Reisman v. Reisman, 2014 ONCA 109

• Judge: Hoy, A.C.J.O., Laskin and Tulloch, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 11, 2013
• Jurisdiction: Ontario
• Citations: 2014 ONCA 109;(2014), 315 O.A.C. 333 (CA)

Reisman v. Reisman (2014), 315 O.A.C. 333 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. FE.009

Linda Joy Reisman (applicant/appellant) v. Howard Jonathan Reisman (respondent/respondent in appeal)

(C55669; 2014 ONCA 109)

Indexed As: Reisman v. Reisman

Ontario Court of Appeal

Hoy, A.C.J.O., Laskin and Tulloch, JJ.A.

February 11, 2014.

Summary:

The parties were married for 20 years. They separated in October 2006, though they remained in their matrimonial home until its sale in April 2008. At trial in September 2011, the wife was 46 and the husband was 48. They had four children: a daughter, aged 22, and three sons, aged 20, 18 and 15. The two older children lived away from home; the two younger children lived alternatively with both parents, although at trial, the 18 year old, was living with his mother. In December 2007, the parties had entered into an interim domestic contract under which the husband paid monthly spousal support and made an equalization payment to the wife on a "without prejudice" basis pending trial. In November 2010, the parties settled all issues relating to their children, and agreed that neither would pay child support to the other. The parties litigated two main issues: (1) whether an estate freeze undertaken by the husband's father in 1998 amounted to a fraudulent conveyance; and (2) the amount and duration of spousal support. The trial judge dismissed the wife's claim that the estate freeze was a fraudulent conveyance; ordered the husband to pay the wife spousal support of $4,500/monthly for 10 years and lump sum support of $119,956.34, and awarded $250,000 costs against the wife. The wife appealed.

The Ontario Court of Appeal allowed the appeal in part. The court made the spousal support order indefinite, subject to variation or termination on a material change, and varied the wife's obligation to pay the costs award from $2,083.33 monthly to $1,000 monthly. The court otherwise dismissed the appeal.

Family Law - Topic 880.3

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - Gift, trust, bequest or award - The parties were married for 20 years - They separated in October 2006 - On the date of marriage, the husband was the beneficiary of the MRL Trust, settled by his father in 1965 - Through its ownership of certain preference shares, the Trust held a 13.89% interest in the equity of MRL, a real estate holding company, which held income producing properties and land - The husband never personally received any distribution from his interest in the Trust - In 1998, the husband's father undertook a complicated reorganization and estate freeze of MRL - The trial judge found that this had three objectives: (1) to freeze the value of the equity shares in MRL; (2) to cause a distribution of trust to the children and grandchildren; and (3) to protect the future growth in MRL in order to take advantage of exclusions under the Family Law Act for gifted property - On appeal, the wife submitted that the common shares given to the husband on the estate freeze were improperly excluded from his net family property as a gift and that she was denied a fair trial by the trial judge's failure to permit her to withdraw her admission that the shares were a gift - The Ontario Court of Appeal rejected the submissions - The court agreed with the trial judge that the wife should not be permitted to withdraw her admission where there was no satisfactory explanation that had been put forward and the prejudice to the husband could not have been compensated for by costs or an adjournment - In any event, the shares were a gift - An intention to donate, an acceptance and a sufficient act of delivery had all been made out - See paragraphs 32 to 48.

Family Law - Topic 966

Husband and wife - Actions between husband and wife - Practice - Costs - The parties were married for 20 years - They separated in October 2006 - In December 2007, the parties entered into an interim domestic contract under which the husband paid monthly spousal support and made an equalization payment to the wife on a "without prejudice" basis pending trial - In November 2010, the parties settled all issues relating to their four children, and agreed that neither would pay child support to the other - The parties litigated two main issues: (1) whether an estate freeze undertaken by the husband's father in 1998 amounted to a fraudulent conveyance; and (2) the amount and duration of spousal support - The trial judge dismissed the wife's claim that the estate freeze was a fraudulent conveyance; ordered the husband to pay the wife spousal support of $4,500/monthly for 10 years and lump sum support of $119,956.34, and awarded $250,000 costs, payable by the wife over 10 years, in equal monthly installments of $2,083.33, unless the husband's obligation to pay spousal support ended earlier, in which case the entire amount remaining would become due and payable - The husband had made three offers to settle, each on terms more favourable to the wife than she obtained at trial - The wife appealed - The Ontario Court of Appeal allowed the appeal in part - The court made the spousal support order indefinite, subject to variation or termination on a material change, and varied the wife's obligation to pay the costs award from $2,083.33 monthly to $1,000 monthly - See paragraphs 75 to 83.

Family Law - Topic 4012

Divorce - Corollary relief - Maintenance and awards - Awards - Lump sum and periodic payments - [See Family Law - Topic 4022.1 ].

Family Law - Topic 4021.5

Divorce - Corollary relief - Maintenance and awards - Support guidelines (incl. non-divorce cases) - [See Family Law - Topic 4022.1 ].

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance and awards - Awards - To spouse - Extent of obligation - The parties were married for 20 years - Under an interim domestic contract, which the parties signed in December 2007, the husband agreed to pay the wife $5,750/month spousal support pending trial, without prejudice to his right to seek to pay a lower amount - He also paid her a $226,538 advance equalization payment - The trial judge awarded the wife a $106,581.66 equalization payment, leaving a $119,956.34 overpayment - The husband agreed to forego the overpayment in return for paying less monthly support - The trial judge ordered that the $119,956.34 be treated as lump sum spousal support (equivalent to $1,500/month for 10 years) - In addition, she ordered monthly spousal support of $4,500 for 10 years (unless there was an earlier material change in circumstances) - In arriving at this amount, she took the husband's 2011 income for support purposes to be $192,000, and imputed $30,000 annual income to the wife - The Spousal Support Guidelines provided for a monthly range of $4,050 to $5,400 - The wife appealed - The Ontario Court of Appeal held that it had no basis to adjust the amount of spousal support - However, given the following five facts, imposing a time-limited order had been unrealistic: (1) the marriage was long (20 years); (2) the wife had been mostly responsible for maintaining the household and raising the children; (3) she had not had a full-time job outside the home since the children were born; (4) the parties had lived well during their marriage; and (5) when the time-limited support order by the trial judge ended, the wife would be 56 years old - The court followed the Guidelines' recommendation and ordered that support be indefinite, subject to variation or termination on a material change - See paragraphs 7 to 16 and 23 to 31.

Family Law - Topic 4029

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of capacity of claimant - The parties were married for 20 years - They had four children - Before marriage, the wife earned a diploma in Early Childhood Education - However, she had not worked in that field for over 20 years - During the marriage, she held part-time jobs in retail, event planning and design - For a time, she also had a gift basket business - She earned between $4,000 and $24,000 annually - The wife testified at trial that she could not have taken on a full-time job outside the home because she had assumed most of the household and child-raising responsibilities - She said that she now had to be available for one of the children, 18 years old at trial, who was living with her and suffered episodes of severe depression - After the parties separated, she had significantly changed her lifestyle, quitting her part-time job and making no effort to find other work for three years - Eventually, she took a part-time retail position with Swarovski Crystal, working 26 hours/week at $13/hr - She admitted that she could earn more money as an event planner - She had also begun to live extravagantly - She took 10 trips to Amsterdam - She renovated and furnished her new home and paid her boyfriend $4,000/month to help her decorate it - Overall, she had spent nearly $900,000, depleted her capital and gone into debt - The Ontario Court of Appeal refused to interfere with the trial judge's imputation of a $30,000 annual income to the wife - See paragraphs 15, 16 and 19 to 22.

Family Law - Topic 4175

Divorce - Practice - Costs - General (incl. considerations) - [See Family Law - Topic 966 ].

Fraud and Misrepresentation - Topic 1452

Fraudulent conveyances and preferences - Impeachable conveyances and preferences under modern statutes - Creditor defined - [See Fraud and Misrepresentation - Topic 1458 ].

Fraud and Misrepresentation - Topic 1458

Fraudulent conveyances and preferences - Impeachable conveyances and preferences under modern statutes - Intention required - The parties were married for 20 years - They separated in October 2006 - On the date of marriage, the husband was the beneficiary of the MRL Trust, settled by his father in 1965 - Through its ownership of certain preference shares, the Trust held a 13.89% interest in the equity of MRL, a real estate holding company, which held income producing properties and land - The husband never personally received any distribution from his interest in the Trust - In 1998, the husband's father undertook a complicated reorganization and estate freeze of MRL - The trial judge found that this had three objectives: (1) to freeze the value of the equity shares in MRL; (2) to cause a distribution of trust to the children and grandchildren; and (3) to protect the future growth in MRL in order to take advantage of exclusions under the Family Law Act for gifted property - The trial judge rejected the wife's argument that the common shares given to the husband on the estate freeze should be excluded from his net family property because they were a fraudulent conveyance for two reasons: (1) the wife was not a creditor of the husband when the challenged conveyance took place; and (2) the estate freeze was not undertaken with an intent to defeat an equalization claim by the wife - The trial judge relied on an affidavit by the husband's father sworn three years earlier - The father now had Alzheimer's disease and could not give viva voce evidence - On appeal, the Ontario Court of Appeal agreed that this was not a fraudulent conveyance - Further, the trial judge did not err in admitting the husband's father's affidavit and relying on it to establish intent - See paragraphs 55 to 74.

Practice - Topic 3679

Evidence - Affidavits - Use of - Affidavits - Evidence - Admissibility - [See Fraud and Misrepresentation - Topic 1458 ].

Practice - Topic 4959

Admissions - Withdrawal, amendment or setting aside of - [See Family Law - Topic 880.3 ].

Practice - Topic 7243

Costs - Party and party costs - Offers to settle - Effect of failure to accept - [See Family Law - Topic 966 ].

Cases Noticed:

Fisher v. Fisher (2008), 232 O.A.C. 213; 2008 ONCA 11, refd to. [para. 24].

Tedham v. Tedham (2005), 217 B.C.A.C. 250; 358 W.A.C. 250; 261 D.L.R.(4th) 332; 2005 BCCA 502, refd to. [para. 28].

Allaire v. Allaire (2003), 170 O.A.C. 72; 35 R.F.L.(5th) 256 (C.A.), refd to. [para. 28].

Serra v. Serra (2009), 246 O.A.C. 37; 93 O.R.(3d) 161; 2009 ONCA 105, refd to. [para. 53].

Stone v. Stone (2001), 156 O.A.C. 345; 55 O.R.(3d) 491 (C.A.), dist. [para. 57].

Counsel:

Gary S. Joseph and Serena Lein, for the appellant;

Nancy Iadeluca, for the respondent.

This appeal was heard on October 11, 2013, by Hoy, A.C.J.O., Laskin and Tulloch, JJ.A., of the Ontario Court of Appeal. Laskin, J.A., delivered the following decision for the court on February 11, 2014.