Court File and Parties

COURT FILE NO.: FD1094/15 DATE: 2016/07/29

ONTARIO SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Valerie Anne Ambrose Alyea Applicant

B.T. Granger, Q.C., for the Applicant

• and -

Phillip David Alyea Respondent

No one appearing for the Respondent

HEARD: April 8, 2016 and written submissions May 2, 2016

MITROW J.

Introduction

[1] This matter proceeded as an uncontested trial on April 8, 2016 pursuant to claims advanced in the application issued on September 1, 2015.

[2] The respondent was served personally on September 3, 2015 with the application, the applicant’s Form 13.1 sworn financial statement and other documents.

[3] The applicant made the following claims: a divorce; spousal support; child support other than table amount; equalization of net family property; freezing assets; costs; pre-judgment interest; and an order apportioning each party’s responsibility for the line of credit established to fund the youngest child’s university expenses.

[4] The respondent failed to respond to the application; he failed to serve or file an answer; he failed to serve or file a financial statement.

[5] Consequently the applicant obtained a date for an uncontested trial; by letter dated March 24, 2016 (Exhibit 3) the applicant’s counsel wrote to the respondent advising the respondent of the date for the uncontested trial, and advising as to the relief to be sought which can be summarized as follows:

(a) requiring the respondent to transfer and convey to the applicant by way of spousal rollover 50 percent of his Dairy Farmers of Ontario Registered Retirement Plan as of January 1, 2014;

(b) requiring the respondent to transfer to the applicant’s LIRA account 50 percent of the value of the respondent’s LIRA account which had a total value at December 31, 2013 in the amount of $105,458.79;

(c) in the event that the youngest child defaulted on a repayment of a line of credit at TD Canada Trust guaranteed by the applicant, an order that the respondent shall be responsible for the payment of $4,000 of such default, with the balance of any default to be apportioned 55 percent to the respondent and 45 percent to the applicant;

(d) further if the applicant is ever obliged to make a payment on the default in excess of the amount set out above, the respondent forthwith shall indemnify the applicant for any such payments;

(e) costs of the proceeding fixed at $1,500; and

(f) the applicant’s claim for spousal support shall be dismissed.

[6] The applicant did not file any affidavit evidence. The evidence at the trial consisted of some brief oral evidence from the applicant; three exhibits were filed consisting of the separation agreement (Exhibit 1); statements from financial institutions as to the respondent’s LIRA and pension plan (Exhibit 2); and the aforementioned letter from the applicant’s counsel. Although not referred to specifically during the trial, the applicant’s financial statement sworn August 27, 2015 was filed at Tab 2 in the continuing record.

[7] In addition the applicant’s written submissions were filed dated May 2, 2016.

[8] For reasons that follow there is insufficient evidence to deal with the pension and university expenses issues, and the hearing is adjourned for further evidence and/or submissions.

Divorce

[9] The parties were married in Woodstock, Ontario on August 10, 1985 and separated on January 1, 2014. The certificate of marriage was not available at the hearing, but a copy of same was appended to the written submissions. I have endorsed the copy of the certificate of marriage as Exhibit 4. The original certificate of marriage should be filed in the continuing record.

[10] The evidence establishes the parties have been separated for over one year. Accordingly the grounds for divorce have been established.

The Respondent’s Pension and LIRA

[11] It is the applicant’s position that the separation agreement signed by the parties divided all of their assets with the exception of their pensions. The applicant submits as follows in her written submission para. 12:

Neither party is attacking the validity of the agreement they executed and the only issue being placed before the court is the division of the respondent’s pension plans as of the date of the separation to complete the division of wealth accumulated during the period of cohabitation by means of an equalization payment.

[12] The applicant submits further that her request for a “spousal roll-over from the respondent’s LIRA account to the applicant’s LIRA account” is “subject to the provisions of s. 56.1 of the Family Law Act and the provisions of the Pension Benefits Act ”. The applicant submits that if either pension plan is subject to the provisions of the Pension Benefits Act, R.S.O. 1990, c. P.8, as amended, then the administrator of each plan will determine the amount of the plan that can be transferred.

[13] In her brief oral testimony, the applicant acknowledged the separation agreement; when asked what relief she was seeking, the applicant testified that she was asking for 50 percent of the respondent’s retirement savings plan for his company, and further that she was seeking 50 percent of the pension that the respondent has in his LIRA.

[14] It was the applicant’s evidence that she prepared the separation agreement. No lawyers were involved. The applicant testified that she “took the document off the internet” and prepared it herself.

[15] The separation agreement was signed January 1, 2014 by both parties and witnessed. It appears that each party witnessed the other’s signature. Appended to the separation agreement is an acknowledgment signed by each party attesting to voluntarily executing the agreement, and further each party executed a waiver of independent legal advice that was also attached to the separation agreement.

[16] In dealing with real and personal property, para. 6(a) of the separation agreement refers to “household contents and other property” and acknowledges that same has been divided to the mutual satisfaction of the parties. It is not clear from the separation agreement as to what is meant by “other property”.

[17] The separation agreement then deals with a 2007 motor vehicle being retained by the respondent. The separation agreement entitles the respondent to have exclusive possession of the matrimonial home and the applicant agrees to convey her interest in the matrimonial home “forthwith upon termination of the current contract” [see para. 6(d)]. It is unclear what is meant by “termination of the current contract”. Also not clear on the evidence is whether the matrimonial home (located at 2535 Westdel Bourne in London) was ever transferred. There is no reference to this property in the applicant’s financial statement, including no mention of the applicant having any interest in this property at date of separation. Reference to matrimonial home in the applicant’s financial statement is left blank.

[18] The separation agreement deals separately with each party’s responsibility for debts including indemnifying the other.

[19] In relation to pensions, the separation agreement provides in para. 6(e), that the parties “…each agree to make an application for division of pension benefits pursuant to the legislation of jurisdiction (sic), whether federal or provincial. Only agreed upon to meet minimum legislation requirements.”

[20] In para. 6(g) the parties acknowledge each other’s right to apply for a division of Canada Pension Plan credits.

[21] Para. 6(h) provides in part as follows:

Subject to the provisions of this Agreement, all cash, accounts in financial institutions, savings and retirement plans, deposits, securities, investments and employer or other private pension plans held in the name of either of the party (sic) have been be (sic) divided 50/50 between both parties...

[22] The first issue is whether either or both of the respondent’s pensions are “pension plans” within the meaning of the Pension Benefits Act. Pursuant to s. 1(1) of the Pension Benefits Act:

“pension plan” means a plan organized and administered to provide pensions for employees, but does not include,

(a) an employees’ profit sharing plan or a deferred profit sharing plan as defined in sections 144 and 147 of the Income Tax Act (Canada),

(b) a plan to provide a retiring allowance as defined in subsection 248 (1) of the Income Tax Act (Canada),

(c) a plan under which all pension benefits are provided by contributions made by members, or

(d) any other prescribed type of plan.

[23] The statement produced for the Dairy Farmers Registered Retirement Plan (“Dairy Farmer’s Plan”) shows a value of $14,995.85 as at December 31, 2013. The statement shows that the value of the plan has defined contribution pension plan and registered retirement savings plan components.

[24] Prima facie it appears that the Pension Benefits Act applies to the Dairy Farmer’s Plan; if such is not the case then evidence should be lead to that effect – in particular evidence from the plan administrator may be of assistance.

[25] The ability to provide for a lump sum payment out of a pension plan pursuant to a separation agreement is dealt with in s. 56.1 of the Family Law Act, R.S.O. 1990 c. F.3 as amended the relevant portions of which are as follows:

56.1 (1) In this section,

“family law valuation date” means, with respect to the parties to a domestic contract,

(a) the valuation date under Part I (Family Property) that applies in respect of the parties, or

(b) for parties to whom Part I does not apply, the date on which they separate and there is no reasonable prospect that they will resume cohabitation. 2009, c. 11, s. 37.

Immediate transfer of lump sum

(2) A domestic contract may provide for the immediate transfer of a lump sum out of a pension plan, but, except as permitted under subsection (3), not for any other division of a party’s interest in the plan. 2009, c. 11, s. 37.

Division of pension payments

(3) If payment of the first instalment of a party’s pension under a pension plan is due on or before the family law valuation date, the domestic contract may provide for the division of pension payments, but not for any other division of the party’s interest in the plan. 2009, c. 11, s. 37.

Restrictions re certain pension plans

(4) If the Pension Benefits Act applies to the pension plan, the restrictions under sections 67.3 and 67.4 of that Act apply with respect to the division of the party’s interest in the plan under a domestic contract. 2009, c. 11, s. 37.

Valuation

(5) Subsections 10.1 (1) and (2) apply, with necessary modifications, with respect to the valuation of a party’s interest in a pension plan. 2009, c. 11, s. 37.

[26] The reference to ss. 67.3 and 67.4 of the Pension Benefits Act requires compliance with a number of conditions, including the preparation of a statement of imputed value for family law purposes prepared by the pension plan administrator. There cannot be a pension transfer, whether by order or separation agreement, unless the pension has been valued by the pension plan administrator.

[27] In the present case no such valuation was filed for the Dairy Farmer’s Pension.

[28] Even if a valuation had been filed, it is not at all clear on the evidence what was intended by the separation agreement. Para. 6(e) of the separation agreement refers to each party making “application for division of pension benefits”. Generally in Ontario, in relation to a pension covered by the Pension Benefits Act, the pension, per se, is not divided; rather the pension is valued and then that value forms part of the pension holder’s net family property. The court then will determine the equalization payment; however pursuant to s. 10.1 of the Family Law Act, all or a portion of an equalization payment may be satisfied by an order requiring the immediate transfer of a lump sum out of a pension plan, having regard to the factors set out in s. 10.1(4).

[29] The above discussion does not deal with the situation of dividing each individual pension payment (see s. 10.1(5) of the Family Law Act and s. 67(4) Pension Benefits Act) as those provisions deal with a pension in-pay at the date of separation, which is not the situation in the present case.

[30] The applicant seeks 50 percent of the Dairy Farmer’s Pension. On the state of the evidentiary record, including the separation agreement, it is not clear on what basis the applicant claims to be entitled to 50 percent of this pension. If the applicant is relying on the separation agreement as she claims to be, then further evidence and/or submissions are required to establish that the agreement entitles the applicant to 50 percent of the pension. Further, the applicant should clarify whether any portion of this pension was accumulated prior to marriage.

[31] If the wording of the separation agreement proves insufficient to give the applicant a 50 percent interest in the Farmer’s Pension Plan and if the applicant seeks instead a lump sum transfer of the pension plan pursuant to s. 10.1 of the Family Law Act as part of the equalization payment process, then the applicant will need to lead evidence as to each party’s net family property. Admittedly this may prove difficult given the failure of the respondent to file a financial statement.

[32] In relation to the “LIRA”, it is assumed that this refers to a “Locked-in Retirement Account.” It is noted that the general regulation, R.R.O. 1990 Reg. 909, under the Pension Benefits Act, contains a detailed “schedule 3” that deals with “Locked-in Retirement Accounts”, including transfers from a LIRA.

[33] Subject to receiving further evidence and/or submissions to the contrary, it appears that a LIRA is subject to the Pension Benefits Act. Accordingly, much of the foregoing discussion in relation to the Dairy Farmer’s Pension, applies to the LIRA.

[34] During the trial the court was not referred to “any other prescribed type of plan” that is not a “pension plan” within the meaning of para. (d) of the definition of “pension plan” in s. 1(1) of the Pension Benefits Act.

[35] It would assist if the applicant can communicate with the administrator of each of the LIRA and Dairy Farmer’s Pension to obtain their consent as to what is required to implement any proposed transfer sought by the applicant, including the specific wording of any order required by the administrator.

Claim for University Expenses

[36] The parties have two daughters. The eldest daughter is working and self-supporting; the youngest daughter, Taylor, who was age 21 at the date of trial, was finishing her last year attending university in the United States.

[37] The claim of the applicant in essence is a claim for s. 7 post-secondary expenses for Taylor.

[38] It was the applicant’s evidence that a $10,000 line of credit was set up to assist Taylor with her post-secondary education expenses. It was the applicant’s evidence that she co-signed on this line of credit and that Taylor is responsible for the payments on the line of credit.

[39] The separation agreement, in para. 4(d), deals with s. 7 expenses for Taylor, and requires receipts to be provided and requires that both parties must agree to the expenses.

[40] At trial, the applicant provided no receipts for any s. 7 post-secondary expenses; no line of credit statements were provided; there was no evidence as to both parties agreeing to each specific expense as contemplated by the separation agreement.

[41] There was insufficient evidence provided to permit an order to be made for university expenses pursuant to s. 7.

[42] Also confusing was that the request for the order was only in the circumstance that Taylor defaults on the payment of the line of credit. This suggests that if Taylor does not default then no payment will be made by either of the parties for post-secondary expenses.

[43] If the applicant seeks an order for s. 7 expenses, then the applicant should provide a written summary of all of the expenses with each expense identified and itemized in a schedule together with supporting invoices; further the applicant should provide a calculation as to how to the expenses are to be shared taking into account income earned by Taylor and Taylor’s contribution towards her education costs.

Adjournment

[44] Given the lack of evidence as discussed above, a dismissal of the applicant’s claims may have been warranted, including a dismissal without prejudice to commence a further proceeding on better evidence.

[45] However, in the circumstances, and considering the respondent’s refusal to provide an answer or a financial statement and in an effort to minimize costs, it is appropriate and in the interests of justice to adjourn the proceeding, before me, for further evidence.

Order

[46] I make the following order:

(i) a decree of divorce is granted;

(ii) all other claims are adjourned before to me to Tuesday, September 13, 2016 at 10 a.m. to be spoken to only, to set a date for a continuation of the uncontested trial;

(iii) the respondent shall serve and file a sworn Form 13.1 financial statement by August 26, 2016;

(iv) the applicant shall ensure that the respondent forthwith is served personally with the Reasons for Judgment and the signed and issued order and the applicant shall file proof of service of same;

(v) for the continuation of the uncontested trial the applicant shall file a Form 23C affidavit that addresses the remaining issues, and if necessary, oral evidence may be heard; and

(vi) costs are reserved to the final disposition of this proceeding.

Justice Victor Mitrow Released: July 29, 2016