Korman v. Korman, (2015) 337 O.A.C. 379 (CA)

• Judge: Feldman, Cronk and Huscroft, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 07, 2015
• Jurisdiction: Ontario
• Citations: (2015), 337 O.A.C. 379 (CA);2015 ONCA 578

Korman v. Korman (2015), 337 O.A.C. 379 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. AU.019

Isaac Michael Korman (applicant/appellant) v. Susan Korman (respondent/respondent)

(C59141; 2015 ONCA 578)

Indexed As: Korman v. Korman

Ontario Court of Appeal

Feldman, Cronk and Huscroft, JJ.A.

August 21, 2015.

Summary:

The parties married in 1988 and separated in 2009. They had two children: J., approximately 22 years of age, and Je., almost 17 years of age. The husband applied for a divorce under the Divorce Act and relief under the Family Law Act. The trial judge granted a divorce. He also ordered the matrimonial home to be sold, the wife to pay an equalization payment in favour of the husband, and the husband to pay child and spousal support, as well as part of Je.'s private secondary school education costs. The husband appealed from: i) the trial judge's finding that the husband gifted his interest in the matrimonial home to the wife when the parties purchased the property; ii) the trial judge's imputation of income to the husband based on money and dividends that one or both of his parents had previously gifted or allocated to him; and iii) the trial judge's treatment of Je.'s private secondary school fees as a s. 7 extraordinary expense under the Federal Child Support Guidelines.

The Ontario Court of Appeal allowed the appeal in part. The court held that the trial judge committed a palpable and overriding error in finding that the husband did not retain a beneficial ownership interest in the matrimonial home. The husband was a beneficial owner of a one-half interest in the matrimonial home. He was entitled to 50% of the proceeds of sale of the matrimonial home, less his 50% share of the maintenance costs of the matrimonial home from the date of separation to the date of sale. The wife was entitled to a credit of $25,296 on account of the husband's arrears in child and spousal support as of April 1, 2015, plus a further credit in the amount of any additional support arrears from April 1, 2015 to the date of the court's reasons. In all other respects, the court dismissed the appeal.

Family Law - Topic 630

Husband and wife - Marital property - Matrimonial home - General - [See both Family Law - Topic 865 ].

Family Law - Topic 644

Husband and wife - Marital property - Transfer between spouses - Rebuttal of presumption of resulting trust - [See first Family Law - Topic 865 ].

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The parties married in 1988 and separated in 2009 - The husband applied for a divorce and relief under the Family Law Act - The wife maintained that when the matrimonial home was acquired in 2002, the parties placed title to the property in her name alone to protect it from potential claims by creditors arising out of the husband's employment - She argued that, since she was the sole registered owner of the home, she alone was entitled to any post-separation increase in its value - The trial judge concluded that, while the husband was entitled to share in the value of the matrimonial home at the date of separation by reason of the equalization provisions of the Act, the wife "through ownership ... benefits in any increase in value of the [Matrimonial Home] as and from [the date of separation]" - The husband appealed the trial judge's finding that the husband had gifted his interest in the matrimonial home to the wife when the parties purchased the property - The Ontario Court of Appeal held that the trial judge committed a palpable and overriding error in finding that the husband did not retain a beneficial ownership interest in the matrimonial home - Section 14 of the Act affirmed the presumption of a resulting trust in determining questions of ownership between spouses in the context of gratuitous property transfers - The wife did not disprove the presumption that the husband was the beneficial owner of a one-half interest in the matrimonial home - Even absent the presumption, the evidence at trial did not ground a finding of a clear intention to gift - See paragraphs 24 to 39.

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The parties married in 1988 and separated in 2009 - The husband applied for a divorce and relief under the Family Law Act - When the matrimonial home was acquired in 2002, the parties placed title to the property in the wife's name alone - The trial judge concluded that, while the husband was entitled to share in the value of the matrimonial home at the date of separation by reason of the equalization provisions of the Act, the wife "through ownership ... benefits in any increase in value of the [Matrimonial Home] as and from [the date of separation]" - The husband appealed the trial judge's finding that the husband had gifted his interest in the matrimonial home to the wife when the parties purchased the property - The Ontario Court of Appeal held that the trial judge committed a palpable and overriding error in finding that the husband did not retain a beneficial ownership interest in the matrimonial home - The determination that the husband was a beneficial owner of a one-half interest in the matrimonial home was dispositive of his entitlement to share in any post-separation increase in the value of the property - He was placed in the same position as a joint owner on title, thereby becoming entitled to a one-half interest in the value of the matrimonial home whenever that value crystalized - When the property was sold, the husband would be entitled to one-half of the net proceeds of sale, reduced by any unpaid share in the expenses of upkeep - See paragraphs 40 to 45.

Family Law - Topic 4021.4

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

Family Law - Topic 4045.4

Divorce - Corollary relief - Maintenance - Child support guidelines - Special or extraordinary expenses - The parties separated in 2009 - They had two children: J., approximately 22 years of age, and Je., almost 17 - The trial judge ordered that the husband pay part of Je.'s private secondary school education costs - The husband appealed from the trial judge's treatment of Je.'s private secondary school fees as a s. 7 extraordinary expense under the Federal Child Support Guidelines - The Ontario Court of Appeal dismissed this ground - Je. had attended private parochial schools her entire life - The trial judge appreciated that Je.'s grandmother had been very generous in assisting with private school fee payments - He also recognized that the continuation of that assistance was uncertain - However, given the annual income imputed to the husband and the fact that J. no longer required any contributions from the husband to his expenses, the trial judge concluded that Je.'s secondary school fees qualified as a s. 7 expense under the Guidelines - There was no reversible error in that ruling - The trial judge expressly applied the two-part test of necessity and reasonableness and addressed Je.'s needs and best interests, the parties' historical approach to the children's schooling, and the husband's financial ability to meet his share of this expense - See paragraphs 70 to 75.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - The husband appealed from the trial judge's imputation of income in the amount of $120,000 to the husband based on money and dividends that one or both of his parents had previously gifted or allocated to him - The Ontario Court of Appeal found no basis to disturb the trial judge's imputation of income to the husband - Gleedah Investments (a corporation controlled by the husband's mother) declared dividends and allocated them to the husband for the purpose of reducing the mother's annual taxable income - The husband never actually received the dividends - The trial judge made a palpable and overriding error in including the husband's declared dividend income from Gleedah in his calculation of the quantum of annual income to be imputed to the husband - However, that did not end the matter - The generous monetary gifts made to the husband by one or both of his parents were also a proper and necessary consideration - There was evidence establishing a settled pattern of monetary gifts to the husband by one or both of his parents, over many years - Moreover, those gifts were substantial - The court was not persuaded that the trial judge erred in imputing global annual income to the husband in the sum of $120,000 - Finally, the annual income imputed to the husband ($120,000) was the same amount to which he stipulated in two consent support orders - Although the husband did not admit the amount of income imputed to him in those orders, he also did not move to vary or appeal the child and spousal support orders containing that imputation of income - See paragraphs 46 to 69.

Gifts - Topic 527

Gifts inter vivos - Presumption against gift - Resulting trust - Rebuttal of presumption - [See first Family Law - Topic 865 ].

Cases Noticed:

Martin v. Sansome (2014), 314 O.A.C. 375; 118 O.R. (3d) 522; 2014 ONCA 14, dist. [para. 25].

Rawluk v. Rawluk, [1990] 1 S.C.R. 70; 103 N.R. 321; 38 O.A.C. 81; 65 D.L.R.(4th) 161, refd to. [para. 25].

Kerr v. Baranow, [2011] 1 S.C.R. 269; 411 N.R. 200; 300 B.C.A.C. 1; 509 W.A.C. 1; 274 O.A.C. 1; 2011 SCC 10, refd to. [para. 27].

Pecore v. Pecore, [2007] 1 S.C.R. 795; 361 N.R. 1; 224 O.A.C. 330; 2007 SCC 17, refd to. [para. 27].

Schwartz v. Schwartz et al. (2012), 290 O.A.C. 30; 2012 ONCA 239, refd to. [para. 27].

McNamee v. McNamee (2011), 280 O.A.C. 372; 106 O.R.(3d) 401; 2011 ONCA 533, refd to. [para. 27].

Nussbaum v. Nussbaum, [2004] O.T.C. 805; 9 R.F.L.(6th) 455 (Sup. Ct.), refd to. [para. 38].

Bak v. Dobell (2007), 224 O.A.C. 10; 86 O.R.(3d) 196; 2007 ONCA 304, refd to. [para. 47].

Riel v. Holland (2003), 177 O.A.C. 162; 67 O.R.(3d) 417; 42 R.F.L. (5th) 120 (C.A.), refd to. [para. 48].

Drygala v. Pauli (2002), 164 O.A.C. 241; 61 O.R.(3d) 711; 29 R.F.L. (5th) 293 (C.A.), refd to. [para. 51].

Statutes Noticed:

Family Law Act, R.S.O. 1990, c. F-3, sect. 10(1) [para. 25]; sect. 14 [para. 26].

Counsel:

Peter I. Waldmann and Matthew J. Armstrong, for the appellant;

Evelyn K. Rayson and Diana L. Solomon, for the respondent.

This appeal was heard on May 7, 2015, before Feldman, Cronk and Huscroft, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Cronk, J.A., and was released on August 21, 2015.