SUPREME COURT OF Nova Scotia
FAMILY DIVISION
Citation: Ferguson v. Ferguson, 2014 NSSC 350
Date: 2014-09-24
Docket: 1206-6393
Registry: Sydney
Between:
Thomas “Gary” Ferguson
Petitioner
v.
Janice Ferguson
Respondent
|
Judge: |
The Honourable Justice Theresa M. Forgeron |
|
Heard:
|
April 16 and 17; June 25; September 5 and 23, 2014, in Sydney, Nova Scotia |
|
Written Decision: |
September 24, 2014 |
|
Counsel: |
Thomas “Gary” Ferguson, on his own behalf Alisha Brown-Fagan for the Respondent, Janice Ferguson |
By the Court:
[1] Introduction
[2] Gary and Janice Ferguson’s long term marriage ended in 2011. They were unable to resolve financial issues after separation. This court must therefore rule on the outstanding property division and support issues.
[3] Issues
[4] The following issues will be determined in this decision:
▪ What is the appropriate division of the assets and debts?
▪ What is Mr. Ferguson’s income?
▪ Should spousal support be awarded?
▪ Should retroactive spousal support be granted?
[5] Background Information
[6] Gary and Janice Ferguson separated on July 1, 2011 after 21 years of cohabitation, which included 19 years of marital cohabitation. Their one child was no longer dependent at the time of trial.
[7] Ms. Ferguson filed an application under the Maintenance and Custody Act on December 28, 2011. In response, Mr. Ferguson filed a divorce petition on May 31, 2012; Ms. Ferguson filed an answer on July 27, 2012. Both parties were represented by counsel at the time.
[8] Trial dates were assigned on July 24, 2013 at the date assignment conference. The date assignment conference memo was circulated to counsel. This document listed the issues and specified disclosure dates, trial dates, and dates for the filing of submissions.
[9] On March 5, 2013, Mr. Ferguson’s counsel applied to be removed as solicitor of record. Mr. Ferguson was present and consented to the motion. The court also confirmed that the trial would proceed on April 16 and 17, 2014. No request for an adjournment was made.
[10] The divorce hearing commenced on April 16, 2014 as scheduled. Mr. Ferguson elected not to appear. The hearing proceeded in his absence. The court heard the evidence of Ms. Ferguson. At the conclusion of the hearing, the matter was adjourned so that Ms. Ferguson’s counsel could complete the necessary mathematical calculations for the equalization schedule. These were to be filed with the court. Ms. Ferguson’s counsel submitted the equalization schedule, via written submissions, on June 9, 2014.
[11] Although the decision was adjourned until June 25, 2014, the court granted and issued an interim spousal support order based upon the evidence and submissions.
[12] On June 25, 2014, the court intended to provide an oral decision. The decision was not rendered because Mr. Ferguson appeared and requested an adjournment so that he could present his case and retain legal counsel. After hearing the submissions of the parties, and balancing the factors stated by Farrar, J. in Moore v. Darlington, 2012 NSCA 68 (C.A.), the adjournment was granted. Mr. Ferguson was also ordered to pay Nova Scotia Legal Aid costs in the amount of $500. The hearing was scheduled to resume on September 5, 2014.
[13] On September 5, 2014, Mr. Ferguson appeared unrepresented. He presented his evidence and was subject to cross examination. Mr. Ferguson provided submissions; Ms. Ferguson supplied supplemental submissions.
[14] Analysis
[15] What is the appropriate division of the assets and debts?
[16] The evidence supports an equal division of the assets and debts. To determine how this equal division is to be implemented, the value of the matrimonial assets and the balances of the debt will be reviewed.
[17] Matrimonial Home
[18] The most significant of the assets is the matrimonial home situate in New Waterford, Nova Scotia, which Ms. Ferguson seeks to retain. Mr. Ferguson agrees. Ms. Ferguson’s statement of property assigned the matrimonial home a value of $38,000. Mr. Ferguson did not provide a value.
[19] The 2014 assessment notice indicates an assessed value of $39,600, but with a taxable assessed value of $31,400. Ms. Ferguson seeks to use the lower figure.
[20] I assign a value of $39,600 for division purposes, less notional disposition costs of 3,732, in keeping with case law flowing from the Nova Scotia Court of Appeal decision of Gomez-Morales v. Gomez-Morales, 100 N.S.R. (2d) 137. Thus, the total value of the matrimonial home for division purposes is $35,868.
[21] Household Contents
[22] Neither party placed a value on the household contents. I have little evidence concerning the contents. Mr. Ferguson seeks his clothing and tools from the home. Ms. Ferguson consents. A mutually convenient date will be arranged between the parties so that Mr. Ferguson can retrieve his clothing and tools. In the absence of evidence, I infer that the parties have reached an equal division of the household contents.
[23] Pensions and RRSPs
[24] Ms. Ferguson does not have a pension, or any retirement vehicle.
[25] Mr. Ferguson has RRSPs. Mr. Ferguson says he cannot collapse the RRSPs. Proof of the separation value of the RRSPs was not provided. The court also notes that Mr. Ferguson withdrew $4,985 in RRSPs in 2011, the year of separation, according to Mr. Ferguson’s 2011 income tax return.
[26] I am concerned that Mr. Ferguson will be obstructive and non-cooperative in dividing the RRSPs. I will therefore not order an in species division. Further, I will not discount the RRSPs for tax reasons because I have insufficient evidence to confirm the current or separation balance of the RRSPs. $11,000 in RRSPs are assigned to Mr. Ferguson in such circumstances.
[27] Vehicles
[28] At separation, Ms. Ferguson was driving a 2006 Mazda 3 sedan. Mr. Ferguson was driving a 1999 Silverado, which he says he used as a trade-in several months post separation. Mr. Ferguson said that he received a $2,500 credit on the new vehicle he bought. No documents were disclosed to confirm this verbal statement. Mr. Ferguson also owned a 2006 Honda Shadow motorbike.
[29] Date of separation values for the vehicles were not provided by either party. Ms. Ferguson produced evidence of current value. The vehicles would have been worth more at separation. Despite the evidentiary limitations, I assign the following values on the vehicles for division purposes:
▪ Mazda 3 - $7,000
▪ Honda Shadow - $5,000
▪ 1999 Chevrolet Silverado - $5,700
[30] Mortgage
[31] Mr. Ferguson retired the mortgage post separation. He will be assigned a credit of $9,935 for this payment.
[32] Mazda Car Loan
[33] The Mazda was financed through a car loan that was paid out on May 8, 2012. The parties separated on July 1, 2011. About nine monthly payments of $380 were outstanding at separation. At separation, the car loan was therefore approximately $3,420. Ms. Ferguson paid this balance and will receive credit for the payments.
[34] Municipal Taxes
[35] Taxes outstanding at separation were $292. Ms. Ferguson will be assigned credit for this debt. I have not considered the taxes paid by Ms. Ferguson post separation as she was occupying the home. Post separation tax payments are not a divisible debt.
[36] Scotia Line Visa
[37] $13,240 was outstanding at separation. The Visa balance was incurred for family purposes. It is a divisible debt. Ms. Ferguson will be assigned a credit for this payment.
[38] Furnace Debt
[39] Ms. Ferguson retired the furnace debt outstanding as of separation in the amount of $3,850. Ms. Ferguson will receive credit for this payment.
[40] Equalization Schedule
[41] The equalization schedule is as follows:
|
Assets |
Value |
Husband |
Wife |
|
Home |
$35,868 |
|
$35,868 |
|
Vehicles |
17,700 |
10,700 |
7,000 |
|
RRSPs |
11,000 |
11,000 |
|
|
Total |
$64,568 |
$21,700 |
$42,868 |
|
Debt |
Balance |
Husband |
Wife |
|
Mortgage |
$9,935 |
$9,935 |
|
|
Car Loan |
3,420 |
|
3,420 |
|
Furnace Loan |
3,850 |
|
3,850 |
|
Taxes |
292 |
|
292 |
|
Visa |
13,240 |
|
13,240 |
|
Total |
$30,737 |
$9,935 |
$20,802 |
|
Equity Total $64,568 |
Husband $21,700 |
Wife $42,868 |
|
30,737 |
9,935 |
20,802 |
|
$33,831 |
$11,765 |
$22,066 |
Equalization Payment: $22,066 - $11,765 = $10,301 = $5,150.50
Ms. Ferguson owes Mr. Ferguson an equalization payment of $5,150.50 which is to be set off against the retroactive lump sum spousal maintenance due as will be discussed later in this decision. Mr. Ferguson must forthwith execute a quit claim deed in which he releases his interest in the matrimonial home in favor of Ms. Ferguson.
[42] What is Mr. Ferguson’s income?
[43] Ms. Ferguson states that Mr. Ferguson’s income is in excess of $150,000 per annum. She relies on his income earning capacity as evidenced in Mr. Ferguson’s 2012 and 2013 income tax returns. For his part, Mr. Ferguson states that he currently has no source of income because he is unable to work due to illness.
[44] In Leskun v. Leskun, 2006 SCC 25 (S.C.C.), Binnie J. confirmed that when reviewing “means”, for the purposes of s. 15 of the Divorce Act, courts are not restricted to income earned, but rather must also examine capital and income earning capacity. Para. 29 of the decision states as follows:
29 There is no support in the case law or in logic for the proposition that the Chambers judge was wrong to take into account the appellant's capital assets acquired after the marital break-up. In Strang v. Strang, [1992] 2 S.C.R. 112 (S.C.C.), the Court stated that the traditional understanding of the word "means" includes, "all pecuniary resources, capital assets, income from employment or earning capacity, and other sources from which the person receives gains or benefits" (p. 119). J. Payne and M. Payne elaborate as follows:
The word means includes all pecuniary resources, capital assets, income from employment or earning capacity, and any other source from which gains or benefits are received, together with, in certain circumstances, money that a person does not have in possession but that is available to such person. (Canadian Family Law (2001), at p. 195)
[45] In Richards v. Richards, 2012 NSCA 7 (C.A.), Bryson, J.A. held that income imputation is not restricted to child support cases. The same principles are at play when determining income for spousal support, despite the different philosophical grounds underpinning such orders.
[46] In St. Jules v. St. Jules, 2012 NSCA 97, the Nova Scotia Court of Appeal held that the trial judge did not err when she imputed an annual income of $65,000 to a father. The father had under projected his income in the past, failed to report his income annually, and provided no independent evidence that his voluntary discharge from the military was medically necessary. Further, the father had, without apparent reason, quit a well-paid job with the military, at times in the past, when court proceedings were ongoing to determine child support obligations.
[47] In Wetzel v. Quinn, 2013 NSSC 301 (S.C.) Lynch J. imputed income to a payor who provided no medical evidence to support a claim of an inability to work for health reasons. The payor mother was a teacher who elected to take an unpaid leave from work.
[48] In Deveaux v. Deveaux, 2013 NSSC 246 (S.C.) this court imputed income to a wife who was seeking spousal support. The wife quit her job. No credible medical evidence was proffered to establish that the wife was disabled or that she was diagnosed with any illness that compromised her ability to work.
[49] In Parsons v. Parsons, 2012 NSSC 239 (S.C.) this court imputed income to a father who failed to provide medical evidence to establish that his income earning capacity was compromised by health concerns. There was no meaningful evidence linking the father’s health needs to a reduced ability to work.
[50] Similar findings were also reached in Paul v. Dennis, 2012 NSSC 366 (S.C.); MacKinnon v. Serroul, 2011 NSSC 386 (S.C.); MacDonald v. Pink, 2011 NSSC 421 (S.C.); and MacGillivary v. Ross, 2008 NSSC 339 (S.C.)
[51] An opposite result is found in Bourque v. Gerlach, 2006 BCCA 157 (C.A.) where Rowles, J.A. reversed a trial decision which imputed income to a payor. Imputation was an error where medical evidence, including that of an independent examiner, linked the serious health needs of the payor to an inability to work.
[52] In the case before me, Mr. Ferguson bears the burden of proving that his income is substantially lower than that which he earned in 2012 and 2013: MacDonald v. MacDonald, 2010 NSCA 34 (C.A.). Proof is based on a balance of probabilities by the production of clear, convincing, and cogent evidence: R. v. McDougall, 2008 SCC 53 (S.C.C.).
[53] Mr. Ferguson did not meet this burden of proof. Mr. Ferguson’s income earning capacity is approximately $130,000 per year. In 2011, he earned $90,982; in 2012 he earned $161,029; and in 2013 he earned $155,433. No independent medical evidence was produced to support the allegation that Mr. Ferguson’s income earning capacity was compromised because of illness or disability. Mr. Ferguson’s bald assertions that he was diagnosed with mental health disorders which rendered him unemployable is insufficient in the circumstances of this case.
[54] Should periodic spousal support be awarded?
[55] The factors which a court must consider in a spousal support determination are set out in s. 15.2(4) of the Divorce Act, which states as follows:
15.2(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including:
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
[56] The objectives to be considered in respect of a spousal support order are set out in s. 15.2(6) of the Divorce Act which provides as follows:
15.2(6) An order made under subsection(1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[57] I have considered the three foundation elements of spousal support as set out in Bracklow v. Brackow, 1999 CarswellBC 532 (S.C.C.). I have also considered the comments of the Supreme Court of Canada in Moge v. Moge (1992) 99 D.L.R. (4th) 456 at para. 85:
85 Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement (see Mullin v. Mullin (1991), supra, and Linton v. Linton, supra). Furthermore, great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavor, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution (see Robertson, “Judicial Interpretation of the Spousal and Child Support Provisions of the Divorce Act, 1985 (Part I),” at pp. 175-75).
[58] Entitlement has been proven on a balance of probabilities for compensatory and noncompensatory factors, for the following reasons:
▪ The parties cohabited for approximately 21 years.
▪ The marriage had elements of a traditional relationship in that Ms. Ferguson was primarily responsible for the home and the parties’ son, although Mr. Ferguson also assisted.
▪ At one point during the relationship, Ms. Ferguson was the primary wage earner as Mr. Ferguson struggled to find permanent employment. Towards the latter part of this lengthy relationship, Mr. Ferguson was the primary wage earner.
▪ Mr. Ferguson’s career and occupational skills were enhanced by Ms. Ferguson tending to the home and child while Mr. Ferguson worked out west.
▪ There is a significant disparity between the incomes of the parties. Mr. Ferguson’s last income tax return reveals an annual income in excess of $155,000, while Ms. Ferguson earns about $25,000 per annum.
▪ Given her age and skills, Ms. Ferguson has likely reached the outer limits of her ability to achieve economic independence.
▪ Ms. Ferguson has a definite need. Ms. Ferguson is frugal, but struggles to maintain her reasonable day to day living expenses.
▪ Mr. Ferguson has a corresponding ability to pay.
[59] Ms. Ferguson suggests that the court apply the Spousal Support Advisory Guidelines. The calculations provided are based upon a conservative estimate of Mr. Ferguson’s annual income at $111,219. The SSAG calculations produce an indefinite award between $2,279 and $3,039 per month.
[60] The Guidelines do not replace the obligation of the court to review, examine, and balance the unique factors of each case in conjunction with the legislative requirements. I have done so and confirm that the requested monthly payment of $2,279 meets the factors and objectives set out in the Divorce Act, given the conservative projection of income to Mr. Ferguson, the tax implications of the award, and the circumstances of the parties.
[61] Should retroactive spousal support be granted?
[62] Ms. Ferguson seeks spousal support to the date of application. This is not in the technical sense, a retroactive claim. Ms. Ferguson applied for support on December 28, 2011. Her retroactive claim is thus for the period commencing January 1, 2012, until the date of the interim support order in April, 2014, a period of 27 months.
[63] Even if the DBS analysis is applied, as noted by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10, such an analysis supports the payment of a retroactive support order for the following reasons:
▪ Ms. Ferguson did not delay in seeking support. She filed a claim in December 2011. Mr. Ferguson was aware of her claim. Ms. Ferguson is not responsible for the systematic administrative delay in having her application processed.
▪ Mr. Ferguson engaged in blameworthy conduct in that he did not fully cooperate with disclosure obligations. His 2013 income was only disclosed on September 5, 2014. Mr. Ferguson also did not pay support to Ms. Ferguson notwithstanding the significant income disparity.
▪ Ms. Ferguson has a need for retroactive support. She is working two jobs and is behind in her bill payments. She is a frugal and conscientious woman who is trying to make ends meet. Her needs are reasonable.
▪ Mr. Ferguson has not proven hardship. A voluntary reduction in income cannot be the foundation of a hardship claim.
[64] I therefore grant the requested relief. In determining the amount of the retroactive award, I must take into account the tax neutral treatment of a lump sum award. Mr. Ferguson cannot claim the lump sum payment as a deduction. Ms. Ferguson does not include the lump sum as income. It is therefore incorrect to suggest that the retroactive award should simply be the product of $2,279 multiplied by 27 months.
[65] In addition, the amount of the retroactive payment must be reduced because of the facts unique to this case, including the fact that Ms. Ferguson lived in the home and did not pay occupation rent. Further, Mr. Ferguson’s income fluctuated during the retroactive period.
[66] I find that a retroactive spousal support order in the amount of $12,000 is appropriate. This will be payable by first deducting the equalization payment of $5,150.50. The lump sum balance of $6,849.50 is to be paid through the Maintenance Enforcement Program.
[67] Conclusion
[68] The following relief is hereby granted:
▪ A divorce based upon a permanent break down in the relationship as evidenced by the one year separation.
▪ A division of the assets and debts as stated in this decision.
▪ An award of periodic spousal support, that is subject to s. 17 of the Divorce Act, in the monthly amount of $2,279. The usual reporting and MEP payment provisions apply.
▪ A lump sum retroactive maintenance payment of $6,849.50 from Mr. Ferguson to Ms. Ferguson.
[69] Any costs submissions should be in writing and forwarded within 15 days. Ms. Brown Fagan is to draft the orders.
Forgeron, J.