Date: 20020826
Docket: 1205-001972
IN THE SUPREME COURT OF NOVA SCOTIA
Citation: L.G. C. v. L.M. C., 2002 NSSC 201
Between:
L. G. C.
Petitioner
v.
L. M. C.
Respondent
D E C I S I O N
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Editorial Notice
Identifying information has been removed from this electronic version of the judgment. |
Revised Decision: The text of the decision has been corrected according to the erratum released December 4, 2002.
Heard Before: The Honourable Justice Hilroy S. Nathanson
Place Heard: Pictou, Nova Scotia
Date Heard: April 30, 2002
Decision: August 26, 2002
Counsel: Milton J. Veniot, Q.C., on behalf of the Petitioner
Roseanne M. Skoke, Esq., on behalf of the Respondent
NATHANSON, J.:
[1] In this divorce action, both parties have agreed upon all facts and issues except with respect to the following:
(1) whether their daughter is a “child of the marriage” as defined in s.2(1) of the Divorce Act and, if so, the quantum and duration of child support required to be paid by the husband;
(2) the division and allocation of assets as between the husband and the wife; and
(3) whether the husband is required to pay spousal support and, if so, the quantum and duration payable.
[2] The parties were married in 1973 and ceased cohabitation on February 20, 2001. They have two children, namely: N. A., born in 1978, and L., born in 1982.
[3] The husband’s petition for divorce alleges that neither of the children is a child of the marriage within the meaning of the Divorce Act. However, the wife’s answer, while it does not deny the allegation, contains a claim for child support. It became clear at trial that the claim was with respect to the daughter, L., who continues to reside with the mother and works part time.
[4] The husband was born in 1951. He has a grade eight education. He has been a self-employed painter and wallpaperer for 25 years. During the marriage he worked hard, performed household chores, kept the home in repair and, in his wife’s opinion, was a good father. He now resides in an apartment with his girlfriend, who shares the expenses of their household.
[5] The wife was born in 1952. She has a high school education plus a secretarial course. She has been employed by the Royal Bank of Canada for 31 years and currently holds the position of personal loans officer at a branch in the nearby town of * . She had the primary care of the children and the home, and was the family money manager. The husband implies that she was a good parent but was too indulgent of the children. She continues to reside in the matrimonial home with her daughter, L.. Her health is good, but she has experienced some emotional problems subsequent to separation. She has the only health plan for the family. She is concerned that her bank branch may close and, if it does, that she will not be entitled to a retirement or severance package.
[6] Each of the parties filed a statement of property. The contents of the two statements are not in complete agreement. However, the submissions of counsel at the end of trial revealed that the parties were in substantial agreement as to the itemization of business and matrimonial assets and the values of their various assets and debts. There was also substantial agreement as to how most of the assets and debts should be divided between them, but there was some disagreement as to the allocation of a few specific assets.
[7] Each of the parties also filed a statement of financial information, disclosing current income and expenses. These statements cannot be accepted at face value. The husband testified that the figures set out in his statement had been adjusted to take into account the contribution of his girlfriend. There is also evidence as to some undisclosed income. The wife admitted that some of her figures were estimates, and also that her statement included expenditures for her son, who no longer resides with her, for her daughter and for her daughter’s boyfriend (who does not contribute to expenses).
ISSUE 1: WHETHER THEIR DAUGHTER IS A “CHILD OF THE MARRIAGE” AS DEFINED IN S. 2(1) OF THE DIVORCE ACT AND, IF SO, THE QUANTUM AND DURATION OF CHILD SUPPORT REQUIRED TO BE PAID BY THE HUSBAND
[8] L. is 19 years old. Her mother testified that she was very nervous and had a school-based phobia since grade seven, at which time she stopped attending school. Her mother also testified that L. had been seen by a family doctor and other professionals, but no expert evidence was presented to indicate her medical or psychological condition. Her father clearly thinks that she was unwilling rather than unable to go to school. She works part time as a clerk at * where she earns $6.25 an hour for 66 hours bi-weekly. She has an annual gross income of approximately $10,725. She resides with her mother but does not pay board; she does pay occasional small amounts to her mother. Her mother pays for her food, car insurance, dental care, eye glasses, occasional clothing, hairdos and gifts. Her relationship with her father has been poor but has improved in the past few months. Her father does not support her but says that he gives her occasional small amounts. She has few friends and no best girlfriend. She socializes such as by going out to a pub upon occasion. Her boyfriend sometimes lives with her at home, but he does not contribute to the expense of his living there. She visits her boyfriend at college, and goes to Halifax with a friend upon occasion.
[9] I find that she is of the age of majority and that she is partially self-supporting and, therefore, still under the charge of her parents. I am inclined to believe that she may have an illness or disability or other cause that keeps her dependent. However, the evidence was incomplete and unsatisfactory; the absence of expert evidence as to any medical or psychological condition was particularly bothersome. It was submitted that the respondent did not fulfill the burden of proof on this issue. I am not persuaded that the burden of proof rested upon the wife or, if it did, that she has not carried it. In any event, this is too important an issue upon which to base a decision on the narrow question of the burden of proof.
[10] After considering the evidence, such as it is, I have come to the conclusion that L. is still a “child of the marriage” and therefore the husband has a continuing legal obligation to pay child support for her. Because she is working and partially able to support herself, the Guideline figures are not particularly helpful and would appear to be excessive. I set the amount at $100 per month. The husband shall pay that amount to the wife for the benefit of their daughter on the same dates as payments of periodic spousal support.
[11] Because she is already beyond the age of majority, there is a question as to how long her father ought to be required to continue payments. That depends upon the nature of her condition. If she is indeed suffering from a medical or psychological condition which has prevented her from attending school and, consequently, of being trained or educated for work, in my view it would be appropriate that the payments continue indefinitely into the future.
[12] On the other hand, if L. is simply unwilling to attend school or be trained, the payments should terminate after a relatively brief period of time. I would consider one year to be an appropriate period. Her parents, particularly her mother, shall forthwith arrange for all appropriate or necessary medical, psychiatric and psychological examinations to be conducted and for the reports of the experts to be filed in court without delay. If any of these reports disclose the existence of a medical, psychiatric or psychological problem, an application should be made to the appropriate court for a hearing for directions as to the quantum and duration of payments in the future. If the reports are not completed and filed, and if notice of an application is not given, within a period of one year from the date of this decision, her father’s duty to make payments for her support will automatically terminate at the end of the one-year period.
ISSUE 2: THE DIVISION AND ALLOCATION OF ASSETS AS BETWEEN THE HUSBAND AND THE WIFE
[13] The parties have agreed upon the categorization of three items as business assets, and their values:
(1) 2001 * truck valued at $32,000, subject to a loan to the Royal Bank of Canada in the amount of $30,000, for a net value of $2,000;
(2) business account CIBC No. 2701014 - $4,000;
(3) tools valued at $615.41.
The wife believes that the tools are worth approximately $1,200. The husband accepts that figure as their original cost, but says that $615.41 is their depreciated value. In the absence of additional evidence, I accept the husband’s valuation.
[14] The wife claims a share of the husband’s business or its assets. He acknowledges that she helped by taking business phone calls at home, mailing invoices, picking up mail, making deposits and paying bills. He says that her contribution amounted to a couple of hours over a year.
[15] Her counsel in summation stated that she was not making a claim with respect to the $4,000 in the CIBC.
[16] In view of what appears to have been a very minor contribution to a small one-man enterprise having net assets of low value, the Court declines to award her a share of the business or its assets. However, the husband is directed to protect her from liability with respect to her guarantee of the loan on his truck.
[17] The parties have also agreed upon the following items being categorized as matrimonial assets, and their values:
(1) matrimonial home at *, * - $106,000.00
(joint ownership)
(2) contents of home - 6,000.00
(3) 1999 [car] - $23,000.00
Minus the balance of a loan owing to GMAC in the
amount of $16,598.00 for a net value of - 6,402.00
(4) 1984 * motor cycle - 1,800.00
This item was sold by the husband for this price.
(5) wife’s Royal Bank of Canada pension - 42,405.10
(6) wife’s Royal Bank of Canada RRSP - 8,435.83
(7) husband’s Royal Bank RRSP - 74,900.00
(8) joint bank account - 1,250.00
(9) Royal Employee Savings and Shareholders Plan -102,600.00
(10) husband’s London Life policy CSV - 13,019.82
(11) wife’s London Life policy CSV - 3,200.00
[18] The total value of these matrimonial assets, net of associated debt, amounts to $367,762.75.
[19] There is also agreement between the parties that there is $6,000 owing with respect to a line of credit at the Royal Bank. It is not clear whether each party is liable for one-half or whether both are jointly liable for the total. The wife is willing to pay it all.
[20] The husband asserts that the wife has not disclosed that she has a safety deposit box which contains cash, old currency and mint sets. The wife minimizes this assertion by describing the contents of the box as “some old bills” which are “of little value”. In the absence of more specific evidence, I accept the wife’s valuation.
[21] Section 13 of the Matrimonial Property Act requires that the division between husband and wife should be an equal division unless such would be unfair or unconscionable. I find no circumstances or behaviour which ought to be characterized in that manner. Both parties worked full time, contributed approximately equally to the family’s finances, and bore the burden and responsibility of household duties and child rearing in a roughly equal manner. Neither of them brought property or other assets into the marriage; all of their assets accumulated during the period of their married life. In the circumstances, I hold that the matrimonial assets of the husband and wife should be divided equally between them.
[22] Therefore, each is entitled to 50% of $367,762 = $183,881. The value of his assets (not counting any interest in the matrimonial home) is $93,919. She is required to pay him a balancing figure of $89,962 which amount, after deducting $3,000 representing his share of the indebtedness which she is assuming and will pay, is reduced to $86,962.
[23] How is this amount to be paid? It is desirable that the matrimonial home be sold. Less expensive and burdensome accommodation can and should be acquired by purchase or rental for use by her and her daughter. By using some of the proceeds of sale to pay the balancing figure, she will decrease her need to look to savings and pension accounts for the remainder; this is in her long-term best interests. She shall forthwith list the matrimonial home for sale and take every step necessary in a timely manner to ensure that it is sold. In order to ensure that both parties bear an equal burden of the expenses of sale, the net proceeds of sale shall be divided equally between them.
[24] If the net proceeds of sale are $106,000 so that his one-half share is $53,000, she must pay him a net balancing figure of $33,962. If, however, the net proceeds of sale and his one-half share are more or less than those figures, the amount of the net balancing figure will be adjusted accordingly.
[25] I will leave it to the wife to decide which of the assets in her name she wishes to use as the source of funds to pay the net balancing figure. That amount, subject to what is set out hereinafter, shall be paid to the husband within 30 days after the date of closing of the sale of the matrimonial home. If access to any of her assets necessitates payment of a tax or penalty, one-half of the amount thereof shall be attributed to, and go to reduce, the amount of the net balancing figure.
ISSUE 3: WHETHER THE HUSBAND IS REQUIRED TO PAY SPOUSAL SUPPORT AND, IF SO, THE QUANTUM AND DURATION PAYABLE
[26] The statement of financial information which the husband has filed discloses 2001 income of $2,649.67 per month which totals $31,796 per year. Income tax returns, notices of assessment and notices of reassessment filed disclose his total income (after deducting business expenses) for each of several prior years, as follows:
1997 $25,026.00
1998 $25,378.00
1999 $28,663.00
2000 $27,107.00
[27] His statement of financial information also discloses personal expenses of $2,288.89 per month, for a monthly surplus of $360.78. It should be noted that his expenses include a contribution to RRSP savings of $300 monthly; savings cannot be considered to be necessary living expenses. I do not overlook the fact that he has not paid any spousal support or child support to date, and his listing of monthly expenses does not include these items.
[28] It might also be noted that his girlfriend, who pays part of their monthly household expenses, had a net income in 2001 of $8,387.
[29] It is submitted on behalf of the wife that the husband has two undisclosed benefits. First, being self-employed, his ability to deduct some expenses allows him flexibility, suggesting possibly that some personal expenses are paid as business expenses or that business assets can also be used for personal purposes. Second, the wife alleges that some of his business income is not reported for income tax purposes. The actual amount is not known. The husband testified that he now reports all income; that amounts to an admission of the truth of the allegation.
[30] All of the foregoing factors will be taken into consideration in setting the amount of the husband’s income.
[31] The wife is paid a base salary plus an annual bonus. The statement of financial information which she has filed discloses 2001 income of $2,410 per month which totals $28,928 per year. However, her income tax return for the same year states her total income to have been $35,555. Income tax returns and notices of assessment on file disclose that her total income for each of several prior years was:
1996 $25,828.00
1998 $28,465.00
1999 $28,829.00
2000 $33,137.00
[32] Her statement of financial information also discloses personal expenses of $4,688.54 per month, for a monthly deficit of $2,278.54. Her expense figure is not credible; I cannot believe that she is going into debt by some $2,300 every month. Cross-examination cast doubt on amounts claimed spent for food, heat, electricity, clothing, telephone, gas, license, insurance, hair grooming, gifts, allowances, drugs, dental, glasses, holidays and entertainment. She admitted some estimating, but stated that she had relied on her written journal and receipts for accurate figures. She also acknowledged that her figures included some expenditures for her son, who does not reside with her, and for her daughter and her daughter’s boyfriend. She stated that it was impossible to be accurate. In light of all this, and in the absence of accurate information, I would notionally decrease her stated expenses by $1,000 per month.
[33] I set the husband’s income at $32,000 per year and his expenses at $21,456 per year for an annual surplus of $10,544.
[34] I set the wife’s income at $35,500 per year and her expenses at $44,256 per year, for an annual deficit of $8,756 per year.
[35] It may be expected that the wife’s expenses will decrease when the matrimonial home is sold and after some debts are paid off. It is also expected that the husband’s expenses will increase during the period in which he is making child support payments, and decrease as debts are paid. He can afford to pay. After considering the factors set out in s. 15.2(4) of the Divorce Act, and with the objectives enumerated in s-s. (6) in mind, this Court directs that he will pay to the wife the amount of $500 per month, which equals $6,000 per year. Such payments will commence on the 15th day of the month after the date of this decision and will continue on the 15th day of each and every month thereafter until one year after the date of sale of the matrimonial home - at which time the financial situation of the parties should be clearer - when the amount of this award ought to be reviewed summarily. If these payments and consequential changes are insufficient to wipe out her deficit, she must change her lifestyle and will have to make do. Also, it would not be unreasonable of her to expect the daughter to contribute to their household expenses.
[36] In addition to these periodic payments, the wife is also entitled to receive lump-sum support from the husband. The parties separated on February 20, 2001. Since that time the husband has not paid support to the wife or to L., nor contributed to the expenses of maintaining the matrimonial home. Since L. continues to reside with her mother and is able only to partially support herself, the wife bears the major responsibility for her support. This will likely continue even after the matrimonial home is sold. At the same time, the husband has a girlfriend upon whom to lean for moral support and some financial contribution to a common household. I do not believe that the wife is going into debt to the extent that she testified, but I have concluded that she must have an increasingly urgent need for financial help.
[37] In accordance with s. 15.2(1) of the Divorce Act, this Court thinks it reasonable that the husband pay to the wife a lump sum for spousal support to date in the amount of $13,000. If the wife prefers, she may require the husband, in lieu of payment, to reduce the amount which she is required to pay him by way of a net balancing figure by the same amount.
DISPOSITION
[38] The divorce is granted. A consequential divorce judgment and an appropriate corollary relief judgment, incorporating the findings of the Court herein, shall issue.
[39] The wife’s application for change of name is granted.
[40] Should it be necessary to the process of selling the matrimonial home, either party may apply summarily for any incidental directions. If any minor detail has been overlooked, the matter can be dealt with when the judgments are taken out.
[41] Each party will bear his or her own costs of the action.
J.