Court of Appeal for Ontario

Date: 2019-12-13 Docket: C66077 Judges: Rouleau, Roberts and Harvison Young JJ.A.

Between

Carla Linn Savage Applicant (Appellant)

and

Michael Anthony Savage Respondent (Respondent)

Counsel

Josh Glieberman, for the appellant Michael H. Tweyman, for the respondent

Heard: November 13, 2019

On appeal from: The order of Justice Susan Woodley of the Superior Court of Justice, dated September 26, 2018.

Reasons for Decision

A. Overview

[1] The appellant appeals an order which terminated the spousal support payable to her by the respondent. She appeals on the grounds that, first, the trial judge erred in finding that the respondent's retirement had constituted a material change in circumstances, and second, that even if she did not err in so finding, the trial judge erred in terminating spousal support in the circumstances.

[2] For the following reasons, the appeal is dismissed.

B. Factual Background

[3] The facts may be briefly summarized. The parties separated in 2012 following an approximately 25-year marriage which produced three children who are now adults. In 2015, shortly before a scheduled trial, the parties settled the outstanding issues between them as set out in the consent order of Nicholson J. (the "consent order"). This order equalized the parties' assets and provided for the payment of non-term limited spousal support by the respondent to the appellant in the amount of $1,650 per month. Notably, the order provided that either party could seek a change in spousal support based on material change, whether the change was "foreseen or foreseeable, unforeseen or unforeseeable".

[4] The respondent brought a motion to change in March 2017 on the basis that he intended to retire. On December 31, 2017, at age 57, the respondent retired with a full pension. The appellant had retired from her public service position in May 2017 when she was 56 and eligible for a full pension.

C. The Reasons Below

[5] The trial judge found that the respondent's retirement constituted a material change in circumstances. She set out the test as whether a change had occurred which, if known at the time of the last order, would have resulted in a different outcome. Having found a material change in circumstances, she then considered the means and needs of the parties pursuant to s. 17 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). Given her assessment, she terminated the support obligation.

D. Law and Analysis

[6] The appellant agrees that, in order to succeed on this appeal, she must demonstrate an error in principle, a significant misapprehension of the evidence, or that the award is clearly wrong: Hickey v. Hickey, [1999] 2 S.C.R. 518, at para. 11.

(1) The Trial Judge Did Not Err in Finding a Material Change

[7] The appellant argues that the respondent's retirement was early, voluntary and unreasonable and could not therefore constitute a material change. She argues that the fact that the original consent order did not reference retirement should be taken to mean that it was specifically exempt from consideration as a material change. She emphasizes that the respondent had wanted a clause that specifically provided that his retirement would constitute a material change in circumstances. That clause was not agreed to and was not included in the order.

[8] We disagree with the appellant's position. The trial judge considered all the evidence before her on this issue which was fully argued. She observed that the original consent order did not reference retirement at all. She noted, however, that the consent order did provide that either party could request a review or change to spousal support in the event of a material change, whether "foreseen or foreseeable, unforeseen or unforeseeable". She found that in the circumstances of this case, the respondent's retirement constituted a material change.

[9] The case law cited by the appellant can be distinguished. For example, in Haworth v. Haworth, 2018 ONCA 1055, 145 O.R. (3d) 74, at para. 18, the order expressly provided for spousal support to be paid "each and every month thereafter until the [payee] dies". By contrast, the consent order in this case anticipated that the support issue could be reopened if the circumstances materially changed, even if this change was foreseeable.

[10] In addition, the trial judge declined to find that the respondent had opted for early retirement at age 57 in order to avoid paying spousal support. She considered the circumstances, including the 27-year span of his teaching career, the drain inherent in the teaching profession and his evidence that retiring when he became eligible for a full pension had been a goal that had pushed him to continue teaching. She also found that his decision to retire based on eligibility for a full pension could not be said to be unreasonable in light of the fact that the appellant herself had retired at age 56 in 2017 on the same basis. She specifically noted that there was no evidence that he had retired to avoid spousal support. The respondent had planned to retire when he became eligible for a full pension upon the "rule of 85" and the trial judge accepted his evidence (which was contrary to the appellant's evidence on the point) that the appellant knew this.

[11] These factual findings were open to the trial judge on the evidence before her. In particular, the appellant's submission that the trial judge erred in placing insufficient weight on the absence of a reference to retirement in the consent order must be rejected. The trial judge considered the evidence before her and applied the correct law in interpreting the consent order.

(2) The Trial Judge Did Not Err in Terminating Support

[12] The appellant argues that the trial judge erred in terminating support. The heart of her argument is that five years of spousal support was insufficient compensation for her income (and thus pension) disadvantages that arose from their marriage. They had been married for over 25 years during which time the appellant took maternity leaves and worked part-time. She says that the trial judge erred in considering the net worth of the parties as part of the needs and means analysis. At the time of the trial, the respondent had pension income of $49,538 annually of which $9,572 had not been equalized. However, he had no capital assets. The appellant's pension income was $29,300.28 annually of which $3,864 had not been equalized but she had approximately $500,000 in investments.

[13] We see no error in the trial judge's consideration of the parties' assets and her finding that income from capital should be imputed to the appellant. It was relevant to an assessment of the relative incomes of the parties. While it might have been preferable for the trial judge to indicate precisely what amounts she was imputing to the appellant for income from capital, it is clear from the percentage figures to which she refers that the result of the application of a reasonable return rate would effectively equalize the parties' pension incomes.

[14] The trial judge also referred to the fact that the appellant has repartnered under the heading of "Means and Needs" as follows:

In addition to imputing income to Carla on account of her capital assets, income may be imputed to Carla on account of the financial benefits that she receives as a result of her re-partnering ….

[15] The appellant argues that this constitutes an error in that the trial judge imputed income to the appellant on the basis that she is living with a new partner, despite the fact that the new relationship was only approximately two and a half years old. We disagree. Viewed in context, it is apparent that the trial judge did no more than consider this "financial benefit" as a general factor in assessing the parties' means and needs. She stated only that income "may" be imputed on this basis but there is no indication that she actually did so. As noted earlier, the income that the appellant can reasonably generate from her capital is more than sufficient to cover any disparity in the parties' retirement income.

[16] The appellant also argues that in terminating support, the trial judge failed to apply the fact that spousal support had been grounded in the compensatory rationale. She accepted the appellant's evidence that her shorter work week had been for the benefit of the family and that this had given rise to an economic disadvantage on the breakdown of the marriage which led to lower income and pension payments. She also found, however, that this economic disadvantage had been fully compensated for by the respondent through both the equalization of their assets and the spousal support that had been paid by the time of the trial. This finding was open to her on the record, and it is not the role of this court to revisit such determinations absent palpable and overriding error. We note that this is not a case like some of those cited by the appellant where the recipient spouse is disabled or has no income of her own, or where the income disparity is very significant.

E. Conclusion

[17] The appellant has not demonstrated any error on the part of the trial judge in finding that the respondent's retirement was a material change and that the spousal support should be terminated.

[18] The appeal is therefore dismissed.

[19] The appellant shall pay costs of the appeal to the respondent in the amount of $7,500 inclusive.

"Paul Rouleau J.A."

"L.B. Roberts J.A."

"A. Harvison Young J.A."