Dembeck v. Wright, 2012 ONCA 852

• Judge: Gillese, Rouleau and Epstein, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 18, 2012
• Jurisdiction: Ontario
• Citations: 2012 ONCA 852;(2012), 299 O.A.C. 166 (CA)

Dembeck v. Wright (2012), 299 O.A.C. 166 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. DE.024

Ella Dembeck (applicant/appellant) v. Terence William Wright (respondent/respondent in appeal)

(C54134; 2012 ONCA 852)

Indexed As: Dembeck v. Wright

Ontario Court of Appeal

Gillese, Rouleau and Epstein, JJ.A.

December 4, 2012.

Summary:

Spouses separated in 2007. The trial judge dealt with various property and support issues. The wife appealed the trial judge's (1) treatment of the husband's property interests at the date of marriage; (2) determination of the value of her business; and (3) determination of the value of the household items. The wife also challenged the amount of income the trial judge assigned to each spouse in order to determine the husband's support obligations. The main question was: under what circumstances, if any, did a spouse "own" on the date of marriage an entitlement to a severance payment that he or she later received. The trial judge had concluded that a portion of the amount of severance the husband was paid before separation when his employment was terminated was property owned by the husband on the date of marriage.

The Ontario Court of Appeal disagreed with the trial judge's conclusion regarding the husband's severance payment and allowed the appeal on that issue. The court dismissed the appeal in respect of all other issues raised by the wife.

Family Law - Topic 880.1

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - General (incl. pre-marriage acquisitions) - [See Family Law - Topic 880.33 ].

Family Law - Topic 880.33

Husband and wife - Marital property - Distribution orders - Particular property - Severance or retirement allowance - The parties married in 1998 and separated on April 19, 2007 - On April 16, 2007, the husband accepted a $190,000 termination package from his employer, comprised of 18 months' salary in lieu of notice (common law damages) and eight weeks' pay under the Employment Standards Act (ESA) - The trial judge concluded that the common law damages portion of the $190,000 had accumulated entirely during the marriage since all the husband had at the date of marriage was an employment contract containing an implied term that he was entitled to damages if his position was terminated without cause - However, the trial judge held that because the ESA severance portion of the $190,000 had fully "accrued" prior to December 30, 1998, when the parties married, it was a property interest that the husband owned as of that date - The trial judge ordered that the equalization payment be calculated on the basis that the husband brought the ESA severance portion of the termination package ($35,241.26) into the marriage - The Ontario Court of Appeal held that the trial judge erred in finding that the husband's entitlement to ESA severance was property he owned on the date of marriage - Until the husband's employment was terminated in circumstances where, according to the ESA, the employer was obliged to pay severance to him, he had no right or entitlement to severance - The court also rejected the husband's alternative argument that his interest in the ESA severance part of the $190,000 retroactively became date-of-marriage property when his entitlement to the amount of ESA severance that had fully accumulated prior to marriage, crystallized before the date of separation - See paragraphs 35 to 62.

Family Law - Topic 4021.4

Divorce - Corollary relief - Maintenance awards - Awards - Considerations - Ability to pay (incl. potential to earn income and calculation of income) - [See Family Law - Topic 4045.5 ].

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Calculation or attribution of income - The parties separated on April 19, 2007 - On April 16, 2007, the husband accepted a $190,000 termination package from his employer - The husband testified that since the separation he had neither been employed nor formally applying for any position - The wife sought to have income attributed to the husband of between $62,000 and $100,000, the former being his pension at age 65 (he was 62 at the time of trial) and the latter his base salary when he left his previous employment - The trial judge held the latter would have been the appropriate amount to attribute to the husband but for the fact that the evidence did not support a finding that he could have found a comparable position - However, the trial judge concluded that the husband was intentionally unemployed and imputed an income of $60,000 on the basis that he could have found some type of employment to produce an income of that amount - The wife contended that the trial judge erred in failing to include the $190,000 termination package less tax as part of the husband's 2007 income - She further submitted that the imputed income from date of separation forward should be $100,000 - The Ontario Court of Appeal dismissed this ground of appeal - In deciding to treat the $190,000 as an asset rather than income and in arriving at an imputed annual income of $60,000 for the husband, the trial judge made findings based on a detailed consideration of the available evidence - That evidence included the circumstances relating to the husband's decision to accept the termination package including the implications of his choice having regard to the specifics of the package, his work history, his age, and his employability - The trial judge's conclusions were supported by the evidence and well within the exercise of his discretion - See paragraphs 72 to 77.

Family Law - Topic 4171

Divorce - Practice - Appeals - Admission of new evidence - On appeal, the wife challenged, inter alia, the amount of income the trial judge assigned to each spouse - The wife applied to have fresh evidence admitted with respect to her 2007 income consisting of her income tax return and notice of assessment for the 2007 fiscal year, showing earnings of $3,000 - The Ontario Court of Appeal dismissed the application - The proposed evidence was available and was actually in hand at the time of trial - In her affidavit, the wife attempted to explain why she did not put the tax documentation into evidence on the basis that she believed her viva voce evidence that she earned $3,000 in 2007 was not being challenged - However, her view that her 2007 income was not contested was not reasonably held - Further, the Family Law Act and the Family Law Rules specifically required a party applying for or responding to support orders to provide detailed and fully supported information concerning their income - The wife failed to comply with that obligation at her peril - It was also not reasonable to expect that the proposed fresh evidence could have affected the trial judge's decision - See paragraphs 27 to 33.

Cases Noticed:

R. v. Palmer, [1980] 1 S.C.R. 759; 30 N.R. 181, appld. [para. 28].

Caratun v. Caratun (1992), 58 O.A.C. 140; 96 D.L.R.(4th) 404 (C.A.), leave to appeal denied (1993), 157 N.R. 317; 64 O.A.C. 273 (S.C.C.), refd to. [para. 41].

Lowe v. Lowe (2006), 206 O.A.C. 293; 78 O.R.(3d) 760 (C.A.), refd to. [para. 44].

Arvelin v. Arvelin, [1996] O.J. No. 412 (Gen. Div.), refd to. [para. 45, footnote 1].

Leckie v. Leckie, [2004] O.A.C. Uned. 244; 238 D.L.R.(4th) 571 (C.A.), refd to. [para. 45, footnote 1].

Gasparetto v. Gasparetto (1988), 15 R.F.L. (3d) 401 (Ont. H.C.), refd to. [para. 46].

Montreuil v. Montreuil, [1999] O.T.C. Uned. A53 (Sup. Ct.), refd to. [para. 46].

Vitagliano v. Di Stavolo, [2001] O.T.C. Uned. 335; 17 R.F.L.(5th) 194 (Sup. Ct.), refd to. [para. 46].

Slack v. Slack, [2001] O.T.C. 941; 23 R.F.L.(5th) 207 (Sup. Ct.), refd to. [para. 46].

Ross v. Ross (2006), 218 O.A.C. 119; 34 R.F.L.(6th) 229; 83 O.R.(3d) 1 (C.A.), refd to. [para. 49].

Serra v. Serra (2009), 246 O.A.C. 37; 93 O.R.(3d) 161; 307 D.L.R.(4th) 1; 2009 ONCA 105, refd to. [para. 57].

Statutes Noticed:

Family Law Act, R.S.O. 1990, c. F-3, sect. 4(1) [para. 38]; sect. 5(6) [para. 60].

Authors and Works Noticed:

Ziff, Bruce, Principles of Property Law (5th Ed. 2010), p. 2 [para. 42].

Counsel:

Patrick Kraemer and Daniel W. Veinot, for the appellant;

Elliot Berlin, for the respondent.

This appeal was heard on June 18, 2012, before Gillese, Rouleau and Epstein, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Epstein, J.A., and was released on December 4, 2012.