Lowe v. Lowe
OSHAWA COURT FILE NO.: FC-19-1337
DATE: 2020-09-01
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Murray Walter Lowe Applicant
– and –
January Natalie Lowe Respondent
COUNSEL:
W. Douglas R. Beamish, for the Applicant
Leo W. Monaco, for the Respondent
HEARD: August 17, 2020
REASONS FOR DECISION
CHARNEY J.:
Introduction
[1] The primary issue in this motion relates to the sale of two jointly owned cottage properties. In addition, the respondent wife has brought a cross-motion for temporary spousal and child support, s. 7 expenses, exclusive possession of the matrimonial home, interim fees and disbursements, a non-depletion order, a restraining order and a variety of other relief.
Facts
[2] The parties were married in September, 1988, and separated on March 22, 2019, after more than 30 years of marriage. They have two daughters, born in 1999 and 2002.
[3] The parties are the joint owners of three properties:
(a) The matrimonial home in Pickering, Ontario (the Pickering home).
(b) A cottage in Bancroft, Ontario (the Bancroft cottage).
(c) A cottage in Corbeil, Ontario near North Bay (the Corbeil cottage).
[4] Since the date of separation the respondent wife has resided at the Pickering home with the younger daughter. The older daughter was away at university but has moved back into that home as a result of the COVID-19 pandemic.
[5] The applicant husband has resided in the Bancroft cottage since February 2020.
[6] The affidavit material filed by each party sets out their respective narratives detailing their inability to agree to a schedule for sharing the two cottages over the summer months. The separation was acrimonious, and the cottages have become a source of (or opportunity for) friction.
Issues
(a) Sale of Cottages
[7] The applicant husband has brought a motion for the immediate sale of the North Bay cottage, and for exclusive possession of the Bancroft cottage.
[8] The respondent mother opposes the applicant’s motion for exclusive possession of the Bancroft cottage, and takes the position that if the North Bay cottage is sold, the Bancroft cottage should also be sold on the same terms.
Legislative Framework
[9] Section 2 of the Partition Act, R.S.O. 1990, c. P.4 empowers the court to order the sale of a jointly owned home, including a matrimonial home:
- All joint tenants… may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.
[10] In addition, sections 23 and 24 of the Family Law Act, R.S.O. 1990, c. F.3 (FLA) deal specifically with the court’s powers regarding the sale, possession and exclusive possession of a matrimonial home:
- The court may, on the application of a spouse or person having an interest in property, by order,
(b) authorize the disposition or encumbrance of the matrimonial home if the court finds that the spouse whose consent is required,
(i) cannot be found or is not available,
(ii) is not capable of giving or withholding consent, or
(iii) is unreasonably withholding consent,
subject to any conditions, including provision of other comparable accommodation or payment in place of it, that the court considers appropriate;
Order for possession of matrimonial home
- (1) Regardless of the ownership of a matrimonial home and its contents, and despite section 19 (spouse’s right of possession), the court may on application, by order,
(a) provide for the delivering up, safekeeping and preservation of the matrimonial home and its contents;
(b) direct that one spouse be given exclusive possession of the matrimonial home or part of it for the period that the court directs and release other property that is a matrimonial home from the application of this Part;
(c) direct a spouse to whom exclusive possession of the matrimonial home is given to make periodic payments to the other spouse;
(e) order a spouse to pay for all or part of the repair and maintenance of the matrimonial home and of other liabilities arising in respect of it, or to make periodic payments to the other spouse for those purposes;
(f) authorize the disposition or encumbrance of a spouse’s interest in the matrimonial home, subject to the other spouse’s right of exclusive possession as ordered;
Order for exclusive possession: criteria
(3) In determining whether to make an order for exclusive possession, the court shall consider,
(a) the best interests of the children affected;
(b) any existing orders under Part I (Family Property) and any existing support orders or other enforceable support obligations;
(c) the financial position of both spouses;
(d) any written agreement between the parties;
(e) the availability of other suitable and affordable accommodation; and
(f) any violence committed by a spouse against the other spouse or the children.
Best interests of child
(4) In determining the best interests of a child, the court shall consider,
(a) the possible disruptive effects on the child of a move to other accommodation; and
(b) the child’s views and preferences, if they can reasonably be ascertained.
Analysis
[11] The relevant provisions of the Partition Act and the FLA must be read together. Where substantial rights in relation to jointly owned property are likely to be jeopardized by an order for sale, the matter should be deferred until the issues are decided under the FLA. However, if the sale will not prejudice either spouse’s claim with respect to the home under the FLA, there is no reason to delay a sale: Silva v. Silva, 1990 CanLII 6718 (ON CA); 1 O.R. (3d) 436: 75 D.L.R. (4th) 415.
[12] An owner of a home has a prima facie right to sale: Davis v. Davis, 1953 CanLII 148 (ON CA), [1954] O.R. 23 (C.A.); Goldman v. Kudeyla, 2011 ONSC 2718, at paras. 17 and 18; Brienza v. Brienza, 2014 ONSC 6942, at para. 22. A matrimonial home may be sold without spousal consent when the evidence does not support a realistic need to maintain the house as a home for the benefit or stability of the children pending trial: Jiang v. Zeng, 2019 ONSC 1457, at paras. 50 and 51.
[13] In Jiang McGee J. stated, at paras. 36 - 38:
Exclusive possession is an Order only available pending the sale of a matrimonial home. An Order for exclusive possession cannot be used to frustrate an owner’s prima facie right to the sale of the home. The sale of the matrimonial home can be ordered prior to Trial on a motion, or at Trial.
The sale of a matrimonial home will generally be ordered on a motion unless there are children residing in the home, per section 24(3)(a) of the Family Law Act, or, an entitlement under the Act that would be otherwise defeated.
The purpose of section 24(3) is to preserve stability and continuity in the lives of children while their parents’ legal issues are determined.
[14] In the present case, the applicant husband has consented to the respondent wife being granted exclusive possession of the Pickering home. Given this consent, it is not necessary to consider the various factors listed in s. 24 of the FLA. I will return to the question of the possible sale of the Pickering home later in these Reasons.
[15] While the applicant would like to purchase the respondent’s interest in the Bancroft cottage, both parties recognize that the court does not have the authority to grant a spouse the right to purchase the other’s interest in, or the right of first refusal for, jointly owned property. This applies to the cottage properties, and will also apply to the matrimonial home if the parties cannot reach an agreement with regard to the disposition of that property: Martin v. Martin, 1992 CanLII 7402 (ON CA), [1992] 8 O.R. (3d) 41.
[16] In Brienza, Perell J. summarized the law at paras. 37 and 38:
The court does not have the jurisdiction to compel one co-owner to sell to the other, although the co-owners may participate in the court-ordered sale of the property in the open market [citations omitted];
The court does not have the jurisdiction under the Partition Act to grant a right of first refusal to either co-owner: Dibattista v. Menecola (1990), 1990 CanLII 6888 (ON CA), 75 O.R. (2d) 443 (C.A.). In Silva, supra, the court noted that where a sale is ordered, the respondent may bid in the sale. See also: Glick v. Carr, [1991] O.J. No. 1588 (Gen. Div.).
[17] See also: Buttar v. Buttar, 2013 ONCA 517, at para. 64: “This court has jealously guarded the rights of joint owners to the best price for jointly-owned property”; Laurignano v. Laurignano, 2009 ONCA 241, at para. 3; Watson v. Watson, 2015 ONSC 2091, at paras. 34-37; McColl v. McColl, 1995 CanLII 7343 (ON SC), at para. 29; Kokaliaris v. Palantzas, 2016 ONSC 198, at para. 44; and Delongte v. Delongte, 2019 ONSC 6954, at para. 14:
To be clear, the respondent is not obligated to sell his half interest in the matrimonial home to the applicant, even if she is financially able to make an offer to do so. It is, however, an option the parties may wish to consider as part of a global resolution of all issues which may avoid the costs of proceeding to trial.
[18] The law relating to the sale of the matrimonial home was recently canvassed by Shaw J. in Delongte, at paras. 16 – 21. Referencing the decision of McGee J. in Goldman, he states, at para. 21:
[T]here have been cases in which the Court has denied interim motions for sale. In each, there were compelling circumstances favouring the resisting party such as the availability of trial within a short period, prejudice to the resisting party’s right to an equalization payment or the need to preserve the residence for a vulnerable spouse or child who might retain the home at trial.
[19] Given that both the Bancroft and Corbeil properties are cottages, none of the parties’ entitlements under the FLA are likely to be prejudiced by the immediate sale of those properties. Indeed, neither party made any submissions to suggest otherwise. While the applicant claims a “sentimental” attachment to the Bancroft cottage, sentimentality is not a relevant consideration under sections 23 and 24 of the FLA.
[20] In the present case, the applicant has asked that the net proceeds of sale of the Corbeil cottage be divided equally between the parties after the repayment of a shareholders’ loan of $75,000, which he alleges is payable and due to his corporation. He alleges that these funds were borrowed from his corporation in order to purchase the cottage.
[21] The respondent takes the position that all funds from the sale of the Corbeil cottage should remain in trust subject to the agreement of the parties or further order of the court. In particular, she opposes the repayment of the corporation loan until after the valuation of the applicant’s business is completed. She alleges that she is concerned that the applicant will try to unilaterally erode the assets of the business before the final equalization of net family property.
[22] Rule 66.03 of the Rules of Civil Procedure requires that subject to court order, the proceeds resulting from a sale under the Partition Act be paid into court until the parties agree otherwise.
[23] The respondent has brought a motion for interim fees and disbursements in the amount of $75,000, claiming that she is in desperate need of financial assistance. In my view, it is preferable to sell the parties’ two cottages, which, together, will make available over $500,000 in equity that can be divided between the parties. The largest portion of this equity will come from the sale of the Bancroft cottage.
[24] Given the dispute between the parties with respect to the $75,000 loan from the applicant’s corporation, only that amount should remain in trust, subject to the agreement of the parties or further order of the court.
[25] The applicant has sought an order for exclusive possession of the Bancroft cottage pending the sale of that property. He has resided in that property since February 2020. The respondent opposes this relief because she also wants to enjoy that cottage until it is sold.
[26] Section 24(1) of the FLA applies only to a matrimonial home. A cottage may qualify as a second matrimonial home if it was commonly used by the family prior to separation: Cork v. Cork, 2014 ONSC 2488, at para. 82. There was no dispute in this case that the Bancroft cottage qualifies as a matrimonial home.
[27] While I would not generally grant one party exclusive possession of a recreational property that qualifies as a matrimonial home, such an order is appropriate in this case. The applicant alleges that he has been unable to find work in his field since the onset of the COVID-19 pandemic, and he does not want to spend his limited financial resources on renting another property while the Bancroft cottage would otherwise remain empty.
[28] In granting the applicant exclusive possession of the Bancroft cottage, I have taken into account the following factors:
(a) The unique economic circumstances of the present pandemic;
(b) The fact that the respondent is granted exclusive possession of the Pickering home;
(c) The fact that by the time this decision is released in September 2020, the cottage season will be substantially over;
(d) Exclusive possession will be temporary pending the immediate sale of the Bancroft cottage.
[29] At the hearing of this motion, the applicant also requested an order for the immediate sale of the Pickering home. I will not grant such an order for two reasons.
[30] The first reason is that the applicant did not request an order for the sale of the Pickering home in his Amended Notice of Motion, or in his factum, or in any document filed with the court, and it would be unfair to the respondent to permit the applicant to raise this issue without proper notice.
[31] The second reason is that the applicant has not yet completed the business valuation and income report requested by the respondent. The applicant has explained that he has retained a certified business valuator, but the completion of the valuation has been delayed because of the COVID-19 pandemic and the fact that his bookkeeper is on vacation for the month of August. His counsel has indicated on the record that the business valuation and income report will be available by the end of September.
[32] In my view, it would be unfair to order the sale of the Pickering home prior to the completion of the business valuation. The Pickering home is the most valuable asset in the parties’ net family property, and the home should not be sold until there is some idea of the value of the applicant’s business. Sale of the Pickering property at this point could well prejudice the respondent’s right to an equalization payment.
(b) Spousal and Child Support
[33] The respondent seeks an order for retroactive and ongoing spousal support in the amount of $1,289 per month commencing April 1, 2019. This amount is based on her base salary of $57,500 per year, and an imputed income of $150,000 per year for the applicant. The respondent’s line 150 Income Tax Return income for 2019 was over $70,000, however, she explains that this was the result of a retroactive payment for previous years.
[34] The respondent also seeks retroactive and ongoing child support for both daughters in the amount of $2,077 per month commencing April 1, 2019, based on an imputed income of $150,000 per year for the applicant.
[35] The applicant is self-employed in construction in the film industry. His personal income for 2019 was $45,500 (based on line 150 of his Income Tax Return), and $30,000 in 2018. This year he is in receipt of $2,000 per month from the Canada Emergency Response Benefit (CERB) during the COVID-19 pandemic. He has provided evidence that he was contracted to work as a construction coordinator for a television series in April 2020, but the production of that series was postponed due to the COVID-19 pandemic, and he has not been able to find alternative production work.
[36] The applicant’s corporate income has been variable - his net corporate income in 2019 was $92,734, in 2018 the corporation was in a net loss position. This year his corporation received an emergency business loan of $40,000 from the Canada Emergency Business Account (CEBA) in relation to the COVID-19 pandemic. Of that amount, $30,000 will have to be repaid.
[37] Section 18 of the Federal Child Support Guidelines, SOR/97-175 gives the court discretion to attribute some or all of the pre-tax income of a corporation to the shareholder, director or officer personally or, in the alternative, to attribute an amount less than or equal to the pre-tax corporate income that is commensurate with the services that the parent provides to the corporation.
[38] The respondent argues that, given the parties’ previous standard of living, the line 150 income reported on the applicant’s personal income tax return does not reflect his actual income, and substantial corporate income should be attributed to the applicant. That is how she arrives at her proposed imputed income of $150,000.
[39] The applicant takes the position that any spousal or child support should await the production of his expert’s income report, which, as indicated above, he anticipates before the end of September, 2020. If his income is only $45,500 per year, as he claims, his income would be less than the respondent’s, and he will not owe any spousal support. His child support would be $423 for one child, or $682 for two children.
[40] The court must be cautious when asked to impute income on the basis of conflicting affidavits on an interim motion: Rushton v. Cuff, 2020 ONSC 490, at para. 24; Steinberg v. Steinberg, 2019 ONSC 3870 at para. 17. This caution is particularly applicable during the COVID-19 pandemic, when many businesses are struggling and many people will be unable to attain their previous year’s income.
[41] Given that the delivery of the applicant’s expert income report is only a few weeks away, it is preferable, in my view, for the court to wait for that report before rushing in with an imputed income. The true state of the applicant’s company and the financial benefit that he derives from it are impossible to fully ascertain on the record available on this motion in the absence of this report. Unless I make a lucky guess, any estimate of imputed income made at this point will simply have to be redone in a few weeks.
[42] For the same reasons, I will not decide the mother’s motion with respect to retroactive spousal and child support at this time.
[43] In fairness to the respondent, she did not know that the applicant’s business valuation and income report would be available by the end of September when she brought her cross-motion. All she knew was that she has been requesting a business valuation and income report since July 2019, and none was forthcoming. Her counsel took the position that if the applicant brought a motion for the sale of the Corbeil cottage, the court should have before it all of the outstanding issues that had to be addressed. This was a legitimate position.
[44] Given these circumstances, the fairest way to address this issue is to order interim spousal and child support on the basis of the applicant’s actual 2019 income of $45,500, but make this order without prejudice to the right of the respondent to bring another motion for spousal or child support after she is served with the applicant’s expert income report.
[45] That said, there is some uncertainty on the record before me (which was compiled at the beginning of August) whether the parties’ older daughter, who is now 21 years of age, will be enrolled full time in the final year of her university program in September, and thereby remain a child of the marriage. There is also some uncertainty on the record before me, whether the older daughter will be living at home with her mother, or whether she will be returning to complete her degree in Ottawa. Again, to be fair to the respondent, that uncertainty is a product of these uncertain times. There are, no doubt, many university students who are unsure what they will be doing, and where they will be living, when the school year begins.
[46] Accordingly, I will order child support for only one child, without prejudice to the respondent’s right to bring a motion for child support for the older daughter when the daughter’s education plans are finalized.
(c) Section 7 Expenses
[47] The dispute with regard to s. 7 expenses relates to three issues. The first is the parties’ proportionate share of these expenses. The second is whether the mother must use the funds accumulated in the children’s Registered Education Savings Plan (RESP) to pay for their post-secondary education expenses. The third is whether the older daughter will be returning to University.
[48] The first issue, like the issue of child support, depends on whether income will be imputed to the applicant. If the applicant has an imputed income of $150,000 as contended by the respondent, the applicant will be required to pay approximately 75 per cent of any s. 7 expenses. If the applicant’s income is actually $45,500, section 7 expenses would be split 50/50.
[49] As with child support, I will make my order on the basis of the applicant’s reported income, and the parties should split the s. 7 expenses on a 50/50 basis. This order is without prejudice to the right of the respondent to bring another motion for s. 7 expenses after she is served with the applicant’s expert income report.
[50] The respondent has taken the position that she does not want to use the children’s RESP to offset the costs of the children’s post-secondary education. She states in her affidavit:
Although we had set up RESP accounts for both of them, it would be a shame to have to withdraw funds from the RESP given that the investments that were attached to them have lost ground due to this COVID-19 crisis.
[51] The respondent’s affidavit does not indicate what investments were attached to the RESP accounts, or what the value of the RESP accounts were prior to the COVID-19 crisis, or what they are today. I would have expected this information if the respondent was seriously advancing this position. During oral argument, Respondent’s counsel advised the court that there was approximately $10,000 in the older daughter’s RESP, and $20,000 in the younger daughter’s. In the absence of a sworn affidavit, this information is of no evidentiary value.
[52] In any event, the respondent cannot refuse to withdraw funds from the children’s respective RESP accounts because she hopes that they will increase in value in some future year. The RESP accounts were created to offset the cost of the children’s post-secondary education, and they must be used for that purpose. As Penny J. stated in Crisp v. Crisp, 2012 ONSC 521, at para. 74:
[T]he RESP must be used first. That is what these funds were designated for, and it is appropriate that recourse be had to them before looking to other sources of support for this expense.
[53] As with child support, based on the record before me, there remains some uncertainty whether the older daughter will be returning to university in the fall, and whether she will be living at home or in Ottawa. If she does return to university to complete her degree, the expenses associated with that degree are s. 7 expenses. I would hope that once the daughter’s plans are finalized, the parties will be able to resolve this particular dispute without the need for a further motion, except, if necessary, with respect to the father’s income.
(d) Questioning
[54] The parties have consented to an order for questioning, limited to one full day for each party.
(e) Non-Depletion
[55] The respondent has requested an order prohibiting the applicant from taking any property or assets under his control without the respondent’s consent or order of the court. The respondent is particularly concerned that the applicant has withdrawn approximately $120,000 from his corporation in the twelve months, leaving only approximately $170,000 in that account. She asks the court to freeze the corporate account.
[56] The applicant contends that the corporation is necessary for him to conduct his business, and freezing his corporate account would interfere with his business.
[57] As indicated above, I have refused to order the sale of the Pickering home. That home is unencumbered. I am satisfied that there is sufficient equity in the Pickering home to offset any depletion of assets that may occur from the applicant’s corporate account. As such, the non-depletion order requested is unnecessary.
(f) Restraining Order
[58] The respondent alleges that the applicant installed spyware on her home computer. Her computer technician has provided her with a report that indicates that spyware was installed on her home computer on March 31, 2019, at 9:00 p.m., just one week after the parties March 22, 2019 date of separation. The respondent is concerned that the applicant installed the spyware and had access to confidential documents and solicitor/client privileged information.
[59] The applicant has denied installing spyware on the respondent’s home computer. He also indicates that he has neither need nor intention to attend at the Pickering home.
[60] The computer technician’s letter does not indicate how the spyware was installed, or whether it is even possible to ascertain how it was installed. For example, was it installed from within the Pickering home? Could it have been installed remotely? Could it have been installed inadvertently by downloading a corrupted program or clicking on an internet link?
[61] Without this information I am not able to conclude with any probability that the applicant was responsible for installing the spyware on the respondent’s computer. On this basis, the request for a restraining order is denied.
(g) Certified Tool Appraisal
[62] The applicant’s corporation owns a number of tools that he uses in his film industry construction business or rents out to others. The applicant has obtained an appraisal of the value of these tools. The respondent alleges that the appraiser was not qualified to conduct the appraisal because he is not a “certified tool appraiser”, and she requests an order that the applicant obtain an appraisal from a certified tool appraiser.
[63] When questioned by the court on this issue, counsel for the respondent acknowledged that he did not know if there was such a thing as a “certified tool appraiser”, and did not know what body, if any, certified tool appraisers. Without such information I am not prepared to accede to this request.
(h) Interim Fees and Disbursements
[64] The respondent alleges that she is in desperate need of financial assistance and requests payment of $75,000 from the applicant to cover the costs of interim fees and disbursements. The motion for interim fees and disbursements is dismissed. As indicated at para. 23 of these Reasons, it is preferable to sell the parties’ two cottages, which, together, will make available over $500,000 in equity that can be divided between the parties.
Conclusion
[65] For the foregoing reasons, I make the following orders:
a) The property municipally known as 76 Kyle Road, Corbeil, Ontario, shall be immediately listed for sale by a mutually agreeable realtor. Each party shall co-operate to facilitate the sale of the property, with no reasonable offers to purchase the property to be reasonably refused by either party.
b) The amount of $75,000 representing the amount allegedly borrowed from 1412137 Ontario Ltd., shall be held in trust by the real estate agent or lawyer, until agreement of the parties or further order of the court, with the remaining net proceeds of sale of 76 Kyle Road, Corbeil, Ontario to be divided equally between the parties.
c) The property municipally known as 1188 Trinity Lane, Highland Grove, Bancroft, Ontario, shall be immediately listed for sale by a mutually agreeable realtor. Each party shall co-operate to facilitate the sale of the property, with no reasonable offers to purchase the property to be reasonably refused by either party.
d) The net proceeds of the sale of 1188 Trinity Lane, Highland Grove, Bancroft, Ontario, shall be divided equally between the parties.
e) Pending the sale of 1188 Trinity Lane, Highland Grove, Bancroft, Ontario, the applicant, Murray Walter Lowe, shall have exclusive possession of 1188 Trinity Lane, Highland Grove, Bancroft, Ontario.
f) The respondent, January Natalie Lowe, shall, if permitted by the terms of her employment health insurance, immediately reinstate the applicant, Murray Walter Lowe, as a beneficiary on her medical, dental and extended health benefits provided through her employer.
g) On consent, the respondent, January Natalie Lowe, shall have exclusive possession of the matrimonial home municipally known as 740 Marksbury Road, Pickering, Ontario.
h) The applicant, Murray Walter Lowe, shall pay to the respondent, January Natalie Lowe, child support for the child Mackenzie Natalie Lowe, (d.o.b. March 9, 2002), in the amount of $423.00 per month, commencing September 1, 2020.
i) This order is without prejudice to the respondent’s right to bring another motion for spousal and child support after she is served with the applicant’s expert income report. I am not seized.
j) This order is without prejudice to the respondent’s right to bring another motion for child support if the child Breanna Rose Lowe (d.o.b. May 19, 1999) enrols in a full time program of education. I am not seized.
k) The respondent shall provide the applicant with all supporting documentation, including copies of statements for the children’s RESP accounts, for the special and extraordinary expenses (s. 7 expenses) claimed for the children.
l) The applicant, Murray Walter Lowe, shall pay to the respondent, January Natalie Lowe, his proportionate share of special and extraordinary expenses (s. 7 expenses) for the children Breanna Rose Lowe and Mackenzie Natalie Lowe.
m) On consent, the parties shall attend at, and cooperate in, Questioning, at a time and location mutually agreed upon by the parties. Questioning of each party is limited to one full day unless otherwise agreed to.
[66] The parties have had divided success. If they are unable to agree on costs, the applicant may serve and file costs submissions, not to exceed three pages, plus costs outline and any offers to settle, within 20 days of the date of this order. The respondent may file responding submissions on the same terms within a further 15 days.
Justice R.E. Charney
Released: September 1, 2020