10. Choice of Law in Family Law
Knight v Knight
HOGG J.:-- The following are the facts as I find them.
Frank Knight, the plaintiff, is 65 years of age and formed a company known as Supersign when he was young. The company prospered and he became a wealthy man. In 1950, he married Alta Goolsby-Knight in the state of Michigan. The couple separated after a period of time.
On December 30th, 1959, after having obtained a Mexican divorce, the plaintiff husband married the defendant, Beverley Knight, who is now 60 years of age, in the state of Pennsylvania. The wife had graduated as a registered nurse in 1958 and worked in a Toronto hospital and then at nursing homes. She met the plaintiff, was pregnant by him at the time of marriage, and their first child, Allan, was born some 7 months later.
Following the birth of the child, the wife stayed at home as a homemaker and parent.
While there may have been some indiscretions on the part of the wife, I find the marriage was a traditional one and lasted for almost 30 years.
In 1974, the parties as man and wife, commenced adoption proceedings through The Children's Aid Society and prepared and submitted all the necessary forms and information. They adopted their second child, Tom, who is now 21 years of age. On or about the 16th day of May 1988, the parties separated, attempted a brief reconciliation, and in June of 1989 separated and have been apart since that time.
In 1988, the wife under The Family Law Act, commenced an action in the District Court of Ontario for custody, spousal, and child support and for a division of the family assets. After several motions and legal proceedings, the husband, in 1989, commenced annulment proceedings in the Supreme Court of Ontario. The actions have been consolidated and have been tried together before me.
Following the final separation, the wife who was in dire financial straits, entered into a common-law relationship with a man that lasted for some years. Amongst other things, he earned an income delivering papers and the wife worked at modest employment sometimes earning approximately $6.00 an hour. This man was tragically killed in an automobile accident at a level crossing. I note that both the children of the marriage were supportive of their mother's decision to live common-law with this man and it appeared that they approved of the relationship.
During the marriage, property was acquired including an expensive home in the Metropolitan Toronto area, two houses at Lagoon City on Lake Simcoe, cottages and other property in the north. The husband prospered in his business and acquired a Rolls-Royce as well as two or three other automobiles. The family lived in some degree of luxury.
In addition, the husband acquired articles of value including gold bullion and gold and silver coin collections. The value was substantial. Some of it was bought with funds from the company. The husband claims that some of the gold and the coins were stolen.
This is one of these cases in which it is impossible to value and indeed to identify all the assets down to the last cent. The husband has not been co-operative with the courts in supplying information required.
Under these circumstances, the court must rely on the material before it and to come to a conclusion.
Both parties engaged one of the well-known and reputable accounting firms to assess the value of the relevant property. This assessment has been filed as Exhibit #15 and I have no hesitation in accepting it as the best valuation that can be made under these circumstances.
There are several issues to be determined.
The Validity of the Marriage - Annulment
The husband takes the position that the marriage is voidable and an annulment should be granted by the court making the marriage void.
The husband argues that the marriage took place in Pennsylvania because Ontario would not recognize the Mexican divorce. It is submitted to me that in spite of the fact that Pennsylvania law recognizes the marriage, this does not make it valid in Ontario since the parties were not resident or domiciled in that state at the time of the marriage.
It is argued that the Mexican divorce and the subsequent Pennsylvania marriage would not have been recognized in Ontario at the time it took place, or at the present, and since both parties chose to avoid Ontario law by marriage in Pennsylvania, they are not spouses since they did not enter the marriage in good faith.
The husband submits to me that since the marriage was entered into some 30 years ago for the purpose of the legitimization of his son, Allan Knight, and for the purpose of maintaining the reputation of his wife (at that time a single or unwed mother was looked at disapprovingly by the community). There would not have been a marriage if it had not been for the pregnancy of the future wife.
The plaintiff, Frank Knight, now seeks to declare invalid for his own pecuniary advantage, a divorce he previously sought.
In my opinion, the statement of Laskin J. in Downtown v. Royal Trust, 1972, 15 R.F.L. 43 applies to the matter before me. After reviewing several authorities, Laskin J. stated:
"...the only claim to consistency that they exhibit is the application of a preclusion doctrine against a spouse who, having obtained a degree of divorce or nullity from a foreign court incompetent to give it, seeks therefore, to assert that incompetence in order to gain a pecuniary advantage against his or her spouse or the estate of a spouse. The doctrine has an ethical basis; a refusal to permit a person to insist to his or her pecuniary advantage on a relationship which that person has previously deliberately sought to terminate...."
In my opinion, the doctrines of preclusion and insincerity, apart from any other interpretation given to the law as it applies to the background of this case, are the basis for estoppel to apply.
I accept the argument of the defendant that the doctrine of insincerity applies and it is outlined by the Earl of Shelbourne L.C. in G. v. M. (1885) 10 App. Cas. 171 and was referred to and adopted by Roach J. in a decision in 1940 of J. v. J. [1940] O.R. 284 and affirmed by The Court of Appeal:
"...there may be conduct on the part of the person seeking this remedy, which ought to estop that person from having it; as, for instance any act from which the inference ought to be drawn that during the antecedent time the party has, with a knowledge of the facts and of the law, approbated the marriage which he or she seeks to get rid of, or has taken advantages and derived benefits from the matrimonial relation which it would be unfair and inequitable to permit him or her after having received them, to treat as if no such relation had ever existed. Well now, that explanation can be referred to known principles of equitable, and, I may say, general jurisprudence. The circumstance which may justify it are various, and in cases of this kind many sorts of conduct might exist, taking pecuniary benefits, for example, living for a long time together in the same house or family with the status and character of husband and wife, after knowledge of everything which it is material to know...."
It is clear to me that whatever problems might have existed in this marriage, the parties "..lived for a long time together in the same house or family with the status and character of husband and wife, after knowledge of everything which it is material to know...."
Considerable evidence was given by and on behalf of the husband of non-access during the course of the marriage. I do not think this relevant nor, under the circumstances, is it material to my decision.
Under the circumstances, I would regard it as unconscionable, unreasonable, and against public policy to hold that the marriage is invalid or void.
I hold, the husband is estopped from denying the validity of the marriage and his claim for annulment fails.
Spousal Support
During the course of the past 7 years, the husband has had several solicitors and, on occasion, sought to remove the wife's solicitor of record. This was rejected by The Honourable Judge J.F. McCart in June of 1990 when he said, in part, in delivering his reasons:
"..I am led to the inescapable conclusion that Mr. Knight is embarked on a course of conduct intended to delay Harris and prejudice his wife in these proceedings....
...Mrs. Knight shall have her costs of both the motion and cross-motion on a solicitor and client basis in any event of the cause...."
A number of judges have been engaged in this case and there has been considerable delay. I find that most of this can be laid at the feet of Mr. Knight.
For some time, the wife has been partially and legally blind, in ill health, and it is obvious to me, has little chance of obtaining employment. The husband maintains, amongst other things, that since she took up belly-dancing when she was young, she could now obtain employment teaching this skill. I regard that as ludicrous. At one point, the husband produced some photographs of his wife and others in connection with what he termed a "belly-dancing orgy." He seemed to disapprove of her activities in this field. I note, with some interest, the evidence that she did teach this art at one point and it appears part of this had some connection with The Etobicoke Board of Education.
I find the suggestion that the wife obtain employment as a nurse equally ludicrous. Even the husband regards his wife as legally blind and, at one time, took steps to see that she did not have a driving licence, giving as a reason, that his insurance situation would be affected.
The husband also has a history of ill health and was an alcoholic for some period of time. He now is diabetic and, I find, has not taken any real part for years in the running of the company Supersign. His son, Allan, has been the guiding force and running the company for many years. The husband did not come to court but by arrangement with counsel, that was approved by the court, he gave evidence with both counsel present, in his home, and that evidence was given under oath and videotaped. Under the circumstances, I approve of this procedure. It was the only sensible one to adopt.
I found the videotaped evidence to be in all respects as helpful as if I had heard it in a courtroom and, indeed, I had the opportunity of going over pieces of testimony more than once. In my view, the plaintiff was not in the least prejudiced by his testimony being given in this way and I had decided, and so ruled, not to allow any further adjournments in this case which has gone on for some 18 months and there being no indication of when we could resume in court.
Property Assets
In the course of the marriage the following real estate holdings were acquired:
a) a house in Toronto, 23 Abbey Trail, registered to husband,
b) house in Lagoon City, 66 Poplar Crescent, registered to the wife,
c) house in Lagoon City, 68 Poplar Crescent, registered to Frank Knight and Allan Knight,
d) 200 acre parcel, lot 19 & 20, concession 8, Perry Township, cottage and factory buildings,
e) 36-foot trailer at Trout Water Park in Sunderland, Ontario.
I find that the husband has taken steps to hide many of his assets and made it difficult to calculate his net family property. There was evidence as to gold bars and coins which have not been declared in the Financial Statement and it is difficult to determine their true value.
Both parties retained Mr. Barry Whitkin, an associate of Dunwoody and Company Accountants, and he was also appointed the Receiver/Manager by the court for negotiation and sale of assets.
There was no issue as to the qualifications of this witness. His is the best possible evidence that can be produced before me. There is no real dispute as to valuation day and I have had the assistance of experts as to the quantum.
There was some argument before me as to whether the parties should share equally. I see no reason in law or fact from finding that the wife is entitled to an unequal share.
The equalization of net family property includes the ownership of the matrimonial homes: 23 Grey Abbey Trail in Westhill, Toronto; 66 Poplar Crescent in Lagoon City; 68 Poplar Crescent in Lagoon City; the Scotia property of some 200 acres in Perry Township; and a trailer at Sunderland, Ontario. In regard to one or two items, it appeared hazy as to whether the company or an individual owned the property but I think that is irrelevant in this case.
The wife submits a summary of net family property. I accept this summary. (See next page)
Summary of Net Family Property:
Net Family Property Husband Wife
1. Value of Assets Owned On Valuation Date: (value on valuation date unless otherwise noted.)
a) Land
(i) 23 Grey Abbey Trail $250,000.00
(ii) 66 Poplar Cres. [See Note 1 below] $198,000.00
(iii) 68 Poplar Cres. $193,000.00
(iv) Scotia - Parry Sound
- cottage $ 35,000.00
- factory $337,000.00
(v) Trailer $ 12,000.00
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Note 1: In keeping with the evidence that 66 Poplar Crescent in Lagoon City was registered in the name of Beverley Knight in error it would seem appropriate to shift this asset to the husband for the reasons previously mentioned. This would increase his NFP by 198,000.00 and have a corresponding decrease on her NFP. Her total NFP would be $22,000.00 while his would be $2,264,100.00 [$2,066,100 + 198,000.00].
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b) Household Items and Vehicles
(i) Grey Abbey - as per husband's financial $ 25,000.00
(ii) other resources - as per husband's financial $ 60,000.00
(iii) 66 Poplar - as per wife's financial $ 3,000.00
(iv) Jewellery - as per wife's financial $ 5,000.00
c) Savings
(i) wife's RRSP $ 10,000.00
(ii) wife's CSB $ 4,000.00
(iii) husband's account $ 2,500.00
d) Value of Supersign Company Ltd. as per expert's report
(midpoint) $902,000.00
e) Misc. - P.D. Murphy Valuation of
* coins $ 3,100.00
* guns $ 1,800.00
* stamps and wines $ 2,700.00
* gold bars (sold by Mr. Knight) $130,000.00
* contents 68 Poplar Cres. as per Exhibit Book 1, Tab 28 $112,000.00
Total Assets $2,066,100.00 $220,000.00
2. Valuation of Debts on Valuation Day
Total Debts Nil Nil
3. The Difference $Nil $Nil
4. NFP Equalization $2,066,100.00 $220,000.00
The amount owing to the wife would be:
$2,264,100.00
< 22,000.00> [wife's NFP]
$2,242,100.00 /2
=$1,121,059.00 From this sum must be deducted:
< 115,000.00> [see A below]
< 20,000.00> [see B below]
986,050.00 To this sum must be added:
30,000.00 [see C below]
$1,016,050.00 Equalization Payment Owed to Wife
A. An advance of $115,000 equalization as per paragraph #16 of the Order of Justice MacFarland dated February 10, 1994 (Exhibit Book #1, Tab #6).
B. An advantage of $20,000.00 on equalization as per paragraph 15 of the Order of November 7, 1990 (Exhibit Book #1, Tab #3).
C. Mrs. Knight was compelled to pay $30,000.00 to Alan in order to see the Lagoon City property that had been registered in his name.
Section 15(2) of The Divorce Act provides for spousal support. The factors to be considered are listed in s. 15(5) and are:
"Conditions, means, needs, and other circumstances of each spouse including:
a) the length of time the spouses cohabited,
b) the functions performed by the spouses during the cohabitation,
c) any order, agreement, or arrangement relating to support of the spouse or child
Section 15(7) provides that an order for support should:
a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown,
b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above the obligation apportioned between the spouses,
c) relieve any economic hardship of the spouses arising from the breakdown of the marriage, and
d) insofar as practical, promote the economic self-sufficiency of each spouse within a reasonable period of time.
The husband has referred to matrimonial misconduct by the wife over a quarter of a century ago. I do not think this relevant in the present circumstances. Section 30 and s. 33 of The Family Law Act relate to spousal support and what should be taken into account by the court.
The cases have held that the purpose of support is to alleviate economic losses and provides that all the circumstances of the parties have been taken into consideration.
In this case, there was a "traditional" marriage for approximately 30 years. The husband worked hard in his business and was successful. The wife made a home, raised the children, had given up her nursing profession, and, at times, helped in the family business.
Because of the near blindness, ill health, and age, the wife is unable to assist herself financially by obtaining employment. The Family Law Act in s. 5 provides for a presumption of equal contribution in a case of this sort.
I do not intend to dwell at length with the unequal division of net family property. Under the circumstances, that may be academic.
What is clear and obvious is that the wife is entitled to an equalization payment.
I am unable to determine with any degree of accuracy, the extent of the husbands' assets. It is obvious that he has sought to hide and conceal from the court the extent of his assets and he has been uncooperative in his disclosures.
The court is aware that it does not have the power to redistribute property amongst the parties but s. 9(1) of The Family Law Act entitles the court to make vesting orders to secure any equalization payment that it makes and s. 33 allows the court to secure support payments.
I agree with counsel for the wife, that this is the only proper and reasonable course to deal with the situation before me.
At the very least, the wife is entitled to an equalization payment plus interest and it is proper that a vesting order be made.
Mr. Barry Whitkin, a member of Dunwoody and Company, was jointly retained by the parties to determine the value of the relevant assets. He was also appointed the Receiver/Manager for the sale of certain assets. He is accepted as an expert.
Exhibit #15 is his evaluation report. I was impressed by the evidence of this witness and I have no hesitation in accepting his testimony and his report. He had a difficult task to perform and this was contributed to by the conduct and the attitude of the husband. I do not think it necessary to review in any detail his testimony. The report speaks for itself.
Counsel prepared a summary of the net family property. In my opinion, it is a fair and accurate picture of the situation. The figures in this case are rounded but that is of necessity and I have no hesitation in finding that it is as accurate a picture of the financial situation as can be derived from the testimony and from the exhibits.
It is clear to me from the evidence that the wife can only be protected by a lump sum payment. In my view, to order otherwise would be to continue the endless litigation that this case has spawn since 1988.
Under the circumstances, having regard to the current financial position, assessment of retroactive support would be academic. As I have held, it is clear that the wife is entitled to an equalization payment.
I find that the wife is entitled to an equalization payment of $1,016,000.00. The wife is entitled to prejudgment interest, which under the circumstances, I set at 5% from the date of the commencement of this action.
The following judgment and order will issue:
1) The petition for divorce is granted as sought.
2) The husband's action for annulment is dismissed.
3) A vesting order will issue for the assets of Supersign Company Limited to Beverley Yvonne Knight in order to satisfy the equalization payment that the court awards. The order will issue in the general form and the Order of Justice Sheppard of Thursday, March 5, 1992, which is found in the Exhibit Book - Tab 4, p. 4.
4) The Rolls-Royce automobile is charged with a payment to Barry Whitkin of Dunwoody & Company in the amount of $10,000.00 plus interest at the rate of 5% from the time of the rendering of his account. Surplus funds from the sale of this asset will be directed toward the wife's costs.
5) The equalization payment that the wife is entitled to is $1,016,050.00 and prejudgment interest at the rate of 5% from the date of the commencement of the action herein.
6) A vesting order will issue for the Scotia property, Parry Sound, Lots 19 & 20 in the 9th Concession, Township of Perry, District of Parry Sound in the name of the wife.
7) There will be an order to go that the wife retains her present property free from any claim by the defendant husband and the Grey Abbey Trail property will be kept by the husband for his own use.
I have considered the question of support for the 20 year old son, Tom. His attendance at school has been sporadic. He has been in trouble with the law. He has had little or no contact with his father for a considerable period of time, and his work record is unsatisfactory.
I take these factors into account together with the order that I have made for the support of his mother and if that is realized in whole or in part, there will be sufficient to assist the son if the circumstances require and it appears the proper thing so to do. Having regard to the line of cases dealing with a "child of the marriage", I am of the opinion at the present time Tom does not fit into this category. Miracles sometimes occurs and if this young man straightens out and requires assistance that cannot be supplied by his mother and the father is in a position to assist (which I doubt), then he will have leave to apply. I doubt this will occur. The application for child support is dismissed.
The issue of costs may be dealt with by counsel on attendance in court, by telephone conference, or in writing as counsel may decide.