Date: 20010611
Docket: S.H. No.. 1201-51768
IN THE SUPREME COURT OF NOVA SCOTIA
[Cite as: O’Regan v. O’Regan, 2001 NSSC 77 ]
BETWEEN:
PATRICK AUGUSTINE O’REGAN
PETITIONER
- and -
EVA ROSE O’REGAN
RESPONDENT
D E C I S I O N
HEARD BEFORE: The Honourable Justice Walter R. E. Goodfellow in the Supreme Court of Nova Scotia on June 1st and June 7th, 2001
DECISION: June 7th, 2001 (Orally)
WRITTEN RELEASE
OF ORAL: June 11th, 2001
COUNSEL: R. Ritchie Wheeler, Solicitor for the Petitioner
John D. Filliter, Q.C. , Solicitor for the Respondent
GOODFELLOW, J.: (Orally)
BACKGROUND
[1] Patrick Augustine O’Regan, now 43, and Eva Rose O’Regan, now 40, were married October the 28th, 1983 and separated December the 29th, 1995. Their marriage was blessed with two children, Lydia Anne O’Regan, born September the 26th, 1986, now 14 and Patrick Shane O’Regan, born August the 2nd, 1991, now 9.
DIVORCE
[2] I find no possibility of reconciliation and that all the jurisdictional requirements of the Divorce Act of Canada have been met. There has been a permanent breakdown of this marriage by reason of the parties having lived separate and apart for a period in excess of one year and a Divorce Judgment on the Petition and Counter-Petition will issue.
CHILDREN - CUSTODY
[3] The parties have been able to function well as parents post separation and now enjoy a clear joint custody regime in which the children spend approximately one-half of their time with each parent. The Corollary Relief Judgment will contain a provision providing for joint custody of their children and any additional terms that the parents wish.
ISSUES
1. Did the parties conclude a Separation Agreement?
2. Is Mrs. O’Regan entitled to Spousal Support?
3. Child Support determinations.
4. Matrimonial Property Act issues.
LIFE INSURANCE/MEDICAL PLAN
[4] In the course of argument, it became clear that both parties have life insurance. It appears that Mr. O’Regan has life insurance through employment and Mrs. O’Regan through contract. Mr. O’Regan has medical health coverage for the children through his employment and the Corollary Relief Judgment should recite continuation of such, so long as it is available to him through existing or alternate employment. Mrs. O’Regan indicates that one of the children may be covered through her common-law spouse’s program, however, I have no authority to order its continuation. The majority of existing life insurance, if not all of it, should continue for the children so long as there is a child of the marriage, as defined in the Divorce Act of Canada. If the parties are unable to finalize the terms of life insurance protection for their children, then I will hear further representations and impose the terms.
ISSUE NUMBER ONE
1. Did the parties conclude a Separation Agreement?
[5] The evidence establishes that extensive negotiations took place between their respective solicitors and this led to a number, at least 4, draft Separation Agreements. A draft Separation Agreement was prepared by Mrs. O’Regan’s previous solicitor in July, 1998 and forwarded to Mr. O’Regan’s solicitor. Mrs. O’Regan’s solicitor in forwarding it referred to a previous draft and outlined a number of changes. It was sent unsigned by Mrs. O’Regan and at no time did she execute any of the drafts. All drafts were forwarded unsigned by Mrs. O’Regan’s solicitor.
[6] Mr. O’Regan’s solicitor returned the July, 1998 draft deleting a clause that addressed the parties desire to split the child tax benefit of marriage equivalent, as apparently Mr. O’Regan concluded that this was not permitted by Revenue Canada. This particular draft was signed by Mr. O’Regan and signed by his solicitor with respect to the providing of independent advice but it, along with all other drafts, were never executed by Mrs. O’Regan or her solicitor.
[7] Mrs. O’Regan’s solicitor sent a further draft April, 1999. The letter referenced changes and referenced that pursuant “to the draft agreement” (my emphasis), child care was calculated. The letter concluded, “I understand that both parties are now anxious to have the matter finalized”.
[8] Mrs. O’Regan did execute and deliver a Quit Claim Deed to the matrimonial home to Mr. O’Regan and the parties conducted themselves substantially along the lines of the provisions of the various draft agreements. It is of interest that the Deed was prepared by Mr. O’Regan’s solicitor and provided to Mrs. O’Regan who executed it in the presence of her previous solicitor but the delivery of the Deed made no reference to being in accordance with or pursuant to any agreement.
[9] One would have expected some type of indication, particularly in correspondence between the solicitors, referencing that they had reached a final agreement and yet nothing has been presented to the Court. Mr. O’Regan’s solicitor takes the view that the only changes were with respect to the changing circumstances as relates to the children and while that is accurate, the draft Separation Agreements dealt comprehensively with a number of issues and there is nothing to indicate that they were severable and concluded in isolation to the other issues.
[10] I have reviewed the case law and in particular, Chapman v. Chapman (1997), 155 N.S.R. (2d) 18 and the authorities cited therein. The onus is on the party alleging an agreement has been finalized and Mr. O’Regan falls short of establishing such on a balance of probabilities. I conclude that the parties came very close but did not finalize agreement on the issues encompassed by the various unexecuted draft agreements. I make it clear that it was not necessary to have an agreement executed to find agreement has been achieved. Separate and apart from the failure to execute an agreement, the threshold required of Mr. O’Regan has not been met.
ISSUE NUMBER TWO
2. Is Mrs. O’Regan entitled to Spousal Support?
[11] A claim for spousal support was included primarily to make certain that all possible jurisdictional opportunities existed to provide relief to Mrs. O’Regan from what she advances are the economic disadvantages that flow to her from the breakdown of their marriage.
[12] The determination of spousal entitlement/termination is a matter of statutory interpretation. I adopt my comments in that regard in Bray-Long v. Long (2000), 181 N.S.R. 327; 560 A.P.R. 327 (S.C.); (2000), 3 R.F.L. 5th 341. All the circumstances giving that word its broadest meaning which encompasses the statutory directions must be weighed carefully and the “circumstances” for consideration in this case are as follows:
(a) The parties did not cohabit prior to their marriage and their period of cohabitation is approximately 12 years;
(b) Mrs. O’Regan is now 40 years of age and was 35 years of age at the time of separation;
(c) Mrs. O’Regan completed high school and a Certified Nursing Assistant’s Course. She has held a number of jobs and presently works for a dentist. Mr. O’Regan has a BSc. and a year of Business oriented courses. He works as a Research Assistant at Dalhousie University;
(d) Mrs. O’Regan was employed throughout the period of cohabitation with the exception of two six month stints for maternity leave. Mr. O’Regan had his employment terminated for a period of a year from August, 1993 to August, 1994 and again for a further period of a year extending post-separation until approximately September, 1996. Throughout these periods during the cohabitation portion, he received Employment benefits;
(e) Both parties were supportive of each other with respect to employment/career pursuits during their cohabitation, however, neither made any contribution nor sacrifice with respect to their respective employment/career pursuits.
(f) There is some disagreement as to the extent each party played in the household but overall, it is acknowledged that both parties made substantial contributions to the household and to parenting. I conclude on a balance of probabilities for approximately nine months immediately post-separation, Mr. O’Regan was substantially responsible for the parenting of the children. When Mr. O’Regan was unemployed, he assumed close to total responsibility for the maintenance of the home and the day to day parenting of the children;
(g) Mrs. O’Regan is residing with Nigel Barnett, a school teacher, whose income is approximately $60,000.00 per annum. This is entirely her own personal decision and the mere fact of cohabitation with her common-law spouse does not enter into the determination of spousal support, s.15.25 of the Divorce Act. It is noted, however, that their cohabitation has been of such duration that they probably have established at least the entitlement to claim against each other for spousal maintenance in the event of a separation. The issue of Mrs. O’Regan’s common-law relationship is raised in the context of the difference in the income available between the two households.
Summary
[13] I reach the clear conclusion after weighing of the total “circumstances” that Mrs. O’Regan has failed to establish on a balance of probabilities an entitlement to spousal support. See also Loughran v. Loughran (2000) 185 N.S.R. (2d) 143. The Corollary Relief Judgment will contain a provision that neither spouse shall now or in the future be responsible to the other for any spousal maintenance.
ISSUE NUMBER THREE
3. Child Support determinations.
[14] Initially, when the parties separated, Mrs. O’Regan asked her husband to leave the matrimonial home and when he declined, she moved out and had a series of residences for some period before commencing cohabitation with Mr. Barnett. Mrs. O’Regan appears to have recognized from the outset the desirability of reducing the impact of separation of the parents on the children by the continued stability of having residence in their home. Mrs. O’Regan made a concerted effort to address the matrimonial debts and I will address that aspect under the Matrimonial Property Act considerations. The financial support each provided the children since separation presents a bit of a checkered history. I am satisfied that for approximately nine months immediately after the separation, the children were predominantly with their father and no direct child support assistance was provided by their mother. Mrs. O’Regan did, for a period of time, when child care expenses were incurred, contribute $300.00 per month which based upon a pro-rata contribution of their respective incomes, represented a disproportionally high level of contribution by the mother, particularly as the situation developed where the children began to spend equal time with each parent, invoking the shared custody provision s.9 of the Child Support Guidelines. In addition, since separation, Mrs. O’Regan has made payments for some of the extra curricular activities of the children. Mr. O’Regan has paid all of the child care costs since July of 1999. Child care cost ceased in September of 2000 with the oldest child being able to take a measure of responsibility, particularly for the time period from the end of the school day until a parent arrived home.
[15] Mrs. O’Regan seeks a substantial credit for the contribution she made, particularly to child care for an extended period of time. I find as a fact that she did contribute substantially more than was required for a period of time, however, there are a number of balancing factors and it seems to me that the best and fairest approach is to start with an assessment as to what should transpire from here on in, treating the pluses and minuses of contributions by these two parents as offsetting, particularly as I intend to give credit to Mrs. O’Regan for payment she made during the period from separation to date on matrimonial debts.
[16] What then should be the level of contribution with respect to the children henceforth?
[17] The Statement of Financial Information provided by Mr. O’Regan as of February the 28th, 2000 showed an income, including child tax benefit, of $3,311.84 per month for an annualized rate of $39,742.08. Mr. O’Regan’s computer printout for income for the total year of 2000 amounted to $39,940.00 and his pay stub for the month of January, 2001 shows a current monthly income of $3,240.83 which is an annual rate of $38,889.96 but does not include the Child Tax Credit which if it is the same rate as previous, would add $150.84 per month, a further $1,810.08, for a total annualized present income of approximately $40,700.00. The Child Tax Credit constitutes income to be taken into account, Petipas v. Petipas S. H. No. 1201-53598, May 1, 2000, not yet reported.
[18] Mrs. O’Regan’s income has varied somewhat since the parties separation, however, her Statement of Financial Information filed February 24th, 2000 listed her income from all sources as $1,452.74 per month, an annualized rate of $17,432.88. In the year 1996 her income, by way of example, was a total of $25,768.00; in 1995, $24,763.00. She has, of course, had changes of employment, particularly from the time of the draft Separation Agreements where one draft recited her total income as being approximately $30,000.00 per annum. A later draft referred to her being employed at Lawton Drugs with a gross annual income of approximately $20,000.00. The recent pay slip from her employment at Ocean Park Dental Centre seems to indicate accepting a probable non-recurring bonus of $600.00, however, she receives a gross pay every two weeks of $839.50 which is an annualized rate of $21,827.00.
[19] I determine that the present annualized income of the parents is for Mr. O’Regan, $40,700.00 and Mrs. O’Regan, $21,800.00. Based upon the Child Support Guidelines, if Mr. O’Regan were paying for two children with Mrs. O’Regan, he would pay $575.00 per month child support and if Mrs. O’Regan were paying child support in accordance with the Guidelines for two children, she would pay $310.00 per month.
[20] The Court must do an analysis and consideration of regulation 9 of the Federal Child Support Guidelines which reads as follows:
Shared custody
9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account
(a) the amounts set out in the applicable tables for each of the spouses;
(b) the increased costs of shared custody arrangements; and
(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.
[21] The parents, as I previously indicated, are in an equal parenting arrangement for the children. Mr. O’Regan’s solicitor makes note of the fact that the household in which Mr. O’Regan resides has only available his income of $40,700.00 and the household in which Mrs. O’Regan resides has a combined income of her income at $21,800.00 and Mr. Barnett’s of at least $60,000.00, for a combined household income of at least $81,800.00. Mr. Barnett does not have any legal obligation of support or otherwise to the O’Regan children. The standard of living Mrs. O’Regan enjoys is given some weight pursuant to s. 9(c) of the Child Support Guidelines. In the end the Court must apply s.9, bearing in mind the clear intent is to provide as far as possible the guideline amounts on the basis that such gives the best overall benefit to the material welfare of the children.
[22] The difficulty here is that Mr. O’Regan is endeavouring to maintain the family home which is very beneficial to the children. I will further address that aspect under the claim by Mr. O’Regan for an unequal division so as to maintain the matrimonial home. As I intend to make an unequal division to permit the retention of the matrimonial home and a postponement of Mrs. O’Regan’s interest in the equalization payment due to her under the Matrimonial Property Act, I concluded that overall Mr. O’Regan should pay the required differential of $265.00 a month less an amount be deemed to be her contribution towards extra curricular activities, etcetera. I have also taken into account that the father will continue the obligation of providing a family plan of medical health coverage for the children and that it is of some level of cost to him. For the immediate future I deem the total amount to be $120.00 per month, reducing Mr. O’Regan’s balancing child support payments to the sum of $145.00 per month, commencing the beginning of the school year, the 1st of September, 2001and continuing the 1st day of each and every month thereafter until revised by consent of the parties or Court Order. I have in mind that if at some point the expenses get more substantial than are presently evident, particularly when the children get involved in school trips, further athletics, music, etcetera, that the parties might determine a more equitable level of contribution in that regard from the mother.
ISSUE NUMBER FOUR
4. MATRIMONIAL PROPERTY ACT ISSUES
1. Aeroplan -
[23] Mr. O’Regan takes the position that Mrs. O’Regan is only entitled to half of his Aeroplan points at the time of separation because, in his view, she only requested in the draft agreements fifty per cent of Aeroplan points. Mrs. O’Regan was not made aware of the existence of Mr. O’Regan’s Canadian Plus points program. Aeroplan points are a matrimonial asset to the extent they are accumulated during cohabitation, Tibbetts v. Tibbetts (1992), 106 N.S.R. (2d) 255; (1993), 119 N.S.R. (2d) 26 (C.A.) The Corollary Relief Judgment will contain a provision requiring Mr. O’Regan to transfer fifty per cent of the balance of points in both plans in existence at the time of separation and my notes indicate this requires a transfer of 24,750 points to Mrs. O’Regan. I would point out that points are now capable of trading, like currency, through www.points.com.
2. Pension -
[24] Mrs. O’Regan, during cohabitation, had employment which resulted in contributions with interest by her to December 31st, 1995 of $6,713.72. The problem in coming up with a specific figure is that although the value of the contributions at the time of separation would normally have appreciated to the date of division, what happened here is that Mrs. O’Regan changed the nature of the asset to a growth fund which does not appear to have prospered. In addition, she has made substantial contributions to that fund since the time of separation and I am left with simply making an assessment of the present value of what was matrimonial at the time of separation. I conclude it has a gross value of $7,500.00 as of now and deduct from it for income tax purposes at the rate of thirty per cent. I use 30 per cent because Mrs. O’Regan’s marginal rate, based on her present and probable income in the immediate future, does not warrant the 35 per cent figure I suggested to counsel during argument. The net pension asset for distribution is therefore $7,500.00 less 30 per cent, $5,250.00 and Mr. O’Regan will receive a credit against equalization required of him to Mrs. O’Regan in relation to the matrimonial home and debts. The credit is $2,625.00.
3. Household items and furniture -
[25] Mrs. O’Regan left with very little in the way of furniture and effects and primarily left the house intact for the children. Understandably, no appraisal has been made of the furniture due to the cost and limitations on the financial resources of the parties. Mrs. O’Regan’s Statement of Property values the furniture, appliances, stereo, computer, etcetera, at a total of $4,100.00. Mr. O’Regan points out that some of the items are essentially children’s furniture and this is an appropriate case to apply Clancey v. Clancey (1991), 99 N.S.R. (2d) 147. In addition, the valuations placed by Mrs. O’Regan are far too high, particularly in relation to the computer. Given these factors, the adjustment in favour of Mrs. O’Regan is rather limited and I set at $500.00.
4. Matrimonial home -
[26] The date of division of an asset is in fact the date it is divided, Stoodley v. Stoodley (1999), 172 N.S.R. (2d) 101.
[27] The parties purchased the property, 57 Hebb Drive, by limited savings and a substantial mortgage. It was acquired by deed December the 13th, 1989. Mrs. O’Regan, in part motivated by a desire for the children to remain in their home and due to pressure from the bank in relation to securing additional personal financing, was apparently required to relieve herself from obligations under the mortgage. This she did, which required a Quit Claim Deed to Mr. O’Regan December the 9th, 1998. The actual division I find took place in December, 1998 and it now falls upon me to determine the value of the property as of that time. The parties purchased the property in 1989 for $81,000.00. Its municipal assessment has risen from 1996, $80,500.00, to the present assessment I believe of $91,500.00. In 1998 it appears the assessment was $89,300.00.
[28] For the purposes of determining the value as of the time of division, that is, when Mrs. O’Regan conveyed her interest to Mr. O’Regan, I fix its market value at $90,000.00. The balance outstanding on the mortgage, as of the 31st of December, 1998, is $57,796.31. The $90,000.00 determined value must be discounted for real estate commission and legal fees, Robski v. Robski (1998) 166 N.S.R. (2d) 161, which results in a deduction of $5,400.00 for commission and adding $600.00 for legal fees with H.S.T. brings the total deductions at $6,000.00 plus $57,796.31, $63,796.31 from $90,000.00, a net of $26,203.69.
[29] Mr. Wheeler argues for a credit to Mr. O’Regan on the basis that from the time of separation, December, 1995, until the delivery of the Quit Claim Deed in December, 1998, a period of three years, when Mr. O’Regan paid the mortgage and expenses on the matrimonial home. The situation here is one that occurs with some frequency and the Court has never made an adjustment unless there has been some exceptional circumstances. The situation here is that Mr. O’Regan, while he paid the mortgage throughout this period, he also is the beneficiary automatically of one-half of the equity produced by those mortgage payments. He has had the use and occupancy of the home to the exclusion of his spouse and he and the children by virtue of the occupancy have had the benefit of Mrs. O’Regan’s share of the equity throughout that period. From time to time we have the counter argument that the spouse not in occupancy seeks interest on her/his equity being so utilized but again, the Court has not found merit in such an argument in normal circumstances. The balancing factors usually result, as they do here, in no adjustment between the parties.
5. Motor Vehicles -
[30] The parties each took a motor vehicle at the time of separation and normally, that would be the date of division, Stoodley, above. The motor vehicles, however, were an integral part of development of the shared parenting and in due course, Mr. O’Regan leased an alternate vehicle when the one Mrs. O’Regan had bit the dust and Mr. O’Regan gave the other motor vehicle to her. Both parties spent a great deal of money trying to retain the two vehicles but in the final analysis, Mrs. O’Regan disposed of the second vehicle for $50.00 and gave Mr. O’Regan $25.00. In these circumstances, I repeat what I indicated in argument, that I would treat the motor vehicles as being a washout.
6. Debts -
[31] There is no longer a claim with respect to the Royal Bank overdraft, as it appears that each party paid a sufficient portion of it. The major debts outstanding were the loan at the Royal Bank of Canada in the amount of $11,959.97 as of November 15th, 1995 and a joint Visa of $2,159.35. I am relying upon my notes with respect to the position of the parties and general mathematics and if I should make any major error in the amounts, counsel have leave to make further representations. There are three other debts to be taken account, the En Route account to the extent it was matrimonial at the time of separation, $671.48; a Bank of Nova Scotia Visa of $1,893.96; and a Master Card of $1,148.91.
[32] It is necessary to make an assessment of the amount of responsibility assumed by each party which includes some measure of interest factor. For the purposes of determining the equalization, I fix the amounts as follows:
Royal Bank of Canada - responsibility of Mrs. O’Regan - $18,000.00
Royal Bank Visa - responsibility of Mrs. O’Regan - $2,400.00
En Route - responsibility of Mr. O’Regan - $700.00
Master Card - responsibility of Mr. O’Regan - $1,300.00
Bank of Nova Scotia Visa - responsibility of Mr. O’Regan - $2,100.00
[33] The net adjustment in favour of Mrs. O’Regan I calculate at $8,150.00.
EQUALIZATION/UNEQUAL DIVISION
[34] The only unequal division that is warranted in the circumstances of this case is a postponement of Mrs. O’Regan’s interest in the matrimonial home. It would be unfair and unconscionable to require the disposition of the matrimonial home, given the recognition by the parents of the desirability of its retention for the children and under s.13(h) of the Matrimonial Property Act, the needs of the children. I have calculated the net amount due to Mrs. O’Regan for an equal division as follows:
Mrs. O’Regan
adjustment on furniture - $500.00
share of the equity in the matrimonial home - $13,101.84
adjustment with respect to matrimonial debts assumed by her - $8,150.00
$21,751.84
Mr. O’Regan
adjustment for his share of the pension being retained entirely by Mrs. O’Regan - $2,625.00
[35] Mr. O’Regan will present Mrs. O’Regan with a mortgage on the matrimonial home, second only to the existing mortgage, and the mortgage will contain terms and conditions in line with those set out in Robski v. Robski, above. The term of cohabitation that triggers payment will be changed from six to 12 months. The postponement of payment of Mrs. O’Regan’s share of the matrimonial assets is a warranted unequal division. Mr. O’Regan should be responsible for the preparation and registration of the mortgage and delivery of the registered instrument to Mrs. O’Regan’s solicitor. Mr. O’Regan will also ensure that there is a proper mortgage insurance endorsement protecting Mrs. O’Regan’s interest and provide confirmation of such to Mrs. O’Regan’s solicitor. The mortgage will carry simple interest at the rate of 5 per cent and Mr. O’Regan will be permitted to pay out the mortgage at any time without penalty or bonus of interest.
COSTS
[36] Counsel have been given an opportunity to address the matter of costs. I conclude each party is to bear their own costs.
J.