Court File and Parties

CITATION: Rochester v. Rochester, 2016 ONSC 7075 COURT FILE NO.: FC-14-0624 DATE: 20161108

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Diane Rochester, Applicant (Responding Party) AND: Gary Rochester, Respondent, (Moving Party)

BEFORE: MR. JUSTICE CALUM MACLEOD

COUNSEL: Rodney B. Cross, Counsel, for the Applicant Gary Rochester, Respondent, self-represented, in person

HEARD: November 8th, 2016

ENDORSEMENT

[1] The respondent, Mr. Gary Rochester brought a motion to change the order of Justice Sheffield made on January 29th, 2014. He alleges there has been a material change in circumstances which should reduce or eliminate his obligation to pay spousal support. By order of Justice Abrams made on August 15th, 2016 the motion was converted to a one day trial. The trial came before me in Brockville on November 8th.

[2] Mr. Rochester represented himself during this hearing. I commend him for the way in which he presented his position. He was organized and respectful and he did his best to separate evidence from argument. He responded to cross-examination and he accomplished the difficult task of cross-examining the applicant without being abusive or argumentative. He had researched the law and was able to present cases that were pertinent and on point. Unfortunately none of this is sufficient to meet the evidentiary burden. The variation he is requesting retroactive to a month after the trial would require powerful, cogent and persuasive evidence of changed circumstances.

[3] For the reasons that follow, I am dismissing the respondent’s claim to reduce support and eliminate the arrears. I am directing that the arrears of spousal support be set off against the outstanding equalization payment. At Mr. Rochester’s request I have also given direction regarding the outstanding claim for divorce.

[4] I feel that it is important to make two observations. Firstly, the parties have been separated for almost 11 years during which they have been engaged in almost constant litigation. Despite the relative civility of the one day trial, a decade of acrimonious litigation should be deeply embarrassing and is entirely disproportionate to the issues. The parties need only read paragraphs one and three of Justice Sheffield’s reasons to understand that they each bear responsibility for this.[^1] And it appears they have quite literally made themselves ill.

[5] Secondly, Mr. Rochester was unsuccessful today because he has not been able or willing to provide evidence that his reduction in income is genuine. He has acted precipitously in asking the court to diminish or repeal Justice Sheffield’s judgment from almost the moment it was pronounced. Indeed he launched this motion on June 20th, 2014 less than 6 months after the trial in violation of s. 37 (3) of the Family Law Act. But Mrs. Rochester must face the fact that her husband is 68 and he will be entitled to retire at some point. In all probability there will then be a genuine reduction in income and a likely reduction in support. The parties would be well advised to face up to this eventuality and to deal with it through negotiation.

Background

[6] I need not set out the history of the marriage in any detail. Justice Sheffield did so in his reasons which are a matter of public record.[^2] Suffice to say the parties were married for 33 years before separating in March of 2006. They have no children so the only issues to be determined were property and support.

[7] The matter originally came to trial in 2011. At that time Mrs. Rochester was suffering from debilitating depression. At a trial before Justice Toscano Roccamo she collapsed in the witness box and was taken to hospital. Thereafter the Public Guardian and Trustee (PGT) was appointed litigation guardian, a mistrial was declared and a new trial was ordered. It was the second trial that proceeded before Justice Sheffield. Mrs. Rochester was represented by the PGT as litigation guardian and by counsel retained on her behalf by the PGT. Mr. Rochester was not represented at the trial.

[8] As found by Justice Sheffield, the only significant asset was the farm property owned by the applicant wife. This was subject to equalization using the separation date value. Justice Sheffield rejected the respondent’s claim for constructive trust. He disallowed as a debt a mortgage claimed by the applicant and he disallowed as property a judgment debt owed to the applicant by the estate of the respondent’s mother.[^3] He ordered the applicant to pay the respondent an equalization payment of $39,820.87. This amount remains owing.

[9] The respondent who is well educated with degrees in psychology and business administration was working at the time of the trial as the general manager for a R.V. dealership in Kingston. He had worked for the Butler group of companies which included the Kingston dealership for many years. In ordering spousal support of $2,700.00 per month, Justice Sheffield found that Mrs. Rochester was medically disabled from working and had been for several years.[^4] He found that Mr. Rochester had average yearly “line 150” earnings of $76,000.00 but he imputed additional income to find that his earning capacity was $80,000.00 per year. This took into account the heart attack suffered by the respondent in 2008.[^5] Mr. Rochester was ordered to put life insurance in place to secure his support. He has not done so nor has he ever voluntarily paid the spousal support.

[10] It is relevant that Mr. Rochester launched an appeal. Although the appeal was ultimately abandoned – or to be more precise it was dismissed for failure to perfect - the grounds of appeal are instructive. The Notice of Appeal may inform the analysis of the issues which were before the court at the time of the trial. Amongst other things, the notice of appeal complained that Justice Sheffield “did not take into account that my income has been falling as the result of a heart attack I had and my subsequent need to work at less stressful and hence less remunerative work”. His appeal was also based on what he stated was erroneous imputing of income, procedural unfairness regarding the wife’s financial disclosure or lack of disclosure and failure to consider his age and mental and physical health. The notice of appeal was dated February 26th, 2014 and at that time Mr. Rochester was represented by counsel.

[11] I will briefly mention some additional aspects of the ongoing conflict which were mentioned during the trial. Firstly, Mr. Rochester had registered a Certificate of Pending Litigation against the matrimonial home. This remains in place and has never been discharged notwithstanding Justice Sheffield’s determination that he had no interest in the land. Mr. Rochester refuses to consent to having it removed. I am asked to make an order removing it so that Mrs. Rochester may proceed with a sale or partial sale of her land.

[12] Subsequent to the Sheffield judgment, Mr. Rochester transferred title to his home which had previously been jointly owned with his current common law partner to her name alone for $1.00. Mrs. Rochester’s previous counsel took the view this was a fraudulent conveyance and at a settlement conference in the current proceeding on November 16th, 2015 leave was granted to the applicant to register a Certificate of Pending Litigation against that property.

[13] Mr. Rochester has a pending motion to discharge the CPL but I mention it because it is his evidence that the reason for the transfer was due to the fact that he had used up his equity in the property. This is because the Family Responsibility Office (FRO) had registered a writ of seizure and sale against the property that had to be satisfied when the mortgage was refinanced. I do not have to determine the validity of the transfer but there was a lump sum of roughly $29,000.00 paid out of the mortgage advance to reduce the arrears. As a consequence, the most recent statement of arrears generated by FRO shows the cumulative arrears of spousal support at $42,873.67. Apart from the lump sum payment, the only spousal support being paid is through federal diversions to FRO of roughly $560.00 per month.

[14] Finally, I should mention a matter that Mr. Rochester drew to my attention during the hearing. In the original application, there was a claim for divorce contained in the Answer. This has never been dealt with. The claim for divorce was neither granted nor dismissed in Justice Sheffield’s reasons since it was not one of the issues discussed during the trial. Mr. Rochester seeks an order that he may proceed with the divorce.

The test for variation

[15] Because there was a claim for divorce but no divorce was granted, the parties agree that the final order was an order for spousal support pursuant to the Family Law Act. I agree with this. Spousal support can be ordered under either provincial legislation (the Family Law Act) or federal legislation (the Divorce Act) but in a divorce proceeding the latter takes precedence and the former is stayed. Where, as here, a judge grants a final order for spousal support that is not a corollary relief order under the Divorce Act it must be presumed that the stay triggered by the divorce application is lifted and relief granted under the provincial legislation.[^6] I observe however that Justice Sheffield believed the divorce had been granted because he was told that the respondent had remarried.[^7]

[16] The parties agreed that the variation was governed by s. 37 of the Family Law Act. S. 37 is similar in substance to the variation provisions of the Divorce Act so the decisions of the Supreme Court of Canada such as L.G. v. G.B.[^8] cited by the respondent and the more recent decisions in Miglin v. Miglin[^9] and L.M.P. v. Lemke[^10] contain the governing principles even though those are cases decided under the federal legislation.

[17] To be successful in a motion to change the court must first be persuaded that there has been a material change in circumstances. As Mr. Rochester correctly points out, this means a change that is significant enough that had it existed at the time of the original order, a different order would have been made. But it is not enough to show that such a change has occurred. The change must be a genuine change and neither manufactured nor self-induced.

[18] If the threshold is reached for a variation order, the court must consider the impact of the change and determine a fair result. This precludes parties from re-litigating the issues that were decided when the original order was granted. Rather, the analysis is concerned only with the impact of the change. The court does not reconsider the validity of the original order. Except in the rarest of instances, the only way to challenge a determination made at the original trial is through a successful and timely appeal.[^11]

Assessment of the Evidence

[19] There are two branches to Mr. Rochester’s argument. Firstly he contends that he has suffered a drastic decline in income. He alleges that he lost his employment shortly after the original order was made and he has been unable to resume full employment since that time. Even if full-time employment is available, Mr. Rochester argues that he is unable to work full time for health reasons. On the other side of the equation, Mr. Rochester argues that his wife has failed to take any steps towards self-sufficiency or to marshal the resources she has at her disposal in order to earn a reasonable income. He contends that income should be imputed to her and argues that her earning capacity is now greater than his own.

[20] Mr. Rochester’s evidence is that he lost his employment on February 28th, 2014. The RV dealership had apparently gone out of business sometime in the fall of 2013 (that is before the date of the trial) but at the time of the trial Mr. Rochester had believed Mr. Butler (the owner of the corporation) would develop a new business in the same location. According to Mr. Rochester, he was taken by surprize when that was not the case. In support of this he provided a copy of a record of employment and a letter from Mr. Butler undated and addressed to “whom it may concern”.

[21] Of course these documents are hearsay although the Record of Employment could be admitted as a business record had the proper steps been taken. Mr. Rochester did not attempt to call Mr. Butler as a witness.

[22] The timing of the apparent termination is problematic for two reasons. Firstly, the decline in business leading to the decision to close the dealership had occurred before the trial. Moreover, the decision to close was apparently made on Mr. Rochester’s own recommendation. Furthermore there was a previous incident of Mr. Rochester being terminated by the Butler group in 2010 during the litigation. On that occasion he was terminated as general manager of the “Leisure Days R.V. Centre” in Kingston effective January 31, 2010. He then worked for the Butler Group of Companies commencing in June and was terminated again in September of 2010. Yet he was re-hired by another Butler company and there was evidence that he continued to work for Butler entities during times he said he was unemployed. All of this evidence was before Justice Sheffield when he concluded that Mr. Rochester had earning capacity of $80,000.00 per year.

[23] The second problem is Mr. Rochester is again working for Pat Butler although this is now only part time. He conceded under cross examination that in all probability if he asked for more work he could get it but he argued that he could not tolerate the stress of working full time given his heart condition.

[24] The record shows numerous occasions on which Mr. Butler has written letters which Mr. Rochester has attempted to use as evidence in the litigation. For example, Mr. Butler spontaneously offered Diane Rochester employment in 2006 just after the separation. He renewed this offer in October of 2007. Mr. Rochester obtained a letter from Mr. Butler in January of this year indicting that Mr. Rochester was not working for him presently and he did not anticipate having any further work for him. This is not accurate as Mr. Rochester continues to do work for the Butler Group.

[25] Under the circumstances, it would be extremely dangerous to put any reliance on the unsworn letters apparently written by Mr. Butler and tendered as evidence by Mr. Rochester. The failure to call a witness to prove the bona fides of the reduction in employment and his own admission that he could obtain more work if he asked for it is therefore deeply problematic for him.

[26] Similarly there is no good evidence that Mr. Rochester has made efforts to find alternative employment. He briefly set himself up as a self-employed consultant and in fact he appears to continue to file his taxes as self-employed. But he does not suggest that he has made any attempt to seek alternative full time or part time employment. To the contrary, his evidence is that he has not sought full time employment because he cannot tolerate the stress of working full time.

[27] Mr. Rochester did suffer a heart attack in 2007. This was well before the trial and his health was put in evidence before Justice Sheffield. He also presented evidence that he was suffering from depression, although his physicians at the time described that as being largely an artifact of the litigation. His evidence at the time of the trial before me was that he recently had a recurrence of chest pain and had been given medical advice that he should not work full time because his heart condition was particularly vulnerable to stress.

[28] In support of his contention that he is now medically disabled from working full time, Mr. Rochester relies upon his own evidence and articles he has copied from medical journals dealing with the cardiovascular consequences of cortisol excess. As well he has produced letters from physicians some of which are dated prior to the trial. In particular a letter from Dr. Tunnicliffe dated May 23, 2008 confirmed the diagnosis of myocardial infarction suffered on April 17, 2007 and related it to the stress of the divorce litigation. Post trial, he has a letter from Dr. Brenda Barry, a locum, dated May 6, 2014 stating that she advises he retire as he is 65 and that “given his history of coronary artery disease and stress-related health issues seeking new full-time employment at this stage would be detrimental to his health”. He has a letter dated June 4, 2014 from Dr. Marina Luka in which she states “I do believe Mr. Rochester should retire early”. She adds that “given the ongoing litigation stress, adding work related stressors may be detrimental to his health” and that she doubts “he will be able work effectively and productively, in his current state of mind”.

[29] These letters cannot be admitted as expert evidence or really as any evidence at all. Taken at their highest, they simply show that Mr. Rochester has been able to persuade a number of physicians to write letters containing advice that he retire and reduce stress in his life. He was cautioned by Justice Abrams at the trial management conference that if he wished to rely upon his medical condition, he would have to call medical evidence. His rationale for not doing so when he appeared before me was that he only saw the doctors once when they wrote these letters and it was some time ago so they did not even remember him and he was unable to find a physician to act as a witness. That is telling, particularly when he has produced recent copies of referrals for chest x-rays which he says are related to episodes of chest pain. I am unable to find that Mr. Rochester has established that his health is materially worse than it was at the time of the trial.

[30] This effectively disposes of the first branch of Mr. Rochester’s motion. He has the burden of proving a material change and if he cannot show the bona fides of his coincidental loss of employment or a significant diminution in his capacity to work for medical reasons, he fails to meet the onus. I cannot accept his evidence that he is now only able to earn a fraction of the amount he was found to be earning at the time of the trial. In addition, I observe that he was able to organize his material and present his case in a calm, organized and professional manner. At the trial he was articulate demonstrating intelligence and organizational skills. Along with his M.B.A. and his work experience as a general manager and business consultant, it is difficult to imagine that he does not remain employable.

[31] I will deal briefly with the contention that Mrs. Rochester should be imputed income. Even if Mr. Rochester cannot demonstrate a material change in circumstances leading to a diminution in his income, it would be material if the applicant’s earning capacity had significantly increased.

[32] At the time of the trial, the applicant was suffering from such disabling anxiety and depression that she was found to require a litigation guardian and the PGT stepped into that role. I am satisfied from the questions asked by Mr. Cross and her responses that she does not require a litigation guardian today and was competent to instruct counsel. That of course is an improvement but it does not rise to the level of a material change without more.

[33] Justice Sheffield found that the applicant had no income earning capacity at the time of the trial and doubted that she would have in the foreseeable future. He found that she had a grade 12 education and was trained as a farrier. During the marriage she had worked periodically outside of the home as a sales representative and she had managed a donut shop and consignment shop but her employment at the time of separation was her attempt to operate a stable for racehorses on her farm. This business failed and she has been unemployed since 2010. At the time of the trial she was living well below the poverty line and was unable to work.

[34] The applicant gave evidence at the trial before me. She advised that subsequent to the trial, she continued under psychiatric care and on medication but she is no longer under medical care today. Her financial situation has continued to deteriorate and her only income is rental income from the farm, spousal support (when she receives it) and some part time work she has taken on in the past year. She earns approximately $200.00 per month from the part time job. This is a change from the trial but not significant enough to be material. The rental income was taken into account – and indeed imputed - by Justice Sheffield. The applicant will qualify for OAS in January and a modest divided CPP payment but she is not in receipt of that income as of this date.

[35] The applicant also has significant debts including loans from family members and debts owed for legal fees. Significant amongst the latter is a lien for $68,144.23 in favour of the Public Guardian and Trustee and $32,000.00 in favour of Legal Aid Ontario. There are also municipal taxes owing in the amount of $26,686.03. Significantly, she still owes the respondent $39,280.00 for the equalization payment.

[36] Mrs. Rochester testified that she is attempting to sell a portion of the farm and has an agreement to do so for $150,000.00 subject to obtaining a severance. This will allow her to deal with the liens or most of the liens and the outstanding property taxes. She then hopes to either continue living in the farm house and renting out the cottage or to sell the remaining parcel of land. She does hope to increase her $200.00 per month employment income.

[37] Mr. Rochester argues that income for rental of horse stalls should be imputed. He argued that horses can be boarded for $300 per stall per month and in support of that he referred to several advertisements he obtained off the internet. He cross examined the applicant on this point. Mrs. Rochester testified that she cannot board horses because she has removed the track and other infrastructure she had when she was training horses, that the barn currently has no hydro, that she cannot afford the necessary liability insurance and there is no market for boarding horses without facilities to exercise, train and care for the horses.

[38] I accept this evidence. In any event I would not impute income for the purpose of deciding if there was a material change. The material change would have to be a significantly improved capacity of the applicant to earn income from her property and there is nothing to suggest that circumstances have improved since the trial. She seems to be taking appropriate steps to divest herself of the land and to retire her outstanding liabilities.

[39] I cannot find that Mrs. Rochester’s marginally improved ability to work is sufficiently material to trigger a variation for the period February 2014 to the present. If she is able to sell the land, reduce her debts, increase her ability to work and obtains OAS next year, it is possible those factors might constitute a material change and trigger a review of the quantum of spousal support particularly if the respondent genuinely retires or suffers a significant deterioration in his health.

[40] In summary, the situation of the parties is not significantly different than it was at trial and the motion to vary the spousal support award will be dismissed.

Other relief

CPL on the wife’s property

[41] The applicant requests an order lifting the Certificate of Pending Litigation registered against her property. That Certificate was registered when the respondent was advancing a constructive trust claim and at trial the claim was rejected. He therefore no longer has an alleged interest in the land other than his interest as a judgment creditor to be paid the equalization payment. He has registered a writ of seizure and sale so the CPL is not required. There will be an order discharging the Certificate of Pending Litigation.

Setoff of arrears against Equalization

[42] The applicant requests an order setting off the support arrears in the approximate amount of $40,173.67 against the equalization payment in the approximate amount of $39,280.00. As it happens these amounts are virtually identical. This is the formula adopted by Justice Sheppard in April of 2014. He offset the equalization against arrears of support but he adjusted for tax deductions that the respondent would receive in paying monthly support and would not receive in paying lump sum support.[^12] That adjustment is not appropriate here because the support is in payment of arrears of periodic support already ordered and which are taxable and deductible. Conversely, given the income of the applicant in the years in question any tax impact to her should be negligible. As the formal order entered in April of 2014 contained no provision for post-judgment interest, that is not a factor.

[43] Accordingly, the overdue equalization payment of $39,280.00 will be reduced to zero and the arrears of spousal support are reduced by the same amount. This amount may be treated for tax purposes as if it had been paid as periodic payments allocated to the oldest arrears first. This should bring the support payments current as of at least September of 2016.

[44] This will also fully satisfy the judgment which is the basis for the writ of seizure and sale registered against the applicant’s property. Thus, in addition to discharging the Certificate of Pending Litigation, there will be an order vacating the writ of seizure and sale.

Divorce

[45] The respondent asks for direction with respect to the claim for divorce. He points out that there was a claim for divorce in the Answer and this was neither granted nor dismissed. He would like to obtain a divorce. The applicant concedes that divorce should be granted. The parties have been separated for 11 years.

[46] In the meantime, the respondent has commenced a new application for divorce and for other relief in Brockville (under the same Brockville court file number). Specifically he seeks to have equalization recalculated on the basis that “the respondent misled the court with respect to the value of the matrimonial home” because “she valued it at $285,000 at trial and put it on the market for $850,000 only months after the trial.”

[47] Dealing firstly with the question of divorce, a new application is not appropriate or necessary as the claim for divorce contained in the Amended Answer in the first proceeding has never been dealt with. That Amended Answer was dated August 17th, 2006 but the claim for divorce was also included in a further Amended Answer dated May 12th, 2011 authorized by Justice Ray.[^13]

[48] The claim to recalculate equalization is frivolous on its face. Both parties had appraisals before the court and Justice Sheffield reviewed both. Having rejected the claim for constructive trust (as well as the claim for occupation rent), the appropriate valuation date for equalization purposes was not the date of the trial but the date of separation. That is March 26th, 2006.

[49] Accordingly, there will be an order staying the new application and instead directing that the respondent may bring a motion in writing in the original Ottawa proceeding for an uncontested divorce. Mr. Rochester will have to obtain a new clearance certificate because the original certificate would have expired in 2012. If he has already done so in the Brockville file then the certificate may be transferred to the Ottawa file.

CPL on the property owned by the Respondent’s wife

[50] Mr. Rochester seeks an order removing the CPL from his wife’s property. This is because the leave to issue the CPL was granted at a conference in this proceeding but there has been no action or application brought under the Fraudulent Conveyances Act. I will not deal with this issue because it is the subject of a motion currently scheduled for November 15th, 2016.

[51] I will observe that in light of the lump sum previously sent to FRO and the setoff I have now ordered against the equalization payments, the net effect is that Mr. Rochester’s support will be almost current. Whether that should have any impact on the utility of pursuing a claim for fraudulent conveyance, I leave to the parties to consider.

Insurance

[52] Mr. Rochester was ordered by Justice Sheffield to secure his support obligation by putting life insurance in place in the amount of $100,000.00. He has not done so. His evidence at the hearing was that he is now uninsurable because of his heart condition but he has not provided any evidence of what life insurance he has currently, of any application that has been denied, or the cost of the insurance if he could obtain it.

[53] Failure to put insurance in place has two potential consequences beside consequences which may flow from breach of a court order. Firstly, the court may consider other security in substitution for insurance. Secondly, if the respondent dies with a support obligation, the applicant may have a right to pursue support against his estate.

[54] Although this issue was discussed during the hearing and Mr. Rochester gave evidence on this point, there was no specific claim for relief before me in the context of the trial of an issue.

[55] It is certain that at the age of 68, it will be much more difficult and expensive to obtain an insurance policy than it would have been had it been put in place in 2014. In light of the respondent’s upcoming 70th birthday and the inevitability that he will eventually retire, and with the issue of insurance outstanding, the parties might wish to consider the possibility of a lump sum payment to extinguish future support claims.

Vexatious Declaration

[56] I was asked to consider declaring the respondent a vexatious litigant. The history of this matter in which he has shown himself unwilling to accept the various decisions of the court and keeps attempting to litigate the same issue might justify such an order. So would the fact that this matter has been litigated in at least three different centres in the East Region. On the other hand, I do not doubt that the respondent will legitimately retire at some point and will legitimately suffer a decline in income which he may be able to prove with proper evidence.

[57] Although an exception could be carved out and in any event a vexatious declaration is not a prohibition but simply requires a party to obtain leave, it would in my view be unjust to grant such an order on the limited information I have available in the context of this trial of an issue.

[58] This may, if necessary, be the subject of a separate motion.

Form of the Order

[59] I will settle the form of the order. Mr. Cross will be responsible for drafting the order. In the event he cannot obtain approval as to form and content from Mr. Rochester within a reasonable period of time, he may submit the draft order to my office with the position of both of the parties. Mr. Rochester may advise of his objections to the draft in the same manner.

Costs

[60] The applicant is entitled to costs of the trial.

[61] I did not hear submissions on the scale or quantum of costs and I am not privy to any offers to settle that might bear on the issue. As a consequence, I invite the parties to attempt to resolve the issue of costs. If they have not done so by December 9th, 2016, brief cost submissions of no more than 3 pages may be sent to me in writing.

Mr. Justice Calum MacLeod

Date: November 14, 2016

[^1]: 2014 ONSC 392. [^2]: Rochester v. Rochester, supra [^3]: Paras 26 & 27 of the judgment [^4]: Para. 48 of the judgment. [^5]: Paras. 52 - 58 [^6]: S. 36, Family Law Act, R.S.O. 1990, c. F.3 as amended. And see Charleton v. Coburn 2016 ONSC 5415 [^7]: Para. 9 of the Sheffield judgment. [^8]: 1995 CanLII 65 (SCC), [1995] 3 S.C.R. 370 [^9]: 2003 SCC 24, [2003] 1 S.C.R. 303 [^10]: 2011 SCC 64, [2011] 3 S.C.R. 775 [^11]: I recognize that s. 37 also contains language about evidence that was “not available” at the time of the original hearing but that provision is not a general invitation to a rehearing. [^12]: Paras 9 – 11 of the formal judgment [^13]: Pp 145 – 151, Respondent’s book of exhibits (Exhibit A)