COURT FILE NO.: FC-16-1482 DATE: 20170706 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
DIANE ISABELLE OBAM DALLAIRE Applicant – and – ERIC DALLAIRE Respondent
Counsel: Carol Crawford and Lauren McMurtry, for the Applicant Marc J. Coderre, for the Respondent
HEARD: May 26, 2017
REASONS FOR decision Beaudoin J.
Overview
[1] The Applicant brings this motion for various relief, primarily an order for ongoing and retroactive child and spousal support to the date of separation, an order determining the parenting schedule of the parties’ son, Samuel Dallaire born February 3, 2013 and an order that the Respondent provide full financial disclosure as previously ordered by me on January 31, 2017.
Preliminary Issue
[2] As a preliminary matter, the Applicant sought an order preventing the Respondent from making submissions on the financial issues or from putting his evidence on financial issues before the court as a result of his refusal to comply with my financial disclosure order of January 31, 2017 or the previous order of Justice Trousdale dated October 14, 2016.
[3] Justice Trousdale’s order was limited in scope and required the Respondent to deliver a sworn financial statement only since it was evident that the Respondent was asserting that Quebec was the appropriate jurisdiction to hear the Divorce Application. A motion to that effect had been argued in Quebec on October 4, 2016. On October 18, 2016, la Cour Supérieure released its decision declining jurisdiction. The Respondent then filed a sworn financial statement on November 16, 2016 which the Applicant claims was deficient.
[4] The Applicant then served a notice of motion seeking interim child and spousal support returnable on January 31, 2017. Although the Respondent initially appeared to have abandoned the jurisdiction issue, he served notice that he would argue the issue once again on the return of the motion. On that date, I confirmed that Ontario had jurisdiction to hear this matter. Since the Respondent was not prepared to argue the support issues, the Applicant agreed to an adjournment on terms, including an order for an interim payment of support in the amount of $40,000.00. I made the order for further detailed disclosure.
[5] The Applicant argues that the Respondent has delayed these proceedings to prevent her from receiving the disclosure she requires and that she and the child have suffered as result of the Respondent’s tactics. She also accuses him of bad faith in pursuing the jurisdiction issue.
[6] I am unable to conclude that the Respondent acted in bad faith in pursuing the jurisdiction issue. His argument that Quebec had jurisdiction had some merit. While he pursued that issue on January 31, 2017, he has paid a lump sum of $40,000 as a term of the adjournment of the motion for support. Even though the Respondent has not perfectly complied with the orders for financial disclosure; his financial situation and his salary structure are more complex and the Applicant’s requests for disclosure were extensive.
[7] Since January 2017, the Respondent has produced two volumes of documents and, while disclosure is not perfect and has not been as timely as it should have been, he has provided sufficient information to allow the court to rule on the pressing issues at hand; namely child and spousal support. I decline to exercise of my discretion under rule 1(8) to grant the relief sought. If the late and missing disclosure has put the Applicant to additional expense in pursuing her claims for support, this can be addressed by way of costs.
Parenting Schedule
[8] The Applicant sought a change in the current parenting schedule in anticipation of Samuel’s full-time attendance at a private school in September of 2017. Samuel has been residing with each parent on a four day a week schedule pursuant to a mediated agreement that was entered into in May 2016. Notwithstanding the 6 volumes of material that have been filed, there is insufficient evidence about Samuel before me to justify any departure from the current status quo.
[9] As in the case of most family law disputes, the parties have focused on their own historic roles as parents; yet there is little information about Samuel, his needs and the parenting plan that each party proposes to address those needs. The Applicant agreed to adjourn this part of her motion in order to provide better evidence, and the parties have agreed to consider the possibility of a further mediation to resolve this issue.
Background
[10] The parties met in 2001, although there is a dispute as to the date when they commenced cohabitation. The parties were married on July 26, 2003 in Washington DC. They underwent a formal religious ceremony in Quebec one year later.
[11] They separated in August 2015. The Applicant describes their marriage as “a traditional marriage” where she subordinated her career to the Respondent’s career in order to support the Respondent, care for their son and manage the household.
[12] According to the Applicant, when the parties began to cohabit, she was a consultant for a Lobby Association and she aspired to a career as a lobbyist. The Respondent was employed as a short-term trader. After the firm that employed him closed in 2003, the Respondent obtained employment in Canada. The Applicant says she left her career path and moved to Canada with the Respondent and acquired status in Canada as an international student.
[13] Upon moving to Canada and not being able to work, the Applicant finished an undergraduate degree and a Master’s degree and then obtained a graduate certificate in project management. She agrees that the Respondent paid for almost all of her educational costs.
[14] The Applicant started working as project manager in 2010. After their son was born in 2013, the Applicant worked as an independent consultant so that she could be available to care for Samuel. She did this until January, 2016 when was then able to obtain temporary employment with the federal public service in March 2016. That contract came to an end in February 2017. She recently obtained a new position with Canada Post commencing on June 5, 2017 with an annual salary of $70,000.
[15] The Applicant claims that she supported the Respondent’s career and was responsible for the care of Samuel and the management of the household. Moreover, she claims that she took on the role of personal career coach to the Respondent. She argues that she has been financially disadvantaged as a result of the role she played in the marriage. She further submits that there has been a power balance between the parties and that the Respondent has used his finances as a means to control her.
[16] This characterization of their marriage is strongly disputed by the Respondent. He claims that when the parties were married in 2003, he had already established his career as an energy trader. He characterizes the wife’s employment at the time of their meeting as an administrative assistant and not as a consultant. The Applicant had no formal post-secondary education and she was then 22 years of age. He claims the Applicant voluntarily left her employment in or about February 2003, before the marriage, as it was her intention to pursue post-secondary studies. He notes that she earned a relatively modest income at that time.
[17] He adds that their son was not born till 2013 some 10 years after the parties arrived in Canada, and that during that period of time, the Applicant was able to, with his full support, complete significant and important post-secondary education for which he contributed approximately $55,000.00. He notes that the Applicant returned to work in October 2013 after eight months of maternity leave and that Samuel has been in full-time daycare since that time.
[18] The conflicting evidence before me raises triable issues with respect to the Applicant’s entitlement to spousal support on a compensatory basis. There is no issue as to the Applicant’s entitlement on a needs basis.
Retroactive Support
[19] The Applicant seeks retroactive child and spousal support to the date of separation. She accuses the Respondent of blameworthy conduct and argues that he has refused to provide her with financial disclosure and pay appropriate support since the date of separation leaving her to incur debt. She adds that the Respondent has abused the court process by attempting to re-litigate the issue of jurisdiction on January 31, 2017. The Applicant relies on the factors set out in DBS v. SRG, 2006 SCC 377 and Kerr v. Baranow, 2011 SCC 10.
[20] The Respondent notes in his updated affidavit that he has paid $198,228.20 to the Applicant on a tax neutral basis since separation. He has paid all of the daycare fees since that date and that these totaled $11,052.00 in 2016.
[21] The Applicant disputes that these amounts were paid to her for her support or for the support of the child. She takes the position that many of these payments were made to improve the property that they had purchased here in Ottawa. According to the Applicant, until October 2016, the Respondent had only made payments in the amount of $50,923.97 which can be characterized as support. The Respondent did provide her with intermittent funds and $2,000.00 monthly by way of blanket support for her and Samuel. The Applicant acknowledges that he paid $9,000.00 on January 25, 2017, and the further sum of $40,000.00 on February 2, 2017, as a condition of adjourning the motion on consent.
[22] Whether all of the amounts paid by the Respondent can be characterized as support raises a further triable issue. In any event, the Applicant acknowledges that she has received approximately $118,000.00 in tax neutral funds from the Respondent since the date of separation. The Applicant maintains that she was forced to commence this application because the Respondent failed to provide her with adequate financial disclosure and that he refused to pay appropriate amounts of support. Her affidavit sworn on October 14, 2016 discloses that she attempted mediation with the Respondent in May 2016 and it became apparent to her that she could not obtain financial disclosure at that time. There is no evidence of any letter seeking disclosure prior to the commencement of the Application. Although the separation took place in August 2015, her application was not commenced in Ontario until July 2016 and this delay strengthened the Applicant’s claim of Ontario residency and allowed her to argue that this Court had jurisdiction. On these facts, I cannot conclude that the Respondent has engaged in blameworthy conduct. This is another matter which is better left to the trial of this application.
[23] The cases cited by the Applicant; namely; Lakhani v. Lakhani, [2003] O.J. No. 4041 and Earnshaw v. Earnshaw, 2011 ONSC 4385, can be distinguished. In Lakhani, the motion judge made the support award retroactive to the date of the first written demand for disclosure and not to the date of separation. In Earnshaw, it appears that the retroactivity would have closely coincided with the date of the Application since the support motion was heard nine months after the date of separation. I adopt the approach of Doyle, J. in Yosef v. Shabana, 2016 ONSC 5457 where she concluded that it was better reserve the issue of retroactive support to the trial judge.
[24] For these reasons, I conclude that it is appropriate to make any award of support retroactive to the 1st day of the month this application was commenced; namely July, 2016.
Quantum of Child and Spousal Support
[25] The Applicant’s income for 2016 was $45,002.79. She commenced her new employment with Canada Post on June 5, 2017 at a salary of $70,000.00 per year. I assume that she will earn $48,833.00 for 2017.
[26] The Respondent’s tax returns for 2014 and 2015 and the T4 Statement he has provided for 2016 disclose the following income:
- 2014: $447,021.27
- 2015: $670,044.44
- 2016: $605,679.39
[27] Historically, the Respondent’s income has been comprised of a salary and a bonus. From the disclosure provided, it appears that the Respondent receives 70% of his yearly bonus in February of the following year, while the remaining 30% is deferred for three years and is then received as cash. The respondent received the following amounts as bonuses for his work in 2014:
- Programme Principal: $66,559.00
- Programme Additionnel: $249,597.00
- Boni Supplémentaire: $367,538.00
- Boni total: $683,694.00
[28] A letter from his employer indicates that 30% of this total bonus, or $205,108.00 will be payable in three years’ time as a deferred bonus, with the remaining $478,586.00 to be paid out immediately. The Respondent is therefore due to receive these deferred bonus funds of $205,108.00 from 2014 sometime in 2017. This bonus cycle, with the receipt of a deferred bonus from prior years in December of each year is consistent with the Respondent’s past years of income. For 2017, the Respondent claimed that his income and bonus will be reduced as a result of a brief sick leave from Brookfield in 2016.
[29] Based on the available documentation and on a copy of the 2017 paystub from the Respondent, the Respondent’s income can be calculated as follows:
- Base salary: $178,327.50
- Bonus: $187,354.00 (paid February 24, 2017)
- Deferred bonus: $205,108.00 (30% of 2014 Bonus deferred)
[30] I accept, at a minimum, the Respondent’s income for 2017 will be $570,789.00. The Respondent has argued that the court should use the amount of approximately $365,000.00 as he has yet to receive the December Bonus. There is no evidence to suggest that he will not receive that amount. I will turn to this later.
Child Support
[31] The Respondent takes no issue with paying child support in accordance with the guidelines for a Quebec resident. In 2016, on an income of $605,679.39, the child support payable was $4,449.00 per month. On an income of $45,002.79, the Applicant, as an Ontario resident, would pay $406.00 per month. Given the shared custody arrangement in place as of July 2016, the net amount of child support payable by the Respondent for 2016 would be $4,001.00 and I order that amount to be paid effective July 1, 2016.
[32] In 2016, the Respondent paid the full amount of Samuel’s daycare costs. The Applicant’s contribution would have been $218.00 per month and the Respondent should be credited with this amount.
[33] In 2017, the monthly amount payable by the Respondent on an income $570,789.50 is $4,252.68 and the monthly amount payable by the Applicant on an income of $48,833.33 is $439.00 for a net amount payable by the Respondent of $3,813.86 effective January 1, 2017.
[34] In 2017, the Respondent paid the full costs of Samuel’s daycare. The Applicant’s share is $219.00 per month and the Respondent should be given credit for that amount up to the date of this order. On an ongoing basis, the Applicant is prepared to equally share the costs of Samuels’ private school fees and after school care costs, and I have taken that into consideration.
Spousal Support
[35] The Respondent relies on section 11.1 of the Spousal Support Advisory Guidelines for the proposition that a ceiling of $350,000.00 should be placed on his income for the purpose of calculating spousal support. I was referred to the Revised User’s Guide of April, 2016. It provides at pp. 56 and 57:
Payor income above the $350,000.00 ceiling
There are some clear principles enunciated in the case law, even if the actual outcomes are discretionary and sometimes conflicting. In J.E.H. v. P.L.H., 2014 BCCA 310, leave to appeal to SCC refused [2014] S.C.C.A. No. 412, there is a careful review of the law for cases above the ceiling, where some of these principles are stated.
- The formulas for amount are no longer presumptive once the payor’s income exceeds the “ceiling.”
- The ceiling is not an absolute or hard “cap”, as spousal support can, and usually does increase for payor incomes above $350,000.00.
- The formulas are not to be applied automatically above the ceiling, although the formulas may provide an appropriate method of determining spousal support in an individual case, depending on the facts.
- Above the ceiling, spousal support cases require an individualized, fact-specific analysis. It is not an error, however, to fix an amount in the SSAG range, as was done in J.E.H. v. P.L.H., above. Evidence and argument are required.
- Where the payor’s income is not too far above the ceiling, the formula ranges will often be used to determine the amount of spousal support, with outcomes falling in the low to mid-range for amount. How far is “not too far above” is still not clear. Somewhere between $500,000.00 and $700,000.00, it seems.
- Once the payor’s income is “far” above the ceiling, then the amount of support ordered will usually be below the low end of the SSAG range, but SSAG ranges are still calculated and sometimes the outcome will fall within the SSAG range.
In light of these principles, it is critical that counsel do SSAG calculations even in high income cases. It is wise to calculate the ranges for alternative income levels: for the $350,000.00, ceiling (as a minimum) and for the full income (as a maximum), as well as for a range of intermediate incomes (to assist the court in triangulating an outcome).
[36] I agree with the Respondent’s submission that the SSAG should not be automatically applied over the ceiling. However, for incomes not too far above $350,000.00, courts generally order an amount at the low end of the SAGG range. That range appears to apply to incomes between $500,000.00 and $700,000.00.
[37] The parties ought to enjoy similar lifestyles after the breakdown of the relationship. In Earnshaw, at paras. 55-59, this Court held that the central question when considering all of the factors enumerated under the Divorce Act, 1985, c.3 (2nd Supp.) is whether the SAGG provides an appropriate result for spousal support when dealing with high income payors. In calculating the appropriate level of spousal support, court can also consider the net disposable income available (NDI) to each of the spouses.
[38] The Respondent raises the problem of cash flow. While his annual income is high, he argues that his base monthly salary does not provide him a sufficient monthly income to pay the amount of support requested by the Applicant. He claims that he would be required to turn over the full amount of his monthly pay cheque. He has suggested that his support obligations should be based on the ceiling amount and, that over and above this, he be ordered to pay 25% of the after-tax amount of his bonuses as these are received by him.
[39] The Respondent’s cash flow problems did not prevent him from recently acquiring an $80,000 automobile. His ongoing support obligations take priority over his cash flow problems. He has assets; his net property statement discloses assets valued at approximately $870,000.00 and, if he needs to borrow against these assets in order to make the appropriate periodic payments of spousal and child support, he can do so. There is a rental property in Quebec City that can be sold. Moreover, the Respondent can seek immediate tax relief through the payroll deductions made by his employer.
[40] Applying the SAGG for 2016 would result in spousal support in the amount of $13,000.00 at the low range. When child support is added, the result is 51.6% of the NDI for the Respondent and 48.4% of the NDI for the Applicant. In 2017, having regard to the slight adjustments in incomes, monthly spousal support in the amount of $12,000.00 produces nearly the same result with regard to each party’s share of the NDI. While the Respondent’s income may increase since he is back to work full-time, the Applicant’s will increase as well.
[41] I accordingly order the Respondent to pay spousal support in the amount of $13,000.00 per month from July 1, 2016 to December 31, 2016 and the amount of $12,000.00 per month from January 1, 2017 on a go forward basis.
[42] The Respondent is to be given credit for all support payments made since the date of the application. If the parties are unable to agree as to the amount, they may contact me to resolve this issue.
[43] Any lump sum payments made; namely $9,000.00 paid on January 25, 2017, $40,000.00 paid in February 2, 2017 and the sum of $20,000.00 ordered paid on May 26, 2017 as well as any further lump sum payments that may be required to be made, represent a clear obligation on the part of the Respondent to make retroactive support payments from the date of this application.
Other matters
[44] I am advised that the Respondent has designated the Applicant as the beneficiary of his life insurance policies in order to secure his obligations to pay support. He should provide proof of this within 10 days of the release of this Decision, if he has not already done so. I further order the Respondent to continue to designate the Applicant and Samuel as beneficiaries of the medical and dental insurance he receives through his employment.
[45] In the absence of any agreement, the parties are to provide me with their brief costs submissions (not exceeding 5 pages) within 20 days of the release of this Decision.