COURT OF APPEAL FOR ONTARIO
CITATION: Berger v. Berger, 2016 ONCA 884
DATE: 20161123
DOCKET: C60127
Weiler, Watt and Huscroft JJ.A.
BETWEEN
Stanley Berger
Respondent/Appellant in Appeal
and
Sandra Berger
Applicant/Respondent in Appeal
Stephen M. Grant and Elizabeth Stephanie Garbe, for the appellant
Marie G. Michaels, Peter J. Burman and Leah C. A. Klassen, for the respondent
Heard: September 8, 2016
On appeal from the orders of Justice Sherrill M. Rogers of the Superior Court of Justice, dated February 5, 2015 and November 26, 2015.
Weiler J.A.:
A. Overview
[1] The appellant appeals the orders that he pay retroactive and prospective spousal support based on a change of circumstances. He alleges that the trial judge erred in her interpretation of the parties’ Separation Agreement, misapprehended evidence, and adopted an unfair procedure in refusing to consider an affidavit he filed in reply to the respondent’s affidavit. The appellant seeks an order rescinding spousal support to December 31, 2012, the date of termination of support in their Separation Agreement; repayment of all support collected by the Family Responsibility Office; and costs.
B. Background Facts
(1) Basic facts
[2] The appellant, Stanley, born November 22, 1954 and the respondent, Sandra, born May 26, 1950, were married on September 4, 1983. Twelve years later, their daughter, whom they adopted at birth, was born on August 2, 1995. Sandra left her position as a legal assistant in the workforce to become a full time homemaker. Stanley was employed as a lawyer with Ontario Power Generation. During the marriage, Stanley gave Sandra an allowance of $3,800 a month in addition to paying ongoing expenses related to the home and other expenses, such as family vacations. Sandra received an inheritance from her mother which she used to pay down credit card debt and for other family purposes, including setting up a Registered Education Savings Plan (“RESP”) for the daughter.
[3] In November 2009, after 26 years of marriage, the parties separated. Sandra continued to live in the matrimonial home and received support from Stanley. In July 2011, the parties entered into a Partial Separation Agreement in which Stanley agreed to pay periodic spousal support of $4,000 per month which he did until November 2012. In the Fall, they sold the matrimonial home and divided the net proceeds of sale.
[4] On October 22, 2012, Ontario Power Generation terminated Stanley’s employment. At that time, according to his Notice of Reassessment for the 2011 taxation year, he was earning employment income of $214,862 annually.
[5] Stanley received a severance payment as well as two pensions from his employment: a defined benefit plan and a Supplementary Pension Plan (“SERP”).
(2) The Final Separation Agreement
[6] In January of 2013 the parties entered into a Final Separation Agreement.
[7] Stanley paid Sandra an equalization payment based on the value of his two pension plans.
[8] As a result, Sandra received:
• $101,519.80 cash from the Stanley’s SERP;
• $768,151.72 in a Locked-In Retirement Account (“LIRA”) until she attained the age of 65;
• $220,000 net proceeds of sale of matrimonial home (acknowledged).
[9] These figures total $1,089,671.52. After deducting her outstanding debts, Sandra’s net worth was $990,050.42.
[10] The daughter continued to live primarily with Stanley and in the Agreement he agreed to assume full financial responsibility for her, including her special and extraordinary expenses, without contribution from Sandra. Sandra transferred the RESP account she set up for their daughter, worth about $4,000, to Stanley to be managed.
[11] Insofar as spousal support was concerned, the Agreement acknowledged that Stanley had been terminated from his employment effective October 2012 and was presently not in receipt of any salary or employment income. He agreed to make a final spousal support payment of $4,000 for December of 2012.
[12] While the Separation Agreement must be read in its entirety, Clauses 7.3 and 7.4 are two of the clauses at the heart of the disputed interpretation of the Agreement and provide as follows:
7.3 The parties acknowledge and agree that the spousal support payments referred to herein and Sandra’s receipt of an equalization of Stanley’s pension interests in both his SERP pension and the defined benefit pension plan fully satisfy the support objectives of the Divorce Act and the Family Law Act. Sandra acknowledges and agrees that her receipt now of a lump sum transfer of the SERP plan and any amounts that she is entitled to receive from the defined benefit pension plan now and in the future are intended to provide her with fair and reasonable support. Sandra agrees to use the capital and income from the lump sum transfer and any additional amounts from the defined benefit pension plan to meet her own needs and in the absence of a material change in circumstances she will not seek or make any claims for spousal support from Stanley in the future. In addition to the factors set out herein, the provisions for termination of spousal support as provided for in paragraph 7.2 [respecting periodic payments] also take into consideration the fact that Stanley was terminated from his employment and the lump sum severance payment that he received in consequence thereof, and the financial provisions that have been made for [the daughter], namely that Stanley will not receive any ongoing child support nor receive any contributions to [the daughter’s] special and extraordinary expenses from Sandra.
7.4 Subject to paragraph 7.7, spousal support may be changed if there is a material change in circumstances, even if the change is foreseen or unforeseen, foreseeable or unforeseeable. A material change in circumstances does not arise from the mere fact that Stanley has obtained income and or employment subsequent to this agreement coming into effect. Such income and/or employment may be of limited or uncertain duration and/or amount and other circumstances such as [the daughter’s] needs or Sandra’s financial means may, in any event, negate any income earned or employment obtained by Stanley.
[13] Clause 7.6 of the Agreement obliged the parties to contribute to their own support, to make reasonable efforts to find a job or to become self-employed and to advise the other when they obtained employment. In the event Sandra applied for a variation based on a material change in circumstances, these efforts were to be “one factor in the determination of her entitlement, if any, and in regards to the issue of quantum.” The clause also obliged Sandra to provide all documentation respecting sources of income if she sought a variation. The clause concluded with the following sentence in handwriting and initialed by the parties: “Each party will inform the other upon obtaining new employment.”
[14] Clause 7.7, referred to in clause 7.4 above, provides that Stanley’s severance payment, an RRSP payment deposited directly to his account, and his pension benefits that had already been equalized would not form part of Stanley’s income in determining issues related to spousal support. The Agreement also contains an acknowledgment that the former matrimonial home has been sold, the proceeds of sale divided to their mutual satisfaction in accordance with the terms of the Partial Separation Agreement entered into earlier and that all property claims including claims respecting Stanley’s pensions were fully satisfied.
[15] Clause 9.4 of the Agreement states that the spousal support and property sections of the Agreement are interdependent and inextricably intertwined.
(3) Events leading up to the application for variation
[16] The parties divorced on March 30, 2013. As the bulk of Sandra’s capital was in the LIRA until she attained the age of 65 in May 2015, she began to live off her other capital.
[17] By letter dated June 24, 2013, Stanley was offered and accepted employment at a law firm commencing July 4, 2013 with a base gross salary of $144,000 per year. If he billed in excess of $300,000 for work on clients that he brought in, he would receive a 30% bonus on the amount collected. In addition he received a taxable allowance of $4,800 annually.
[18] Stanley did not advise Sandra that he had obtained new employment as required by the terms of their Agreement. Sandra testified that she became aware that Stanley was employed through his Linkedin page sometime in October of that year.
[19] In January 2014, Sandra issued her application seeking retroactive spousal support to July 1, 2013, on the basis that Stanley’s re-employment represented a material change under the Agreement.
[20] In addition, Sandra submitted that their daughter was no longer a child of the marriage for whom Stanley was obligated to pay support as she was over 18 and had dropped out of her hospitality course at George Brown College in December 2013.
C. The Trial Judge’s Spousal Support Judgments
(1) Judgment of February 5, 2015
[21] Early in her reasons, at para. 9, the trial judge observed that Stanley who, was self-represented, insisted the only conclusion the court could make was that Sandra was not entitled to support. He had been “reluctant” to discuss alternatives to this position with the court. “He did not supply the court with calculations from the Spousal Support Advisory Guidelines”.
[22] The trial judge was also missing “a crucial piece of evidence concerning an income change for [Sandra] in the spring of 2015”, namely, the amount of the proceeds she would receive annually from the LIRA when she turned 65. However, the trial judge decided to issue a partial judgment on the issue of whether Sandra had proven a material change of circumstances so that the court could deal with entitlement and provide for support to flow until the required information was received.
[23] The trial judge then dealt with the Agreement and the aims of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). She noted that the parties intended the Agreement to be interpreted to honour the aims of the Divorce Act. She observed at para. 14, “There were no extensive releases of spousal support in the Final Separation Agreement such as are usually found in such a domestic contract although there are robust releases about property.”
[24] The trial judge appreciated the circumstances at the time the Agreement was entered into: Stanley had lost his job and had no employment income; the parties had assets from equalization of their property and would have to use their assets to meet their needs. She held that para 7.4 of the Agreement contained a material change of circumstance provision and para. 7.5 set out how the parties were to deal with an alleged material change of circumstances. She concluded that, accordingly, the termination of support was based on the factual situation at the time and that any spousal support claimed in the future “would have to be considered in accordance with the terms of the Agreement and those terms must be in keeping with the aims of the Divorce Act, section 15.2(6).”
[25] The trial judge rejected Stanley’s submission that the property settlement in the Agreement meant Sandra was disentitled to support and, at para. 21 of her reasons, held:
There is no point to the material change of circumstances clause in paragraph 7(4) if there cannot be a further consideration of support. Nor is there any point to paragraph 7(5) setting out how the parties might go about claiming an alleged material change. Nor is there any point to paragraph 7(6) which sets out some criteria for consideration in calculating quantum if the material change of circumstances has been proven.
[26] The trial judge then dealt with Stanley’s other arguments regarding Sandra’s entitlement to support and rejected them. She held that the needs of his daughter were not a bar to spousal support and that para. 7.4 of the Agreement obliged the court to consider the daughter’s needs as part of the change of circumstances analysis. She acknowledged that para. 7.3 required Sandra to provide for herself. She stated, “However, the clause goes on to say that the applicant [Sandra] would not claim support from the respondent [Stanley] ‘in the absence of a material change of circumstance’.” At a later point in her reasons, the trial judge considered both Sandra’s ability to earn income and the daughter’s situation.
[27] The trial judge concluded at para. 26 of her reasons that as a long-standing spouse and then former spouse Sandra was entitled to support under the Divorce Act unless she had waived her entitlement to support in the Agreement. She concluded that Sandra had not waived her entitlement to spousal support for the rest of her life. The Agreement was a suspension of support based on the dire circumstance of Stanley’s loss of employment.
[28] The trial judge next considered whether Sandra had proven a change of circumstances. The trial judge held that there was a material change in Sandra’s circumstances on two bases: 1) Stanley’s new employment and 2) the fact that their daughter was 19, had left college to pursue a volunteer placement abroad in Finland, and was no longer a child of the marriage.
[29] The trial judge addressed Stanley’s submission that his new employment was not a change of circumstances under the terms of the Separation Agreement. That submission was based on the wording of para. 7.4, particularly the following:
A material change in circumstances does not arise from the mere fact that Stanley has obtained income and or employment subsequent to this Agreement coming into effect. Such income and/or employment may be of limited or uncertain duration…
[30] Stanley’s interpretation was that before there was a material change of circumstance and spousal support became payable, he had to have certainty in his employment and he did not have that. The trial judge disagreed and held that the paragraph did not mean that Stanley had to have a job minus any uncertainty before spousal support became payable. She rejected his submission that his current employment was uncertain.
[31] Next, the trial judge considered the requirement in para. 7.4 of the Separation Agreement that the daughter’s needs be taken into consideration and held this portion of the paragraph had to be interpreted in accordance with the legislation and jurisprudence respecting dependent children. She supported her conclusion by noting the reference to the Federal Child Support Guidelines, S.O.R./97-175 (the “Guidelines”) in para. 6.5 of the Agreement, which states that the support arrangements for the daughter’s support were an alternative to the Guidelines. The trial judge also considered para. 6.6 of the Agreement, which states that in the event Sandra seeks a variation of spousal support, then child support shall also be reviewed in order to determine if child support should be paid in accordance with the Guidelines, “including both Table support and special and extraordinary expenses” payable.
[32] The daughter was not in school full time and she was over 18. The trial judge acknowledged the daughter’s Attention Deficit Hyperactivity Disorder (“ADHD”) but observed: “there is no evidence that this is a disability such as would cause her to remain a child of the marriage.” She found that the daughter was no longer a child of the marriage and that Sandra was no longer obliged to support her. In doing so, the trial judge rejected Stanley’s submission that she should interpret the reference to the daughter’s needs as requiring consideration of the amount Stanley spent on the daughter irrespective of her age and whether she was a child of the marriage. She held at para. 37 that, “Lacking a definition of this vague term, ‘[the daughter’s] needs’, the court can only fall back on the definition of a ‘child of the marriage’ within the Divorce Act.” Even if some loose definition of dependency were intended, she found there was no evidence of dependency. There was no evidence she could not earn a low level of income. Her father’s choice to enhance her lifestyle was not an obligation.
[33] Having found a material change of circumstance both respecting Sandra’s income and the fact the daughter was no longer a child of the marriage, the trial judge considered Sandra’s claim for support. She noted that Sandra had not been in the workforce from 1995 onward, save for when she was a lunch-time monitor at the daughter’s school between 2006 and 2009. Since their separation Sandra had made significant efforts to find employment. She had filled out 136 job applications and had had three interviews but no job offers. She attended a pre-employment program at a not-for-profit agency and had also done programs to update her skills. At the time of separation, she was 59 and had been out of the job market for over 14 years. At the time of trial she was 64. She also suffered from arthritis, diabetes, osteoporosis and depression. Her age and health issues reduced the prospects of her obtaining employment at all. The trial judge found there was no evidence Sandra was enjoying an extravagant lifestyle.
[34] The trial judge held Sandra’s capital ought to be invested toward producing an income stream and that she ought not to have had to encroach on her capital to service her debts and pay living expenses. She found Sandra’s income to be $3,760 a year at that time and, accordingly, found that Sandra had a current need for support. When Sandra turned 65 on May 26, 2015, she would be able to access her LIRA and the trial judge held that, “The court will require further evidence from the parties to calculate the income after the LIRA funds are available for monthly investment yield”. In addition, she would also be eligible for the Canada Pension Plan (“CPP”) and Old Age Security (“OAS”) at that time. Thus, her need for support would change.
[35] Having found that Stanley had the ability to pay spousal support on the basis of “constant income” since obtaining his job in 2013, the trial judge found his annual income to be $152,000 based on his 2013 Notice of Assessment. She commented, “There is no current income calculation for 2014 and the court therefore has only the evidence of the 2013 income of $152,000 to carry forward.” She rejected Stanley’s submission that his income would deteriorate in the coming months because she held that the proffered evidence of a change was hearsay.
[36] In relation to quantum, the trial judge found no reason to depart from the Spousal Support Advisory Guidelines (Ottawa: Department of Justice Canada, 2008) (“SSAGs”), and ordered support of $5,400 per month retroactive to July 1, 2013. The trial judge requested further information about Sandra’s future income upon attaining age 65 in May 2015, to be submitted promptly in affidavit form and permitted Stanley to reply by affidavit.
[37] The trial judge also ordered financial disclosure by the parties of their income tax returns to each other “within seven days of the date on which they must file said return with the Canada Revenue Agency” and their Notice of Assessment within seven days of receipt.
[38] The order provided for registration and enforcement of the order with the Family Responsibility Office.
(2) Judgment of November 26, 2015
[39] At the outset of her reasons the trial judge acknowledged that an internal filing error by the court’s filing office caused an unfortunate delay following her first order, as the parties’ submissions had not been directed to her by the filing office and she assumed that a settlement had been reached. It was only when counsel for Stanley was retained and contacted the court office that the error was discovered.
[40] Based on Sandra’s affidavits respecting withdrawals from her LIRA and calculating her income on the balance remaining at 1%, along with CPP and OAS payments, the trial judge ordered that Stanley’s support obligations be reduced from $5,400 per month as follows:
$1,900 per month commencing May 1, 2015 to April 30, 2016 with LIRA withdrawals of $66,250;
$1,930 per month commencing May 1, 2016 to April 30, 2017 with LIRA withdrawals of $65,221; and
The sum of $2,068 per month indefinitely commencing May 1, 2017 with LIRA withdrawals of $62,167.
[41] The trial judge rejected a number of concerns raised in Stanley’s affidavit, holding that the only issue the court had before it was the new quantum that would flow from Sandra’s enhanced income and that Stanley’s additional concerns were not part of the evidentiary base before the court from the trial. The trial judge continued:
As an example of this over-reaching, Mr. Berger wishes the court to consider that he has a new income. That different income was a possibility during the trial but not in place. The trial was conducted on the basis of the evidence of income at the time of the trial. Any future changes, other than the applicant/wife’s income improvement as noted in the trial and clarified by affidavit evidence, cannot be a part of this court’s decision as the evidence was not tested in the trial. Such concerns would be the subject of a Motion to Change.
D. Issues
[42] The issues on appeal are as follows:
• Did the trial judge fail to consider all s. 15.2(4) factors of the Divorce Act?
• Did the trial judge err in interpreting the terms of the parties’ Final Separation Agreement and in finding that there was a material change of circumstances?
• Did the trial judge err in considering only Sandra’s affidavit evidence respecting her income after turning 65?
• Did the trial judge misapprehend evidence, otherwise err in her appreciation of Sandra’s needs and means, or err in adhering to the SSAG quantum of spousal support?
E. Standard of Review
[43] With respect to the review of support orders, in Mason v. Mason, 2016 ONCA 725, at para. 110, this court held that a deferential approach to support awards was appropriate due to their fact-based and discretionary nature:
Because of the fact-based and discretionary nature of support awards, a trial judge's order for spousal support is entitled to significant deference on appeal. This deferential approach to support awards promotes finality in family law litigation and also recognizes the importance of the trial judge's role in seeing and hearing the parties and other witnesses testify. An appeal court is not entitled to overturn a spousal support order simply because it would have balanced the relevant factors differently or arrived at a different decision: Hickey v. Hickey, 1999 CanLII 691 (SCC), [1999] 2 S.C.R. 518, at paras. 10-12.
[44] Nonetheless, this court recognized in Mason, at para. 111, that an appeal court must intervene in a support award where: “the trial judge’s reasons disclose an error in principle, a significant misapprehension of the evidence or if the award is clearly wrong: Hickey, at para. 11.”
[45] This reflects the approach to the standard of review for findings of fact as set out in Housen v. Nikolaisen, 2002 SCC 33, 2 S.C.R. 235. In that case, the Supreme Court held at para. 10 that findings of fact should be reversed where it can be established that the finding is a “palpable and overriding” error. In H.L. v. Canada (A.G.), 2005 SCC 25, [2005] 1 S.C.R. 401, at paras. 55-56, Fish J. clarified that the “palpable and overriding” error test is met if the findings are “clearly wrong” or can “properly be characterized as ‘unreasonable’ or ‘unsupported by the evidence’.”
[46] Furthermore, with respect to the parties’ Separation Agreement, Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 52-53, establishes that, in most cases, an appellate court should not interfere with a trial court’s decision interpreting a contract, absent palpable and overriding error.
[47] Therefore, the trial judge’s interpretation of the Separation Agreement, as an exercise in contractual interpretation, and the trial judge’s resulting February 5, 2015 and November 26, 2015 spousal support orders, as fact-based support orders, attract a standard of palpable and overriding error on review.
F. Discussion
(1) Did the trial judge fail to consider all s. 15.2(4) factors of the Divorce Act?
[48] Section 15.2(4) of the Divorce Act provides as follows:
(4) In making an order [for spousal support], 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.
[49] In addition, in making an order for spousal support the trial judge must consider the objectives of an order for support in section 15.2(6) of the Divorce Act. These are:
(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 it is practicable, promote the economic self-sufficiency of each spouse within a reasonable time.
[50] Stanley submits that the trial judge’s approach was flawed in that she failed to consider all the factors in the Divorce Act as a whole as opposed to considering certain factors in isolation and failed to properly identify her basis for awarding support. He also submits that the trial judge erred because she first presumptively assumed Sandra was entitled to spousal support because of the length of the relationship, then considered whether she had waived that entitlement, and finally examined the various factors. His position is that she was required to first consider the factors under the Divorce Act and determine entitlement, including entitlement under the Separation Agreement, and not just whether it included a support waiver.
[51] The trial judge is an experienced judge and can be expected to know the law. As this was a lengthy marriage during which the wife assumed a traditional role of homemaker and mother for much of the time, the jurisprudence holds that she is likely, from that fact alone, to be economically disadvantaged: Moge v. Moge (1990), 1990 CanLII 2593 (MB CA), 64 Man. R. (2d) 172 (C.A.), at p. 402, aff’d 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813; Linton v. Linton (1990), 1990 CanLII 2597 (ON CA), 1 O.R. (3d) 1, at para. 86. Read as a whole, the trial judge’s reasons do not disclose any palpable and overriding error respecting her approach. The reasons are responsive to the positions taken by the parties at trial, particularly Stanley’s position, maintained on appeal, that Sandra is not entitled to any support under the terms of the Separation Agreement nor does Sandra need support. The basis for the trial judge’s award of support was that Sandra needed support and Stanley had the ability to pay.
[52] Stanley relies on Jackson v. Mayerle, 2016 ONSC 72, at para. 756, which statesthat, “disparity of income in itself does not create an entitlement to spousal support. Otherwise spousal support cases would simply be decided based on ability to pay.” He submits that the trial judge did not take into consideration Sandra’s means and ability to earn income.
[53] I agree that an income disparity post-separation does not mean that the payee spouse is automatically entitled to support.[^1] However, the submission that the trial judge did not take into consideration Sandra’s means and ability to earn income or otherwise consider the requirements in the Divorce Act is not supported by a careful reading of the trial judge’s reasons.
[54] The trial judge considered the requirement that support should recognize the economic advantages and disadvantages arising from the marriage breakdown. She held at para. 62 of her reasons that Sandra’s financial situation stemmed from the breakup of the marriage. As required by s. 15.2(4), the trial judge considered the length of time the spouses cohabited; their functions during cohabitation; and the arrangements they had made in their Separation Agreement. She specifically considered the length of time the spouses were married, the fact Sandra was a stay-at-home mother over the years, the parties’ Separation Agreement and Sandra’s age at the time of separation. The trial judge listed the requirements of s. 15.2(6), recognized Sandra had been out of the workforce for 14 years at the time of separation, the efforts she had made to become re-employed since separation, the condition of her health and how these factors affected Sandra’s ability to become self-sufficient. In addition, in her February 2015 judgment, the trial judge recognized the deficiency in the information she had concerning Sandra’s means once she turned 65 and ordered Sandra to provide that information before making an order for indefinite support in her November 2015 judgment.
[55] Stanley takes issue with a comment by the trial judge that she was primarily concerned with the needs and means of the parties and submits that she did not give adequate consideration to Sandra’s ability to become self-sufficient. As this court held in Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, at para. 55, in a traditional long-term marriage, “[T]he spousal support analysis typically will not give priority to self-sufficiency because it is an objective that simply cannot be attained.”
[56] The trial judge considered Stanley’s ability to pay and rejected his submission that his income was uncertain within the meaning of the Separation Agreement. She also considered Stanley’s submissions respecting the support he was paying for his daughter. I would reject Stanley’s argument, that in making her order for support, the trial judge erred by failing to consider the factors she was required to consider under the Divorce Act or by considering only certain factors in isolation.
[57] I will now deal with Stanley’s submissions respecting whether the trial judge erred in her decision on individual factors considered in making the spousal support award.
(2) Did the trial judge err in interpreting the parties’ Final Separation Agreement?
[58] Stanley submits that the trial judge erred in her interpretation of the Separation Agreement. He submits that she overlooked clause 9.4 of the Agreement, which provides:
The spousal support and property sections of this Final Agreement and the Partial Separation Agreement are interdependent and inextricably intertwined. Together, they fully satisfy the support objectives set out in the Divorce Act and the Family Law Act.
[59] Stanley submits that the Agreement represents a negotiated compromise with which the trial judge erroneously interfered by not taking clause 9.4 into consideration, as well as the fact Stanley was and is supporting their daughter.
[60] Having regard to the standard of review pertaining to a trial judge’s interpretation of a negotiated Agreement in the Supreme Court’s decision in Sattva, I must reject Stanley’s submissions. Even reviewing the Agreement on a standard of correctness, I would not hold that the trial judge erred in her interpretation. The trial judge was entitled to conclude that the Separation Agreement was not a bar to Sandra’s application for support based on a change of circumstances because the Agreement:
• acknowledged that Stanley had lost his job and had no employment income;
• effected an equalization of property;
• stipulated that the cessation of spousal support was subject to a future material change;
• required Stanley to notify Sandra in the event he obtained future employment;
• set out relevant considerations in determining if a material change had occurred and how the parties would notify one another of an alleged material change; and
• lacked extensive releases of spousal support, unlike typical separation agreements.
[61] Stanley submits that a material change in circumstances did not occur when he obtained employment in July 2013. This submission is largely based on the words in para 7.4, “A material change in circumstances does not arise from the mere fact that Stanley has obtained income and or employment subsequent to this Agreement coming into effect.” Stanley’s submission ignores the opening words of the next sentence which reads, “Such income and/or employment may be of limited or uncertain duration and/or amount”. The words “such income and/or employment” modify the previous sentence and explain that casual income for a limited or uncertain time does not in and of itself constitute a change of circumstances.
[62] I note that the sentence does not use the word “indefinite” in relation to the duration of employment, as Stanley would have us read it. It uses the word “uncertain”. In this case, Stanley does not have employment that is uncertain, in the sense that it is “changeable” or “erratic”, one of the definitions of the word “uncertain” in The Shorter Oxford Dictionary, Thumb Index Edition (1993), sub verbo “uncertain”. He does not have to wait for a telephone call asking him to work a particular day or week. He goes to work each day knowing that he has a job until he receives a notice of termination or chooses to terminate his employment. He also does not have uncertain income. He knows what his base salary is and there is a fixed formula for calculating income above that. When Stanley’s employment income went from zero to a base salary of $144,000 annually, that change was a material change of circumstances and the trial judge’s conclusion in this regard must be upheld.
[63] Similarly, Stanley’s argument that his continuing support of his daughter means that he does not have to support Sandra, must be rejected. An agreement is to be interpreted so as to give effect to all of its provisions. If Stanley’s submission were correct, there would be no need for para. 6.6 of the Agreement, which provides that in the event Sandra seeks a variation of spousal support, the child support arrangements in the Agreement are also to be reviewed with reference to the Guidelines. Stanley’s interpretation gives no meaning to this provision.
[64] The onus was on Stanley to prove his daughter was a dependent and unable to withdraw from his charge: Haist v. Haist, 2010 ONSC 1283, 83 R.F.L. (6th) 147, at para. 54. He introduced no medical or psychological evidence in support of his position that she was unable to withdraw from his care on account of her ADHD; he did not show that, after December 31, 2013, she was enrolled in a fulltime program of education. Stanley also submits that the trial judge ought to have found the daughter would return to school after a transitional period, and that she ought to have taken into account Stanley’s support for his daughter in assessing spousal support during that period. However, Aubert v. Cipriani, 2015 ONSC 6103, 70 R.F.L. (7th) 198, indicates, at para. 27, that certain conditions must be met for support to continue during a transitional period, including:
• The child is actually enrolled in a full-time program of education prior to the start of the transitional period;
• The transitional period is the result of a reasonable educational plan that has been thought out and put in place prior to the commencement of the transitional period;
• The child is not reasonably able to commence the next portion of the educational plan sooner;
• The transitional period is necessary to achieve the overall educational plan and is being used to advance that plan or for legitimate educational purposes to further the plan;
• The transitional period does not exceed the time between the end of the semester for the first program and the beginning of the very next semester of the subsequent program, or between the summer months at the end of school in the spring and the commencement of school in the late summer or fall.
[65] The daughter turned 18 on August 2, 2013. Although she was enrolled in a full-time program of education from September to December 31, 2013, prior to going to Finland, the criteria for transitional support after that time are not met. As of the time of trial in December 2014, there was no evidence the daughter had returned to school. The trial judge did not err in concluding that the daughter was no longer a child of the marriage and that Sandra had no continuing obligation to support her.
(3) Did the trial judge err in refusing to consider Stanley’s post-trial affidavit?
[66] The trial judge did not simply reject Stanley’s post-trial affidavit of March 20, 2015, in its entirety. In that affidavit Stanley submitted that Sandra’s affidavit as to the amount of CPP and OAS she would receive contained a mathematical error. Stanley indicated that the monthly figure for each of these was shown as an annual figure and was therefore too low.
[67] On October 1, 2015, the trial judge endorsed a query on the record wondering if the figures for OAS and CPP had been improperly entered and asked Sandra to file any reply affidavit by October 10, 2015. Sandra’s counsel then filed an affidavit agreeing that the figures for CPP and OAS had been incorrectly entered and attached a recalculation using DivorceMate.
[68] Stanley also submitted that the interest rate used to calculate interest income on the respondent’s LIRA should be 5% and not 1%. The trial judge also considered this submission at para. 4 of her November 2015 reasons and rejected it as speculative. She held that the disclosure regime ordered in her judgment would help decide if a Motion to Change was necessary.
[69] Stanley’s real complaint is the trial judge’s refusal to consider the portion of his affidavit in which he stated that his employment would end by December 31, 2015 unless new arrangements were made by September 30, 2015; that no such arrangements were being pursued; and his evidence that effective February 1, 2015, his salary would no longer be $144,000 but $120,000. In support of this submission, he attached a memo from his firm to him as Exhibit “D” to his affidavit.
[70] At trial, Stanley had made a similar submission to the trial judge. At para. 57 of her February 2015 reasons, she held:
The respondent [Stanley] submitted that his income will deteriorate in the coming months. He has had a roughly constant income from this employment since he obtained the job in July of 2013. The evidence about a potential change in his income was hearsay. If the respondent [Stanley] wished to prove this point, he ought to have called the proper witness, as he well knows.
[71] The trial judge held, at para. 3 of her November 2015 reasons that, Stanley “raised a number of concerns that are not part of the evidentiary base before this court from the trial.” She considered his affidavit to be “over-reaching” and held that she was going to base her decision on Stanley’s income at the time of trial. Future changes, other than the improvement of Sandra’s income as noted at trial, could not be part of the court’s decision as “the evidence was not tested in the trial.” This concern could be the subject of a motion to change.
[72] Stanley submits the result is an unfair procedure whereby the trial judge considered only Sandra’s evidence and not his.
[73] Inasmuch as the trial judge had decided to make an order for future support she could not consider only Sandra’s evidence as to her future income and refuse to consider Stanley’s evidence as to his. The panel’s initial reaction was that the trial judge had therefore erred in principle. However, as the trial judge had previously ruled during the trial that she would not accept Stanley’s hearsay evidence on this point, can she be faulted for refusing to consider Stanley’s affidavit?
[74] The memo attached to Stanley’s affidavit, like his evidence at trial, is hearsay. Rule 14(19) of the Family Law Rules, O. Reg. 114/99, allows a judge to admit affidavit evidence the affiant learned from someone else, but only if “the source of the information is identified by name and the affidavit states that the person signing it believes the information is true.”
[75] This requirement appears to have been met. However, the jurisprudence, and in particular, Children’s Aid Society of Huron-Perth v. H.(C), 2007 ONCJ 744, at paras. 28-29, further requires that Stanley not only clearly identify the source of the information, but explain why the original source of the information did not swear his or her own affidavit and explain the circumstances of how the hearsay evidence was obtained.
[76] Thus, it was not enough for Stanley to simply attach the memo dated January 15, 2015 from his employer to his affidavit. Stanley did not explain why the original source of the memo had not sworn his own affidavit. Even if Stanley had provided this explanation, the trial judge would have had the discretion to refuse to admit the evidence. This is because r. 14(19) provides that admission of third-party evidence is not mandatory.
[77] Given the trial judge’s ruling as to Stanley’s attempts to introduce similar evidence during the trial, had the trial judge adverted to her discretion under the rules, there is little doubt she would have rejected it as speculative hearsay. Indeed, at para. 3 of her reasons, the trial judge states that Stanley’s desire to have the court consider that he had a new income, “was a possibility during the trial but not in place.” In para. 4 of her reasons, she rejects Stanley’s submissions that Sandra’s future income would improve with the comment, “Again, this is speculative.” The trial judge’s use of the word “Again” can be read as a reference to the preceding paragraph in which Stanley submitted his income would decrease. Thus, the trial judge’s reasons can also be read as having considered Stanley’s affidavit evidence as to his future income and a rejection of it as being speculative.
[78] None of the exhibits attached to Stanley’s affidavit, including the memo in Exhibit D, were in Stanley’s appeal book and compendium. At the hearing of this appeal, counsel for Stanley assured the court that the exhibits had been attached to his affidavit. The original affidavit with the exhibits attached was obtained from the court office in Newmarket. Exhibit D is a memo dated January 19, 2015. It purports to be from “Michael H. Appleton” and is on the firm’s letterhead. His position with the firm is not stated. The memo is unsigned by the sender. Stanley signed an acknowledgment that he received it.
[79] At the outset, the memo states Stanley’s final 2014 Production (personal fees billed and his own client billings) was $165,156.
[80] The memo also does not simply state that Stanley’s salary will be reduced to $120,000. It states that for January 2015 Stanley’s base salary and draws are the same as in 2014. In addition to the work he is currently doing, the memo states that Stanley advises he expects to do work for two named clients. The memo reads as follows:
In view of the foregoing recent developments and to provide you with a greater incentive to improve your own production in 2015, I am prepared to recommend to the [law firm] Executive Committee the following amendments to my letter of October 20, 2014.
Effective February 1, 2015:
The reduction in your annual base salary commencing with the February 8th draw will be reduced from $144,000 payable $6,000 bi-monthly to $120,000 payable $5,000 bi-monthly. Your base salary and draws for January 2015 shall remain the same as in 2014.
The sum of $200,000 referred to in sub-paragraph (c) on Page 3 of my October 20, 2014 letter shall be increased to $225,000.
Except as amended as herein provided, the terms and conditions of both your hiring letter of June 23, 2013 and my letter to you of October 20, 2014 shall continue in full force and effect.
Unless new arrangements are entered into between yourself and [the law firm] on or before September 30, 2015 your employment as an Income Partner at [the law firm] will terminate on December 31, 2015 and this Memo should constitute as notice to you in that regard.
[81] In order to properly consider Stanley’s submission, the letter of October 20, 2014 referred to in the memo is required. It is not before the court. Having regard to the structure of the memo as compared with the offer of employment and the memo’s stated aim to provide Stanley with “a greater incentive to improve [his] own production”, it appears that Stanley’s threshold for receiving a percentage of his billings is being reduced. The percentage of billings Stanley will receive is not indicated in the letter.
[82] In para. 18 of Stanley’s March 20, 2015 affidavit, Stanley referenced the memo’s notice of termination of his employment at the end of 2015 unless new arrangements were entered into on or before September 30, 2015 and swore, “No new arrangements are currently being pursued.”
[83] At the hearing of this appeal, counsel for Stanley simply gave the registrar a copy of a memo on Stanley’s firm letterhead dated September 25, 2015. Counsel for Sandra, perhaps under the impression it was Exhibit D at the time, did not object to this court’s consideration of this document. This memo could not have been Exhibit D to Stanley’s affidavit as it is dated almost six months after Stanley’s affidavit was sworn. No sworn affidavit from Stanley accompanied the memo and no application to admit fresh evidence was brought.
[84] The September 25, 2015 memo indicates Stanley’s production for eight months, and on an annualized basis. The total annualized amount is $193,089. Thus, if the memo were accepted for the truth of its contents, Stanley’s billings are projected to increase from $165,156 the prior year. The memo indicates Stanley’s employment will not terminate at the end of 2015 but will continue in 2016 with a base salary reduction to $72,000 and provides in para. 2 as follows:
In addition to your base draw, you will be entitled to receive additional income, if applicable, as follows:
(a) 15% of all collected fees billed to your own clients (or clients shared with another [law firm] lawyer in proportionate so shared.)
(b) 15% of your personal collected billings collected in excess of $125,000.
[85] The memo states that these are the arrangements for 2016 and concludes that unless new arrangements are entered into Stanley’s employment will terminate on December 31, 2016.
[86] The pattern in these memos indicates that Stanley’s employment is the subject of a series of one year contracts,[^2] that his billings are increasing, and that his base salary is decreasing. At the same time, the threshold for Stanley to receive a percentage of his billings is also decreasing although the percentage of billings he receives is also reduced. While the documentation provided indicates that Stanley’s base salary will be reduced, it does not prove that Stanley’s employment income will be reduced.
[87] Given that this appeal was heard in September 2016, it was within Stanley’s power to show that he was prejudiced by the trial judge’s refusal to consider his March 2015 affidavit that his income for 2015 would be reduced by seeking to have his 2015 T4 slip showing his income from employment or income tax return and notice of assessment admitted as fresh evidence. He has chosen not to do so.
[88] Thus, even if Stanley’s argument that it was an error in principle for the trial judge to refuse to consider Stanley’s affidavit was accepted, Stanley has not shown any prejudice from the alleged error. I would dismiss this ground of appeal.
[89] Finally, I note that in calculating Stanley’s income for 2014 and on a go- forward basis, the trial judge did not include the $18,000 in royalty income Stanley testified that he receives from his book. Thus, even if Stanley’s base salary were reduced from $144,000 to $120,000, such that his overall income was reduced by $24,000 in 2015, two-thirds of that reduction could be compensated for by the addition of the $18,000 in royalty income received by Stanley. Stanley’s royalty income was not the subject of submissions on appeal.
(4) Did the trial judge misapprehend evidence or otherwise err in her appreciation of Sandra’s needs and means?
(a) Misapprehension of the evidence
[90] Stanley submits that, in dismissing his submission that Sandra had used her capital extravagantly for accommodation, the trial judge was under the erroneous impression Sandra had purchased a house when in fact she was renting one. The sole basis for this submission is para. 47 of the trial judge’s reasons in which she stated:
There was no evidence of the applicant [Sandra] enjoying an extravagant lifestyle. The respondent [Stanley] pointed to what he alleged was an over-investment in housing, feeling a more modest home was called for. The court cannot determine on the evidence in the trial if that real estate investment was the best use of the applicant’s [Sandra’s] capital, but it was not a gesture of high living.
[91] Sandra’s evidence was that she was renting a four bedroom house in Maple for $2,200 a month plus utilities as of September 2014. She described the physical features of the house as a semi-detached house of about 1,700 square feet, with three bathrooms and a single car garage. Prior to that, she rented a larger house of approximately 2,400 square feet, which was a four bedroom, four bathroom home, with a double car garage, and made efforts to rent out rooms because it was close to a school. She joined an organization and paid it a $100 fee per year to provide her with students’ names and phone numbers. She provided Stanley with a compilation of all of the letters and emails she had exchanged as well as her advertisements to rent and these were filed as an exhibit at trial. She testified she lost almost $3,000 on fraudulent cheques and the new owner raised the rent so she could no longer afford the house. The house she was renting as of September 2014, was $350 a month less than the $2,550 per month she had been paying.
[92] I agree that paying rent is not an “investment” in real estate. That said, a casual observer would have realized from looking at Sandra’s financial statement that she was renting a house. Sandra’s financial statement has a heading, “Rent or mortgage” under which is shown $2,550. Immediately under this heading is the heading Property Taxes. No amount is shown for property taxes. Then under the heading Tenant insurance we find in brackets (required by lease) and the amount of $37 month. The trial judge also found that Sandra’s annual income was $3,760. It is not possible to own a house in the Greater Toronto Region with this annual income.
[93] Given the evidence of Sandra’s efforts to rent out rooms, the trial judge’s use of the words “real estate investment” could equally have been a shorthand reference to Sandra’s efforts to earn income from the house she was renting. In the circumstances, the trial judge’s use of the word “investment”, standing alone, does not lead me to conclude that she misapprehended the evidence. The trial judge’s point was that she could not determine on the evidence if Sandra’s housing expenditure was the best use of her capital, but she found on the whole of the evidence that it was not excessive. Sandra’s evidence that she was attempting to rent rooms in an effort to generate income for herself was not contradicted and was supported by documentary evidence. There was evidence on which the trial judge could come to the conclusion she did. Thus, I would reject this argument.
[94] In relation to the basis for support, Stanley quarrels with the trial judge’s comment in para. 12 of her reasons that, “The evidence that would ground a compensatory support claim was not fully developed in the trial.” He points out that any claim for compensatory spousal support was specifically withdrawn at trial.
[95] There are three conceptual grounds for support. They are, (1) compensatory; (2) non-compensatory or “need”; and (3) contractual: Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420. Reading the reasons as a whole it is clear that the trial judge did not award compensatory spousal support but support based on need. The trial judge’s comment did not affect the basis on which she awarded support and is therefore of no consequence: Marinangeli v. Marinangeli (2003), 2003 CanLII 27673 (ON CA), 66 O.R. (3d) 40 (C.A.), at paras. 19-20, 25.
[96] The trial judge did erroneously state that both parties were represented at trial. Sandra was represented by a lawyer. Stanley, a lawyer, was self-represented. When the post-trial affidavits were filed, both were represented. While the trial judge erred in saying both parties were unrepresented, her error in this regard is not material.
(b) Calculation of interest
[97] Stanley submits the trial judge erred in not attributing income to Sandra from her LIRA in calculating the amount of support she awarded in her February 2015 judgment. Instead, the trial judge stated at para. 50 of her reasons, “The applicant [Sandra] need not and actually cannot afford to deplete this income.”
[98] While it is true that the income generating capacity of all assets, including capital assets, must be taken into account in determining Sandra’s need for support, Stanley has taken this comment out of context. At para. 53 of her reasons, the trial judge stated, “The court will require further evidence from the parties to calculate the income after the LIRA funds are available for monthly investment yield.” The trial judge was not required to take into account income from the funds in the LIRA that Sandra was unable to access in determining retroactive and ongoing spousal support until she became 65 years of age. “Means” refers to available money and includes " all pecuniary resources, capital assets, income from employment or earning capacity, and any other source from which gains or benefits are received, together with, in certain circumstances, money that a person does not have in possession but that is available to such person": Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 29 quoting J.D. Payne & M.A. Payne, Canadian Family Law (Toronto: Irwin Law, 2001), at p. 195.
[99] Stanley submits that the trial judge erred in not considering the income generating capacity of Sandra’s non-LIRA sources. Stanley submits that, in the absence of evidence on the point, the trial judge ought to have presumed a 5% interest rate on the capital Sandra received.
[100] The non-LIRA capital, including the proceeds from the matrimonial home, comprised approximately $322,000 in January 2013. Sandra testified that of the $220,000 she received from the proceeds of sale of the matrimonial home, she invested $200,000 in a Guaranteed Investment Certificate (“G.I.C.”) that matured in May 2014, when she received $9,000 in interest. Of the approximately $100,000 remaining, $82,000 was invested with the Toronto Dominion Bank at 4 or 5% interest. From January 2013, Sandra testified she lived off the income from her investments, a line of credit at the bank and her credit cards. She agreed in cross-examination that she was paying interest on these at triple what she was receiving in interest on her money and carrying a monthly debt load of 15% or more costing her $750 a month. If she had paid off all her debt, she would have been left with $34,000 on which to live for the year. (See pp. 103-106 transcript). Sandra’s reported income and expenses in 2014 left her with negative annual cash flow of -$73,743.48. Having regard to this evidence, the trial judge did not err in not attributing income to Sandra on her non LIRA assets, as any income she received was eaten up in interest paid out on debt and then some.
[101] Once the LIRA was in play, the trial judge assigned a rate of interest to it. That rate was 1%. The appellant submits that a more realistic rate of interest is 5%. Stanley’s submission is based on the 26th Actuarial Report on the CPP as of December 31, 2012 and was attached as Exhibit A to his affidavit of March 20, 2015, which estimated overall rates of return for 2013 through 2018 at approximately 5%.
[102] At para. 5 of her continuing reasons, the trial judge held in relation to Sandra’s rate of income from the fund, “Mr. Berger speculated that the numbers should be higher but the best evidence of the LIRA yield is the information Ms. Berger has received from the fund.”
[103] It is possible to calculate the actual rate of interest the LIRA has earned. On November 11, 2009, the date of separation, the amount in the LIRA was worth $786,151.72. On Feb 5, 2015, it was worth $839,500. The annual rate of interest over this period of time to produce this amount is 1.26%.[^3]
[104] I also note that the preferred rate used in DivorceMate lump sum calculations is the Long-term Government of Canada Real Return Bond Rate, which sets out the risk free rate of return adjusted for inflation.[^4] At the time of trial, it was 0.66%.[^5]
[105] I would hold that the trial judge did not err in attributing 1% income on the LIRA.
(c) Stanley’s support of his daughter between July 1, 2013 and December 31, 2013.
[106] It appears that in ordering spousal support retroactive to July 1, 2013, the trial judge did not take into consideration the undisputed fact that the daughter was a child of the marriage until December 31, 2013 when she ceased to be in full time attendance at George Brown College.
[107] I was unable to find evidence of the dollar amount the appellant spent for the daughter’s support during this time. In Stanley’s amended answer pursuant to the order of Justice P. W. Nicholson dated October 14, 2014 and Rule 11 of the Family Court Rules, O. Reg. 114/99, he states on the third page of para. 6 that, while the daughter’s tuition of some $2,000 was paid for out of Sandra’s RESP for her, he “was responsible for her daily transport to and from class, food and expenses, textbooks and cooking supplies.” Stanley also states that in 2014 he has been paying his daughter’s expenses while she is on her placement in Finland and living with a family and that these expenses had exceeded $11,000 for 2014 thus far (as of October 2014). If the 2014 figure were used to calculate support in 2013, it appears Stanley may have had expenses averaging approximately $1,100 a month for his daughter.
[108] Stanley acknowledged that $2,000 of the RESP was used for his daughter’s tuition. It was within Stanley’s power to have his daughter use the balance of the $2,000 in the RESP for her related costs. If he chose not to do so, that does not mean he is entitled to say Sandra contributed only $2,000 for the daughter during this period.
[109] In addition to a paucity of evidence from Stanley as to his expenses for the daughter, the trial judge did not have the benefit of Stanley’s calculations as to the appropriate amount of spousal support payable taking into account his support for his daughter from the SSAGs because, as she indicated at para. 9 of her reasons, he refused to supply them.
[110] In these circumstances, and having regard to the onus of proof on Stanley, I would not disturb the trial judge’s award of retroactive spousal support between July and December 2014.
(d) Appreciation of Sandra’s needs and means in the calculation of support
[111] In relation to needs, Stanley submits that the trial judge erred in holding in para. 62 of her February 2015 reasons that Sandra, “is not required to deplete her capital to live on but to invest it to acquire an income that allows her a regular source of funds.”
[112] The trial judge’s comment was responsive to Stanley’s submission at trial that Sandra did not need any support and that she was obliged to use up her accessible capital. Immediately prior to this sentence the trial judge stated at para. 62:
The distribution of assets was in accordance with the Family Law Act and the applicant is responsible to manage her asset base to yield a proper income. The current income from said assets is insufficient… She is not required to deplete her capital to live on but to invest it to acquire an income that allows her a regular source of funds.
[113] The trial judge did not err in holding that Sandra need not deplete all her accessible capital before being entitled to claim support based on changed circumstances. See Elgner v. Elgner (2009), 2009 CanLII 68827 (ON SC), 85 R.F.L. (6th) 51 (Ont. S.C.), at para. 33, leave to appeal refused, 2010 ONSC 1578, 99 O.R. (3d) 687 (Div. Ct.), additional reasons at 2010 ONSC 2399 (Div. Ct.), affirmed 2010 ONSC 3512 (Div. Ct.); Goeldner v. Goeldner, 2005 CanLII 455 (ON CA), 194 O.A.C. 129 (C.A.), at para. 8.
[114] In relation to means, the trial judge found that at the end of her marriage Sandra was at an older age, with out-dated skills because she had not worked full-time since 1995. She stated at para. 52, “The court is satisfied that [Sandra] has made reasonable efforts to provide for herself but this effort has not borne fruit.” She had tried to develop self-sufficiency but her age, health and skill levels have hindered such efforts. The trial judge held Sandra’s current income of $3,760 until June 1, 2015 was insufficient to provide for herself. The trial judge was entitled to come to this conclusion on the evidence.
[115] After considering Stanley’s employment history, his submissions respecting the support of his daughter and his submissions concerning a decrease in his income, both of which she rejected, the trial judge found Stanley’s employment income for 2014 to be $152,000. She took into consideration the requirement in the Separation Agreement that any variation exclude Stanley’s income from his pensions because they had been equalized. She looked at the SSAGs and observed that the court could depart from them if clearly articulating reasons but found no reason to do so. She chose the mid-range of support under the SSAGs as appropriate which would leave him with 54% of net disposable income. Given that he had costs associated with working she found this reasonable.
[116] In her financial statement, Sandra claimed annual expenses of $77,719.56 but she admitted at trial that RRSP contributions of $399 a month were not a continuing monthly expense with the result that her annual expenses total $72,931.56. Stanley submits that Sandra’s current income is sufficient to meet her expenses based on income tax of about $20,000 and that if support is paid as ordered Sandra will have an excess of income. This submission does not include any explanation as to how the $20,000 figure for income tax was arrived at and I am unaware of any foundation for it in the evidence.
[117] In any event, an award of spousal support does not simply aim to give a payee spouse an income sufficient to just meet expenses dollar for dollar. It is intended to give the payee spouse a lifestyle similar to that enjoyed during marriage. A recipient’s need is measured against the parties’ marital standard of living: Mason, at para. 201. The closer the economic union, the greater is the presumptive claim to an equal standard of living upon dissolution: Fisher, at para. 56.
[118] At the time the spouses separated in 2009, Stanley was earning about $240,000 a year. It was not until the latter part of 2012 that his employment was terminated. Given that Stanley earns less now than he did when the parties were married, and taking into consideration the terms of the Separation Agreement excluding Stanley’s income from pensions that have been equalized, the trial judge was entitled to make an award of support that took into account standard of living by making an award in accordance with the SSAGs.
[119] Section 9 of the SSAGs addresses using the ranges. In addition to the objectives in the Divorce Act, the SSAGs provide a number of factors to consider when choosing a particular location within the ranges. The following SSAG factors are particularly relevant in this case: the recipient’s needs; the payor’s needs and ability to pay; property division and debts; and, as discussed earlier, self-sufficiency incentives.
[120] Section 9.2 of the SSAGs explains how a recipient’s needs impact an analysis: “In a case where the recipient has limited income and/or earning capacity, because of age or other circumstances, the recipient’s needs may push an award to the higher end of the ranges for amount and duration.”
[121] Sandra has limited income and earning capacity due to her age, her absence from the workforce during the marriage, and her health issues. At the time of trial, she was 64 years old, had withdrawn from the workforce for over 14 years to care for their daughter and the home, and suffered from arthritis, diabetes, osteoporosis, and depression. She has little prospects of obtaining employment. Sandra’s needs push support in the higher range.
[122] Section 9.4 of the SSAGs addresses the payor’s needs and ability to pay. When applying the “without child support” formula (as in this case), it is important to look at the net income consequences of any particular amount of spousal support, especially for the payor. This is critical in longer marriages, where the formula percentages are higher.
[123] Stanley has the means and ability to pay. The trial judge found that his annual employment income is $152,000. The trial judge also properly considered the net outcome of her support award in both judgments. A mid-range amount left Stanley with 54% of the net disposable income, given that he had costs associated with working.
[124] Section 9.6 deals with property division and debts and states that:
Underpinning the Advisory Guidelines is a basic assumption that the parties have accumulated the typical family or matrimonial property for couples of their age, incomes and obligations, and that their property is divided equally under matrimonial property laws. Significant departures from these assumptions may affect where support is fixed within the ranges for amount and duration.
[125] Further, "[i]f the recipient receives a large amount of property, the low end of the range might be more appropriate."
[126] Section 9 of the Spousal Support Advisory Guidelines: The Revised User’s Guide (Ottawa: Department of Justice Canada, 2016) further provides that property equalization “can influence location, mostly at the extremes. A large property settlement gives the spouses security and capital to fall back upon, likely leading to an amount lower in the range: Cochrane v. Cochrane, 2013 BCSC 2114.”
[127] The amount of property Sandra received was in accordance with the requirements in the Family Law Act, R.S.O. 1990, c. F.3 for equalization of property and was not a significant departure from the assumptions in the SSAGs. While not too extreme, the recipient’s equalization payment of $1,089,671.52 is arguably on the “larger” side. For example, in Cochrane, a property award of $1,400,000 justified lower spousal support.
[128] Finally, s. 9.7 of the SSAGs explains that self-sufficiency incentives may push a support award in different directions. A low-end award may encourage the recipient to make greater efforts to achieve self-sufficiency. Conversely, a high-end award may promote self-sufficiency by allowing the recipient to obtain re-training and education, leading to more remunerative employment and less support in the long-term.
[129] A lower support award to incentivize Sandra would be inappropriate in this case, particularly given the traditional, long-term nature of the marriage and Sandra’s efforts to find employment. At the time of trial, Sandra had completed 136 job applications and attended three interviews. She also attended programs to update her skills. Unfortunately, she had not received any job offers. The reality is that her age, her role in the parties’ traditional marriage, and health issues all limit her ability to find employment.
[130] Given these SSAG factors, and the objectives of the Divorce Act, the trial judge was within her discretion to order mid-range support.[^6]
[131] I would reject the submission that the trial judge erred in making the award of support she did.
G. Ancillary Matters, Costs and Disposition
[132] Stanley also asks this court to order Sandra to reimburse him for the $3,621 she has been ordered to pay and has not paid.
[133] Sandra’s factum states Stanley has not paid the trial costs awarded against him in the amount of $45,000.
[134] I would hold that Stanley is entitled to deduct the $3,621 from the trial costs of $45,000 he was ordered to pay. Sandra is entitled to have the net amount of costs enforced by the Family Responsibility Office. Costs are part of the award of support: Family Responsibility and Support Arrears Enforcement Act, 1996, S.O. 1996, c. 31, s. 1(1); Wildman v. Wildman (2006), 2006 CanLII 33540 (ON CA), 82 O.R. (3d) 401 (C.A.).[^7]
[135] I would dismiss the appeal. Sandra is entitled to her costs of the appeal, which by agreement are fixed at $9,000 all inclusive.
Released: “D.W” November 23, 2016
“K.M. Weiler J.A.”
“I agree David Watt J.A.”
“I agree Grant Huscroft J.A.”
[^1]: A post-separation increase in a payor’s income is a different issue than simple income disparity, which is what is at issue. Post-separation increases in income are addressed in the SSAG, and have a distinct set of considerations.
[^2]: This court held in Ceccol v. Ontario Gymnastic Federation (2001), 2001 CanLII 8589 (ON CA), 55 O.R. (3d) 614, at paras. 28-29, that a series of one year contracts can be considered employment of indefinite duration.
[^3]: Solving for the interest rate (“r”): = 0.0126*100%=1.26%.
[^4]: S.C. Montgomery, “Understanding DivorceMate’s ‘Lump Sum’ Calculations” (April 2015), online: DivorceMate https://www.divorcemate.com/Content/Pdfs/UserGuides/Lump%20Sum%20Calculations%20-%20April%202015.pdf.
[^5]: Bank of Canada, “Canadian Bond Yields: 10-Year Lookup” (11 October 2016), online: http://www.bankofcanada.ca/rates/interest-rates/lookup-bond-yields/).
[^6]: Furthermore, the spousal support awards in the November 26, 2015 judgment seem to be below the low end of the SSAG range. It is not clear why the trial judge took this approach in her second judgment. In any event, the respondent has not raised any issues by cross-appeal regarding the SSAG calculation, or the amount of the support award.
[^7]: The Family Responsibility and Support Arrears Enforcement Act, 1996 defines “support order” as including “(g) interest or the payment of legal fees or other expenses arising in relation to support or maintenance”,