DATE : November 5, 2021 COURT FILE NO. D31024/19
ONTARIO COURT OF JUSTICE
B E T W E E N:
BERNADETTE THOMAS-ALEXIS
RICHARD TEICHER, counsel, and EMMA TOMAS AND ALINA VALACHI, law students, for the APPLICANT
APPLICANT
- and -
RICHARD ALEXIS
ACTING IN PERSON
RESPONDENT
HEARD: OCTOBER 26, 2021
JUSTICE S.B. SHERR
REASONS FOR DECISION
Part One - Introduction
[1] This trial was about spousal support.
[2] The applicant is 62 years old. The respondent is 46 years old. They started living together on July 25, 2012. They were married on May 12, 2013 and separated on July 3, 2019. This was the first marriage for both parties. They had no children together.
[3] The applicant was unemployed when the parties started their relationship. She did not work during the marriage. She returned to school after the parties separated and has been taking a course to become a personal support worker (PSW). She is presently on an unpaid PSW internship and will start employment as a PSW just after December 15, 2021.
[4] The respondent is a carpenter. He works for his father’s business and also does freelance carpentry jobs.
[5] The applicant seeks spousal support of $1,400 per month for 3 years. In the alternative, she seeks spousal support of $1,000 per month for 5 years, and in the further alternative, she seeks spousal support of $859 per month for an indefinite period, starting on June 1, 2020.
[6] The applicant seeks to impute the respondent’s annual income at $75,000 for the purpose of the support calculation.
[7] The respondent agrees that the applicant is entitled to spousal support but submits that the amounts she is claiming are too high. He said that he could afford to pay $700 each month. He said that he does not earn anywhere close to $75,000 annually. Rather, he earns about $36,000 annually.
[8] The parties filed affidavits and financial statements as their direct evidence. They were permitted to give additional oral evidence. They cross-examined each other.
[9] To determine the issue of spousal support, the court has to determine the following:
a) Does the applicant have a compensatory basis for her support claim (the non-compensatory basis having been conceded by the respondent)? b) What income will the applicant earn in her new job after December 15, 2021? c) What income should be imputed to the respondent since he concedes that his income tax returns and business records do not accurately reflect his actual income? d) Should the court order spousal support that exceeds the ranges set out in the Spousal Support Advisory Guidelines (SSAG), and if so, for how long?
Part Two – Factual background
[10] The applicant is a native of Grenada. She immigrated to Canada in 1991. She is a Canadian citizen.
[11] The applicant initially was a child-care worker in Canada and then was employed as an elder-care worker for 10 years. She worked in nursing homes, hospitals and private residences.
[12] In November 2007, the applicant broke her left wrist and left thumb when hit by a car while crossing the street. She lost the strength in her left hand and wrist and was unable to work in elder care. She eventually received an insurance settlement for her damages. [^1]
[13] The applicant said that she has other health issues that have impaired her ability to work, including a congenital foot issue that causes leg pain, sore knees and a blood clot, discovered in 2019, that can sometimes cause her dizziness.
[14] The respondent is also a native of Grenada. He met the applicant in Canada in 2012 when he was working in Canada on a work visa. When his visa expired, the applicant sponsored his immigration to Canada.
[15] The respondent has a 15-year-old son from another relationship who lived with the parties during their marriage. He continues to live with the respondent. The respondent does not receive any child support from his son’s mother.
[16] During their marriage, the respondent worked long hours as a carpenter and financially supported his son and the applicant. The applicant looked after the home and cared for the respondent’s son. She did not look for work.
[17] The respondent paid support to the applicant after the separation. The applicant claims that she received $7,760 from the respondent until the end of May 2020. [^2] The respondent claims he paid her $9,330 during that time period.
[18] The application was issued on August 7, 2019.
[19] The respondent initially failed to respond to the application. The applicant sought to proceed to a final uncontested hearing. On December 3, 2019, Justice Carolyn Jones extended the time for the respondent to file his Answer/Claim. She asked for further evidence from the applicant and made disclosure orders regarding both parties.
[20] On February 4, 2020, the parties agreed to a further disclosure order.
[21] The case was then administratively adjourned due to the pandemic.
[22] The respondent filed his Answer/Claim on June 29, 2020.
[23] On March 15, 2021, after a contested motion, Justice Jones ordered the respondent to pay spousal support of $510 each month to the applicant, starting on June 1, 2020, with a payment of $40 each month on account of the arrears that were created because the respondent had made no support payments since June 1, 2020.
[24] On June 23, 2021, the court made a further disclosure order regarding the respondent. He did not comply with it.
[25] On September 15, 2021, Justice Jones placed the case on the trial sittings.
Part Three – Legal considerations
[26] Section 30 of the Family Law 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.
[27] Subsection 33 (8) of the Family Law Act sets out the purposes of spousal support and subsection 33 (9) sets out the considerations for the determination of the amount, if any, and duration of spousal support. The court has considered these subsections in making its decision.
[28] 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.
[29] The Court of Appeal in Fisher v. Fisher, 2008 ONCA 11 stated that before applying the SSAG, entitlement to support must first be established. The court also 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:
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.
[30] 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 or provide an explanation for why it isn’t doing so.
[31] In Mason, 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.
[32] 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.
[33] The SSAG are about more than just the ranges. Chapter 12 of The Spousal Support Advisory Guidelines: Revised User’s Guide, April 2016 by Professor Carol Rogerson and Professor Rollie Thompson (the guide) sets out a number of exceptions to the ranges that the court should take into consideration, if relevant. The relevant exceptions in this case are:
a) 12.4 – Illness and disability; and b) 12.7 - Basic needs/hardship.
[34] The guide sets out that the illness and disability exception will generally be relevant where the marriage is short-to-medium length and there are no children in the care of the recipient, but the disability is long-term. These will be cases that fall under the without child support formula or the custodial payor formula. The formulas produce ranges for amount and duration that may seem “too low’ or “too short”, certainly to recipients. [^3]
[35] The guide explains that the basic needs/hardship exception recognizes the specific problem with shorter marriages (1-10 years) under the without child support formula (and the custodial payor formula which is built around the without child support formula) where the recipient has little or no income and the formula is seen as generating too little support for the recipient to meet his or her basic needs for any transitional period that extends beyond the interim exception. The exception allows for awards higher in amount than the SSAG ranges, enough to meet basic needs, but does not allow for an extension of duration. This exception has been primarily applied on temporary support motions. [^4]
Part Four – Entitlement to spousal support
[36] The respondent does not dispute that the applicant has a non-compensatory entitlement to spousal support. She suffered economic hardship as a result of the breakdown of the relationship. She had been totally reliant on the respondent for support during their marriage. The respondent had been aware of her medical issues when he met her and accepted them. There has been a significant disparity in their incomes since their separation.
[37] The applicant depleted her remaining savings of $15,000 in her TFSA account to support herself after the separation. There was nothing else left from her personal injury settlement.
[38] The court also finds that there is a non-compensatory element to the applicant’s spousal support entitlement. This is significant because it is a factor that supports increasing the amount of the spousal support award. See: Wharry v. Wharry, 2016 ONCA 725, par. 95.
[39] In an effective cross-examination by Ms. Tomas for the applicant, the respondent agreed that the applicant:
a) Took care of the home and kept it neat and tidy. b) Did all the laundry and cleaning. c) Paid most of the bills. d) Prepared all his meals. e) Took care of his son from the beginning. f) Cooked for his son and ate with him. g) Ensured that his son had clean clothes. h) Took his son to medical appointments. i) Picked up and dropped off his son at school. j) Arranged with the school for services for his son when his son had behavioural issues. k) Helped his son with his homework. l) Arranged a tutor for his son.
[40] The respondent agreed that the applicant did all this while he worked long hours and was not at home.
[41] The court finds that the respondent has financially benefitted due to the roles that the applicant assumed in the marriage. Further, her marketability was reduced because of these roles, as she delayed her return to the workforce. She will likely only receive entry level wages at her new job.
Part Five – The applicant’s income
[42] A basic principle of spousal support law is that the recipient must make reasonable efforts to become economically self-sufficient. See: Dingle v. Dingle, 2010 ONCJ 731.
[43] The court finds that the applicant has made reasonable efforts to become economically self-sufficient. The applicant applied for many jobs in elder care between July 2020 and November 2020. She was unable to find employment. She enrolled in the PSW course at Seneca College. She has been on her unpaid internship during the fall of 2021, working eight-hour shifts, three days a week. The applicant deposed that she has been able to physically manage this workload.
[44] The applicant applied for and received the Canada Pension Plan credit division for the time that she was married to the respondent. She also applied for and received student loans and grants in 2021.
[45] The court finds that the applicant’s 2020 income was $1,395. This was the amount set out in her notice of assessment.
[46] The applicant deposed that in 2021 she received a student grant of $1,025. Student grants and bursaries, which do not need to be repaid, can be viewed as analogous to income. See: Lewi v. Lewi. The applicant’s student grant will be added to her income for support purposes. The court will not include the money she received for student loans in her income because that money must be paid back to the government. See: Bhandal v. Bhandal, (1999) 48 R.F.L. 4th 39 (Ont. Ct. General Division); K.D.C. v. M.C.C., 2007 ONCJ 127; Pitcher v. Pitcher, [2002] N.J. No. 358. The applicant’s income for support purposes in 2021 will be set at $2,420.
[47] Everyone was surprised at trial when the applicant informed the court that she had accepted an offer of employment to continue working as a PSW after the completion of her internship on December 15, 2021.
[48] The applicant’s trial material focused heavily on her argument that she is medically unfit to work and that she will only have annual income of $1,395 from CPP on an ongoing basis. This was the position taken in her October 7, 2021 trial affidavit and in a well-drafted factum. Her draft order and SSAG calculations were all based on this premise.
[49] The respondent’s proposal to pay spousal support of $700 each month was also based on this premise. The theory of his case was that the applicant’s medical evidence did not establish that she was completely unable to work. Further, if she was medically unable to work as a PSW, why was she wasting her time taking this course when she could be retraining in a field where she could perform the work?
[50] The respondent did not need to pursue these arguments any further at trial since the applicant had found employment. He agreed that the applicant had taken reasonable steps to become self-sufficient.
[51] The applicant, when questioned by her counsel, testified that she had been offered this employment and had accepted it on September 7, 2021 – one month before she swore her trial affidavit. She did not mention that she would start working at this job in her affidavit. The applicant confirmed, when questioned by her counsel that the job was still available and that she had accepted it. [^5]
[52] The applicant was unable to tell the court how many days she will work, the length of the shifts and her rate of pay for this job. She expects that she will not work any less than the hours she is working now – 24 hours each week. She hopes to work even more shifts. She feels that she can physically manage these hours.
[53] The applicant will be an entry level PSW. In the absence of further evidence, the court will assess her income at 24 hours each week at $20 per hour. This comes to annual employment income of $24,960. The respondent agreed that this would be a reasonable income figure to use for the applicant starting in 2022. The applicant will continue to receive CPP income of $1,395 annually that should be added to her income starting in 2022. The applicant’s 2022 income will be assessed at $26,355 for support purposes.
Part Six – The respondent’s income
[54] The respondent’s evidence about his income was all over the map.
[55] His notices of assessment set out the following annual income:
2017 - $17,464 2018 - $12,487 2019 - $10,400 2020 - $0
[56] The respondent filed no financial disclosure for 2021 despite court orders to do so.
[57] The respondent deposed in his May 27, 2020 financial statement that his annual income was $22,080. In his December 23, 2020 financial statement, he deposed that his annual income was $40,080 (despite declaring no income in his income tax return). He confirmed in an affidavit dated June 16, 2021 that his financial statement of December 23, 2020 remained accurate.
[58] At trial, the respondent testified that his annual income was about $36,000.
[59] In his affidavit sworn December 23, 2020, the respondent deposed at paragraph 21 that:
My income between January 2020 to August 2020 was in fact between $25,075 and $40,120. This can be extrapolated to an income between $37,612 and $60,180 for the 2020 year.
[60] The respondent’s evidence about his work hours was just as inconsistent. He said that he worked 20 hours each week for his father and a few hours each week doing freelance carpentry work. He said that he could work up to 30 hours each week for his father. He did not provide a logical explanation about why he is not working more hours.
[61] The respondent provided a chart of hours he claimed that he had worked from 2018 to 2020. The chart represented that he was working about 16 hours each week. The respondent acknowledged that the chart was missing jobs that he had done. The chart was not a reliable indicator of how many hours the respondent works or how much income he earns.
[62] The respondent’s expenses set out in his financial statements were far greater than the income he was reporting. He did not show any corresponding increases in debt in his financial statements to explain how he supported himself.
[63] The respondent acknowledged that his tax returns were not an accurate reflection of his income.
[64] The respondent also acknowledged that he is sometimes paid in cash and sometimes pays for materials in cash. He acknowledged that this is not reflected in his records.
[65] The respondent did not provide a meaningful explanation of his actual income and expenses. Despite court orders, he did not provide the relevant documentation necessary to accurately assess his income.
[66] A self-employed person has the onus of clearly demonstrating the basis of his or her net income. This includes demonstrating that the deductions from gross income should be taken into account in the calculation of income for support purposes. See Whelan v. O’Connor, [2006] O.J. No. 1660, (Ont. Fam. Ct.).
[67] The self-employed have an inherent obligation to put forward not only adequate, but comprehensive records of income and expenses, from which the recipient can draw conclusions and the amount of support can be established. See: Meade v. Meade (2002), 31 R.F.L. 5th 88 (SCJ). This includes the obligation to present information in a user-friendly fashion. A recipient should not have to incur the expense to understand it. See: Reyes v. Rollo.
[68] When a self-employed person fails to comply with these obligations an adverse inference will usually made, and income will be imputed to them. See: Maimone v. Maimone, [2009] O.J. No. 2140 (SCJ).
[69] The court draws an adverse inference against the respondent.
[70] This leads to the issue of what annual income should be imputed to the respondent for support purposes. The applicant submits it should be $75,000. The respondent submits that this amount is far more than he has ever earned.
[71] There are several different ways to assess the respondent’s income.
[72] The court could take the amount the respondent deposed that he was earning in his December 23, 2020 financial statement ($40,080) and gross this amount up since he declared no income in 2020. [^6] This would result in a 2020 income of $47,680.
[73] The court could also pick an income figure between $37,612 and $60,180, as set out in his December 23, 2020 affidavit and gross it up. The mid-point in this income estimate is $48,896. After being grossed up, this results in 2020 income of $60,357.
[74] The court could look at the average wage for carpenters in Toronto. Both parties provided evidence from internet sites about this. The applicant seeks to impute the respondent’s income at the highest end of that wage range – $65,000 to $75,000 per annum. That would be unfair. The respondent has little education and is not a sophisticated businessman. Numbers clearly confused him at trial. It is highly unlikely that he is at the high end of earnings for carpenters. Further, the parties did not lead a lifestyle commensurate with this level of income when they lived together.
[75] The average wage for carpenters in Toronto from the website provided by the respondent is $51,400 per annum. The respondent has over twenty years of experience as a carpenter and should be earning slightly more than the average amount.
[76] The respondent bought a truck in 2020. He represented in his application to the financing company that his annual income was $60,000. The respondent claims that he was advised to exaggerate his income to obtain the necessary financing. Combined with his false income tax reporting, this explanation did not help his credibility.
[77] The applicant submitted that based on his job chart submitted for 2020, the respondent was on track to earn about $75,000. However, that would be a gross income figure. The court accepts that the respondent would have legitimate business deductions for supplies, materials and transportation expenses. It is the respondent’s net income that should be used for support purposes.
[78] The court finds that the respondent is earning, after taking into consideration the gross up of income, or that he is capable of earning, between $55-60,000 annually. For support purposes, the court will impute his annual income at $57,500.
Part Seven – What amount of spousal support should be paid?
7.1 Prior to June 1, 2020
[79] Neither party provided documentary evidence regarding the payments the respondent paid to or on behalf of the applicant from July 2019 until May 2020. [^7] The respondent has been aware for many months about the applicant’s position about the total payments he made. The onus was on him to provide proof that he had paid more. He did not provide this proof.
[80] Further, where their evidence conflicted, the court preferred the evidence of the applicant to the respondent. This is because the respondent has admittedly made false representations about his income to Revenue Canada and to the company that financed his vehicle.
[81] However, this determination will have little impact on the court’s analysis. According to the applicant, the respondent paid $7,760 over these 11 months – an average of $705 each month. The court finds that this met the respondent’s spousal support obligation to the respondent for this time period. As will be set out below, these payments exceeded the high range in the SSAG.
7.2 After June 1, 2020
[82] The court finds that it is appropriate to conduct its support analysis after June 1, 2020 in two stages. First – for the period from June 1, 2020 until the end of 2021, when the applicant had little income and was retraining (the first time period). And second – the period after January 1, 2022 when the applicant will be employed (the second time period).
[83] The applicant filed a variety of SSAG calculations. However, they failed to account for the respondent’s son living in his home and being supported by him. This meant that the SSAG ranges submitted were too high.
[84] A software calculation for 2021 generates SSAG monthly support in the low range of $403, the mid-range of $470 and the high range of $537. This is based on the applicant’s 2021 income being $2,460, the respondent’s income being $57,500 and the respondent’s son living with the respondent. [^8]
[85] Based on the applicant’s income increasing to $26,355 as of January 1, 2022, and the other factors remaining the same, the software calculation generates SSAG monthly support in the low range of $193, the mid-range of $225 and the high range of $258.
[86] The applicant asks the court to apply the illness and disability exception set out in section 12.4 of the SSAG and the basic needs/hardship exception set out in section 12.7 of the SSAG and order an amount in excess of the high SSAG range.
[87] This argument has some merit for the first time period. This is when the applicant’s need was the greatest. She had nominal income and was retraining. She had both a compensatory and non-compensatory claim for support. The court finds that the SSAG ranges do not generate a fair amount of support for the first time period.
[88] However, there are factors that dictate against deviating too much from the SSAG ranges. The respondent paid the applicant an average of $705 each month from July 3, 2019 until the end of May 2020. This was in excess of the high SSAG range. The respondent has been supporting his son since the parties separated. There is not a lot of money to go around here. Lastly, the applicant no longer has an immediate need for support that is significantly in excess of the SSAG ranges. She received student loans to make ends meet. Repayment of those loans will be a future obligation that can be considered during the second time period.
[89] The court finds that it is appropriate to apply the SSAG exceptions and order support in excess of the high SSAG range for the first time period, but not to the extent sought by the applicant. The court orders that the respondent shall pay the applicant spousal support in the amount of $750 each month for the first time period.
[90] The court sees no basis to deviate from the SSAG ranges for the second time period starting on January 1, 2022. The illness/disability exception no longer applies. Nor does the basic needs/hardship exception, as the applicant will be working part-time.
[91] Several factors favour ordering support towards the lower end of the SSAG ranges after January 1, 2022. These include:
a) The respondent made payments to or for the applicant from July 3, 2019 until the end of May 2020 that exceeded the high range in the SSAG. b) This order requires the respondent to pay spousal support higher than the high range in the SSAG for the first time period. c) The payments in paragraphs a and b above satisfy the applicant’s compensatory claim for spousal support. d) The respondent is not seeking child support for his son from the applicant. Based on the evidence both parties provided at trial, the applicant would likely be found to be a parent with a support obligation for the respondent’s son pursuant to the Family Law Act.
[92] The court balanced these factors against the reality that the applicant’s health is fragile. There may be some variability in her income due to her age and health issues. The court also considered that the applicant had to deplete her savings and obtain student loans because the respondent stopped paying her anything from March 2020 until Justice Jones made her temporary order on March 15, 2021.
[93] Balancing these considerations, the court will order the respondent to pay the applicant spousal support of $225 each month starting on January 1, 2022.
Part Eight – Payment of support arrears
[94] This order will create support arrears for the respondent. He will be permitted to pay these arrears over a reasonable period of time. However, since the spousal support payment is being significantly reduced as of January 1, 2022, the respondent will have more money available to him to pay these arrears. There is no reason why the applicant should have to wait too long to receive support that is owing to her.
[95] Starting on January 1, 2022, the respondent is to pay the applicant the sum of $375 each month for the support arrears until they are paid in full.
[96] A final order shall go as follows:
a) There shall be no order for spousal support prior to June 1, 2020. b) The respondent shall pay the applicant $750 each month for spousal support starting on June 1, 2020. This changes the order of Justice Jones dated March 15, 2021. c) The respondent is to be credited only with support payments made after June 1, 2020, as reflected in the records of the Family Responsibility Office. d) Starting on January 1, 2022, the respondent shall pay the applicant spousal support in the amount of $225 each month. This will be paid for an indefinite (unspecified) duration, subject to variation and possibly review. e) Starting on January 1, 2022, the respondent shall pay the applicant the amount of $375 each month towards the arrears created by this order, until such time as these arrears are paid in full. f) Support deduction order shall issue. g) The Director of the Family Responsibility Office is requested to amend its records in accordance with this order.
[97] To be clear for the respondent, he should make a support payment of $750 on December 1, 2021 to the Family Responsibility Office. Starting on January 1, 2022, he should make support payments of $600 each month to the Family Responsibility Office - $225 of that payment will be for ongoing support and $375 will go towards paying down his support arrears. Once the support arrears are paid off, he should make support payments of $225 each month to the Family Responsibility Office.
[98] The software calculations for the SSAG ranges referred to in this decision will be attached. If either party believes there has been an inputting error, they are to serve and file with the trial coordinator’s office a Form 14B setting out any error by November 15, 2021.
[99] If either party seeks costs, they are to serve and file written submissions at the trial coordinator’s office by November 19, 2021. The other party will then have until December 2, 2021 to respond. The submissions should not exceed three pages, not including any offer to settle or bill of costs.
[100] The court commends the law students who assisted the applicant’s counsel for their hard work and excellent presentations.
Released: November 5, 2021 _____________________ Justice S.B. Sherr
Footnotes
[^1]: The applicant deposed that she received $103,000. Legal fees were deducted from this amount. [^2]: Most of this amount was from the respondent paying the applicant’s rent. [^3]: See: Subsection 12 (d) of the guide – page 62. [^4]: See: Subsection 12 (i) of the guide – page 67. [^5]: The applicant was transparent about her employment when questioned by the court. She is not a sophisticated litigant. The court does not find that she was attempting to deceive the court. [^6]: Unreported income is grossed up to achieve consistency between payors who pay less income taxes and therefore have more funds available with which to pay support. See: Riel v. Holland, [2003] O.J. No. 3901 (CA); Orser v. Grant, [2003] O.J. No. 1669 (SCJ); Sarafinchin v. Sarafinchin, [2000] O.J. No. 2855 (SCJ). [^7]: The respondent stopped paying anything for the applicant after May 31, 2020. [^8]: The court recognizes that the ranges would be marginally higher in 2020 because the applicant did not receive the student grant. This will not affect the court’s analysis as the court will be ordering spousal support in excess of the high range of the SSAG for 2020 and 2021.