McKearney-Morgan v. Morgan

McKearney-Morgan v. Morgan Court Supreme Court Date 2012-09-12 Citation 2012 NSSC 236 Docket 127-000 Judge/Registrar/Adjudicator Legere-Sers, Moira (Honourable Justice) (SC) Document Type Decision Decision Content SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: McKearney-Morgan v. Morgan, 2012 NSSC 236 Date: 20120912 Docket: 1217-000734 Registry: Port Hawkesbury Between: Michelle Marie McKearney-Morgan Petitioner v. John Bernard Morgan Respondent Judge: The Honourable Justice Moira C. Legere Sers Heard: June 7, 2012, in Port Hawkesbury, Nova Scotia Counsel: Wayne MacMillan, for the petitioner Adam Rodgers, for the respondent By the Court: [1] This petition for Divorce concerns Michelle McKearney-Morgan and John Bernard Morgan. [2] On June 25, 2010, the petitioner first filed her Petition for Divorce as well her Statement of Guideline Income, Statement of Expenses , Statement of Property and Notice to File Financial and Guideline Income Information.. [3] The respondent’s documents were to be filed within 20 days of service of the Notice to File. [4] The respondent was served with the documents on the 4th day of July, 2010. [5] The Request for a Date Assignment Conference was filed on November 16, 2010. The petitioner anticipated being ready for trial in January, 2011. [6] On December 23, 2010, the respondent filed a Statement of Property, Statement of Income and Statement of Expenses. [7] For reasons unknown to the Court, the matter did not proceed. [8] The petitioner filed another Notice of Motion for Directions on November 1, 2011. The matter was set down for January 16, 2012. Both counsel identified the issues in contention. [9] A Pre Trial Memorandum dated January 16, 2012, identified filing deadlines. [10] The matter was set down for hearing on May 18, 2012. [11] The Pre Trial Memorandum was sent to counsel on February 7, 2012, and again in February 27, 2012, as a reminder of the filing deadlines. The respondent’s affidavit was to be filed by April 27, 2012. [12] The respondent’s affidavit was not filed in accordance with the pretrial directions. [13] On May 4th a letter was sent to the respondent’s counsel reminding the respondent of the filing requirements. [14] His counsel responded by letter dated May 10th indicating the respondent was seeking an adjournment as he was unable to address his retainer. [15] The Court also received a letter directly from the respondent, dated May 10, 2012, advising he had received notice from his counsel on May 7, 2012, that he was no longer prepared to represent the respondent for the May 18 hearing. [16] A letter from the Court to counsel for the respondent dated May 14, 2012, reminded the respondent’s counsel of the requirements of Rule 33.03(d). [17] Given the advance notice all parties had prior to a hearing, the ample time between the pretrial in January, 2012, and the hearing date of May 18, 2012, the lack of any notice of intent to withdraw as counsel and the prejudice to the petitioner, (who lived in Prince Edward Island) should an adjournment be granted, the Court declined to grant an adjournment unless the parties consented to such an adjournment. The Petitioner did not consent . [18] There was no motion before the Court by counsel seeking to withdraw and therefore no evidence on which the Court could be advised of the reasons for this state of affairs. [19] There was no evidence before me that an adjournment would result in the timely retention of alternate counsel such that a hearing could be docketed as soon as possible. [20] The petitioner had previously experienced delays as a result of the respondent’s failure to obtain an appraisal of the home as is evidenced in Mr. MacMillian’s affidavit supporting the Motion for Directions. [21] I am unclear as to the reasons for the failure of the respondent to fully disclose details of his claim or to provide in a timely fashion his affidavit in response to the petitioner’s claim. The respondent’s affidavit was eventually filed on May 25, 2012. Given the material already filed by the petitioner, the responding affidavit was short on details. [22] I was not made aware of the reason why the respondent’s pretrial brief was not filed. The respondent’s viva voce evidence provided little supporting evidence. History of the marriage [23] The parties were married on November 17, 2007, and separated on March 3, 2009. The relationship lasted one year and five months. There were no children of this union. [24] This is a second marriage for the petitioner. She was 39 at the date of marriage and the respondent was 41. [25] Although an answer was not filed, the parties and counsel were clear that the relief sought was contested. There was no objection raised regarding the absence of a formal answer. The matter proceeded to a contested hearing on the merits. [26] The issue before the Court is the division of matrimonial property and debts. [27] The petitioner seeks an equal division of assets including the respondent’s pension accumulated since April 30, 1990, despite the short term nature of the relationship. [28] The petitioner rests her claim on section 4 of the Matrimonial Property Act, R.S., c. 275, s.1, based on her financial contributions to the marriage, to the respondent’s debts and her own impoverishment as a result of their union. [29] There is little, if any equity, in the matrimonial home. [30] The respondent is seeking an unequal division of his pension and assets pursuant to section 13 of the Matrimonial Property Act , given the short term marriage and the manner and dates of acquisition of the assets. [31] Spousal support is not an issue. [32] In assessing the petitioner’s claim regarding contributions to the marriage, I have reviewed the income positions of the parties. [33] The petitioner’s income as illustrated by Statement of Income on June 15, 2010, was $44,599.80 whereas the respondent’s, as of September 10, 2010, was $64,794.00. The respondent has consistently earned a larger income than the petitioner, particularly during their marriage. [34] The petitioner brought into the marriage: 1.the equity from her home; and 2. the pension contributions she received when she withdrew her pension and terminated her employment in Prince Edward Island before coming to Nova Scotia to be married to the respondent on November 17, 2007. The equity in her home was $23,423.47 and her pension contributions amounted to $15,241.98 for a total contribution of $38,665.45. [35] There is evidence to confirm these funds were applied to capital expenditures for the couple, the respondent’s pre-existing debts, day-to-day care and maintenance of the home and the parties lifestyle. These funds have been depleted in their entirety. [36] The respondent received substantial financial benefit from the marriage. Debts [37] During the course of the marriage, the petitioner contributed towards the respondent’s old and current debts in his name with Citifinancial, Master Card, S & D Central, Wells Fargo, Home Hardware, Bell Mobility, and a dental bill for a total of $6,671.16. Capital Contributions [38] She bought a new heating system for the home costing $6,303.14. Day to Day Expenses [39] She contributed to the day to day expenses to maintain the home including insurance and other expenses. Mortgage Arrears and Prospective Payments [40] She also contributed to the mortgage on a regular basis and brought the mortgage arrears up to date. [41] The petitioner confirmed in her evidence (reply affidavit - paragraph 9 (b)) that the mortgage was in arrears when she married the respondent. She made deposits to the respondent’s bank account to get the mortgage and loan arrears paid up. [42] On December 11, 2007, she paid $800.00; on January 11, 2008 - $1,000.00; and January 17, 2008 - $1,400.00. [43] On December 7, 2007, she deposited $400.00 to his bank account in order to address his outstanding loans. However, the bank applied this to the mortgage arrears. [44] On February 4, 2008, the petitioner met with the respondent’s bank manager and deposited $1,173.99 to the respondent’s account to be paid against the mortgage arrears. On that date, she changed the mortgage payments so that the funds began to come out of her account. [45] By February 11, 2008, the mortgage arrears had been paid and the mortgage was up to date. Thereafter, she maintained the monthly payments from March 3, 2008, to March, 2009. [46] The respondent admits that the petitioner handled most, if not all, of the finances during the marriage [47] The respondent denies that the petitioner paid the mortgage. He advises he gave her cash to pay the mortgage. [48] He acknowledges that he does not have contrary evidence to the petitioner’s documented evidence regarding her payments towards bills and the heating system. [49] The respondent testified that the balance of the mortgage as of the date of separation was $172,577.49. Pension [50] The respondent’s pension comes from his employment at the Port Hawkesbury mill. He hopes to return to employment in August of 2012, although he is of the belief (not yet substantiated) that pensions will be reduced by thirty percent. [51] The respondent’s hiring date with NewPage Port Hawkesbury Corporation was April 30, 1990. As of the statement dated December 31, 2010, the respondent had 19.7917 total years of credited service with a projected normal retirement date of July 1, 2031. His mother is listed as his beneficiary. [52] The pension earnings show a five year average income of $64,611.95 with accumulated contributions with interest to December 31, 2009, of $58,006.62. Matrimonial Home [53] The parties agree on a valuation of approximately $185,000.00 for the matrimonial home. [54] As of the 23rd of May, 2012, the mortgage has been reduced to $156,512.00. After ordinary disbursements of six percent real estate, together with HST and $800.00 legal fees, the equity in the home would be approximately $14,923.00. Matrimonial Debt [55] Finally, there were matrimonial bills including the Visa in the petitioner’s mother’s name out of which the parties paid for $5,000.00 worth of landscaping, plus $4,424.22 of debt. That debt was presented as a matrimonial debt. [56] The evidence was insufficient to identify what payments were made on this Visa bill and what existed at the time of separation, as well as a lack of certainty as to what of the balance related to matrimonial matters. The respondent contested the classification of this bill as matrimonial. [57] After the hearing, I directed correspondence dated June 22, 2012, to both counsel for clarification regarding this visa debt in the name of the petitioner’s mother. The petitioner tendered a supplementary affidavit after the hearing in response to my request. I then extended to the respondent an opportunity to respond. [58] Given the additional new information and the lack of clarity, I set the matter down for further evidence on August 28, 2012, to allow each party to address the new evidence. [59] The petitioner then advised the Court, through her counsel, that she did not wish to undertake further costs including another trip from Prince Edward Island. She withdrew her request to have this debt considered in the division. [60] This was confirmed by both counsel in court on August 27, 2012. [61] I therefore do not make any findings as to the division of this debt. [62] I have not included the Aliant debt as a matrimonial debt. It is a bill that relates to February/March 2009. I am unable to determine what part of that is post separation debt which might be recoverable as opposed to pre-separation debt, which would be a joint responsibility. [63] In addition, the insurance payment would be an ordinary expenditure and I have not included that in the capital expenditures as part of her contribution. [64] The petitioner was responsible for the payment of debts and ongoing expenses. Although the respondent brought in approximately $3,289.00 per month to his own account, he paid little towards the maintenance other than groceries and gas. [65] The petitioner advises that much of the respondent’s money went to gambling. She had no access to his bank account. He moved his account to the Scotia Bank when the Bank of Montreal took his money to pay the outstanding indebtedness. [66] He admits to spending money on gambling in the past and admits to marijuana use costing him $325.00 per month. [67] The documentation provided shows that many of his personal debts were in collection. Personal Household Possessions [68] I have insufficient information about the personal possessions to affect any division. [69] The respondent has not made out a claim that would support an unequal division of the matrimonial home. [70] As it stands now, the respondent has a pension, valuation unknown other than included on the statement, and a matrimonial home, which if sold, would likely yield no more than $7,000.00 to the petitioner. [71] The petitioner has exhausted her savings and walked away with neither her pension nor a manner of obtaining any equity from the matrimonial home. [72] She has improved the respondent’s financial status by paying off outstanding loans in his name only. [73] Section 4 (1) of the Matrimonial Property Act states: 4 (1) In this Act, "matrimonial assets" means the matrimonial home or homes and all other real and personal property acquired by either or both spouses before or during their marriage, with the exception of: (a) N/A (b)N/A (c)N/A (d) reasonable personal effects of one spouse; (e) N/A (f) N/A (g) real and personal property acquired after separation unless the spouses resume cohabitation. [74] The matrimonial assets, including the pension and the matrimonial home acquired before or during the marriage, are matrimonial assets unless a party otherwise satisfies the Court on a balance of probabilities that an asset falls within one of the exceptions of the definition contained in section 4 (1) of the Act. [75] It is the respondent who is seeking an unequal division of the matrimonial assets. It is he who bears the burden of proof. [76] As indicated in Adams v. French, 2007 NSSC 57, at paragraph 50: “The Matrimonial Property Act creates a presumption in favor of an equal division of matrimonial property. The burden of establishing entitlement to an unequal division of matrimonial property rests with the party who seeks the unequal division. A claim for an unequal division should only be granted in circumstances where an equal division of matrimonial assets is unfair and unconscionable.” [77] To place the respondent’s claim for unequal division within a legislative framework by the evidence presented, I would place the respondent’s case for an unequal division under section 13 (d): “13 (d) the length of time that the spouses have co-habited with each other during their marriage”. [78] This is an extremely short term marriage of one year and five months. Section 13 (e) reads: “13 (e) the date and manner of acquisition of assets”. [79] The bulk of the pension was accumulated prior to the marriage relationship and co-habitation period. [80] The matrimonial home was built just two years prior to the relationship and the petitioner has certainly proven that she has contributed significantly to this asset. [81] All other subsections of section 13, if considered, would relate more to the impoverishment of the petitioner as a result of the investment of her funds in the marriage, the amount of debts to which she contributed. Section 13 (l) reads as follows: the value to either spouse of any pension or other benefit which, by reason of the termination of the marriage relationship, that party will lose the chance of acquiring”, given she withdrew her own pension contributions prior to entering into the relationship and invested it into the family unit” The respondent continues to live in the matrimonial home. [82] Selling the home would not result in sufficient profit toeither party to offset the contributions the petitioner put into the marriage and the hardship she will suffer as a result of that one year and five months and her investment of equity and pension contributions. [83] There is no other asset other than the home and the pension. [84] The only reliable evidence Mr. Morgan has given with respect to the pension is contained in Exhibit “A” attached to his Affidavit dated May 24, 2012, which shows an accumulation of contributions to December 31, 2009, of $58,006.62. [85] While Mr. Morgan has indicated that he is expecting a reduction of thirty percent as a result of the new deal, I have no evidence to confirm that. [86] The petitioner’s capitol contribution to the marriage was $36,212.01. [87] In the Statement of Property, I am unable to determine if the debts listed by the petitioner are anything other than personal debts for which she has a personal loan, Master Card, and repayment of sick benefits in the amount of approximately $18,000.00 to $19,000.00; whereas the respondent shows no debts, largely in thanks to the petitioner. [88] The likely equity available from the home with a valuation of $185,000.00 and the current mortgage would be approximately $14,922.00 - one half of which would be her entitlement of $7,461.34. [89] The respondent shall pay to the petitioner within 45 days of the date of this decision the amount of $7,462.00 in full and final satisfaction of her interest in the matrimonial home. Judgment may be entered and interest accruing on the judgment in accordance with the Interest on Judgment’s Act, R.S., c. 233, s. 1. [90] With respect to the pension, the petitioner shall be entitled to thirty five (35) percent of the total pension earned up to the date of separation that is March 3, 2009. [91] The combination of these two awards in some manner equalizes as much as possible the division of assets and debts having regard to what each brought into the marriage, contributed to the assets and gained /suffered as a result of the breakdown of the relationship. [92] Mr. MacMillan shall draft the orders. Moira C. Legere Sers, J.