Court File and Parties

COURT FILE NO.: CV-14-496328

DATE: 20210416

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: DANIEL CARVALHO Applicant

AND:

MARIA AMORIM and THE LABOURER’S PENSION FUND OF EASTERN AND CENTRAL CANADA Respondents

BEFORE: Mr. Justice Chalmers

COUNSEL: M. Paiva for the Applicant P. Di Monte, for the Respondent, Maria Amorim D. Yiokaris, for the Respondent, The Labourers’ Pension Fund

HEARD: April 6, 2021, by videoconference

ENDORSEMENT

OVERVIEW

[1] The Applicant, Daniel Carvalho seeks a declaration that the Respondent, Maria Amorim does not meet the eligibility requirements of a spouse pursuant to section 44 of the Pension Benefits Act, R.S.O. 1990 c. P.8, (the “Act”).

[2] Mr. Carvalho and Ms. Amorim married in April 1980. They were residents of Portugal. In 1985, Mr. Carvalho moved to Canada. Ms. Amorim moved to Canada in 1990. She stayed for two months before returning to Portugal. Divorce proceedings were commenced in 2007/08. The parties were formally divorced in Portugal on July 14, 2009.

[3] Mr. Carvalho applied to The Labourers’ Pension Fund of Eastern and Central Canada (the “Fund”) for a disability pension in August 2002. In his application he stated that he was legally married, however he provided a waiver which was purportedly signed by Ms. Amorim. On the basis that Ms. Amorim had appeared to have waived her right to a spousal pension, Mr. Carvalho received a pension which was not at the joint and survivor benefit rate. In February 2010, Ms. Amorim advised the Fund that she did not execute the spousal waiver. The Fund reduced Mr. Carvalho’s pension to the joint and benefit survivor rate.

[4] Mr. Carvalho argues that Ms. Amorim does not meet the eligibility requirements of a spouse because at the time he began receiving the disability benefit in August 2002, they were living “separate and apart”. Ms. Amorim argues that although they may have been living physically apart, they continued to have a marriage relationship. For the reasons set out below I conclude that Mr. Carvalho and Ms. Amorim were “living separate and apart” at the time Mr. Carvalho first received the pension benefit, and as a result, Ms. Amorim does not meet the eligibility requirements of a spouse pursuant to s. 44 of the Act. I find that Mr. Carvalho is entitled to a “life-only” pension benefit.

BACKGROUND FACTS

Relationship Between Mr. Carvalho and Ms. Amorim

[5] Mr. Carvalho and Ms. Amorim were legally married on April 12, 1980. They had a child together, Alberto Manuel de Amorim Carvalho. He was born on September 15, 1984.

[6] Soon after they married, Mr. Carvalho went to Venezuela to work. Ms. Amorim remained in Portugal. In 1982, Ms. Amorim moved to Venezuela. They returned to Portugal 11 months later. They remained in Portugal until April 1985 at which time Mr. Carvalho moved to Canada. He was successful in finding employment. He remained in Canada for approximately four years without returning to Portugal. During this time Ms. Amorim remained in Portugal with their son.

[7] Mr. Carvalho returned to Portugal at the end of 1989. He stayed in Portugal with Ms. Amorim until April 1990, when Mr. Carvalho, Ms. Amorim and their son moved to Canada. After about one month, Ms. Amorim and their son returned to Portugal. Mr. Carvalho remained in Canada. According to Mr. Carvalho, he wanted his wife and son to remain with him in Canada, but she refused. Mr. Carvalho states that he and Ms. Amorim had a telephone conversation in 1996/97 and agreed their marriage was over. He states that after that time, Ms. Amorim would occasionally visit Canada. She would stay with her brother and sister-in-law who live in Toronto, but never stayed with him.

[8] Ms. Amorim denies there was a conversation in 1996/97 that the marriage was over. She states that the arrangement between them was that Mr. Carvalho would work in Canada and send money to Ms. Amorim and their son, when necessary. They would visit each other every six months. Between 1990 and September 2007, Ms. Amorim did not come to Canada for any reason. She did not have a valid Portuguese passport and could not travel. She lost her Canadian permanent resident status. Ms. Amorim states that Mr. Carvalho visited her in Portugal. He stayed in their matrimonial home. She states that they slept in the same bed and had sexual relations until May 2006. At that time, she noticed a difference in Mr. Carvalho. He began sleeping in a different bedroom in the house. They stopped having sexual relations.

[9] In September 2008, Mr. Carvalho initiated divorce proceedings in Portugal. In the application for divorce, Mr. Carvalho stated that “at least” as of January 2005 he ceased to live with Ms. Amorim, no longer leading a common life. They were formally divorced on July 14, 2009 in Portugal.

Claim for Disability Benefits and Spousal Waiver

[10] Mr. Carvalho worked in the construction industry. He was a member of the Fund since 1988.

[11] On August 27, 2002, Mr. Carvalho attended at the administration office of the Fund to apply for a disability pension. He met with Sonia Henriques who is a pension benefits analyst with the Fund. She speaks Portuguese and they communicated in Portuguese throughout the meeting. He completed the disability pension application. She asked whether he had a spouse. He stated that he had a spouse and they had not been legally separated or divorced. Mr. Carvalho stated that his wife agreed to waive her right to a joint and survivor pension. Ms. Henriques provided him with a Declaration of Marital Status Form which was signed by Mr. Carvalho on August 28, 2002. He was also provided with a Spousal Waiver form that Ms. Amorim was required to sign.

[12] Mr. Carvalho states that he spoke with Ms. Amorim by telephone and asked her to sign the waiver. On August 28, 2002, Mr. Carvalho went to the home of Leonel Amorim; Ms. Amorim’s brother in Toronto. He believed she was staying there while visiting Toronto. He brought the Spousal Waiver form. Mr. Amorim answered the door. Mr. Carvalho told Mr. Amorim that he brought the waiver form for his sister to sign. According to Mr. Carvalho, Mr. Amorim took the form and left him at the door. He returned a short time later with the spousal waiver with Ms. Amorim signature. Ms. Amorim denies signing the waiver form. She states that she did not travel to Toronto between 1990 and 2007 and was not staying with her brother in August 2002. Mr. Amorim swore an affidavit dated July 6, 2006, in which he states that his sister was not at his house in August 2002 and did not sign a spousal waiver or any other document.

[13] Mr. Carvalho returned to the offices of the Fund on August 29, 2002 and dropped off the signed Declaration of Marital Status form, and the signed Spousal Waiver form. The Fund sent a letter to Mr. Carvalho on October 23, 2002 confirming receipt of the application and spousal waiver. The Fund asked that both Mr. Carvalho and Ms. Amorim sign the letter and return to the Fund if they understand and agree that the spousal waiver should be accepted. The letter appears to be signed by both Mr. Carvalho and Ms. Amorim. The signed letter was dropped off at the Fund office.

[14] The Fund paid the pension benefit to Mr. Carvalho on the basis that it was a “life-only” benefit in the amount of approximately $770 a month.

Ms. Amorim’s Claim

[15] In 2008, Ms. Amorim executed a general Power of Attorney on October 8, 2008 appointing her brother, Leonel as her attorney for property in Canada. In connection with the divorce proceedings which had been commenced in September 2008, Mr. Amorim contacted the Fund to enquire whether Mr. Carvalho had applied for any type of pension. He was told that Mr. Carvalho had applied for the disability pension in 2002 and had provided a signed spousal waiver. On February 26, 2010, Mr. Amorim attended at the Fund’s offices. He alleged that Mr. Carvalho forged Ms. Amorim’s signature on the spousal waiver.

[16] On April 22, 2010, the Fund wrote to Mr. Carvalho and advised that his pension was being reduced to the joint and survivor benefit level, and that he would be subject to an overpayment of $19,680 unless he could provide proof that Mrs. Amorim executed the spousal waiver or that they were living separate and apart at the time his disability pension commenced. Mr. Carvalho provided some documentation but did not substantiate to the Fund’s satisfaction that Ms. Amorim executed the spousal waiver. By letter dated July 22, 2010, Mr. Carvalho was given an additional 60 days to clarify the situation. Mr. Carvalho failed to clarify the situation. The Fund reduced the pension benefits to the joint and survivor benefit level commencing February 1, 2011. There was a claw-back of the overpayments.

THE ISSUES

[17] Mr. Carvalho takes the position that Ms. Amorim is not entitled to a joint and survivor pension from the Fund. He advances two arguments:

a. Ms. Amorim was not his spouse at the time the disability pension commenced, because they were “living separate and apart”; and

b. In the alternative, Ms. Amorim waived her entitlement to the joint and survivor pension.

ANALYSIS

1. Were Ms. Amorim and Mr. Carvalho “living separate and apart” when the disability pension commenced?

[18] Section 44(1) of the Act provides that every person who has a spouse on the date of the payment of the first installment of the pension shall be a joint and survivor pension. The Act provides as follows:

s. 44(1) Every pension paid under a pension plan to a retired member who has a spouse, or same sex partner on the date that the payment of the first installment of the pension is due shall be a joint and survivor pension.

s. 44(4) Subsection (1) to (3) do not apply:

(a) In respect to a pension benefit if payment of the pension was commenced before the 1^st day of January 1988; or

(b) in respect to a former member who is living separate and apart from his or her spouse or same sex partner on the date that payment of the first installment of the pension is due.

[19] The term “living separate and apart” is not defined in the Act. The phrase is contained in section 8 of the Divorce Act, R.S. 1985 c. 3 (2nd Supp.). Cases that considered the phrase in the context of the Divorce Act, are of assistance in determining whether the test is met in this case.

[20] Some of the relevant criteria to determine if the parties are “living separate and apart” include:

a. Physical separation, however, this is not the deciding factor as spouses may remain together for economic reasons;

b. 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;

c. the absence of sexual relations however this is not a conclusive factor;

d. discussions of family problems and communications between the spouses;

e. presence or absence of joint social activities; and

f. the true intent of a spouse as opposed to a spouse’s stated intent: Greaves v. Greaves, 2004 CanLII 25489 (ONSC), at para. 34.

[21] At the time the pension benefit was first payable, the parties were physically separated. Mr. Carvalho lived in Canada and Ms. Amorim lived in Portugal. Ms. Amorim did not travel to Toronto to visit Mr. Carvalho after 1990. Ms. Amorim had no interest in moving to Canada and lost her permanent residence status. Mr. Carvalho states that by August 2002, Ms. Amorim had withdrawn from the marital relationship and the parties were living their separate lives. Mr. Carvalho states that his true intent was that there was no marital relationship. It is his position that they did not make a life together.

[22] Ms. Amorim concedes that they did not live in proximity to each other, but it is her position that they were in a marriage relationship as of August 2002. She states that their arrangement was for Mr. Carvalho to work in Canada and for her to work in Portugal and raise their son. Mr. Carvalho traveled to Portugal at Christmas and Easter. He sent money to her for their child and to build their family home in Portugal. It is her position that although it was a non-traditional relationship it worked for them.

[23] Mr. Carvalho and Ms. Amorim had a joint bank account. Mr. Carvalho states that he deposited money in a joint account to provide some support for Ms. Amorim and their son. He states that he stopped making payments to the joint account in 2000-01. The bank records for the period after 2003 are an exhibit to Ms. Amorim’s affidavit. The records indicate that Mr. Carvalho continued to make deposits to the joint account after 2001. On August 30, 2004, there was a withdrawal of $25,000. This withdrawal may have been to buy their son a BMW motor vehicle. On February 11, 2005, approximately $60,000 was transferred to a separate account and to a Super Growth fund. I am unable to determine who transferred/withdrew this amount. Mr. Carvalho states that he transferred the money to his son in 2005/06 after his son had an accident. He also states that Ms. Amorim took money from the account in 2006/07 without his authorization.

[24] There is very little evidence with respect to the use of the joint account. There is no evidence from Ms. Amorim as to the amounts withdrawn from the account. On the cross-examination she could not identify the money she says Mr. Carvalho sent to her. The records for the relevant period; August 2002 were not provided. I am unable to conclude on the evidence before me that Ms. Amorim regularly accessed the joint bank account, or that the money deposited by Mr. Carvalho was used by Ms. Amorim for her living expenses.

[25] There is conflicting evidence with respect to the sexual relationship. According to Mr. Carvalho there had been no sexual relations since 1996. When he visited Portugal after 1996, he stayed in a separate room from Ms. Amorim. Ms. Amorim states that they continued to have sexual relations when Mr. Carvalho visited Portugal until 2006 when he began staying in a separate room.

[26] According to Mr. Carvalho there was very little communication with Ms. Amorim. They communicated by phone about their son, but there was little substance. Ms. Amorim testified on her cross-examination that she did not know where Mr. Carvalho worked or that he had been involved in a work-place accident. Ms. Amorim states that they did not exchange cards. She did not produce any photographs of them together. There is no evidence of any letters, e-mails or texts. She states that Mr. Carvalho visited Portugal every year. She does not provide any detail with respect to the dates of visits. Although her brother, Leonel Amorim swore an affidavit on July 6, 2016, he did not provide any evidence with respect to Mr. Carvalho and Ms. Amorim’s relationship in August 2002.

[27] Mr. Carvalho states that they did not participate in any social activities together. Both Mr. Carvalho and Ms. Amorim state they last had a meal together when their son had holy communion, which would have been in the mid-1990’s. Ms. Amorim does not provide any detail with respect to their relationship as of August 2002.

[28] Ms. Amorim refers to the disability applications as evidence that Mr. Carvalho considered himself married when he applied for disability benefits in August 2002. In the claim form he notes that he has a spouse. He also indicates that he has not been separated or divorced. The statement that he continued to be legally married at the time he completed the application, was true. I am of the view that the information contained in the disability application is not inconsistent with Mr. Carvalho’s position that he and his spouse were “living separate and apart” in August 2002.

[29] Ms. Amorim also refers to the fact that in the application for divorce, Mr. Carvalho states that the separation occurred in 2005. In the third article of the divorce application he states that “at least” as of January 2005 he ceased to live with Ms. Amorim, no longer leading a common life. Article 5 states that since January 2005, or at least August 2005, Mr. Carvalho and Ms. Amorim no longer had any life together, having completely broken off their life in common.

[30] The application for divorce was made on October 30, 2008. According to Mr. Carvalho, he had to establish that the parties were living separate and apart for at least three years in order to obtain a divorce. He states that the divorce application refers to the date of separation to be “at least” January 2005 to comply with the three-year separation requirement. The statement that the separation was at least from January 2005 does not preclude an earlier date of separation. In his cross-examination, Mr. Carvalho states that he told his lawyer in Portugal, who prepared the legal documents, that they had separated many years before. I am of the view that the statements in the application for divorce are not inconsistent with Mr. Carvalho and Ms. Amorim “living separate and apart” in August 2002.

Summary

[31] I conclude that at the time Mr. Carvalho first began receiving his disability pension he and Ms. Amorim were “living separate and apart”. They were physically separated. From 1990, Mr. Carvalho lived in Canada and Ms. Amorim lived in Portugal. After 1990, Ms. Amorim did not travel to Toronto. There is also no evidence that they participated in each other’s lives in any meaningful way.

[32] I acknowledge that parties can be in a marital relationship even if they live in separate locations: Greaves v. Greaves, at para. 34. It is my view, however, that there must be evidence of a common purpose, involvement in each other’s lives, and communication either in-person or by letters, texts, e-mails or phone. Here, there is no evidence of any sustained or significant interaction between the parties at the time Mr. Carvalho began receiving the disability pension in August 2002.

2. Did Ms. Amorim waive her entitlement to the joint and survivor pension?

[33] Mr. Carvalho makes an alternative argument. He states that if there is a finding that he was not living separate and apart from Ms. Amorim, she waived her entitlement to a joint and survivorship pension when she executed the spousal waiver on August 28, 2002.

[34] The circumstances surrounding the execution of the waiver are highly suspicious. Ms. Henriques gave Mr. Carvalho the waiver form on August 27, 2002. Mr. Carvalho states that the waiver form was signed the next day when he attended at her brother’s house. Ms. Amorim denies signing the form. There is no evidence that Ms. Amorim was in Canada in August 2002. She states that she did not travel to Canada at any time after 1990. In fact, she states that she did not have a valid passport at that time and was unable to travel. More importantly Leonel Amorim swore an affidavit on July 6, 2016, in which he deposed that Mr. Carvalho did not attend at his house in August 2002 to have the waiver form signed. His testimony was not challenged by Mr. Carvalho.

[35] I am satisfied that Ms. Amorim did not sign the waiver. Had I not found that Mr. Carvalho and Ms. Amorim were living separate and apart as of August 2002, I would have found that Ms. Amorim met the eligibility requirements of a spouse and is entitled to a joint and survivorship pension.

DISPOSITION

[36] I make the following order:

a. Declaring that Ms. Amorim does not meet the eligibility requirements of a spouse imposed by s. 44 of the Act;

b. Declaring that Mr. Carvalho is entitled to receive from the Fund pension benefits on a “life-only” basis; and

c. Directing that the payments to Mr. Carvalho on a “life-only” basis be made retroactive to February 1, 2011, with pre-judgment interest in accordance with section 128 of the Courts of Justice Act, R.S.O. 1990, c. C. 43.

[37] Mr. Carvalho is successful in this Application and is presumptively entitled to his costs. Before this endorsement was released, I received Bills of Costs from the parties. Mr. Carvalho’s Bill of Costs is in the amount of $14,950, inclusive of counsel fee, disbursements and HST. Ms. Amorim’s Bill of Costs is in the amount of $14,127.80 inclusive of counsel fee, disbursements and H.S.T.

[38] Although the general rule is to award costs to the successful party, this does not prevent the Court from denying costs or awarding costs against the successful party in the appropriate case: Rule 57.01(2) of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194. Here, I found that Ms. Amorim did not execute the spousal waiver. Mr. Carvalho must have known she did not execute the spousal waiver, but he represented to the Fund that she had done so. It is my view that this conduct disentitles Mr. Carvalho to costs. As stated in Orkin on the Law of Costs, loose-leaf (2019, online), 2nd ed., at para. 205.2(2):

A ground for disallowance of costs may be found in the conduct of the parties either before or during the litigation. Thus, a successful party may be disentitled to all or part of his or her costs if the party has not been free from fault.

[39] I do not make an order with respect to the costs of the Application. Had I been prepared to make an order, I would have fixed Mr. Carvalho’s costs in the amount of $12,500 inclusive of counsel fee, disbursements and H.S.T.

[40] If Mr. Carvalho and the Fund cannot agree on the amount of the retroactive payment to February 1, 2011 or the applicable pre-judgment interest, a case conference may be scheduled with me.

DATE: APRIL 16, 2021