Court File and Parties

ONTARIO COURT OF JUSTICE DATE: 2022 07 11 COURT FILE No.: Thunder Bay FO-19-157-01

BETWEEN:

Deborah Dalseg Applicant

— AND —

Ross Johnson Respondent

Before: Justice D.J. MacKinnon

Heard on: January 20 & 21, March 29 & 30, 2022 Reasons for Judgment released on: July 11, 2022

Counsel: L. Tocheri.................................................................................... counsel for the applicant(s) M. Cupello.............................................................................. counsel for the respondent(s)

MacKinnon, D. J.:

[1] The Applicant and Respondent began to cohabit in May of 1997. In August of 2009 they married. They separated in April of 2015. At the time of the hearing, the husband was 63 years of age and the wife was 57 years of age.

[2] The Applicant wife (Ms. Dalseg) left her job with the Ontario government in order to work for and run the medical offices of the Respondent husband (Dr. Johnson). Dr. Johnson continues to be a licensed medical doctor.

[3] Prior to the time of the separation of the parties, the business of Dr. Johnson suffered losses resulting in a declaration of bankruptcy by him and by his management company. Not only had the parties been building a million dollar home at the time, but the medical practice included other doctors. Dr. Johnson had previously had another bankruptcy at the end of his first marriage, according to Ms. Dalseg.

[4] Following the separation from Ms. Dalseg, Dr. Johnson continued to work in order to pay off any creditors he had as he said it was a “moral obligation”. Ms. Dalseg, whose finances were tied up with those of Dr. Johnson, also had to declare bankruptcy. Unlike him, she remains undischarged as a result, she alleges, of his termination of spousal support and her inability to pay off her creditors.

[5] The parties entered into a separation agreement dated November of 2015 which established the spousal support which is the subject of this litigation. The support was paid for three years when the husband stopped paying. The husband requests that the spousal support be reduced to zero, along with any arrears. The wife resists these attempts.

[6] This matter came on for hearing before me. The parties agreed that I should hear this matter even though I heard the proceeding involving the enforcement of the support by the Family Responsibility Office, as the Statement of Arrears in that proceeding is deemed correct and not determinative of the issues of entitlement or variation in this proceeding.

The Separation Agreement

[7] Each of the parties were represented by counsel and received independent legal advice at the time of entering into the separation agreement.

[8] Dr. Johnson suggests that he did not really understand the document or get advice, but he produced no evidence to substantiate same. He was represented by an experienced and qualified lawyer and signed his acknowledgement that he was fully aware of the nature and consequences of the terms of the agreement. He followed the separation agreement. I do not find that he was impaired in any way in his ability to enter into this agreement and that his subsequent behaviour supports that he understood the terms of the agreement.

[9] The key support provisions are as follow:

Spousal Support – The Husband will pay spousal support to the Wife of $10,000 per month commencing October 20, 2015 and on the 20th day of each month thereafter, until varied. The Husband agrees to provide the Wife with post-dated cheques for spousal support commencing November 20, 2015 to and including December 20, 2016 and thereafter as set out below. In addition, the Husband will pay to the Wife as periodic support, for the month she receives it, a further sum of $7,000 on the execution of this Agreement by her.

[10] The agreement further provides for review:

Review of Support – The parties agree that spousal support and the third party payments, if applicable, shall not be reviewable or varied for any reason for a period of three years from January 2016 (earlier if the Husband is no longer licenced to practice medicine due to his retirement). Spousal support and the third party payments shall be reviewed and varied on a prospective basis only, from and after January 2019. Neither party has any obligation to inform the other of changes in their financial position (earlier if the Husband is no longer licenced to practice medicine due to his retirement) unless and until the review provisions are implemented. Until spousal support and/or third party payments are varied by an amending agreement or a court order, the Husband will continue to pay spousal support and/or third party payments, if applicable, pursuant to the terms of this Agreement…

[11] The third party payment was a payment of $500 per month for the boarding of the horse of the wife until it passed. This is not the subject of this court matter.

[12] The husband stopped paying support in April of 2019.

[13] The agreement is more interesting for what it does not contain. It does not indicate whether the support is compensatory or needs based. There is no termination date to the payment of support. There can be no review of the support until after three years, however, the support continues until varied. The court is granted authority by the separation agreement to review the support which was agreed to by the parties.

[14] I find that the separation agreement which was filed with the court for enforcement in May of 2019 set out the entitlement and the rate of spousal support for the Applicant. The agreement allowed for review of the support, but that the payments were to continue until varied by the court or by agreement. While there is a reference to retirement caused by the loss of the licence of the husband to practice, there is no other provision for a variation based on retirement.

[15] The Family Law Act in s. 30 notes the following:

Setting aside domestic contract

(4) The court may set aside a provision for support or a waiver of the right to support in a domestic contract and may determine and order support in an application under subsection (1) although the contract contains an express provision excluding the application of this section,

(a) if the provision for support or the waiver of the right to support results in unconscionable circumstances;

(b) if the provision for support is in favour of or the waiver is by or on behalf of a dependant who qualifies for an allowance for support out of public money; or

(c) if there is default in the payment of support under the contract at the time the application is made. R.S.O. 1990, c. F.3, s. 33 (4) ; 2006, c. 1, s. 5 (1)

[16] Setting aside the separation agreement would require proof that there had been a material change in circumstances since the time that the agreement was entered into or that the agreement resulted in unconscionable circumstances or there was default in the payment of support set out in the contract. The person claiming that there was default cannot of course be the defaulter.

[17] I conclude that the court can re-consider the spousal support set out in the separation agreement and vary such amount if warranted.

Position of the Husband

[18] The husband says that he decided voluntarily to retire from the practice of medicine. Doctor Johnson continues to be licensed and ensured that he was referred to as “Doctor” during these proceedings. However, he does not work and reports his income as zero. He suggests that he lives off of the avails of others.

[19] The reasons Dr. Johnson has given for leaving the practice of medicine include:

1. There is no place of him in the practice of medicine because he does not know how to bill and work electronically;
2. The practice of medicine differs now in its patient care in a way contrary to his beliefs;
3. He is an alcoholic who might revert to drinking if forced to practice medicine;
4. He needs a better lifestyle for his health.

[20] There was no evidence to support the first proposition that Dr. Johnson cannot practice medicine because he cannot do electronic billings and filings. Dr. Johnson did not contact his Association or OHIP to see if any accommodation could be made for him.

[21] He has not applied for any jobs at all as he decided to retire, so he was unable to testify as to any accommodations that an employer would make for this issue. Given the general shortage of physicians in the Northwest, which I take judicial notice of, it is more likely that an employer would accommodate this issue so that the doctor could practice.

[22] Similarly, in regard to the methods of delivering care, no evidence has been provided to support the conclusion of Dr. Johnson that he cannot provide the level of direct patient care he feels is necessary. In fact, Dr. Johnson has worked as a volunteer physician at a local seniors’ home, but he gave no evidence from that experience that would suggest an inability to provide the care he wishes to offer. For example, there was no data or directives from any employer that a set number of patients needed to be accommodated in a set period of time, thus reducing the care provided to each. His conclusion is not supported by evidence.

[23] A considerable amount of time was spent in this case on the issue of the alcoholism of Dr. Johnson. He has acknowledged he is an alcoholic, and over the period of his practice he had three relapses, the last being about eight years ago. It lasted a couple of weeks. His counsellor and support, Ms. Tiina James, gave evidence that he is cognizant of the need to maintain his sobriety. She did cast aspersions against Ms. Dalseg, however, it is obvious that her sole source of information as to the dilemmas of Dr. Johnson was he himself. He is also a regular user of cannabis.

[24] The Respondent did call Dr. Greg Carfagnini to give evidence. He acts as an addiction specialist. He identified that he was not an independent medical examiner who would conduct an in-depth assessment to determine the capacity of the Respondent husband to work.

[25] Dr. Carfagnini was surprised that Dr. Johnson came to him six weeks before this hearing, especially as the addicted individuals he deals with are usually not in remission at the time of their consultation, unlike Dr. Johnson. In addition, Dr. Carfagnini made it clear that he takes his patients at the point where they are and does not diagnose them. Thus, he could not provide a diagnosis in regard to Dr. Johnson or predict any impact on him of work. He would be there to support his patient whether he was working or not.

[26] Many alcoholics who acknowledge their disease are able to manage it. Except for a couple of periods, Dr. Johnson was able to maintain himself even during the collapse of his practice, separation and the subsequent bankruptcy. While it is always a possibility that an alcoholic could relapse, it does not seem to be a probability in this case.

[27] The doctor also felt that it was important that he have a healthy lifestyle. No one can argue with this idea, but other working people are able to establish such a lifestyle without quitting work – because they can’t. I do not have any evidence before me that such a change is critical to his survival or how work acts as an impediment to a healthy lifestyle.

[28] In regard to these reasons to quit working as a physician; that is the expectations of electronic billing, patient care and alcoholism, and having a healthier lifestyle, there is no factual underpinning to these reasons sufficient for the court to agree with Dr. Johnson that they are impediments, or indeed that they necessitate that he quit the practice of medicine.

Failure to Pay the Agreed Support

[29] Following his decision not to practice medicine, Dr. Johnson suddenly stopped paying any support in April of 2019. Dr. Johnson voices a number of reasons for not paying support to Ms. Dalseg including that:

a. he needed to see the end of the tunnel; b. he is waiting for a higher power to give him direction; and c. the payment of support could be used by the wife for her alcoholism and he wants to save her.

[30] It would have been easy for the separation agreement to set a termination date for spousal support so that Dr. Johnson could see the “end of the tunnel”. The most that can be said is that there is certainty of the payments for three years without review and that the support continues until varied by a court or by agreement. This was what he agreed to.

[31] I make no comment in regard to his second reason for termination of support. We all have to continue on even if there is no sign.

[32] Dr. Johnson attempts to show that he was altruistic in regard to terminating the support for the health of his ex-wife. If such a situation existed which required careful management of her funds to keep her from an alcoholic lifestyle, protective conditions would have been contemplated at the time of the separation agreement, closer to the last time that the parties resided together. There is no evidence supporting that Ms. Dalseg has an alcohol problem.

[33] In his examination for discovery, Dr. Johnson said the following:

I chose to voluntarily retire at this time based on where I was in my life…I had, thoughts that I always wanted to do another career or something else. I’ve been practising medicine for almost 40 years and there are other interests that I have in my life that I might want to pursue…I have no doubts, I, I owe nobody nothing, so far as I know. Taxes are paid so I am in the best financial situation that I’ve ever been in…Right now… (p.14, line 7 to 29)

[34] Dr. Johnson was not required to retire by any other entity other than his own decision to do so. I have determined, in all of the circumstances, that Dr. Johnson decided to retire for the purpose of avoiding paying spousal support.

Entitlement

[35] Ms. Dalseg was entitled to spousal support at the time of the separation agreement. The agreement is silent as to whether the support is compensatory or non-compensatory.

[36] During cohabitation and marriage, Ms. Dalseg worked for the doctor at his office. She gave up her job with the government in order to assist him. Just as consideration is given for spouses who put their partner through university to become professionals, Ms. Dalseg was able to assist Dr. Johnson to practice medicine and support himself over the years.

[37] Upon the termination of the spousal support, Ms. Dalseg suffered a change of her lifestyle. Her income dropped from $120,000 per year on spousal support to zero overnight. She could not keep her horses. She could not find a job because her work for Dr. Johnson was not recognized professionally. The house was gone. She has no savings or pension.

[38] The wife has had to obtain retraining for work as a Community Health Worker which has irregular hours and lower payment. She has tried to be self supporting. She has a number of medical conditions which make work a difficulty. Ms. Dalseg has fulfilled her duty to become self supporting as much as possible. The bankruptcy is still not resolved.

[39] In s.30 of the Family Law Act, the obligations of the parties are set out:

Obligation of spouses for support

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. R.S.O. 1990, c. F.3, s. 30 ; 1999, c. 6, s. 25 (3); 2005, c. 5, s. 27 (7) .

[40] The actions of Ms. Dalseg to obtain training and support herself, in my view, mean that she has met her obligations under the Family Law Act. Her husband has an obligation to support her to the extent that she cannot support herself. This is called non-compensatory support.

Ability to Pay

[41] Dr. Johnson’s pleadings argue that he is unable to pay support because his income is zero. However, his evidence at the hearing is that he commenced collecting social assistance of $770 per month in June of 2021. The Respondent, as concluded above, is capable of working. Ms. Dalseg says that her husband warned her that he had a girlfriend that was more than happy to support him and he would impoverish himself to avoid payments to her.

[42] There are numerous other jobs in the medical field including seniors’ homes, public health, labs which could use the medical knowledge of the Respondent husband. In addition, it seems that there are a number of different administrative situations for doctors; contract positions, staff doctors, and like Dr. Carfagnini, doctors to deal with addictions.

[43] For much of the period of this litigation, Dr. Johnson has worked as an attending physician at a local long term care facility, but chooses to do so without remuneration. The simple fact is that Dr. Johnson did not seek out any different practice modalities because he decided to retire.

[44] There has been no evidence presented that supports the concept that the Respondent husband is unable to work. He suffers from no medical condition impacting on his ability to work. Regarding his alcoholism, there is no evidence that it is an active consideration or that it would eliminate his ability to work as a physician, as he has been an alcoholic all the years of his practice, which did not impede his ability to earn income. In fact, to a question put to him at his examination for discovery, he answered as follows:

Q: So some people are unable to work, if they’re disabled or medically are unable to do so. Have you been diagnosed with anything to do that… A: No. Q:…prevent you… A: It’s a personal choice. (p.17, question 83)

[45] In the leading case of Bater v. Bater, 2018 ONSC 1489, the facts were very similar to those at bar but dealt with a lawyer who decided to retire. The court said the following:

The Respondent’s position is that he chose to retire at age 62 because of medical problems. He has not provided any medical evidence that he is unable to work due to medical problems….The Respondent’s retirement at age 62 was planned by him. I find that the Respondent voluntarily chose to retire from the practice of law…In addition, I find that there is no certainty that the Respondent will retire from all employment as a lawyer…

[46] The husband was found to have the ability to pay spousal support based on his profession. This is similar to the circumstances in this case. The Respondent husband has not shown evidence that he is unable to work, the retirement was planned by him and there is no proof that he could not return to medical practice at any time. Ms. Dalseg reports that her husband previously said that he would be working into his 80’s like other physicians.

[47] The doctor says that, in order to pay his yearly licence fee, that in one year the funds came from a short contract he took flying into remote Indigenous communities to teach about Covid protocols. He also has worked at the long term care home as a physician. Other funds that he needs he says come from his girlfriend.

[48] In addition to his medical licence, Dr. Johnson completed training in operating heavy equipment. However, he did not look for a job in this field.

[49] In all of the circumstances, the Respondent husband has the ability to pay spousal support. I reject that he cannot work for medical reasons.

[50] Dr. Johnson’s voluntary retirement ignores that he does have a financial obligation to meet in regard to his wife. If the doctor had purchased a new car and then decided to retire, the finance company would expect him to continue to make the monthly payments. Similarly, as he agreed to take on the financial obligation of paying support, the decision to retire in this case should have no impact on that obligation.

Type of Support

[51] The separation agreement is silent in regard to the type of support being paid to Ms. Dalseg. While she worked for her husband, she did scheduling, the government billings, hiring, training, managing aspects of the walk-in clinic, handled purchases and reconciling of the books. This later included doing this work for other doctors at the clinic. Her work for her husband was at times seven days a week.

[52] Ms. Dalseg testified that the parents of the Respondent husband had handled these tasks prior to her involvement. It also included paying his child support and ongoing expenses from his prior marriage, taxes, utilities. She said that her husband never wanted to be involved with the day to day finances. He did not want to know if the hydro was paid or not.

[53] At the end of her work, Ms. Dalseg does not have a pension, savings, life insurance, RRSP’s, a job or a profession. She reports that it is difficult to work with her medical conditions including pancreatitis and employers are skeptical of hiring her because of her age.

[54] The husband in this proceeding questions why Ms. Dalseg did not take steps during the period that he was paying support, which he estimates at $490,000 over 49 months, to become self-supporting or to obtain training. His counsel argues that it must have been contemplated by the parties as the matter could be reviewed after three years which might have resulted in no further support being paid. He cites her trips to the Caribbean as an example of wasted money.

[55] Ms. Dalseg counters that she understood that the support would continue and would not be changed. She says that the bankruptcy trustee took half of her monthly income in any event.

[56] There is some validity in both views. However, in reviewing the separation agreement, the payment of the support is the negotiated settlement of this issue. The separation agreement does not suggest in any way that the purpose of the support and the review mechanism, was to allow the wife to obtain retraining and self sufficiency during the three year period. While she may have been somewhat foolish not to see the possibility of the termination of the support upon review, or the current situation of the refusal to pay by the husband, there is nothing in the agreement compelling her to become self sufficient.

[57] At the time of the separation the business of the practice of medicine by Dr. Johnson had collapsed. Ms. Dalseg’s income was non-existent, but her husband continued to have a viable medical license. Their relationship of eighteen years and her financial situation at the time of the separation agreement, speak to a needs based support agreement at that time.

[58] It seems to me that the support agreed to in the separation agreement is both compensatory to reflect the contributions of the wife and her economic dependence and losses suffered by her by the breakdown of the marriage, and also non-compensatory based on her needs at the time of the separation.

Level of Support

[59] As indicated above, the Applicant wife has met her obligation to support herself. It is clearly a struggle without the spousal support.

[60] What is the standard of living that the wife is entitled to? She is entitled to a standard of living as close as possible to that which she had while married. For example, she no longer owns a home, she drives a 1992 vehicle and cannot take holidays. Every penny of income is important. She provides accommodation to her daughter who attends university.

[61] The husband lives in a large lakefront house with a student renter. The house was purchased by the doctor’s son with an inheritance received from the mother of Dr. Johnson. Its value is reported to be about $700,000. However, the son does not live in the house. Although this appears as a contrivance, its only relevance is related to the standard of living he maintains and whether he has to pay rent as an expense.

[62] The doctor says that the rent paid by the student is given to Mark, his son. This is handled by his girlfriend Elizabeth Hughes who resides there a few days a week. Asked if he pays rent himself, he did not answer the question although asked twice, but answered both times that Elizabeth manages that for him.

[63] The level of support for his wife is $10,000 per month or $120,000 per year. In his negotiation, the agreement specifies that the said support is subject to deduction by him and inclusion by her as income. After taxes there would be about $85,000 or $7,000 per month. The bankruptcy trustee of the wife would take part of this.

[64] The doctor’s income in evidence was $518,029 for 2019 and $393,008 for 2018. I note from his examination for discovery, that he also transferred $90,000 of assets to his son in 2019. The wife says that originally the amount to be paid per month was $20,000 but she agreed to lower it at the request of her husband. Even a cursory review of the support under the Spousal Support Advisory Guidelines based on the income from 2019 suggests that the $10,000 per month payment is on the lower end of the range. In addition, the length of the marriage and cohabitation represent indefinite support.

Decision

[65] Is the voluntary retirement of Dr. Johnson a material change in circumstances such that spousal support should be varied or eliminated?

[66] In the case of Bullock v. Bullock, [2004] 16949 (S.C.J.) Corbett J. said:

Many people dream of retiring “early”, although there is not a set age at which people today expect to cease working. Many successful people find that they can afford to stop work before they reach the age of 65. Others continue on well into their seventies and even longer. The legal question for this case, then, is not whether Ronald should retire at age 62, but whether this personal choice should be viewed as a “material change of circumstances” for the purposes of payment of spousal support…In my view it should not. (para 9)

[67] I agree with this view in the case at bar. The legal question is whether there has been a material change of circumstances. I am not satisfied that there has been a material change of circumstances of Dr. Johnson to warrant a change to the spousal support paid to Ms. Dalseg as negotiated in the separation agreement. I reject that he has an entitlement to retirement which deprives his wife of support.

[68] Ms. Dalseg was reliant on the support promised to her by Dr. Johnson. While he saw other creditors as legitimate and his payments to them as a moral obligation, it is difficult to understand his complete lack of duty to his wife.

[69] I have considered whether the age of Dr. Johnson alone should result in a change of the support or a gradual reduction of the support to correspond with the slowing down of his ability to work over the next dozen years. He is 64 at this time. The separation agreement makes no provisions for retirement.

[70] In determining not to create a reduction of support over time, I consider a number of factors. The age of the wife and the length of the marriage, along with her contributions to his career, validate an indefinite spousal support order. The husband has failed to honour his obligation by stopping the support without warning or court sanction, did not seek an interim order to stay the support pending the outcome of the case, transferred assets to his son which could have been liquidated and used for the purpose of meeting his financial obligation and has chosen to be a burden and charge upon others. He only commenced his motion to change upon the enforcement efforts of the Family Responsibility Office. Dr. Johnson has not acted in good faith.

[71] This situation is different for spouses who are truly trying to meet their commitments and just can’t do it. It is especially egregious that the doctor has not matured enough to shoulder the responsibilities he has himself, rather than developing co-dependency situations where others feel compelled to care for him and pay his expenses.

[72] In addition to the rejection of the entitlement of Dr. Johnson to retire to defeat spousal support, of great importance is the fact that it has not been shown that Dr. Johnson does not have the capacity to work as a physician and earn income. He refuses to work for money that could benefit Ms. Dalseg. This can only be characterized as a shameful and dishonourable waste of a privilege.

[73] The Final Order in this matter is as follows:

1. The motion of the Husband Ross Johnson to vary the spousal support is dismissed.
2. The Husband, Ross Johnson, shall continue to pay $10,000 per month spousal support to the Wife, Deborah Dalseg in accordance with the schedule set out in the Separation Agreement filed with the court dated November 2015;
3. All terms of the Separation Agreement shall continue in force and effect except that leave is required by the Husband prior to any other variation applications;
4. Cost submissions within seven days of today, limited to 3 pages not including accounts or offers, with responses within seven days of the receipt of the submissions, limited to 3 pages not including accounts or offers.

Released: July 11, 2022 Signed: Justice D.J. MacKinnon