COURT FILE NO.: FS-17-0092-00
DATE: 2021-10-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
S.C.
Mr. W. Shanks and Ms. T. Ohm, for the Applicant
Applicant
- and -
T.H.
Self Represented
Respondent
HEARD: February 18 & 19, 2020 and June 23, 2021 at Thunder Bay, Ontario
Mr. Justice W.D. Newton
Reasons on Trial
Overview
[1] The parties were common law spouses who cohabited for about 13 years. They have two children who are now 17 and 13.
[2] The applicant father[^1] seeks child and spousal support and half of the increased value of the mother’s pension. The mother does not dispute her obligation to pay child support but argues that a higher income should be imputed to the father. She submits that the father has not established entitlement to spousal support and denies that there was a joint enterprise entitling the father to an interest in her pension.
The Facts
[3] The facts are largely uncontested.
[4] Both parents have a child from a previous relationship. They met while both had the same employer. The mother was living with her parents and the father moved in with her there in 2003. Their children were born in 2004 and 2008. The mother was on maternity leave and parenting while the father worked full time. She returned to work when she could.
[5] They lived rent free with her parents until 2009 when they moved into a newly built home next door on a lot that had been sub divided from her parents’ property. Although the lot had a value of about $70,000 or $80,000, it was transferred to the father in exchange for a promissory note for $30,000.
[6] The mother was, at that time, a bankrupt so she did not take title. The promissory note is still outstanding.
[7] They built a home on the property for about $300,000 and obtained a mortgage for $350,000 to pay for the house and other debts at the time.
[8] The father was responsible for paying the mortgage, hydro and insurance. The mother paid for the other utilities, groceries, appliances, children’s clothing and school and recreational activities. Although each party filed hundreds of pages of various receipt and bank records to establish that they paid for certain expenses around the home none of it was summarized in any fashion. I accept the father’s statement during cross-examination as accurate: “We equally bought different things at different times, so it’s hard to tell what you bought, what I bought, when and where.”
[9] Both parents worked together, both maintaining employment, raising the children, and improving their home. In 2012 or 2013 the father lost his job, received a substantial severance and cashed in some RRSP’s. Some of these funds were used for a pool and a deck. Unfortunately, he was oblivious to his tax obligations and incurred significant taxes owing. The mortgage was refinanced to pay this and other debts. The mother was put on title for the home and on the mortgage.
[10] Despite two incomes, it was apparent that the parties were living beyond their means. Their municipal taxes fell into arrears and they had to borrow $25,000 from the mother’s parents to pay the taxes in 2013.
[11] The father secured other employment and by 2016 was earning about $93,000 compared to the mother’s earnings of just under $100,000.
[12] The financial stress continued, and no doubt contributed to the breakdown of their relationship. In March 2017, when it was clear that the relationship was over, the mother emailed the father suggesting that they cohabit in their home for another year to allow them to get their finances in order. Instead, the father commenced proceedings and left home when the mother was served.
[13] Unfortunately, when he left, the father discontinued making mortgage payments. By the time that this was brought to the mother’s notice five payments, totaling over $5,000, had been missed. Unable to pay, she abandoned the property and began living with her mother. The mortgage, still over $350,000, was in default and the mortgagee proceeded under power of sale. The mother went bankrupt again and there is still a short fall under the mortgage of approximately $24,000.
[14] Since separation, the mother has consistently made between $90,000 and $100,000 annually. She is obligated to pay her trustee in bankruptcy $450 per month for three years. That obligation ends in a few months.
[15] Since separation, the father made about $85,000 in 2017 and 2018 but he lost his employment and is now self-employed. His income is about $50,000 annually.
Positions of the Parties
Child Support
[16] Parenting of the children was resolved by final order dated April 5, 2019 which provided for “joint custody” and equal parenting time on alternate weeks.
[17] It does not appear to be disputed that the father owes the mother $1,598 for child support in 2017. This is based on the mother’s income of $92,339 and the father’s income of $84,662, taking into account different periods of time when the parenting was other than equal shared parenting.
[18] Similarly, for 2018, it does not appear to be disputed that the father owes the mother $321 for child support based on the mother’s income of $95,839 and the father’s income of $86,966, taking into account changes in shared parenting.
[19] For 2019, the father claims $7,596 based on a monthly set off amount owing by the mother of $633 based on her income of $95,655 and the father’s reduced income of $51,725. The father seeks that amount and an order fixing child support at that amount from that point forward.
[20] The mother argues that I should impute income to the father since he has chosen to open his own business and is, in effect, underemployed. She also claims hardship on account of her obligation to pay her trustee in bankruptcy. She claims a credit for child support on account of her paying for the cell phones for the two children. In her written argument she estimated that the cost was $80 per month although some receipts were produced which showed a higher cost.
Spousal Support
[21] In his factum, the father submits “that he is entitled to spousal support on the basis of compensatory and non-compensatory grounds due to his contributions to the relationship during the cohabitation and the corresponding loss of opportunities he had to build a solid financial standing as a result of his responsibilities in the relationship.”
[22] The mother denies that the father is entitled to spousal support on any basis as the parties shared equally in the family responsibilities with her, rather than him, forgoing her career after the children were born and in the early years.
Property Division
[23] The father claims one half of the mother’s increased pension value which is equal to $158,627.31. After the marriage breakdown and the loss of the home the father was left with nothing but the $24,000 debt resulting from the shortfall on the sale of the home. He argues that it is unfair for the mother to survive her bankruptcy with her exempt pension since he paid the mortgage and contributed severance and RRSP from his previous employment to home improvements and family expenses. Relying upon Kerr v. Baranow[^2], he argues that the mother has been unjustly enriched by his contributions.
[24] The mother argues that each contributed to family expenses equally and that she was not unjustly enriched by any action or sacrifice of the father. She has been contributing to her pension since she first became employed and that the father made no contributions that would impact upon her pension.
Disposition
Child Support
[25] It is not disputed that the father owes the mother $1,598 for child support in the 2017 and $321 for 2018.
[26] For 2019, I have determined that the “set off” amount payable by the mother to the father for child support is $627 per month based on the mother’s income of $95,655 and the father’s income of $52,109.63. I have not imputed any additional income to father for 2019. I accept that he was blameless in losing his employment. With respect to the cell phone charges she has incurred for the children, the mother is credited for $50 per month in recognition of that expense.
[27] For 2020 and 2021, I do impute income to the father. Between 2015 and 2018 his average annual income was $80,000. I conclude that he is capable of earning more income from employment than in his new business venture. In recognition of the fact that it takes time for business to “grow” and the difficulties posed by Covid-19 I determine that the annual income that should be imputed to the father is $60,000 for 2020 and $70,000 for 2021.
[28] The mother’s income for 2019 was $95,655 and the “set-off” for child support payable to the father is $503 per month.
[29] The mother’s income for 2020, net of union dues, is $98,589 and the “set-off” for child support payable to the father is $387 per month.
[30] The “set-off” amount for child support in 2021 will be $387 per month payable to the father based on the 2020 actual and imputed income.
[31] In 2019, 2020 and 2021 the mother is credited for $50 per month in recognition of the cell phone expense for the children.
[32] Thereafter, the parties will exchange income tax returns and notices of assessment by June 1 and child support payable will be adjusted annually with $70,000 imputed income to the father if he earns less than that amount. Section 7 expenses are to be shared pro rata and the cell phone charges apportioned according to that formula.
Spousal Support
[33] In Bracklow v. Bracklow[^3] three bases for support were identified:
a. Compensatory support (both specific, calculable and nonspecific) to address the economic advantages and disadvantages to the spouses flowing from the marriage (or the rules adopted in marriage);
b. Non-compensatory dependency-based support, to address the disparity between the parties needs and means upon marriage breakdown; and,
c. Contractual support, to reflect an express or implied agreement between the parties concerning the parties’ financial obligations to one another.
[34] No basis for support based on an agreement is advanced.
[35] Nonspecific compensatory support arises, for example, where a spouse’s ability to achieve self-sufficiency was compromised by career/job dislocation for the family. Specific compensatory support arises where a spouse can point to a specific calculable overriding loss resulting from the marriage or the rules adopted in marriage.
[36] The evidence discloses neither a specific nor a nonspecific basis for compensatory support. The father did not adopt a role in the family that prejudiced his career advancement or ability to earn income. Although he claims that he paid for more expenses during the marriage, I am not satisfied on a balance of probabilities that his contributions were significantly greater than the mother’s contributions.
[37] In the three years before separation his average income was over $75,000. In the two years following separation the father made about $85,000 each year. His loss of income since then arises from his decision to start his own business. It did not arise upon marriage breakdown.
[38] The father has not established entitlement to spousal support.
Property Division
[39] In Kerr v. Baranow[^4] the court stated:
… the basis of the unjust enrichment is the retention of an inappropriately disproportionate amount of wealth by one party when the parties have been engaged in a joint family venture and there is a clear link between the claimant's contributions to the joint venture and the accumulation of wealth. [Emphasis added.]
[40] While I accept that the parties shared responsibilities and expenses during their 13 years together, there is no clear link, or even an indirect link, between the father’s contributions and the growth of the mother’s pension. As such, the father’s claim for an interest in the mother’s pension is dismissed.
Costs
[41] Although success was divided, the parties may make cost submissions limited to three pages plus costs outline plus authorities. A party seeking costs shall deliver cost submissions within 20 days. Any responding submissions to be received within 10 days thereafter.
[42] If no cost submissions are received within 20 days, then costs will be deemed settled.
“Original signed by”
The Hon. Mr. Justice W.D. Newton
Released: October 22, 2021
COURT FILE NO.: FS-17-0092-00
DATE: 2021-10-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
S.C.
Applicant
- and -
T.H.
Respondent
REASONS ON TRIAL
Newton J.
Released: October 22, 2021
/lvp
[^1]: The names of the parties and their children will not be used in these reasons to respect the privacy of all involved.
[^2]: 2011 SCC 10.
[^3]: 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420.
[^4]: 2011 SCC 10 at para. 81.