COURT FILE NO. FS-15-00405158
DATE: 20210308
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CLAIRE CRONIER
Applicant
– and –
PATRICK LEO WAYNE CUSACK
Respondent
Self Represented and acting in person
Self-Represented and acting in person
HEARD: February 24, 25, 26, 27, 28, November 9, 10 and 12, 2020
REASONS FOR DECISION
DIAMOND J.:
Overview
[1] The applicant is currently 69 years of age. The respondent is currently 70 years of age. They had both been previously married.
[2] Their relationship started in or around late 2004/early 2005. They began cohabitating in early November 2005, and were married on December 6, 2008.
[3] There are no children of the marriage. Each party differs as to the date of separation. The applicant submits that the parties separated “once and for all” on January 31, 2015, while the respondent submits that parties were legally separated on December 12, 2014.
[4] This application was commenced on September 10, 2015. Nearly five years later, the trial of this application proceeded before me over several days. For a marriage without children, this application was nevertheless a very contested, high conflict case.
[5] I heard evidence from the parties, the applicant’s son (from a previous marriage) Francis Cronier-Theriault (“Francis”) and the applicant’s sister Elaine Fuoco (“Elaine”).
[6] At the conclusion of the trial evidence, I took my decision under reserve and permitted the parties to exchange and file written closing submissions, which I have now had an opportunity to review.
[7] These are my Reasons for Decision.
Issues to be Decided
[8] Having reviewed the oral and documentary evidence in detail, in my view I am charged with determining the following four issues.
Issue #1 What is the parties’ date of separation?
Issue #2 Was there a binding agreement between the parties with respect to monetary compensation for in-kind contributions?
Issue #3 Equalization calculations, and the applicant’s request for an unequal net family property distribution
Issue #4 Is either party owed spousal support?
[9] While the parties presumably did their best to tender their respective versions of events leading up to the breakdown of their marriage (and beyond), the presentation of the evidence, both oral and documentary, was choppy, inconsistent, less than straightforward, and frankly difficult to follow in key areas.
[10] I have attempted to reconcile the diverging and contradictory evidence with reference to the exhibits filed by each party, but I note that, as with most contested family trials, an assessment of credibility was both warranted and necessary.
Assessment of Credibility
[11] As the trier of fact, I am charged with determining the truth. On occasion, that task can be rendered unenviably difficult when both sides of a dispute are motivated to offer evidence designed to “fit” within a specific theory of the case.
[12] In Prodigy Graphics Group Inc. v. Fitz-Andrews 2000 CarswellOnt 1178 (S.C.J.) Justice Cameron offered a non-exhaustive list of traditional criteria by which the evidence of each witness, and, where appropriate, the exhibits presented at trial, ought to be assessed:
(a) Lack of testimonial qualification
(b) Demeanour of Witness: apparent honesty, forthrightness, openness, spontaneity, firm memory, accuracy, evasiveness
(c) Bias/Interest in the Outcome (if a party, motive)
(d) Relationship/Hostility to a party
(e) Inherent probability in the circumstances i.e. in the context of the other evidence does it have an "air of reality"
(f) Internal consistency i.e. with other parts of this witness' evidence at trial and on prior occasions
(g) External consistency i.e. with other credible witnesses and documents
(h) Factors applicable to written evidence:
(a) Presence or absence of details supporting conclusory assertions
(b) Artful drafting which shields equivocation
(c) Use of language in an affidavit which is inappropriate to the particular witness
(d) Indications that the deponent has not read the affidavit
(e) Affidavits which lack the best evidence available
(f) Lack of precision and factual errors
(g) Omission of significant facts which should be addressed, and
(h) Disguised hearsay
[13] The assessment of the credibility of witnesses is especially important when bearing in mind the onus of proof. As the trial judge, I must decide whether a specific proposition of fact has or has not been established on a balance of probabilities by the party having the onus of proof. For a party to seek to discharge its legal onus of proof, I must first be satisfied with the credibility and reliability of the evidence in order to be in a position to make the relevant findings of fact.
[14] Put another way, a moving party has the onus of factual proof of the evidence necessary to satisfy its legal burden. As stated by Justice Stinson in Zesta Engineering Ltd. v. Cloutier 2010 ONSC 5810 (S.C.J.):
“In certain instances it is simply not possible to reconcile some aspects of the evidence that was presented by the witnesses at this trial. In part, I liken the situation to attempting to assemble several old jig-saw puzzles whose various parts have sat, co-mingled, in the bottom of an actively-used desk drawer for a decade: some pieces are missing, some are undecipherable, some have changed over time and no longer fit together, and some are not what they seem to be, all due to the passage of time and intervening events. In this case my task is to use the pieces of evidence to re-create as clear a picture of past events as I can give the foregoing limitations, applying the "real test of…truth" as described above, drawing inferences where appropriate, and applying the rules of burden and standard of proof, as required.”
[15] In evaluating the credibility or reliability of evidence, I look to a number of interrelated factors such as its probability, logical connection with other findings and support from independent facts or documents. As held by Justice Brown (as he then was) in Atlantic Financial Corp. v. Henderson et al, [2007] 15230 (S.C.J.):
“In deciding between these two diametrically opposed positions, I am guided by the observations made about assessing the credibility of witnesses by O’Halloran, J.A. in Faryna v. Chorny, 1951 252 (BC CA), [1952] 2
D.L.R. 354 (B.C.C.A.) where he stated, at page 357:”
“The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.’”
[16] I carefully listened to and observed the testimony of all the witnesses called by both parties at trial. I also reviewed the exhibits tendered and relied upon by the parties.
[17] Generally, I encountered difficulty following the oral evidence of both parties. The applicant’s evidence was, on occasion, internally inconsistent. Those inconsistencies caused the applicant to resubmit different net family property calculations in the middle of her testimony.
[18] While the applicant attempted to be direct and focused upon the issues to be addressed, it was difficult to understand the chain of events leading up to the parties’ separation. I found the applicant to have overstated and/or exaggerated her position on a few occasions, and she sometimes remained rigid in a manner which did not mesh with the documentary record.
[19] The respondent, a practicing lawyer, certainly did not take the necessary steps to produce a sufficient record” of documents to fall in line with his testimony. Some of the respondent’s evidence lacked an air of reality, especially when dealing with the purported agreement between the parties relating to the in-kind contributions to the home renovations (discussed hereinafter in greater detail).
[20] I do not generally prefer the evidence of one party over the other. My disposition of the four relevant issues will address my concerns with the credibility of both parties.
Issue #1 What is the parties’ date of separation?
[21] On the basis of there being “no reasonable prospect that they would resume cohabitation”, the applicant argues that January 31, 2015 is the date of separation for valuation purposes. This was the date upon which the applicant “formally” asked the respondent for a divorce (although she had certainly used the threat of divorce on numerous prior occasions).
[22] The applicant relies upon email correspondence from the respondent to Francis wherein the respondent seemingly acknowledged the difficulties in the party’s relationship and that the decision to separate was the applicant’s and not his.
[23] Francis testified he spent Christmas 2014 at the parties’ matrimonial home, 56 Comay Road, Toronto, Ontario (“the Comay property”) and that he did not notice any outward signs of material distress over those holidays.
[24] Francis further testified that it was not until January 31, 2015, that his mother, in the presence of the respondent, informed him that the parties were obtaining a divorce. The applicant and the respondent had shared sleeping accommodations until February 3, 2015 at which point the applicant asked the respondent to sleep in the guest bedroom due to the breakdown of the marriage.
[25] For his part, the respondent argues that December 12, 2014 was the parties’ date of separation, but this was primarily based upon his subjective feelings towards the applicant. The respondent gave evidence that he was extremely frustrated with the applicant’s continuous threats of ending their marriage. He points to a December 10, 2014 email sent to the applicant informing her that he would no longer accept her “angry outbursts and threats of separation and divorce”, and since the applicant renewed such conduct two days later, the date of separation was effectively December 12, 2014.
[26] The respondent relies upon section 8(3) of the Divorce Act, R.S.C. 1995 c.3 to argue that the Court may accept a subjective intention to ground a finding of a separation date, and that a
period of resumed cohabitation of not more than 90 days will not interrupt or terminate the parties’ separation.
[27] As Justice Aston wrote in Cammaroto v. Cammaroto 2015 ONSC 3968:
“Continuation of a marital relationship requires two people. Either spouse can unilaterally end that relationship without the consent of the other. There are many cases where one spouse knows there will be no reconciliation, but the other may not know. At the same time, the court must be careful to look for some objective evidence upon which to find a date of separation, rather than simply accepting the after-the-fact statements of the party who has decided the relationship is over.”
[28] The problem I have with the respondent’s versions of events is that there is little, if any, objective evidence upon which to find December 12, 2014 to be the date of separation. While I accept that the respondent may have been experiencing strong feelings over the 2014 Christmas holidays due to what he saw as the applicant’s seemingly constant threats and adversarial attitude, the objective evidence tendered by the applicant, including Francis’ testimony, points to January 31, 2015 as being the date of separation. The respondent’s subsequent email to Francis in fact shows that the respondent never actually agreed “that the parties should separate”.
[29] While it is possible that the parties “put on a brave face” for a short period of time, in my view the evidence in totality confirms that the date of separation between the parties was January 31, 2015. As such, I agree with the applicant, and all valuations are to use January 31, 2015 as the date of separation.
Issue #2 Was there a binding agreement between the parties with respect to monetary compensation for in-kind contributions?
[30] In order to decide this issue (and, for that matter, some of the foundation for the disposition of Issue #3), it is important to assess the parties’ historical dealings with respect to two properties: 1309 Parc du Village, Ottawa, Ontario (“the Parc property”) and the Comay property.
[31] I begin with the Parc property, which was originally owned by the respondent. In or around 2006, when the parties had yet to marry, the respondent was in relatively substantial debt. The applicant purchased the Parc property from the respondent in 2006, in part to relieve him of this debt.
[32] The applicant gave evidence that the purchase price for the Parc property was $235,000.00. On the day before closing, the purchase price was changed to $245,000.00; this was done, according to the respondent, to reflect the appraised value of the Parc property for financing purposes, with the actual purchase price paid by the applicant ($235,000.00) resulting in a
$10,000.00 difference to be treated as equity that the respondent would maintain in the home.
[33] According to the respondent, this was a business arrangement between the parties, and nothing more. The terms of that arrangement were allegedly as follows:
(a) There was a tenant at the Parc property, and his rental deposit along with all other collected rent was transferred by the respondent to the applicant;
(b) The applicant would collect and retain rents going forward and make decisions about the Parc property;
(c) The applicant would be responsible for all expenses related to the property;
(d) The parties would both contribute time and effort to manage the property, including performing any renovations and repairs;
(e) The applicant would account to the respondent regarding financial matters relating to the property; and,
(f) If and when the Parc property was sold, the proceeds would be applied in the following order;
(i) Pay off all registered encumbrances on title,
(ii) Reimburse the applicant for the purchase price ($235,000.00), and
(iii) Divide the remaining proceeds equally between the parties.
[34] In closing, the respondent argued that he is entitled to claim approximately $28,000.00 in pre-marriage property, which sum consists of the alleged $10,000.00 in equity plus approximately
$18,000.00 which arises from an increase in a mortgage the applicant put on the property to use as a down payment on another property, although one half of that mortgage increase would be approximately $17,000.00 and not $18,000.00.
[35] According to the applicant, the purpose of the Parc property agreement was to account for the discrepancies in the parties’ respective contributions, and the respondent told her that he would draft an agreement for them prior to the closing of the Parc property transaction.
[36] The agreement would have provided that the respondent would pay the taxes, mortgage, and interest until he had matched the applicant’s contribution. No agreement had been prepared by the time of closing, and the applicant testified that she did not want to close but the respondent said she “had to or else she would face litigation fees”.
[37] The applicant felt bullied into closing. The respondent had given her a verbal agreement, which she assumed was binding as she “relied on his expertise as a lawyer.”
[38] There is no dispute that the applicant purchased the respondent’s interest in the Parc property. The reporting letter from the lawyer who acted on the transaction seemed to imply that the additional $10,000.00 might be “a gift in the circumstances” from the respondent to the applicant of any remaining equity in the property.
[39] In February 2009, the applicant took a job in Toronto. Her contract ended in August 2009, but this prompted the applicant to consider working in Toronto on a full-time basis. The respondent did not enjoy his job at that time, so the parties decided to move to Toronto.
[40] The parties rented a Toronto property for approximately one year. They wanted to take advantage of the Toronto real estate market and find a house to either flip or rent to a tenant. They saw a lot of houses and carefully considered their purchase.
[41] In late 2009/early 2010, both parties were diagnosed with health problems which affected their ability to earn money, and thus made it even more important for them to take advantage of the Toronto real estate market. They put all their energy into finding a property that would make sense given their reduced employment.
[42] They ultimately found the Comay property. The respondent told the applicant that he did not have money to put towards a house. He was earning approximately $100,000.00 per year from his law practice. They decided the applicant would use her investments (ie. the equity in the Parc property) to purchase the Comay property, and the respondent would match the applicant’s contributions over time.
[43] The applicant received all of the proceeds of the sale of the Parc property. It appears that the parties did at least agree upon the manner in which any profits were to be split, and based upon the decisions made by the applicant with respect to the Parc property (decisions which were within her power and control to make according to the respondent’s evidence), there were simply no profits to divide between them.
[44] The parties purchased the Comay property as joint tenants, and the plan was to live in the house and renovate it within a year to avoid paying capital gains. The total down payment was approximately $173,000.00; the applicant contributed around $150,000.00 and the respondent contributed $20,000.00 from his line of credit.
[45] The parties took four years to renovate the Comay property, but the renovations were not 100% completed by the time the parties separated.
[46] In 2013, the respondent was sued, and according to the applicant there was a threat on his life due to this apparently significant lawsuit. The applicant worried that her investment in the Comay property was at risk.
[47] The respondent then prepared written agreements to apply retroactively to both the Parc property and Comay property transactions. None were ever formally signed, although the applicant gave evidence that she agreed with the terms related to the Comay property but only the terms
related to the Parc property which were not inconsistent with prior emails from the respondent to third parties on the subject.
[48] According to Elaine, one version of the draft agreement was printed at her house, and she understood the purpose of the agreement to be “to ensure the parties’ contributions would be equal in the long term.”
[49] The applicant strongly relied upon one draft agreement which in her view provided that if the proceeds of sale of the Parc property were insufficient to repay her, any shortfall would be counted as a contribution towards the purchase of the Comay property. That draft agreement in fact provides that payments by either party for repairs, renovation and extraordinary costs shall be added to their respective contributions for the purposes of the agreement. The applicant agreed that the agreement was that, in addition to the costs of acquiring the property, the costs laid out individually would be added to the parties’ respective contributions.
[50] For his part, the respondent testified that he was concerned by the applicant’s constant threats of separation and divorce, particularly because she had proposed contractual terms that he found problematic such as the applicant wanting 100% of her contributions to “count”, but only allow 50% of the respondent’s contributions to offset her own. The respondent submits that there was never a specific agreement not to enter a contract, as “it just didn’t happen.” All their efforts to arrive at a verbal or formal agreement were unsuccessful.
[51] The respondent did nonetheless make a number of attempts to draft an agreement dating back to 2006, when the respondent initially tried to draft a cohabitation agreement. These attempts always failed because they could simply never agree upon terms. Various drafts were provided to the applicant for review, not just the two main draft agreements that were relied upon at trial by the applicant. According to the respondent, some draft agreements contained terms relating to the Parc property, but the applicant insisted that the Parc property was a separate matter and she did not want it included in any marriage contract
[52] In my view, the evidence surrounding the alleged agreement for in-kind contributions is regrettably “all over the place”. For example, the applicant gave evidence that she could charge the respondent for her time and be compensated when the properties were ultimately sold. None of the draft agreements support such a term, but instead only refer to “payments made” by the parties for expenses being added to their respective contributions.
[53] The relevant portion of that draft agreement provided that if the proceeds of sale from the Parc property were insufficient to repay the applicant, the shortfall would be deemed to be added to her contribution to the Comay property. Notwithstanding what the draft agreement says, the respondent testified the parties never agreed to be compensated for in-kind contributions.
[54] The sale price for the Parc property was $328,000.00 The applicant received a cheque for approximately $66,000.00 from the real estate agent handling the disposition costs. The
$52,000.00 shortfall was based on mortgage, property taxes, utilities, additional expenses, renovation materials, labour, and out of pocket expenses.
[55] Of note, this $52,000.00 shortfall is not included in the applicant’s NFP because the applicant based her claim on unjust enrichment (which I will address below). She says that this should be added to what is owing to her from the sale proceeds of the Comay property, of which there is still $180,000.00 remaining in trust after paying both parties $90,000.00 each to date.
[56] There is simply not enough sufficiently reliable and cogent evidence to make a finding that the parties entered a legally binding agreement. There was definitely accord between the parties on some issues, but a lack of certainty of terms precludes me from finding the presence of a valid and binding agreement.
[57] That said, the applicant is advancing a claim for unjust enrichment based upon her contention that whether a formal agreement was reached or not, there was nevertheless a shortfall in the respondent’s in-kind contributions (when compared to her own) and as a result the respondent has been unjustly enriched.
[58] The elements of a claim for unjust enrichment are:
(a) An enrichment on the part of the defendant;
(b) A corresponding deprivation to the plaintiff; and,
(c) An absence of a juristic reason for the enrichment.
[59] I adopt and rely upon the comments of Justice Wilson in Ryan v Ryan 2017 ONSC 1377:
“Courts are required to determine questions of beneficial ownership of assets at the first stage of the NFP analysis. The Court of Appeal has confirmed that, ‘[b]efore property can be equalized under the Family Law Act, a court must first determine the ‘net family property’ of each spouse. This exercise requires first that all questions of title be settled’: Martin v. Sansome, 2014 ONCA 14, [118
O.R. (3d) 522](https://www.canlii.org/en/on/onca/doc/2014/2014onca14/2014onca14.html), at para. 47; see also McNamee v. McNamee, 2011 ONCA 533, 106 O.R. (3d) 401, at para. 66. Under s. 10(1) of the FLA, a court can determine questions of ‘ownership or right to possession of particular property’ between spouses.
I begin the outline of the law with a caution.
I echo the views of Hoy A.C.J. in Martin, at para. 67, that it is a ‘rare’ case when constructive trusts should be imposed to give a proprietary interest in property when the parties are married. Generally, the statutory scheme of the FLA should address questions of unjust enrichment in the context of marriage.”
[60] As such, the Court should proceed cautiously when determining a claim for unjust enrichment in a case such as this one.
[61] To begin, no claim for unjust enrichment is contained in the prayer for relief in the applicant’s Application. I suppose the applicant’s claim for an unequal distribution of property is perhaps based upon a theory that (a) the parties either agreed to be compensated for any difference in contributions (which I have not found), or (b) to allow for a straightforward equal distribution (which is the presumed result) would be unconscionable based upon the difference in such contributions.
[62] That said, the applicant does not advance a claim for a constructive trust remedy (or any beneficial interest in the Comay property) in the event a finding of unjust enrichment is available.
[63] The applicant submits that she contributed $58,641.75 more than the respondent to both households over the course of their marriage, and as a result the respondent has been unjustly enriched. I encountered significant difficulty in following the evidentiary basis for the applicant’s calculations, which in some ways bordered on being incomprehensible and subject to a moving target as the trial unfolded.
[64] In his testimony, the respondent seemed to acknowledge a difference in the parties’ household contributions. While the respondent was clear that there was never any agreement for compensation for in-kind contributions to the properties, at the same time he did admit that there was a disparity in the work that they had performed in favour of the applicant.
[65] The respondent claims that the parties agreed that the applicant would pay the majority of the down payment and the respondent would pay the mortgage and property taxes, with both parties contributing to renovation costs and $1,000.00 per month each to a joint account for living expenses. According to the respondent, the applicant did not abide by their agreement and unilaterally reduced her contributions to the household expenses to $800.00 per month, and then stopped making any contributions to that account whatsoever.
[66] Even if the respondent may have been enriched, the jurisprudence is clear that for the second element of the test, the applicant must show that the enrichment corresponds to a deprivation which the applicant has suffered. There must be a “direct nexus” between the applicant’s deprivation and the respondent’s enrichment.
[67] The applicant cannot satisfy the second element of the applicable test. She received the proceeds of sale from the Parc property, and no additional profit was available. The respondent’s contributions were not disproportionate to those of the applicant. The respondent did contribute to the Comay property, and while the value of the parties’ actual contributions may not have been even, it does not approach the level of unjust, especially given that the applicant’s calculations are based in part upon estimations for time spent which have no legal foundation.
[68] Further, the applicant bears the onus of proof to show that the established categories of juristic reasons (contract, disposition of law, donative intent, and any valid common-law, equitable or statutory obligations) to deny recovery do not apply. At this stage of the analysis, the Court may consider all of the circumstances, including policy, and the legitimate expectations of the parties.
[69] There are very few cases that assess the three-part test between married couples. On the record before me, I cannot find that the applicant reasonably expected to be reimbursed for all the in-kind contributions she claims to have expended, or in the alternative that she would receive an increased interest in the Comay property.
[70] As such, the applicant’s claim for unjust enrichment is dismissed.
Issue #3 Equalization calculations, and the applicant’s request for an unequal net family property distribution
[71] To begin, the applicant seeks to revisit her request for compensation for the difference in in-kind contributions by “importing” her concerns into the equalization calculation. The applicant submits that as she allegedly contributed $58,641.75 more than the respondent to the household(s) over the course of their marriage, leaving the equalization on a 50/50 basis would be unconscionable and a proper result would be to thus vary the equal sharing of net family property in her favour.
[72] I have attempted to go through the applicant’s calculations as best as I could. While I can find an overall shortfall in contributions on the part of the respondent, it is not as large of a shortfall as the applicant alleges. I come to this conclusion for the following reasons:
• The total cost required to renovate the Comay property appears to be
$606,750.00. This sum consists of the applicant paying $150,000.00, securing a mortgage in the amount of $393,750.00, a payment from the respondent in the amount of $20,000.00, a further payment from the respondent in the amount of $18,000.00 (from an inheritance) and an additional $40,000.00 spent on renovations from the joint line of credit.
• To summarize, the applicant contributed $150,000.00, while the respondent contributed $38,000.00. The parties jointly contributed
$40,000.00 for the line of credit.
• The respondent paid $73,418.77 in mortgage payments towards the Comay property prior to the date of separation.
• The respondent paid $14,509.01 in property taxes towards the Comay property prior to the date of separation.
• Taking into account the respondent’s payments, his total contribution appears to be $125,927.78, leaving a $24,072.22 shortfall.
[73] In my view, this shortfall does not lead to a finding of unconscionability, and a resulting unequal sharing of equalization division. As held by the Court for Appeal for Ontario in Serra v. Serra 2009 ONCA 105, the threshold finding for unconscionability is exceptionally high, and “unfair harsh or unjust circumstances” do not satisfy the test.
[74] A $24,072.22 shortfall does not “shock the Court’s conscious”, and as such the applicant’s request for an unequal net family property equalization is dismissed.
[75] Before I embark upon an analysis of the parties’ respective equalization claims, I wish to make it clear that in my view, it is not the Court’s responsibility or obligation to re-write any Net Family Property Statements for the benefit of the parties. Various iterations of Net Family Property Statements were provided by the parties throughout this proceeding, and indeed during the trial itself. It is practically impossible for the Court to perform the accounting exercise sought by the parties, as their own entries into their respective Net Family Property Statements were fluid and based upon different separation dates.
[76] As such, I will endeavor to make the necessary findings with respect to various disputed entries in the Net Family Property Statements, and leave it to the parties to perform any resulting recalculations using and applying my findings. At the end of the exercise, in the event they cannot arrive at a final equalization payment, I am willing to receive their respective revised Net Family Property Statements (in light of these Reasons) with written submissions totaling no more than two pages each for my review and consideration.
[77] I now address the various disputed items raised by both parties.
(a) The Parc Property
[78] As previously stated, the respondent claimed an asset in the Parc property of more than
$28,000.00 as of the date of marriage. In my view, this claim lacks merit and should be dismissed. There is no dispute that the applicant was the sole owner and sole decision maker when it came to the management of the Parc property.
[79] Upon sale, any balance remaining after payment of any debts/encumbrances were to be split equally between the parties. As such, I find that any interest he may have had in the Parc Property as at marriage to be contingent in nature, and thus unquantifiable.
[80] While the mortgage on the Parc property was increased at the applicant’s behest, as admitted by the respondent the applicant had that authority. These were the terms agreed to by the respondent, and as such his claim for the $28,000.00 interest is dismissed.
(b) Debt owed from the Respondent’s Employer
[81] The respondent claims an asset of approximately $119,000.00 allegedly owing to him as of the date of marriage by his then employer. During his testimony, the respondent corrected that entry on his own financial statement by reducing it to approximately $75,000.00, but nonetheless insisted that the debt owed to him was real.
[82] The respondent was only able to produce email correspondence between himself and the employer which referenced, at least in part, the terms of the debt owed to him. However, there were no contracts between the respondent and his employer evidencing the business arrangements reached between them, which is somewhat surprising giving the nature of the business (a law firm).
[83] The applicant requests that the respondent’s claim to any money allegedly owed to him by his employer should be dismissed as unproven through any contractual documentation.
[84] While the lack of any contractual documentation is curious and arguably questionable, a review of the email correspondence does disclose that the respondent’s employer did agree that money remained owing to him as of the date of marriage. As such, I am prepared to accept that the respondent was owed $75,000.00 as of the date of marriage from his employer.
(c) Respondent’s RRSP
[85] The respondent initially claimed that the value of his RRSP held at the date of marriage was approximately $40,000.00. Through cross-examination by the applicant, it became apparent that the actual value of the respondent’s RRSP as at the date of marriage was $12,301.99.
[86] The parties appear to now agree upon this figure, as the respondent admitted his initial RRSP entry on his financial statement to be an error.
[87] As such, I find the value of the respondent’s RRSP as at the date of marriage to be
$12,301.99.
(d) Snowblower and Car
[88] The applicant submits that the respondent has claimed the value of a snowblower as of the date of marriage, and inflated the value of his car which he owned at the date of marriage. She asked that the value of the car be reduced to $12,000.00, and that the snowblower entry on the respondent’s financial statement be rejected.
[89] There is no evidence in the record supporting the value of the alleged snowblower. It appears that the applicant may have admitted that the respondent owned a snowblower at one time, although it is unclear whether she agreed that he owned it as of the date of marriage. In any event, absent further supporting evidence I am rejecting the respondent’s claim to the value of the snowblower as of the date of marriage.
[90] With respect to the respondent’s vehicle, the parties agree that there should be some value attributed to the respondent’s vehicle as of the date of marriage, but the proposed value appears
arbitrary, and no “blue book” or “black book” value was offered for the Court to perhaps take judicial notice of in the circumstances.
[91] With a view to resolving this issue in an efficient manner, I find the value of the respondent’s vehicle as of the date of marriage to be $10,000.00.
(e) Respondent’s Debts as at the Date of Marriage
[92] According to the respondent’s financial statement (which changed several times during this proceeding), he had no debts owing as at the date of marriage. The applicant argues that the respondent has intentionally reduced and deflated his actual debts owing at the date of marriage in an effort to increase his net worth at that time.
[93] The applicant argues that the respondent’s actual debts as at the date of marriage totaled
$48,513.92, and consisted of lines of credit, Canada Revenue Agency (“CRA”) debts, credit card debts, a bank loan and a cost order related to pre-marriage litigation. I will address these specific items in turn.
[94] Dealing first with the applicant’s request to split the money owing on the Scotia Line of Credit account (i.e. $7,453.78 to be placed on the respondent’s side of the ledger), I agree with the respondent that this claim represents half of a debt owing on that line of credit solely held by the applicant as of the date of marriage. While the nature of the line of credit changed to render the respondent jointly responsible for same at a later date, on the record before me the balance owing as of the date of marriage ($14,907.12) was the applicant’s alone.
[95] With respect to the applicant’s claim that an additional line of credit in the amount of
$9,036.21 ought to be attributable to the respondent, I agree with her submission. The respondent did admit that this amount was not included as a debt at the date of marriage, and it should be.
[96] With respect to the Canada Revenue Agency debt in the amount of $8,218.64, the respondent submits that the applicant has misinterpreted tax documentation that includes an entry “CRA AMT OWE”, and that these entries were remittances made to Canada Revenue Agency in anticipation of future taxes (which I interpret to mean instalments). While I consider the subject documentation to be ambiguous at best, and I appreciate that the applicant was under the impression that the respondent was in serious debt with Canada Revenue Agency prior to her purchase of the Parc property, I cannot find sufficient evidence on a balance of probabilities to attribute this CRA debt to the respondent as of the date of marriage.
[97] With respect to the respondent’s alleged credit card debt, the applicant claims the sum of
$5,005.09, but I find the credit card debt on the part of the respondent to total the sum of $6,043.88 as of the date of marriage. The respondent argues that the applicant is once again misinterpreting a credit card statement, submitting that the bulk of the alleged debt was fully paid off as of the date of that statement. He argues that the debt was to come due after the marriage.
[98] In my view, the credit card statement states that the previous balance of $1,038.79 was paid on December 10, 2008, four days after the marriage occurred. This should be considered debt owing on the part of the respondent as of the date of marriage. The additional funds that I have found (i.e. over and above what the applicant claims) relate to charges that also occurred prior to the wedding date as per the credit card statement. A handwritten note on that statement indicates that the bill was allegedly paid in full on January 17, 2009, more than 30 days after the parties were married. Accordingly, there shall be a credit card debt owing by the respondent as of the date of marriage of $6,043.88.
[99] With respect to the bank loan “of at least $14,000.00” allegedly owed by the respondent as at the date of marriage, once again I cannot find on a balance of probabilities that the applicant has provided sufficient evidence to make the finding she requests, and as such, I am not prepared to attribute this bank loan as a debt owing by the respondent as of the date of marriage.
[100] Finally, with respect to the $4,800.00 cost order, while the litigation pre-dated the parties’ marriage, on the record before me the cost order appears to have been made on November 21, 2011, during the marriage. While the acts which may have led to the cost order could have occurred prior to the marriage, the debt was not owing until the Court made its pronouncement in that litigation. Accordingly, this cost order is not a debt owing by the respondent as of the date of the marriage.
(f) Respondent’s Assets as at the Date of Separation
[101] The applicant obtained a court order in this litigation requiring the respondent to provide a statement of his Work-In-Progress (“WIP”) as at the date of separation. No such statement was ever provided. There is evidence that there were eight client files opened as of the date of separation, although with no value described to those files by the respondent. The applicant alleges that there are additional files which were not disclosed by the respondent. According to the applicant, the Court is being asked to impute a value of $69,443.43 for WIP billings owed to the respondent as at the date of separation.
[102] For his part, the respondent admits that he did not provide any WIP statement, due to the fact that as of the date of separation, his legal business had “zero value”. In my view, his unilateral assessment of the value of his WIP is not his to make – it is a finding to be made by the Court, and the respondent simply did not comply with his court-ordered obligations.
[103] In commenting upon the documentation provided by the applicant, the respondent gave evidence that (a) some of the work on the files in fact began after the party separated, (b) some of the files may have commenced but were never completed, (c) some of the files were pro bono work (for his mother’s estate, as an example), and (a) the other files were either paid to him prior to separation, or represented files where funds in fact belonged to his clients.
[104] The respondent raises concerns with the sourcing of some of the documents produced by the applicant, as he claims that those documents are be protected by solicitor and client privilege.
The applicant does not deny taking photographs of documents scattered loosely in the respondent’s office and the family room, but was essentially forced to do so after months of frustrated attempts to obtain disclosure.
[105] I am not prepared to disregard those documents (or photographs of them) due to the respondent’s submissions that they were “illegally obtained”. I cannot find that their admission would prejudice the administration of justice. While there may be an argument that their admission could violate solicitor/client privilege in terms of the identities of clients, the respondent was given many chances to produce a WIP statement which he could have redacted (as the applicant was never interested in the identities of the clients), and he chose not to honour his obligations.
[106] The Court is thus left in the unenviable position of trying to make its “best guess” in order to do justice between the parties, as the respondent’s evidence explaining the WIP statement away was self-serving and unsubstantiated. Given that it was the respondent’s onus to prove that no WIP was indeed owing – a fact of which he was well aware since an interim disclosure order was made seeking that information – I am drawing the appropriate adverse inference against the respondent and find that the sum of $50,000.00 be imputed to the respondent as WIP owing to him as at the date of separation.
[107] The applicant further alleges that up to three bank accounts belonging to the respondent are not contained in his disclosure, and one of those bank accounts shows a balance of $18,546.06. The applicant submits that the respondent mixed personal funds together with his firm’s trust accounts in an effort to hide income. Of note, the respondent did agree with the applicant’s submissions that he deposited $24,000.00 for the parties’ joint line of credit into his trust account, something which may or may not have violated the rules of the Law Society of Ontario (“LSO”), although I was not asked to make such a finding in this proceeding.
[108] The respondent admitted in his cross-examination that he erroneously omitted his Teraview account from his ongoing financial disclosure, and failed to provide additional disclosure regarding another trust account due to confidentiality concerns and solicitor and client privilege. I am not concerned with either of these missing accounts, as any funds contained within them are likely not the respondent’s money, thus belonging to clients or third parties.
[109] There does appear to be evidence that the respondent’s own money was commingled with other money likely belonging to clients/third parties. I am prepared to find the $18,547.06 as an asset owned by the respondent as at the date of separation.
[110] Finally, the applicant alleges that the respondent has carried out a campaign of “smoke and mirrors” to obfuscate her efforts to find the amount owed by the respondent to the CRA, and asks the Court to draw an adverse inference against the respondent, thereby precluding the respondent from making any deductions in his financial statements for CRA debt as at the date of separation.
[111] While it appears that the respondent has not filed his tax returns, or even maintained adequate and proper tax records, it is difficult to conclude on the record before me that the adverse
inference as requested by the applicant is warranted. As such, the applicant’s request in this regard is dismissed.
(g) Respondent’s Depletion of RRSP Account
[112] The respondent withdrew funds from his RRSP in the amount of $59,365.07 to cover legal fees for a Mareva Injunction motion which he eventually lost. That Mareva Injunction motion was related to a claim arising from the respondent allegedly facilitating a mortgage fraud. The applicant did produce evidence from the LSO that the respondent was involved in a mortgage fraud, and the applicant therefore argues that this RRSP account depletion was intentional and reckless warranting a finding that the $59,365.07 sum be attributed back to the respondent.
[113] To grant the applicant’s request, I must find that this liability was incurred recklessly or in bad faith. In the LSO’S reasons reported at Law Society of Ontario v. Cusack 2018 ONLSDH 100, the LSO concluded that the respondent’s conduct facilitated a potential fraud, and the respondent made a number of substantive misrepresentations in violating the oath of the Commissioners Taking Affidavit Act.
[114] While the withdrawal from the respondent’s RRSP account was certainly carried out without the applicant’s consent or knowledge, I accept the respondent’s position that, at the time, he had no other source of funds to pay those legal costs. Indeed, had those costs not been paid, there was a risk that the Comay property could have targeted as an asset against which those costs could have been enforced.
[115] Accordingly, in my view while the decision to use his RRSP account to fund the cost may have left a bad taste in the applicant’s mouth, it does not reach the level of “reckless” to justify the finding she seeks. The respondent had the right to defend his right to practice law, and I cannot find that the decision was carried out in bad faith on the evidence before me.
Issue #4 Is Either Party owed Spousal Support?
[116] The applicant’s claim for entitlement to spousal support is based upon her position that her income is now significantly lower than the respondent’s, and such a disparity is causally connected to their marriage and its breakdown.
[117] She alleges that living conditions in the Comay property became untenable leading to the parties’ separation, and as such she was unable to carry on a home based business. She required therapy for the emotional fallout, and physical health consequences ensued as well.
[118] The applicant requests spousal support in the amount of $1,500.00 per month for two years, then $1,000.00 for three further years at which point spousal support would terminate.
[119] For his part, while the respondent believes that he is able to make a claim for spousal support, it is his position that there is no entitlement for spousal support for either party. He has very little, if any ability to pay given his current poor health and lack of employment opportunities.
The respondent argues that the applicant has in fact grown the value of her assets, and not incurred any further post-separation debt. She was even able to purchase a new home.
[120] The respondent argues that the applicant has not encountered any difficulty in meeting her expenses, and has taken a variety of expensive trips following the breakdown of their marriage.
[121] The respondent does nevertheless request a lump sum spousal support payment on a compensatory basis as he holds the applicant responsible for improperly alleging misconduct on his part to the LSO, which has in turn adversely impacted his ability to continue to work as a lawyer in his later years.
[122] A marriage is a joint endeavour, and compensatory support is available in circumstances where a party needs to be compensated for losses suffered as a direct consequence of the marriage. I find that to the extent that either party is suffering from any alleged losses, those do not directly stem from the marriage or its breakdown. I do not find the presence of a prima facie case for entitlement on the part of either party. Both parties worked during the marriage, and were able to support their joint and individual expenses and needs. While the marriage was volatile at times, and led to several incidents of emotional outbursts and reactions, I do not find that such events contributed to the applicant’s alleged current inability to work.
[123] The respondent is currently suffering from his own physical issues which curtail his ability to earn an income. I am not prepared to impute an income of $150,000.00 per annum to the respondent on the record before me as requested by the applicant.
[124] I do not find a sufficient evidentiary basis for an order for spousal support for either party. To the extent that the applicant’s income may be lower than the respondent (and I am not prepared to make such a finding on the record before me), I do not consider same to be directly related to the breakdown of the marriage. The applicant’s cardiac anomalies occurred in 2009 and there is no medical evidence tying those physical issues to the alleged emotional fallout from the breakdown of the marriage.
[125] For these reasons, both parties’ claims for spousal support are dismissed.
Respondent’s Motion to Amend
[126] I would be remiss if I did not address the respondent’s request to seek leave to further amend his Amended Answer. That request arose after the applicant had closed her case, and the draft pleading was not served upon the applicant or filed with the Court until the last day of trial (November 12, 2020).
[127] The respondent’s motion for leave to amend was, not surprisingly, opposed by the applicant. I asked the parties to include their submissions on the respondent’s motion as part of their closing written submissions. The applicant did so. The respondent did not. On that basis alone, the respondent’s motion for leave to amend is dismissed. The respondent failed to address why the Court should grant him leave to amend when there was prejudice to the applicant having
already called her witnesses, closed her case, and prepared for her cross-examination of the respondent.
[128] In any event, to my review the draft amendments are effectively moot given my findings as set out in these Reasons.
Costs
[129] It is arguable that success was divided on this trial. If the parties take a different view, and wish to pursue any costs of the proceeding, they may exchange and file written costs submissions totaling no more than five (5) pages, including a Costs Outline, in accordance with the following schedule:
(a) the applicant’s written costs submissions to be served and filed within ten (10) business days of the release of these Reasons for Decision; and
(b) the respondent’s written costs submissions to be served and filed within ten (10) business days of receiving the applicant’s written costs submissions.
Diamond J.
Released: March 8, 2021
COURT FILE NO. FS-15-00405158
DATE: 20210308
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CLAIRE CRONIER
Applicant
– and –
PATRICK LEO WAYNE CUSACK
Respondent
REASONS FOR DECISION
Diamond J.
Released: March 8, 2021