Father Claims Proceeds from Sale of Family Home Should Negate Need to Pay Support

January 19, 2022

Written on behalf of Feigenbaum Consulting

When a married couple separates or gets divorced, they must go through a division of their property. For many couples, the family home is their most valuable asset. One party might purchase the other’s interest in the home, or the home may be sold and the proceeds divided between the parties. If the home had significant equity, the parties might find themselves with substantial payouts from the home sale.

In a recent decision of the Ontario Superior Court of Justice, the court addressed a father’s claim that the proceeds from the sale of the family home should negate the need for him to pay child support or spousal support.

Parents Separated and Sold Home, Mother Relied on Government Financial Supports

The parties involved in the trial were married in India in the spring of 2009, after which the mother sponsored and paid for the father’s immigration to Canada. The couple purchased their first home in 2013 and had one child before they separated in 2019. Almost two years after they separated, they sold the home and divided the proceeds of the sale.

The mother had some setbacks in her career in the years leading up to and following their separation. She was involved in a car accident in December 2015 and was on sick leave until January 2017. She began work as a law clerk in July 2018 but was diagnosed with depression and anxiety in 2019, leading to an eventual layoff that autumn. Since losing her job, she unsuccessfully applied for 24 jobs and supported herself through Employment Insurance benefits and the Canada Emergency Response Benefit (CERB).

Mother Claimed Need for Retroactive and Current Support

Since the CERB program ended, the mother told the court she had been depleting her savings in order to care for herself and the child. She told the court she had to let go of her apartment and has since moved in with her mother, where she pays $1,000 monthly in rent. This led to her application for child support and spousal support on an ongoing and retroactive basis.

The father claimed that the mother makes some income under the table and further stated that she should be made to deplete her savings before he is required to pay support. He added that he cannot afford to pay support as he currently pays all related expenses for the home he shares with his mother and brother.

Court Noted Discrepancies in Father’s Evidence Regarding Income

The father provided the court with Notices of Assessment from his taxes that show he made around $80,000 in each of the last two years. However, the court had trouble accepting this as entirely true because of contradictions with other evidence, namely property records, which show him as a 1% owner of his new home and his mother as the owner of the remaining 99%. The father told the court that neither his mother nor his brother has any income but could not tell the court how the mother was able to contribute to the downpayment of the home.

In her support request, the mother argued the father receives $1,500 in rent from his brother each month and stated it was proof that the father had a higher income than he claimed. The father denied that his brother pays him rent, but the court pointed to an earlier statement in which he told the court that the only way he is able to carry the expenses of the home is with the help of his brother, who pays for utilities, groceries, or credit card bills. He also told the court that he borrowed money from his brother, who is a student, in order to afford the downpayment on the home.

Finally, the father told the court that the mother should be made to use her savings, which comprised of the matrimonial home’s sale proceeds, to sustain herself. He argued that it is culturally customary for him to support his immediate family.

Mother Not Required to Deplete Home Sale Proceeds Before Receiving Support from Father

The court was not satisfied with the evidence provided by the father, pointing out the many inconsistencies in his statements. The court also stated that it is not appropriate for the mother to be forced to deplete her savings in order to support herself or the parties’ child. The court highlighted that the mother had been the primary caregiver and financial supporter of the child, emphasizing that she stayed home to assist the child with their schooling during pandemic-related remote learning.

The court awarded the mother retroactive and ongoing child and spousal support. It also imputed the father’s income at just over $90,000 to take into account the money it found he received from his brother for rent, and his support obligations were adjusted accordingly.

Contact Feigenbaum Law for Advice on Support Obligations

At Feigenbaum Law, Mark Feigenbaum advises clients on an extensive range of family law issues, including child support and spousal support matters. We help our clients move forward through separation or divorce while retaining as much financial stability as possible. We understand the emotional and financial toll that a relationship breakdown has on all involved and aim to make the process less stressful. Contact us online or by phone at 877-275-4792 to discuss how we can help with your family law matter.

Blog

Late Withdrawals from Your RRSP Can Cost You

Personal Tax

Late Withdrawals from Your RRSP Can Cost You

May 20, 2022

Can Creditors Claim a Bankrupt Beneficiary’s Trust Funds?

Bankruptcy

Can Creditors Claim a Bankrupt Beneficiary’s Trust Funds?

May 6, 2022

Plaintiff has Difficult Time Proving He and Friend Had an Agreement on Condo Ownership

Uncategorized

Plaintiff has Difficult Time Proving He and Friend Had an Agreement on Condo Ownership

April 29, 2022

One Word Could Have a Significant Impact on How a Court Might Rule

Custody

One Word Could Have a Significant Impact on How a Court Might Rule

April 22, 2022

Not all Research and Development is Treated Equally When it Comes to Tax Deductions

Corporate Tax Law

Not all Research and Development is Treated Equally When it Comes to Tax Deductions

April 14, 2022