Cheung v Sze, 2020 ONSC 937 - Valuation date
Often I am asked by clients in matrimonial cases as to what the valuation date is. Generally the valuation date is the date of separation between the parties. However the date is often contentious and parties disagree as to the date. The valuation date is so important because that is effectively the date of separation and the date at which equalization concludes. In other words the date of valuation is also the date of separation.
Analysis:
Section 4(1) of the Family Law Act, defines “valuation date” as the earliest of five different events. The event applicable to this case is “The date the spouses separated and there is no reasonable prospect that they will resume cohabitation”.
The Court then quoted Al-Sajee v. Tawfic, 2019 ONSC 3857, at para. 26, where Chappel J. provided a comprehensive list of 26 factors that might be considered to decide on a valuation date:
Ascertaining when spouses begin to live separate and apart requires a careful analysis of the unique realities of their relationship, routines, social and other habits and practices and living arrangements over time. In deciding how much weight, if any, to give to any particular factor, the court must carefully assess whether there have been any real changes in regard to that factor since the parties were clearly together in a conjugal relationship. In addition, because of the particular dynamics of each relationship, no one factor will be determinative of whether spouses are living separate and apart; a global analysis and weighing of all factors is required. Subject to these caveats, the relevant principles and considerations that emerge from the case-law can be summarized as follows:
1. There are two aspects to spouses living separate and apart. First, they must live apart from each other, and second, there must be an intention on the part of one or both of them to live separate and apart from the other (Oswell; Greaves).
2. To live “apart” requires a physical separation between the parties (Oswell, at para. 13). This means that the parties cannot be cohabiting in a conjugal relationship (Greaves). However, the fact that they continue to reside in the same home together does not necessarily mean that they are not living apart. Spouses can be living separate and apart under the same roof. The determination of whether parties who reside in the same home are living separate and apart involves a consideration of all relevant factors, including whether they are occupying separate bedrooms and/or areas of the home and any stated reasons for remaining in the same residence (Oswell, at para. 12; Greaves, at para. 34; Neufeld, at para. 6; S.(K.L.) v. S.(D.R.), 2012 NBCA 16 (C.A.), at para. 20).
3. By the same token, the fact that the spouses have two residences and spend significant periods apart in the two homes is not determinative of whether they are living separate and apart. As the Ontario Court of Appeal stated in Lachman v. Lachman, 1970 CarswellOnt 122 (C.A.), at para. 12, spouses in these circumstances will only be considered to be living separate and apart if at least one of them intends to end the marital relationship. Where the parties live primarily in separate residences, the court must examine all of the other circumstances surrounding their relationship to determine whether they were, in fact, living separate and apart…
4. In order to establish the requisite intent to live separate and apart, there must be a withdrawal by one or both spouses from the matrimonial obligation with the intent of destroying the matrimonial consortium or of repudiating the matrimonial relationship (Oswell, at para. 14; Greaves, at para. 34). The term “consortium” does not have a precise or complete definition, but refers broadly to the companionship, love, affection, comfort, mutual services and support, and sexual relations typically involved in the marital relationship (Kungl v. Schiefer, 1960 CanLII 22 (ON CA), [1961] O.R. 1, (C.A.), at para. 11; Molodowich v. Penttinen, 1980 CarswellOnt 274 (Dist. Ct.), at para. 16).
5. The law does not require a meeting of the minds regarding the intention to separate; a physical separation, coupled with the intention of one party to live separate and apart, is sufficient (Strobele v. Strobele, 2005 CarswellOnt 9201 (S.C.J.), at para. 30; S.(H.S.) v. D.(S.H.), 2016 CarswellBC 1975 (S.C.), at para. 40); Nearing v. Sauer, 2015 BCSC 58 (S.C.), at para. 54). As McDermot J. stated in O’Brien v. O’Brien, 2013 ONSC 5750 (S.C.J.), at para. 50:
Unlike the decision to marry, the decision to separate is not a mutual one. It is a decision which is often made by one party over the objections of the other. Those protestations matter not; once one party has decided to permanently separate and has acted on it, the other party has no ability to stop the process or object to it.
6. A clear statement or unequivocal act by one of the parties of their desire to terminate the relationship will be very relevant to the determination of whether parties are living separate and apart (O’Brien, at para. 52; S.A.H. v. I.B.L., 2018 BCSC 544 (S.C.), at para. 17). However, the intention to separate need not be unambiguously relayed to the other spouse by way of a verbal expression of settled intention. In the context of both common law relationships and married couples, the courts have held that a relationship has come to an end when either party regards it as being at an end, and that party by their conduct has demonstrated in a convincing manner that their state of mind on this issue is a settled one (Sanderson v. Russell (1979), 1979 CanLII 2048 (ON CA), 24 O.R. (2d) 429 (C.A.), at para. 432; Hodge v. Canada (Minister of Human Resources Development), 2004 SCC 65 (S.C.C.), at para. 42; S.(H.S.), v. D.(S.H.), at para. 43; Naegels v. Robillard, 2019 ONSC 2662 (S.C.J.), at para. 37).
7. In assessing whether there is an intention on the part of one or both parties to live separate and apart from the other, the court must strive to determine their true intent and not simply their stated intent at the time of hearing (Oswell, at para. 18; Greaves, at para. 34; R.(T.) v. K.(A.), 2015 ONSC 7272 (S.C.J), at para. 47).
8. A party’s intention to live separate and apart will not necessarily be broken by brief references by that party to the possibility of reconciliation where no serious steps were taken to move towards such a goal (Nearing, at para. 59).
9. The degree to which the parties were intimate with each other is a relevant consideration (Oswell, at para. 15; Rosseter, at para. 38; Anthony v. Anthony, 2019 ONSC 650 (S.C.J.), at para. 42). However, the absence of sexual relations is not a conclusive indicator that the parties are living separate and apart (Newman v. Newman, 1970 CarswellOnt 123 (C.A.); Cooper v. Cooper (1972), 10 R.F.L. 184 (Ont. H.C.); Oswell, at para. 15). Similarly, the fact that the parties have engaged in sexual relations is not determinative of whether they remain separate and apart or have reconciled. Parties who are generally living separate lives in separate homes may be found to be living separate and apart despite occasional incidents of sexual intimacy and discussions of reconciliation (Greaves, at para. 36; S.(K.L.), at para. 23; Wells. v. King, 2015 NSSC 232 (S.C.), at para. 23). However, the presence of sexual relations while the parties are still physically living with each other will be a strong indicator that they continue to cohabit in a conjugal relationship (Tokaji v. Tokaji, 2016 ONSC 7993 (S.C.J.), at para. 26).
10. Whether the parties have been involved romantically with other people (Rosseter, at para. 39). However, the fact that they have had relationships with other people is not determinative either, particularly if the other party was unaware of the other relations (Neufeld, at para. 75).
11. Whether the parties have continued to discuss family issues and problems and communicate about daily issues (Greaves, at para. 34; Cooper, at para. 12; Oswell, at para. 16).
12. Have there have been any changes in expectations regarding their accountability to each other for daily activities? (Oswell, at para. 37).
13. The extent and nature of their contact with each other, including whether they have continued to participate in joint social activities (Cooper at para. 15; Oswell, at para. 16; Greaves, at para. 34; Torosantucci; Rosseter, at para. 26; Anthony, at para. 42). In assessing any contacts, the court should consider whether the events were evidence of an ongoing relationship or reconciliation or simply “rare moments of friendliness or civility” (Torosantucci; Daley v. Gowan, 2015 ONSC 6741 (S.C.J.), at para. 66).
14. Whether the parties spent vacations together (Oswell, at para. 26; Rosseter, at para. 34; Henderson v. Casson, 2014 ONSC 720 (S.C.J); Neufeld, at para. 75; Anthony, at para. 42 ).
15. Attendances by both parties with their children for family events, activities and even family vacations is relevant but not determinative, as these may simply reflect the parties’ efforts to co-parent in the best interests of the children post-separation (Volcko v. Volcko, 2015 NSCA 11, at para. 10-11; Neufeld, at para. 75(j)).
16. Have the parties continued to share and participate in each other’s daily routines as in the past, such as eating meals together and sharing household chores? (Cooper, at paras. 13 and 14; Oswell, at paras. 16 and 17; Rosseter, at para. 20; Henderson; Anthony, at para. 42).
17. Whether they have celebrated special occasions together (Oswell, at para. 37; Rosseter, at para. 29)
18. Whether they have purchased gifts or exchanged other tokens of affection with each other (Oswell, at para. 29; Rosseter, at para. 29; Neufeld, at para. 75).
19. Whether they have supported each other with respect to extended family obligations, through difficult times and with each other’s personal issues (Rosseter, at para. 31; Henderson v. Casson, 2014 ONSC 720 (S.C.J)).
20. How the parties referred to each other and held out their relationship to third parties (Anthony, at para. 42; R.(T.) v. K.(A.), at para. 46).
21. Documentary evidence respecting their relationship status is also relevant. For example, the manner in which the parties described their status in important documents, including Income Tax Returns, and whether they have claimed any benefits that are conditional on their relationship status are important considerations (Czepa v. Czepa (1988), 16 R.F.L. (3d) 191 (Ont. H.C.J.), at para. 13; Oswell, at para. 18; Greaves, at para. 34; Joanis v. Bourque, 2016 ONSC 6505 (S.C.J.), at para 25; Rosseter, at para. 47; Henderson, at para. 35; Tokaji, at para. 25). Once again, however, these considerations are not determinative, and the court should consider any explanations which either party may proffer before determining the weight, if any, to accord to them (Morin v. Morin, 2011 ONSC 1727 (S.C.J.), at para. 27; Anthony, at para. 42).
22. If the parties have retained a counsellor or mediator, the purpose for which the mediator was consulted may also be of assistance in determining whether the parties have separated (Oswell, at para. 28).
23. Whether there have been any changes in the way the parties manage their financial affairs, including whether they have taken steps to separate their financial dealings (Newton v. Newton, 1995 CarswellOnt 84 (S.C.J.); Rosseter, at para. 41; Tokaji, at para. 24; Anthony, at para. 42).
24. Have the parties continued to share the use of assets? (Rosseter, at para. 43).
25. The parties’ behaviour towards each other in the presence of third parties (Rosseter, at para. 44).
26. Whether the parties have taken legal steps to legally terminate their relationship and resolve issues relating to their separation (Oswell, at para. 35; Tesfatsion v. Berhane, 2013 CarswellOnt 213 (S.C.J.), at para. 53; Rosseter, at para. 49). However, this factor is not determinative and may be given little weight if no further steps were taken and other factors point to a continuation of their involvement with each other as a couple (Rosseter, at paras. 49-51).
[30] With respect to the determination of the valuation date for the purposes of equalization of net family properties, Chappel J. states, at para. 37:
The identification of the valuation date involves the determination of two issues. First, the court must decide when the parties separated. Second, it must determine the point at which there was no reasonable prospect that the parties would resume “cohabitation.”… [A]t the second phase of the analysis, the task is to determine the point at which there was no reasonable prospect that the parties would resume living together in a conjugal relationship. The notion of “reasonableness” is at the heart of this analysis. Half-hearted suggestions or discussions about possible reconciliation will not necessarily move the valuation date forward in the absence of sincere action by the parties to put their relationship back on track (Strobele, at para. 32)… A sincere desire on the part of one party to resume cohabitation and efforts by that party to advance this objective will not generate a reasonable prospect of resumed cohabitation if the other party has no mutual interest in exploring this possibility. In the words of Corbett J. in Strobele, at para. 32, “groundless hopes of reconciliation should not extend the valuation date where one spouse has been clear in his or her intentions to end the relationship” (see also O’Brien, at para. 50).
[31] There are significant factual disputes in relation to the date of separation. For example, the applicant claims that she and the respondent did not share a bedroom after September 5, 2013, while the respondent disputes this. The applicant claims that they did not have sexual relations after June 2014, while the respondent disputes this.
[32] There are, however, a number of undisputed facts that assist in determining the date of separation.
[33] Certainly y several of these factors support the applicant’s position that the date of separation was September 5, 2013. The fact that the respondent took $80,000 from the parties’ joint line of credit on that day, money over which he maintained sole control regardless of how he used it, indicates an intention to separate his financial future from the applicant. This is further supported by the fact that the respondent repaid his mother’s pre-marriage loan of $200,000 by withdrawing funds from his investment account in September and October 2013. This strongly suggests that the respondent was preparing for separation and that the parties were no longer an economic unit.
[34] On the other hand, whether the parties shared a bedroom (a fact in dispute), there is no dispute that the parties continued to have a sexual relationship until sometime in 2014
[35] It is also clear from the notes taken by the marriage counsellor that there was, at least in the first six months of 2014, a reasonable prospect that the parties would resume cohabitation (assuming that cohabitation had stopped). The parties attended marriage counselling together and were “willing to continue spending time together to nurture the relationship”, went on vacation to Tokyo together in March 2014 and on a family vacation to Disney World in May 2014. The parties considered moving to a different location together.
[36] I am satisfied, based on this evidence, that the valuation date cannot be fixed as early as September 5, 2013. By that date neither party had given up on the marriage.
[37] I am also satisfied that by the time joint counselling had come to an end in July 2014, there was no longer any reasonable prospect that the parties would resume cohabitation. Joint counselling did not end because they had reconciled, it ended because there was no reasonable prospect of reconciliation. By this point all conjugal relations between them had ceased, and although they continued to cooperate when it came to their children, they no longer interacted like a family on a day to day basis.
[38] I have considered the fact that the applicant continued, in 2015 and 2016, to file her income tax returns as “married” and to claim the respondent as a dependant. I am not persuaded that this was an innocent error on her part, but I am persuaded that it was done to obtain a tax deduction and was not an accurate reflection of the status of their relationship. She has since amended her returns, and any financial advantage has been negated.
[39] In my view, both of the dates proposed by the respondent are well past the date when cohabitation had ceased and there was no reasonable prospect that the parties would resume cohabitation. The respondent was removed from the matrimonial home on January 5, 2015, and did not return for almost a year. Even when he did return, I am satisfied that he did so for financial reasons and never returned to the same bedroom as the applicant. As such, the latest possible separation date would be January 5, 2015.
[40] That said, even though they still lived in the same home, nothing significant changed between July 2014 (the date when joint counselling ended) and January 2015, such that I would choose the latter date over the former. Matters continued to deteriorate between those dates, which finally led to police intervention and a restraining order in January 2015, but all the significant elements were already in place by July 2014.
What date does the judge pick?:
The Judge concluded that the date of separation for the purposes of the valuation date in Part I of the Family Law Act is July 3, 2014. This is not the date proposed by either the applicant or the respondent, but, in my view, is the date most strongly supported by the evidence.
BLOG ANALYSIS:
The analysis in this case is insightful and provides excellent guidance considering the list of 26 factors that normally need to be gone into in determining the date of separation. One me normally think that intimate sexual or conjugal relationship automatically supporters that the parties are still together. However as the court has analyzed in this case that assumption need not necessarily be correct. There are clearly a number of other factors which are equally important in determining the date of separation. In this case some of those other factors included the intention of the parties before the marriage counselor, the date when one of the parties removed a large amount of money from the joint account, time spent vacationing together, and date when one of the parties put in the income tax forms as being married even though they may have been separate at that point in time.
What do clients need to keep in mind in determining the date of separation?:
Clients need solid analysis, legal research skills and ensuring that the facts of the case fit where the principles laid out through various cases. Most important, the lawyer needs to present all of this in a coherent, logical and proper manner to the court. At Shankar Law we will do this for you. An important part of the analysis is to analyze all of the historical facts in an accurate manner in order to fit one or many more of the principles laid out above to make out the proper date of separation.
At Shankar Law, we are happy to assist and guide you through whatever challenges you have in your spousal, marital or matrimonial life. We work primarily in three counties: Huron, Bruce, and Grey and span several cities (Southampton, Kincardine, Goderich, Wiarton, Hanover, Dundalk, Walkerton, Meaford, Markdale, Chatsworth), through our two locations in Port Elgin and in Owen Sound.