DATE: 20040419
DOCKET: C39873

COURT OF APPEAL FOR ONTARIO

CATZMAN, GOUDGE AND SHARPE JJ.A.

On appeal from the judgment of Justice J.C. Kennedy of the Superior Court of Justice dated March 26, 2003.

BY THE COURT:

[1] The appellant husband raises four issues on this appeal.

[2] First, he says that the trial judge erred by including in the net family property statements of both the husband and the wife a part of the severance package received by each of them when they left their employment with Dow Chemical. These packages were created by Dow after the parties separated. They were offered to employees as part of a corporate restructuring. The size of the package depended upon the employee's years of service. Both parties accepted the severance package.

[3] The trial judge apportioned each severance package according to the years of marriage divided by the years of service and included that share in each net family property statement.

[4] He erred in doing so. The severance packages did not exist at the date of separation. Neither party had any entitlement to such a package as at the date of valuation. They are not property as of separation.

[5] As Perkins J. said in Marquardt v. Marquardt, [1996] O.J. No. 4139 (Gen. Div.):

13 I think it is stretching the definition of property in section 4(1) of the Family Law Act to conclude that something that did not exist and to which the husband had no right at the time of separation should be considered his property, as of separation, merely because the method of calculating his entitlement to severance some 16 months later includes time during which the parties were married and living together.

[6] Counsel advised that if the value of the severance package is removed from each statement the result is a reduction of $21,831.00 in the appellant's equalization obligation.

[7] Secondly, the appellant challenges in two ways the trial judge's finding in connection with a debt owed to a credit union by the appellant's bankrupt son, which the appellant guaranteed. The trial judge included as a liability for the appellant only the value of the debt as of the date of separation, not the amount ultimately paid by the appellant on his guarantee, which included considerable subsequently accrued interest. In our view, it was open to the trial judge to value this liability in this way and indeed there is nothing unusual in his doing so.

[8] The trial judge also found that, despite the bankruptcy, the appellant's son recognized his obligation to reimburse the appellant for this, acknowledged for his own reasons that this should be done, and ultimately paid the debt. There was evidence to sustain these findings and we would not, therefore, interfere with the trial judge's decision also to include the value of this debt as an asset in the appellant's net family property statement.

[9] Third, the appellant says that the trial judge erred in finding that the appellant would have retired early at age 60, and that both parties would have started drawing their pensions at that age, the earliest they could do so on an unreduced basis. In our view, this argument fails. There was ample evidence on which the trial judge could base these findings.

[10] Lastly, the appellant complains about the imputation of income to him by the trial judge in the amount of $30,000 per year. Again we find that this is a finding of fact which on this record is not palpable and overriding error.

[11] The respondent also raises several issues. She says that the trial judge erred in denying pre-judgment interest on the equalization payment. Particularly given that the respondent continued to occupy the matrimonial home, it was open to the trial judge to do so in the exercise of his discretion. He did not err in principle. Nor can the respondent successfully complain that the trial judge's finding of the appellant's attributed income was too low any more than the appellant can do the reverse. There was a proper evidentiary basis for the amount fixed on by the trial judge. Finally, it was open to the trial judge to find on this record that the appellant was not in arrears in his support payments and to so order. The respondent's argument to this effect also fails.

[12] In summary, apart from the modest modification to the equalization payment set out above, the appeal is dismissed as are the issues raised by the respondent. That modification does not alter the effect of the offers on which the trial judge based his costs order and we would leave it unaltered. Success in this court having been divided there shall be no costs of the appeal.

Released: April 19, 2004 "MAC"

"M.A. Catzman J.A."
"S.T. Goudge J.A."
"Robert J. Sharpe J.A."