Court File and Parties
Court File No.: D90640/16 Date: 2016-11-22 Ontario Court of Justice
Between:
Meshell Aucoin Applicant
- and -
Catherine Michelle Langdon Respondent
Counsel:
- Richard Teicher and Katie Sharp, for the Applicant
- Acting in Person, for the Respondent
Heard: November 14, 2016
Justice: S.B. Sherr
Reasons for Judgment
Part One – Introduction
[1] The applicant (Meshell) seeks an order for spousal support from the respondent (Catherine). Specifically, she is asking that Catherine pay her spousal support of $1,224 each month for 6 years, starting on December 1, 2016.
[2] Catherine asks that Meshell's application be dismissed. She submits that Meshell is not entitled to spousal support, or in the alternative, that if Meshell is entitled to spousal support, the support obligation has already been satisfied by payments she has made to her. In the further alternative, Catherine submits that she does not have the ability to pay spousal support.
[3] The issues for trial are as follows:
a) Is Meshell entitled to spousal support from Catherine?
b) If so, what are the incomes of each party for the purpose of the support calculation?
c) What should be the amount and duration of spousal support?
[4] Only the parties testified at trial.
Part Two – Background Facts
[5] Meshell is 50 years old. Catherine is 47 years old.
[6] Meshell has been married once. She married her husband in 1998. She separated from him in August 2004. They had no children together. Meshell divorced her husband in 2014.
[7] Catherine has never married. She has no children.
[8] Meshell and Catherine lived together in a common-law relationship from September 2006 until May 9, 2014. They have remained separate and apart since that time.
[9] Meshell has a degree in Human Services from George Brown College.
[10] Meshell had several long-standing health issues when she met Catherine. At one point before they started living together, she had been out of the work force for over four years due to these issues.
[11] Meshell was employed as a customer service representative for a bank when she met Catherine in 2006. She had been hired under the bank's disability program. Allowances were made for her health issues. At that time, her annual income was approximately $30,000.
[12] In 2010, Meshell started working reduced hours at the bank (4 days each week) due to her health issues. Meshell deposed that she developed lupus-like symptoms and suffered from chronic fatigue, muscle pain and nausea.
[13] Meshell testified that her health further deteriorated after November 2011, when she was diagnosed with diabetes. She said that this "tipped the scale for her". She was fatigued, had pinched nerves and painful abscesses. She began missing more time from work.
[14] In 2014, the year of her separation from Catherine, Meshell was still working at the bank and earned $33,429.
[15] Meshell testified that her physical and emotional health deteriorated after she separated from Catherine. Shortly after the separation, Meshell said she felt so helpless that she went to the emergency room at the Centre for Addiction and Mental Health in Toronto. She participated in a six-week counseling program at its Crisis Clinic.
[16] Meshell said that her physical health is significantly affected by stress. She went on short-term disability from October 2014 until April 2015 due to her health issues.
[17] Meshell earned $37,440 in 2015.
[18] Meshell issued her application for spousal support on April 15, 2016.
[19] Meshell testified that she was forced out of her job by the bank on June 3, 2016, as she was missing many days of work due to her health. Meshell testified that she had contracted shingles. She said that the bank was no longer willing to accommodate her work absences.
[20] Meshell said that her union intervened on her behalf and she negotiated an agreement, that in exchange for her resignation, she would be paid severance of just under $8,000. Meshell has not worked since June 3, 2016.
[21] Meshell deposed that she is retraining and wants to run her own business. She testified that she has a passion for alternative healing treatments. She wants to become a Certified Reflexologist Healthcare Practitioner and a Certified Indian Head Masseuse. She started taking classes in 2016 and plans to be certified in these areas by March 2017. Her plan is to move into a two-bedroom apartment and operate a business out of her home. She said that she knows other people in these fields who have been successful. She expressed confidence that she will also eventually become successful. She stated: "I love it, it is within my gifts, abilities and talents".
[22] Meshell said that she is in a new relationship, but not living with her new partner.
[23] Meshell presently has no source of income. She testified that she has met her expenses by depleting her savings and from accepting gifts and loans from friends.
[24] Catherine obtained a Bachelor of Arts and a certificate in Criminology from Memorial University in Newfoundland.
[25] When she began living with Meshell in 2004, Catherine was employed as an accounts payable clerk at a trucking company. At that time, she was earning annual income of about $30,000.
[26] Catherine advanced quickly in the company. She became a sales person, then the used truck sales coordinator and by 2011, she was the company's used truck manager.
[27] In 2013, Catherine was paid an annual base salary of $45,000 plus commissions. Her total income was $141,920. This included RRSP income of $29,950.
[28] In 2014, Catherine changed jobs within the same field. Catherine was paid an annual base salary of $50,000, plus commissions. In 2014, Catherine's total income was $108,799. This included RRSP income of $12,704.
[29] In 2015, Catherine changed jobs – again in the same field. She primarily arranged financing deals for used trucks. She was paid an annual base salary of $60,000, plus commissions. In 2015, Catherine's employment income was $126,161. She had no RRSP income in 2015.
[30] Catherine was terminated by her employer without cause on June 16, 2016. Pursuant to her employment contract, she received a severance payment of $10,000.
[31] Catherine found new employment on September 1, 2016 as a district sales manager for a credit commercial corporation. This job is similar to her past jobs. She arranges financing for heavy trucks. Her annual base salary will be $30,000, plus commissions.
[32] Catherine is living on her own. She deposed that she is also suffering from anxiety arising out of the separation (and this court case) and has been seeing a psychotherapist.
[33] Catherine testified that she set up Meshell in a new apartment when they separated. She paid Meshell's first and last month's rent and provided her with furniture and supplies. She said that she paid $8,294 to Meshell (either in cash or by payments to third parties on Meshell's behalf) from the date of separation until the end of 2015. Meshell testified that Catherine had paid her $6,620 during this time frame.
Part Three – Entitlement
3.1 Legal Considerations
[34] Section 29 of the Family Law Act (the Act) defines a spouse as follows:
- In this Part,
"dependant" means a person to whom another has an obligation to provide support under this Part; ("personne à charge")
"spouse" means a spouse as defined in subsection 1 (1), and in addition includes either of two persons who are not married to each other and have cohabited,
(a) continuously for a period of not less than three years, or
(b) in a relationship of some permanence, if they are the natural or adoptive parents of a child. ("conjoint").
[35] Section 30 of the Act states that every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so.
[36] Subsection 33 (8) of the Act sets out the purposes of spousal support as follows:
Purposes of Order for Support of Spouse
(8) An order for the support of a spouse should,
(a) recognize the spouse's contribution to the relationship and the economic consequences of the relationship for the spouse;
(b) share the economic burden of child support equitably;
(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and
(d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).
[37] Subsection 33 (9) of the Act sets out considerations for the determination of the amount, if any, and duration of spousal support as follows:
Determination of Amount for Support of Spouses, Parents
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,
(a) the dependant's and respondent's current assets and means;
(b) the assets and means that the dependant and respondent are likely to have in the future;
(c) the dependant's capacity to contribute to his or her own support;
(d) the respondent's capacity to provide support;
(e) the dependant's and respondent's age and physical and mental health;
(f) the dependant's needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;
(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(h) any legal obligation of the respondent or dependant to provide support for another person;
(i) the desirability of the dependant or respondent remaining at home to care for a child;
(j) a contribution by the dependant to the realization of the respondent's career potential;
(k) Repealed: 1997, c. 20, s. 3 (3).
(l) if the dependant is a spouse,
(i) the length of time the dependant and respondent cohabited,
(ii) the effect on the spouse's earning capacity of the responsibilities assumed during cohabitation,
(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family's support,
(v.1) Repealed: 2005, c. 5, s. 27 (12).
(vi) the effect on the spouse's earnings and career development of the responsibility of caring for a child; and
(m) any other legal right of the dependant to support, other than out of public money.
[38] Spousal support is not merely a consideration of needs and means. In determining the appropriate amount of spousal support, compensatory and non-compensatory considerations should be taken into account in an effort to equitably alleviate the economic consequences of the breakdown of the relationship. See: Rioux v. Rioux, 2009 ONCA 569, [2009] 97 O.R. (3d) 102 (OCA). Entitlement can be based on compensatory, non-compensatory or contractual grounds. See: Bracklow v. Bracklow.
[39] The Court of Appeal in Fisher v. Fisher, 2008 ONCA 11 stated that before applying the Spousal Support Advisory Guidelines (SSAG), entitlement to support must first be established.
[40] On its own, a mere disparity of income that would generate an amount under the SSAG does not automatically lead to entitlement. See: Lee v. Lee, 2014 BCCA 383; R.L. v. L.A.B., 2013 PESC 24. However, in practice, entitlement will generally be found in cases where there is a significant income disparity at the time of the initial application. See: Spousal Support Advisory Guidelines: The Revised User's Guide, April 2016: Professor Carol Rogerson and Professor Rollie Thompson.
[41] The Ontario Court of Appeal discussed entitlement to spousal support based on non-compensatory grounds where the claimant had health issues in paragraphs 27 and 28 of Gray v. Gray, 2014 ONCA 659 as follows:
[27] One of the objectives of the Divorce Act is to relieve economic hardship. Need is not measured solely to ensure a subsistence existence, but rather should be assessed through the lens of viewing marriage as an economic partnership. As stated by this court in Marinangeli v. Marinangeli (2003), 66 O.R. (3d) 40 at para. 74, in determining need, courts ought to be guided in part by the principle that the spouse receiving support is entitled to maintain the standard of living to which she was accustomed at the time cohabitation ceased. The analysis must consider the recipient's ability to support herself, in light of her income and reasonable expenses.
[28] In the case before us, Ms. Gray's health prevents her from working. This is relevant to the assessment of her needs. As stated by the Supreme Court in Bracklow v. Bracklow, [1999] 1 S.C.R. 420, "in some circumstances the law may require that a healthy party continue to support a disabled party, absent contractual or compensatory entitlement. Justice and consideration of fairness may demand no less." (at para. 48).
3.2 Meshell's Position
[42] Meshell submitted that she is entitled to support on both a compensatory and non-compensatory basis.
[43] Meshell's compensatory claim is based on the roles she assumed during the relationship. She deposed that she and Catherine jointly made a decision for her to reduce her work hours to four days each week in 2010. Meshell testified that she then became responsible for the management of the household. She did the cooking, cleaning and shopping. She claimed it was her assumption of these roles that enabled Catherine to focus on her job and which contributed to Catherine's career advancements.
[44] Meshell's non-compensatory claim is based on her need for support and Catherine's ability to support her. She claims that she has been economically disadvantaged by the breakdown of the relationship. She deposed that she has been forced to deplete her savings, exhaust her RRSPs, borrow money and accept gifts of money from family and friends to survive. She claims that the lifestyle, which she and Catherine enjoyed together, has been seriously diminished.
[45] Meshell listed several health issues that she has had over the years including: diabetes, lupus, gout, fibromyalgia, pneumonia, shingles, depression, anxiety and post-traumatic stress disorder. She said that she is tired all the time and in a lot of pain from muscle aches and joint pain.
[46] Meshell provided medical evidence supporting these medical conditions. Her treating doctor wrote that Meshell was started on insulin therapy in 2015 to control her diabetes. Meshell initially had difficulties adjusting to this therapy, but has improved. This is a long-term chronic condition, her doctor wrote, with a good prognosis.
[47] Meshell's psychologist wrote that Meshell's post-traumatic stress disorder (arising from her childhood) was triggered by her separation from Catherine and that Meshell's depression and anxiety worsened. The psychologist has been seeing Meshell on a pro bono basis since June 2014, because Meshell can no longer afford to pay her. The psychologist wrote in her report dated July 10, 2016:
Ms. Aucoin is doing her best to manage, but both her quality of life and mental health have been seriously compromised by the ending of her partnership with Cathy Langdon.
[48] Meshell is on multiple medications for her health conditions.
[49] Meshell stated her belief that she is ineligible for government benefits for her health issues, such as Ontario Disability Support Payments (ODSP) or Canada Pension Payments because her health fluctuates — at times she is fully capable of working, but at other times, when her health issues flare, she misses considerable time from work.
[50] Meshell believes that she is no longer capable of working in an office job due to her health issues – she would miss too much time from work to be a palatable employee for an employer. She believes that by being self-employed, she will be able to control her work hours and work environment and reduce the stress which activates her health conditions.
[51] Meshell submitted that her annual income should be imputed at $20,748 for the purpose of the support calculation, in recognition of her obligation to be self-sufficient.
3.3 Catherine's Position
[52] Catherine submits that Meshell is not entitled to support.
[53] Catherine claimed that Meshell was not disadvantaged by the breakdown of the relationship. Meshell was employed by the bank when they met and was still employed by the bank when they separated. Meshell had her own furnished apartment when they met and upon separation, Catherine set Meshell up in her own furnished apartment.
[54] Catherine vigorously disputed Meshell's claim of entitlement to compensatory support. Catherine deposed that Meshell made the decision to cut back her work hours as she didn't like working on Mondays, since she had to deal with more difficult customers. Catherine said that Meshell's decision to work less had nothing to do with and had no impact on her career advancement.
[55] Catherine deposed that she and Meshell lived in a small condominium that had all the amenities they required. Catherine said there was little housekeeping involved and they usually ate out.
[56] Catherine said that Meshell did not contribute financially to the household, even though she was capable of doing so. Catherine claims that as a result, she depleted her RRSPs and left the relationship in debt.
[57] Catherine submitted that it was Meshell's choice to resign from the bank and Meshell had options of taking other positions in the bank to reduce her stress level, but failed to do so, as Meshell felt that these jobs were beneath her.
[58] Catherine testified that she and Meshell had often discussed that if they separated, Meshell would just be put back into the same situation she was in at the start of the relationship.
[59] Catherine questioned why she should pay spousal support when Meshell remained married to her husband throughout their relationship and did not declare that she was living in a common-law relationship on her income tax returns. Catherine said that she was deprived of the tax benefits of living in a common-law relationship during the relationship because of this.
[60] Catherine also questioned why Meshell did not claim spousal support against her husband when she sought a divorce in 2014.
[61] Catherine claims that Meshell is financially better off than her. Meshell has more savings and a pension – Catherine has more debts.
[62] Catherine feels that Meshell's retraining may not be realistic and that she should be making attempts to find employment.
[63] Catherine claimed that she is just meeting her own basic needs at this time and has no ability to pay support to Meshell.
[64] In the event the court finds that Meshell is entitled to support, Catherine submits that the amounts she paid to Meshell up until December 31, 2015 satisfies this entitlement.
3.4 Analysis
[65] Meshell and Catherine are spouses as defined in section 29 of the Act. They cohabited for eight years in an exclusive relationship. Catherine, for the most part, financially supported Meshell during this relationship. Meshell's failure to obtain a divorce from her husband or to declare a common-law relationship on her income tax returns has no bearing on the reality of the nature of the relationship between her and Catherine.
[66] The court finds that Meshell did not establish a claim for compensatory support. The evidence did not support a finding that the roles Meshell assumed in the relationship contributed in any way to Catherine's career advancement. Catherine would have had the same career trajectory if Meshell had continued to work five days each week.
[67] Meshell did not give up employment prospects or career aspirations in the relationship. The court finds that Meshell chose to reduce her work load by one day each week to reduce her stress at work – the choice was not made to facilitate Catherine's career.
[68] Any additional household contributions by Meshell, as a result of working less would have been minor – certainly not enough to establish a compensatory support claim.
[69] However, Meshell was able to establish entitlement to support on a non-compensatory basis. Meshell became financially dependent on Catherine as their relationship developed. Catherine acknowledged that she was primarily responsible for supporting Meshell.
[70] The lifestyle of Meshell and Catherine improved significantly during their relationship, as Catherine's income increased. As Catherine noted, they usually ate out at restaurants. They travelled together frequently. They travelled to Mexico, Florida, Calgary, New York and Newfoundland on vacations. Catherine generously paid for Meshell to travel alone to Japan to tour the Buddhist temples.
[71] Catherine was aware of Meshell's physical and emotional infirmities both before and during the relationship. She accepted Meshell as she was. She supported Meshell's decision to reduce her work hours to alleviate the stress she was under. She chose to financially support Meshell. There was an implicit recognition that Meshell was dependent on her.
[72] This was a relationship of medium length. There has been a great disparity in the incomes of the parties for many years. Catherine will continue to have the capacity to earn much greater income than Meshell. Meshell is economically very vulnerable, particularly given her age and physical and emotional frailties. Her infirmities, many of which are chronic, will likely compromise her ability to fully support herself on a long-term basis.
[73] Meshell has suffered considerable economic hardship as a result of the breakdown of the relationship. She is living a significantly reduced lifestyle. She has depleted her small savings and has been reliant on friends and family for support. She no longer travels. She described her stress in buying affordable food and how she worries about supporting herself in the future. She deposed that she can no longer afford to go to concerts and movies – activities she frequently went to with Catherine. She testified that if she is unable to obtain adequate support, her next step is to apply to have her pension from the bank (worth about $33,000) unlocked.
[74] It was not surprising, given Meshell's fragility, that she did not cope well with the end of her relationship with Catherine. Meshell's physical and emotional health deteriorated, culminating in her losing her job at the bank.
[75] The court finds that the breakdown of the relationship has diminished Meshell's ability to support herself.
[76] Meshell is and will likely continue to remain in a precarious economic position.
[77] Catherine felt that by placing Meshell in the same position as she was in when the relationship started, she had satisfied her legal obligations towards her. That is not the law. Meshell's lifestyle and dependency on Catherine evolved over the course of the relationship. Further, Meshell was not placed back in the same position by Catherine. She was eight years older and physically and emotionally much more vulnerable on the day of separation than when they first met.
[78] The only disconnect in the evidence regarding Meshell's need for support was that she received a gift of $9,000 from a friend in 2016. From that gift, Meshell lent $2,000 to other friends. This was an unusual act for someone to take when they deposed they were in dire straits. Meshell acknowledged this contradicted her claim of need, but couldn't provide a rationale for this, other than it was her money to do with as she chose.
[79] The court accepts Meshell's evidence that she did not have a viable claim for spousal support from her ex-husband (as submitted by Catherine). Meshell's ex-husband declared bankruptcy after he and Meshell separated. Meshell was left with their joint debts and she subsequently declared bankruptcy as well. Meshell's ex-husband's current income is comparable to what Meshell earned at the bank. Apparently, he received an inheritance of $80,000 after his separation from Meshell. This money would not be subject to an equalization of net family property and would not generate sufficient income to create a viable spousal support claim – particularly since Meshell and her husband separated 12 years ago.
[80] Meshell has the need for support and Catherine has the ability to pay it. For reasons that will be set out in more detail below, the court finds that the support payments made by Catherine to Meshell to date have been insufficient to end Meshell's entitlement to support.
Part Four – Incomes
[81] In order to determine the amount and duration of spousal support, it is first necessary to determine Meshell's and Catherine's incomes.
4.1 Meshell's Income
[82] Catherine asked that additional income be imputed to Meshell for the purpose of any support calculation. She believes that Meshell is not earning what she is capable of earning. Her position is that Meshell should be earning what she earned at the bank. In 2015, this was $37,440.
[83] Meshell acknowledged that income should be imputed to her for the purpose of the support calculation, to recognize her obligation to become self-sufficient. She proposed imputing an income of $20,748. This is roughly based on a minimum wage income if Meshell worked 35 hours a week.
[84] The test for imputing income for child support purposes applies equally to claims for spousal support. See: Niranchan v. Nadarajah, 2015 ONCJ 149; Rilli v. Rilli, [2006] O.J. No. 2142 (SCJ); Crowe v. McIntyre, 2014 ONSC 7106.
[85] In determining how much income to impute, the court must have regard to the person's capacity to earn income in light of such factors as employment history, age, education, skills, health, available employment opportunities and the standard of living enjoyed during the parties' relationship. The court looks at the amount of income the party could earn if he or she worked to capacity. See: Lawson v. Lawson.
[86] Cogent medical evidence in the form of detailed medical opinion should be provided by the person in order to satisfy the court that his or her reasonable health needs justify his or her decision not to work. See: Cook v. Burton, [2005] O.J. No. 190 (SCJ) and Stoangi v. Petersen, [2006] O.J. No. 2902 (SCJ). This principle would also be applicable to a decision to reduce work hours or to embark on a new career path for medical reasons.
[87] The court will use the imputed income amount proposed by Meshell for the following reasons:
a) The court accepts Meshell's evidence that she had to leave her job at the bank due to her frequent absences and she negotiated the terms of her resignation, realizing she had no viable alternative. The medical evidence supported that Meshell was devastated by the separation, her health deteriorated and she was not functioning well at that time.
b) Meshell's job options are limited. She is 50 years old. She used to work as a counselor and has worked in customer service. Meshell finds these jobs extremely stressful. She does not react well to stress.
c) Meshell is probably capable of obtaining a retail job, but this would likely be a minimum-wage job. It is also unlikely, given her health challenges, that Meshell could work full-time for a sustained period of time.
d) Meshell is trying to become self-sufficient with the new courses she is taking. The court shares some of Catherine's reservations about the viability of this career path. However, its viability would be a greater concern if Meshell was asking that no income be imputed to her. That is not the case.
4.2 Catherine's Income
[88] Meshell is asking that Catherine's 2015 income of $126,181 be used for the purpose of the support calculation. She submitted that this is the most reliable evidence of Catherine's ability to earn income. She asked the court to impute this amount to Catherine, claiming that she is intentionally under-employed in her new job. In the alternative, she asks that Catherine's annual income be assessed at $125,629. This is the average of Catherine's total line 150 income in her income tax returns from 2013 to 2015.
[89] Catherine was unsure what her annual income will be at her new job. She testified that it will be far less than in her previous job. She said that the economy is poor and it will be more difficult to earn commissions.
[90] Meshell is asking the court to apply the SSAG to calculate spousal support. The Ontario Court of Appeal in Mason v. Mason [2016] ONCA 725 set out that if the court is going to apply the SSAG, it must calculate income in accordance with the Child Support Guidelines (the guidelines) or provide an explanation for why it isn't doing so. The court wrote at paragraphs 118-120:
[118] Section 6.1 of the SSAGs provides that the starting point for determining income is the definition of income under the Guidelines.
[119] As the trial judge was using the SSAGs to determine the amount of spousal support, it was incumbent on him to either rely on the Guideline provisions for determining income – or to explain why they should not apply.
[120] In this regard, I note that the SSAGs are income-based guidelines that require careful attention to the actual incomes, or the income earning capacities, of both spouses. Where, as here, a party's income is in dispute, it makes little sense to determine the amount of spousal support that is payable solely by applying the SSAGs ranges without considering the SSAGs provisions for determining income.
[91] Paragraphs 15-20 of the guidelines set out how a person's income should be determined. Paragraph 18 of the guidelines (corporate income) is not relevant to this case.
[92] Section 15 of the guidelines provides that, except where a court accepts the parties' written agreement concerning a spouse's annual income, a spouse's annual income is determined in accordance with sections 16 to 20.
[93] Section 16 of the guidelines sets out the general rule that income is determined using the sources of income set out under the heading "Total income" in the T1 General form issued by the Canada Revenue Agency ("line 150 income"). This section reads as follows:
Calculation of Annual Income
16 Subject to sections 17 to 20, a spouse's annual income is determined using the sources of income set out under the heading "Total income" in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.
[94] Section 17 of the guidelines permits a court to depart from line 150 income where the court is of the opinion that the determination of the spouse's line 150 income would not be the fairest determination of income.
[95] Subsection 17(1) of the guidelines allows a court to consider patterns or fluctuations in a spouse's income over the last three years. It reads as follows:
Pattern of Income
17 (1) If the court is of the opinion that the determination of a spouse's annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse's income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
[96] Section 19 of the guidelines permits a court to impute income to a person and sets out a non-exhaustive list of circumstances where income may be imputed in clause 19 (1) (a).
[97] The onus is on Meshell to establish that Catherine is deliberately underemployed. See: Homsi v. Zaya, 2009 ONCA 322. Meshell did not establish this. Catherine provided a termination letter from her employer that she was terminated without cause in 2016. She received severance pursuant to the terms of her employment contract. She quickly looked for and found new employment in the same field.
[98] Catherine did not provide comprehensive evidence of her income in 2016. She did provide pay stubs from her new employer and deposed that she received a $10,000 severance payment from her previous employer. However, it was unclear how much she earned from the first employer in the first six months of 2016. Due to this lack of clarity, together with Catherine having missed two months of work, the court finds that it can't use Catherine's 2016 income to reliably assess her income moving forward.
[99] The court next looked at Catherine's 2015 line 150 income to determine if it would be the fairest determination of her income (as set out in sections 16 and 17 of the guidelines). The court does not believe that it is. Catherine has lost the job she held in 2015. Her new job has a base salary that is $30,000 per annum less. It might also take some time for Catherine to earn the same level of commissions that she previously earned.
[100] The court next turned to section 17 of the guidelines to consider the patterns or fluctuations in Catherine's income over the last three years and to determine an amount that is fair and reasonable in light of those patterns or fluctuations of income or the receipt of non-recurring amounts during those years.
[101] Many courts applying section 17 of the guidelines do so by averaging a person's income over the previous three years. However, section 17 does not state that the court must do this. Section 17 provides the court with an assessment tool to project future income, by taking into account the person's patterns or fluctuations of income over the past three years. See: Ewing v. Ewing, 2009 ABCA 227; Favero v. Favero, 2013 ONSC 4216.
[102] The court finds that section 17 of the guidelines assists it in determining Catherine's income moving forward. Catherine is now working for her fourth employer since 2013. It has become common for her to change jobs. Her jobs have been similar. She works in the trucking industry, and in particular, is involved in financing. In her new job, she is the District Finance Manager. All of Catherine's jobs since 2013 provide her with a base salary plus significant commissions. Catherine's past income patterns assist the court in predicting her future income.
[103] Catherine has been consistently successful at these jobs. She presented to the court as confident, motivated and very capable.
[104] In assessing Catherine's past three years of line 150 income, it is important to note that it includes a total of $42,654 of RRSP income. To arrive at the fairest determination of Catherine's future income, this amount should be excluded as Catherine had exhausted her RRSPs by 2015. This reduces her average income from 2013-2015 to $111,409.
[105] This average income for the past three years gives the court a starting point in projecting the fairest determination of Catherine's income moving forward. However, this figure would not be the fairest determination of her income for the following reasons:
a) Catherine's base income with her new employer is now $30,000 per annum less than with her previous employer.
b) Catherine may take a short while to build her commission sales up with the new employer.
c) The court recognizes that Catherine has also been going through emotional turmoil as a result of the separation and this process. This was confirmed in a report from her psychotherapist. This could have some adverse impact on her ability to earn income.
d) The court accepts Catherine's evidence that there has been an economic slowdown affecting her industry.
[106] Taking into account all of these considerations, the court finds that Catherine will earn or will be capable of earning $85,000 each year for the duration of the spousal support award that will be ordered, recognizing that the amount may fluctuate annually.
Part Five – Duration and Amount
5.1 Legal Considerations
[107] The Court of Appeal in Fisher v. Fisher, 2008 ONCA 11, stated that the SSAG, while only advisory, are a useful starting point to assess the quantum and duration of spousal support, once entitlement is established. The court wrote at paragraph [103]:
[103] In my view, when counsel fully address the Guidelines in argument, and a trial judge decides to award a quantum of support outside the suggested range, appellate review will be assisted by the inclusion of reasons explaining why the Guidelines do not provide an appropriate result. This is no different than a trial court distinguishing a significant authority relied upon by a party.
[108] Amount and duration are interrelated parts of the SSAG formula. See: Domirti v. Domirti, 2010 BCCA 472. Using one part of the formula without the other undermines its integrity and coherence. Extending duration beyond the formula ranges, for example, may require a corresponding adjustment of amount by means of restructuring (see SSAG Ch. 10) or a finding that the facts of the case require an exception (see SSAG Ch. 12). See: Spousal Support Advisory Guidelines: Revised User's Guide, supra, Chapter 7.
[109] In Mason v. Mason, supra, the Ontario Court of Appeal cautioned against courts defaulting to the middle range of the SSAG in a spousal support determination. Each case requires a contextual analysis. It wrote in paragraph 122:
[122] Further, in The Spousal Support Advisory Guidelines: A New and Improved User's Guide to the Final Version, the authors note, at p. 1 of the Introduction, that one of the challenges of the SSAGs "is the problem of unsophisticated use." The authors continue by stating:
For too many, using the Guidelines means just plugging the income figures into the software program, getting the range and choosing the mid-point. There is more to the advisory guidelines than this, and using them in this way can lead to inappropriate results.
[110] In general, awards in highly compensatory cases tend to be at the longer end of the durational range and those in many non-compensatory cases (e.g. where the purpose of the award is to provide a transition from the higher, marital standard of living) at the shorter end of the duration range. But in cases of illness and disability, extreme need may push awards to the longer end of the duration range or even beyond. The disability exception under Chapter 12.4 of the SSAG may result in an extension of support beyond the durational ranges. See: Spousal Support Advisory Guidelines: Revised User's Guide, supra, Chapter 7.
[111] The depth of need can be a strong non-compensatory factor pushing the amount of support higher in the range. See: Bastarache v. Bastarache, 2012 NBQB 75. If the recipient required training or education to improve their earning capacity, this can push the amount higher in the range for a short period of time. See: Jones v. Hugo, 2012 ONCJ 211.
[112] Debt payments by a payor may be considered in determining his or her ability to pay support. See: S.D. v. J.D., 2012 NBQB 237.
5.2 Analysis
[113] Based on Catherine's income of $85,000 per annum, the SSAG formula sets out figures of support at $643 per month at the low end of the range, $750 per month in the middle of the range and $857 per month at the high end of the range, with the duration of the order to be between 4-8 years.
[114] The following factors would lead to a longer duration and higher amount of award:
a) Meshell is economically very vulnerable.
b) Meshell is presently not working and has no source of income.
c) Meshell has significant health issues, both emotional and physical, which impair her ability to become self-sufficient.
d) Meshell's age will make it more difficult for her to become more self-sufficient.
e) Meshell is engaged in retraining, which will usually result in a higher amount ordered in the short-term.
f) Catherine's income was significantly higher on the day of separation than the amount projected for her moving forward. Meshell has not sought retroactive support based on this higher income.
g) Catherine did not pay any support to Meshell in 2016 when Meshell was in need of support.
[115] The following factors would lead to a shorter duration and lower amount of award:
a) Meshell does not have a compensatory claim for support.
b) Meshell has already received between $6,600 and $8,300 from Catherine, through either cash or third party payments. This has been net of tax.
c) Meshell's income on the date of separation was higher than when she started living with Catherine.
d) Meshell left the relationship with Catherine with a higher net worth, since she has a pension and some savings. (However, Meshell has had to deplete most of her savings to support herself.)
e) Catherine has a higher debt load than Meshell (although most of that debt arises out of a $55,000 vehicle purchased by Catherine after her separation from Meshell).
f) Meshell's health does not prevent her from doing any work. She admitted that her health issues are insufficient for her to qualify for ODSP at this time. She is usually well enough to work, but misses work when her health conditions flare. Meshell emphasized that she is a very good and capable employee when she is healthy. She was proud that she has been independent and self-supporting in the past and expressed confidence that her new career path will permit her to be independent in the future. Meshell's doctor reported that her diabetes is under control with the new treatment. Meshell deposed that her health has recently improved.
[116] The court finds that it can fairly determine spousal support within the ranges and durational limits set out in the SSAG. For the reasons set out in subparagraph 115 (f) above, the court finds that the illness exception in Chapter 12.4 of the SSAG does not have to be applied, nor does the order have to be restructured to obtain a fair result.
[117] However, the court will structure the award within the SSAG formula to give Meshell more support in the short-term to assist her in her transition to her new career. She will receive less towards the end of the order.
[118] Balancing all of the considerations set out above, the court will order Catherine to pay Meshell an award that averages out to $700 per month for 5 more years. The court considered spreading the order out over a longer period of time, but decided not to. This process has been difficult for both Catherine and Meshell and the benefits of finality outweigh any marginal benefits of spreading out the support payments over a longer period of time.
[119] The court will order Catherine to pay Meshell $800 per month for the first two years of the order, while Catherine transitions into her new field. The court might considered ordering more support in the short-term, but is aware that Catherine is also getting established in her new job. Catherine will then pay Meshell $700 per month for the following 2 years and then $500 per month for the final year of the order. Support will then terminate.
[120] The court recognizes the possibility that Catherine may earn income that is far different than what has been projected for her. Either party will have the right to seek a review of this order after July 1, 2019 and before December 31, 2019, if it turns out that Catherine's average income in 2017 and 2018 is either $10,000 more or less than the $85,000 per annum set out in this decision. The review period is limited, so that neither party will have the issue looming over them after December 31, 2019.
Part Six – Conclusion
[121] A final order shall go on the following terms:
a) Starting on January 1, 2017, Catherine shall pay Meshell support in the sum of $800 each month.
b) Starting on January 1, 2019, Catherine shall pay Meshell support in the sum of $700 each month.
c) Starting on January 1, 2021, Catherine shall pay Meshell support in the sum of $500 each month.
d) Support shall end on December 31, 2021.
e) Catherine or Meshell will have the right to seek a review of this order after July 1, 2019 and before December 31, 2019, if it turns out that Catherine's average income in 2017 and 2018 is either $10,000 more or less than the $85,000 per annum set out in this decision. The right to seek a review ends at the end of December 31, 2019.
f) Catherine and Meshell shall exchange their complete income tax returns and notices of assessment no later than June 30th each year.
g) A support deduction order shall issue.
[122] If either party seeks their costs, they shall serve and file their written costs submissions by December 5, 2016. The other party will have until December 19, 2016 to respond. The costs submissions shall not exceed 3 pages, not including any offer to settle or bill of costs. The costs submissions should be delivered to the trial coordinator's office on the second floor of the courthouse.
[123] The court urges Catherine and Meshell to first attempt mediation before bringing a review motion. This decision should give them some guidance as to how the court would determine a review motion.
[124] The court commends Catherine and counsel for Meshell on the presentation of their cases. In particular, the court commends Ms. Sharp, a law student, who was permitted by the court to make a well-presented closing argument for Meshell.
[125] I recognize how stressful the separation and this litigation has been on Catherine and Meshell. Both impressed me as being very good people in difficult circumstances. They conducted themselves with dignity and civility during a stressful proceeding for them. It is my hope that this decision will provide them with some certainty and that they can now move forward with their lives.
Released: November 22, 2016
Justice S.B. Sherr