Court File and Parties

COURT FILE NO.: 5136/10 DATE: 2017/05/25

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Susanne Heffren B. Thomas Granger, counsel for the applicant Applicant

- and -

C. Michael Silverthorn David R. S. Pentz, counsel for the respondent Respondent

HEARD: May 8, 9, 10, 2017

Aston J.

Background and Issues

[1] This application was started in May of 2010. It finally came on for trial in May 2017. During the course of the proceeding, the parties settled the issues of custody and access, the table amount for child support and periodic spousal support. The remaining issues for trial are:

i) equalization of net family property, including the division of household goods, furniture, electronics, tools, sports and hobby equipment and personal items;

ii) post-separation adjustments to the net family property determination;

iii) the applicant’s claim under s.7 of the Child Support Guidelines for child support over and above the table amount; and

iv) the applicants claim for a lump sum for spousal support.

Equalization of Net Family Property

[2] The parties dispute the date of separation, the applicant asserting a date of January 1, 2010 and the respondent a date of November 9, 2009. As a practical matter, to limit the cost of the dispute, the parties agreed early on that the valuation date for net family property purposes would be January 1, 2010 with one exception. The exception relates to a significant back injury sustained by the applicant December 29, 2009 which ultimately resulted in her spending some $22,500 for remedial surgery in the United States. She had claimed that expense as a “contingent liability” on the date of separation in her net family property calculation, but ultimately abandoned that claim at trial. In the end, it is not necessary for the court to determine the effective date of separation.

[3] The parties have also agreed on the v-date values of many of the assets and debts had by each. This decision will only address those items they have not agreed upon.

Household Goods and Furniture, Electronics, Tools, Sports and Hobby Equipment and Personal Items.

[4] There is no valuation evidence from either side, only the self-serving guestimates of the parties themselves. It is not even clear in the evidence who kept what items. At the date of separation, Mr. Silverthorn said he wanted his personal items, tools, motorcycle parts and clothing and hunting and fishing gear. Had he received all those items he was content that Ms. Heffren retain everything else they owned within the home as an even trade. Twenty months or more post separation, Mr. Silverthorn was still trying to arrange a time to pick up his belongings from the matrimonial home. Ms. Heffren had obtained an order for exclusive possession of the home. Mr. Silverthorn’s repeated efforts through their lawyers to arrange a pick-up time were to no avail. His unsuccessful effort is documented and persuades me that an adjustment should be made in the net family property calculation in his favor to reflect the difference in value between what each spouse ultimately received. Mrs. Heffren’s animus towards Mr. Silverthorn continues today. I have no hesitation in finding that she had both the motive and the opportunity to keep the lion’s share of their personal property.

[5] Mr. Silverthorn is entitled to the immediate delivery of the tool cabinet and any remaining tools, motorcycle parts and equipment and his golf clubs. In addition, Ms. Heffren’s share under this category will include $5,000 more than Mr.Silverthorn’s, to reflect the difference in value between what she kept and what Mr. Silverthorn received or will receive.

Husband’s 1986 Kawasaki Motorcycle

[6] I fix the value at $1,500 based on the husband’s admitted value in his financial statement and the absence of any evidence to support a higher figure except for the wife’s unqualified opinion.

2003 Suzuki LTR 400 Eiger Quad

[7] This vehicle is still in the husband’s name, but Ms. Heffren has retained possession of it since separation and wanted to keep it at that time. The parties agree the value is $3,000 at v-date. The husband is ordered to transfer ownership of the vehicle to Mrs. Heffren forthwith and the $3,000 value will be included in her net family property.

Husband’s 2000 GMC Sierra

[8] This vehicle had 250,000 km on it at the date of separation. There is independent evidence of extensive rust damage by 2011. The husband spent $2,400 on repairs before receiving $3,700 sometime later on as a trade-in. The applicant’s unsupported opinion of the value ($9,000) seems quite unrealistic. I fix the value of the vehicle at $3,700.

Wife’s 2007 Suzuki XL7

[9] This vehicle was purchased about eight months before separation for $17,000 or $18,000 as part of a sell off by the husband’s employer. The MSRP was about $30,000. Ms. Heffren agreed in her testimony that they got a “fantastic deal” on the vehicle and that the fair market value was greater than the price they paid. I have no doubt that this vehicle was worth $16,000 on v-date as Mr. Silverthorn contends. Evidence of the subsequent trade-in value is irrelevant because the vehicle was extensively damaged post-separation.

1984 Suzuki Tempter Motorcycle

[10] The motorcycle was at the husband’s mother’s home on v-date and overlooked in his financial disclosure. It was not road worthy. The photograph of the vehicle leads me to conclude that the vehicle is not worth much more than the husband’s opinion of $200 and less than the wife’s opinion of $800 I fix the value at $400.

RRSP Intended for Lauren Silverthorn

[11] The respondent purchased this RRSP for his daughter Lauren before his marriage to the applicant. I need not guess at how much it appreciated in value during the marriage because I find the respondent is a mere trustee. Lauren is the beneficial owner of the account. It is not to be included in the respondent’s net family property.

BMO Joint Account Number xxxx-057

[12] The parties now agree the respondent assumed this overdraft. The v-date amount was $685.54.

Prime Financial Credit Union Account Number xxxx 578

[13] The parties now agree the balance in the applicant’s account on v-date is $136.61.

Canada Savings Bonds

[14] The applicant overlooked this item in her financial disclosure. She admits that $3,692 should be added to her net family property.

Bank of Montreal Account Number xxxx670

[15] The applicant also overlooked disclosing particulars of this account, necessitating testimony from a bank employee at trial. The amount to be added to the applicant’s net family property per Exhibit 8 is $70.61.

Edward Jones CI Investment

[16] I accept the applicant’s testimony that approximately $400 was held in her name when her baseball team and its social arm stopped functioning. I accept that, notwithstanding the T5 slip on her 2009 tax return, she held this asset as a mere trustee at the date of separation. It is not included in her net family property.

Money Advanced to Lauren Silverthorn for Educational Costs

[17] The applicant says that the parties loaned Lauren $3,900. There is no evidence of repayment. The respondent says there was never any expectation of repayment. It does not matter either way. On the wife’s own version, the money came from the joint account of the parties and would be a debt equally owed to the two of them. It therefore does not factor into the bottom line of any equalization payment.

Other Money Receivable

[18] Thirteen or fourteen months before separation, the applicant wrote a cheque for $4,000 on the joint line of credit. The respondent alleges that she loaned this money to her friend Elisa Ilic for a car. The applicant does not recall what the cheque was for but vehemently denies that she loaned her destitute friend money she knew could not be repaid. The cheque was not produced nor did the respondent seek to call Ms. Ilic as a witness. I am not satisfied the respondent has met the onus of proof.

CIBC Line of Credit

[19] The parties now agree that $936.21 should be shown as a debt of the respondent even though the line of credit was in joint names on v-date.

Notional Tax on RRSP’s

[20] The parties now agree that notional tax is to be included in the net family property calculation; $1,365.00 as a liability of the respondent and $1,494.94 for the applicant.

BMO Joint Credit Card Number xxxx5617

[21] Whatever the balance on the date of separation, the balance is 50/50 and therefore irrelevant to the bottom line calculation of an equalization payment.

Wife’s Credit Cards with Home Depot, HBC and PC Financial MasterCard

[22] Though she has provided statements for the months after the separation (February and March 2010), the applicant has not provided any statement of the balances owing on v-date. She cannot be sure that these cards were not used between January 1, 2010 and the date of the statements she produced. She has not met the onus of proof under s. 4(3) of the Family Law Act and cannot deduct these minor debts.

Wife’s Car Loan

[23] The respondent confirmed that when the wife’s Suzuki vehicle was purchased at the company sell off in the spring of 2009 almost all of the purchase price was financed. Though there is no documentary evidence of the loan balance I accept the applicant’s figure of $14,000 because few payments would have been made since the date of purchase eight months earlier.

Property, Debts and Liabilities on Date of Marriage

[24] The applicant was a student when the parties married. It is likely she had no significant assets. She had a leased Sunfire motor vehicle. The respondent had been working at Cami and owned a ten year old truck, hunting and fishing gear and some tools. I find that the net difference in their net wealth at the date of marriage was $4000 in favor of the respondent, an amount that barely exceeds the applicant’s own estimate.

Conclusion

[25] The application of these findings applied to the net family property calculations filed as exhibits at trial (with other agreed upon items and figures) leads me to conclude that the applicant owes the respondent an equalization payment of $13,031.07. If counsel calculate the figure differently or are unable to agree upon the calculation, brief written submissions may be made within the next 30 days.

Post-Separation Adjustments to the Net Family Property Calculation

[26] Part way through the trial the parties entered into partial minutes of settlement marked as Exhibit 25 in which they agree that the applicant is indebted to the respondent in the sum of $15,000 for post-separation adjustments. This provision is to be incorporated into the final order. Those same minutes of settlement also provide for a mechanism in relation to a replacement cheque from the township of Malahide. Paragraph 2 of Exhibit 25 shall also be incorporated into the final order.

Child Support

[27] The parties settled the question of the table amount of child support before trial. An order has already been granted in relation to that aspect of the child support claim, reserving for this trial the applicant’s claim for s.7 expenses, both retroactively and as an ongoing item.

[28] With any expense under s.7 of the Child Support Guidelines the court must consider:

1. the necessity of the expense having regard to the child’s best interests
2. the reasonableness of the expense in relation to the means of the parents, and
3. the spending pattern of the parents during cohabitation.

[29] In the case of educational or extracurricular activities there is an additional qualifier; the expense must be “extraordinary”. Seemingly inconsistent jurisprudence on what constituted an “extraordinary” educational or extracurricular expense prompted an amendment to the guidelines. Under s.7(1.1)(a) the starting point is whether the expenses “exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouses income and the amount that the spouse would receive under the applicable table…”

[30] In this case the applicant claims $24,131 for historical s.7 expenses, $16,182 of which relate to tutoring and extracurricular activities over the last six years. In 2011, when the claim was first asserted, her income was less than $60,000 annually. Following her return to work in December 2011 her income rose steadily to over $100,000 in 2015, where it has levelled off. When the application was started in 2010 the table amount of child support payable by the respondent on his annual income of $79,400 would have been between $1,100 and $1,200 monthly. In subsequent years it would have risen by about an additional $100 monthly.

[31] Going forward the tutoring and extracurricular activities the boys are still undertaking will range between $4,000 and $5,000 annually.

[32] I find on the first part of the extraordinary expense question under s.7(1.1)(a) that Ms. Heffren could reasonably cover most of the expenses claimed, but not the totality of them. I turn next to s.7(1.1)(b). It is appropriate to break down the extracurricular activities and consider each one separately. Many of them are minor expenses that should be subsumed in the table amount or by the applicant’s own income. I find that the applicant’s expenses for baseball, soccer, swimming, cadets and school trips fall into that category and do not qualify.

[33] However, I find that the music expenses for Kael do qualify under this subsection of the guidelines. Kael has been devoted to his music studies since a young age. He has demonstrated special talent. Music has become more than a mere recreational activity for him. His invitation to an advanced level military camp for six weeks this summer is the product of his musical versatility and skill with several instruments. His participation at the camp may pave the way to Royal Military College and his dream of veterinary medicine. There is a realistic possibility his music will lead to a post-secondary scholarship. In that sense the cost may prove to be an investment, not just an expense. The cost of lessons is significant, especially in the context of the other activities the applicant is paying for outside the “extraordinary” catchment. The cost of his violin ought to be included as it was within a reasonable cost range. I also include the music expenses for Jesse for 2010-2012 because they continue a pre-separation activity and for most of that period the applicant was on disability with significantly less income.

[34] I accept the applicant’s evidence that she has paid $12,377 in the past for the music lessons. She first advanced her claim early in this litigation in early 2011.There is no reason to deny any of the older expenses.

[35] The respondent is ordered to pay 45 percent of the $12,377 ($5,570) for the period to date. Going forward he is to pay that same percentage, which approximates the pro-rated incomes of the parents. Going forward he is only required to reimburse the applicant upon presentation of a third-party receipt for the expense. The modest children’s activity tax credit has been discontinued and is not a significant factor.

[36] Mr. Silverthorn admits the tutoring expenses qualify under s.7. He is ordered to pay 45 percent of the $2,875.00 paid by the applicant, $1293.75.

[37] The remaining s.7 expenses do not have to be extraordinary to qualify. The test is whether they are necessary and reasonable in all of the circumstances.

[38] The respondent accepts that the art therapy expense ($800) qualifies under s.7. He is ordered to pay 45 percent, $360.

[39] The dental expenses claimed do not meet the test of necessity. They could have been paid by the respondent’s plan had they been submitted. Alternatively the applicant could have opted to expand her own group coverage as she was later ordered to do. With an order in place requiring both parents to include the children on their group insurance there should be no further uninsured dental expenses.

[40] For the same reason, I do not allow the prescription drug claim for the period pre-dating January 1, 2017. The uninsured portion would have been covered had both parents maintained the children on their plans. The applicant should not be able to foist off her cost on the father by choosing only single coverage on her employment plan.

[41] However, I accept the applicant’s evidence that effective January 1, 2017 the cost of Jesse’s Adderall prescriptions will not be covered at all because there is a generic alternative. It costs $244.99 monthly. Dr. Kerr is aware of this fact but continues to specify the name brand in his prescription, presumably because the generic version is not a satisfactory alternative. There is no medical opinion evidence, but it is a reasonable inference that flows from the prescription itself.

[42] Commencing June 1, 2017, the respondent is to reimburse the applicant for 45 percent of the costs she incurs for the Adderall prescription upon presentation of receipts for the costs. His 45 percent share for the first five months of 2017 is $551.23. The cost shall be apportioned in this manner between the parties for income tax purposes.

[43] In summary:

a) The applicant shall pay to the respondent an equalization payment of $13,031.07 b) The applicant shall pay to the respondent $15,000.00 for post-separation adjustments to the equalization payment c) The respondent shall pay to the applicant $7,774.98 on account of s. 7 expenses to date.

Spousal Support

[44] The parties separated more than 7 years ago after about 12 ½ years together. They have two sons: Kael, about to turn 16 and Jesse, who just turned 14 years of age. The boys have been primarily in their mother’s care since the parents separated. They see their father regularly and frequently. They have a good relationship with both their parents.

[45] When the parties married November 1, 1997, Ms. Heffren had completed her post-secondary school studies and was working in Windsor as a registered respiratory therapist, the same type of work she does today. By the time Kael was born in June 2001 she had secured local employment in London and St. Thomas. Today she works two jobs and earns in excess of $100,000 annually. She is not claiming periodic spousal support but claims a lump sum stemming from a back injury she sustained December 29, 2009. The parties dispute whether their separation occurred in November 2009 or January 2010, but nothing turns on that for the purposes of her spousal support claim.

[46] In the first fifteen weeks of 2010, Ms. Heffren received short term disability equal to 100 percent of her pay, followed by a two week “waiting period” of no income, then fifteen weeks of employment insurance amounting to 40 percent of her pay. Finally she was placed on long term disability. At some point in 2010, she was informed by the disability insurance company that she would receive $3,300 per month for “permanent disability”. She understood from her doctor and from the insurance company that she was not expected to ever go back to work.

[47] Throughout 2010 the applicant underwent epidurals and other treatment to manage her excruciating pain but no remedial treatment was offered for the injury itself. She ultimately learned of a surgical alternative available in the United States. In the spring of 2011, she underwent surgery at the Laser Spine Institute in Pennsylvania. It was remarkably successful. She was back to full-time employment by December 2011. The hiatus in her full-time income amounted to 20 months, from April 2010 until November 2011.

[48] The surgery in Pennsylvania cost $22,500, confirmed by Ms. Heffren’s 2011 tax return. The tax treatment of that expense resulted in an income tax reduction for her of about $2,500 for the year. She had other incidental expenses in relation to the surgery, which involved a five-day stay in Pennsylvania, but she is only claiming $20,000 as a lump sum to reimburse her for the cost of the surgery itself. To fund this surgery, Ms. Heffren cashed in her only RRSP’s, $8,712 according to her 2011 tax return, and borrowed most of the rest from her mother. She ultimately repaid that debt to her mother years later after her mother passed away by adjustment with her sisters in the distribution of their mother’s estate. She also had some assistance in defraying some part of her total costs when her co-workers sponsored a fundraiser that raised approximately $4,000 for her.

[49] The court’s discretion with respect to spousal support is quite broad but it must reflect the factors and objectives spelled out in s. 15.2(4) and (6) of the Divorce Act.

[50] In this marriage the parties both had good jobs throughout their years together. They pooled their resources. They did not live frugally. Rather they subsidized their lifestyle by accumulating debt notwithstanding their incomes. They were each actively engaged in parenting responsibilities. They functioned as true partners financially and otherwise. There is no evidence to justify compensatory support for the applicant’s role in the marriage. She has not sustained any economic disadvantage nor has the respondent been economically advantaged by the functions or roles that they adopted.

[51] However, the applicant has been disadvantaged by the breakdown of the marriage during the 23 months immediately following separation. During this period of disability from employment the respondent paid the mortgage and some other bills in lieu of child and spousal support. However, had the separation not occurred his income of almost $80,000 a year would no doubt have picked up the slack on other living expenses.

[52] The applicant had an obligation to become economically self-sufficient to the extent practicable. She certainly fulfilled that obligation. However, one objective of a support order is to promote the economic self-sufficiency of a dependent spouse. That may require one spouse to assist the other in achieving self-sufficiency. In this case it is unfair to have either spouse shoulder the entire cost of the wife’s remedial surgery. It is more reasonable to share that cost.

[53] Between the date of separation and the interim support order 18 months later in June of 2011, the respondent had been paying mortgage payments and other payments on joint debts in lieu of child and spousal support. In 2010, his income was $78,000 and hers was $54,000. It is implicit that the parties were content to abide by this arrangement for the first year or more post-separation. It would be inappropriate to rewrite history by an analysis now of whether he paid too little or too much, even assuming I could actually conduct such an exercise on the disputed evidence of who paid what.

[54] In March 2011, the respondent stopped paying. The applicant brought the motion for interim support that resulted in the temporary order of June 2011. Payments of child support and in relation to the mortgage payments and other joint debts were fixed with a commencement date of June 1, 2011. The sale of the former matrimonial home in August 2011 changed the underlying rationale for the order and relieved Mr. Silverthorn of his share of the carrying costs in the home. Ms. Heffren still had to provide accommodation for herself and the children but now without any assistance from him at a time when she was still disabled from employment.

[55] In this case the length of the period of cohabitation and the ages of the applicant and the children at the date of separation would suggest a range for the duration of a support order under the Spousal Support Advisory Guidelines (“SSAGs”) of 6-12 years post-separation. In the case of a disabled dependent spouse a longer term of indefinite support might be appropriate.

[56] I accept the submission of counsel for the respondent that, because of the child support, the SSAGs suggest that no range of spousal support would be payable in 2011 on the incomes of the parties.

[57] It has been observed repeatedly that the SSAG’s do not create an entitlement to spousal support just because they generate a suggested quantum or range. Entitlement is a threshold issue when using the SSAG’s. This case tests the other side of that coin. If the SSAG’s suggest no range of spousal support does that imply no entitlement?

[58] Clearly not. For example, a spouse may have an entitlement to spousal support that is merely postponed while child support is in play. The unusual facts in this case provide another example. A lump sum for spousal support may be the best reflection of the objectives and factors enumerated in s. 15 of the Divorce Act.

[59] Lump sum support is an exception to the norm for the reasons set out in paras. 70-74 of Davis v. Crawford, 2011 ONCA 294:

[70] As we have said, we do not endorse the submission that lump sum spousal support awards must be limited to "very unusual circumstances" as a matter of principle. Nonetheless, we agree that most spousal support orders will be in the form of periodic payments. To a large extent, this is for four very practical reasons.

[71] First, in many instances, moneys will simply not be available to fund a lump sum support award either to take the place of, or to supplement, an award of periodic support. Instead, support will be paid from one spouse's income, the only available source for support payments, and it will be paid to finance the ongoing needs of the other spouse, which will generally be of a periodic rather than lump sum character.

[72] Second, for married couples, the court will have determined already the amount to be paid to equalize the value of the spouses' net family properties: see s. 5, Family Law Act. In many circumstances, this payment will obviate any requirements a dependent spouse may have for transitional capital.

[73] Third, in many cases, there will be no considerations favouring a lump sum award from the perspective of either spouse.

[74] Fourth, in at least some cases where there are considerations favouring a lump sum award, the general exigencies of life, including the possibility that the parties' means and needs will change, will outweigh the considerations favouring a lump sum award.

[60] On one hand the applicant’s determined effort to get back into the work force simply reflects her obligation under the Divorce Act to do all she reasonably can to be self-supporting before turning to her spouse for help. On the other hand the efforts that she undertook were not only extraordinary in the circumstances but potentially relieved the respondent from indefinite and long term periodic spousal support had she remained permanently disabled.

[61] It is also significant, in my view, that to pay an expense of this magnitude the applicant had to resort to her only available capital (the RRSP’s included in her net family property) and also had to borrow money for the cost of the surgery. She shared the after tax value of her RRSP’s with the respondent in the net family property calculation then had to use those RRSP’s to relieve him of a possible future spousal support obligation.

[62] At paras. 66-68 of Davis v. Crawford the Court of Appeal highlighted the need to weigh the perceived advantages of a lump sum against any presenting disadvantages:

[66] Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.

[67] The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to terminating ongoing contact or ties between the spouses for any number of reasons (for example, short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.

[68] Similarly, the disadvantages of such an award can include the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.

[63] In this case the advantage of a lump sum is that it satisfies the applicant’s entitlement to spousal support in a manner that can be satisfied immediately in the context of the property issues. The amount awarded will simply be credited against the amount otherwise owing to the respondent by the applicant. Given the underlying rationale for this spousal support order it is appropriate it not be variable. It should not be variable by the respondent and the applicant has elected to claim this form of spousal support knowing that it may effectively deprive her of any right to future variation or an additional claim.

[64] Having regard to the factors and objectives of the Divorce Act in these circumstances the respondent is ordered to pay a $12,000 lump sum to the applicant for spousal support.

Divorce

[65] The issues all arose in the context of a divorce proceeding. The necessary requisites have been met. The formal order will include the usual provision for dissolution of the marriage subject to an effective date of 31 days.

Costs

[66] If counsel are unable to agree on costs, brief written submissions may be made within 30 days.

“Justice D. R. Aston” Justice D. R. Aston

Released: May 25, 2017

COURT FILE NO.: 5136/10 DATE: 2017/05/25 ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT BETWEEN: Susanne Heffren Applicant

• and - C. Michael Silverthorn Respondent REASONS FOR JUDGMENT Aston J.

Released: May 25, 2017