Martin v. Martin

81 O.R. (3d) 495

Court of Appeal for Ontario,

Catzman, Moldaver and Armstrong JJ.A.

August 11, 2006

• Vous trouverez la traduction françasie de la décision ci-dessus à la p. 503, post.

Family law -- Support -- Spousal support -- Interim spousal support of $12,500 per month permitting wife to enjoy standard of living she enjoyed during marriage -- Trial judge ordering husband to pay spousal support in amount of $27,000 per month after taking into account fact that husband had regularly paid large part of his salary into retirement compensation arrangement -- Trial judge's order not being tantamount to redistribution of capital -- Husband's appeal dismissed.

The husband was a National Hockey League coach. During the marriage, he had arranged to have a large portion of his salary paid into a retirement compensation arrangement (the "RCA") in order to secure the family's financial future when he no longer received the high income of an NHL coach. At the time of the trial, the husband was paying the wife $12,000 a month for interim spousal support. This amount enabled her to enjoy the same standard of living she enjoyed during the marriage. The trial judge ordered the husband to pay spousal support in the amount of $27,000 per month. That amount took into account the moneys that the husband had regularly paid into the RCA. The husband appealed. [page496]

Held, the appeal should be dismissed.

The husband's argument on appeal was that the award of spousal support constituted a redistribution of his capital, which is generally prohibited. There was no issue as to the husband's ability to pay. The trial judge's order was not, in fact, tantamount to a redistribution of capital. The husband established his personal savings plan to benefit the family, including the wife. The wife was a stay-at-home mother. Because the husband was often away from home, the day-to-day responsibility of raising the children and running the household fell to the wife. The wife became totally dependent upon the husband not only for her day-to-day needs but for her future financial security. The award of spousal support in this case met both those ends.

APPEAL from the judgment of Power J., 2004 48712 (ON SC), [2004] O.J. No. 5170, 12 R.F.L. (6th) 415 (S.C.J.), by the husband for spousal support.

Cases referred to Hoar v. Hoar (1993), 1993 16106 (ON CA), 62 O.A.C. 50, 45 R.F.L. (3d) 105 (C.A.); Mannarino v. Mannarino, 1992 14022 (ON CA), [1992] O.J. No. 2730, 43 R.F.L. (3d) 309 (C.A.); Marinangeli v. Marinangeli (2003), 2003 27673 (ON CA), 66 O.R. (3d) 40, [2003] O.J. No. 2819, 228 D.L.R. (4th) 376, 174 O.A.C. 76, 38 R.F.L. (5th) 307, 123 A.C.W.S. (3d) 902 (C.A.); Willemze- Davidson v. Davidson, 1997 1440 (ON CA), [1997] O.J. No. 856, 98 O.A.C. 335, 69 A.C.W.S. (3d) 706 (C.A.), distd Other cases referred to Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, [1992] S.C.J. No. 107, 81 Man. R. (2d) 161, 99 D.L.R. (4th) 456, 145 N.R. 1, [1993] 1 W.W.R. 481, 43 R.F.L. (3d) 345 Statutes referred to Divorce Act, S.C. 1986, c. 4, s. 15.2 [as am.]

H. Hunter Phillips, for appellant. Mary Jane Binks, Q.C., and William J. Simpson, Q.C., for respondent.

The judgment of the court was delivered by

[1] ARMSTRONG J.A.: -- At the time of trial, the appellant, Mr. Martin, was paying the respondent, Mrs. Martin, $12,500 a month for interim spousal support. While receiving $12,500 a month, Mrs. Martin was able to enjoy the same standard of living she enjoyed during the course of her cohabitation with Mr. Martin.

[2] During the marriage, Mr. Martin, a National Hockey League coach, had arranged to have a large portion of his salary paid into a retirement compensation arrangement ("RCA"). This was done in order to secure the family's financial future when he no longer received the high income of an NHL coach.

[3] The trial judge, the Honourable Denis Power of the Superior Court of Justice, ordered Mr. Martin to pay spousal support in the amount of $27,000 per month. The $27,000 per month took into account the moneys that the husband had regularly paid into the RCA. Mr. Martin appeals the order of the trial judge in [page497] respect of spousal support and also appeals the order of costs at trial in the amount of $49,544.58. No application for leave to appeal has been made in respect of the costs award at trial. However, counsel for Mr. Martin advised at the outset of the oral argument that he would not proceed with the costs appeal if the appeal in respect of spousal support was dismissed.

Factual Background

[4] The parties were married on May 1, 1976. They separated on July 1, 2002. There are two adult children, Angela born September 10, 1979, and Nathalee born March 24, 1983.

[5] At the time of the marriage, Mr. Martin held a Bachelor of Science degree from St. Lawrence University in New York State. In August 1976, Mr. Martin was employed as a physical education and recreation instructor at Algonquin College in the City of Ottawa. His salary was between $30,000 to $35,000 per year. Mr. Martin also coached junior hockey teams in the Ottawa area and operated a hockey school in the summer.

[6] Mr. Martin's goal was to become a professional hockey coach. In 1983, he was employed as an assistant coach with the Peterborough Petes of the Ontario Hockey League. He was paid a salary of $10,000 plus expenses in his first year and $15,000 in his second year. He, his wife and children lived rent-free at the cottage of Roger Neilsen, a well-known hockey coach. While serving as an assistant coach in Peterborough, Mr. Martin also did supply teaching at a local school.

[7] Mrs. Martin was not employed outside the home after the family moved to Peterborough. She stayed at home and took on the responsibility of raising the children and running the household throughout the marriage. She also assisted her husband in the operation of his summer hockey school for which Mr. Martin paid her $10,000 a year from 1996 to 2001.

[8] In June 1985, Mr. Martin was hired as head coach of the Guelph Platers in the Ontario Hockey League at a salary of $22,500. He was a very successful coach of the Guelph team which won the Memorial Cup in his first season. The Memorial Cup is the ultimate award for junior hockey in North America.

[9] In 1986, as a result of his success as a junior hockey coach, Mr. Martin was offered the position of head coach of the St. Louis Blues of the NHL. He received a two-year contract at a salary of $100,000 for the first season and $115,000 for the second season. The position with the St. Louis Blues marked the commencement of a lengthy career as a coach in the NHL.

[10] After two years with the St. Louis Blues, Mr. Martin held coaching positions with the Chicago Blackhawks, the Québec [page498] Nordiques, the Cornwall Aces (a Québec Nordiques farm club) and the Colorado Avalanche.

[11] In January 1996, Mr. Martin was hired as a head coach of the Ottawa Senators -- a position he held until June 2004. The following schedule sets out Mr. Martin's compensation from his employment (excluding bonuses) with the Ottawa Senators from 1996 to 2004 and the percentage of those amounts that were directed to pension or savings. The figures are taken from the facta filed by counsel for the appellant and counsel for the respondent.

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[12] In his reasons for judgment, the trial judge made reference to Mr. Martin's evidence concerning his rationale for directing such large amounts of money to savings through his RCA. At para. 50 of his reasons, the trial judge said:

Mr. Martin was asked by his counsel why he had decided to pay such a large amount of money into a retirement fund. His answer was that there were two reasons:

(a) It gave him an opportunity to take advantage of possible tax savings; and

(b) He was employed in a very insecure position. It had taken him seven years to obtain another head coaching position after his dismissal in St. Louis and it was important to the family in order that it could live comfortably in the future.

[13] The trial judge also commented at para. 22 of his reasons for judgment on the evidence of Mrs. Martin concerning their practice of saving: [page499]

Mrs. Martin testified that while in Ellisville [St. Louis] "we lived well -- we saved -- we didn't over spend -- we lived a good life". Saving became a fact of life in the Martin household.

[14] After Mr. Martin was dismissed as coach of the Ottawa Senators at the end of the 2003 -- 2004 season, he was hired to coach the Florida Panthers of the NHL pursuant to a five year contract which provided a base salary in U.S. dollars as follows:

[QL:GRAPHIC NAME="81OR3d495-2.jpg"/]

[15] The contract with the Florida Panthers was negotiated in expectation of a labour disruption which in fact occurred as a result of a management lock-out in the fall of 2004. The contract with Mr. Martin provided that in the event of a labour disruption, Mr. Martin's base salary would be reduced by 50 per cent until a new collective agreement was signed.

[16] In respect of Mr. Martin's future plans for saving, the trial judge made the following comments at para. 61 of his reasons for judgment:

While giving his testimony, Mr. Martin was asked what were his future plans for saving. His response was that he would try to continue the percentage of savings he had maintained in past years. He said that there was a chance that he could be fired and he wanted to save money for the future. He also said that his desire was to continue as an NHL coach to age sixty.

[17] At trial, the main issue for determination was the quantum of spousal support. Mrs. Martin was to receive $1,700,000 as her share of the family property as a result of a settlement on the eve of trial. The evidence at trial was that when Mrs. Martin receives her full equalization payment, she will earn an investment income (calculated at 5.5 per cent) of $81,472.58 per annum. A similar calculation at 5.5 per cent will produce investment income for Mr. Martin of $182,476.43.

[18] As indicated above, Mrs. Martin was receiving interim spousal support at the equivalent rate of $12,500 per month. The trial judge observed at para. 29 of his reasons for judgment:

She also agreed that her present, post-separation standard of living is not less than it was before the separation. [page500]

The Trial Judgment

[19] In deciding the issue of spousal support, the trial judge had to determine whether any allowance should be made for the savings element that had for many years been a part of the Martin household's financial planning.

[20] The trial judge delivered lengthy reasons. After a detailed review of the facts, he considered the application of the spousal support provisions in s. 15.2 of the Divorce Act, S.C. 1986, c. 4.

[21] The trial judge also conducted a survey of the relevant case law with particular reference to Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, [1992] S.C.J. No. 107. The trial judge's reading of Moge led him to the conclusion that the savings factor should be included in his award of spousal support. At para. 150 of his reasons, the trial judge said:

In paragraph [74] [actually para. 73] of the Moge decision, L'Heureux-Dubé J. said:

. . . In so far as economic circumstances permit, the Act seeks to put the remainder of the family in as close a position as possible to the household before the marriage breakdown . . .

Here, the position of the household before the marriage breakdown included a lifestyle based on a combination of spending and saving for the future, presumably, for the benefit of both spouses. Therefore, when addressing the question of whether Mrs. Martin enjoys the same, less, or a better standard of living after separation, the savings factor cannot be excluded from the equation.

[22] The trial judge concluded at subparas. 171(k) and (p) of his reasons for judgment:

(k) Notwithstanding that Mr. Martin's current saving practices are consistent with a pattern developed during cohabitation, it would not be fair and reasonable to deduct from his gross income the amount of these savings for the purpose of determining his ability to pay support and the quantum of support. Prior to separation the benefit of the savings accrued to both spouses -- that was a substantial component of the standard of living they enjoyed. Therefore, Mrs. Martin must now receive an amount of support that will permit her to control her own savings; -- i.e., the amount of spousal support should be such as to promote the economic self-sufficiency of both spouses, not just Mr. Martin; . . . . .

(p) While Mr. Martin's present employment contract appears to be a fairly secure one, it seems reasonable to assume that, as a professional sport's coach, there is still good reason to assume that his continued employment is fraught with uncertainties. Accordingly, both parties need to adopt a policy of saving for the future given that there is no meaningful pension in place. Mrs. Martin's budgeting needs, therefore, are but one factor to be considered in determining the quantum of support. [page501]

[23] In the result, the trial judge ordered Mr. Martin to pay spousal support of $12,500 per month for the period coincident with the NHL lock-out following which he is to pay Mrs. Martin $27,000 per month.

The Appeal

[24] Counsel for Mr. Martin submits that the main issue at trial was whether the amount of spousal support was to be based on need as determined by the accustomed standard of living during the marriage or whether Mrs. Martin was entitled to some additional amount in excess of need for compensatory reasons. The thrust of counsel's argument is that Mrs. Martin was awarded an amount of spousal support that was more than double the need demonstrated by her own evidence. Counsel observed that $27,000 per month is $12,000 more than Mrs. Martin showed on her financial statement and $14,500 more than the monthly interim support that Mr. Martin was paying prior to trial.

[25] Counsel for Mr. Martin argues that the award of spousal support in this case constitutes a redistribution of Mr. Martin's capital which this court has said is a forbidden practice. In Marinangeli v. Marinangeli (2003), 2003 27673 (ON CA), 66 O.R. (3d) 40, [2003] O.J. No. 2819, 38 R.F.L. (5th) 307 (C.A.), the court said at para. 74:

In determining need, the court is to be guided by the principle that the spouse receiving support is entitled to receive the support that would allow her to maintain the standard of living to which she was accustomed at the time cohabitation ceased. In addition, there is jurisprudence to the effect that a spouse is entitled to an increase in the standard of living such as would have occurred in the normal course of cohabitation: see MacDougall v. MacDougall (1973), 1973 1940 (ON SC), 11 R.F.L. 266, [1973] O.J. No. 618 (QL) (H.C.J.) per Henry J. See also Linton v. Linton (1990), 1990 2597 (ON CA), 1 O.R. (3d) 1, 75 D.L.R. (4th) 637 (C.A.). At the same time the court must guard against redistributing the payor's capital in the guise of support.

For the same proposition, counsel also relies on Mannarino v. Mannarino, 1992 14022 (ON CA), [1992] O.J. No. 2730, 43 R.F.L. (3d) 309 (C.A.); Willenze-Davidson v. Davidson, 1997 1440 (ON CA), [1997] O.J. No. 856, 98 O.A.C. 335 (C.A.); and, Hoar v. Hoar (1993), 1993 16106 (ON CA), 62 O.A.C. 50, 45 R.F.L. (3d) 105 (C.A.). All of the three aforesaid cases refer to the caution against awarding lump sum payments as a redistribution of capital. In the Hoar case, the court was also critical of using a retroactive child support order as a device to redistribute capital.

[26] Each of the above cases can be distinguished from this case. Counsel for Mr. Martin submits that there are no reported cases where a spouse has been awarded a substantial sum above that which was required to maintain that spouse. [page502]

[27] In spite of the able argument of counsel for Mr. Martin, I am not persuaded that the trial judge's order for spousal support is tantamount to a redistribution of capital. It is certainly a very high award. However, it became clear during oral argument that we are not being asked to interfere on any basis other than that the trial judge engaged in a forbidden redistribution of capital. If he did not do so, then the order should stand. There is no issue about Mr. Martin's ability to pay.

[28] As indicated above, this case appears to be unique. A decision was made by Mr. Martin to invest large sums of money in a pension savings plan to protect against the high degree of insecurity that attaches to the career of a professional hockey coach. Mr. Martin established his personal savings plan to benefit the family including his wife. Mr. Martin testified that the personal savings plan was important to the family in order that it could live comfortably in the future. Mrs. Martin testified that saving became a fact of life in the Martin household.

[29] Mrs. Martin was a stay-at-home mom. Due to the tremendous amount of travel that Mr. Martin was obliged to do, he was often away. The day-to-day responsibility of raising the children and the running of the household fell to Mrs. Martin. The family moved nine times in 13 years -- it was Mrs. Martin and the children who bore the brunt of adjusting to life in a new community. While there is no suggestion that Mr. Martin was not a loving and caring father, his ability to participate in the lives of his children was obviously more limited than that of Mrs. Martin.

[30] In all the circumstances, Mrs. Martin became totally dependent upon her husband not only for her day-to-day needs but for her future financial security. It is conceded that Mrs. Martin is not required to seek employment in the workforce. Her day-to-day needs continue and her need for financial security continues. In my view, the award of spousal support in this case meets both those needs.

Disposition

[31] In the result, the appeal is dismissed. The appeal against costs is also dismissed as an abandoned appeal.

[32] In accordance with the agreement of counsel for the parties, costs are awarded to Mrs. Martin in the amount of $25,000 including disbursements and GST.

Appeal dismissed. [page503]