CITATION: O’Brien v. O’Brien, 2017 ONSC 5488
COURT FILE NO.: FS-15-38,339
DATE: 2017-09-18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Leslie Morgan O’Brien
Karen Ballentyne, for the Applicant
Applicant
- and -
Karen Louise O’Brien
William C. Kort, for the Respondent
Respondent
HEARD: April 10,11,12,13, 2017
REASONS FOR JUDGMENT
M. J. Donohue, J.
Contents
Background. 3
Issues for the Court 5
A) What Was the Date of Separation?. 7
B) What Adjustments Need to be Done to the Line of Credit?…….………..…11
C) What Claims Should Flow for Maintenance/Improvements/Occupation Rent
on the Matrimonial Home?...........................................................................13
Maintenance Claim.. 14
Improvements Claim.. 15
Delay of Claims. 15
Occupation Rent 16
Law Related to Occupation Rent 16
Analysis of the Matrimonial Home Claims. 18
D) Should there be pre-judgment interest on the equalization payment?.......20
E) What Retroactive Child Support is Payable?. 21
Child Support Claims. 21
Section 7 Claims. 24
F) What Prospective Award Should be Made for Child Support and S. 7 Expenses? 25
G) What Terms Should be Ordered for the Sale of the Matrimonial Home?. 25
Return Date. 28
Divorce. 28
Costs. 29
Background
[1] This matter involved financial issues relating to:
• the date of separation;
• adjustments on a line of credit;
• claims of maintenance and improvements on the matrimonial home;
• occupation rent;
• pre-judgment interest on the equalization payment;
• retroactive child support;
• future child support; and
• terms of sale of the matrimonial home.
[2] The following is not contentious.
[3] Mr. and Mrs. O’Brien married in 1985 but sometime after 2000 began having difficulties.
[4] By August 2009, Mrs. O’Brien declared at a meeting with the marriage counsellor that she wanted to separate. She began looking for places to rent and moved out a year later, in August 2010.
[5] An appraisal was done of the home and of Mrs. O’Brien’s pension. An equalization at that time would have resulted in a modest payment of less than $10,000, either way, depending on how the debts were characterized. No action was taken to fix the equalization payment.
[6] In 2009, their son was aged 18 and away at university. Their daughter was aged 14 and about to start high school. Their daughter while in high school was able to live at either of their residences. After separation, Mr. and Mrs. O’Brien shared expenses for the children’s university costs. Each parent paid for additional child-related expenses without keeping track or creating documentation. Nothing was done officially by court order.
[7] Mr. O’Brien was under the impression that the value of the matrimonial home crystallized or was “frozen” as of the date of separation and so he did not take prompt steps to finalize the equalization and take over title to the home. It was acknowledged that her pension would offset her share in the equity of the home at that time.
[8] Although Mrs. O’Brien received early legal advice that she would share in the increase in value of the home, she did not take steps to finalize the equalization either.
[9] Mr. O’Brien remained in the home paying all expenses, doing renovations and maintenance and paying down the mortgage. He also provided a home to their daughter for about half the time.
[10] He did not take legal steps until his application of November 2015, more than six years after Mrs. O’Brien’s announcement that she wished to separate. Mr. O’Brien was successful in obtaining a court order allowing him to extend the limitation for his equalization claim.
[11] Although Mr. O’Brien had much less income than Mrs. O’Brien, he did not initially claim child support while their daughter lived with him part-time. He did not pursue the s. 7 expenses he covered related to his daughter’s horse. Although his pro rata share of s. 7 university expenses for both children was less than half, he nonetheless paid half the expenses, and did not claim an adjustment until recently. Over the years, he did not seek any contribution towards the mortgage or house expenses. He occupied the home and worked on it. He was not asked or given notice of a claim for occupation rent until May 2016.
[12] Mrs. O’Brien, too, paid for many expenses for both children without seeking a claim from Mr. O’Brien. At times, each of the children lived with her. She did not seek support from Mr. O’Brien until late in this litigation.
[13] Seven years after the fact, the parties are making claims of each other that neither initially contemplated. Their memories have faded, the documents are sparse and the delay results in prejudice. Some balancing must be done.
Issues for the Court
A) What was the date of Separation?
[14] Mrs. O’Brien claims it to be August 15, 2009 when she announced her decision during marriage counselling. Mr. O’Brien claims it to be August 1, 2010 when Mrs. O’Brien actually moved out of the matrimonial home.
B) What adjustments must be done to the joint line of credit?
C) What claims should flow for Maintenance/Improvements/Occupation Rent on the Matrimonial Home?
D) Should there be pre-judgment interest on the equalization payment?
[15] Mr. O’Brien seeks this payment from Mrs. O’Brien as it is agreed she owes an equalization payment.
[16] As the matrimonial home has now increased significantly in value, Mr. O’Brien claims the maintenance costs and costs of improvements as against Mrs. O’Brien. She counters with a claim for occupation rent.
E) What retroactive child support is payable?
[17] Mr. O’Brien now claims back three years for child support for the one year plus two summers that their daughter resided primarily with him. He also claims a retroactive adjustment to his share of their daughter’s university expenses. Mrs. O’Brien now claims for a year when their son resided with her after a car accident.
F) What Prospective Award should be made for child support and s. 7 expenses?
[18] Mr. O’Brien seeks child support for the summers when his daughter was with him and s. 7 expenses to be shared proportionate to their respective incomes.
G) What shall be the terms of sale for the matrimonial home?
[19] Mr. O’Brien seeks an order that would allow him to purchase the home if it does not sell in a reasonable time frame.
A) What Was the Date of Separation?
[20] Despite Mrs. O’Brien’s stated declaration of wishing to separate on August 15, 2009, Mr. O’Brien argued that there was a reasonable possibility of reconciliation until she left the home on August 1, 2010, a year later.
[21] The courts have long considered various factors to decide whether a particular couple have cohabited in a relationship or whether the relationship is actually over, despite them remaining under the same roof.
[22] The case of Oswell v Oswell (1990), 1990 CanLII 6747 (ON SC), 74 O.R. (2d) 15 at paras. 12-18 states:
[12] Various indicia are set out in several cases under the Divorce Act, which contains similar phraseology, to assist a court in determining when spouses who occupy the same premises are living separate and apart.
[13] (1) There must be a physical separation. Often this is indicated by the spouses occupying separate bedrooms. Just because a spouse remains in the same house for reasons of economic necessity does not mean that they are not living separate and apart.
[14] (2) There must also be a withdrawal by one or both spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium or of repudiating the marital relationship.
[15] (3) The absence of sexual relations is not conclusive but is a factor to be considered.
[16] (4) Other matters to be considered are the discussion of family problems and communication between the spouses; presence or
absence of joint social activities; and the meal pattern.
[17] (5) Although the performance of household tasks is also a factor, help may be hired for these tasks and greater weight should be given to those matters which are peculiar to the husband and wife relationship outlined above.
[18] Under the Family Law Act, the court must have regard to the true intent of a spouse as opposed to a spouse's stated intent. An additional consideration to which the court may have regard in determining the true intent of a spouse as opposed to that spouse's stated intentions is the method in which the spouse has filed income tax returns: Czepa. If a mediator is consulted, the purpose for which the mediator was consulted may also be of assistance. [citations omitted]
[23] I also find the discussion by Corbett, J. in Strobele v Strobele, (2007) 34 R.F.L. (6th) 111, [2005] O.J. No. 6312 at para. 31 to be helpful on the facts of this case:
[31] When was it that there was no reasonable prospect that they would resume cohabitation? In the language used in the case of Czepa v. Czepa, when had the marriage irretrievably broken down so that the resumption of cohabitation is not reasonably foreseeable? In considering this question, it is helpful to keep in mind the purpose for which the question is being asked. It is to set the valuation date, the date at which the parties ceased being one kind of entity for financial purposes — a couple — and became another, a separated couple. Surely it is obvious that there is no one moment in time that can be fixed as the objectively true separation date. Rather the Court should determine the date on which it is fair that the parties no longer share the financial consequences of being married. [Citations omitted.]
[24] It is not disputed that Mrs. O’Brien began looking for a new residence. Sometime in November 2009, she used their line of credit to arrange first and last months’ rent. She testified that she gave up that apartment as she was worried about her daughter and the location was not good. Mr. O’Brien acknowledged that at that time, Mrs. O’Brien was depressed and overwhelmed by the “logistics” of packing up her “stuff”.
[25] Mr. O’Brien points to the evidence that they continued to have sexual intimacy after August 2009. Mrs. O’Brien agreed that relations continued into October and even after she left the following year. She said it made her husband easier to deal with. I find the factor of sexual intimacy was weakened by his evidence that the two continued to have relations after his date of separation of August 2010.
[26] Mr. O’Brien’s evidence was that they “never” slept in separate bedrooms. Mrs. O’Brien’s evidence was that she moved to the spare room. Later, she changed her evidence to say she slept in their son’s room as he was away at university. Their daughter testified that she knew her mother to be sleeping in her brother’s room and this occurred in the time before her parents told her they were separating in 2010.
[27] Mr. O’Brien pointed to evidence that a cake was provided at his spring 2010 birthday; that the two attended a wedding as a couple in July 2010; and their disclosure to his parents and to their two children occurring in the summer of 2010, as support for the later date.
[28] These factors can be considered as indicia of the relationship continuing but they are considerably outweighed by other indicia as follows.
[29] It was agreed that Mrs. O’Brien had stated a wish to separate several times in the past. But after marriage counselling, Mr. O’Brien said she would be “committed” again and they would reconcile. In this case, however, there is no support that she was “committed” again. Rather, she took steps to locate another home and arranged separate banking. The counsellor’s notes were telling; “Karen feeling strong; not happy. ‘I want to be independent in my life.” The marriage counselling ended as of August 15, 2009. This factor supports a finding that no reconciliation was reasonably expected.
[30] Mrs. O’Brien’s sister testified as to when she and their mother were told of the separation. It occurred at the cottage, in the summer of 2009. She recalled that the O’Brien’s daughter was entering Grade 9 that fall and Mrs. O’Brien was expressing her worry about how the separation would affect her daughter just starting high school.
[31] Mrs. O’Brien’s friend testified that she was advised the marriage was over in the summer of 2009.
[32] Mrs. O’Brien and her sister testified that Mr. O’Brien was absent from the big family dinners in November 2009, Christmas 2009 and Easter 2010, although Mr. O’Brien disputed this evidence.
[33] Mrs. O’Brien testified that after one night of sexual intimacy, Mr. O’Brien told her, “This doesn’t change anything.” Mr. O’Brien agreed he may have said that. He also took various other actions that were consistent with there being no reconciliation.
[34] Mr. O’Brien acknowledged that he stopped wearing his wedding ring.
[35] Mr. O’Brien arranged for an appraisal of the matrimonial home using the August 2009 valuation date.
[36] He filed their 2009 tax returns in the spring of 2010 noting their marital status as “separated”.
[37] When Mrs. O’Brien was trying to commit to a rental unit, he agreed she could use the line of credit for first and last months’ rent.
[38] Later, when Mrs. O’Brien had her pension valued, the valuation date used was August 15, 2009. Mr. O’Brien did not dispute this date.
[39] The first notice that he was relying on the 2010 separation date occurred in his application five years later, in November 2015.
[40] With respect to the evidence on sharing a bedroom, I consider their daughter’s unbiased testimony that her mother slept in her brother’s room to support a physical separation.
[41] On these facts, looking at all the indicia, I am satisfied that there was no reasonable possibility of reconciliation after August 15, 2009, and this is the date of separation for valuation purposes.
[42] The parties agreed that, if this was the date, then the equalization payment owed by Mrs. O’Brien is $162,277.
B) What Adjustments Need to be Done to the Line of Credit
[43] The parties had a joint credit line which they used for household expenses, post-secondary expenses for their son, their daughter’s horse and other expenses for their children.
[44] Some time at trial was spent covering Mrs. O’Brien’s evidence that she deposited more to that account than did her husband. She did not produce her bank statements to support this and so the argument was not made in final submissions.
[45] Ultimately, she agreed that the balance outstanding should be shared equally. She proposed several adjustments. Mr. O’Brien also agreed the balance should be shared, subject to several adjustments.
[46] No argument was made in closing submissions but in the written submissions filed, Mrs. O’Brien sought an adjustment of $4,000 representing the value of winnings by the daughter at horse shows but claimed by Mr. O’Brien. Mr. O’Brien made no submissions to dispute this but I did not hear evidence on this. I will allow further submissions at a return date if the parties require it.
[47] Mrs. O’Brien sought an adjustment for $1,605 representing the income tax refund belonging to their son which Mr. O’Brien claimed. This submission was only in the written closing and was not responded to by Mr. O’Brien. I did not hear evidence on this. I will allow further submissions at a return date if the parties require it.
[48] Mrs. O’Brien sought an adjustment of $3,259.69 representing a “double count” of the expense on the Line of Credit exhibit and Home Improvement Expense exhibit. On my review of the exhibits, there is no such line entry for $3,259.69. Mr. O’Brien made no submissions on this item but did state an amendment had been done to the spreadsheets before filing. I will allow further submissions at a return date if the parties require it.
[49] Similarly, Mrs. O’Brien sought an adjustment of $393.75 representing a “double count” of an expense on the Line of Credit exhibit and Maintenance Expense exhibit. On my review, there is no line entry for that amount. Mr. O’Brien made no submission on this item. I will allow further submissions at a return date if the parties require it.
[50] Mr. O’Brien sought adjustments as follows. He sought half the interest payments he made from January 2012. Mrs. O’Brien acknowledged that she stopped making payments on the credit line at that time. She made no opposing submission why she should not pay half the interest. I allow the adjustment as requested by Mr. O’Brien of $6,265.
[51] Mr. O’Brien sought half of the $3,000 which Mrs. O’Brien took for her personal use from this joint line of credit. She acknowledged that it was for her personal use. She did not make any submission why there should not be a credit to him of half that amount. I allow the adjustment as requested of $1,500.
C) What Claims Should Flow for Maintenance/Improvements/Occupation Rent on the Matrimonial Home?
[52] The parties have long treated the matrimonial home as Mr. O’Brien’s property. Since separation, he had paid the mortgage, taxes and insurance. He also maintained, improved and occupied the property.
[53] It is agreed that he was under the false understanding that Mrs. O’Brien’s interest in the home crystalized or was “frozen” as of their date of separation. Mrs. O’Brien got legal advice and knew that Mr. O’Brien was wrong in thinking her interest was capped at the valuation date. She did not correct him or disabuse him of his false understanding.
[54] At separation, her share of the equity in the home would have roughly matched the equalization payment she owed and so she would not have received anything of the equity had the title been transferred to his name at the time.
[55] Substantial equity is now in the property as it has been improved and the property itself is much more valuable. Mr. O’Brien has largely paid out the mortgage. Mrs. O’Brien has benefited by this delay in dealing with the equalization and title.
[56] Mrs. O’Brien agreed that, to share in the equity, she now owes half the mortgage, taxes and insurance. The parties calculated these to be $175,597 as of the time of trial such that she would owe $87,798.50. The parties may make submissions regarding any adjustments since trial at a return date if required.
[57] Mr. O’Brien further sought a contribution retroactively of half the maintenance costs and the cost of improvements. Mrs. O’Brien sought retroactively a payment of occupation rent.
Maintenance Claim
[58] Mr. O’Brien sought to claim the routine maintenance he performed while living at the home to preserve it. The amount he claimed to be shared was $28,444. He prepared a careful spreadsheet of all he did in regular maintenance including materials. He costed his own labour at $30.00/hour. This is a country property. Mr. O’Brien designed and built much of the house himself. I do not find his labour at $30.00/hour unreasonably high. The maintenance costs, he calculated, averaged $307.84 monthly. I consider that would be similar to a property manager handling a property.
Improvements Claim
[59] Mr. O’Brien made a claim of the labour and cost of the improvements to the property. The amount he claimed to be shared was $25,755.
[60] I find it eminently reasonable that the installation of new windows, doors, trim and such work as bathroom renovations would enhance its value. Although Mr. O’Brien admits the house is still a work in progress, to the extent that he furthered the progress of the house, it would have added value.
[61] There is no contrary evidence that the work could be done for a less expensive hourly rate than his proposed $30.00/hour. He testified that he is an experienced cabinet maker.
[62] Based on his evidence of the work done, I find the numbers claimed to be reasonable.
Delay of Claims
[63] The maintenance and improvements claims of $14,222 and $12,877, respectively, being Mrs. O’Brien’s half of each of these totals, were never sought against her, before notice in his application of November 2015. Mrs. O’Brien responded in her Answer seeking occupation rent.
Occupation Rent
[64] The parties agreed at trial that the value for occupation rent would be $1800/month, being $78,000 up to the date of trial. The issue was whether occupation rent was owing.
[65] It is clear that Mrs. O’Brien did not wish to live in the house. She testified that the house was not finished at the date of separation. She believed that living in the house in an unfinished state contributed to her depression.
[66] Mrs. O’Brien’s first notice to Mr. O’Brien, of a claim for occupation rent, was in May 2016, some seven years after separation.
Law Related to Occupation Rent
[67] The recent case of Virc v. Blair, 2016 ONSC 49 set out a review of the factors a court should consider in a claim for occupation rent at paras. 454 - 455:
[454] In Wawzonek v. Page, Pazaratz J. dismissed a claim for occupation rent by a joint owner in circumstances where the parties separated after an incident of domestic violence. As observed, occupation rent is a discretionary remedy to be granted only in exceptional circumstances. The court referred to Ombac v. George, another case where occupation rent was denied to a beneficial owner. Pazaratz J. clearly summarized the considerations guiding the exercise of the court's discretion.
[229] In Griffiths v. Zambosco, the Ontario Court of Appeal identified the relevant factors to be considered in determining whether to award occupation rent. These factors include:
(a) The timing of the claim for occupation rent.
(b) The duration of the occupancy.
(c) The inability of the non-resident spouse to realize on her equity in the property.
(d) Any reasonable credits to be set off against occupation rent, and
(e) Any other competing claims in the litigation.
[230] The onus is on the claimant to satisfy the factors set out in Griffiths: Rebiere v. Rebiere.
[231] In Higgins v. Higgins (S.C.J.), the court expanded the list to include:
(a) The conduct of the non-occupying spouse, including the failure to pay support.
(b) The conduct of the occupying spouse, including the failure to pay support.
(c) Delay in making the claim.
(d) The extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home.
(e) Whether the non-occupying spouse moved for the sale of the home and, if not, why not.
(f) Whether the occupying spouse paid the mortgage and other carrying charges of the home.
(g) Whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support.
(h) Whether the occupying spouse has increased the selling value of the property.
(i) Ouster is not required, as once was thought in some early decisions.
[232] A co-owner claiming occupation rent must provide specific evidence as to what the market rent for the home would have been. Stetco v. Stetco.
[455] In Foffano v. Foffano, Steinberg J. alluded to a "family use" of a property for which occupation rent was claimed, as well as other financial claims in the litigation that benefited the claimant as reasons for dismissing the claim. [Citations omitted.]
[68] The case of Kazmierczak v Kazmierczak, 2001 ABQB 610, 292 A.R. 233 also dealt with a delayed claim for occupation rent. The court considered that the husband had occupied the home to provide a home for the children of the marriage and made no claims for child support from the wife. The case involved a delayed claim of 13 years and the court stated at para. 95, “rarely, if ever should one spouse be able to bank a claim for occupation rent, and present that claim in capitalized form years later as part of a matrimonial property action.”
Analysis of the Matrimonial Home Claims
[69] These parties organized their lives and their finances without either considering these various competing claims.
[70] The claim for occupation rent cannot be viewed in isolation to the history of how these parties peaceably handled their obligations over the years. It is clear that Mr. O’Brien had not contemplated that he would seek half his expenses on the home. Similarly, it is clear that Mrs. O’Brien had not contemplated seeking occupation rent.
[71] I am not persuaded that an award for occupation rent is appropriate in the circumstances of this case for the following reasons:
A) Mrs. O’Brien was not compelled to leave. She did not like the house.
B) Their home has benefited their daughter, providing her with a part-time, a full-time, and a summer-time residence at various years. It was a seven-minute drive from the barn and her horse. Horse-back riding was an extracurricular activity which both parents supported.
C) Although entitled to claim child support, Mr. O’Brien did not bring such a claim until 2016 as he stated that he thought he and his wife had made “various trade-offs”.
D) Although Mr. O’Brien had the advantage of residing in the joint asset, he funded the seven years of mortgage, taxes and insurance. He put his own labour and time into preserving and improving the property, as noted.
E) Had the parties equalized their net family property and transferred title at separation as contemplated, then Mrs. O’Brien would not have received any equity from the home. It cannot be said that she was deprived the use of her equity in the home over the last seven years. Mr. O’Brien on the other hand has created this equity she may now enjoy.
F) His efforts have improved the value of the property and preserved the property.
G) He invested his time and money and occupied the home not being aware that an occupation claim could or would be claimed, and reasonably relied on their early understanding that the house would be his.
[72] In light of my denial of the occupation rent claim, I consider that his maintenance and improvements claims must be denied as he did this work for himself as an occupier.
D) Should there be pre-judgment interest on the equalization payment?
[73] Mrs. O’Brien urges the court to use its discretion to not award prejudgment interest under s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C. 43.
[74] Mrs. O’Brien argued that it would be inequitable to award pre-judgment interest to Mr. O’Brien because the payment is based on her future interest in her pension. She had no means of paying other than by realizing on the equity of the matrimonial home which remained unsold. She provided her pension valuation to Mr. O’Brien in 2011 and he took no steps.
[75] Mrs. O’Brien relies on the Court of Appeal decision of Burgess v. Burgess (1995), 1995 CanLII 8950 (ON CA), 24 O.R. (3d) 547 (C.A.) which notes an exception to the general rule that pre-judgment interest be awarded in family law cases. The exception is stated at para. 25 where,
the payor spouse cannot realize on the asset giving rise to the equalization payment until after the trial, does not have the use of it prior to trial, the asset generates no income, and the payor spouse has not delayed the case being brought to trial.
[76] Mr. O’Brien was extremely slow in bringing his application for the equalization, understandably in the circumstances.
[77] There is no suggestion that Mrs. O’Brien has delayed the trial in any way.
[78] Mr. O’Brien argued that recent changes to the Pension Benefits Act, R.S.O. 1990, c. P.8, allowing the transference of a pension interest into an RRSP which would earn interest, changes the basic premise of the Burgess decision. It is possible, but there was no consideration by the parties of transferring her pension interest six years ago nor is there a request for it now. Once she produced her pension valuation in 2011, there was, as her counsel put it, “deafening silence”.
[79] Mr. O’Brien’s counsel particularly urged consideration of the claim for pre-judgment interest if a claim for occupation rent was to be awarded to Mrs. O’Brien. As discussed below, I consider that the claim for occupation rent should fail. On these facts, I consider that a claim for prejudgment interest on this equalization payment is not appropriate.
E) What Retroactive Child Support is Payable?
Child Support Claims
[80] Mrs. O’Brien did not seek an order for the support of their son until January 2017. By her own evidence, their son ceased being a dependent child of the marriage in June 2016.
[81] Pursuant to paras. 88 - 89 of D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 SCR 231 and per Louie v. Lastman (2002), 2002 CanLII 45061 (ON CA), 61 O.R. (3d) 459, 217 D.L.R. (4th) 269, a claim for child support may not succeed if at the time of the application he was not a child of the marriage and in need of support.
[82] D.B.S. states:
[89] … An adult, i.e., one who is over the age of majority and is not dependent, is not the type of person for whom Parliament envisioned child support orders being made. This is true, whether or not this adult should have received greater amounts of child support earlier in his/her life. Child support is for children of the marriage, not adults who used to have that status.
[83] I therefore deny Mrs. O’Brien’s claim for child support.
[84] Mr. O’Brien had not planned to seek child support for his daughter. His income has always been much lower than Mrs. O’Brien’s but he did not take any action as they had agreed to share the children’s expenses.
[85] He recognized that the most he could reasonably claim was up to three years before the date of his application. This amounted to $18,776 calculated as follows:
• Sept/13 to Dec /13 (4 months); Mrs. O’Brien’s Line 150 Income $105,716; monthly table support payable $925; Total Support for Period $3,700;
• Jan/14 to Aug 14 (8 months); Mrs. O’Brien’s Line 150 Income $112,996; monthly table amount $982; Total Support for the Period $7,856;
• May/15 to Aug/15 (4 months); Mrs. O’Brien’s Line 150 Income $95,938; monthly table amount $847; Total Support for the Period $3,388;
• May/16 to Aug/16 (4 months); Mrs. O’Brien’s Line 150 Income $110,016; monthly table amount $958; Total Support for the Period $3,832;
• Total Retroactive Child Support Claim $18,776.
[86] Mr. O’Brien admits that his claim for child support was in response to Mrs. O’Brien’s claim for occupation rent. He otherwise had been content with neither party paying child support.
[87] Their history has been to share the support. They have long agreed on their respective obligations. Their daughter has lived at various times with one and then the other. Their son, as noted above, was dependent on his mother for over a year. I have no doubt that this award would be onerous on Mrs. O’Brien, whom I believe has supported both children over the years, although she did not produce the necessary documentation.
[88] The SCC directed a number of factors to consider in whether to order retroactive child support in D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 SCR 231. At para. 96, the court noted,
[96] Unlike prospective awards, retroactive awards can impair the delicate balance between certainty and flexibility in this area of the law. As situations evolve, fairness demands that obligations change to meet them. Yet, when obligations appear to be settled, fairness also demands that they not be gratuitously disrupted. Prospective and retroactive awards are thus very different in this regard. Prospective awards serve to define a new and predictable status quo; retroactive awards serve to supplant it.
[89] Fairness in the circumstances of this case favours denying this retroactive award.
[90] At para. 100 of D.B.S., the court was considering cases where an application for support could have been made earlier, but was not. They stated, “The circumstances that surround the recipient’s choice…not to apply for support will be crucial in determining whether a retroactive award is justified.”
[91] Until 2016, Mr. O’Brien led Mrs. O’Brien to consider that her obligations had been met (see para. 102 of D.B.S.) and his choice to seek child support was only in response to her demand for occupation rent.
[92] In light of my denial of the occupation rent claim, it is only fitting to deny the retroactive child support claim.
Section 7 Claims
[93] Mr. O’Brien had long been paying 50% of the s.7 expenses for the children’s education. He sought to retroactively adjust what he had overpaid regarding his daughter’s university costs. His average income for three years before the application was $56,790. Mrs. O’Brien’s average income was $106,167. Their proportionate share more properly should have been 35%/65%.
[94] Out of the $35,786 paid to date, Mr. O’Brien paid $17,893 as his 50% share. Had he paid a pro rata share, it should have been $12,525. He claims the overpayment of $5,368.
[95] For the reasons stated above regarding retroactive childcare, being Mr. O’Brien’s longstanding choice not to pursue such a claim except to respond to an occupancy rent claim which I have not allowed; I deny this retroactive claim as well.
F) What Prospective Award Should be Made for Child Support and S. 7 Expenses?
[96] Mr. O’Brien sought an order for ongoing table support for their daughter who resides with him during the summer months. He claimed $958/month based on Mrs. O’Brien’s 2016 income of $110,016.
[97] Mrs. O’Brien made no submissions as to why this should not be awarded and I can think of none. I order her to pay this support. The parties may make further submissions at a return date, if required, as to what date this support should commence as no evidence or submissions were given.
[98] Mr. O’Brien also sought an order to reflect their differing incomes on future s.7 expenses. I order s. 7 expenses on future agreed extraordinary expenses to be shared proportionate to their incomes.
G) What Terms Should be Ordered for the Sale of the Matrimonial Home?
[99] Mr. O’Brien sought specific terms for the sale of the home as he wished to have the opportunity of buying it. He proposed the following terms:
a) The home will be listed for sale with a mutually agreeable realtor, or if they cannot agree on a realtor they shall each have their own realtor who will work together and share the commissions;
b) The home will be listed for sale within 30 days;
c) Within the first 30 days of the listing, the Applicant shall have the opportunity to match any arms-length offer deemed acceptable by the Respondent in writing. If the Applicant chooses not to match the offer, the parties will accept said arms-length offer; and
d) The Applicant may purchase the matrimonial home for $612,500 in the event that the home is not sold (to the Applicant or an arms-length party as per above) after the first 30 days of the listing.
[100] Mr. O’Brien’s proposal was to allow Mrs. O’Brien to have control of what offers are accepted. If she chooses not to accept an offer within 30 days, then Mr. O’Brien would have the opportunity to purchase the house at the mid-point of the parties’ two appraisals.
[101] Mrs. O’Brien’s proposal for terms was as follows:
The matrimonial home… shall be listed for sale forthwith. If the parties are unable to agree to the terms of sale, they may apply, summarily by way of Motion, for further directions from the Court…
[102] I agree that future litigation should be avoided, however, what Mr. O’Brien proposes is a right of first refusal at a set price.
[103] The Court of Appeal in Buttar v. Buttar 2013 ONCA 517 has dealt with this issue at paragraphs [63] and [64], that such rights of first refusal are not appropriate for the court to make, as noted:
[63] To start with the question of the appropriateness of the order, the fundamental problem with the judge’s order in this case was that it took away the appellant’s right to the highest price for his interest in the properties. The values used by the application judge in redistributing the properties were the valuations as at the date of separation, and as fixed by the parties for the purposes of calculating the equalization payment at trial. There was no evidence that those values represented the market value of the properties as at the time of the application or that they represented the highest price. As Granger J. said in Batler v. Batler (1989), 1988 CanLII 4726 (ON SC), 67 O.R. (2d) 355 (H.C.J.) at 356:
A joint tenant is entitled to the highest price for his or her interest which may be more than the appraised value of the property. In today’s real estate market, the appraised value of the property may not reflect the fair market value. The true test of the fair market value is to sell the property in an open market. Unless the parties agree to a transfer of the property at an agreed price, the property should be listed for sale and sold, to ensure that fair market value is obtained.
[64] The court has jealously guarded the rights of joint owners to the best price for jointly-owned property. Martin v. Martin (1992), 1992 CanLII 7402 (ON CA), 8 O.R. (3d) 41 (C.A.) provides an example of this principle in a slightly different context. In that case, this court explained the rationale behind the rule that one party cannot be given a right of first refusal with respect to matrimonial property ordered sold. As Osborne J.A. explained in Martin at p.48:
A right of first refusal will most often work to discourage other interested buyers. If a spouse is granted a right of first refusal, the effect of it is to remove that spouse from the competitive market for the matrimonial home…
Both Dr. and Mrs. Martin have a right to buy the matrimonial home. If Dr. Martin wants to exercise that right he should be in a position of having to compete with any other interested purchaser. It is only in that way that Mrs. Martin’s interest in the property will be fairly and justly quantified.
Therefore, I order the sale according to the wording proposed by Ms. O’Brien above.
Return Date
[104] As noted above, if the parties wish a return date before me to make further submissions on the issues I noted; to update the figures since trial; and to correct any arithmetical errors, they are to contact my judicial assistant within 14 days so that arrangements may be made.
[105] I note that the parties worked diligently to narrow the issues and agreed on as many aspects of the case as possible. Counsel were diligent, helpful and courteous. The parties themselves endeavoured to behave as dignified and politely as possible in this difficult situation.
Divorce
[106] Mr. O’Brien sought a divorce order. Mrs. O’Brien did not contest it. The parties have resided apart for more than a year. Accordingly, they may proceed by way of a chambers motion to obtain the divorce.
Costs
[107] Costs submissions are deferred if the parties advise in 14 days that they wish a return date.
[108] Otherwise, if the parties are unable to resolve costs, Mr. O’Brien may file written submissions on costs within 21 days of the release of this decision. Mrs. O’Brien may file responding written submissions within 14 days thereafter. Submissions are not to exceed three pages, plus costs outlines, case law and any applicable offers.
[109] Such written submissions are to be forwarded to me at my chambers in Hamilton at 45 Main Street East Hamilton, Ontario L8N 2B7.
M. J. Donohue, J.
Released: 18 September 2017
CITATION: O’Brien v. O’Brien, 2017 ONSC 5488
COURT FILE NO.: FS-15-38,339
DATE: 2017-09-18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Leslie Morgan O’Brien
Karen Ballentyne, for the Applicant
- and –
Karen Louise O’Brien
William C. Kort, for the Respondent
REASONS FOR JUDGMENT
M. J. Donohue, J.
Released: 18 September 2017