Court File and Parties
COURT FILE NO.: FS-13-77617 DATE: 2016-08-17
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Katherine Joanne Ernikos Self-Represented Applicant
- and -
Anastasios Ernikos and Antonia Ernikos Jose Bento Rodrigues, for Anastasios Ernikos Howard Reininger, for Antonia Ernikos Respondents
HEARD: January 13,14,15, & April 21, 2016
Reasons for Judgment
M. J. Donohue, J
OVERVIEW
1This family law application proceeded to trial regarding equalization of net family property. In the course of the trial, the parties resolved all other issues regarding child support, s. 7 expenses, custody, access and spousal support, as well as contents of the matrimonial home.
2Ms. Ernikos included her mother-in-law, Mrs. Antonia Ernikos, as a co-respondent in the application. She claimed that the Rutherford Road property where she and Mr. Ernikos resided was a matrimonial home property held in trust for Ms. Ernikos by virtue of a resulting, implied or constructive trust.
3Ms. Ernikos also sought a restraining order as against Mr. Ernikos.
4The parties married in 1997 and raised three children. They separated for the first time in 2006 but reconciled. They lived together again until March 2013, at which time this application was brought.
5When the parties had their first separation in 2006, there were court proceedings brought in Ontario Family Court Division.
6The parties later signed a document entitled Final Minutes of Settlement in March 2007, which stated that they finally dealt with their division of property. The document stated that in the event of reconciliation of the parties, there would be no further equalization.
SEPARATION AGREEMENT
7Ms. Ernikos, the applicant, was self-represented. As the trial initially unfolded she was uncertain how she wished to proceed. Ultimately, she made certain decisions and clarified the issues.
8Ms. Ernikos confirmed that she was not seeking to set the Final Minutes of Settlement agreement aside. She agreed that it was a valid contract. She advised that she was not claiming duress nor lack of independent legal advice.
9Her position was that the agreement required that she was to be paid an equalization payment of $75,000 and that she had never received that payment.
10As well, she sought answers as to how the figures were arrived at in the calculations of property set out in the agreement, which she signed.
11For reasons set out below, I find Ms. Ernikos has misinterpreted the agreement.
The Document
12The agreement actually set out that:
i. Ms. Ernikos owed an equalization payment to Mr. Ernikos of $74,755; ii. that she had been paid an advance of $5,000; iii. that her share of the joint debt to Mrs. Antonia Ernikos was $5,000; iv. that her share of the Halton Paving debt was $7,000; and v. that she owed a lump sum child support payment of $50,745.
13The sums, which the agreement stated Ms. Ernikos owed to Mr. Ernikos, totalled $142,500.
14However, the agreement also provided that Ms. Ernikos would not be required to pay those amounts on her transferring her $142,500 share in the matrimonial home to Mr. Ernikos.
15Ms. Ernikos initialled each page of the agreement. She crossed out the paragraphs stating she had had independent legal advice and initialled it. She signed the agreement on March 6, 2007, before a witness.
Actions Following the Agreement
16Mr. Ernikos withdrew the support order from the Family Responsibility Office on March 7, 2007.
17Ms. Ernikos attended an independent law office on May 23, 2007 and signed an acknowledgement and direction transferring her interest in the Rutherford Road property, which had been the matrimonial home, to Mr. Ernikos.
18The Rutherford Road property was formerly transferred to Mr. Ernikos on June 4, 2007. The transfer tax statement set out that the consideration for the transfer was $142,250 monies paid and $14,000 for Mr. Ernikos assuming the mortgage.
ANALYSIS: THE 2007 EQUALIZATION
19Based on the documents alone there is no reason to doubt that the agreement of the parties was that there was no equalization owing by either party.
20Ms. Ernikos did not dispute the calculations of the debts listed such as the monies previously paid to her, the debt to her mother in law, Mrs. Ernikos, nor the division of the Halton Paving costs.
21Neither party called as a witness the family law lawyer who drafted the agreement to explain how the net family property was calculated to determine that Ms. Ernikos owed $74,755 to Mr. Ernikos. Mr. Ernikos testified that he did not know how those figures were reached.
22There is some indication in the agreement as to how the child support lump sum amount was calculated. Paragraph 5.2 sets out that Ms. Ernikos’ income for support purposes was $19,700 and that the Guideline support for three children in Mr. Ernikos’ care was $412.00 per month. The parties agreed in March 2007 that Ms. Ernikos would owe a lump sum amount of $50,745.00. It is not clear if this included monies owed for arrears or for future child support only.
23What is clear is that Ms. Ernikos agreed to this property division by deducting future child support that she would owe from what she might have received from her share of the matrimonial home. The evidence shows that she was back in the home with the children at least in late May 2007. If she owed child support from March 2006 (the time of the first separation) until May 2007 this is a period of only 14 months such that she would only have owed child support of $5,768.00 and nothing further. Her agreement to pay a lump sum of child support in March 2007 of $50,745 turned out, in retrospect, to have been a bad bargain for her.
24The picture is made more dismal in that following the reconciliation of May 2007, Ms. Ernikos received a pay out of her disability claim. In August 2007 she deposited $135,000 into Mr. Ernikos’ bank account.
25Nonetheless, it is clear that Ms. Ernikos understood she was signing over her rights to the matrimonial home to Mr. Ernikos. She testified to this at trial and she was not seeking to set aside the agreement.
Confusion on the Numbers
26As noted above, neither Ms. Ernikos nor Mr. Ernikos could explain how the equalization numbers in the agreement were reached. Mr. Ernikos testified that he did not know what an equalization was even for. Ms. Ernikos testified that she understood that the agreement was to make sure the house was “safe for her children”.
27There were allusions to Ms. Ernikos’ mental health but no evidence was put before the court that she was not capable of dealing with her property. There was only a doctor’s letter by her psychiatrist dated September 5, 2006 that she was, indeed, capable of making such decisions.
28Neither party appeared to be sophisticated in financial matters.
29As said, Ms. Ernikos was convinced that she was owed approximately $75,000 from the agreement and that she had never been paid out. Although the agreement which both signed says that no payment was required for equalization based on the calculations, Mr. Ernikos, in his Answer said that he did make cash payments to Ms. Ernikos thereafter comprising $75,000.
30Mr. Ernikos furthered the confusion by testifying at trial that he made cash payments to Ms. Ernikos of various amounts under $10,000. His bank records do not disclose withdrawals to support this. Mr. Ernikos had no other details to support this evidence.
31It was apparent that this added confusion to Ms. Ernikos in these proceedings as she testified adamantly that she received no such payments.
32Ultimately, it was not submitted or argued by Mr. Ernikos’ counsel that $75,000 was paid in cash to Ms. Ernikos. Rather he relied on the separation agreement where the parties agreed that no payment was required on equalization in consideration of Ms. Ernikos transferring her share of the Rutherford property to Mr. Ernikos.
33Ms. Ernikos argued that Mr. Ernikos did not fulfill his legal obligations agreed to in the separation agreement. All the evidence supports that he did. It proved to be a disadvantageous contract for Ms. Ernikos to have signed when she reconciled so soon as she appears to have overpaid child support.
34There is no basis however to suggest that the agreement was not binding or that Mr. Ernikos did not satisfy his obligations. Ms. Ernikos agreed it was a valid contract.
DATE OF SEPARATION
35While agreeing at trial that the agreement was a valid contract Ms. Ernikos argued and gave evidence that the parties were not separated in March 2007 when they each signed the agreement. She testified that she in fact reconciled with Mr. Ernikos and returned to the Rutherford Road home and to her children in September 2006, some six months before this agreement was signed.
36I am persuaded however that the evidence supports that they reconciled in late May 2007 for the following reasons:
a) On August 30, 2007 Ms. Ernikos swore an affidavit wherein she agreed with the Office of the Children’s Lawyer to have an order that her husband remain in the family home with the children and she would have unsupervised visits. Ms. Ernikos testified at trial that she was lying when she signed the affidavit in the lawyer’s office. I prefer however to trust her memory and understanding as being more reliable in 2007 than it is today. b) On September 5, 2006 her psychiatrist wrote a letter that Ms. Ernikos was competent to make a decision regarding “equity of the marital home.” I find this to be consistent with the parties not being reconciled at this time. c) On September 24, 2006 the parties were in attendance before the Ontario Court of Justice Baldock. Baldock, J. noted that Ms. Ernikos was seeking new counsel and “reconciliation not now likely”. The matter was adjourned to November 21, 2006 for a case conference. d) The Agreement itself, at paragraph 1.2, states, “They separated on March 25, 2006. The parties will continue living separate and apart.” e) On May 23, 2007 Ms. Ernikos met with her independent lawyer to sign over her interest in the Rutherford Road property consistent with paragraph 11.2 of the agreement.
37Taken together these facts support Mr. Ernikos’ evidence that they reconciled in late May, 2007 after she transferred her interest in the Rutherford Road property.
IS THERE AN EQUALIZATION PAYMENT FOR THE MARCH 2013 SEPARATION?
The Law
38Mr. Ernikos relied on the Court of Appeal decision of Sydor v. Sydor. The court considered the effect of a separation agreement made in the first separation followed by reconciliation and a subsequent separation.
39The facts in Sydor were similar to the facts here in issue. The parties separated and signed an agreement wherein the husband paid the wife a dollar amount for the wife’s interest in the matrimonial home. The wife transferred her interest to the husband. The agreement stipulated that the wife would have no further interest in the matrimonial home under the Family Law Act, R.S.O. 1990, c. F.3. The agreement further stated that in future proceedings the agreement could be pleaded as full estoppel and defence to any claims relating to property rights.
40The court determined that the parties could specifically state their intentions to survive reconciliation: see Sydor, at para. 22:
[T]he common law rule is to the opposite effect: the separation agreement is void upon reconciliation, subject to a specific clause in the agreement that would override the common law or a clause that would be implied from the agreement that the intent of the parties was that transactions carried out under the agreement will remain in place.
41The Court of Appeal found that the trial judge was entitled to find that the parties intended to dispose of their rights to the matrimonial home in the separation agreement, which divided the value between them and that it was intended to be final and to survive reconciliation: see Sydor, at para. 27.
Analysis of the Ernikos Agreement
42The separation agreement of the Ernikos parties, drawn in 2007, some four years after the decision released in Sydor, may well have considered that decision.
43These parties specifically agreed in paragraph 14.2 that if the parties reconciled, the agreement would become void “except that any transfers or payments made to that time will not be affected or invalidated.”
44In paragraph 14.3 the parties agreed that if they reconciled, that none of the property or debts in either of their names would be included in the net family property ….and “if there should be a breakdown of the relationship that neither shall be entitled to an equalization of net family property as calculated pursuant to the Family Law Act”.
45The parties very clearly dealt with Ms. Ernikos’ interest in the matrimonial home by the clear language of the contract.
46The parties made it clear that their intention was that transfers of property and their net family property had been equalized and that transfers of property carried out under the agreement were to remain in place.
47This is exactly what the Court of Appeal stated was necessary to bind the parties, even after reconciliation.
Values for the Net Family Property on the 2013 Separation
48The parties disputed the value of the Rutherford Road property for the valuation date of March 28, 2013, the second separation date. The parties agreed on the values of all other assets and debts.
49Ms. Ernikos argued that the Rutherford Road home was to be included as an asset with a value of $500,000.
50On March 28, 2013 however, neither party owned the Rutherford property. Mr. Ernikos had transferred it to his mother, Mrs. Antonia Ernikos, three years before.
51There was no evidence before me that the transfer from Ms. Ernikos to Mr. Ernikos in the spring of 2007 was improper. It was in fact supported by the agreement. There was no evidence before me that the transfer from Mr. Ernikos to Mrs. Antonia Ernikos in 2010 was improper. He had the right to transfer what he owned to his mother. Again it was supported by the agreement, which Ms. Ernikos acknowledged to be a valid agreement.
52I find therefore that the net family property of the parties in 2013 does not include the Rutherford Road property as they did not own it at the valuation date.
53The calculations of net family property become unnecessary by virtue of the agreement the parties signed in 2007 that their property was excluded by Paragraph 14.3 of the agreement. Pursuant to s. 4(2) of the Family Law Act, “that excluded property does not form part of the spouse’s net family property,” brings the net family property calculation to zero. There is no payment owing as follows:
| Assets | Applicant | Respondent |
|---|---|---|
| Rutherford Property | 0 | 0 |
| Household Items/Vehicles | $6,212.50 | $6,212.50 |
| Bank Accounts / Savings | $14.88 | $125,168.04 |
| Life Insurance | $847.86 | $5,153.92 |
| Total Value of Property | $7,075.24 | $136,534.46 |
| Debts | $1,964.24 | $0 |
| Value of Property Excluded under s.4(2) F.L.A. per para 14.3 Agreement | -$7,075.24 | -$136,534.46 |
| Net Family Property | -$1,964.24 | $0 |
Equalization: no payment owing by either party
54Further, by virtue of paragraph 14.3 of the agreement both parties agreed that neither would be entitled to an equalization under the Family Law Act.
55I therefore conclude that there may not be an equalization and there is no equalization payment owing.
CLAIM AS AGAINST MRS. ANTONIA ERNIKOS
56Ms. Ernikos, the applicant, did not give any evidence to support a finding of resulting, implied or constructive trust of the Rutherford Road property.
57The evidence is that Ms. Ernikos transferred her interest in that property in May 2007 pursuant to the agreement. She did so by an independent law firm from that of Mr. Ernikos.
58Mr. Ernikos held title to the Rutherford Road property until April 2010 at which time he transferred title to his mother Antonia Ernikos. There was no legal impediment against him doing so. Mr. Ernikos had suggested that the transfer was to done to forgive loans given to him by Mrs. Antonia Ernikos. The loans were not proven at trial. Ms. Ernikos argued that he needed to prove such loans. I find that he did not. I repeat that he was legally entitled to transfer what was legally his, particularly in light of the agreement the parties had made three years before.
59The parties, after reconciliation, continued to reside in the Rutherford home from 2007 to 2013. Ms. Ernikos testified that during that time they paid property taxes and insured the property. She suggested that by doing so they were the legal owners of the property. There is no basis for this however.
60By virtue of the agreement in 2007 the matrimonial home was dealt with and Ms. Ernikos waived her claim to that property, and so too its transfer.
61There is no basis to set aside the transfer of the property from Mr. Ernikos to his mother, Mrs. Antonia Ernikos.
62The claim as against Antonia Ernikos is dismissed.
CERTIFICATE OF PENDING LITIGATION
63As there is no evidence in support of the trust claim on the property there is no entitlement to Ms. Ernikos to have the certificate of pending litigation registered on title.
64As requested by Mrs. Antonia Ernikos I order the certificate of pending litigation to be discharged and lifted from title. I order that Mrs. Antonia Ernikos be permitted to discharge the certificate without consent or approval of Ms. Ernikos.
POSSESSION OF THE RUTHERFORD ROAD PROPERTY
65As the evidence supports that Antonia Ernikos is the legal owner of the Rutherford property, she seeks an order for possession of the property.
66Since the second separation of March 2013 Ms. Ernikos has resided in the Rutherford Road property with the children. Ms. Ernikos has not paid rent for this property over the last three years.
67Mrs. Antonia Ernikos has not brought a claim for occupation rent nor provided any evidence for such a claim. She does however seek vacant possession of the property.
68As Mrs. Antonia Ernikos is the legal owner, I find that Ms. Katherine Ernikos must vacate the property within 30 days.
RESTRAINING ORDER
69Although Ms. Ernikos sought a restraining order she made no submissions as to why it was needed nor did she give any evidence to support such a need.
70The request for a restraining order is denied.
SUMMARY
71This Court orders:
- There is no equalization owing between Ms. Ernikos and Mr. Ernikos;
- The claim as against Mrs. Antonia Ernikos is dismissed;
- The certificate of pending litigation on the Rutherford Road property is hereby discharged;
- Mrs. Antonia Ernikos is permitted to discharge the certificate without consent or approval of Ms. Katherine Ernikos.
- Ms. Katherine Ernikos is to vacate the Rutherford Road property within 30 days to give vacant possession to the owner, Mrs. Antonia Ernikos.
COSTS
72If the parties cannot agree on costs, the respondents may make written submissions as to costs within 15 days of the release of these reasons. The applicant has 15 days after receipt of the respondents’ submissions to respond. All such written submissions are to be forwarded to my judicial assistant at my chambers at 7755 Hurontario St. Brampton, ON, L6W 4T1. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves. Submissions are to be five pages or less plus any attached costs outlines, offers, and case law.
M. J. Donohue, J
Released: August 17, 2016