2010, 2011 or 2012. Ms Ryma did recall that Mr. Taylor had looked after Ms Marshall’s dog at the trailer park for a week, and she did recall visiting with Mr. Taylor and Ms Marshall at their Georgetown home and observed Mr. Taylor putting in some sliding doors.
11Jennifer Fox first met Linda Marshall in April 2011 when they began taking a dog-grooming course together. Ms Fox first met Mr. Taylor at Ms Marshall’s home late that month. Ms Marshall described Mr. Taylor to Ms Fox as her “ex-husband”.
12Linda Marshall testified that her suicide attempt in September 2010 was a response to Mr. Taylor’s verbal abuse and other mistreatment of her. She testified that he would make it clear to her that she was not welcome at his trailer then beg to be taken back in to her house in the winter months. Each time she relented.
13Ms Marshall testified that although she considered her relationship with Mr. Taylor to be over as of her suicide attempt, she did not have the strength immediately following the suicide attempt to tell Mr. Taylor that. She testified that following some counselling in the fall of 2010 she learned to assert herself and that it was around Christmas time of that year that she clearly told Mr. Taylor that the relationship was over and that he would have to leave.
14Ms Marshall testified that although she again relented in terms of permitting Mr. Taylor to stay at her house over the winter she insisted at that point that he begin paying rent. They set up a joint account so that he could deposit $800 each month. She also deposited an equal amount in to the joint account, from which she paid the household bills. The records of the joint account confirm this beginning in January 2011.
15Mr. Taylor agreed that the parties were not intimate following Ms Marshall’s suicide attempt but that he put that down to her delicate mental health. He testified that he did not consider the relationship to be over until the end of January 2013 when Ms Marshall clearly told him to leave. It was his position that Ms Marshall continued to visit the trailer park in the summer months. It was his position that his contribution to the joint account is evidence of their joint enterprise. He points out that Ms Marshall continued to describe herself as married in her income tax returns subsequent to September 2010.
16I accept that Ms Marshall clearly communicated to Mr. Taylor that she considered their relationship over as of the end of 2010. The change in their financial relationship wherein Mr. Taylor began making a monthly cash contribution to a joint account, rather than just buying groceries and doing maintenance around the house, signals a change that is consistent with Ms Marshall’s evidence that she permitted Mr. Taylor to remain residing at her house in the winter months upon payment of rent.
17Ms Marshall’s behaviour toward Mr. Taylor from that point on was also observed by others at the trailer park and is consistent with her position that the relationship between them was at that point at an end. Her description of Mr. Taylor to her new friend as her ex-husband is also consistent with her position that she considered the relationship over. I accept her testimony that she continued to describe herself as married in her income tax returns due to her belief that because they had no separation agreement and were not divorced that was her status.
18Mr. Taylor’s refusal to accept Ms Marshall’s position until February 2013 does not mean that the parties were not separated before then. It appears that Mr. Taylor was financially motivated in wanting to maintain a relationship with Ms Marshall’s parents. His negotiation, by way of payment of rent in order to remain living in Ms Marshall’s house in the winter months does not support his position that they were not yet separated.
19As those payments by Mr. Taylor began in early January of 2011 I accept that the parties were living separate and apart and with no reasonable prospect of reconciliation as of December 31, 2010 despite their half-yearly residency in the same house from the end of 2010 through to February 2013.
Calculation of Net Family Property
20The parties have offered up date of separation values for their assets and liabilities as of September 2010 and February 2013. Ms Marshall prepared and presented two sets of Net Family Property Statements – one for each of the claimed separation dates.
21I do not have evidence of the value of assets and liabilities as at the end of December 2010. I accept the position taken by Ms Marshall’s counsel that it would be too difficult and costly to the parties to attempt to gather evidence of the value of assets and liabilities as at December 2010 at this stage of the proceedings.
22Ms Marshall’s chosen date of separation of September 2010 being much closer in time to the date I have found, consistent with Strobele, that they actually separated, I will use the September 2010 Net Family Property values in order to calculate equalization. I have no evidence that the value of any assets changed in any significant way between September 2010 and December 31, 2010. I will be relying on the best evidence available.
23Mr. Taylor, while testifying, agreed that each of the entries on Ms Marshall’s Net Family Property Statements is correct. The evidence given by Ms Marshall showed some slight changes in those entries in regard to the passage of time between the timing of the documentation and the date of separation she claimed of September 2010.I have gone through each entry to show the figures I have relied on.
24The only disagreement Mr. Taylor had with the entries on Ms Marshall’s Net Family Property Statement was the notional disposition amount of 30% accorded to Ms Marshall’s RRSPs. Mr. Taylor takes the position that the notional disposition rate should be 15-18% as he surmises that due to the fact that both parties are relatively low income earners, the taxable rate, at a time when the RRSPS are cashed in, will be in that approximate range.
25Ms Marshall testified that in her experience cashing in RRSPs on previous occasion that approximately half is held back in tax. She therefore takes the position that a 30% notional disposition rate is reasonable.
Land
26The parties agree that the appraised value of Ms Marshall’s house at 43 Normandy Boulevard in Georgetown was $241,000 as at September 2010. Mr. Taylor agrees that the notional disposition amount for this house is $14,816.50 leaving the value land owned by Ms Marshall at $226,183.50.
27The parties agree that the value of Mr. Taylor’s trailer is $15,000 leaving the value of “land” owned by Mr. Taylor at $15,000. The parties placed Mr. Taylor’s trailer under the subsection ‘land” although it is properly a vehicle or other property. The placement makes no difference to the Net Family Property calculation.
General Household Items and Vehicles
28Both parties agree there is little if any value to the household goods and furniture. Both parties agree that the vehicle Ms Marshall had on separation was gifted by Ms Marshall’s father. Both agree that the value of the KIA vehicle driven by Ms Marshall was $17,000. The evidence is that Mr. Taylor used $5,000 gifted by Ms Marshall’s father to him February 10, 2010 to purchase the van he drove (although it was in Ms Marshall’s name). Mr. Taylor kept the van and continued to drive it post-separation. I find that Ms Marshall’s paper ownership of the van was a holding in trust of that vehicle for Mr. Taylor. On all the evidence, the money used to purchase it was gifted to him and it was used exclusively by him. Both agree the value of Mr. Taylor’s golf cart is $100.
29I find that the date of separation value of Ms Marshall’s vehicle was $17,000. I find that the date of separation value of Mr. Taylor’s golf cart was $100. I find that the van driven by Mr. Taylor at the date of separation belonged to him having been purchased with money gifted to him. I find therefore that the date of separation value of Mr. Taylor’s vehicles was $5,100.
Bank Accounts and Savings, Securities and Pensions
30Both parties agree that the date of separation value of Ms Marshall’s Bank of Montreal chequing account was $2,814.01; her BMO Savings account $7,000; her RRSP # 008904956 $24,559.73; her RRSP # 008109316 $64,386.54; her RRSP 008836583 $4,749.83; and her RRSP # 008012344 $27, 756.61.
31Ms Marshall seeks to have a notional disposition rate for her RRSPs of 30%. Mr. Taylor takes the position that the notional disposition rate should be 18% as MS Marshall’s income is low. There is no expert evidence on this point. I find that a reasonable notional disposition rate for the RRSPs is 20% taking into account the income level of Ms Marshall.
32Applying a notional disposition rate of 20% to Ms Marshall’s RRSPs at their separation date value totalling $121,524.98 amounting to $24,305, I find that the separation date value of her Bank Accounts and Savings, Securities and Pensions is $107,033.99.
33Both parties agree that the date of separation value of Mr. Taylor’s Bank of Montreal account 3104-394 was $816.32 and his TD account (number unknown) $8.40. Mr. Taylor provided only 2013 values for his Bank of Montreal Account 020-423 and his Paypal account. Ms Marshall is prepared to use these amounts to calculate Net Family property. They are, respectively, $9.23 and $118.36, bringing the total of Mr. Taylor’s date of separation Bank Accounts and Savings, Securities and Pensions to $952.31.
Life and Disability Insurance
34Linda Marshall has a life insurance policy with a cash surrender value of $3,371.90. Mr. Taylor has none.
Debts and Other Liabilities
35Mr. Taylor did not provide any information as to whether he owed anything as at the date of separation on a Walmart credit card, Visa or BMO credit card. He did owe $77.30 on a Capital One credit card. Ms Marshall had no date of separation debts.
Property, Debts and Other Liabilities on Date of Marriage
36Mr. Taylor owned the trailer worth $15,000 on the date of marriage. He had no other date of marriage property. Mr. Taylor’s net value of property owned on the date of marriage is $15,000.
37Mr. Taylor in his testimony accepted the following date of marriage values for Ms Marshall: a Hyundai Elantra worth $1,500, bank account # 2670-8020-520 $1,815.51, bank account # 7084-418 $5,229.71, BMO Mutual funds $08904956 $24,937.40, RRSP 008109316 $65,338.20, RRSP 008836583 $4,841.99, RRSP 008012344 $23,101.22.
38While counsel for Ms Marshall deducted a notional disposition rate of 30% for the RRSPs I find that it would be more appropriate to apply the same notional disposition rate as at the date of separation. It will be 20% or $18,656.28.
39Ms Marshall’s net value of property owned on the date of marriage is $106,607.13.
Excluded Property
40Ms Marshall seeks to exclude a $17,000 Kia vehicle as it was a gift from her father. Mr. Taylor does not dispute that it was a gift. I find that Ms Marshall’s excluded property totals $17,000.
41As the vehicle owned by Mr. Taylor on the date of separation was worth $5,000, that amount also having been gifted to him by Ms Marshall’s father I find that Mr. Taylor’s excluded property totals $5,000.
Net Family Property
42I find that the total of Mr. Taylor’s property owned on the valuation date was $21,052.31 and the total of his debts, date of marriage property and excluded property was $20,077.30 for a net family property value of $975.01.
43I find that the total of Ms Marshall’s property owned on the valuation date was $353,589.39 and the total of her debts, date of marriage property and excluded property was $123,607.13 for a net family property value of $229,982.25.
44The equalization payment payable by Ms Marshall to Mr. Taylor would be $114,991.12.
Division of Property
45The Family Law Act provides at section 5 that:
(1) When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them.
46Ms Marshall seeks a variation in the division of net family properties pursuant to section 5(6) of the Family Law Act on the basis that an equal division would be unconscionable. In particular, she seeks to be able to claim the matrimonial home, which she owned on the date of marriage, as a date of marriage deduction. This would result in Mr. Taylor benefiting only from the increase in value of the matrimonial home during the marriage rather than receiving an equal share of the date of separation value of that asset.
47Section 5(6) provides that:
The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,
(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;
(d) a spouse’s intentional or reckless depletion of his or her net family property;
(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
(g) a written agreement between the spouses that is not a domestic contract; or
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.
48Counsel for Ms Marshall submits that there should be an unequal division of property having regard to the substantial financial gain to Mr. Taylor and the substantial financial loss to Ms Marshall of Net Family properties are equalized. Counsel submits that I can find that the parties cohabited for less than five years if I subtract the summers that Mr. Taylor spent at the trailer while Ms Marshall continued to reside at her home in Georgetown.
49It is clear that Mr. Taylor brought very little, financially, to the marriage. Even the trailer that he owned on the date of marriage, his only substantial asset, Ms Marshall paid $5,000 toward. Ms Marshal brought significant assets to the marriage, most significantly the home she owned which became the matrimonial home.
50The parties resided together from the Fall of 2004. As I found above, they separated in the Fall of 2010. They cohabited for 6 years. While it is true that Mr. Taylor spent every summer at the trailer and until 2009 when she retired Ms Marshall would visit there primarily on the weekends, I do not find that they were separated during these summer months. They clearly continued to be spouses during this period and up until their separation in the Fall of 2010.
51I have reviewed the cases counsel for Ms Marshall referred me to. In Rivers-Eshkibok v. Eshkibok upheld at an unequal division was justified in that one spouse had made no contribution to the acquisition, preservation, maintenance or improvement to the matrimonial home. Here there was evidence from Mr. Taylor that he had contributed to improvements in the home – specifically a deck, some sheds on the property and a set of patio doors; the last corroborated by Kay Ryma.
52In Von Czieslik v. Ayuso, 2007 ONCA 305, [2007] O.J. No. 1513 the Court of Appeal held at paragraph 25 that a court in applying s. 5(6) is not limited to the difference between the parties’ net family properties. In that decision the Court re-affirmed the approach to be taken as set out in Berdette v. Berdette, [1991] O.J. 788 (O.C.A.) at paragraph 3:
…there is a three-step process that the court must follow to determine spouses' rights under Part I of the FLA: (i) establish the net family property of each spouse on valuation day; (ii) determine whether one spouse's net family property is less than that of the other; and (iii) decide whether, in view of the considerations contained in s. 5(6), it would be unconscionable to equalize the net family properties. If so, the court can make an award that is more or less than half the difference in the net family properties. The third step is to be kept distinct from the determination of ownership, and therefore the considerations contained in s. 5(6) are irrelevant to the issue of ownership of property.
53While I am aware of the financial situation Ms Marshall will be placed in having to make an equalization payment, I do not find any basis on which to conclude that to equalize the net family properties would be unconscionable such that there should be an unequal division of property.
54I note however that $1,200 was taken by Mr. Taylor for his trailer fees from the parties’ joint account in March 2013. This was well after the parties had separated. I find that Ms Marshall is entitled to be repaid this amount which was for Mr. Taylor’s sole benefit. $1,200 is to be deducted from the equalization payment to Mr. Taylor.
55I find the total amount to be paid to Mr. Taylor by Ms Marshall is $113, 791.12.
56Ms Marshall may refrain from making that payment until after I have made a decision as to costs.
Costs
57The parties may exchange and file written submissions as to costs, not to exceed five pages exclusive of a Bill of Costs no later than August 12, 2016.
MILLER J. Released: July 12, 2016