COURT FILE NO.: FS-15-00407256-0000 DATE: 2023-12-27
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
TEENA MORRA Applicant
– and –
WILLIAM O’NEILL Respondent
Olivia Oprea, for the Applicant
Theodore Nemetz, for the Respondent
HEARD: December 12, 2023
VELLA J.
REASONS FOR DECISION
Introduction
[1] The Applicant is seeking an order that the Respondent transfer title to the Matrimonial Home, pursuant to the Minutes of Settlement dated March 3, 2022 (“Minutes”) which, in turn, were incorporated into the Final Order of Faieta J. on March 4, 2022 (“Faieta J. Order”), and the subsequent endorsement of Sugunasiri J. dated April 11, 2023 wherein Her Honour ordered, at para 13, that the Respondent comply with para. 33 of the Minutes. She also seeks an order that she pay $379,846.38 or some other amount as ordered by this court to the Respondent once the transfer of title is completed.
[2] The dispute before me was focused on what adjustments were to be made with respect to the purchase of the Matrimonial Home by the Applicant to the Respondent. By summary overview, the Applicant is seeking post separation and post Minutes adjustments, whereas the Respondent states that the Applicant is only entitled to post Minutes adjustments. As a consequence, he submits that he is owed about $585,000 from the Applicant in consideration of the transfer of title. The parties also dispute some of the specific charges being claimed by the Applicant.
[3] The Respondent acknowledged, over the course of the motion, however, that he had neglected to account for the existing $170,000 mortgage on the Matrimonial Home and admits he is responsible for half, or $85,000. This reduces the amount he claimed of approximately $585,000 to something closer to in or around $500,000. He also acknowledged that he is responsible for half the interest paid by the Applicant on the mortgage. This reduces the gap between the parties’ respective positions to around $96,000.
[4] Over the course of argument, the parties came to some agreements. They now agree, pending resolution of the various amounts claimed by the Applicant as deductions from the Respondent’s share of the consideration for transferring title to the Matrimonial Home to the Applicant, as follows:
[5] The amount of consideration, pre adjustment, owed by the Applicant is $476,034 ($561,034 minus $85,000);
[6] Upon payment by the sum of $476,034 by the Applicant into Trust to be held by Crys Masterson (real estate lawyer), and the payment of $379,039 from that Trust amount to the Respondent (on consent), the Respondent will deliver a signed transfer deed and any other necessary document to complete the transfer of title in the Matrimonial Home from him to the Applicant (in the interim, a signed transfer title deed will be held in escrow by the Respondent’s lawyer pending pay out of this amount);
[7] The balance of $96,995 will be held in trust by Crys Masterson, pending the determination of a reference to the Associate Justice (under r. 54 of the Rules of Civil Procedure);
[8] I will provide the terms of the Reference to the Associate Justice.
Analysis
[9] There is no rule under the Family Law Rules that permits a judge to order a reference or any other similar procedure for this type of situation. However, pursuant to r. 1(7) of the Family Law Rules, where those rules “do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act governing the case and, if the court considers it appropriate, by reference to the Rules of Civil Procedure.”
[10] Rule 54.02 of the Rules of Civil Procedure (the “civil rules”) provides that (subject to any right to have an issue tried by a jury), “a judge may at any time in a proceeding direct a reference of the whole proceeding or a reference to determine an issue where:
a) All affected parties consent;
b) A prolonged examination of documents or an investigation is required that, in the opinion of the judge, cannot conveniently be made at trial; or
c) A substantial issue in dispute requires the taking of accounts. (emphasis added)
[11] Under r. 54.02 of the civil rules, a reference of an issue can be ordered with respect to, inter alia, the conduct of a sale, or the enforcement of an order.
[12] Under r. 54.03 of the civil rules, the reference may be directed to various individuals including an associate justice.
[13] The parties both consent to this reference. Further, it arises as an enforcement of the Faieta J. Order.
[14] In my view, it would be most appropriate and convenient to direct the issue of the outstanding amounts due under the Minutes of Settlement/Faieta J. Order with respect to the sale of the Matrimonial Home from the Respondent to the Applicant. Therefore, I am making this order for a reference on this issue to an associate justice.
[15] Under r. 54.03, the referee, being an Associate Justice in this case, has the request powers to make findings and provide an allocation of the amount that will be remaining in trust ($96,995) to the Respondent and/or Applicant.
[16] Under r. 54.06, the Associate Justice will make a report and provide it to the parties.
[17] The procedure outlined under r. 54 will govern this reference.
[18] In order to assist the Associate Justice, I have to make findings with respect to the interpretation of the Minutes.
[19] The required analysis is based in contractual interpretation of the Minutes, the terms of which were incorporated verbatim into the Faieta J. Order.
[20] The Minutes themselves best reflect the intentions of the parties at the time when they entered into it.
[21] The material clauses (in material part) are as follows:
Equalization of Net Family Properties and Disposition of the Matrimonial Home
s. 32. Neither party will pay the other an equalization payment under the Family Law Act.
s. 35. Out of the sale of the matrimonial home, Mr. O’Neill shall reimburse Ms. Morra for the $1258.50 she paid in February 2022 to settle his outstanding debt to Rogers.
HELOC
s. 36. The amount on the HELOC being finalized in March 2022 as of the date the funds become available will be split evenly between Ms. Morra and Mr. O’Neill. Any withdrawals and interest from the HELOC either may make once the funds become available will be their individual responsibility and thereafter the account shall be closed.
[22] Neither party challenges the enforceability or binding nature of the Minutes.
[23] With one express exception (the Rogers bill), the parties waived all entitlement to an equalization payment under the Family Law Act. An equalization payment would have taken into account post separation adjustments. Therefore, based on a plain reading of s. 32 of the Minutes, Ms. Morra cannot claim any post separation adjustments other than the Rogers bill. The fact that the parties specifically turned their minds to carving out one post separation expense further supports this interpretation.
[24] Accordingly, the Associate Justice will not deduct any post separation amounts incurred up to date of the Minutes from the amount held in trust, other than the Rogers bill (unless it has already been accounted for in the $379,039).
[25] However, the Minutes do not address any expenses incurred by Ms. Morra in relation to the carriage of the Matrimonial Home after the date of the Minutes, with the exception of the Home Equity Line of Credit (HELOC).
[26] By way of background, the parties originally opened a HELOC in 2010 to assist with the financing of renovations to the Matrimonial Home. This was a joint debt.
[27] The parties then jointly obtained a new HELOC with the TD Bank in February 2022, in order to provide financial assistance to the Applicant for her anticipated legal fees, since the matter was scheduled to go to trial in March 2022. The existing debt from the original HELOC was rolled into the new HELOC. Both parties signed the new HELOC agreement. The Applicant withdrew $150,000 and the Respondent withdrew $25,000.
[28] Mr. O’Neill stopped making payments on the HELOC when he vacated the matrimonial home from November 24, 2022 onwards.
[29] The Applicant has had to pay all of the interest charges on the amounts withdrawn by both parties, or else risk action by the TD Bank in the case of a default.
[30] Mr. O’Neill has only made one interest payment of $115 to the HELOC on August 10, 2022. He has not paid the principal amount that he borrowed ($25,000). Mr. O’Neill concedes that he owes the interest accumulated on the amount he withdrew, of $25,000 (less the one payment), and the principal sum as well. However, the court lacked evidence on the amount of interest accrued that is attributable to Mr. O’Neill.
[31] Ms. Morra also had to pay legal fees and for an appraisal of the house in order the parties to qualify for the new HELOC. She is seeking half of those costs. Mr. O’Neill does not agree.
[32] The Minutes provide that any withdrawals and interest incurred by each party from the HELOC is to be the individual responsibility of that party. However it does not address the fees incurred in order to qualify for the HELOC. That said, these costs would normally be accounted for under the equalization payment which, as stated, has been waived.
[33] Therefore, the appraisal and legal fees associated with opening the HELOC are not to be deducted from the funds held in trust as a credit to Ms. Morra.
[34] On the other hand, Mr. O’Neill is responsible for half of the costs the TD Bank charged to bring the joint HELOC and joint mortgage into good standing recognizing that Mr. O’Neill did not pay his share of the interest on the HELOC nor on the mortgage obligation that he was jointly liable for, in addition to the one half of the charge that relate to TD Legal department’s costs associated with the threat of foreclosure when the HELOC went into default. These are appropriate post settlement adjustments that could not have been reasonably foreseen at the date the Minutes were entered into.
[35] In the event the parties are now able to resolve this matter with the benefit of these reasons, then the Reference can be abandoned by their mutual consent.
Order
[36] I direct a reference, on consent, to an Associate Justice under r. 54 of the Rules of Civil Procedure to determine whether any credit is owed to Ms. Morra from the amount remaining in trust after disbursement to Mr. O’Neill of the sum of $379,039, being $96,995, and if so, how much, guided by the findings I have made.
[37] I further order, on consent,
(a) The sum of $476,034 shall be paid by the Applicant to Crys Masterson, in trust, within 10 business days from today, with confirmation to the Respondent;
(b) The Respondent shall sign a transfer of title deed (and any other necessary documentation to effect the transfer), transferring his interest in the Matrimonial Home to the Applicant, within 10 business days from today to be held in escrow by the Respondent’s lawyer;
(c) Crys Masterson is directed to pay the sum of $379,039 to the Respondent, from the sum being held in trust, following confirmation by the Respondent’s lawyer that he has received the signed transfer title deed, and the Respondent shall acknowledge receipt with a copy of the acknowledgment to the Applicant;
(d) Upon receipt of the sum of $379,039 by the Respondent from Crys Masterson, the Respondent shall direct his lawyer to deliver the duly executed transfer of title deed referenced in 41(b) to the Applicant’s lawyer within 5 business days of receipt of these funds.
(e) The Applicant shall then be at liberty to register the transfer deed on title of the Matrimonial Home.
[38] For clarification, the transfer of title of the Matrimonial Home from Mr. O’Neill to Ms. Morra is not delayed pending the Reference.
[39] If costs cannot be agreed upon, then the Applicant shall provide her cost outline and submissions within 10 business days and the Respondent shall provide his cost outline and submissions within 10 business days thereafter. The submissions shall not exceed 2 typed pages each.
Justice S. Vella
Released: December 27, 2023
COURT FILE NO.: FS-15-00407256-0000 DATE: 2023-12-27
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
TEENA MORRA Applicant
– and –
WILLIAM O’NEILL Respondent
REASONS FOR DECISION
Vella J.
Released: December 27, 2023