Court File and Parties

COURT FILE NO.: FS-20-113 DATE: 2024-10-09

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Kelly Walker, Applicant Jason J. Murphy, for the Applicant

- and -

Brian Holman, Respondent Scott C. Vining, for the Respondent

HEARD: April 17, 2024

JUDGMENT

Introduction

[1] This matter proceeded as an eight-day trial. The key issues to be determined by me are the validity of a Separation Agreement that was prepared and signed by the parties, retroactive and ongoing child support, and parenting-time arrangements for the [Age Omitted] child of the marriage, R.

Summary of Decision and Orders Made

[2] For the reasons that follow, I find that the Separation Agreement is valid. The Applicant, Kelly Walker, is entitled to purchase the matrimonial home from the Respondent, Brian Holman, for $50,000 as per the terms of the Agreement. Mr. Holman is entitled to prejudgment interest set at $4,664.38 pursuant to the Courts of Justice Act retroactive to the date the Separation Agreement was signed on July 22, 2018.

[3] The Canada Revenue Agency (“the CRA”) has placed liens on the matrimonial home resulting from business debts owed by Mr. Holman. Ms. Walker and the CRA have entered into a Pierringer Agreement that provides for the liens on the home to be vacated subject to Ms. Walker paying the CRA the amount she would otherwise have been ordered to pay to Mr. Holman as a result of this ruling. This resolution of the CRA issues with respect to the matrimonial home permits the title of the home to be cleared of CRA debt and transferred to Ms. Walker. Mr. Holman will be required to resolve the balance of the debt owed by him to the CRA directly with the CRA.

[4] The Separation Agreement reflects that the primary residence of the child of the marriage, R ([Age Omitted] at the time the Agreement was signed, now [Age Omitted]) was to be with Ms. Walker. R’s primary residence has been with Ms. Walker since the date of separation in 2015. I do not find that there has been a material change in the child’s circumstances that justifies a change in the current parenting time schedule at this time.

[5] Mr. Holman shall pay ongoing child support to Ms. Walker at the rate of $556 per month.

[6] Mr. Holman is required to pay retroactive child support to Ms. Walker in the amount of $15,819.72.

[7] Mr. Holman is required to repay Ms. Walker $7,601.11, which is 38% of the $20,002.92 in s.7 expenses incurred by Ms. Walker for the benefit of R since the date of separation on September 1, 2015.

[8] Going forward, Mr. Holman shall pay 38% of all s.7 expenses, and Ms. Walker shall pay 62% of all s.7 expenses, with the exception of post-secondary s.7 expenses, which shall be shared equally by the parties.

[9] The parties shall continue to have joint decision-making responsibility with respect to R.

[10] Ms. Walker is not required to pay retroactive or ongoing spousal support to Mr. Holman.

[11] Mr. Holman is not entitled to payment for occupation rent.

[12] Mr. Holman is not entitled to receive an equalization payment from Ms. Walker with respect to her pension.

Background

[13] Ms. Walker, and Mr. Holman first began living together on May 1, 2007, in a home that Mr. Holman already owned. They married on January 24, 2010.

[14] The parties’ daughter, R, was born on [D.O.B. Omitted].

[15] Although Mr. Holman moved out of the matrimonial home in 2013, the parties have agreed that the date of separation is September 1, 2015. The parties agree that there was very little equity in the matrimonial home as of the date of separation.

[16] When the parties separated, Ms. Walker was working full-time as a teacher, and Mr. Holman was the general manager of the Owen Sound/Port Elgin/Collingwood division of Forestell Design Landscaping (“Forestell”). He testified that the head company ran the franchise and provided the equipment.

[17] Mr. Holman testified that taking on the franchise was the beginning of his problems with the CRA. He testified that he believed, incorrectly, that all the payments owed by the company for HST, and payroll were being made. Mr. Holman further testified that even though the company was sold to a new owner in 2017, he was left with all the debt.

[18] Mr. Holman testified that he was aware that debts were beginning to build up, and that out of desperation he stopped paying for the mortgage and home insurance for the matrimonial home in September 2015. The parties agree that in approximately November 2015, Ms. Walker began paying for the mortgage, line of credit, and homeowners insurance. Mr. Holman continued to pay the property taxes.

[19] Mr. Holman testified that in late 2015 his personal accounts with the Royal Bank were frozen. Ms. Walker was not paying any rent to Mr. Holman, and Mr. Holman was not paying child support. The Royal Bank later obtained a judgment against both parties.

[20] After his employment at Forestell ended, Mr. Holman started a landscaping and snow removal business in 2017. Mr. Holman incorporated his business. He testified that his corporation does not own any assets. Mr. Holman testified that he currently works for Extreme Linings and Coatings in Owen Sound, where he has been employed since approximately March of 2023 doing primarily concrete work and snow removal. He is paid $32 per hour, and generally works 37.5 hours per week. His Financial Statement sworn on April 24, 2024 shows a current income of $60,000 per year.

[21] As a result of their commendable co-operation and mutual desire to avoid conflict at that time, the parties signed a Separation Agreement on July 22, 2018. Their signatures were witnessed by lawyer Ian Robertson. Both parties testified that Mr. Robertson did not provide either one of them with legal advice prior to the signing of the Agreement.

Parenting Provisions Under the Separation Agreement

[22] Ms. Walker testified that she found the precedent for this Agreement online, and modified it to reflect the arrangement that she believed the parties had reached regarding the parenting of R, the residency of R, and transferring the matrimonial home from Mr. Holman to Ms. Walker. Ms. Walker asked a lawyer to review the Agreement before presenting it to Mr. Holman.

[23] After reviewing the document, Mr. Holman made handwritten changes to it to read that the parties were to have “100% joint physical custody” of R.

[24] When the parties met at Mr. Robertson’s office to sign the Agreement, Mr. Holman’s requested amendment to include the words “joint physical custody” of R were not reflected in the proposed Agreement. A handwritten amendment was then written on the document to change the term “remove the word “guardianship” and replacement it with the words change the language “joint legal guardianship” to “joint legal physical custody”. Both parties placed their initials by the change.

[25] The relevant section of the Agreement dealing with parenting time for R appears at paragraph 7(a), and reads as follows:

It is the intention of the parents in agreeing to joint physical custody that each of them will continue to have a full and active role in providing a sound social, economic and educational environment for the child and continue that support which the child has received to date.

[26] It is also important to note that the Agreement indicated that R was to have her “primary residency” with Ms. Walker.

[27] Ms. Walker testified that at the time that the Agreement was signed, R was living with her full-time. She testified that Mr. Holman didn’t ask for any changes in the parenting time after the Agreement was signed, although she acknowledged that the Separation Agreement did not include a set schedule for parenting time.

[28] Mr. Holman testified that he believed that the words “joint physical custody” meant that Ms. Walker was agreeing to equally share parenting time of R with him. Mr. Holman agreed under cross-examination that he had previously signed letters to the CRA confirming that R’s primary residence was with Ms. Walker, which allowed Ms. Walker to continue to receive the Canada Child Benefit. His evidence was that Ms. Walker drafted the letter, and he signed what she asked him to sign.

Sale of the Matrimonial Home in the Separation Agreement

[29] The Separation Agreement also addressed the sale of the matrimonial home. The parties agree that the value of the home at the time the Agreement was signed was $300,000. The parties both testified that they determined that their joint debts were approximately $200,000 at that time, including the mortgage and line of credit on the home, and a second joint line of credit, resulting in approximately $100,000 in equity in the home. The parties therefore agreed that Ms. Walker would refinance the home, and pay Mr. Holman $50,000 in exchange for having the title of the home transferred to her. Mr. Holman’s debts to CRA did not form part of the parties’ calculations when determining the amount that Ms. Walker was to pay Mr. Holman in exchange for sole title to the home.

[30] Mr. Holman testified that he knew when he signed the Separation Agreement that he had debts with the CRA that exceeded the funds he would be receiving from Ms. Walker for the home, but he did not know that the CRA had placed liens on the home. He testified that it was his expectation that he would be able to use the $50,000 to make a deal with the CRA to resolve his debt situation.

[31] Ms. Walker testified that she did not know that Mr. Holman had debts with the CRA at the time that the Agreement was signed.

[32] I accept the evidence of both Mr. Holman and Ms. Walker that neither of them was aware of the CRA liens on the home at the time that the Separation Agreement was signed.

[33] The terms of the Separation Agreement confirms that both parties intended it to be a final settlement of their matrimonial issues pertaining to both property, and to all issues associated with R.

Child Support and s.7 payments under the Agreement

[34] The Agreement states that Mr. Holman was not required to provide financial assistance for the maintenance of R. However, the Agreement also states that Mr. Holman is to “contribute to the daily necessities required for the maintenance of R”. These two clauses in the Agreement are internally contradictory.

[35] The Agreement also states that Mr. Holman is to share the costs of mutually agreed upon extra-curricular activities for R, and contribute equally towards her post-secondary education costs.

Pension and Spousal Support under the Agreement

[36] The Agreement specifies that neither party is required to share their pension with the other party. The parties agree that Ms. Walker’s pension was worth $56,000 at the time that the Separation Agreement was signed.

[37] The Agreement also releases both parties from an obligation to pay spousal support.

[38] The Agreements specifies that Mr. Holman is responsible for the repayment of all debts in his name, and Ms. Walker is responsible for the repayment of debts in her name “outside of joint debts”.

Discovery of the CRA Liens

[39] Ms. Walker testified that following the signing of the Agreement, she contacted a real estate lawyer to arrange for the transfer of title of the matrimonial home to her, as per the terms of the Agreement. Once the title search was performed, Ms. Walker testified that she was shocked and devastated to learn that there were multiple liens on the home, including two CRA liens, and three liens from the Royal Bank. I accept her evidence that this phone call from the real estate lawyer was the first time she learned that the CRA had placed liens on the home.

[40] Ms. Walker testified that she contacted Mr. Holman to question him about the liens. Mr. Holman testified that he first found out about the CRA liens from Ms. Walker. Ms. Walker testified that Mr. Holman assured her that the quantum of the CRA liens was not accurate, and that he owed less than the amount reflected in the liens. She testified that he told her that he and his accountant were dealing with the liens.

[41] Ms. Walker testified that despite the discovery of the liens, she still wanted the Separation Agreement and the transfer of the matrimonial home to go through. She testified that she regularly followed up with Mr. Holman regarding the status of the liens, and he continued to assure her that he did not agree with the amount of the liens, and that he and his accountant were working together to clear up the issue with the CRA.

[42] By the time the Separation Agreement was signed in 2018, the CRA liens totaled over $93,000. Mr. Holman takes the position that he believes the CRA would have been willing to take the $50,000 payment and work out a deal for the balance of money owed. I was not provided with evidence regarding the efforts that Mr. Holman has made to address the CRA liens, other than Mr. Holman’s testimony that he and his accountant have written letters to the CRA claiming financial hardship for Mr. Holman. Mr. Holman testified that his CRA debt is now in the range of $200,000 due to ongoing interest and penalties.

[43] Ms. Walker provided copies of text messages with Mr. Holman from March 2020 in which she asks Mr. Holman as to the status of the liens and if they will be resolved soon, to which Mr. Holman responded “Probably not. 2 big ones still there until government and accountants agree on numbers. I’m not paying the shit until then otherwise I’m agreeing to what they say I owe now which isn’t the case!” Ms. Walker testified that she chose to file the Application when she realized that Mr. Holman did not expect the CRA liens to be dealt with any time soon.

[44] Ms. Walker testified that after her Application was filed, Mr. Holman paid two of the liens on the property, but he did not pay the CRA liens.

Current Parenting Schedule for R

[45] In the fall of 2019, Mr. Holman was able to obtain stable housing, and R began having regular overnight parenting time with her father starting in January 2020. The current parenting schedule is that R lives primarily with Ms. Walker, and spends alternating weekends with Mr. Holman, and one overnight mid-week with him every week. Mr. Holman picks up R from school on Wednesdays at 4:30 p.m., and returns her back to school on Thursday mornings. This parenting schedule has been in place since approximately February 2021.

[46] In an effort to avoid conflict, the parties no longer speak to one another in person, even when they are both attending one of R’s sporting events.

[47] There has been an interim child support order in place since September 16, 2021 which orders that Mr. Holman pay child support retroactive to April 1, 2021 at the rate of $556 per month based on an imputed annual income of $60,000. Ms. Walker testified that she has never received the child support payments for the first 6 months covered by the order, totaling $3,336. This child support order is based on an imputed income of $60,000 for Mr. Holman.

[48] Mr. Holman gave evidence during the trial confirming that his child support payments were current. Ms. Walker testified that she does not have a current statement from FRO regarding the status of Mr. Holman’s child support payments.

Position of Ms. Walker

[49] Ms. Walker is prepared to abide by the terms of the Separation Agreement. She argues that it meets the requirements of s.55 of the Family Law Act, R.S.O. 1990, c. F.3, in that it is in written format, it is signed, and it is witnessed. She therefore submits that the matrimonial home should transfer from Mr. Holman to her upon payment by her of $50,000, subject to post separation adjustments. She emphasizes that the CRA liens were not registered against the property until after the date of separation, and that they are therefore not debts of the marriage. From the time that the CRA liens on the home were discovered, Ms. Walker has taken the position that the liens are exclusively Mr. Holman’s debts.

[50] With respect to the parenting time schedule, Ms. Walker submits that R has been living primarily with her for R’s entire life, and that there is no evidence to suggest that the parenting schedule should change as there has been no material change in circumstances for R or either of the parties. Ms. Walker submits that as she is a teacher, she has the time to spend all school holidays with R. She contrasts this situation with Mr. Holman’s work schedule, which requires him to work long hours in the summer. Ms. Walker takes the position that R is doing well in school, is well-adjusted and thriving, and that it is not in her best interests to have the parenting schedule altered.

[51] Ms. Walker’s sister, Tina Walker, testified that she spends time with Ms. Walker and R about once a month. She described a close and loving relationship between mother and daughter. She emphasized that Ms. Walker accommodated Mr. Holman coming to the house after the parties were separated because Ms. Walker put R’s needs first, and wished to try to normalize R’s family life with separated parents. Tina Walker also testified that her sister does not speak negatively of Mr. Holman when R is present. She also testified that her sister has asked the rest of the family to treat Mr. Holman as normally as possible when they see him, and stated that her sister reminds R to contact Mr. Holman when she is having parenting time with her.

[52] Regarding child support, Ms. Walker submits that despite the fact that the Agreement does not provide for child support for R, s. 56(1.1) of the Family Law Act permits the court to go beyond the agreement with respect to the issue of child support.

[53] Ms. Walker takes the position that I can uphold the Agreement with respect to the parenting issues and the transfer of the matrimonial home, but still order that child support be paid. She seeks child support retroactive to the date of separation, which she calculates to be $40,428 based on an imputed income of $60,000 for Mr. Holman.

[54] Ms. Walker also seeks reimbursement for half of the s. 7 expenses she has incurred on R’s behalf since the date of separation, which totals $10,001.46.

[55] Ms. Walker disputes that she has made less than fair market value payments for the use of the matrimonial home. She submits that the amount she has paid for the mortgage, insurance, property taxes on the matrimonial home totals $115,853.45 over 100 months, resulting in a monthly cost of $1,150. Ms. Walker submits that this amount represents a fair monthly rental price for her home, and that she does not owe Mr. Holman any occupation rent.

[56] Ms. Walker also testified that when the time came to renew the mortgage, Mr. Holman refused to co-operate with her dealings with the bank to secure a new mortgage. The mortgage was therefore renewed with a six-month term, which Ms. Walker submits carries a higher interest rate than a longer term mortgage.

Position of Mr. Holman

[57] Mr. Holman takes the position that the Separation Agreement ought to be set aside, as the parties were both unaware of the existence of the CRA liens on the home at the time that the Agreement was signed. He therefore argues that the Agreement was a contract based on a mistake of fact that cannot now be fulfilled.

[58] Mr. Holman also takes the position that he has a beneficial interest in the matrimonial home, and he seeks payment of occupation rent back to the date of separation. He argues that the amount that Ms. Walker paid for the mortgage, insurance and property taxes is less than the fair market rental cost that he could have obtained if he had leased the home to a different tenant. He relies upon an expert appraisal from a property evaluator hired by Ms. Walker that the fair market value range of rent for the 1562 square foot home as of March 2023 was $1,900 to $2,100 per month plus utilities.

[59] Mr. Holman further argues that the financial terms of the Agreement are heavily in favour of Ms. Walker, including the fact that there is no provision for spousal support to be paid to him, or any credit for the value of her pension as of the date of separation. He seeks an equalization payment that fairly considers the value of Ms. Walker’s pension. He also argues that the Agreement is unfair to him in that it does not credit him for the $21,000 he paid to the Royal Bank for joint debts, nor the fact that Ms. Walker is relieved of joint debt to the CRA that was incurred prior to the date of separation, which he argues is in the range of $18,000 to $28,000.

[60] Mr. Holman also points to the fact that since the date of separation he has paid for some major repairs for the matrimonial home such as the furnace and water pump. His position is that he simply be returned his home, and he will absorb those expenses as they were improvements to his home even though he was not living there. If Ms. Walker is ordered to vacate the home, Mr. Holman intends to sell it to help pay his debts.

[61] Mr. Holman wants equal parenting time with R. He testified that during the pandemic in 2020, R spent increased time at his home, including most weekends and frequent mid-week overnight visits, and she thrived. He points to a report card generated during this time frame that indicates that R had made “significant improvements”.

[62] Mr. Holman also testified that by writing the words joint legal “physical custody” into the Agreement, he believed that Ms. Walker was agreeing to share parenting time equally with him.

Analysis

Is the Separation Agreement Valid?

[63] Section 55 of the Family Law Act sets out the formal requirements for creating a binding Separation Agreement as follows:

55 (1) A domestic contract and an agreement to amend or rescind a domestic contract are unenforceable unless made in writing, signed by the parties and witnessed.

[64] The purpose of s. 55(1) is in part to establish that the parties intended to reach the agreement made, and understood the obligations being imposed by the agreement: Virc v. Blair, 2014 ONCA 392, 119 O.R. (3d) 721, at para.78.

[65] The fact that the parties chose to draft their own Separation Agreement does not negatively affect the validity of the Agreement, provided there is no unfairness of the degree to justify intervention by the court: Gamble v. Longpre, 2016 ONSC 3499, 79 R.F.L. (7th) 337, at para. 23.

[66] If a family agreement was not drafted by a lawyer and lacks the usual clauses that specifically refer to contracting out of the equalization provisions of the Family Law Act, the agreement is a valid and binding domestic contract if the intent of the clause in the agreement concerning the matrimonial home is clear: Knight v. Knight-Kerr, 2021 ONSC 55, 51 R.F.L. (8th) 84, at paras. 52 and 53.

[67] The Agreement between the parties is written, signed, and witnessed. It therefore meets the requirements of s. 55 of the Family Law Act. Both parties were clear in their testimony that they understood that they were signing an agreement that was intended to be a final agreement between them. Ms. Walker drafted the Agreement, and Mr. Holman modified it. Either party could have asked that a lawyer review the document prior to signing, but only Ms. Walker received legal advice prior to signing. Mr. Holman confirmed in his testimony that he was under no pressure to sign the Agreement. There is no evidence that either party was under duress at the time that the Agreement was signed.

Should the Separation Agreement be Set Aside?

[68] Mr. Holman seeks to set aside the Separation Agreement. He therefore bears the onus of establishing that the circumstances in this case meet the criteria set out in s. 56(4) of the Family Law Act to permit this Agreement or a provision in the Agreement to be set aside. The three main considerations are:

a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

b) if a party did not understand the nature or consequences of the domestic contract; or

c) otherwise in accordance with the law of contract.

a) Did one of the parties fail to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made [s. 56(4)(a)]?

[69] The facts are clear that neither party disclosed the value of their pensions at the time that the Agreement was signed. However, Mr. Holman had alerted himself to the existence of Ms. Walker’s pension, and had made a conscious choice to not pursue her pension.

[70] Apart from the pension valuation, at the time that the Agreement was signed there is no evidence that Ms. Walker failed to disclose any assets. If anything, it was Mr. Holman who was not fully transparent regarding the disclosure of details of his income and other financial issues.

[71] I find that part (a) of the test under s. 56(4) does not apply.

b) Did one of the parties not understand the nature or consequences of the domestic contract [s. 56(4)(b)]?

[72] I am satisfied that at the time that the Agreement was signed, the parties shared an intention for Ms. Walker to purchase the matrimonial home from Mr. Holman for $50,000. Although neither party was aware at the time that the CRA had placed liens on the home which would have to be addressed before the title to the home could transfer, Mr. Holman testified that he was aware that he owed money to the CRA at the time that the Agreement was signed.

[73] There is no evidence before me that Mr. Holman did not understand the nature and consequences of the Agreement he signed. I find that part (b) of the test under s. 56 does not apply.

c) Are there other contractual factors supporting that the Agreement or a provision in the Agreement be set aside [s. 56(4)(c)]?

[74] The other grounds that can justify setting aside a domestic contract under this section include the following contractual concepts as set out by the Court of Appeal in Ward v. Ward, 2011 ONCA 178, 104 O.R. (3d) 401, at para. 21:

a) Unconscionability;

b) Undue influence;

c) Duress;

d) Uncertainty;

e) Mistake;

f) Misrepresentation

[75] If a party has successfully demonstrated that one or more of the factors that effect a contract’s validity applies, the court must then consider whether it is appropriate to exercise discretion in favour of setting aside the Agreement: Demchuk v. Demchuk (1986), 1 R.F.L. (3d) 176 (ON H.C.), at p.189-190.

[76] Mr. Holman argues that the Agreement should be set aside on the ground of mistake. He argues that due to the existence of the CRA liens, the Agreement seeking to transfer title from Mr. Holman to Ms. Walker was incapable of being fulfilled. As neither party was aware of the CRA liens at the time that the Agreement was made, Mr. Holman argues that it is an unenforceable contract based on mistake of fact.

[77] The fact that both parties were unaware of the CRA liens at the time that the Agreement was signed is not a sufficient reason to set aside the Separation Agreement.

[78] The evidence presented throughout the trial establishes that Mr. Holman was a financially careless business owner. He acknowledged that he often filed his taxes several years late. He was not proactive about addressing the CRA liens once they were discovered. He confirmed at trial that when he signed the Separation Agreement, he knew that the CRA debt was in his name, and would be his responsibility to pay under the Agreement.

[79] I find that the parties each had a clear understanding of the Agreement with respect to what was intended to happen with the matrimonial home at the time that the Agreement was signed. The existence of the CRA liens does not change the intention of the Agreement reached by the parties. I further find that this Agreement was entered into without undue pressure or duress experienced by either party.

[80] Mr. Holman has not met his onus of establishing that there was a mistake in the Agreement signed by the parties that justifies rescinding the Agreement under s.56(4)(c) of the Family Law Act. I acknowledge that the value of the home has increased since the Separation Agreement was signed, and accordingly, the $50,000 payment agreed to in the Separation Agreement no longer reflects an equal division of the net equity of the home. However, that fact is not a sufficient reason for the Agreement to be set aside. It was Mr. Holman’s delay in addressing the CRA liens that has contributed to the delay in transferring title to the home.

[81] It is indeed regrettable that the CRA debts were not addressed by Mr. Holman in a more proactive manner, which likely could have avoided additional interest and penalties that have now accrued with respect to this debt.

[82] I also note that the Separation Agreement specifically states that the parties are each responsible for debts in their name. The CRA debts are in Mr. Holman’s name. He has not provided sufficient evidence to establish that any portion of the CRA debt is a joint debt that must be shared by the parties under the terms of the Separation Agreement.

[83] The parties agree that in addition to the $50,000 purchase price, Ms. Walker is to reimburse Mr. Holman for $8,000 that he paid for property taxes after the date of separation, and $7,331.94 that Mr. Holman paid for repairs to the water tank and the furnace after the date of separation. The total Ms. Walker must pay to Mr. Holman is therefore $50,000 + $15,331.94 = $65,331.94.

Should the parenting-time provision in the Separation Agreement be modified?

[84] I accept Mr. Holman’s testimony that when he wrote the words joint legal “physical custody” regarding the parenting arrangements for R in the Separation Agreement, he believed that Ms. Walker was agreeing to share the parenting time of R with him on a 50/50 basis. I also note, however, that the Agreement itself specifies that R’s primary residence was to be with Ms. Walker, and that Mr. Holman did not obtain stable housing to permit overnight parenting-time with R until more than a year after the Agreement was signed. However, the parenting arrangements the parties intended when the Agreement was signed in 2018 are not determinative in this analysis. The primary consideration is what are the living arrangements that are in the best interests of R (Divorce Act, R.S.C., 1985, c.3(2nd Supp), ss. 16(1) and (3)).

[85] R is in the enviable position of having two parents who treasure her, support her, and have created loving homes for her. Although I was not provided with evidence of R’s views and preferences, the evidence before me is that R enjoys a strong and supportive relationship with both parents, and that both parents can provide her with a stable, safe, and loving home.

[86] Both parties are employed full-time, and have appropriate living arrangements for R. Mr. Holman testified that he now lives in a rental farmhouse where R has her own room. His home is located close to Ms. Walker’s home, and also close to R’s school.

[87] Mr. Holman also testified that he has now re-partnered, and that his new partner enjoys a healthy and supportive relationship with R. Ms. Walker did not provide any evidence to suggest any concerns with Mr. Holman’s new partner spending time with R.

[88] During the trial neither parent raised concerns about the other parent’s capability as a parent. Both parties regularly attend R’s sporting events, which means that R will still be able to see both parents throughout the week, no matter where she is sleeping at night. As well, R has a phone available to her, and communicates regularly with both parents.

[89] I acknowledge the inappropriate, aggressive, and sarcastic language that Mr. Holman used towards Ms. Walker in some of the text messages in evidence, as well as the evidence that the parties no longer speak to each other.

[90] Although these factors are concerning, they do not rise to the level to prevent R spending more time with her father if that is in her best interests considering all the evidence.

[91] I also reject Ms. Walker’s argument that Mr. Holman’s refusal to communicate with her regarding the recent renewal of the mortgage which resulted in a higher interest rate, is financial abuse, which can be described as family violence under s. 2(1)(g) of the Divorce Act. She argues that this is a factor that weighs in favour of not increasing R’s parenting time with her father. She argues that this circumstance has had a negative financial effect on R, and is not a child-centered approach. Ms. Walker also points to the fact that Mr. Holman has not contributed to R’s extra-curricular expenses in contravention of the order from Justice Chown as further evidence of financial abuse on the part of Mr. Holman.

[92] I agree with Ms. Walker that Mr. Holman’s behaviour regarding these issues does not demonstrate a child-focused approach. His decision not to co-operate with the mortgage renewal documents cost Ms. Walker additional money, which could have a negative impact on R.

[93] Mr. Holman did not offer an explanation as to why he did not co-operate with Ms. Walker regarding the mortgage renewal, nor as to why he has not provided payment to Ms. Walker for R’s extracurricular activities in contravention of Justice Chown’s order, other than to suggest that he has paid for some of her equipment. While irresponsible, in my view these two issues do not rise to the level where Mr. Holman’s behaviour could be characterized as being financially abusive, particularly when he has generally been paying child support in accordance with the order from Justice Chown.

[94] During the trial there were concerns raised by both parties regarding the tone and language used by the other in text exchanges. The parties must both avoid using rude, sarcastic, or disrespectful language when communicating with the other.

[95] Since the date of separation in 2015, R has lived primarily with Ms. Walker for the past nine years. The parenting schedule including overnights with Mr. Holman has been in place for over 4 ½ years. The parties agree that R is thriving. She is active in sports, has good friends, and is a good student.

[96] I accept the evidence of Ms. Walker and her sister, Tina Walker, that Ms. Walker supports and encourages R having regular and meaningful contact with Mr. Holman. Mr. Holman did not suggest otherwise.

[97] Mr. Holman’s request that R’s parenting time schedule be changed so that she spends more time with him than she has done for the last nine years, and less time with her mother, would represent a substantial change for her. R is a healthy, thriving child. Mr. Holman wants more time with R. He has not presented evidence in support of his contention that such a significant change will better meet her needs, or offer advantages to her such that it is in her best interests to make this order. The evidence does not demonstrate a significant change in R’s circumstances that justifies altering her well-established and predominantly successful parenting schedule.

[98] Neither party felt it was necessary to present me with a Voice of the Child report. In the absence of any evidence regarding R’s views and preferences, I draw the inference that the present arrangement aligns with R’s views and preferences, and meets her needs.

[99] Mr. Holman has therefore not proven that it is in the best interests of R to alter the current parenting schedule for the 2024-2025 school year.

[100] I note that R is presently in grade 8, and will be entering high school in the fall of 2025. Commencing high school may well be a developmental change which will signal a material change of circumstances. The parties are encouraged to engage with Peel Family Mediation Services or a mediator of their choice to review their parenting plan to coincide with the start of high school in 2025, with input from R as to her views and preferences.

[101] The current holiday and birthday schedule shall remain in place, subject to any further agreement reached by the parties. The parties may request to attend before me if there is any aspect of the current parenting arrangement that requires clarification.

Should the Separation Agreement be modified to address decision-making?

[102] The Separation Agreement does not contain specific language with respect to decision-making for R. The closest reference to decision-making appears in clauses 7(a) and (b). In particular, s. 7(a) includes the following sentence: “The parents will exert their best efforts to work co-operatively in future plans consistent with the best interests of the child and in amicably resolving such disputes that may arise.”

[103] There is a second s. 7(a) in the Agreement, which states:

The Husband and/or Wife has independent signing authority for education and non-emergent and emergent medical needs. Both parties agree to openly share information and share or provide copies, of all documents relevant to the child.

[104] The Agreement also discusses the parents each requiring the other’s consent to remove R out of the vicinity where they live, not including vacations, co-operative arrangements to obtain a passport for R, and agreement that neither parent will attempt to change R’s name without the other’s consent.

[105] At trial, Ms. Walker testified that she will continue to work co-operatively with Mr. Holman regarding decisions to be made for R and to put her needs first.

[106] With the exception of a disagreement over a supervisory app that Ms. Walker placed on R’s phone, the evidence at trial was that the parties generally agree when it comes to decision-making for R. They agree about her education and extra-curricular activities. There was no evidence given at trial about disagreements relating to religion.

[107] Ms. Walker asks that she be given sole decision-making authority for R. She points to the evidence of Mr. Holman’s sometimes inappropriate communication decisions such as sarcastic text messages and insults directed towards her, and suggests that the parties’ relationship has deteriorated to the point where Mr. Holman cannot communicate effectively with her to justify an order for joint decision-making responsibility.

[108] Mr. Holman asks that the parties be granted joint decision-making responsibility for R, and suggests that the parents use a parenting app to reduce conflict between them.

[109] Despite the parties’ demonstrated challenges communicating, they have successfully agreed upon the major decisions for R in terms of education and her involvement in extra-curricular activities. Although there is much room for improvement, the parties have historically demonstrated an ability to communicate to work together to make decisions that are in R’s best interests.

[110] I find that it is in R’s best interests for her parents to continue to share joint decision-making responsibility for her. The Separation Agreement shall accordingly be modified to contain a clause to clearly state that the parties shall have joint decision-making responsibility for R.

[111] Given the parties’ demonstrated difficulties with communication, by October 31, 2024 they are to sign up for, and commence using AppClose, or, if they both agree, another parenting app such as Our Family Wizard.

Should Mr. Holman pay Ms. Walker child support?

[112] The Separation Agreement contains a problematic clause regarding child support which suggests that Mr. Holman has no obligation to pay child support for R. Paragraph 9 of the Agreement states:

9. The Husband is not required to provide financial assistance for the maintenance of the child, but will upon mutual agreement

(i) share the costs of mutually agreed upon extra-curricular activities the child participates in, including equipment and additional costs

(ii) contribute to daily necessities required for the maintenance of the child

(iii) will contribute equally toward the costs of the post-secondary education of the child, which costs include, tuition, residence, supplies, equipment and other incidental expenses.

[113] Ms. Walker relies upon s. 56(1.1) of the Family Law Act, which permits me to order that child support is payable despite the fact that no provision for child support is included in the Agreement. S.56(1.1) states:

56 (1.1) In the determination of a matter respecting the support of a child, the court may disregard any provision of a domestic contract pertaining to the matter where the provision is unreasonable having regard to the Child Support Guidelines, as well as to any other provision relating to support of the child in the contract.

[114] Ms. Walker bears the onus of establishing that the lack of provision in the Agreement for the payment of child support is unreasonable in light of the Child Support Guidelines, and should be disregarded: Spencer v. Irvine (1999), 45 R.F.L. (4th) 434 (ON SC), at para. 6.

[115] As R resides with Mr. Holman less than 40% of the time, Ms. Walker argues that she is entitled to continue to receive child support payments from Mr. Holman.

[116] Mr. Holman is presently paying child support at the rate of $556 per month based on an imputed annual income of $60,000 as ordered by Justice Chown on September 5, 2021. Ms. Walker asks for a final order that Mr. Holman continue the support payments for R at this amount.

[117] Ms. Walker urges me to find that Mr. Holman’s current income is $60,000 per year. Mr. Holman testified that he earns $32 per hour at his present job, and works on average 37.5 hours per week. When multiplied over 50 weeks allowing two weeks for vacation, this rate of pay results in a gross annual income of $60,000. Mr. Holman did not make submissions regarding altering the child support he is paying in the event that the parenting schedule remains the same. I also note that in his Financial Statement sworn April 4, 2024 Mr. Holman lists his income as $60,000.

[118] The provision in clause 9 of the Separation Agreement which removes Mr. Holman’s obligation to pay child support is not reasonable. Child support is the right of the child, which cannot be removed by contract. Mr. Holman shall continue paying child support at the rate of $556 per month based on a gross annual income of $60,000, as R is with him less than 40% of the time under the parenting schedule.

[119] Both parties shall exchange income information every June.

Does Mr. Holman owe Ms. Walker retroactive child support?

[120] Ms. Walker seeks child support payments retroactive to the date of separation on September 1, 2015 to October 1, 2021 when Mr. Holman began making child support payments. Ms. Walker submits that Mr. Holman was not transparent with his finances, and asks that Mr. Holman’s income be imputed to $60,000 per year for this entire period.

[121] Mr. Holman relies on D.B.S. v. S.R.G., 2006 SCC 37, [2006] 2 S.C.R. 231, to argue that there must be good reason to go beyond the three years prior to the date the Application was filed in 2020 to justify retroactive child support earlier than 2017.

[122] Mr. Holman also argues that Ms. Walker has not established entitlement to a claim for retroactive child support. He argues that his income fluctuated significantly between 2015 and now, and that I should rely on s.17 of the Child Support Guidelines to average the income that he earned.

[123] When determining the quantum of retroactive child support owed, Mr. Holman also asks that I consider that Ms. Walker had the benefit of the home throughout the time with carrying costs equal to or below fair market rent, that Ms. Walker had a significant spousal support obligation to the Respondent which would have far exceeded any child support that she was not required to pay, that Mr. Holman had limited funds, and that there was conflicting evidence as to how much time R spent at each parent’s home from 2020 to 2021 during the COVID-19 pandemic.

[124] The decision in D.B.S. deals with varying a final order. The order for child support currently in place is a temporary order. There is no limitation period for the payment of child support. Mr. Holman did not pay child support from September 1, 2015 to October 1, 2021. Mr. Holman testified that around the time of the date of separation he had stopped making payments for the mortgage and home insurance. He therefore stopped contributing to R’s living expenses as of that date. I repeat again that child support is the right of the child. In these circumstances it is therefore appropriate to order Mr. Holman to pay child support retroactive to the date of separation.

[125] The fact that the carrying costs for the home may have been less than the fair market rental costs for the home does not change the fact that Mr. Holman has owed Ms. Walker child support payments since 2015. The Separation Agreement does not address payment of rental fees for the home or occupation rent since the parties intended for the title of the home to transfer. It was the failure of Mr. Holman’s business that caused the CRA to put liens on the home, and the failure of Mr. Holman to efficiently deal with CRA regarding the liens which has delayed transferring title to the home. Ms. Walker was not responsible for either situation.

[126] Ms. Walker does not provide sufficient evidence for me to impute income based on a gross salary of Mr. Holman of $60,000 retroactive to 2015. I am not persuaded that Mr. Holman was intentionally hiding income in the years when he ran his own business. Mr. Holman admits that his record-keeping and business management abilities are deficient, and that the income levels reflected on his tax returns during the time that he was self-employed may not be accurate. However, there was no evidence before me to suggest that Mr. Holman has lived an extravagant lifestyle. I accept his evidence that he did not secure stable housing accommodations until the fall of 2019, when he was able to begin renting the home where he currently lives. He does not own his home, and drives an old truck that has almost 500,000 km on it. There was no evidence before me of expensive trips taken by Mr. Holman, or any other patterns of lavish spending.

[127] The retroactive child support payments owed by Mr. Holman shall be based on the income he earned as reported on his tax returns in each of the years between 2015 and 2020. Mr. Holman’s income in 2015 was $104,168. Based on that income, he owes child support of $943.38 x 4 months = $3,773.52 from September to December of 2015.

[128] Mr. Holman’s income in 2016 is a negative income. He is not required to pay child support for 2016.

[129] Mr. Holman’s income in 2017 was $19,890, which results in monthly child support payments of $160.41 x 12 months = $1,924.92 owed for 2017.

[130] Mr. Holman’s income in 2018 was $22,620, which results in monthly child support payments of $180.84 x 12 months = $2,170.08 owed for 2018.

[131] Mr. Holman’s income in 2019 is $17,250, which results in monthly child support payments of $122.80 x 12 months = $1,473.60 owed for 2019.

[132] Mr. Holman’s income in 2020 was also $17,250, which results in child support payments of $122.80 x 12 months = $1,473.60 owed for 2020.

[133] Justice Chown’s September 5, 2021 order imputed income to Mr. Holman at $60,000 per year, despite the fact that his tax return eventually reflected an income of $22,358 for 2021. Counsel advises me that Mr. Holman consented to the $60,000 imputation of income. Accordingly, pursuant to s.19 of the Ontario Child Support Guidelines, Mr. Holman’s income for 2021 is imputed to be $60,000, which results in a child support payment of $556 per month x 9 months = $5,004, until October 2021 when Mr. Holman began making child support payments.

[134] The total retroactive child support payment owed by Mr. Holman to Ms. Walker retroactive the date of separation is $3,773.52 + $1,924.92 + $2,170.08 + $1,473.60 + $1,473.60 + $5,004 = $15,819.72.

What provision does the Agreement make for payment of s.7 expenses?

[135] Clause 9 of the Agreement appears to be in the nature of a s. 7 clause:

9. The Husband is not required to provide financial assistance for the maintenance of the child, but will upon mutual agreement,

(i) share the costs of mutually agreed upon extra-curricular activities the child participates in, including equipment and additional costs

(ii) contribute to daily necessities required for the maintenance of the child

(iii) will contribute equally toward the costs of the post-secondary education of the child, which costs include tuition, residence, supplies, equipment, and other incidental expenses.

[136] Mr. Holman takes the position that parts (i) and (ii) of clause 9 are contradictory and confusing, as part 9 of the Agreement states that Mr. Holman is not required to provide financial assistance for R, but part (ii) requires Mr. Holman to contribute to “daily necessities” for R.

[137] Mr. Holman also argues that clause 9(iii) is unfair to him, as it appears to suggest that the parties will share equally in the cost of items for R such as extra-curricular activities and post-secondary expenses, rather than sharing these expenses proportionally as required under s. 7.

[138] Part (i) of clause 9 speaks of the parties “sharing” expenses, while part (iii) states that the parties will “contribute equally” to certain s.7 expenses related to R’s post-secondary education. The Child Support Guidelines specify in s.7(2) that the guiding principle is that the expense is shared by the parents in proportion to their incomes.

[139] The parties agree that Ms. Walker’s Line 150(00) income for 2023 was $100,324. The term of the current order from Justice Chown will therefore remain in place that Ms. Walker will pay 62% of all s.7 expenses, and Mr. Holman will pay 38% of all s.7 expenses. If one of the parties intends to seek reimbursement from the other for any s. 7 expenses going forward, the party must obtain consent from the other prior to incurring the expense.

[140] The parties agree that Ms. Walker has spent $20,002.92 on childcare and other s.7 expenses since the date of separation. Mr. Holman has not made any payments towards these expenses. Ms. Walker testified that for the most recent hockey season, Mr. Holman stated to her that he did not want to contribute towards registration costs because he had purchased equipment for R. Ms. Walker noted that Mr. Holman did not give her a receipt for this purchase. She did, however, acknowledge that Mr. Holman has paid equipment costs for R from time to time, although she testified that there was no consistency or predictability to the payments. There were no receipts before me as to the amounts that Mr. Holman has paid in the past for R’s extra-curricular activities.

[141] Mr. Holman shall reimburse Ms. Walker for 38% of the $20,000.92 that she has previously paid towards R’s s.7 expenses, for a total payment owed by Mr. Holman to Ms. Walker of $7,601.11 as of the date of trial.

[142] Any post-secondary expenses incurred on behalf of R shall be shared equally as per clause 9(iii) of the Agreement. Although Mr. Holman’s income is lower than Ms. Walker’s income, the language in this clause is clear that the parties agreed to share expenses post-secondary expenses. The law allows parties to enter into unfavourable domestic contracts, as seen in Gesihardt v. Ahmed, 2017 ONSC 5513, 1 R.F.L. (8th) 152, at para. 136, provided that they understand the terms of the agreement. The evidence before me is that Mr. Holman fully understood the terms of the Agreement he signed.

[143] Mr. Holman could have obtained legal advice before signing this Agreement, but chose not to do so. I do not find that the inequality in income between the parties as it relates to equally sharing post-secondary expense for R rises to the level of unconscionability sufficient to justify the court’s intervention to change the terms of the Agreement.

Does Ms. Walker owe Mr. Holman spousal support?

[144] In the Separation Agreement the parties specifically release each other from all spousal support claims. Mr. Holman has not argued that he is entitled to spousal support on a compensatory or needs basis. I have found that Mr. Holman understood what he was signing, and that the Agreement is valid. The Agreement includes the specific release of his spousal support claim. The Separation Agreement will not be modified to include a provision for retroactive or ongoing spousal support owed by Ms. Walker.

Does Ms. Walker owe Mr. Holman occupation rent?

[145] I have already found that the Separation Agreement is valid. It contains no provision for occupation rent to be paid by Ms. Walker to Mr. Holman. In addition, in the Agreement the parties released each other from all spousal support claims. The Separation Agreement will not be modified to include a retroactive claim for occupation rent to be paid by Ms. Walker to Mr. Holman.

Does Ms. Walker owe Mr. Holman half of the value of her pension as of the date of separation?

[146] As with the analysis regarding spousal support, in the Agreement both parties release each other from entitlement to each other’s pensions. While this arrangement was financially not in Mr. Holman’s best interests given his substantially smaller pension, he knowingly agreed to this term in the Separation Agreement. In addition, he testified that he didn’t want any part of Ms. Walker’s pension as he didn’t want to remain connection to her. The Separation Agreement will not be modified to include a provision for Mr. Holman to receive an equalization payment with respect to Ms. Walker’s pension.

Conclusion

[147] With the exception of the provisions regarding child support, which I have found to be unenforceable, the July 22, 2018 Separation Agreement signed by the parties is valid. Ms. Walker shall pay Mr. Holman $50,000 for the transfer of title, plus $4,664.38 in prejudgment interest.

[148] Ms. Walker will also pay Mr. Holman an additional $15,331.94 to reimburse him for property taxes and repairs paid by him since the date of separation.

[149] Ms. Walker will therefore pay Mr. Holman $69,994.27 to transfer the matrimonial home into her name. Ms. Walker’s confidential agreement with the CRA regarding the liens on the matrimonial home is activated with this decision.

[150] The Separation Agreement shall be modified as follows:

a) Mr. Holman shall pay ongoing child support at the rate of $556 per month;

b) The parties shall have joint decision-making responsibilities for R;

c) Mr. Holman shall pay 38% of R’s s. 7 expenses and Ms. Walker shall pay 62% of R’s s.7 expenses.

d) The parties shall share R’s post-secondary s.7 expenses on an equal basis.

e) Mr. Holman shall pay Ms. Walker $15,819.72 for retroactive child support payments.

f) Mr. Holman shall pay Ms. Walker $7,601.11 for past s. 7 expenses incurred for R as of the date of trial. Going forward, the parties each shall secure consent from the other prior to incurring s.7 expenses. If a party fails to reply to a request for contribution towards a s.7 expense within 7 days, the non-responding party will be deemed to have consented to contribute to the expense.

[151] The parties may take out a consent order reflecting the terms of this Judgment, which shall be filed with FRO.

[152] Either party may proceed to file for a divorce on an uncontested basis.

Costs

[153] If the parties are unable to agree upon costs, the Applicant shall serve and file her cost submissions by October 28, 2024. The Respondent shall serve and file his cost submissions by November 14, 2024. No reply is to be filed unless requested by me. Costs submissions shall be no longer than three pages, double spaced, not including Bills of Costs, and Offers to Settle, and emailed to my judicial assistant at Bihara.wijewardena@ontario.ca. If I do not receive cost submissions within these timeframes, I make no order as to costs.

Wilkinson J. Released: October 9, 2024