ONTARIO COURT OF JUSTICE

CITATION: S.N.S. v. K.N.S., 2023 ONCJ 55

DATE: February 6, 2023

COURT FILE No.: D40565/20

Toronto

BETWEEN:

S.N.S.

Applicant

— AND —

K.N.S.

Respondent

Before Justice Debra Paulseth

Heard on January 23, 24, and 25, 2023

Reasons for Judgment released on February 6, 2023

Poroshad Mahdi............................................................................. counsel for the applicant

Theresa Maclean....................................................................... counsel for the respondent

Paulseth, J.:

Overview:

[1] The parties were married on May 8, 1999 and separated on December 3, 2018. They are in their mid-fifties and have a daughter who has completed an undergraduate degree.

[2] The primary issue before the court is spousal support.

[3] Ten years before the marriage, the respondent/ husband (K ) was injured in a very serious car accident. He receives a monthly tax free annuity for life as part of a structured settlement. He also received a lump sum payment of 1 million dollars in January, 2023 (the lump sum payment).

[4] In August of 2020, the applicant/wife (S) filed this court Application, seeking spousal support and a restraining order. K filed his Answer in October, 2020, in which he opposed S’s relief and sought his own restraining order.

[5] On December 23, 2020, the court made a temporary order for spousal support in the amount of $3,900 a month commencing September 1, 2020, with credit to K for monies paid to S of $6,450. The motion judge ordered K to pay costs of $7,000.

[6] It is S’s position that she is unable to work due to mental health issues that arose as early as 2004. She is seeking ongoing spousal support of $7,500 a month based on the husband’s annuity and a share of the lump sum payment.

[7] S also seeks an order that K not molest, annoy or harass her and that K purchase life insurance to secure his spousal support obligations.

[8] K’s position is that he will pay $3,000 a month in spousal support, commencing May 1, 2022, indexed at 3% a year. He is opposed to the non-harassment and insurance orders sought by S.

[9] Each party provided an affidavit for their evidence in chief. A friend of K’s family also gave evidence. Cross examinations took place during the focused hearing.

[10] Each party’s treating doctor gave evidence about their respective health: diagnoses, treatment and prognosis.

[11] An actuary gave evidence about the lump sum payment and how much income it could generate based on certain assumptions.

S’s Evidence:

[12] A short summary of S’s evidence includes:

(a) She was born in Mexico on […], 1968 and moved to Canada in 1991.

(b) She started living with K in May of 1998 and married on May 8, 1999. They separated on December 4, 2018.

(c) She has a high school diploma and completed some post secondary courses.

(d) She and K have one child, a daughter, B, born […], 1999. She graduated from Dalhousie University. During all school holidays and the pandemic, B lived primarily with mother. She now lives with her boyfriend in Halifax.

(e) Although the exact amounts are in dispute, both parents supported B during university. B also obtained student loans for her first and fourth year. The amount of $36,789.46 is owing from these student loans.

(f) S set up an Registered Education Savings Plan (RESP) for B and was the only contributor to the account. She took out monies from time to time for B’s university costs. A family friend also gave B money for school.

(g) Throughout the relationship, S testified that the couple depended on the husband’s annuity for income. They saved very little money and looked to the large lump sum payment in 2023 to solve all their financial needs and satisfy debts.

(h) S describes the relationship as emotionally abusive. S says that K spent enormous amounts of money on drugs, alcohol, hotels, and escorts. K would often stay at a hotel downtown for the weekend. K called her names and swore at her. K attended treatment for his drug and alcohol addictions. S says she called the police many times due to escalating conflict in the home but always declined to press charges.

(i) S observed K to consume drugs; such as cocaine, crack, hashish, and pot throughout the relationship. K saw prostitutes and escorts. K gave S venereal disease, for which she is still being treated.

(j) On December 4 , 2018, S says that K grabbed her by the hair and punched her in the face as S was flushing his drugs down the toilet. S called the police. No charges were laid. The parties separated and K moved out of the apartment.

(k) From December of 2018 until August of 2020, K paid S’s rent in the amount of $2,496 a month. In September and October of 2020, K paid half of her rent. In December of 2020, he gave S $2,000.

(l) S started this court application and depended on the court order of support of $3,900 a month, commencing September 1, 2020. K was behind on these payments but gave her a lump sum for all arrears when he received his January 2023 payment.

(m) The lifestyle of the family during the marriage included expensive clubs like Osler Bluffs ski club and the Toronto Lawn Tennis Club. The family lived beyond their means.

(n) During the marriage, S and B were financially dependent on K. The annuity funded their rent, food, vacations, clubs, and K’s pornography, escorts and drugs.

(o) K worked for his father’s insurance business until his father passed away in 2009 and continued to receive money from that business until 2019. K also continued as an insurance benefit specialist and assisted his mother with her design business. K then went on to provide private concierge services for friends of the family.

(p) K had access to cottages, ski cabins, and vacation homes owned by his extended family.

(q) S lives in an apartment building in downtown Toronto. In October of 2020, K and his mother moved into the same complex but a different building. S saw him once in the hall and another time in the lobby.

(r) S was financially dependent on K throughout the marriage. Her income was never significant.

S’s Income:

[13] S did not complete the university business degree she began while still living in Mexico. She has completed a project management course in Ontario.

[14] S was a full time parent from 1999 to 2005. From 2005 until 2010, she worked for E-Health Ontario, but twice during that time took several months leave for disability reasons. She was finally laid off. From 2011 until 2013, S was home full time. From 2013 until 2018, S had a series of contracts with the provincial government on a part time basis. Since the summer of 2018, S has been home full time. S was therefore home full time for about half of the marriage plus time on disability.

[15] By the time of the separation, S had an RRSP of close to $95,000.

[16] Notices of Assessment for S indicate her income as:

(a) 2016: gross business income of $29,750; line 150 income of $19,549;

(b) 2017: line 150 income of $76,019;

(c) 2018: line 150 income of $47,997;

(d) 2019: RRSP income of $39,997 and a business loss of $2223.

(e) 2020: RRSP income of $19,993 and net income of $10,400.(CERB)

(2) 2021: RRSP income of $29,990 and net business income of $6,600.

[17] S’s income source for these years has always been government contracts. K’s family assisted her in obtaining several of these contracts.

[18] S’s treating psychiatrist since 2004 is Dr Sutton. He describes S as suffering from depression and anxiety, triggered by chronic marital problems. He has seen her for regular assessments and supportive psychotherapy. He has diagnosed S with generalized anxiety disorder, situational disorder, and major depression. It is his opinion that S will not likely be able to work in the future.

K’s Evidence:

[19] A short summary of K’s evidence includes:

(a) As a result of the car accident in 1989, he suffered permanent brain damage.

(b) He continues to have related health issues; such as: short term memory loss, physical balance issues, emotional instability, fatigue, drowsiness, loss of sense of smell, slurred speech, and regular anxiety attacks.

(c) He was under psychiatric care for several years but is now being followed by his family doctor.

(d) As a result of the accident, he received a structured settlement:

(i) Beginning at age 25, payments of $3,084.14 a month, tax free, indexed at 3% a year, guaranteed for 30 years, and payable thereafter as long as he is alive; and

(ii) A lump sum payment of $1 million on January 1, 2023.

(e) Because he could not work full time, he was the primary caregiver for their child, B.

(f) Throughout the marriage, S worked contracts and took extended periods of time off to visit her mother in Mexico, take other trips, play tennis and ski.

(g) The family did have memberships at a private ski club in Ontario and a tennis club in the city. Other vacation properties were owned by K’s extended family and not by him. K owns no real estate. For example, he has a cousin who lives in Chicago but owns a chalet in Ontario. He and S rented the chalet for two seasons so their daughter could give ski lessons to younger children. The cost was $5,000 for each of two seasons. K paid his half but S has not paid her half.

(h) S was eager to work as it gave her spending money, while he covered all the household expenses; such as, rent, car payments, phone, internet, and cable. S used to say that the husband is responsible for taking care of the family financially.

(i) He knew about the RESP for B but was surprised that it had been depleted by the time B needed the money for university. He never saw any record of the RESP but believed there was $50,000 to $70,000 in it. He says that S must have used the money for her own vacation trips every year.

(j) Both he and S contributed to B’s university expenses, in addition to the student loan. He borrowed $21,600. from a relative to give B for her expenses and a further amount from his mother’s friend. From December of 2018 until August of 2020, he paid all of S’s rent and half of B’s rent, groceries, and flights home.

(k) He always intended to repay all of the loans from his lump sum payment in January of 2023.

(l) He has had little or no contact with S, except for a few questions about B and when S contacted him to discuss settlement. He moved back into the complex in October of 2020, almost two years after the separation, as it was a familiar community for him. For 7 years K was a board member with his tenants’ association. He is now an honourary member. In his role of renewing and signing new members, he always worked with someone else as a team.

(m) He had a life insurance policy for one year about 10 years ago. B was the beneficiary. He let the policy go because he couldn’t afford the premiums. His precarious health makes the cost of insurance prohibitive for him.

(n) He has borrowed money from his mother, who has very little savings, to defend himself in this litigation. K’s mother now has serious health issues. As an only child, he will help care for her.

[20] At trial, he indicated that he has received the lump sum payment and disposed of it as follows:

(a) $295,000 repaid to his mother, representing some 30 years of loans for various items such as rent, credit card payments, club memberships, and legal fees. In his March 29, 2022 financial statement, K identified the debt to his mother as $40,000;

(b) $9,520 to S for his support arrears including interest;

(c) Repaid relatives and friends who loaned money for B’s education; some of these items were not identified in previous financial statements;

(d) For himself, he bought new glasses, a chair, boots, and a filing cabinet. The amount was not provided;

(e) $400,000 he put into a joint account with his mother for his future expenses;

(f) He has about $100,000 remaining in his bank account.

[21] K describes his health as having deteriorated recently. He cannot drive. He has been diagnosed with sleep apnea, diabetes, and early dementia. He will need assistance soon. His living situation is up in the air. He would like to get his own place.

[22] Through DNA testing, K has found a half-sister who lives in Burlington. He had long thought he was an only child so is excited to get to know this person.

[23] K testified that he knew S was seeing a psychiatrist regularly but did not know she suffered from major depression.

[24] A friend of K’s mother provided an affidavit and gave evidence. She has known K since he was very little and met S when K and S were a young couple. She has spent time with the whole family and also knows their daughter B. She helped S to obtain some of her government contracts. She last saw S when they had lunch in 2017 and she gave S some contact information for work prospects.

K’s Income:

[25] K has only ever worked on a part-time basis, due to his health limitations.

[26] After separation, S and his daughter created a resume for him, most of which, in cross examination, he did not recognize.

[27] From 1995 until 2015, K was an office assistant at his father’s insurance company. He has never had a specialist insurance designation

[28] From 2016 until 2022, K provided senior care services to friends of his parents. He charged $25 an hour and claimed the income on his taxes. The last of these elderly clients died at Thanksgiving of 2022. During the pandemic, he received CERB. In 2021, these payments totalled $18,600.

[29] At some point K consolidated his debts, which he believes were about $46,000, and began to make a monthly payment of $230.

[30] K believes that his monthly health care expenses, which total about $700. should be deducted from his monthly annuity income for the purpose of spousal support. K’s Form 13, sworn March 22, 2022, indicates $450 a month for medicine, drugs and eye care. Health insurance premiums are $191 and dental expenses are $50 a month

[31] K disputes that his annuity should be grossed up for tax as he cannot claim the spousal support payments as a deduction for tax purposes. K pays no tax on any monies from the structured settlement.

[32] It is K’s understanding that the lump sum payment was designed to offset severe medical expenses that were predicted for him for his later years; such as, alzheimers.

[33] Dr Greenberg is K’s family doctor and also has considerable experience with concussion/traumatic brain injuries. He has reviewed all of the medical reports for K and has seen him regularly since 2009. A summary of his evidence follows:

(a) He confirms the diagnoses outlined above.

(b) K also suffered an additional concussion when he fell off a stool in October, 2021 and broke his clavicle.

(c) K is being treated for hypertension now and is using an experimental drug for psoriasis.

(d) Dr Greenberg points to the initial diagnosis of frontal brain damage as consistent with K’s self-destructive and impulsive behaviours over the years Dr Greenberg summarizes K’s condition as likely to deteriorate in the future. “His prognosis is extremely poor”.

(e) A recent development is K’s diagnosis of severe sleep apnea which necessitated his loss of driver’s licence. He has also been diagnosed with pre-diabetes and early onset dementia. The doctor is referring K for a follow up with a sleep clinic and once the sleep apnea is under control he will send him to a local memory clinic. In the future, K will need assisted living in his home and then probably a locked institutional setting. It is impossible to foresee the timing of this. The early dementia is directly attributable to the frontal lobe injury and the more recent concussion.

(f) Dr Greenberg administered a recognized memory test to K, which he failed. The doctor has also observed K’s gradual decline.

Entitlement to Spousal Support:

[34] Under Section 30 of the Family Law Act, RSO 1990 (FLA), every spouse has an obligation to support the other spouse in accordance with need, to the extent that he or she is capable of doing so. This is consistent with the concept of marriage as a partnership. There is a presumption that spouses owe one another a mutual duty of support: Bracklow v. Bracklow, 1999 CanLII 715 (S.C.C.), [1999] 1 S.C.R 420 para. 20.

[35] There is no dispute between the parties about entitlement. The court however, should identify the grounds for entitlement, as it may affect the range of spousal support, the length of time for spousal support, and whether the recipient shares in post separation increases in income.

[36] Generally, there are three categories of support: compensatory, non-compensatory or needs-based, and contractual.

[37] Compensatory support is based on the roles of the spouses during the relationship; specifically where the recipient has lost career advantages in order to support the other spouses’ career or the children.

[38] The legal considerations for the entitlement to compensatory support was reviewed by Chappel J. in Thompson v. Thompson, 2013 ONSC 5500, at paras. 55–59,

[39] The compensatory basis for spousal support entitlement recognizes that upon marriage breakdown, there should be an equitable distribution between the parties of the economic consequences of the marriage.. A compensatory award recognizes that such sacrifices, contributions and benefits conferred often lead to an interdependency between the spouses and merger of their economic lives.

[40] In considering whether a compensatory claim exists, the court must undertake a broad and expansive analysis of advantages and disadvantages which each party experience throughout the relationship as a result of the marital union.

[41] Compensatory support ought not to be varied (unless there is an inability to pay) since it will have been awarded to recognize the length of the marriage and the roles adopted throughout the marriage. These factors are retrospective.

[42] Non compensatory entitlement occurs when the support obligation arises from the marriage relationship itself when a spouse is unable to become self-sufficient. It can be based on need. Under this model, spousal support will be based on economic hardship resulting from the breakdown of the marriage, but not necessarily the roles assumed during the marriage. The needs based support could, therefore, consider the recipient’s ability to become self-sufficient for reasons such as health

[43] 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. Gray v. Gray, 2014 ONCA 659.

[44] In Ford v. Waldhart, 2022 ONSC 6277, the court said:

Entitlement on a needs basis 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 (“SSAGs”). In the case before me, there is a large discrepancy in the parties’ incomes (regardless of whether I accept the Husband’s calculations or the Wife’s calculations of the Wife’s income).I find that the Husband suffered an economic hardship as a result of the breakdown of the long-term relationship. There is no question that the Husband cannot afford to maintain a standard of living similar to that enjoyed by the parties during the relationship.

[45] 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), 2003 CanLII 27673 (ON CA), 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 CanLII 715 (SCC), [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).

[46] A third type of spousal support entitlement is through an agreement between the parties. The express or implied term will either create or negate spousal support. This does not apply here.

[47] All three models of support must be considered.

[48] Whether support should be awarded ultimately depends on what is just and fair in the circumstances.

Income determination:

[49] Both parties believe that the other party is purposely unemployed or underemployed.

[50] Section 19 of the Child Support Guidelines (CSG) provides that the court may impute to a spouse “such amount of income … as it considers appropriate” and provides a non-exhaustive list of such circumstances. The relevant portions of s. 19 read as follows:

19.(1) Imputing Income – The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include,

(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the spouse;

[51] The same test for imputing income in child support cases (Drygala v. Pauli) applies in spousal support cases. See: Rilli v. Rilli, [2006] O.J. No. 2142 (SCJ); Perino v. Perino 2007 CanLII 46919 (ON SC), [2007] O.J. No. 4298 (SCJ).

[52] Imputing income is one method by which the court gives effect to the joint and ongoing obligation of spouses. In order to meet this obligation, the parties must earn what they are capable of earning. If they fail to do so, they will be found to be intentionally under-employed. Clause 19(1)(a) of the guidelines is perceived as being a test of reasonableness. See Drygala v. Pauli 2002 CanLII 41868 (ON CA), [2002] O.J. No. 3731(Ont. CA).

[53] The Ontario Court of Appeal in Drygala v. Pauli set out the following three questions which should be answered by a court in considering a request to impute income:

1. Is the party intentionally under-employed or unemployed?

2. If so, is the intentional under-employment or unemployment required by virtue of reasonable educational or health needs?

3. If not, what income is appropriately imputed?

[54] A court must also consider whether the under-employment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse. If the court is satisfied that one of these reasons has been established, it cannot impute income to the party. See: Lavie v. Lavie, 2018 ONCA 10, at para. 28.

[55] The onus is on the party seeking to impute income to the other party to establish that the other party is intentionally unemployed or under-employed. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made.

[56] In this case, there is no dispute that both S and K have been underemployed and now unemployed.

[57] The onus then shifts to the individual seeking to defend the income position they are taking. See Lo v. Lo, 2011 ONSC 7663; Charron v. Carriere, 2016 ONSC 4719.

[58] The court must look at whether the act is voluntary and reasonable.

[59] The payor must prove that any medical excuse for being underemployed is reasonable. See Rilli v. Rilli, 2006 CanLII 34451 (ON SC), [2006] O.J. No. 4142 (SCJ.). Cogent medical evidence in the form of detailed medical opinion should be provided by the payor in order to satisfy the court that his/her reasonable health needs justify his/her decision not to work. See: Cook v. Burton 2005 CanLII 1063 (ON SC), [2005] O.J. No. 190 (SCJ) and Stoangi v. Petersen 2006 CanLII 24124 (ON SC), [2006] O.J. No. 2902 (SCJ).

[60] A party who wishes to have her medical condition taken into account as a basis that she cannot work bears the onus to establish material disability. This goes beyond testifying that she suffers from depression and anxiety: she must establish that the extent of her condition disables her from work. This onus cannot ordinarily be discharged solely on the basis of the party’s testimony. … She would need to produce medical records and expert evidence about her condition, prospects and treatment. See: Geishardt v. Ahmed, 2017 ONSC 5513; Wilkins v. Wilkins, 2018 ONSC 3036.

[61] The test applies equally to the recipient of spousal support as to the payor. In particular, see Kinsella v. Mills, 2020 ONSC 4785:

[165] In the spousal support context, the ability to impute income applies equally to the payor and the recipient spouse, since one of the objectives of spousal support is to promote the economic self-sufficiency of each spouse within a reasonable time, in so far as practicable (Juvatopolos v. Juvatopolos, 2004 CanLII 34843 (ON SC), 2004 CarswellOnt 4423, 9 R.F.L. (6th) 147 (S.C.J.), aff’d 2005 CanLII 35677 (ON CA), 2005 CarswellOnt 4774, 19 R.F.L. (6th) 76 (C.A.)). As the authors of the SSAG emphasize, by focussing on income, including the possibility of imputing income to the recipient spouse, the SSAG encourage “a more sophisticated analysis of "self- sufficiency" on the part of the recipient, rather than some rough-and-ready downward adjustment of the monthly amount of support” (at p. 137).

[62] It is fair to apply the same test to support recipients. See Elmgreen v. Elmgreen, 2016 ONCA 849.

[63] The third question in Drygala v. Pauli, supra, is: “If there is no reasonable excuse for the payor’s under-employment, what income should properly be imputed in the circumstances?” The court must have regard to the payor’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, 2006 CanLII 26573 (ON C.A.).

Credibility and Reliability of the Parties:

[64] Both parties have very poor memory in terms of where they spent their money, how much and when they borrowed money, and who they borrowed from.

(a) Neither party kept records of loans from family members. S’s mother loaned her money and the amount changed significantly in her financial statements. K didn’t seem to record how much money he borrowed from his mother and family members.

(b) S wants K to repay B’s student loans but neither S nor B will give him any details about the loan. K’s family provided loans for B’s education for at least two of her 4 years at university. There is no evidence that B ever worked during her university years.

[65] They both have credibility and reliability issues.

[66] S’s credibility is strained by these undisputed or agreed facts:

(a) she used an accountant for her taxes but failed to claim her spousal support payments as income;

(b) there is no evidence that S told K or his family about her mental health challenges, although she has been in treatment since before 2004;

(c) S would often say that the husband should support the family but she was fully aware of the reason for K’s structured insurance settlement.

[67] Similarly, K’s evidence produces credibility issues:

(a) K kept his own bank account and S kept her account. Neither saw the other’s financial accounts. They both used the same accountant but didn’t seem to know each other’s financial state.

(a) K and his family friend believed that K was the primary parent in B’s early years; yet S was home full time until B was six years old. The family had one car and K never worked full time so he drove B to and from school.

(b) He has not disclosed the details of the consolidated debt he is repaying.

[68] The reliability of S’s evidence is strained by the following inconsistencies:

(1) She claims physiotherapy and chiropractic costs of $150 a month in her March of 2022 Financial Statement. She said she only went to the chiropractor a few times but by December of 2022, the cost of each had risen to $460 a month. There is no medical information to support these expenses.

(2) S’s psychiatrist associates her body pain with her mental health. S testified that she is taking prescribed anti-depressant medication but the doctor says she hasn’t take it since December of 2020, because of the side effects; such as weight gain.

(3) S had rent arrears of approximately $5,000. When K gave her the $9,500 of arrears he owed her in January of 2023, she said she used it to pay credit card expenses incurred since March of 2022 and a line of credit, neither of which is mentioned in her financial statements.

(4) S testifies that she is and has been in dire financial straits but admits she deliberately took time off between contract positions in order to travel. She recently returned from a two week vacation in Florida.

(5) S’s therapy notes indicate that she has been planning to leave K since 2005. In August of 2018, she said she was waiting for the $1 million.

(6) S never disclosed the details of the RESP to K

[69] The reliability of K’s evidence is weakened by these facts:

(1) He has not recorded on financial statements the full extent of his debts; In his March of 2022 financial statement he owed his mother $40,000. By January of 2023, the debt was $295,000. There is no documentation to support this debt.

(2) He has always said he would repay B’s student loans but now realizes he doesn’t know the details of the loan and neither B nor S will tell him or show him a document.

[70] Both S and K have poor judgment when it comes to financial matters. S should have pursued a career or education when she could. Neither should have kept up the private clubs they could not afford.

Findings on S’s Income:

[71] Counsel for K argues that S should be imputed with some income, because:

(1) S gave false evidence about taking anti-depressant medication. She is not compliant with recommended treatment.

(2) Dr. Sutton changed his notes for a date in June of 2022. Further, counsel says he gave evidence as an advocate rather than a treating specialist. His evidence should not be relied upon.

(3) S worked full time for many years with E-Health and the Ministry of Health. She suspiciously stopped work of any kind in the summer of 2018, just before separation

(4) S’s job resume is false or misleading

(5) S has not even tried to look for employment since separation

[72] Counsel for K argues that S’s income should be between $40,000 and $50,000, based on her income for the years 2017 to 2019:

[73] The evidence of S was:

(a) When she worked for E-Health from 2005-2011, she was also on a disability leave twice for a total of 13 months;

(b) In 2017 she earned $76,019; a contract that terminated after 6 or 9 months;

(c) In 2018 the contract finished in July; it totalled $48,000; she then went to Mexico for a month;

(d) In 2019 she took $37,774 from her RRSP;

(e) In 2020, she took $20,000 from her RRSP; and netted $13,000 from self employed income. She doesn’t recall where that income is from;

(f) At no time did S declare the money she received from the court order for temporary spousal support; for example, K paid $46,800 in spousal support in 2021.

[74] The evidence showed that Dr Sutton deleted part of one case note which referred to threats to report one of the counsel in this case to the Law Society of Ontario. In my view this does not detract from the reliability of his expert evidence.

[75] It is true that many treating physicians consider themselves as advocates for their patients. Both Dr Sutton and Dr Greenberg showed this tendency. This does not detract from their opinions. The court finds that both physicians are participant experts.

[76] Dr Sutton has treated S for many years, although he saw her more in some years than others. Certainly since the separation he has seen her on a monthly basis. I accept the medical evidence that S is not able to look for work and is not able to work.

[77] The court finds that S is not intentionally underemployed or unemployed.

Findings on K’s Income:

[78] For 30 years K has depended on his annuity for income. In the year of separation, 2018, that annuity paid $6,457 a month, or about $77,000 a year, indexed at 3% annually.

[79] As noted by Justice Spence in his temporary spousal support order, the Ontario Court of Appeal found in Hunks v Hunks, 2017 ONCA 247, that an annuity from a structured settlement is income for the purpose of support and not property.

[80] In addition to the annuity, K earned some modest amounts of income from his concierge business. His last client passed away at Thanksgiving of 2022.

[81] In 2020, K’s annuity was $6,850 a month or $82, 200 a year. K earned income of $20,000 gross, which amount was taxed.

[82] In 2021, K’s annuity was $7,056 or $84,037 a year and he earned income of $18,806, from CERB. His tax was less than $500.

[83] In 2022, K’s annuity was $7,267 or $86,558 and his income is unknown, but certainly no more than the income earned in 2021.

[84] By January of 2023, K is now unable to drive and his physical health is deteriorating. He has sleep apnea, diabetes, and early onset dementia. Early dementia was a foreseeable outcome for K as a result of the brain injury and, according to Dr G, has been compounded by the further fall in October of 2021.

[85] As of January 1, 2023, K’s annuity is $89,832.

[86] The court accepts the evidence of Doctor Greenberg, although some diagnosis was based on other specialists, such as the sleep apnea. Dr Greenberg administered the memory test himself and gave evidence of his own observations of K over many years.

[87] The court finds that K is not intentionally underemployed or unemployed.

Entitlement Analysis:

[88] Both parties depended primarily upon K’s annuity for income during the relationship.

[89] S knew, or should have known, from the nature of the structured settlement and K’s behaviour, that K was not going to be capable of earning much income. S acknowledges that K only worked for family or friends.

[90] Similarly, K knew or should have known, that S was not capable of earning much income. S had little post secondary education and, less than 5 years into the relationship, was seeing a therapist for anxiety and depression.

[91] K used the annuity income to pay the rent and most household expenses. S used her income for personal expenses, such as hair and nail salons and her own vacations.

[92] The lifestyle of the family appeared to follow the husband’s family’s lifestyle; such as ski and tennis clubs.

[93] S became accustomed to several vacations a year, including visiting her mother in Mexico.

[94] If household money was short, S testified that she would ask her mother for money and K said the same: he would borrow from his mother. No one worked or worked more to earn the necessary money to maintain the lifestyle.

[95] The court finds that there is a compensatory entitlement, not perhaps in the usual manner, but nevertheless caused by the interdependence of the relationship:

(a) S has rarely worked full time or a full year since 2011, with the exception of short term contracts, which ended in the summer of 2018.

(b) S was almost completely financially dependent on the relationship and K’s income. She did obtain a project management designation but did not complete any other course. She was frequently let go or her contract not renewed.

(c) S believed her husband was wealthy when the numbers told her he was not.

(d) She did not complete any post secondary diplomas, except for the modest project management diploma.

(e) She did not pursue full time employment within the area where she had obtained successful contracts.

(f) She vacationed frequently when she could not afford it.

(g) As the chasm between her fantasy and reality grew, her mental health deteriorated.

[96] As S has been diagnosed with debilitating mental illness, she is in great need of support. Her non-compensatory entitlement is strong.

[97] This was a long term relationship and the rule of 65 (SSAG) applies.

Duration and the Rule of 65:

[98] The Spousal Support Advisory Guidelines (SSAG) are advisory only but very persuasive. If the court deviates from the SSAG, then a reasonable explanation must be provided.

[99] SSAG use the length of the relationship to categorize cohabitation. In this case the relationship was twenty years or longer, which is considered long term.

[100] Where the total years of cohabitation and age total 65 plus, the SSAG provide for indefinite support. However, indefinite support does not necessarily mean permanent support, it only means that the duration has not been specified.

[101] The SSAG explain at section 7.5.3 that the Rule of 65 is “intended to respond to the situation of older spouses who were economically dependent during a medium length marriage and who may have difficulty becoming self-sufficient given their age. See Lazare v. Heitner, 2018 Carswell Ont 9389 (Ont. S.C.J.)

[102] Spousal support in this case should be indefinite.

Start Date for Spousal Support:

[103] S initiated this application in August of 2020, seeking support from the date of separation. Until the court application, K was paying S’s rent of about $2500 a month and helping their daughter in university. When he advised that this rent payment would be halved in September, 2020, S came to court.

[104] The only reason given by S for the delay in coming to court was the fact that expenses were being covered and she had access to her RRSP.

[105] In 2019, S used RRSP funds of about $40,000 to supplement the rent paid by K. which totalled about $30,000, tax free. Her tax payable that year was about $2,500. Financially she was better off than if she had been paid spousal support directly that would have been taxed as income and then paid her same rent with net income.

[106] Accordingly, the court will order spousal support effective September 1, 2020.

Conclusion on Spousal Support from September 1, 2020 until Dec 31, 2022.

[107] From September of 2020 until the end of 2022, S had primarily RRSP income and did not declare her spousal support payments as income.

[108] During this same time frame, K had limited income from sympathetic employers and CERB, along with his tax free annuity income. The income tax he paid was minimal.

[109] The temporary spousal support order by Justice Spence was $3,900 a month commencing September 1, 2020. This amount represented the needs of S over and above the rental payment and K’s ability to pay.

[110] The amount of $3,900 a month is also mid-range in the SSAG’s for this period, taking into account modest income from both parties.

[111] The court finds this amount to be an equitable amount of spousal support in all of the circumstances for this period of time

The Impact of K’s Lump Sum Payment

[112] Should some or all of the lump sum payment be considered income available for spousal support?

[113] Counsel for K argues that the lump sum payment was always designed to cover those costs associated with increased care required by K in his later years; for example, he was assessed as having a higher risk of early dementia because of his brain injury.

[114] Sadly, this prediction has come true.

[115] The actuary retained by S examined the million dollar lump sum payment. He made calculations based on the assumption that $800,000 would be available for investment. The annual income with cautious investing would be $33,689 in 2022 dollars. The actuary added this amount of investment income to the annuity for 2022, $87,216 to produce $120,905 per year. If this total amount is grossed up for tax, the gross income available for spousal support is $181,184.

[116] The court requested SSAG for the scenario outlined by the actuary with no income earned by S. The SSAG range was:

(1) Low- 4643

(2) Mid- 5417

(3) High- 6190

[117] S uses these calculations to request at the start of trial spousal support of $7,500 a year.

[118] The annuity alone, because it is indexed, produces income in 2023 of $89,832, and grossed up for tax, results in SSAG (assuming zero additional income for either party) of

(1) Low- 3175

(2) Mid- 3704

(3) High- 4096 *

[119] The SSAG range from K’s income of $89,832 automatically takes into account incomes based entirely on legitimately non-taxable sources, such as a disability payment or annuity. In a longer marriage, using the “without child support” formula, ability to pay may become an issue. The SSAG formula automatically applies a 50/50 net income cap so as to equalize the incomes. This formula is indicated by a * on the SSAG provided by counsel. See SSAG Guidelines 12.8.

[120] The upper end of the range leaves both parties with net income of $4,096.

[121] There is an argument to be made that a lump sum payment that arose before the relationship began and was payable more than 4 years after the relationship ended is not available for spousal support but only for the purpose for which it was intended- care of the injured person.

[122] The caselaw provides a list of factors to consider:

(a) A recipient spouse is not automatically entitled to increased spousal support based on a payor spouse's post-separation increase in income See Patton-Casse v. Casse, 2012 ONCA 709 (C.A.), at paras, 26-27;

(b) The question of whether there should be a sharing of post-separation income increases is not an "all or nothing" matter. Partial sharing of such increases, and/ or sharing for a specified period of time, are issues that the court should also consider. See Helle v. Helle, 2019 BCCA 97 (C.A), at para. 38).

(c) The determination of whether there should be any sharing of income increases, and if so the extent of any such sharing, must take place within the framework of the general spousal support objectives and factors set out in the relevant legislation.

(d) The basis of a spouse's entitlement to spousal support is an important consideration. In both compensatory and non-compensatory cases, the court's assessment of the needs of the recipient and ability of the payor spouse to pay are significant factors that should inform the court's analysis regarding sharing of post-separation income increases (Hartshorne v. Hartshorne, 2010 BCCA 327 (C.A.), at para. 56.

(e) However, in cases involving non-compensatory claims, the focus tends to be on maintaining a reasonable standard of living as measured by the standard enjoyed during the relationship, and this is a factor which may impact the decision as to whether a recipient should benefit from the payor's post-separation income increases (A.A.M. v. R.P.K., 2010 ONSC 930 (S.C.J.); Kohan v. Kohan, 2016 ABCA 125 (C.A.); T.N.F. v. M.V.J.A., 2018 ONSC 3310 (S.C.J.).

(f) The existence of a compensatory element to a support claim is an important factor in determining entitlement to share in post-separation increases in income (Marinangeli v. Marinangeli, 2003 CanLII 27673 (ON CA), 2003 CarswellOnt 2691 (C.A.); Lazare v. Heitner, 2018 ONSC 3604 (S.C.J.)). In addressing this factor, the court should consider the various indicators of compensatory entitlement and not simply the assumption of childcare and home management responsibilities. In these cases, the general strength of the compensatory claim is an important factor. The analysis should include consideration of the length of the relationship, the extent of the recipient's contributions and sacrifices both during the relationship and post-separation and the duration of time during which those efforts and sacrifices were made.

(g) Another important consideration in compensatory situations is whether the recipient's efforts and contributions during and after the relationship contributed to the payor's financial advancement during the relationship and post-separation (Marinangeli; Hartshorne; Kohan; and Hersey v. Hersey, 2016 ONCA 494.

(h) Evidence that the recipient spouse has not taken reasonable steps towards achieving self-sufficiency is another factor that courts have considered in determining whether there should be a sharing of post-separation income increases, and if so, the extent of any such sharing (Kelly v. Kelly, 2007 BCSC 227 (S.C.); Kohan; Choquette, at para. 25). In such situations, the shortcomings in the recipient's self-sufficiency efforts will also be relevant to determining whether income should be imputed to them, but it is not inappropriate to consider the issue from both lines of analysis.

[123] In Greenglass v. Greenglass, 2010 ONCA 675, the court fixed 2% of the capital as income, where it was not generating income. See also Converti v. Escobedo, 2011 ONCJ 627, Mason v. Mason, 2016 ONCA 725; Berta v. Berta, 2016 ONSC 5723 Ferlisi v. Boucher, 2021 ONCJ 48.

[124] There is no hard and fast rule that a spouse can only share in increased post-separation income if their entitlement is rooted in compensatory elements. Rather, the Court must return to the principles set out in the legislation. See: Want v. Gauthier, 2021 ONSC 7595.

[125] Almost invariably in long term traditional marriages, the standard of living established jointly by the couple cannot be replicated by the lower income spouse individually. In addition, the lower income spouse often becomes dependent in long-term marriages. Where these circumstances are present, the spousal support analysis will not give priority to self-sufficiency because it is an objective that simply cannot be obtained. See Fisher, supra, and Linton v Linton, [1990] 1 O.R. (3d) (C.A.).

Analysis Regarding the Lump Sum Payment:

[126] S’s entitlement is both compensatory and needs’ based. The compensatory claim is not strong because neither party made any effort to pursue a career. S’s efforts or lack thereof did not affect K’s income. Their household expenses were covered by K’s annuity. S’s spending money came from her paychecks when she had them.

[127] Both parties admit they lived beyond their means and looked to family to finance their lifestyle.

[128] Neither party can afford the previous lifestyle post separation. K now lives with his mother. S has remained in the family apartment, although she probably cannot afford to be there.

[129] S stated that she always wanted to pursue an education and may still attend school. Although she had large amounts of time off from work, she only achieved the project management designation and did not complete any other courses she started. S has made no effort to become self-sufficient, but this approach to life started long before separation. This is not the first time that S has not worked for several years.

[130] S’s needs may have grown since separation. She does not take her medication and does not seem able to even apply for any employment.

[131] S has waited for this lump sum payment for a long time.

[132] This lump sum payment is very different from a payor spouse’s income that increases post separation, like K’s indexed annuity.

[133] The difficulty with S’s position is that the lump sum was never intended to be a joint asset or income replacement. The lump sum later in life was intended to cover K’s anticipated physical care expenses.

[134] There is no link between S’s role as spouse and the lump sum payment.

[135] There is no link between anyone’s career and the lump sum payment.

[136] There has, however, been a long term relationship and S has a disability that may come and go in future years, as it has in the past.

A Holistic Approach:

[137] Neither K nor S have saved any money. The RRSP that S contributed to over the few years she worked has been mostly dissipated, as was the RESP.

[138] K has now very quickly disposed of almost half of his lump sum payment; without documentation to show any rationale. It may be that his family has taken steps to protect the money.

[139] K will require care in the near future that is expensive.

[140] There is no more money.

[141] The annuity is not tax deductible as in other income cases; but S must include it in her income. The SSAG provide for this inequity by evening out the net income at the higher range.

[142] S will need to take steps to live within her income; steps she has not taken to date – again with no explanation other than awaiting the result of this litigation.

[143] For these reasons, I will not award S a share of the lump sum payment but will give her a somewhat higher level of support on the SSAG, indexed at 3 % while K lives.

[144] Effective January 1, 2023, K will pay spousal support of $4,100 a month, indexed at 3% a year on the 1st of January each year.

Life Insurance:

[145] S is seeking to have insurance as security for her ongoing support payments which will stop with the passing of K.

[146] Again, one spouse did not seem to know what the other spouse was doing with respect to finances. K said they also argued about this issue in the past.

[147] K did have a policy for about a year, approximately 10 years ago. He could not afford to keep it. He could not possibly afford to obtain such a life insurance policy now. His health has always been precarious.

[148] The court dismisses this claim.

Non-Harassment Order:

[149] S would like a non-harassment order as against K. S bases this request on a few sightings of K and a few times when they consented to have some settlement discussions or talk about their daughter. There are no dates given for these contacts. There is no evidence that K was assertive in any way. There is no evidence that K harassed S in any way.

[150] I would accordingly dismiss this part of the claim.

Final Orders:

1. K is to pay S spousal support of $3,900 a month commencing September 1, 2020, with credit to K of $6,450.

2. K is to pay S spousal support of $4,100 a month commencing January 1, 2023 and indexed at 3% a year.

3. A support deduction order shall issue.

Costs:

[151] If either party seeks costs, please serve and file submissions of 3 pages maximum, excluding Bills and Offers within 14 days of receiving this decision. The other party may reply with 3 pages maximum, excluding Bills and Offers, within 7 days of receiving the cost submission. The submissions should be filed in the trial office of this court on the second floor.

[152] I thank counsel for their thorough presentation of a particularly sad case.

Released: February 6, 2023

Signed: Justice Debra Paulseth