Court File and Parties

Court File No.: 11580/19 Date: 20210216 Superior Court of Justice - Ontario

Re: Trevor Paul Harness, Applicant And: Alison Erica Savoy, Respondent

Before: Justice K. Tranquilli

Counsel: Iain Sneddon, for the applicant Kirsten Hughes, for the respondent

Heard: November 19, 2020 via Zoom

Endorsement

[1] The parties have competing motions for interim relief regarding the disposition of the matrimonial home, child support, spousal support and disclosure.

Overview

[2] The parties married on November 4, 2006. The parties disagree as to the date of separation. The respondent asserts they began to live separate and apart under the same roof beginning on November 1, 2018. The parties appear to agree that the respondent left the matrimonial home on March 16, 2019.

[3] The parties are the legal guardians of Connor MacPhail, born April 3, 2003. Connor is now 17 years of age. The applicant’s sister, Lisa Harness-MacPhail and her spouse, Warren MacPhail, adopted Connor at his birth. The applicant’s sister passed away in 2005. Connor continued to live with his adoptive father thereafter; however, in 2014, this reportedly became untenable. The applicant and respondent took Connor into their home and became his legal guardians.

[4] The parties hold joint title to the matrimonial home located at 42 Denrich Avenue, Tillsonburg, Ontario. The applicant and Connor have continued to live in the matrimonial home since the respondent left in March 2019. The respondent has been solely responsible for the carrying costs of the matrimonial home to date. She rents her new living accommodation in the Burlington area.

[5] The parties each hold shares in a jointly owned corporation, 2173671 Ontario Inc., operating as “The Moving Source”. It was reportedly unprofitable and has not operated since before the parties’ separation. The applicant is the sole shareholder of 25356578 Ontario Inc. operating as “Total Safety Management”, which he reports has operated at a loss since its inception in 2016.

The Motions

[6] The respondent Alison Savoy (Harness) seeks orders for the immediate sale of the matrimonial home and for outstanding disclosure, including for the applicant to obtain a business valuation of his company and an income report at his expense.

[7] The applicant Trevor Harness seeks orders for interim exclusive possession of the matrimonial home, that the child shall have his interim principal residence with the applicant and for the respondent to pay interim spousal and child support.

[8] The court is satisfied that the matrimonial home should be listed for sale without further delay. The evidence fails to establish sufficient reason for the court to exercise its discretion to refuse a sale.

[9] It is premature to order interim child support payable by the respondent. The child’s adoptive father is legally obligated to pay the full table amount of child support. Assuming the respondent has a legal obligation to pay child support, the amount of child support requires the court to consider any other parent’s legal duty to support the child. The amounts paid by the adoptive father have not been disclosed, preventing the court from being satisfied that a just interim order can be made.

[10] Similarly, there is an insufficient evidentiary record on which to order interim spousal support for the applicant. An interim support application does not require an in-depth analysis of the parties’ circumstances and the applicant has provided evidence of economic disadvantage and hardship since the breakdown of the marriage. However, the current record does not establish a prima facie basis for entitlement. There are contested issues of fact as to entitlement and there has not been full financial disclosure by the applicant.

[11] The court is not persuaded that the applicant should be compelled to undertake an income analysis and business valuations at his expense. He has provided business valuations, which the respondent can elect to accept or challenge. An income analysis report may be advisable given the questions raised by the respondent in her review of the financial disclosure to date; however, that will be left to the applicant’s discretion.

The Issues

[12] There are 4 main issues in these motions:

1. Should the matrimonial home be listed for sale or should the applicant hold interim exclusive possession?
2. Should the respondent pay interim child support?
3. Should the respondent pay interim spousal support?
4. Is the applicant required to obtain business valuations and an income analysis report?

[13] The court heard these interlocutory motions for a full day. There were numerous grounds of relief sought, along with multiple, voluminous and competing affidavits. It had all the appearances of an effort to conduct what amounted to a summary trial.

[14] One problematic area of evidence related to an opinion letter from Connor’s therapist, purporting to address Connor’s views, preferences and best interests as it related to remaining in the matrimonial home. This report was appended to a law clerk’s affidavit, whereas it ought to have been part of the therapist’s own sworn affidavit: Ceho v Ceho, 2015 ONSC 5285 (S.C.J.) at para. 50. The respondent also raised concerns that the therapist was in a conflict of interest, given her previous role providing family counselling to the parties and Connor. The court is not able to make a finding in that regard at this stage; however, given the procedural issues and conflict raised, the court has not considered the therapist’s information in the analysis and disposition of this matter.

[15] The respondent also seeks an order severing the divorce from the corollary issues to proceed on an uncontested basis. A divorce cannot proceed at this stage with the child support issue unresolved. The applicant also seeks an interim order placing Connor in his principal care. There is no compelling reason in the record to explain why the applicant requires interim child custody. Connor is 17 years of age and has remained in the applicant’s care since the parties’ separation.

1. Should the matrimonial home be listed for sale or should the applicant hold interim exclusive possession?

[16] The respondent has solely carried the capital carrying costs of the matrimonial home in the over two years since separation. The respondent submits she has incurred substantial debt and that the sale of the matrimonial home is inevitable. She wishes to exercise her right as a joint owner to receive her share of the equity on the open market. The applicant submits he is unable to contribute to the capital costs; however, he wishes to purchase the respondent’s interest in the matrimonial home. The applicant is pre-approved for a mortgage and claims a credit for the equalization payment and spousal and child support arrears owed to him by the respondent to account for his ability to purchase the respondent’s interest. He submits that interim exclusive possession is in Connor’s best interests. He has had an unstable family history and is in his final year of high school.

[17] The respondent questions whether the applicant is in a realistic position to purchase her interest in the matrimonial home. Overall, he would need to qualify for financing to address discharging the current mortgage, payment of equalization to the respondent, payment of a vehicle loan and settlement of other post-separation adjustments. The respondent claims this amount was estimated at about $523,000 as of February 2020. The applicant’s pre-approved mortgage for $305,000 is therefore insufficient to purchase her interest, settle post-separation adjustments and the equalization payment.

[18] The recent decision of Pazaratz J. in Dhaliwal v. Dhaliwal, 2020 ONSC 3971 (S.C.J) at paras 13-16, sets out a comprehensive summary of the legal principles to consider on an interim motion for the sale of the matrimonial home. I have considered those principles as they relate to the circumstances of this case.

[19] In general, motions of this nature should not be made at an interim stage as a matter of course and where any disputes related to property and other claims are yet to be determined. The applicant contends there are still significant issues to resolve with the equalization claim and support. However, I accept the respondent’s evidence that the lack of timely disclosure from the applicant has delayed resolution of support and property issues. The respondent has raised reasonable questions about the financial operations and valuation of the corporations which have yet to be addressed. There is a factual dispute about the existence of a family loan to the parties and there is documentation yet to be produced. In the meantime, the respondent continues to be financially responsible for the costs of the matrimonial home and the applicant contends he cannot afford to contribute. This stalemate has been the status quo for more than two years with no end in sight if the court accepts the applicant’s position.

[20] The court is satisfied that this financial arrangement is not sustainable for the respondent and that sale of the matrimonial home is the inevitable result. These motions were unfortunately delayed for several months due in large part to the pandemic and the scheduling of these motions. The respondent initially brought her motion for sale of the matrimonial home to be heard in March 2020. The scheduling was delayed first due to the pandemic and then because of the applicant’s motions and request that all matters be heard at a special appointment, which was finally set for November 19, 2020. It is unlikely that the matter can get to trial within a relatively short period of time, particularly given the ongoing concerns about financial disclosure which will be material to determining the support and property issues.

[21] The court is concerned for Connor’s well-being. His history of family disruption leads to a common-sense conclusion that stability and consistency is important. However, it cannot be the overriding factor in these circumstances. There is no specific admissible evidence that his well-being depends on being able to stay in the home: Dhaliwal, supra, at para. 16. He is at a stage in adolescence where plans are usually made for post-secondary education or training and supporting a transition to independence. In that context, the court is not convinced that sale of the home would be fundamentally disruptive to Connor’s best interests.

[22] It has been over two years since separation and the parties are unable to make meaningful progress towards resolution of the property and financial issues. I am satisfied that the sale of the matrimonial home requires specific orders as to the listing and sale of the home and distribution of the proceeds to satisfy debts, with the balance to be held in trust pending equalization and post-settlement adjustments. An order will therefore go for sale of the matrimonial home in accordance with paragraphs 1 through 8 of the draft order filed by the respondent as Schedule “A” to her factum dated November 11, 2020.

2. Should the respondent pay interim child support?

[23] The applicant submits that the respondent stands in the place of parent to Connor and is obliged to pay child support of $1,238.00 per month in accordance with the Guidelines and the respondent’s 2019 income of $141,811.00. [1]

[24] The respondent argues she has no legal obligation to support Connor for two reasons. First, the final order of Hockin J. dated January 25, 2018 determines the child support obligation. That final order requires his adoptive father, Warren MacPhail, to pay child support for Connor to the applicant of $2,360.00 per month subject to adjustment and the applicant and Mr. MacPhail to each contribute 50% towards Connor’s s. 7 expenses. The parties deliberately did not adopt Connor in order to preserve his adoptive father’s child support obligation. Second, the final order expressly provides that all current or future claims against the respondent other than as addressed in the final order are dismissed. The respondent submits this provision is a complete bar to any future child support claim.

[25] In the alternative, the respondent submits that a proper consideration of the quantum of child support that she may be obliged to pay as a multiple payor under s.5 of the Guidelines requires a full accounting of the child support paid to the applicant by Connor’s adoptive father. The applicant has not disclosed this information in his financial statements.

[26] There is no need for the court to consider the impact of the final order on the respondent’s child support obligations at this interlocutory stage. Similarly, the court does not need to make a finding that the respondent stands in the place of a parent to Connor. However, I note that there does not appear to be a significant dispute that the respondent has had a significant role in Connor’s financial support, education and discipline. The respondent acknowledges a bond with Connor and that she has paid for various of Connor’s expenses since separation.

[27] However, from a practical standpoint, the court cannot properly assess the amount of child support without a complete accounting of the support the applicant receives from the adoptive father. None of this information appears in the applicant’s financial statement. The court has only the applicant’s affidavit evidence that the adoptive father has reduced the amount of support due to changed financial circumstances. The particulars of the payments and reduced circumstances are lacking. Any support obligation of the respondent turns on s. 5 of the Guidelines. The court is required to determine an amount that is “appropriate”, having regard to the Guidelines and any other parent’s legal duty to support the child. Without the information as to all support and s. 7 expenses paid by Mr. MacPhail to the applicant, the court cannot consider what amount may be appropriate for the respondent to pay towards child support.

[28] There is also merit to the respondent’s position that the child support claim is properly addressed in the form of a motion to change the final order of Hockin J., with Mr. MacPhail as a party.

3. Should the respondent pay interim spousal support?

[29] The applicant seeks interim spousal support on a compensatory and non-compensatory basis. He seeks spousal support of $2,883.00 per month, representing the mid-range in accordance with the Spousal Support Advisory Guidelines, the applicant’s 2019 income of $13,863.00 and the respondent’s 2019 income of $142,812.00. [2]

[30] The applicant submits the evidence establishes a prima facie case for interim spousal support. The parties had a 14.5-year marriage. The applicant claims he made career sacrifices to become Connor’s primary caregiver and to support the respondent’s career. When the parties found their company, the Moving Source, was unprofitable, they agreed the applicant would start Total Safety Management and that the respondent would support the family while the applicant started up the new venture.

[31] The company has been operating at a loss since its inception in 2016. The applicant reports his 2019 income from Total Safety Management was $13,863.00. He claims Total Safety Management has operated at a loss due to the impact of the COVID-19 pandemic and that he earned no income from the business as of July 2019 and August 2020. He received the CERB for approximately four months.

[32] The respondent disputes the applicant’s entitlement to interim spousal support. She submits that the parties both worked full-time during the marriage, including when they became Connor’s legal guardians. The applicant also claims that the respondent has failed to provide the necessary financial disclosure required to determine his income. His disclosure of his income earned from his company, Total Safety Management, is also inadequate.

[33] Entitlement to interim spousal support does not require an in-depth analysis of the parties’ circumstances. However, interim support should also only be ordered where it can be said a prima facie case for entitlement has been made out. There is conflicting evidence about the parties’ roles during their marriage, although this is not determinative on entitlement. The applicant’s evidence also establishes need or economic hardship since the marriage breakdown. However, the court accepts that the respondent has raised reasonable questions about the extent of financial disclosure for the purposes of determining the applicant’s income. There are also questions about certain expenses that seem to be at odds with his claims of earning little to no income from his company and transfers made between the two companies. This issue cannot be decided in the face of competing affidavits and unresolved issues about whether the applicant has made full financial disclosure: Schnarr v. Schnarr, 2006, O.J. No. 53 (C.A.) at para. 15; Ierullo v. Ierullo, 2006 O.J. No. 3912 (C.A,) at paras. 18-22.

[34] The court wishes to make it clear that no finding on the applicant’s entitlement to interim spousal support is made. Future applications for interim support are not foreclosed. It is simply premature in the face of competing affidavits, no questioning and issues about financial disclosure.

4. Is the applicant required to obtain business valuations and an income analysis report?

[35] The respondent also submits that the applicant’s income, for spousal support purposes, cannot be determined without an expert opinion. There are expense deductions, unexplained operating expenses and the applicant has been moving funds between their jointly held company and his company at his discretion.

[36] The respondent similarly contends that a qualified expert should prepare business valuations of both corporations, The Moving Source and Total Safety Management, for the purposes of the equalization calculation. The respondent is prepared to equally share in the cost of the expert for the valuation of the jointly held corporation. The respondent submits that the applicant is obliged to retain an expert at his own expense for valuation of his solely held company, Total Safety Management.

[37] The applicant disputes the need for an expert to prepare either an income report or business valuations. He has made substantial financial disclosure. He has also produced two reports prepared by a registered professional accountant which values The Moving Source at $0.00 and Total Safety Management at $2,000.00. If the respondent is dissatisfied with those opinions, she has the resources to retain an expert at her own expense.

[38] The applicant has provided a business valuation. He claims he does not have the resources to obtain further valuations to meet the respondent’s expectations. The court acknowledges the respondent’s reservations about the qualifications of the accountant and documents relied upon. However, the applicant has provided some evidence in satisfaction of his obligation to provide particulars of the value of these assets. The respondent is at liberty to obtain further valuations at her expense and to address this disbursement in the proceeding: O’Brien v. O’Brien, 2006 CarswellOnt 2269 (ONSC).

[39] Similarly, the court is not prepared to impose an income analysis report upon the applicant in the face of his objection. That said, the respondent’s materials establish the grounds for further disclosure orders, notwithstanding the applicant’s evidence that he has been satisfying the disclosure requests. This matter has delayed too long, and this motion demonstrates the lack of necessary information. Further disclosure may negate the need for an income analysis report; however, the court will defer the advisability of this assessment to the applicant. The respondent is also at liberty to retain an expert for this purpose.

Orders

[40] Orders

1. Orders to go in accordance with paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 13 and 14 of the draft order dated November 19, 2020 submitted by the respondent as Schedule “A” to her factum;
2. The applicant’s motion for interim exclusive possession of the matrimonial home is dismissed;
3. The applicant’s motions for interim spousal support, interim child support and s. 7 expenses and interim custody are dismissed without prejudice;
4. The respondent’s motion to sever the divorce from the corollary relief is deferred pending determination of the issue of child support.

[41] The parties are encouraged to resolve the costs of these motions in the context of this ongoing proceeding. If costs are not resolved, the applicant shall provide his written submissions by March 1, 2021 and the respondent her written submissions by March 8, 2021. The applicant has no right of reply without leave of the court. Submissions are limited to three pages.

Justice K. Tranquilli Date: February 16, 2021

Footnotes

[1] The respondent’s 2019 income was not consistently reported at the same quantum within the applicant’s motion materials. The record referred to her income as being either $142,812 or $141,811 and in earlier materials in the range of $152,000. Given my conclusions, nothing turns on this discrepancy.

[2] See footnote 1 re the income discrepancy.