KINGSTON COURT FILE NO.: 524/14 DATE: 20190528 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

B.S. Applicant – and – B.W. Respondent

Counsel: Theresa Van Luven, for the Applicant Mark S. LaFrance, for the Respondent

HEARD: April 18, 2019

AMENDED ENDORSEMENT ON MOTION TO CHANGE

Corrected decision: The text of the original Endorsement was corrected on May 28, 2019 by replacing “the Respondent” with “the Applicant” in the last sentence of paragraph 100 subparagraph 2; by replacing “the Respondent” with “the Applicant” in the last sentence of paragraph 100 subparagraph 3; by replacing the “Applicant B.W.” with the “Applicant B.S.” in the first sentence and by replacing “the Respondent” with “the Applicant” in the second and last sentence of paragraph 100 subparagraph 6.

SWARTZ J.

Nature of the Case

[1] The Applicant Mr. S. requests a termination of his spousal support obligation. Ms. W. resists this request and asks that spousal support continue.

[2] The parties commenced this court proceeding by way of a Motion to Change. On consent they acknowledge that an Application as the originating process was the more appropriate route. In any event, at the start of submissions on the motion, counsel confirmed that this current proceeding be deemed an originating process and that the terms of the Divorce Act are appropriate for consideration in this matter notwithstanding that this was a Motion to Change commenced based on a Separation Agreement and long after the parties were divorced.

[3] Counsel have filed voluminous materials, facta and case books and have made substantial and helpful submissions on behalf of their clients today which comprised an entire day of review of the affidavit evidence, the case law and the legislative framework under the Divorce Act for consideration of the spousal support issues in this case.

[4] Counsel are to be commended for the clear and helpful materials prepared on behalf of their clients and their submissions today in this case.

Analysis and Jurisdiction

[5] Counsel agree and this Court finds it reasonable to analyze this matter based on s. 15.2 of the Divorce Act as there is in fact no order to vary and the Family Law Act is unavailable to the parties as they were divorced in April of 2015.

[6] The Court is prepared, and in particular in light of the parties’ consent, to treat this matter as a trial “de novo” which will be determined on the affidavit evidence received.

Background and History

[7] Mr. S. is 59 years of age and Ms. W. is 57 years of age. Mr. S. and Ms. W. were together for 24 years. They began common law cohabitation in 1985 and were married on May 16, 1986. They separated in 2009. Both parties had university degrees at the time of the commencement of their relationship. Mr. S. had an undergraduate and graduate degree in Engineering and Ms. W. had a Bachelor of Arts degree in Education and in Criminology. When the parties relocated to Kingston, Mr. S. commenced work at DuPont and continued in that capacity until he left employment with DuPont and took an early retirement package in 2017.

[8] The parties successfully raised four children who are now adults and who have proven their parents’ efforts worthwhile. They are all successful adults. Ms. W. was the primary caregiver for the first 15 to 16 years of the relationship and did obtain some limited employment during the latter 8 to 9 years of the marriage. Mr. S.’s employment required that he regularly travel outside of the region and the country during which periods Ms. W. continued as primary caregiver and homemaker. In essence, however, it is acknowledged by Mr. S. that Ms. W. was the primary, stay at home parent for substantial periods of the marriage.

[9] During the course of the parties’ relationship, Ms. W. was able to engage in some retraining and was successful in obtaining work with a local organization in 2001 when the youngest child was starting Grade 2 and able to work part-time, given the age of the children and her responsibilities at home. She worked there for approximately 10 years. Ms. W. completed further training and obtained further and better employment.

[10] Mr. S. was very successful with his work at DuPont where he remained for approximately 24 years. Subsequent to his departure from DuPont, he undertook a new venture in the United States with a start-up company and has been very successful in that regard as well. His income from employment at the present time is approximately double what it was at the time of separation. Both parties’ financial circumstances have increased during the course of the separation and while the exact numbers are disputed, it is clear that Mr. S.’s net worth has increased significantly more than that of Ms. W.

[11] When the parties separated in 2009, they executed a Separation Agreement which included clear provisions for review of spousal support and exchange of financial materials. The terms of that Agreement are not in dispute. The parties had counsel, full and complete financial disclosure and do not challenge those terms.

[12] The difficulty between them is, at this point, that Mr. S. is requesting termination of spousal support effective May 1, 2018 (9 years after separation) and Ms. W. seeks continued spousal support of an increased nature effective June 1, 2018.

[13] In addition, the situation is complicated by the fact that Mr. S. took a buyout of his pension in 2017 which resulted in a payment of approximately $1.4 million dollars, some of which was placed in a locked-in retirement vehicle and some of which was paid to him in cash. Up to that point, and specifically from the time the Separation Agreement was signed on August 25, 2010 (Amending Agreement of October 21, 2011), the parties followed the terms of the Separation Agreement and made a number of changes that reflected both parties’ increasing and decreasing incomes at different times.

[14] At the time of the initial Separation Agreement, Mr. S. was and did pay Ms. W. the sum of $4,010.00 every month. Support was based on his income of $144,000.00 and her income of $34,000.00 and was agreed to be set at the mid-range at that time and for any subsequent reviews. There was a detailed structure set out in the parties’ Separation Agreement as to how spousal support was to be determined.

“5.3 The quantum of spousal support is variable annually, using the formula set out in the Spousal Support Advisory Guidelines (using the mid-range value of recommended support). That is, each year, no later than May 15th, the parties shall exchange Income Tax Returns, and support shall be re-adjusted based on each party’s income for the previous year, by June 1st. For example, the $4,010 monthly quantum set out in this Agreement was arrived as follows: A.’s stated income $144,000.00; B.’s stated income $34,0000.00; 25 year cohabitation; B. was 48 years of age at separation; using the “Without Child Support” formula, the mid-range recommended quantum of support is $4,010.00. This approach/formula shall be implemented annually.

5.4 Without limited the generality of the foregoing paragraph, the issue of spousal support (not division of property, which is final and non-variable), quantum and duration, is reviewable and variable upon a material change in circumstances affecting either party, including but not limited to A.’s retirement. Regarding any review and variation based on A.’s retirement, the principles set out in the Supreme Court of Canada decision Boston v. Boston, shall be applied, regarding A.’s pension.”

[15] The parties Amending Agreement in 2010 addressed Ms. W.’s full-time employment. Spousal support was revisited based on Ms. W.’s income of $60,500.00 and Mr. S.’s income of $164,000.00. The parties reduced the spousal support to $3,708.33 effective November 1, 2011. The parties acknowledged in that Amending Agreement that the level of spousal support slightly exceeded the mid-range of the support suggested by the SSAGs.

[16] The Amending Agreement confirmed that absent any similar agreement in the future for further variation of spousal support payable between the parties that it be determined by the formula set out in parts 5.3 and 5.4 of the Agreement. All other aspects of the original Agreement remained in place.

[17] Over the years from 2009 to 2016, the parties adjusted the spousal support by discussion between them. This is not disputed and while there was nothing in writing after the Amending Agreement itself, there is no dispute that the parties engaged in discussions that reflected and followed the terms of their contract in a consistent manner.

[18] During these periods the parties’ incomes were as follows:

A.’s income B.’s income (excluding support)

2009 $146,969 $38,405 2010 $150,868 $37,837 2011 $164,000 (per Agreement) $48,304 2012 $165,430 $61,604 (before adjustment for union dues) 2013 $161,603 $66,792 (before adjustment for union dues) 2014 $163,928 $68,695 (before adjustment for union dues) 2015 $164,551 $70,399 (before adjustment for union dues) 2016 $162,193 $72,940 (before adjustment for union dues)

[19] Between 2014 and 2016, the average monthly amount of support ranged between $3,427.00 in 2014 and $3,146.00 in 2016. In 2017, Mr. S. requested a variation of the support and began paying in January of 2017 the sum of $2,953.00. This was not formally disputed by Ms. W. although in her evidence she indicates that she simply did not wish to engage in a dispute or “raise her voice” further with Mr. S.. While the amount of support varied over the course of 2017, it was between January and June, approximately $2,900.00 per month that was paid by Mr. S.

[20] In June of 2017, Mr. S. reduced the amount to $2,000.00 a month and this continued for the balance of 2017. Unfortunately, at this point things became more difficult between the parties.

[21] Starting in January of 2018, Mr. S. decided that the support ought to be reduced further to $1,400.00 per month. Ms. W. asserts that she did not agree to this, objected and at this point as the children had left the home, she raised her voice and formalized her objection to what she asserts was a unilateral reduction of the support further to $1,400.00 per month. That $1,400.00 per month has remained consistently paid by Mr. S. to the date of this motion.

[22] On consent, Mr. S. filed a Notice of Reassessment from Revenue Canada which has been marked as Exhibit 1 and which confirms his taxable income for 2017 at $999,347.00. This income is substantially comprised of his employment income from DuPont and the cash portion of his pension payout which was paid to him and deemed as income in that year by Revenue Canada along with the new income stream which commenced in 2017 when Mr. S. began employment with Banzan International in Massachusetts.

[23] Unfortunately, it was unclear to Ms. W. the exact situation with regard to the Applicant’s income until mid-way through 2018 when documentation was produced which clarified the reasons for and nature of Mr. S.’s departure from DuPont and work in the United States.

[24] This lack of clarity is compounded by the fact that Mr. S.’s Financial Statement sworn in April of 2018 did not accurately set out his total income from all sources for 2017 which has now been evidenced to be just under a million dollars.

[25] By comparison the parties’ incomes were as follows:

Mr. S.’s income Ms. W.’s income

2017 $999,079 $84,331 (excluding support) 2018 $354,286 $85,474 (excluding support)

[26] This then moves us to the legal issues in this case.

Questions for Determination:

1. Should spousal support be terminated?
2. What is the effect of the Final Agreement entered into between the parties which the parties themselves relied on for a significant period post-separation? Should it be disregarded?
3. Should post-separation increases in income received by the Applicant be considered for the purposes of spousal support calculation if this Court decides that spousal support should continue?
4. Should the lump sum payment received by the Applicant from his pension received in cash be considered income for the purposes of spousal support?
5. If spousal support is payable, what is the appropriate application of the Spousal Support Advisory Guidelines? How is the Court to address the fact that Mr. S.’s income exceeds $350,000?
6. What is the impact, if any, of the Respondent’s repartnering with respect to ongoing spousal support?

The Law:

[27] The factors and objective the Court must consider in making an order of spousal support are outlined under subsections 15.2(4) and (6) of the Divorce Act:

15.2(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c ) any order, agreement or arrangement relating to support of either spouse.

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse 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 any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[28] The Supreme Court of Canada Bracklow v. Bracklow, [1999], 1 S.C.R. 420 (S.C.C.)) outlines the conceptual bases for entitlement to spousal support whether it be compensatory, contractual or non-compensatory. This is a thorough review by the Supreme Court of Canada on these issues.

[29] It is acknowledged by counsel that this Court is to consider all factors under 15.2(4) of the Divorce Act and that these factors must be carefully considered by the Court in light of the objectives of spousal support listed in 15.2(6) of the Act. These objectives must be balanced within the facts of this and every case. This is to be a case-by-case analysis within the context of the family structure history and current circumstances.

[30] Discretion must be exercised in order to relieve adverse consequences and economic hardship that may result from the marriage breakdown. There is no single objective or one test, rather, this is to be nuanced, comprehensive review of the family structure, units, evidence, history and current circumstances. No one single objective or test is to take precedence over another.

[31] The Bracklow case at para. 41 enunciates very clear the analysis of s. 15.2(6) of the Divorce Act and the objectives of support orders addressing non-compensatory factors.

Section 15.2(6) of the Divorce Act, which sets out the objectives of support orders, also speaks to these non-compensatory factors. The first two objectives -- to recognize the economic consequences of the marriage or its breakdown and to apportion between the spouses financial consequences of child care over and above child support payments -- are primarily related to compensation. But the third and fourth objectives are difficult to confine to that goal. “[E]conomic hardship . . . arising from the breakdown of the marriage” is capable of encompassing not only health or career disadvantages arising from the marriage breakdown properly the subject of compensation (perhaps more directly covered in s. 15.2(6) (a): see Payne on Divorce, supra, at pp. 251-53), but the mere fact that a person who formerly enjoyed intra-spousal entitlement to support now finds herself or himself without it. Looking only at compensation, one merely asks what loss the marriage or marriage breakup caused that would not have been suffered but for the marriage. But even where loss in this sense cannot be established, the breakup may cause economic hardship in a larger, non-compensatory sense. Such an interpretation supports the independent inclusion of s. 15.2(6) (c) as a separate consideration from s. 15.2(6) (a). Thus, Rogerson sees s. 15.2(6) (c), “the principle of compensation for the economic disadvantages of the marriage breakdown as distinct from the disadvantages of the marriage”, as an explicit recognition of “non-compensatory” support (“Spousal Support After Moge”, supra, at pp. 371-72 (emphasis in original)).

[32] It is important to note that in this case it is acknowledged on the record by counsel that there is a significant compensatory element to the claims herein. The need based claim of Ms. W. is in my view quite significantly reduced at the present time. Counsel for Ms. W. confirms that she has achieved “self-sufficiency” in the sense that her situation has stabilized on a day-to-day basis and she is able to meet her expenses in a reasonable way. There must, however, be a more nuanced and comprehensive review in order to assess the situation and determine that a reasonable structure is in place for this family on the issue of spousal support on more than just a “can she pay her bills” analysis.

[33] The issue of self-sufficiency has been raised by Mr. S. and he would like the Court to rely significantly on the fact that Ms. W. has a solid job, has re-partnered and is able to meet her expenses.

[34] As noted in Fisher v. Fisher, 2008 ONCA 11, the Ontario Court of Appeal has addressed the issue of self-sufficiency and confirms that it is to be assessed in relation to the economic partnership that the parties enjoyed and could sustain during cohabitation and that they can reasonably anticipate after separation.

[35] As set out in the Fisher case at para. 53:

Self-sufficiency, with its connotation of economic independence, is a relative concept. It is not achieved simply because a former spouse can meet basic expenses on a particular amount of income; rather, self-sufficiency relates to the ability to support a reasonable standard of living.

[36] In determining income for spousal support, the same principle utilized for determining income for child support purposes apply. The starting point for the determination of income begins with the definition of income under the Federal Child Support Guidelines.

15 (1) Subject to subsection (2), a spouse’s annual income is determined by the court in accordance with sections 16 to 20.

(2) Where both spouses agree in writing on the annual income of a spouse, the court may consider that amount to be the spouse’s income for the purposes of these Guidelines if the court thinks that the amount is reasonable having regard to the income information provided under section 21.

16 Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.

17 (1) If the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

[37] In this particular situation, the case of Slongo v. Slongo, 2017 ONCA 272, is in my view illustrative and helpful.

[38] The case is similar in that a spouse retired early and continued with other employment. The value of the pension had been based on a later expected retirement date of age 65 which is the exactly the set of circumstances in this case. The commuted value of Mr. Slongo’s pension was available to him at approximately $1.9 million. These monies were paid partly as taxable income at $1,296,000.00 in six installments and partly in a locked-in retirement account.

[39] These are very similar circumstances to this case in that Mr. S. had approximately $800,000.00 provided to him into a LIRA and approximately $631,000.00 (a portion of which has already been equalized) remains as cash available to him and which was taxable as income by Revenue Canada. He has an ongoing debt with regard to that tax obligation which is evidenced in his Financial Statement.

[40] Counsel for Ms. W. has provided actuarial evidence as to the portion of the cash payment received by Mr. S. from DuPont that has already been subject to equalization and which ought to be properly excluded in calculating Mr. S.’s income in accordance with the Boston principles. The suggested methodology utilizes the pre-tax value of the pension entitlements which accumulated during the marriage and the total pre-tax value of Mr. S.’s pension at retirement in 2017.

[41] The mathematical calculations urged upon me by counsel for Ms. W. further attempt to account for any growth in the value of Mr. S.’s pension from the date of separation to the date of payout and has increased the actuarially documented pre-tax value of the marital portion of the pension of $258,606.00 by 15%.

[42] This calculation is accepted by the Court as a reasonable approach to complying with the Boston principles while fairly addressing anticipated growth in the pension from the date of separation to 2017. This calculation increases the pre-tax amount of the equalized portion of the pension to $297,397.00. Further accounting for inflation, I find that the request of Ms. W. for a finding that 80% of the pension was not already equalized and therefore not sheltered is reasonable and results in a figure of $504,875.00 available as taxable income in 2017 which was not subject to equalization.

[43] When one then accounts for employment income of $53,161.00, investment income of $8,395.00 along with employment income from the United States of $299,425.00, this results in a total income found available for payment of spousal support of $865,856.00. It is significant to note that this calculation does not include for support purposes any amount of the pension payout that was directed into a locked-in retirement plan by Mr. S. in 2017.

[44] Despite my request for clarification during submissions on this motion, I received limited alternative submissions and no calculations from Mr. S. as to how the Court ought to approach the issue of the cash payout of his pension for support purposes. I did not receive substantial submissions as to how the Boston principles ought to be applied in the event that the Court deemed that income available for spousal support purposes. Mr. S. simply said “stop my support”, despite the fact that in 2017 his total income reflected in his tax materials was just shy of one million dollars.

[45] This is not, however, the number upon which Ms. W. wishes support to be based. In my view, her calculations to address for the Boston principles and inflation are reasonable and comply with the objectives of the Divorce Act. In the exercise of my discretion and upon considering on balance, the factors and objectives under the Divorce Act in the context of the facts of this case, I find that the inclusion of a portion of the lump sum received by Mr. S. in his income for support purposes fairly addresses the adverse consequences and economic hardship that have flowed to the parties from their marriage or its breakdown.

[46] While no one factor or single objective is to override the others, it is important on the facts of this case to recognize the economic advantage that flowed to Mr. S. from the choices these parties made during their marriage and the negative impact that flowed from those choices and the separation between the parties in Ms. W.’s direction. Defining as available income the cash payout of Mr. S.’s pension is in my view also consistent with the apportioning between the parties of the financial consequences of the choices they made in raising their children and structuring their lives.

[47] The Court of Appeal in the Slongo case did not accept the husband’s assertion that annuity income was to be deemed and utilized for support purposes. It is perhaps most helpful to note the Court of Appeal in Slongo states “The support order should be based on the reality of the income stream available to the husband for support purposes.”

[48] The Court specifically rejected the suggestion that the cash payment to the husband ought to be deemed as an annuity and paid out according to that available, hypothetical income stream.

[49] The parties before this Court have agreed that the Boston v. Boston, 2001 SCC 43, case ought to be applied and that the already equalized portion of Mr. S.’s pension is to be shielded from any assessment of spousal support. There is no dispute in this regard. Ms. W.’s position clearly acknowledges this. Her calculations for inclusion of income account for a reduction to the cash amount to reflect the already equalized portion of Mr. S.’s pension.

[50] The Court of Appeal in the Slongo case utilized all of the husband’s income after reduction for that portion of the funds which had already been equalized. The Court states at para. 134:

Given the lump-sum nature of this pension payout, intended to compensate the husband for what would otherwise have been smaller annual payments, it seems appropriate here for the wife to benefit from the application of the formula to the full amount.

[51] The Court further states on the topic of incomes in excess of $350,000.00 at paras. 105 and 106:

As already mentioned, the Guidelines, while not binding, should not be lightly departed from. This is in large part because, without them, it is very difficult to establish a principled basis for arriving at a figure for spousal support. In my view, the motion judge erred in departing from the Guidelines for the reasons he did: namely, the good luck associated with the husband’s early pension pay-out opportunity (at para. 140) and his finding that the wife was “mismanaging her affairs” (at para.150).

In the face of a very strong compensatory basis for entitlement to support, as well as an income increase arising from the very same job that the husband occupied throughout the 23-year-long traditional marriage, there was simply no reason to conclude that “the underlying assumptions of the SSAGs [were now] less helpful” (para.151).

[52] Professors Thompson and Rogerson state in The Spousal Support Advisory Guidelines: The Revised User Guides (2016) (“the RUG”):

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 and $700,000, it seems.

[53] Counsel raised the issue of how much is too much and references the assertion in the RUG that one does not want to go too far and how far is not too far within the ranges suggested between $500,000 and $700,000.

[54] The Ontario Court of Appeal in the case of Halliwell v. Halliwell, 2017 ONCA 349, which was decided shortly after the Slongo decision notes as follows:

In my view, attributing income of $675,000 a figure at the mid-point between the $350,000 ceiling and the full imputed income amount and maintaining the low-point of the range generated by this income (as the trial judge did), fairly achieves the desired effect of providing both compensatory and non-compensatory aspects of support.

[55] In my view, attributing to Mr. S. an income of $607,928.00, a figure at the mid-point between the $350,000.00 ceiling and full imputed income amount of $865,856.00 and maintaining a low-point of range generated by this income fairly achieves the desired effect of providing for both compensatory and non-compensatory aspects of support. The contractual nature of the support claims is also reasonably addressed.

[56] I find this approach in the Halliwell case particularly appropriate to the circumstances of this file. It is a reasonable and fact specific approach that addresses the particular circumstances of this family and reflects both the compensatory, contractual and reduced need based elements of support.

[57] Cork v. Cork, 2014 ONSC 2488 provides a very useful review for answering the question of how we apply the SSAGs to incomes that surpass $350,000.00. Justice Warkentin notes the objective becomes less about striving to equalize the parties’ incomes, even in a long term marriage. The SSAG calculations are often considered as one part of the overall consideration of factors that determine spousal support. She notes further that two factors tending to increase the quantum of spousal support to the higher end of the range suggested in the SSAGs is the length of marriage and the resulting concept of the merger of the parties’ economic lives over the course of their marriage. In the court case, those factors included things that are very similar to the case before me.

[58] The Court in Cork notes that in balancing the many factors relevant to a long-term marriage when the payor’s income is over $350,000.00, the suggestions under the SSAGs result in payment of spousal support in the range of between 37.5% and 50% of the gross income difference between the spouses.

[59] There is an assertion by Mr. S. that the increases in his income post-separation had nothing to do with Ms. W. and she ought not to benefit from his post-separation income increases and success.

[60] Chapman v. Chapman, [2009] O.J. No. 5994, case provides some assistance in this regard. I note that the Court states therein as follows at para. 23:

I reject the notion the Applicant did not contribute to his new position. While the method of payment and the employer may have changed, he is still in the banking industry like he was in their 23 year relationship and the court infers the long term service with the first bank made him attractive to the second bank as an employee.

[61] It is also helpful to then turn to the SSAGs and the Revised User’s Guide, in particular at s. 14.3 which notes:

Some rough notion of causation is applied to post-separation income increases for the payor, in determining whether the income increase should be reflected in increased spousal support and, if it should, by how much. It all depends on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase (new job vs. promotion with same employer, or career continuation vs. new venture).

That word “causation” has often been read without the preceding words “some rough notion of causation”. It would be better to describe it as a “link” or “connection”, between the marriage and the increase after separation. That has certainly been the approach of most courts, especially those in B.C. and Ontario.

[62] Justice Chappel also notes in the Thompson v. Thompson case that the approach toward post-separation increases in payor’s income. The Court stated at para. 103:

The authors of the SSAG and the cases decided since the guidelines were introduced have established that the treatment of post-separation increases in a payor's earnings in spousal support cases is ultimately a matter of discretion for the court, to be undertaken having regard for the unique circumstances of each case and the general factors and objectives underlying spousal support. Upon considering these factors and objectives and the relevant case-law, I conclude that the following general principles should guide and inform the court's exercise of discretion on this issue:

a) A spouse is not automatically entitled to increased spousal support when a spouse's post-separation income increases.

b) The right to share in post-separation income increases does not typically arise in cases involving non-compensatory claims, since the primary focus of such claims is the standard of living enjoyed during the relationship.

c) Compensatory support claims may provide a foundation for entitlement to share in post-separation income increases in certain circumstances. The strength of the compensatory claim and the nature of the recipient's contributions appear to be the major factors which may tip the balance either for or against an entitlement to share in the increased income.

d) The recipient spouse may be permitted to share in post-separation increases in earnings if they can demonstrate that they made contributions that can be directly linked to the payor's post-separation success. The nature of the contributions does not have to be explicit, such as contribution to the payor's education or training. The question of whether the contributions made by the recipient specifically influenced the payor's post-separation success will depend on the unique facts of every case.

e) A spousal support award is more likely to take into account post-separation income increases where the relationship was long-term, the parties' personal and financial affairs became completely integrated during the course of the marriage and the recipient's sacrifices and contributions for the sake of the family and resulting benefits to the payor have been longstanding and significant.109 When this type of long history of contribution and sacrifice by a recipient spouse exists, the court will be more likely to find a connection between the recipient spouse's role in the relationship and the payor's ability to achieve higher earnings following the separation.

f) In determining whether the contributions of the recipient were sufficient, the court should consider such factors as whether the parties divided their family responsibilities in a manner that indicated they were making a joint investment in one career, and whether there was a temporal link between the marriage and the income increase with no intervening change in the payor's career.

g) If the skills and credentials that led to the post-separation income increase were obtained and developed during the relationship while the recipient spouse was subordinating their career for the sake of the family, there is a greater likelihood of the recipient deriving the benefit of post-separation income increases.

h) By contrast, the likelihood of sharing in such increases lessens if the evidence indicates that the payor spouse acquired and developed the skills and credentials that led to the increase in income during the post-separation period, or if the income increase is related to an event that occurred during the post separation period.

i) Assuming primary responsibility for child care and household duties, without any evidence of having sacrificed personal educational or career plans, will likely not be sufficient to ground an entitlement to benefit from post-separation income increases.

j) Evidence that the post-separation income increase has evolved as a result of a different type of job acquired post-separation, a reorganization of the payor's employment arrangement with new responsibilities, or that the increase is a result of significant lifestyle changes which the payor has made since the separation may militate against a finding that the recipient should share in the increase.

k) Where the payor's post-separation advancement is related primarily to luck or connections which they made on his own, rather than on contributions from the recipient, the claim for a share in post-separation income increases will be more difficult.

l) The court may also consider the amount of time that has elapsed since separation as an indicator of whether the recipient's contributions during the marriage are causally related to the post-separation income increases.

m) Evidence that the payor also made contributions to the recipient's career advancement, or that the recipient has not made reasonable steps towards achieving self-sufficiency are also factors that may preclude an award that takes into account post separation income increases.

[63] Counsel for the Respondent urges upon me the decision of Justice Pazaratz in the case of A.A.M. v. R.P.K., 2010 ONSC 930 wherein Justice Pazaratz notes:

To simply ignore continuing income gains by the payor, while factoring in changes in the recipient’s earnings, would almost inevitably preclude consideration of an important component of a compensatory claim.

[64] It is difficult to understand Mr. S.’s position that his move to the United States with the accompanying increase in his income is unrelated to the support recipient and their relationship. The evidence is clear that during the course of the marriage, Mr. S.’s career was supported through the efforts of Ms. W. and those efforts specifically freed up Mr. S. to continue his career path uninterrupted while she focused her energies on raising the children. The skills, resume and experience that Mr. S. acquired during the relationship and while Ms. W. was working to raise their children and support their household, directly allowed him to search for and obtain the lucrative position he now enjoys in the United States. His belief that there is no connection between the marriage choices and his success is not shared by the Court.

[65] He would have this Court make a determination that he alone undertook the risk of such an undertaking and ought to alone receive the benefits. I find that it was only as a result of the slowly and steadily acquired benefits flowing from the efforts of both parties during the marriage that he had the skills, experience and strength of mind that permitted him to even consider that bold manoeuvre into employment in the United States.

[66] It is also not insignificant that he had underneath him a substantial buyout of a DuPont pension that was acquired and accumulated during the course of the marriage. This approximately $1.4 million dollar “cushion” sat underneath him while he took the “risk” of obtaining further and better employment in the United States in a substantially similar type of career path that he had at DuPont and in which he continues as an engineer.

[67] Further, while it is clear that the parties did utilize both of their post-separation financial positions for many years to assess and reduce support, at the moment that the Applicant moved to the United States and doubled his income, that situation did not continue and he decided to reduce the support.

[68] There is significant caution and respect to be accorded to agreements made between parties that have been fairly negotiated and that reflect the intentions and expectations of the parties. The Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303 decision is of great assistance in this situation although the first step called for in Miglin is not an issue here as there is no request to set aside an agreement although the suggestion by the Respondent that the case can be utilized to address the circumstances under which agreements should be enforced is important.

[69] The Court in Miglin set out that fairly negotiated agreements that represent the intentions and expectations of the parties and that comply substantially with the objectives in the Divorce Act should receive considerable weight and respect.

… Therefore, in searching for a proper balance between consensus and finality on the one hand, and sensitivity to the unique concerns that arise in the post-divorce context on the other, a court should be guided by the objectives of spousal support listed in the Act. In doing so, however, the court should treat the parties’ reasonable best efforts to meet those objectives as presumptively dispositive of the spousal support issue. The court should set aside the wishes of the parties as expressed in a pre-existing agreement only where the applicant shows that the agreement fails to be in substantial compliance with the overall objectives of the Act. These include not only those apparent in s. 15.2 but also, as noted above, certainty, finality and autonomy.

[70] There is an assertion by Mr. S. that Ms. W.’s repartnering is to have a significant impact and in fact, this is noted by him to be one of the significant reasons why he feels that support should be terminated, that is, that the repartnering by Ms. W. ought to be a key if not a crucial piece of why it is reasonable to terminate his obligation for spousal support.

[71] Cassidy v. Cassidy, 2018 ONSC 7222, clarifies how this issue is to be addressed to by the Courts at para. 25:

[T]he mere passage of time itself does not constitute a material change in circumstances in respect of a spousal obligation": Hess v. Hamilton, 2018 ONSC 661 at para. 100. In circumstances where the original basis for entitlement was compensation, repartnering is unlikely to constitute a material change in circumstances: Walsh v. Davidson, 2016 ONSC 7318 at para. 19. This is because compensatory support is intended to compensate for economic loss or disadvantage caused by roles adopted during the relationship. This is a retrospective analysis: see Wegler v. Wegler, 2012 ONSC 5982. The focus of the analysis is on where the recipient would have been if they had entered or remained in the labour force.

[72] In J.M.G. v. L.D.G., 2016 ONSC 3042 the Court spoke to the reasons set out in the Boland v. Boland case noting:

When a support recipient re-partners, this can be considered by the court in determining both the quantum of duration of spousal support. Murray J. in Boland v. Boland, 2012 ONCJ 102, [2012] O.J. No. 925, at paras. 106-110 summarized the law in this respect:

A former spouse who is in receipt of spousal support is not automatically disentitled from receipt of support because she or he repartners. Repartnering is simply a factor to be taken into account in the assessment of entitlement to and quantum of support.

The case law indicates that the significance of the repartnering will vary, depending on a number of factors, such as:

• the duration and stability of the new relationship;
• the value to the support recipient of any benefits she or he receives by reason of this new relationship;
• the existence of any legal obligation of the new partner to provide support;
• the economic circumstances of support recipient's new partner, sometimes in comparison to his or her former partner.

As was said by Justice G.M. Barrow in Kelly v. Kelly, 2007 BCSC 227, [2007] B.C.J. No. 324 "Remarriage does not compensate the receiving spouse for that which was foregone during an earlier marriage."

[73] Most helpful in addressing the question of Ms. W.’s repartnering are the statements of the Supreme Court in Moge v. Moge, [1992] 3 S.C.R. 813, excerpts of paras. 54-55, 63, 69, 71, 84 and 92 as follows:

It is also imperative to realize that the objective of self-sufficiency is tempered by the caveat that it is to be made a goal only "in so far as practicable". This qualification militates against the kind of "sink or swim" stance upon which the deemed self-sufficiency model is premised.

That Parliament could not have meant to institutionalize the ethos of deemed self-sufficiency is also apparent from an examination of the social context in which support orders are made. In Canada, the feminization of poverty is an entrenched social phenomenon.

It would be perverse in the extreme to assume that Parliament's intention in enacting the Act was to financially penalize women in this country. And, while it would undeniably be simplistic to identify the deemed self-sufficiency model of spousal support as the sole cause of the female decline into poverty, based on the review of the jurisprudence and statistical data set out in these reasons, it is clear that the model has disenfranchised many women in the court room and countless others who may simply have decided not to request support in anticipation of their remote chances of success.

… in many cases a former spouse will continue to suffer the economic disadvantages of the marriage and its dissolution while the other spouse reaps its economic advantages. In such cases, compensatory spousal support would require long-term support or an alternative settlement which provides an equivalent degree of assistance in light of all of the objectives of the Act.

.. while the union survives, such division of labour, at least from an economic perspective, may be unobjectionable if such an arrangement reflects the wishes of the parties. However, once the marriage dissolves, the kinds of non-monetary contributions made by the wife may result in significant market disabilities. The sacrifices she has made at home catch up with her and the balance shifts in favour of the husband who has remained in the work force and focused his attention outside the home. In effect, she is left with a diminished earning capacity and may have conferred upon her husband an embellished one.

Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement (see Mullin v. Mullin (1991), supra, and Linton v. Linton, supra). Furthermore, great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.

In all events, whether judicial notice of the circumstances generally encountered by spouses at the dissolution of a marriage is to be a formal part of the trial process or whether such circumstances merely provide the necessary background information, it is important that judges be aware of the social reality in which support decisions are experienced when engaging in the examination of the objectives of the Act.

Summary:

[74] This then brings us back to the questions to be determined by this Court:

1. Should spousal support be terminated?

[75] The answer to this question is no. This was a long-term relationship where Ms. W. was primary caregiver for four children. The parties together planned their life around her role and Mr. S.’s career. Mr. S.’s career flourished as did the children. Both parties had followed their plan.

[76] It is undisputed that Ms. W.’s spousal support entitlement is significantly compensatory in nature and while her situation has improved, the compensatory element of her claim remains strong. Spousal support has simply not continued long enough or in a way that has ameliorated the impact of the relationship and separation between these parties.

[77] It is noteworthy that when the implementation of the Separation Agreement resulted in a reduction in spousal support, Mr. S. was quite content to continue. At the moment that his situation significantly improved, not only did he unilaterally reduce the support to something far less than reasonably contemplated by the parties in their contractual relationship, but he then sought to terminate the support absolutely. This is not reasonable in light of all of the circumstances of this family and the situation that they both found themselves in, moving out of the relationship and into their separated future. Then then brings us to the second question:

2. What is the effect of the Final Agreement entered into between the parties which the parties themselves relied on for significant period post-separation? Should it be disregarded?

[78] The agreement between the parties is not in dispute and in fact, it was followed by the parties carefully and cooperatively for many years when it benefitted the support payor through support reducing. It is not appropriate to simply ignore that contract now. There is nothing that convinces me that it ought to be ignored. In fact, the conduct of the parties has confirmed their acceptance of the agreement. They conducted themselves in a way consistent with its terms and their intentions. It would be inequitable to ignore the contract now given the length of time the parties were together, the roles that they chose and planned for themselves during their relationship and the effects of those choices both before and after the separation on them both. Furthermore, I find that the contract continues to comply with the objectives listed under 15.2 of the Divorce Act.

[79] This then brings us to Mr. S.’s request that his post-separation increases in income be excluded from consideration of spousal support, if support is to continue.

3. Should post-separation increases in income received by the Applicant be considered for the purposes of spousal support calculation if this Court decides that spousal support should continue?

[80] In reviewing the totality of the situation between the parties, I see absolutely no acceptable reason why Mr. S. believes that his post-separation success is unrelated to the parties’ relationship. He continues in the same type of career he was in during the relationship. He has strongly and positively continued through his career path in an almost uninterrupted fashion and in a very lucrative way. That he says that Ms. W had nothing to do with his success is not only difficult to understand but it is completely divorced from the reality of the choices these parties made between them for their family over a very long period of time. This includes the periods after separation when both parties “post-separation” financial realities were considered in their agreed changes to the contract between them.

[81] I find that it would be inequitable and unfair on the one hand to reduce the spousal support during periods of time when Ms. W.’s income was improving and thereafter not only fail to increase the spousal support when Mr. S.’s income increased but to terminate it, as he requests this Court do. This is not the only consideration but it is a significant one. This then moves us to the fourth question:

4. Should the lump sum payment received by the Applicant from his pension (received and held in cash) be considered income for the purposes of spousal support?

[82] I have carefully reviewed the case law relating to whether the lump sum or a portion of the lump sums received by Mr. S. from his pension ought to be considered in assessment of appropriate spousal support. Unfortunately, Mr. S. did not provide a detailed position as to what the Court should do in the event that a portion of the lump sum were to be included in income for the year in which it was received. It is acknowledged between the parties that a reduction for all pre-equalized portions of that pension is required by way of a Boston analysis.

[83] I have reviewed the calculations of Ms. W. in that regard and I find her approach wherein she urges on the Court the methodology in the Halliwell case to be most appropriate. This approach picks a mid-point between the $350,000.00 ceiling under the Guidelines and the “Boston acknowledged” unequalized cash portion of Mr. S.’s pension.

[84] In my view, this achieves a fair and equitable result which acknowledges the actual financial situation and abilities of the support payor, removes from the calculation any other already equalized assets and fairly provides to the support recipient a support structure reflective of the parties’ choices, their history and the effects of those choices and history on the two of them as they move forward addressing both the positive and negative impact on them both.

[85] I find that it is therefore reasonable to include a figure of $607,928.00 in the support payor’s income for the year in which it was received. The SSAGs at that level at the low end would suggest $15,742.00 per month.

[86] This then moves us to question 5.

5. What is an appropriate application of the Spousal Support Advisory Guidelines given that Mr. S.’s income in the year in which he received the lump payout of his pension would exceed the $350,000.00 cap in the Guidelines themselves?

[87] I have considered the Financial Statements of the parties. With post-separation increases in income, the support payor will have a much increased obligation for spousal support and the support recipient will have her situation improve considerably. This without inclusion of any lump sum amount.

[88] I have considered the “need based” elements of the recipient’s claim and as acknowledged by the parties, note that her situation, aside from spousal support, has improved. I find that to date, in all years excepting in the year in which the lump sum was received, it is appropriate to use the low end of the Guidelines and that the figure found therein is appropriate in all of the circumstances of this case. Going forward for the current year, it is clear that Mr. S.’s income may approach or slightly exceed the $350,000.00 cap.

[89] At this point, I find that his spousal support obligation is most appropriately addressed at the low end of the range and that the entitlement of the recipient is met fairly in that amount.

[90] In what I will call the “lump sum year”, Mr. S. had a vastly improved situation out of which he failed to acknowledge or reasonably address his responsibilities. His attempt to not only reduce but to terminate the support is unacceptable given both historical and current financial situation of these parties.

[91] From June 1, 2019 forward, support at the low end of the range is appropriate utilizing all post-separation income and properly addresses the factors to be considered under the Divorce Act and in s. 15.2(4) and (6). The placement of support to the low end also acknowledges Ms. W.’s improved employment income and repartnering.

[92] Further, utilizing the Halliwell methodology for the 2017 “lump sum year” also meets with Divorce Act objectives.

[93] This then turns us to the last question:

6. What is the impact, if any, of the Respondent’s repartnering with respect to ongoing spousal support?

[94] While it is relevant that Ms. W. has repartnered and that has an effect on where in the SSAGs the Court places support, it is not the new partner’s responsibility to ameliorate the compensatory nature of the claims between these parties. It is not the new partner’s obligation to shoulder the effects of someone else’s long-term marriage and separation. It is difficult to comprehend how Ms. W. is to proceed with her life in an autonomous and independent way without having a clear and realistic acknowledgment of how it is that she finds herself in her current situation. And in fact, it is not respectful or reflective of the parties’ historical relationship to now say that a third party is somehow to bear responsibility for the choices these parties made, the roles they adopted for themselves as they successfully parented their two children and as the support payor’s career proceeded on such a positive trajectory.

[95] It is unacceptable to the Court that in long-term relationships where one party has undertaken an unpaid role such as primary childcare, that thereafter a stranger to that relationship and those choices ought to be compelled to assist or at least have their financial circumstances assessed in a way that reduces the support payor’s obligations.

[96] Long-term relationships in particular those where children are parented primarily by one spouse while the other’s career has a financial trajectory of success and long-term retirement protection, need to be analyzed in a more nuanced and comprehensive way. It is not enough to say to the Court that “someone new has come along and I am therefore to be relieved of some or all of my responsibilities for the choices previously made directly with the support recipient”.

[97] In this particular case, in addition, there is a contractual obligation that the parties themselves reinforced again and again over many years by way of their collaborative adjustments to reduce the support.

[98] Mr. S. essentially asks the Court to find that his obligation has ended. The answer in response is, not yet.

[99] I received some submissions from counsel with regard to life insurance. I have reviewed the evidence in regard to the request for life insurance to secure the spousal support and find that the sum of $275,000.00 requested by Ms. W. is reasonable in the circumstances and that provision shall issue accordingly.

Order:

[100] This Court orders that:

1. This matter was considered on the basis of an originating application pursuant to s. 15 of the Divorce Act on consent of the parties;

2. Commencing June 1, 2018 and the first day of each month thereafter to and including May 1, 2019, the Applicant B.S. shall pay support to the Respondent B.W. in the amount of $15,742.00 each month based on an income of $607,928.00 for the Applicant and $84,331.00 for the Respondent. On account of spousal support, the Applicant shall receive credit for payment of $1400.00 each month for each and every month made by him during this period of time.

3. Commencing June 1, 2019 and on the first day of each month thereafter to and including May 1, 2020, the Applicant, B.S. shall pay to the Respondent, B.W. the sum of $8,000.00 each month on account of spousal support based on his 2018 income of $354,286.00 and hers of $85,474.00 (at the low end of the SSAGs). Pending issuance of this Order, the Applicant shall receive credit for all payments made by him from June 1, 2019 onwards.

4. If there is no agreement as to support going forward after May 1, 2020, the $8,000.00 spousal support per month shall continue until further order or written variation that may be effected between the parties pursuant to their contract or further agreement.

5. On May 15, 2020, and on May 15th each year thereafter for so however long the Applicant, B.S. is obliged to pay spousal support to the Respondent, B.W., the parties shall exchange their respective Income Tax Returns (and which shall include foreign Income Tax Returns) for the preceding calendar year. Any change to spousal support shall be effective June 1 of the year of exchange.

6. The Applicant, B.S. shall obtain life insurance on his life in the amount of $275,000.00 (base amount) and shall irrevocably designate the Respondent, B.W. as the beneficiary thereof. The Applicant shall provide proof of said coverage and designation within 30 days of the date of this Order. The quantum of life insurance may be reviewed every three years at the request of either party. Should this insurance not be in place at the time of the Applicant’s demise, the amount of insurance shall form and be a first charge against his estate.

7. Failing agreement on costs, within 30 days of the date of this Order, the Applicant, B.S. and the Respondent, B.W. shall serve and file costs submissions not to exceed 4 pages, excluding any Offers to Settle and Costs Summary. Those submissions if any are to be received no later than June 7, 2019 failing which there will be no order as to costs.

8. All support payments under this Order, unless the Support Order is withdrawn from the Office of the Director of the Family Responsibility Office, shall be enforced by the Director and amounts owing under the Support Order shall be paid to the Director, who shall pay them to the person to whom they are owed.

9. This Order bears post-judgment interest at the rate of 3% per annum effective from the date of this Order. Where there is default in payment, the payment in default shall bear interest only from the date of the default.

Madam Justice Deborah Swartz

Released: May 28, 2019