COURT FILE NO.: FS-15-83939 DATE: 2019 03 26

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

AMANDA MARIE PLIMMER Applicant Calvin Houng, for the Applicant

• and -

JAMES ANTHONY BURKE Respondent Self-Represented, Respondent

HEARD: January 21, 22, 23; and March 1, 2019, in Brampton

REASONS FOR JUDGMENT

SHAW J.

Overview

[1] This trial commenced on January 21, 2019. On the third day of trial, the parties informed the court that they had reached an agreement to settle all issues save and except for how the equalization payment of $50,000 owing by the applicant to the respondent was to be paid. Signed Minutes of Settlement were filed with the court and my endorsement stated that an order would issue in accordance with those Minutes of Settlement dated January 23, 2019 and prior Minutes of Settlement dated January 13, 2019 which dealt with child support and access. The respondent was self-represented and spoke with duty counsel before he signed the Minutes of Settlement.

[2] On January 23, 2019, after being informed of the settlement, I heard evidence from the parties dealing only with the unresolved issue of how the equalization payment would be paid.

Position of the Parties

[3] The applicant’s position was that rather than pay the respondent the equalization payment, the respondent would be credited for future child support owing to the applicant which would be a set-off against the equalization she owed to him.

[4] The respondent’s position was that the $50,000 payment should be paid on a lump sum basis as the applicant would be able to qualify for financing to fund the payment.

[5] Following hearing evidence and submissions, I then requested that the parties return to court to present additional evidence solely with respect to the applicant’s ability to secure financing to fund an equalization payment. That evidence was heard on March 1, 2019. At that time, the applicant was also self-represented.

Review of the Evidence

[6] The applicant’s evidence was that she would have difficulty funding a lump sum payment of $50,000. According to her Financial Statement sworn November 27, 2018, she owns a home at 44 Mowbray Place in Acton, Ontario that she purchased on February 9, 2018 for $500,000. There is a mortgage registered on title with an outstanding balance of $300,000. Her evidence was that when she applied for the mortgage she had a great deal of difficulty securing financing. She did not know if she could refinance the home to secure financing for the $50,000 payment.

[7] The applicant also owns a second property at 2100 Finch Street in Toronto which is a property from which she operates her hearing business. The only evidence presented of its value was from an MPAC assessment that valued the property at $187,000. There is no mortgage on title.

[8] The applicant testified that she does not have any other debts. It was not disputed that her annual income is approximately $107,000.

[9] Her evidence was that she has always been the primary caregiver for the two children of the marriage and has been so since the parties separated in April 2015. Given the respondent’s financial situation, he only commenced to pay child support in January 2019 based on an imputed income of $48,000. (The Minutes of Settlement the parties signed on January 13, 2018 did not specify the monthly amount of child support.)

[10] When the matrimonial home sold, the respondent received his one-half share of the net proceeds of sale in January 2018 which totalled $183,000. The applicant’s evidence was that when he received those funds, he was not paying child support and he could have used some of those proceeds to make a contribution towards child support. Rather than contributing to their support, he chose to put the money in a savings account. She suggested that this was perhaps indicative of an unwillingness to pay child support. That, coupled with the uncertainty of his future income based on his self-employed status, raises doubt about his willingness and reliability to pay ongoing child support. That is one of the reasons that the applicant seeks an order that the future child support payments be offset against the equalization payment she owes to the respondent.

[11] The respondent’s evidence was that when he received his share of the proceeds of sale of the matrimonial home in January 2018, he paid debts of $40,000 and the balance of $140,000 remains in a savings account to use as a downpayment to purchase a home. His evidence was that his total current debt is approximately $15,000.

[12] Mr. Burke is self-employed. He had worked as a hearing instrument specialist with the applicant but his employment was terminated after the parties separated. In 2015 he collected Employment Insurance benefits for three months and then started to work on a seasonal basis for a roofing company. In approximately February 2016 he started his own business installing back splashes for kitchens which he continues to operate. He is optimistic that the business will be successful.

[13] Mr. Burke testified that he would like to purchase a home and he requires the equalization payment owing to him to be paid on a lump sum basis so that he will have sufficient funds for a downpayment to purchase a home. He testified that given his self-employed status, he has encountered some difficulty securing a mortgage.

[14] Mr. Burke’s evidence is that there would be no undue financial hardship for the applicant to pay him the $50,000 equalization payment on a lump sum basis given her debt-free status and ownership of two properties that she could use to secure financing. He also submits that he is willing and will meet his monthly ongoing child support payments.

[15] In my endorsement dated January 24, 2019 I ordered that the parties appear before me on March 1, 2019 so that the applicant could provide additional evidence regarding her ability to secure financing if I were to order a lump sum payment for the equalization payment. I ordered that she make an application to secure financing for an amount up to $50,000. I also ordered that she file as evidence any response she received from whatever financial institution she applied to for financing.

[16] The applicant’s evidence on March 1, 2019 was that she had made an application for financing with the Bank of Montreal, jointly with her sister Christine Plimmer, with whom she operates the hearing business. An email from Monique Bola from the Bank of Montreal to the applicant and her sister indicated that they had been approved for a $25,000 small business unsecured line of credit. Some additional documents were required to complete the financing. The applicant made no other applications for financing. Her evidence was that she had another existing line of credit that she thought might have $20,000 available to her. She did not have any particulars of that line of credit.

[17] There was no further evidence presented by the applicant with respect to her ability or inability to pay the equalization payment.

[18] On March 1, 2019, the parties indicated that some other issues had arisen since they had reached their final agreement on January 23, 2019 and they wanted to make additional submissions. I would not allow the parties to make submissions regarding the terms of the Minutes of Settlement dated January 23, 2019 as that agreement had been incorporated into a final order as per my endorsement of that date. I also directed the parties to my endorsement dated January 24, 2019 which very clearly stated that the sole purpose of the attendance on March 1, 2019 was to hear evidence on the discrete issue of the applicant’s attempts to secure financing to fund a lump sum equalization payment. I reminded the parties that all other issues had been resolved on a final basis and I would not hear any further submissions unless there was an issue on consent, which there was not.

Analysis

[19] Section 9 of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) sets out the powers the court has regarding equalization claims by a spouse. The section states the following:

Powers of court

9 (1) In an application under section 7, the court may order,

(a) that one spouse pay to the other spouse the amount to which the court finds that spouse to be entitled under this Part;

(b) that security, including a charge on property, be given for the performance of an obligation imposed by the order;

(c) that, if necessary to avoid hardship, an amount referred to in clause (a) be paid in instalments during a period not exceeding ten years or that payment of all or part of the amount be delayed for a period not exceeding ten years; and

(d) that, if appropriate to satisfy an obligation imposed by the order,

(i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years, or

(ii) any property be partitioned or sold. R.S.O. 1990, c. F.3, s. 9 (1) ; 2009, c. 11, s. 25 .

[20] Although not stated, the applicant’s position was that ordering a lump sum payment would be a hardship as the only way it could be paid is through financing. She does not have access to any funds such as savings or a bank account nor does she have assets she could liquidate to make the payment.

[21] Pursuant to s. 9 of the FLA, I have authority to order that an equalization payment be paid in installments over time in circumstances of hardship. That section does not authorize the court to fund an equalization by a set-off against future child support. This issue was addressed in Lutz v. Lutz, 80 O.A.C. 293. In that case, the Court found that a trial judge does not have jurisdiction to set off a debt owed by a recipient parent to a payor parent against future child support owing by the payor parent.

[22] In the recent decision of Pascual v. Pascual, 2018 ONSC 5412 Peterson J. found at para. 64 that she was bound by Lutz.

[23] Based on Lutz and Pascual, I find that the court does not have jurisdiction to do as the applicant requests and set-off the future child support owing to her from the equalization she owes to the respondent.

[24] Given the applicant’s financial circumstances and as she has been the sole financial support for the children, I find it would be a hardship for her to pay the equalization in one lump sum payment. Her evidence was that she has access to some financing. Accordingly, relying on s. 9(1)(c) of the FLA I order that the $50,000 equalization payment owing be paid by one lump sum payment of $20,000 to be paid by the applicant to the respondent by June 1, 2019. The balance owing of $30,000 shall be paid by the applicant to the respondent at the rate of $500 per month commencing July 1, 2019 and thereafter on the first day of each month until the amount is paid in full. The $30,000 to be paid by way of monthly installments shall be secured by way of a charge on the applicant’s residence at 44 Mowbray Place, Acton, Ontario or 2100 Finch Street, Toronto, Ontario. Once the equalization payment is paid in full, the security shall be discharged.

[25] There shall be no order as to costs.

Shaw J.

Released: March 26, 2019