2010 ONSC 2400, 2010 ONSC 2400

CITATION : Belton v. Belton, 2010 ONSC 2400 COURT FILE NO.: 188/07 DATE: 2010/04/23 ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: ) ) LYNNE CHRISTINE BELTON ) ) ) Bruce S. Wormald, for the Applicant ) Applicant ) ) - and - ) ) ) LANCE PAUL BELTON ) ) ) Whereabouts unknown ) Respondent ) ) ) ) HEARD: February 1, 2010 THE HONOURABLE MADAM JUSTICE W.L. MACPHERSON [ 1 ] This is an Application by Lynne Christine Croft (formerly Lynne Christine Belton). The Applicant and the Respondent (Lance Paul Belton) were married on May 16, 1992.

They have lived separate and apart since June 27, 2002. [ 2 ] These proceedings were commenced by way of a Petition for Divorce in August 2002. The Respondent did not file an Answer and has never participated in the Court action. The parties were divorced pursuant to the Order of Madam Justice Tucker dated February 21, 2007. [ 3 ] The matter came before me on an uncontested hearing on February 1, 2010 to deal with the corollary relief claimed on a final basis. At my request, additional written submissions were made and additional documentation was filed on April 20, 2010.

SPOUSAL SUPPORT [ 4 ] At the time of separation, the Applicant was employed earning an annual income of $36,000.00. The Respondent was employed as an investment/financial planner earning an annual income in the range of $100,000.00 to $150,000.00. [ 5 ] The Applicant continues to be employed on a fulltime basis earning $41,500.00.

As the Applicant had no knowledge of the Respondent’s whereabouts despite efforts to locate him through a private investigator and through family and friends, she was unable to provide any information regarding the Respondent’s current employment and income situation. [ 6 ] The Applicant requests the continuation of the interim order for spousal support in the amount of $270.00 per week on a final basis. [ 7 ] There was no evidence as to the Respondent’s income and his current ability to pay spousal support. This was a ten year marriage and the obligation to pay support has continued for almost eight years.

In those circumstances, it is not appropriate that the spousal support obligation should continue. [ 8 ] As such, the spousal support obligation shall be terminated effective May 1, 2010. [ 9 ] Although there was no FRO statement filed, the Applicant’s evidence was that other than approximately $1,800.00 paid shortly after the interim support order was made, there have been no other support payments made.

The current total arrears of spousal support arising from the interim Order of September 6, 2002 would be in excess of $100,000.00 as of the current date. [ 10 ] These arrears are due and payable to the Applicant and will be dealt with later. LIFE INSURANCE [ 11 ] As there is no ongoing spousal support obligation, there is no basis for a continuation of an Order requiring life insurance to be maintained with the Applicant designated as the beneficiary. There shall be no continuation of the interim Order.

EQUALIZATION OF PROPERTY [ 12 ] The largest asset that was owned by the parties at the date of separation was the matrimonial home located at 6184 Culp Street, Niagara Falls, Ontario. The Financial Statement filed at the commencement of the proceeding suggested a value of $224,000.00. It was sold in April 2003 for a sale price of $193,000.00. It was necessary for the Applicant to obtain a Court order authorizing the disposition of the matrimonial home as the whereabouts of the Respondent were unknown and his consent would not have been forthcoming. The net sale proceeds totalled $79,301.67.

After payment of an execution owed by the Respondent to Revenue Canada ($22,000) and payment to the Applicant of $15,000.00 and $750.00 in costs, the balance of the Respondent’s one-half interest in the net sale proceeds in the amount of $977.47 was paid into Court pursuant to the Order of Justice Matheson dated April 11, 2003. [ 13 ] Although the Applicant is requesting that these funds now be paid out to her, it appears that there are no longer any funds held in Court to the credit of this action as they were paid out on consent to Martin Sheppard Fraser LLP in accordance with the Order of Justice Matheson dated March 10, 2004. [ 14 ] Upon separation the Applicant discovered that the Respondent had forged her signature and had:

a) Cashed in her Whole Life insurance policy with a value of approximately $1,900.00;

b) Cashed in her son’s education funds in the approximate amount of $60,000.00;

c) Remortgaged the matrimonial home (several times) without her knowledge and consent, increasing the mortgage by $34,000.00;

d) Incurred debt on a VISA card in her name in the approximate amount of $10,000.00.

[15] It also became known that the Respondent owed clients and others in excess of $250,000.00. There have been subsequent Courtproceedings involving several of those creditors, which have necessitated that the Applicant be joined in those proceedings to protect theonly remaining asset of the Respondent, namely a self-directed Locked-In Retirement Account with CIBC which was held in CIBCWorld Markets Inc. Account No. 561-65854. This represented funds that the Respondent had received as a severance payment fromPrudential. The value of the LIRA account as of June 30, 2002 was $105,508.26.

The Applicant has no knowledge as to the currentvalue of the LIRA account. [16] Based on the Net Family Property Statement filed by the Applicant Wife, there is an equalization payment owed by theRespondent to the Applicant in the amount of $38,615.45. [17] The Applicant is seeking an unequal share of the parties’ net family property. She relies upon section 5(6) of the Family LawAct and in particular the following subsections: (

b) the fact that debts claimed in reduction of a spouses’ net family property were incurred recklessly and in bad faith; (

d) a spouse’s intentional or reckless depletion of his net family property; (

f) the fact that one spouse has incurred a disproportionately larger amount of debts for the support of the family; and (

h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of an asset. [18] In order for a Court to award a spouse an amount that is more than one-half the difference between the parties’ net familyproperty there must be a finding that an equalization of the property would be unconscionable. This is a very high threshold to meet.

Itmust not simply be unfair but must be shocking to the conscience. [19] The Husband’s actions in incurring the substantial debts that he did; forging the Wife’s signature and increasing the liability onthe mortgage and her credit cards; and removing the funds from the Wife’s child’s education funds and Life Insurance policy are clearevidence of bad faith. The Wife has also incurred additional legal fees to defend other Court actions in order to preserve the Husband’sone remaining asset to be able to pursue her claims under the Family Law Act.

Taking all of the above into consideration, this is anappropriate case for an unequal division of the parties’ net family property in favour of the Wife. [20] The monies obtained by the Respondent from the forging of the Applicant’s name and increasing the indebtedness totalled morethan $100,000.00. I find that in addition to the $38,000.00 equalization payment owed that a further $50,000.00 is owed to the Applicantby way of an unequal division for a total payment of $98,000.00 to be paid by the Respondent to the Applicant.

VESTING ORDER [21] The Applicant requests a vesting Order such that the LIRA account be transferred to and vested in the Applicant. [22] The general power of a court to make a vesting Order is found in

section 100 of the Courts of Justice Act. In a family lawproceeding a court has the specific power under section 9 (1) (d) (

i) and section 34 (1) (

c) of the Family Law Act to grant a vesting orderon an application for equalization of property or support. [23] As set out by the Ontario Court of Appeal in Lynch v. Segal (ON CA), [2006] O.J. No. 5014 (C.A.): As a vesting order – in the family law context, at least – is in the nature of an enforcement order, the court will need to be satisfied (asthe trial judge was here) that the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour,indicate that the payment order will not likely be complied with in the absence of more intrusive provisions: see Kennedy v.

Sinclair (2001) (ON SC), 18 R.F.L. (5th) 91 (S.C.J.) affirmed (2003) (ON CA), 42 R.F.L. (5th) 46 (OnC.A.).

Thus the spouse seeking a vesting order will have already established a payment liability on the part of the other spouse and theamount of that liability, and will need to persuade the court that the vesting order is necessary to ensure compliance with the obligation. [24] I am satisfied from the actions of the Respondent upon separation (forging of Applicant’s signature; incurring of debts in theApplicant’s name; failure or refusal to pay spousal support as ordered; and his unknown whereabouts for a considerable period of time)that unless a vesting order is granted and the LIRA account is transferred to the Applicant, that she will be unable to realize on either thespousal support or the equalization payment.

[25] The other issue that must be considered is whether such an Order would contravene

section 51 of the Pension Benefits Act whichlimits the amount of a pension that can be transferred to a spouse to fifty percent (50%) of the pension. It is clear from Nicholas v.Nicholas (ON SC), [1998] O.J. No. 1750 (Ontario General Division) that

section 51 of the Act deals withequalization of property and is silent as to support. As such a Court is not prevented from ordering one-half of the pension to betransferred to satisfy the property claims, with the remaining one-half of the pension to be transferred in satisfaction of a supportobligation under

section 65 of the Pension Benefits Act. ORDER [26] For the reasons set out above, a final Order shall issue as follows: 1. The spousal support obligation under the Order of Madam Justice MacDonald dated September 2002 shall terminate effective May1, 2010. 2. Fifty percent (50%) of the funds in CIBC Wood Gundy Account No. 561-65854 shall be transferred to and vested in the name ofthe Applicant, Lynne Christine Belton (now known as Lynne Christine Croft) on account of spousal support payable. 3.

The remaining one-half (50%) of the funds in CIBC Wood Gundy Account No. 561-65854 shall be transferred to and vested in theApplicant, Lynne Christine Belton (now known as Lynne Christine Croft), on account of the property payment due in the amount of$98,000.00. 4. In the event that CIBC Wood Gundy requires forms or other necessary documents to be signed to effect the transfer, the forms maybe executed by the Applicant on behalf of or as agent for the Respondent. 5.

In the event of a bankruptcy of the Respondent before the whole equalization payment due to the Applicant is paid in full, theequalization payment shall be deemed to be a domestic obligation within the meaning of the Bankruptcy and Insolvency Act and it shallnot merge on the bankruptcy of the Respondent. 6. This Court shall retain jurisdiction and the Applicant may return this matter for any other Orders that may be necessary to effect thetransfer and vesting of the assets in the name of the Applicant. 7.

The Respondent shall pay costs to the Applicant in the amount of $5,000.00 inclusive of g.s.t . and disbursements. ___________________________ MacPherson J. Released: April 23, 2010 CITATION: Belton v. Belton, 2010 ONSC 2400 COURT FILE NO.: 188/07 DATE: 2010/04/23

ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: LYNNE CHRISTINE BELTON Applicant - and - LANCE PAUL BELTON Respondent REASONS FOR JUDGMENT MacPherson J. Released: April 23, 2010