Heard v. Heard, (2014) 317 O.A.C. 45 (CA)

• Judge: MacPherson, Cronk and Gillese, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: February 28, 2014
• Jurisdiction: Ontario
• Citations: (2014), 317 O.A.C. 45 (CA);2014 ONCA 196

Heard v. Heard (2014), 317 O.A.C. 45 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. MR.042

Catherine Heard (applicant/appellant in appeal) v. Garry Heard (respondent/respondent in appeal)

(C56716; 2014 ONCA 196)

Indexed As: Heard v. Heard

Ontario Court of Appeal

MacPherson, Cronk and Gillese, JJ.A.

March 17, 2014.

Summary:

The parties agreed on five issues for trial: (1) imputation of income to the husband; (2) child support and apportionment of s. 7 expenses; (3) spousal support payable by the wife; (4) property issues, including the sale of the matrimonial home and equalization; and (5) financial adjustments between the parties. The wife appealed from the trial judge's ruling regarding equalization of net family property and his order that each party bear their own trial costs. The husband cross-appealed from the trial judge's imputation of income to him for the purpose of support and s. 7 expense obligations, and from the trial judge's dismissal of his spousal support claim against the wife.

The Ontario Court of Appeal dismissed the appeal and the cross-appeal.

Family Law - Topic 757

Husband and wife - Actions between husband and wife - Property - Existence of trust relationship - On appeal, a wife argued that the trial judge erred in his ruling on equalization of net family property by attributing the total post-separation losses sustained in a limited partnership investment (LPI) to her - She contended that the parties treated the LPI as a joint asset throughout their marriage and after separation - Alternatively, she submitted that she held the LPI in trust, before and after separation, for the parties' joint benefit - The Ontario Court of Appeal rejected the argument - The trial judge made critical findings that were dispositive of the wife's claims of trust or joint ownership - They established that the wife had legal title to the LPI and that she controlled and used it for her own benefit after separation - These facts were inconsistent with characterization of the LPI as a joint or trust asset - Although the parties shared equally in the monthly funds generated by the LPI during their marriage and the husband continued to receive one-half of these monthly funds after separation, this aspect of the parties' conduct concerning the LPI was not determinative of its essential nature - See paragraphs 4 to 15.

Family Law - Topic 882

Husband and wife - Marital property - Considerations in making distribution orders - Relevant considerations (incl. income tax) - On appeal, a wife submitted that the trial judge erred in his equalization of net family property analysis by applying a notional tax rate of 20.7% to both parties' taxable assets (principally, to the husband's registered retirement savings plan and the wife's pension) - The Ontario Court of Appeal rejected the submission - At trial, the wife had relied on tax tables prepared by a pension valuator (DSW Actuarial) to argue that divergent tax rates (28.4% for the wife and 18% for the husband) should be applied to determine the net value of their respective taxable assets - The trial judge held that there was no admissible evidence before him establishing that divergent notional tax rates should apply - The wife led no expert evidence regarding the issue of applicable notional tax rates, or the parties' respective projected incomes on retirement - The wife herself was not qualified to offer evidence on income-tax related projections or tax rates - Even if it was open to the wife to rely on the income tax rates included in the DSW Actuarial report, she had applied a notional tax rate of 20.7% to the parties' respective registered retirement savings plans in various of her financial statements - See paragraphs 16 to 22.

Family Law - Topic 4021

Divorce - Corollary relief - Maintenance and awards - Awards - Considerations - General - On appeal, a husband argued that the trial judge erred by not awarding him spousal support - The trial judge concluded that "... the respondent has not suffered any economic disadvantage arising from the marriage or its breakdown. If there is any disadvantage in this regard, it would be to the applicant who now only has her own income and a modest amount of child support to look after herself and two teenage daughters who live with her. The respondent has not suffered any economic hardship arising from the breakdown of the marriage. The respondent is self-sufficient and in my view is doing quite well in the home inspection business." - The Ontario Court of Appeal stated that "A trial judge's decisions as to whether to award spousal support, and as to the quantum of spousal support, are discretionary decisions. An appellate court should not interfere with these determinations absent an error in principle, a significant misapprehension of the evidence, or unless the order is clearly wrong ... [T]he husband cannot bring the trial judge's decision on spousal support within any of these categories." - See paragraphs 37 to 41.

Family Law - Topic 4021.4

Divorce - Corollary relief - Maintenance and awards - Considerations - Ability to pay (incl. potential to earn income and calculation of income) - At trial, a wife advanced several methodologies for imputing income to the husband for child support purposes - The trial judge rejected them all, but still imputed income - He reasoned as follows: "Although I find the applicant's methodology flawed, in that each approach, on its own, was insufficient to impute income to the respondent - it is the cumulative effect of all of her approaches that provides a sufficient evidentiary base for me to consider the imputation of income, in a greater amount than the respondent admits to in his testimony and his financial statements." - On appeal, the Ontario Court of Appeal agreed with the husband that this was not a proper basis for imputing income - A series of rejected methodologies could not, by rolling them together, become a valid methodology - However, the factors of credibility and lifestyle, taken together, amply supported the trial judge's decision to impute income, and the amounts he chose - See paragraphs 29 to 36.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - [See Family Law - Topic 4021.4 ].

Personal Property - Topic 1621

Ownership - Joint tenancy - General - [See Family Law - Topic 757 ].

Practice - Topic 7030

Costs - Party and party costs - Entitlement to party and party costs - Where success or fault divided - On appeal, a wife argued that in ordering each party to bear their own trial costs, the trial judge erred by failing to take into account the offers to settle exchanged by the parties before trial - The Ontario Court of Appeal noted that the trial judge's reasons did not expressly indicate whether he considered the parties' offers to settle when assessing costs - The court held that, to the extent that the trial judge failed to take account of these offers to settle, he erred - However, given the results achieved at trial and the court's disposition of the issues on appeal, success at trial was divided - The trial judge did not err in principle in his costs award, nor was his costs award plainly wrong - Accordingly, there was no basis for appellate interference with his discretionary costs award - See paragraphs 23 to 28.

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - [See Practice - Topic 7030 ].

Practice - Topic 8421

Costs - Appeals - Grounds - General - [See Practice - Topic 7030 ].

Trusts - Topic 3

Definitions - Trust defined - [See Family Law - Topic 757 ].

Cases Noticed:

Serra v. Serra (2009), 246 O.A.C. 37; 93 O.R.(3d) 161; 307 D.L.R.(4th) 1; 2009 ONCA 105, dist. [para. 5].

Hickey v. Hickey, [1999] 2 S.C.R. 518; 240 N.R. 312; 138 Man.R.(2d) 40; 202 W.A.C. 40, refd to. [para. 39].

Counsel:

James D. Singer, for the appellant;

T.G. Reczulski, for the respondent.

This appeal was heard on February 28, 2014, by MacPherson, Cronk and Gillese, JJ.A., of the Ontario Court of Appeal, who delivered the following decision on March 17, 2014.