Scrim v. Ouellette, 2023 ONSC 2167

Court File and Parties

COURT FILE NO.: FC-22-83 DATE: 2023/04/06 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Christine Marie Scrim, Applicant – and – Michael Joseph Leo Ouellette, Respondent

COUNSEL: Thomas Byrne, for the Applicant Danielle Waechter, for the Respondent

HEARD: January 11, 2023 (Brockville)

REASONS FOR DECISION ON MOTION

SOMJI J.

Overview

1The Applicant Ms. Scrim and the Respondent Mr. Ouellette were in a 14-year common law relationship commencing in 2008 and ending in January 2022. Mr. Ouellette is 70 years of age and has been retired for the past 10 years. Ms. Scrim is approaching 65 years of age and looking forward shortly to a peaceful retirement following 25 years of public service.

2The parties own a large house on Harvester Road as joint tenants (the “home”). They both agree the house needs to be sold so that they can reclaim the equity they put into it, pay for their financial debts, and move forward with their independent lives. However, they disagree on how much each has contributed to the value of the home and what they are entitled to upon its sale. This disagreement has delayed the sale of the home.

3The parties have each brought a motion requesting an interim order for the sale of the home, how the sale should be managed, and how the proceeds should be distributed. In addition, Mr. Ouellette seeks interim spousal support from Ms. Scrim. The issues to be decided are:

1. Should the home be sold, and if so, how should the proceeds of sale be distributed?
2. Should there be an order for Ms. Scrim to pay Mr. Ouellette interim spousal support, and if so, for what periods post-separation?

Evidence

4The parties rely on the following evidence in support of their motions:

1. Application of Ms. Scrim dated March 29, 2022 and Reply dated May 12, 2022;
2. Affidavits of Ms. Scrim dated November 5 and December 21, 2022, and January 4, 2023;
3. Financial Statement of Ms. Scrim dated May 12, 2022;
4. Answer and Claim of Mr. Ouellette dated May 2, 2022;
5. Affidavit of Mr. Ouellette dated January 3, 2023; and
6. Financial Statement of Mr. Ouellette dated January 3, 2023.

Issue 1: Should the home be sold, and if so, how should the proceeds of sale be distributed?

5On May 11, 2017, the parties purchased a large home as joint tenants. Part of the reason for the large purchase was to accommodate Mr. Ouellette’s mother who resided with the parties and contributed $1500/month to the home expenses until her passing in 2021. The deed for the home was $422,853, and the purchase price inclusive of taxes and fees was $459,244. On closing, Mr. Ouellette paid outright for his 50% share including realtor and legal fees, and land transfer taxes plus any additional costs for builder upgrades agreed upon by the parties.

6Ms. Scrim took out a mortgage for her 50% share of the cost of the home which she has been paying off at a rate of $1000/month. In addition, Ms. Scrim used the parties’ joint line of credit to pay for her portion of the builder upgrades. These facts are not disputed by the parties.

7In September 2022, the parties obtained a list price of $760,000 for the sale of the home from a realtor, Nina Tachuk of Royal Lepage, but the parties dispute over the distribution of proceeds has delayed the sale. Ms. Scrim agrees that Mr. Ouellette should get more than one half the proceeds of the sale given he has contributed more than her. Her proposal is if they are able to obtain $760,000, then after the mortgage debt and line of credit is paid off, Mr. Ouellette should immediately receive $323,152 from the proceeds which reflects his contribution to the home and that she should receive the remainder. She recognizes that Mr. Ouellette will claim he has contributed more and will insist on maintaining that claim up to trial. Therefore, in order to move forward with the matter, she seeks to have only $50,000 of proceeds immediately released from the sale so that she can pay off visa debts and legal costs and for the remainder to remain in trust pending final disposition. Ms. Scrim reports that she has a BMO line of credit on which she owes $13,914, a TD personal loan on which she owes $13,708, and an RBC Visa debt of $28,456.

8Mr. Ouellette argues that he should receive $335,000 from the proceeds immediately upon sale for his contributions to the home, an amount that is only $12,000 higher than what Ms. Scrim agrees to. He argues she should only get $30,000 in proceeds immediately upon sale. I note that the discrepancy between them on the issue of proceeds is $32,000.

9Mr. Ouellette argues that he contributed as follows to the house:

1. $225,511 for his share of the purchase price
2. $25,000 in deposits
3. $46,347 for builder upgrades at the time of construction
4. $57,000 for renovations

10Of these categories, the only area not in dispute is Mr. Ouellette’s contribution to the share of the purchase price of the house at the time of closing. The parties differ on the precise amounts contributed to the deposit, the builder upgrades, and the additional renovations Mr. Ouellette claims he made to the home over the years, albeit not significantly. Based on the reporting documents from the close of the sale, I find that the purchase price of the house including fees and taxes was $459,244, that Mr. Ouellette paid for his 50% share outright, and that he should be immediately entitled to $230,000 from the proceeds of sale.

11Mr. Ouellette argues that Ms. Scrim should not be entitled to more than $30,000 immediately from the proceeds of sale given there is an outstanding mortgage ($190,000), joint line of credit ($50,000), and differences in their contributions that have yet to be reconciled. He also argues that Ms. Scrim has been unjustly enriched by his disproportionately higher contributions to the value of the home.

12Upon review of the pleadings filed, I find Ms. Scrim has contributed to the value of the home through mortgage and other payments and that her equity in the home has likely increased given the home has gone from a value of $460,000 to an estimated $760,000 in 2022 so as to warrant the release of some proceeds immediately to her. I find Ms. Scrim’s request for $50,000 immediately from the proceeds of sale is reasonable. It will allow her to significantly reduce her present debts of approximately $56,000 and to pay some of her legal fees. The remaining net proceeds can be held in trust pending final resolution of this matter. In the interim, Ms. Scrim will continue to pay for the mortgage and the parties shall share all other expenses for the home.

13Both parties agree that the house should be listed with realtor Nina Tachuk. They both agree that Janssen law should be retained to manage the transaction. Ms. Scrim has concerns that Mr. Ouellette will micromanage the process potentially resulting in further delays. Mr. Ouellette has proposed conditions for overseeing the management of the sale which I find are reasonable.

14There will be a final Order that:

1. For the partition and sale of the home pursuant to the Partition Act, R.S.O. 1990, Chapter P.4.
2. The parties will sign the listing agreement for the sale of the home with Nina Tachuk as real estate agent, and if she is not available, another mutually agreeable real estate agent within 7 business days of the Order.
3. The parties shall determine a listing price with the assistance of the real estate agent and in the event of a disagreement, the parties will use the list price proposed by the agent.
4. That the home will be listed for sale within 30 days of this Order.
5. The parties will accept the first offer within 5% of the listing price.
6. If no acceptable offers are obtained within 60 days of listing, the parties will determine a new listing price with the real estate agent. In the event of a disagreement, the parties will use the list price as proposed by the real estate agent. The parties will accept the first offer within 5% of the new listing price.
7. Should the real estate agent recommend a repair or expense for improvement of the house prior to listing, the parties will cooperate in undertaking to get the repair or improvement completed and will share the cost equally. Neither party will incur further expenses on home improvements without the consent of the other party.
8. The parties shall retain Jansen Law to represent them on the sale of the family residence or another lawyer mutually agreed on by the parties within 15 days of this Order.
9. The parties shall direct the real estate lawyer upon the sale of the home to address the proceeds of sale after payment of the outstanding mortgage, joint line of credit, real estate commission, taxes, discharges, and legal fees (“net proceeds”) on a without prejudice basis as follows: i. Mr. Ouellette shall immediately receive $230,000 of the net proceeds and Ms. Scrim shall immediately receive $50,000 of the net proceeds collectively referred to as the “immediate net proceeds”; and ii. The remaining net proceeds shall be held in trust by a real estate lawyer pending further agreement by the parties or order of the court.
10. Ms. Scrim shall make the mortgage payments until the home is sold.
11. The parties will share all other expenses related to the home including but not limited to property taxes, insurance, and utilities including water, gas, and hydro, until the home is sold.
12. The parties are entitled to exclusive possession of any items ow

15Both parties concede that the market has changed since September 2022. However, even after the payment of the outstanding mortgage ($190,000), line of credit ($50,00), real estate commissions, taxes and legal fees, and the distribution of immediate net proceeds, there should likely remain sufficient net proceeds in trust for the parties until such time as they are able to reconcile their differences on their respective contributions to the home.

Issue 2: Should Ms. Scrim pay Mr. Ouellette interim spousal support and if so, for what periods post-separation?

16Mr. Ouellette seeks spousal support from Ms. Scrim in the amount of $800/month, based on her income of $101,961 and his income of $29,961 for the period of May 2, 2022, up to the sale of the home, and thereafter in the amount of $1,373/month, until final disposition of the matter. He argues this request is consistent with the mid-range level of spousal support that he is entitled to under the Spousal Support Advisory Guidelines (“SSAG”).

17Mr. Ouellette retired on August 30, 2012, at the age of 60 due to health issues. In particular, he had to have arthroscopic surgery in November 2012 and a hip replacement in January 2013. Since that time, he continues to suffer additional medical conditions preventing him from seeking employment. These include issues related to his back for which he received surgery in December 2016 and a drop foot which makes it difficult for him to support himself. He walks with a cane since the surgery. Mr. Ouellette requires eyecare, physiotherapy, orthotics, footcare every six weeks, leg braces every two years, and massage therapy for physical stresses caused from using aids to walk. These regular medical expenses are expected to continue, and in addition, he anticipates additional costs to address a tooth infection and knee replacement surgery. Mr. Ouellette does not have any extended medical, health, and dental benefits and has relied, until separation, on Ms. Scrim’s benefits.

18During the past 8 years, Ms. Scrim has been the primary income earner in their relationship. She earns close to $100,000/year as an employee of the Canadian Federal Government. Mr. Ouellette’s sources of income since retirement are his Old Age Security, Canada Pension Plan, and a small employment pension form the Canadian Armed Forces bringing his total income to $29,000 per year. In 2019 and 2020, Mr. Ouellette withdrew $10,000 from his RRSP, which is now worth $52,000. He recognizes that by 72, he will have to convert his RRSP into a RRIF, and additional withdrawals will be required. Mr. Ouellette also has a TFSA which is now valued at $10. He acknowledges it was an oversight on his part to omit it from his original Financial Statement. He also acknowledges he withdrew $16,000 from the TFSA since the beginning of 2022 and did so to support himself following separation, including paying for medical and dental expenses no longer coverable by Ms. Scrim’s insurer.

19Ms. Scrim argues that once the home is sold, Mr. Ouellette will have ample resources to support himself and the issue of interim spousal support should be determined based on the parties’ finances after the sale of the home. Ms. Scrim is presently living outside the home with her daughter, continuing to pay for the mortgage and shared expenses of the home, managing accumulated visa debts, and not receiving even a nominal amount of occupation rent. She describes the home as a “financial millstone around” her neck and that she cannot afford to pay interim spousal support to Mr. Ouellette until after the home is sold.

20Outside of her anticipated government pension, Ms. Scrim’s only retirement savings is her limited equity in the home and RRSPs valued at $12,000. Ms. Scrim also attests that her income for 2022 is projected to be closer to $92,100 and that the higher income figure in 2021 of $114,606 was the result of one-time payouts. She anticipates her 2022 income, including CPP benefits of $10,408, to be $103,308. She predicts Mr. Ouellette’s income to be $38,208 because he has regularly taken $10,000 from his RRSPs in the past. Ms. Scrim acknowledges that Mr. Ouellette has lost access to her extended benefits, but she had little choice in the matter as he no longer qualified as a “spouse” as defined by the Public Service Health Care Plan. She notes that Mr. Ouellette should be entitled to access a drug benefit plans available to senior citizens.

21Every spouse has an obligation to provide support for themselves and for the other spouse in accordance with need, to the extent that they are capable of doing so: s. 30 Family Law Act (the “FLA”). Non-married spouses are entitled to make a claim for spousal support: s. 33 FLA. The grounds for requesting support can be contractual, compensatory, or needs based (non-compensatory): Moge v Moge [1992] 3 SCR 813; Bracklow v. Bracklow [1999] 1 SCR 20.

22The purpose of support orders is a) to recognize a spouse’s contribution to the relationship and the economic consequences of the relationship; b) to share the economic burden of child support equitably; c) to make fair provisions for a spouse to become self-supporting; and d) to relieve financial hardship for a spouse if this has not already been done by other orders including those related to property division: s. 33(8) FLA.

23Where the request for support is based on need, s. 33(9) FLA sets out seventeen non-exhaustive factors to be considered in determining the circumstances of the parties.

24In Driscoll v. Driscoll, the court, relying on the decision of Robles v. Kuhn, 2009 BSCS 1163, set out a list of principles governing interim support motions:

1. On applications for interim support the applicant's needs and the respondent's ability to pay assume greater significance;
2. An interim support order should be sufficient to allow the applicant to continue living at the same standard of living enjoyed prior to separation if the payor's ability to pay warrants it;
3. On interim support applications the court does not embark on an in-depth analysis of the parties' circumstances which is better left to trial. The court achieves rough justice at best;
4. The courts should not unduly emphasize any one of the statutory considerations above others;
5. On interim applications the need to achieve economic self-sufficiency is often of less significance;
6. Interim support should be ordered within the range suggested by the Spousal Support Advisory Guidelines unless exceptional circumstances indicate otherwise;
7. Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out;
8. Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support.

25The court is not required to embark on an in-depth analysis of the parties' circumstances when assessing interim support: Driscoll at para 14; see also Jarzebinski v. Jarzebinski [2004] O.J. No. 4595 at para 36. Based on the evidence filed, I find that Mr. Ouellette has established a prima facie case for entitlement to interim spousal support. Mr. Ouellette is 70 years of age, unemployed, with almost no prospect of returning to work. He has relied for the past 10 years largely on Ms. Scrim’s income and extended health benefits to support himself and is entitled to continue living at approximately the same standard of living. Mr. Ouellette has considerable medical and dental expenses anticipated for 2023. His annual income is just under $30,000, and he will likely have to draw from his limited RRSP savings to pay for these medical and dental expenses. A claimant’s health is a relevant assessment when considering need: Gray v Gray, 2014 ONCA 659 at paras 27-28. Ms. Scrim, on the other hand, will continue to earn, at least until July 2024, close to $100,000/year. Once the home is sold, she will no longer be paying the mortgage and will have paid off some of her debts with the immediate net proceeds. At this juncture, she will be in a better position to pay support than currently and still earning a full salary.

26In arriving at my decision on entitlement, I have considered that once the house is sold, Mr. Ouellette will receive a sizeable chunk of proceeds to help him support himself. In addition, it is anticipated that Ms. Scrim’s income will be reduced to $35,000/year upon her retirement in July 2024. Both these factors, when triggered, will certainly impact entitlement and quantum of support on a final basis. However, the purpose of an interim support order is to provide a short-term remedy to ensure Mr. Ouellette has sufficient means to maintain a reasonable lifestyle.

27The SSAG, on the basis of an income of $101,961 for Ms. Scrim and $29,527 for Mr. Ouellette, suggests a range of spousal support of $1,177 (low) to $1,569 (high). Taking into consideration the factors set out in s. 33(9) of the FLA, including the present and future financial circumstances of the parties, there will be a temporary and without prejudice order that Ms. Scrim shall pay SSAG low range spousal support to Mr. Ouellette in the amount of $1,177 per month, effective the first day of the first month, following the distribution of the immediate net proceeds from the sale of the home until further agreement by the parties or order of the court. The issue of additional interim support retroactive from the date of separation is left to the trial judge.

28Counsel will prepare a draft Order consistent with this decision for my review.

Costs

29There has been divided success on these motions, and consequently, each party is responsible for its own costs.