Perry v. Perry, 2013 NSSC 28

SUPREME COURT OF NOVA SCOTIA Citation: Perry v. Perry, 2013 NSSC 28 Date: 20130117 Docket: 1208-003019, SYD-073630 Registry: Yarmouth Between: Lori Jane Perry Petitioner v. Douglas Edward Perry Respondent Judge: The Honourable Justice Charles E. Haliburton Heard: December 17, 2012, in Barrington, Nova Scotia Written Decision: January 17, 2013 Counsel: Celia J.

Melanson, for the Petitioner Susan Mullins, for the Respondent By the Court : [ 1 ] I adopt the facts relating to this divorce as set forth in the pretrial brief tendered on behalf of the Petitioner which I now paraphrase. [ 2 ] The Petitioner and Respondent commenced cohabiting in or about the autumn of 1996. They were married at Yarmouth, Nova Scotia on July 5, 2002. The Petitioner had a daughter from a previous marriage who had always lived with her mother. She is 18 years old.

She is not a child of the marriage and for our purposes is relevant to this proceeding only because an RESP was established for her benefit. Her mother now seeks confirmation that the Respondent has no claim on that asset. [ 3 ] There is one child of the marriage, Jacob Ryan Douglas Perry (Jacob) who was born November 3, 1999. The parties separated October 31, 2010 ending their 13 year relationship. [ 4 ] At the conclusion of the hearing, I granted a Divorce Judgment. This decision is to deal with corollary matters.

[ 5 ] Upon separation, the Petitioner departed the matrimonial home located on highway 330 in Centerville, Shelburne County, Nova Scotia, taking Jacob with her. Since that time, the Petitioner and her two children reside in an apartment on her parents property in Barrington. The Petitioner seeks to have the matrimonial home sold in order to satisfy the various debts owing by each of the parties, and to restore their credit.

The idea that the home be sold is vigorously resisted by the Respondent who argues that doing so would diminish the value of this major asset and not satisfy their debts. [ 6 ] The Petitioner is a self-employed certified accountant operating her own business under the style of “ Causeway Tax and Bookkeeping ” . She was so employed during the latter years of the marriage achieving earnings in 2010 of $37,844 and in 2011, $30,392. The Respondent is employed as an engineer with the Coast Guard and in 2011 earned an income of $82,698.

Leading up to the date of the separation, the Respondent had been on sick leave and had been receiving Workers Compensation benefits. His reduced income over some three years no doubt resulted in a reduction of the parties current net worth. Issues [ 7 ] The issues to be resolved are: 1. The custody of Jake who is presently attending grade seven in a local school; 2. A determination whether all assets are matrimonial, or whether some are “ business ” assets/liabilities of the respective parties; 3. The division of matrimonial property; 4. Whether an order should require that the house/matrimonial home be sold.

Custody [ 8 ] Jacob has lived with his mother since the separation in October 2012. Early on, after separation, Jacob would return to the family home occupied by his father after school. When he did so, his mother would pick him up after she complete her work day and take him home with her. The father was at that time off work and receiving Workers Compensation benefits. He was suffering PTSD as a result of his earlier work on the recovery of debris resulting from the “ Swiss Air Disaster ” . The father believed he had an “ excellent ” relationship with his son for the three years he was off work.

Among the assets at separation was a 1974 Barracuda motor vehicle. His father had bought it for Jake so that the two of them could do mechanical work on it together. Among the other activities he enjoyed with Jake were Tae Kwon Do, baseball and he testified that he had taken Jake with him to participate in a “ captains course ” . It was when he bought a bulldog for his son, against his wife ’ s wishes, that the parties finally separated. The father conceded that there were disagreements about parenting.

It was his opinion that Jake spent too much time on video games and not enough time “ at the shore ” or using his pellet gun. [ 9 ] Very soon after the separation, Jake stopped coming around in spite of his father ’ s continuing efforts at making contact. The Petitioner considered these efforts to be harassment of both her and Jake. These persistent efforts eventually resulted in criminal charges and conviction, which excluded the father from even “ indirect ” contact with either mother or son.

As of the hearing date, the father continued to be under an order of the Provincial Court to have no contact with the mother although limited, supervised contact can occur with Jake. The result of the conflict between the parents is that his father has had no contact directly with Jake since February of 2011. [ 10 ] Erin Spidle, a social worker at Shelburne Mental Health, has been counselling Jacob since October 2012. She is a mental health therapist. She sees Jacob as the result of referrals from both parents. She first saw him in company with his mother.

The object of her counselling is to seek to reunite him with his father. She testified that her goal is to have him comfortable to visit with his Dad, but said that she would “ take my lead ” from Jake; probably initiating the process by having the two of them meet together in a session with her. She expressed her opinion that after only a few sessions Jake has changed his attitude and would meet with his father “ if he has support ” . Ms. Spidle suggested the possibility that the parents also need some counselling of their own.

This would need to be done by their own counsellors. [ 11 ] The situation here is not one where it would be appropriate to order joint custody which is sought by the father. Jake and his father are clearly seriously estranged. There is a background of long standing conflict between the parents, and certainly the evidence of the

Petitioner suggests she cannot, at least at present, contemplate co-parenting with the Respondent. Nonetheless the child has a right toknowledge of and access to both his parents. [12] The Divorce Act, RSC 1985,

Chapter 3, provides at

section 16 that where an application for the custody of children is made, “thecourt shall take into consideration only the best interests of the child of the marriage as determined by reference to the condition, means,needs and other circumstances of the child.” In doing so, subsection 10 admonishes the court to “give effect to the principle that thechild of the marriage should have as much contact with each spouse as is consistent with the best interests of the child and, for thatpurpose, shall take into consideration the willingness of the person for whom custody is sought to facilitate such contact.” [13] I am referred to the 17 considerations expressed by Goodfellow, J. in Foley v.

Foley (1993), (NS SC), 124 NSR(2d) 198 for assistance in relation to the assessment of the “best interests” of the child. Using some of those factors as a guide, I wouldmake the following observations: 1. The parents continue to live in proximity to one another and of their respective extended families. It is desirable that Jake shouldhave access to those extended families as well as his parents; 2. Because of his work pattern, the father would have ample time available to spend with Jake; 3. His father has no other children.

A healthy relationship between father and son should lead to the development of a healthier, moreactive and financially secure situation for his adolescence and his future life. [14] Jake has apparently suffered emotionally from the breakup of his parents marriage. He is reluctant to visit/or fearful of his father. There has been no evidence produced to this court to explain the problem. There was, of course, the fact that the Respondent wasconvicted of assault in Provincial Court. It seems possible that Jake perceives that his mother needs his support in her conflict with hisfather.

Both parents are sufficiently concerned about his emotional status and his estrangement from his father that they have taken andwill take counselling and guidance from social workers and psychologists with the object of repairing the father/son relationship. [15] Based on the evidence I have heard, it is appropriate that his mother continue to be his primary caregiver and custodian. TheRespondent will have reasonable access including overnight visitation when, in the professional opinion of Erin Spidle or a successorcounsellor, he will tolerate such visits.

In the meantime, counselling with Jake and with his father will continue as proposed by Ms.Spidle, with the objective of establishing a healthy relationship between them. My expectation is that this process will promote, at aminimum, a weekly visit between Jake and his father. When Jake is comfortable with doing so, his mother has said that she has noobjection to promoting liberal access. [16] With respect to child support, there appears to be no dispute between the parties. There are presently arrears which have beenagreed upon.

Continuing child support will be payable on the basis of the Respondent’s annual income of $82,698 and as disclosed inhis income tax returns in future years. [17] There is no evidence offered regarding medical and dental benefits to which the father may be entitled for the benefit of hisdependants. On the assumption his employment includes it, he will maintain Jake as his dependant and continue such coverage.

Matrimonial Property [18] At the time of separation in 2010, the parties possessed the following assets believed to have values assigned here: Matrimonial home $191,000 Vehicles 2007 Dodge Ram truck $20,000 2008 Dodge Charger $25,000

1974 Dodge Barracuda $9,000 1968 Dodge Charger $50,000 [ 19 ] At separation they were obligated to satisfy the following debts: Mortgage $138,182 CIBC credit line $39,247 RBC credit line $29,993 CIBC Visa (Petitioner) $5,969 CIBC Visa (Respondent) $3,572 MasterCard (Petitioner) $12,851 car loan (Charger) $25,903 car loan (Dodge Ram) $20,794 bank overdraft $900 income tax (Petitioner) $6,432 unpaid employee contributions (Respondent) $9,204 [ 20 ] The parties have already divided some personal property which is not the subject of this application.

In addition, the Petitioner retained possession of the 2008 Dodge Charger and assumed the obligation to pay the related loan. Likewise, the Respondent took possession of the 2007 Dodge Ram and the loan associated with that. [ 21 ] The MasterCard debt, CIBC Visa, and the income tax liability were all incurred in the name of the Petitioner. The Respondent says they are actually business debts of the Petitioner and were contracted in connection with her accounting practice. The accounting practice has not been listed by either party as an asset. It may or may not have any actual value.

The Petitioner claims that these accounts are matrimonial. She testified that when she charged business expenses to the Visa or credit line, all such charges were repaid by her business. [ 22 ] No detailed evidence was let to support the position of the Respondent that these debts are business liabilities derived from the Petitioner ’ s “ Causeway Tax and Bookkeeping ” services. The Petitioner denied that these obligations represented debts created by her business, and again there is no evidence relating the details of these accounts to the court.

With no evidence to demonstrate that these obligations relate to the Petitioner ’ s business, the presumption is that they are matrimonial. I conclude that these are matrimonial debts. [ 23 ] The two motor vehicles, the Barracuda and the Charger, were left in the possession of the Respondent and since separation both those vehicles have been sold. Because of their year of manufacture, both qualified as “ antique vehicles ” .

The position of the Petitioner is that those two vehicles and the CIBC credit line of $39,247 are not matrimonial in nature, but represent assets and liabilities contracted in relation to the Respondent ’ s antique car business which operated under the name “ Doug Perry Antique Auto Parts ” or alternatively, “ Hypurr C.A.R.S. ” . [ 24 ] The Petitioner maintained the financial records for his antique car business and testified that it had a registered business number, but had not been registered for HST purposes.

She testified that the business inventory consisted of some car parts together with these two vehicles. She agreed that the family travelled to “ car shows ” particularly the one in Moncton where her husband put out a sign offering to sell antique car parts. [ 25 ] The Respondent ’ s evidence was to the effect that the antique cars represent a part-time business while he was on Workers Compensation. His intention was to generate sufficient income to support the monthly interest payment on the related lines of credit. The family went to the annual Moncton car show.

The parties had celebrated their honeymoon by travelling to that event. Both of them

took vehicles to this annual event and both had won prizes in the “ show and shine ”

section of the car show. That is to say, the Petitioner won her own prizes. [ 26 ] The Respondent testified that the 1974 Barracuda and the 1968 Charger were sold after separation to satisfy debts. I accept his evidence that the actual recovery from these vehicles was $3,200 and $27, 500 respectively. [ 27 ] The antique car business would more appropriately be characterized as a hobby than a business enterprise.

Business assets are defined in the Matrimonial Property Act of Nova Scotia as being those “ held for or in connection with a commercial business investment or other income producing or profit producing purpose, but does not include...(assets)...ordinarily used for......recreational, social...purposes ” . [ 28 ] I find the assets and liabilities relating to these antique cars are more properly classified as relating to recreational or hobby interests. Income and expense records maintained by the Petitioner were not produced in evidence. Profits, if any, were used for family or travel purposes.

These assets and liabilities are matrimonial. [ 29 ] What value should be assigned to these vehicles for purposes of division. The parties hold significantly divergent opinions of the value of these antique cars. I have already noted that the Respondent recovered only $30,700 in total from the sale of them. They were listed in the Petitioner ’ s statement of assets for a total value of $59,000. The Respondent had initially agreed with that assessment. However, the evidence is that the 1968 Charger was purchased for $32,000. There was a further cost of some $4,000 to have it delivered to Nova Scotia.

The car was insured, an appraisal was required for insurance, and for that purpose it was assigned a $50,000 “ replacement value ” . The Respondent argues, convincingly, that that figure does not represent market value. As a result of the separation and the financial strains it created, he sold this vehicle at a sacrifice price of $27,500 to satisfy outstanding debts. The Barracuda which had been bought for $4,000 was traded for a boat which he thought would entice Jake to visit with him. When that did not happen, he eventually sold it for $3,200.

I deem the “ cost ” of these two vehicles to be $36,000 which I propose to use as the value of the assets for division. [ 30 ] The remaining item in the financial statements is the Royal Bank line of credit which at separation had a balance of $29,993. Both parties were borrowers. The evidence suggests that this debt initially related to a Chevrolet Corvette. The Respondent testified that after separation he negotiated a settlement of that account and paid the bank $18,000. He believed the bank had agreed to release both parties from this obligation.

The bank has however pursued the Petitioner and has apparently obtained judgment for a portion of that loan. In the division of assets, I propose to credit the Respondent with payment of $18,000. The balance outstanding will be the obligation of the Petitioner. [ 31 ] It is therefore determined that all assets and liabilities enumerated are matrimonial in character. [ 32 ] The Respondent has expressed a desire to refinance and purchase the Petitioner ’ s share of the matrimonial home.

He argues that this is in the best interests of the Petitioner inasmuch as the price which the house is likely to attract will not satisfy the various outstanding debts. The municipal assessed value of the property is $182,000; there was a higher value assigned on an appraisal which was done for the purpose of obtaining the mortgage. It must be recognized that a forced sale would not achieve the best price.

He says that he will be able to remedy his credit difficulties; and with the assistance of family get himself into a position to relieve the Petitioner from any obligations relating to the home within one year. [ 33 ] My analysis of the situation and my arithmetic persuades me that it is more likely than not that an order to dispose of the house immediately would not generate a sufficient return to satisfy the existing matrimonial debts. It is apparent that listing and selling the property will incur costs of disposal of something in excess of $10,000.

It is my conclusion that if the respondent is able to arrange refinancing and retain ownership of the property it will be in the best interests of everyone involved. I am prepared to order that the matrimonial assets of the parties be divided on the basis that the Respondent will retain the matrimonial home for an assumed value of $182,000. [ 34 ] The division of assets and liabilities then will be as follows:

[ 34 ] The division of assets and liabilities then will be as follows: Husband Wife matrimonial home 182,000 antique cars 36,000 debts mortgage 138,182 RBC line of credit 18,000 11,993 MasterCard 12,851 CIBC line of credit 39,247 CIBC Visa 3,572 CIBC Visa 5,969 employee contribution outstanding 9,204 income tax 6,432 bank overdraft 900 totals 8,895 -37,245 [ 35 ] The payment required to equalize matrimonial assets will be the sum of $23,070 paid by the Respondent to the Petitioner. [ 36 ] The two RESP accounts held for the benefit of the children will be assigned to the Petitioner/mother.

The pension credits earned by the Respondent during the co-habitation of the parties will be equally divided at source. [ 37 ] The Respondent will have until March 31 to satisfy the arrears of child support in the agreed amount. The equalization payment required with respect to the settlement of matrimonial property will be paid on or before June 30, 2013. On or before June 30, each of the parties is to exercise their best efforts to relieve the other party from any liability on their joint debts including the potential liability of the Petitioner with respect to the mortgage on the matrimonial home.

In the event that the Petitioner has not been released from that obligation by that date, then the home will be listed for sale with a real estate firm chosen by the Respondent and agreeable to the Petitioner. In the event the house is sold before the Petitioner is released from the mortgage, the parties will share equally any gain or loss if the proceeds are more or less than the value assigned of $182,000. Haliburton, J.