Court File and Parties
COURT FILE NO.: FS-16-8661 DATE: 20190708
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Christine Leeann Jantzen Applicant
Catherine Watson and Paul Phillips, for the Applicant
- and -
David Edward Jantzen Respondent
Scott Vining, for the Respondent
HEARD: April 10 and 12, May 28 and 30, 2019
REASONS FOR JUDGMENT
Sproat J.
I. Introduction
[1] The parties married on August 22, 1998 and separated on October 14, 2016. There are three children; Emilee age 20, Hailee age 19 and MacKenzie age 17.
II. THE ISSUES
[2] The principal issues for trial are as follows:
a) Spousal and child support.
b) The equalization of net family property. Ms. Jantzen called expert evidence as to the value of the farm and asks that title to the farm be vested in her based upon that value. Mr. Jantzen’s position is that the farm should be listed for sale to allow its fair market value to be determined.
III. SPOUSAL AND CHILD SUPPORT TO DATE
[3] The parties impressed me as decent hard working people. Mr. Jantzen has a grade 12 education and had a 34 year career with a printing company and advanced to a supervisory position earning an annual income on the order of $130,000. Ms. Jantzen, I am sure, worked equally hard looking after their farm property and taking primary responsibility for caring for and raising three daughters.
[4] While conduct itself is not relevant, it provides some context and I will make brief reference to it. Ms. Jantzen alleges infidelity with a co-worker. Mr. Jantzen alleges that Ms. Jantzen made a false allegation of assault leading to him facing a criminal charge which was later withdrawn. What is not in dispute is that the marriage fell apart.
[5] Mr. Jantzen testified that as a result of the breakup he suffered from anxiety and depression for which he has sought treatment and been prescribed drugs. He filed a letter from his doctor, which was not in the form of a medical report pursuant to the Evidence Act. Mr. Jantzen, however, was able to give direct evidence effectively confirming the contents of the letter. He is being prescribed drugs for anxiety and depression. He says that since separation he has had no fixed address. He testified he has been taken in by relatives and friends, and spent nights sleeping in his truck. He has self-medicated with alcohol and drugs to numb the pain he felt.
[6] In addition to his mental health challenges Mr. Jantzen testified that he has a hip problem that interferes with his mobility and ability to do manual labour.
[7] People respond differently to adversity. I accept Mr. Jantzen’s evidence as to his mental and physical health challenges and that as of today he is unable to work. I also accept that he wants to get better and be able to work and contribute to his family. Mr. Jantzen indicated that he intends to make a CPP disability claim.
[8] I appreciate that Mr. Jantzen’s lack of income puts great pressure on Ms. Jantzen. It is, however, a fact of life. I also note that Mr. Jantzen’s former employer is closing the plant at which he worked so, even absent the marriage breakdown and his termination, he would have faced grave difficulty in maintaining anything close to his level of income. He is in the position of looking for employment, at age 51, with supervisory skills in the printing industry which he described as in decline.
[9] Mr. Jantzen did his SSAG calculations for 2016 factoring in farm losses he claimed. In 2016 he reported farm income of $8,243 and farm expenses of $33,695 which included $17,493 in capital cost allowance. I think it more accurate to use his employment income for 2016 of $127,672. Mr. Jantzen has not filed tax returns for 2017 or 2018 so there is no farming loss issue in those years.
[10] For 2017 Mr. Jantzen’s line 150 income, as recorded on a T1 Summary Report was $130,089.
[11] Mr. Jantzen’s employment was terminated on June 14, 2018 allegedly for “misconduct”. Mr. Jantzen retained counsel and on December 17, 2018 received a $140,000 settlement, $24,000 of which went to pay legal fees. Mr. Jantzen’s 2018 income, according to the T4 slips he produced, was:
a) Transcontinental $76,810 b) Employment Insurance $11,487 Total $88,297
[12] Mr. Jantzen testified that he understood he would have to pay back the Employment Insurance (“EI”) he received in 2018, but that this would effectively re-set his eligibility to receive EI later. I, therefore, will make no adjustment relating to the possibility he will have to repay EI.
[13] Mr. Jantzen’s 2018 income was depressed because he was terminated from employment in June and did not settle his claim until December with the result that a large amount of the settlement was not received until 2019. The settlement, net of legal fees, was $116,000 and I think it more accurate to use that amount as his annual income for the purpose of 2018 and January – March, 2019.
[14] Ms. Jantzen submitted SSAG calculations based on Mr. Jantzen having an income of $127,700 per annum for the period from separation to date; and Ms. Jantzen’s actual income calculation also assumed three dependent children throughout.
[15] In my opinion, the fair and accurate assumptions are as follows:
a) 2016 Mr. Jantzen - $127,672 Ms. Jantzen - $27,410 3 children
b) 2017 Mr. Jantzen - $130,089 Ms. Jantzen - $27,996 3 children
c) 2018 Mr. Jantzen - $116,000 Ms. Jantzen - $34,872 3 children 2 months 2 children 4 months 1 child 6 months
d) 2019 Mr. Jantzen - $116,000 Ms. Jantzen - $34,872 1 child
[16] At my request, counsel prepared calculations based on these assumptions. Mr. Vining submitted these calculations, initialed by Ms. Watson indicating her agreement that the calculations were accurate based on the assumptions, by letter dated June 6, 2019. The calculations resulted in the following:
Total spousal support per SSAG $36,893 Total child support per SSAG $56,718 Total support per SSAG $93,611
[17] In Murray v. Murray, (2003), 660 O.R.(3d) 540 (S.C.J.) Croll J., at para. 108, addressed the proper calculation of a retroactive spousal support award:
However, had this support been paid periodically through the years in question, it would have been deductible to Mr. Murray for income tax purposes. Similarly it would have been taxable to Ms. Murray. Any lump sum award made today is not deductible to Mr. Murray, and it is not taxable to Ms. Murray. In my view, in the interest of fairness, it is important that the retroactive spousal support award be tax neutral, that is, that it have roughly the same consequences for the parties as would have been the case had the support payments been made on a periodic basis during the years in question.
[18] I, therefore, agree that the support arrears should be adjusted on this account, and on account of Ms. Jantzen’s receipt of the child tax benefit. I accept Mr. Vining’s calculation of the credit in the amount of $10,467. The net support that should have been paid is, therefore:
Total support $93,611 Tax-child tax credit $10,467 $83,144
[19] Ms. Jantzen agrees that Mr. Jantzen should be credited with having paid support in the amount of $67,346 calculated as follows:
Mortgage payments $40,699 House tax (50% of total) $2,180 Germania Insurance $5,081 Hydro One $5,446 E transfers $11,615 Personal Insurance ($75 x 31 months) $2,325 $67,346
[20] I would also credit Mr. Jantzen for the payments he made to Shaw $1,727, and Bell Canada $274. Mr. Jantzen is, therefore, entitled to a total credit of $69,347. As such, the shortfall to date in support paid is $15,798.
[21] Ms. Jantzen filed her application the month after separation so Mr. Jantzen knew of the claim for support from the outset. Up until his employment was terminated in June, 2018 he earned a substantial income and could certainly have retained counsel and ascertained the amount of support that he was required to pay given his income. I, therefore, see no unfairness in him being required to pay the support I have calculated in the amount of $15,798. Consistent with my earlier calculations of total spousal and child support I allocate the support payable as follows:
Spousal $6,224 (39.4% of $15,798) Child $9,574 (60.6% of $15,798) $15,798
IV. ONGOING SPOUSAL AND CHILD SUPPORT – S.7 EXPENSES
[22] As discussed, I accept that Mr. Jantzen is currently, through no fault of his own, unemployed. As such, there is no basis upon which I could make an order today requiring him to pay support.
[23] Mr. Jantzen shall, however, make all reasonable efforts to take treatment and secure new employment. Until such time as he is employed he shall on or before December 31, 2019 and every 6 months thereafter, produce to Ms. Jantzen:
a) his personal resume, a list of all places or persons to whom he has applied for employment within the last 6 months, with dates and contact information, and a copy of all responses received;
b) medical documentation verifying any inability to work due to illness or disability;
c) a copy of any application for illness or disability benefits submitted to the Canada Pension Plan, the Ontario Disability Support Program or any illness or disability insurer and the response to each application;
d) documentation to show any Employment Insurance received within the last 6 months, as well as any supplemental income or benefits received during this time; and
e) a copy of his bank statements and credit card statements for the period January 1, 2019 to November 30, 2019.
[24] In any event, Mr. Jantzen shall advise Ms. Jantzen immediately if he secures employment or starts to receive EI, CPP or any other source of income. He shall also produce to her documentation of the application he made for such benefits or employment and evidencing the amount of income and any other benefits that he is receiving.
[25] As considerable time was spent on section 7 expenses I will address them to the extent possible.
[26] Hailee was a full time student at Grey Highlands Secondary until June 29, 2018. She turned 18 on May 4, 2018. Since then she has worked and taken courses to upgrade her marks so she can go to college.
[27] Emilee was a full time student at Grey Highlands Secondary until February 2, 2018. She turned 18 on January 14, 2017. She too has worked and taken courses to upgrade her marks so that she can attend college.
[28] Hailee and Emilee are both accepted to and plan to attend Georgian College in September, 2019.
[29] MacKenzie is a full time student at Grey Highlands Secondary.
[30] Hailee and Emilee both plan to take a two-year Office Administration course and live at home. The estimated tuition is $4,214 each per year. In addition there will be books and supplies. The parties had $26,447 in an RESP as of February 19, 2019 which will help defray expenses, although one-third of that should be notionally viewed as MacKenzie’s share.
[31] As and when Mr. Jantzen receives income he shall pay the appropriate child support for each of the girls so long as each girl is a full time student at high school, college or university living at home.
[32] On the assumption that Mr. Jantzen’s income is equal to or less than Ms. Jantzen’s income, I would not order any additional s.7 payment relating to educational expenses for Emilee and Hailee. The RESP funds will pay for all tuition. By September Hailee will have been out of school and working fairly steadily for approximately 16 months and Emilee for approximately 19 months. As such, they are in a position to make a substantial contribution to the cost of their education.
[33] This is without prejudice to any claim for s.7 expenses should Mr. Jantzen start to earn more than Ms. Jantzen or should MacKenzie not have a gap year to earn income or should any of the girls pursue education that is beyond two years at college or not live at home.
V. EQUALIZATION OF NET FAMILY PROPERTY
Should the Farm be listed for sale?
[34] During the litigation the parties jointly retained Marleen van Hamm to provide a valuation of the farm. This was presumably in aid of a possible resolution whereby Ms. Jantzen would take the farm property at an agreed value as part of the equalization. There is, however, no evidence upon which I can find that Mr. Jantzen agreed to be bound by the appraisal.
[35] During the litigation the parties both, at times, valued the farm in excess of $700,000. Ms. van Hamm, however, valued it at $540,000 as of December 18, 2017.
[36] Mr. Jantzen claimed there were neighbours interested in purchasing the farm for an amount in excess of $700,000 but an offer never materialized. Mr. Jantzen blames that on a lack of co-operation by Ms. Jantzen which dissuaded potential purchasers. Mr. Jantzen was provided an opportunity during the litigation to provide his own appraisal and did not do so.
[37] The case law, however, makes it clear that in virtually all cases the court should order that a jointly owned property be listed for sale.
[38] In Buttar v. Buttar, 2013 ONCA 517 the trial judge valued various properties owned by the parties and then, to implement an equalization of net family property, ordered that certain of the properties be transferred to each party. The Court of Appeal rejected this approach stating:
[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), 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] This court has jealously guarded the rights of joint owners to the best price for jointly-owned property. Martin v. Martin (1992), 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.
[65] The order of the application judge was, in effect, a forced sale of the jointly-owned properties between the parties, without the benefit of fair market value. That is not an appropriate use of the Partition Act: see Miller v. Hawryn, 2010 ONSC 6094, at para. 25.
[66] For that reason, even if the division of the farm properties were permissible generally under the Partition Act, it would not have been an appropriate order in this case.
[39] Ms. Watson submitted that an order for the sale of the farm should not be made as Mr. Jantzen had not made an application under the Partition Act. This application was, however, not necessary given that s.9(ii)(d) of the Family Law Act provides that on an application to equalize net family property the court can order that any property be partitioned and sold.
[40] Ms. Watson also cited several cases in which an order was made vesting property in a family law litigant. These were, however, highly unusual cases where the court had a concern that an order for payment of money would be difficult to enforce, for example, because a party had acted deceptively in hiding or transferring assets. Lynch v. Segal, 82 O.R. (3d) 641 (Ont. C.A.) was such a case and Blair J.A. stated:
- […] as a vesting order – in the family law context, at least – is in the nature of an enforcement order the court will need to be satisfied (as the trial judge was here) that the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour indicated that the payment order will not likely be complied with in the absence of more intrusive provisions […]
[41] In our case there is no large lump sum obligation to enforce by a vesting order. There is no basis upon which I could calculate, and no reason why I should order, a lump sum support payment. Mr. Jantzen worked for 34 years. He now has health problems. He is taking treatment and wants to regain employment. As and when he does he will have to pay whatever support is appropriate based on his income.
[42] As in Buttar, an appraisal cannot tell us the value of the farm today so that listing for sale is appropriate. An additional factor supporting listing for sale is that Ms. Jantzen’s proposal that the equalization largely be resolved by her taking the farm and Mr. Jantzen taking his pension leaves Mr. Jantzen, at age 51, having all of his assets locked into a pension plan.
[43] I, therefore, order that the farm be listed for sale with a local realtor who has no personal or business connection to either party. If the parties cannot agree on the realtor, each shall provide me with the credentials of the realtor they recommend with a letter not to exceed three pages explaining why this realtor is preferred. I will then choose the realtor and the parties shall list the property at a price recommended by this realtor and accept such offer as may be recommended by this realtor as being most likely to maximize value. The realtor shall keep both parties fully and equally apprised of any prospects and developments. Both parties shall cooperate fully with the listing and sale and shall follow the advice of the realtor regarding such matters as vacating the property during visits by prospective purchasers. Either party may make an offer to purchase. The proceeds of sale from the matrimonial home shall be held in trust by the parties’ real estate solicitor pending written agreement or court order.
Value of the Farm
[44] For the sake of completeness, I will provide the reasons why I would accept Ms. van Hamm’s opinion as to the value of the farm as of December 18, 2017. The parties jointly retained Marleen van Hamm to provide expert appraisal evidence as to the value of the farm. Ms. van Hamm is a well-qualified appraiser. She has a Master’s Degree in Agricultural Economics from the University of Guelph. She worked as an agricultural account manager for two banks and for three years as a real estate broker.
[45] From 2003 to 2017 she has carried on business as a real estate appraiser restricting her practice to the appraisal of farm properties. She has completed 80 - 150 farm appraisals per year and so has extensive experience. She has been qualified to give expert appraisal evidence on three prior occasions in the Superior Court of Justice. I ruled that she was qualified to give expert appraisal evidence.
[46] The subject property is 61 acres with 30 acres being tillable. Ms. van Hamm explained that a commercially viable farm generally requires 100 acres of land. She explained that the subject property might be attractive to a person, such as a Mennonite farmer, who wanted to farm the property without the use of expensive equipment, or a person who simply wanted to use it as a hobby farm. She indicated that the current use of the subject property was to grow hay which is not considered a cash crop.
[47] Ms. van Hamm visited the subject property on December 18, 2017. Ms. van Hamm adopted a reasonable approach to the appraisal process. After looking at a larger number of sales, she picked the five that she believed were most comparable. Three of the five were approximately 3 km. from the subject property and the furthest was 10 km. away. Four of the five comparable sales occurred in 2017. She did make the valid point that with rural properties the comparables are never going to be identical or nearly identical. With respect to each of the comparables she then analyzed the property data, and attended at each property to view it from the road, in order to break down the total sale price into its component parts. For each property she formed an opinion as to the value paid for the tillable acres, the wooded acres, and for buildings. She said that using Google Earth photographs she was able to estimate tillable area to within one acre of the actual tillable area.
[48] Ms. van Hamm estimated tillable acres and the building site area to be worth $10,500 per acre based on the comparables. She determined that woods and fence-rows had a value of $500 per acre.
[49] The subject property had a house, shed and barn on it. The house consisted of a 1.5 storey, very old farm house, that was in an unfinished state. For example, with only a subfloor. There was, however, a one storey addition added in 2015.
[50] Ms. van Hamm indicated that the dwelling was 1700 sq. ft., and that it would cost $160 per sq. ft. to construct such a building. She testified it was standard to apply a depreciation factor and she applied a 50 percent depreciation factor taking into account that in her opinion the proper depreciation factor for the older part of the building would be approximately 80 percent. She engaged in a similar exercise for the shed and only depreciated it 40 percent. She testified that the barn had probably been constructed between 1850 – 1920 and she attributed a value of $15,000 to it because it contained some horse stalls which might be of some use. In Ms. Hamm’s opinion the subject property had a value of $540,000 as of December 18, 2017.
[51] In cross-examination Ms. van Hamm said the subject property was 3 – 5 km. from Dundalk. She said that she was unaware there was proposed development in Dundalk. She later explained, however, that to attribute additional value due to development potential would only be reasonable if the property was close to the developed area and effectively slated for development within the next five years. She described the subject property being 3 – 5 kms. away from Dundalk as being “forever away from development”.
[52] Ms. van Hamm testified that farm prices have been increasing steadily over the years. The largest increase was in 2012 which she said resulted from the perfect storm of very high crop prices and very low interest rates. She said that while interest rates are low in historical terms the interest rate has doubled since 2017.
[53] Ms. van Hamm denied the suggestion that she had told Mr. Jantzen that she was an expert for his wife. She said it was clear that she had been retained by both of them.
[54] Ms. van Hamm did not attribute any significant value to the wood lot on the property. She said she did not see any large circumference trees and that there was water in much of the wood lot.
[55] Ms. van Hamm was logical and she has extensive experience. The comparables she chose were land proximate to the subject property and the sales took place relatively close in time to December 18, 2017. Her evidence was not shaken in cross-examination. I accept her evidence and find that the value of the subject property was $540,000 as of December 18, 2017.
Mr. Jantzen’s Pension
[56] Mr. Jantzen has a pension he valued at approximately $343,000, in his June 7, 2018 NFP statement. I order that this pension be divided equally at source as part of the equalization.
[57] The evidence suggested, but did not make absolutely clear, that a pension fund Mr. Jantzen had with Sun Life was rolled into the pension valued at $343,000. The parties were seeking to confirm that and I remain seized to make any further order required if in fact the Sun Life pension was not included in the pension that was valued.
Chattels
[58] Mr. Jantzen testified that he owned a Mustang and a new Ford F150 on the date of marriage. He had no documentation, and could provide no cogent evidence, as to the extent to which they also had loans against them. I, therefore, do not attribute any date of marriage value to them.
[59] There was some disagreement as to the valuation date value of certain chattels that are in dispute. Where the only evidence is the lay opinion of the parties, I have simply “split the difference”. Otherwise I will provide a brief explanation for my finding as to the values at the date of separation.
[60] I find the values as of the valuation date as follows:
a) International 60 Horse Tractor - $3,750 b) Walk-behind Snow blower - $300 c) Skid steer - $10,000 (it was purchased for around $10,000. Few chattels appreciate in value so I accept Ms. Janzen’s estimate) d) 2010 Ford F150 - $7,375 e) All remaining farm equipment - $2,500 f) 3 Snowmobiles - $225 g) 3 Generators - $1,200 h) Household Items - $7,500 (the parties had done a renovation and purchased items for approximately $8,000 in the year prior to separation. As such, I find that $5,000 is low. Have said that, many household furnishings depreciate rapidly and have little value) i) Two horses - $2,000 (the two horses used by the parties were purchased in or about 2010 approximately $10,000. As of separation they were approximately 17 and 19 years old.) j) ATV - $5,000 (Mr. Jantzen agreed to this in cross-examination) k) 2010 VW Jetta - $10,000 (I accept Mr. Jantzen’s estimate as reasonable) l) Pro Fisher fishing boat and trailer (not on Ms. Jantzen’s list) (Title was transferred by Ms. Jantzen’s father to her, I accept it was a gift to her and should be excluded.) m) Dirt Bike - $3,500 (Mr. Jantzen noted this as the value in a July 28, 2017 note he signed) n) Kayak - $1,000 (Mr. Jantzen noted this as the value in a July 28, 2017 note he signed)
[61] I accept Ms. Jantzen’s evidence that the chattels referred to at Tabs 1, 2, and 3 of Exhibit 1 were sold by her for fair market value and that Mr. Jantzen was paid 50% of the proceeds.
[62] With respect to chattels now in the possession of the parties, they can within 20 days elect whether to retain the chattel. If retained the amount I have determined as the value will be factored in to the equalization calculation. There were a number of additional chattels that I could not value. Any chattels not retained, or that I have not valued, shall be put up for auction or offered for consignment sale at a price suggested by the consignment vendor.
[63] I accept Mr. Jantzen’s evidence that certain items referred to in the May 28, 2018 email from Hans Schiele (Ex. 23, Tab 14) were intended as gifts from Mr. Jantzen’s mother to the three girls. As such, these should not be counted as property subject to equalization. These items should be divided among the girls, or sold and the proceeds divided if that is the preference of the girls. On consent, Mr. Jantzen shall be entitled to the grand piano subject to him arranging through counsel to have it picked up within 30 days. If he does not then it shall also be auctioned or offered for consignment sale.
Inheritance
[64] Ms. Jantzen had a joint account with her grandmother who died prior to separation. I agree that this was an inheritance that should be excluded from her net family property.
Line of Credit
[65] Mr. Jantzen admitted, by virtue of a Request to Admit, that increases in the line of credit after the valuation date resulted from his personal expenses incurred in taking trips.
Savings Accounts
[66] I accept Ms. Jantzen’s evidence that the savings, identified as “girls’ savings” in her Tab 62 net family property statement, are in fact the property of the girls.
VI. DIVORCE
[67] A divorce is granted subject to the parties paying the requisite fee and filing an Affidavit for Divorce and a Clearance Certificate.
VII. Conclusion
[68] As discussed at the end of the trial, I have endeavoured to make the findings necessary to permit the parties to work out the equalization calculations and draft a final order. I will, however, remain seized to address any matters that remain in dispute and as necessary to implement these reasons.
[69] If the parties cannot agree on costs, Ms. Jantzen shall provide me with cost submissions within 20 days of the date a final order is approved by counsel or signed by me. Mr. Jantzen shall provide his cost submissions within a further 20 days. Reply, if any, by Ms. Jantzen within a further 7 days.
Sproat J.