SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-0825-00
DATE: 20120307

RE: Berta Costa (applicant)

v.

Moises Costa (respondent)

BEFORE: MacKenzie J.

COUNSEL:
Mr. M. Rodenburg, for the applicant
Mr. J. Eason, for the respondent

HEARD: February 14, 2012

E N D O R S E M E N T

Introduction

[ 1 ] The main issue in this trial is the quantification of the applicant’s final order for spousal support payable by the respondent.

[ 2 ] The respondent also brought a motion for review of an interim spousal support payment ordered by Seppi J. on August 16, 2011.

[ 3 ] On that date, Seppi J. ordered that the respondent pay spousal support to the applicant on an interim basis of $2,900.00 per month from and after August 31 st , 2011 on a without prejudice basis, allowing for review and variation if the then disability of the respondent prevented him from being back at full-time work by at least the end of October 2011: see para. 3 of Order made August 16, 2011.

[ 4 ] Both counsel acknowledged that the respondent’s motion to vary should be disposed of at the trial of the main issue of whether there should be a final order for spousal support.

Background

[ 5 ] The applicant wife, born in July 1963, is about 48 years of age. The respondent husband, born in July 1962, is about 49 years of age. Both parties have completed an Ontario grade 12 education. The applicant has taken some business-related courses commencing in July 2011 relating to computer skills. At present, she has completed come courses in computer skills and is currently seeking to take upgrading English language programs. In this regard, she testified that her objective in these English upgrading courses is to deal with her perceived weakness in English grammar.

[ 6 ] She acknowledges she was able to purchase a residence on a mortgage-free basis from her equalization payment arising from the sale of the matrimonial home, and accordingly she has no running debt-service obligations on her residence.

[ 7 ] In cross-examination, she acknowledged that she had held clerical type employment at a junior level from 1981 to 1988 on a full-time basis, albeit at the minimum wage.

[ 8 ] She indicated that after the parties’ separation in Western Canada and return to Ontario, she obtained part-time employment from 1998 through 2002 at Dare Foods, the then employer of her husband. This employment stint was part-time, again on a minimum wage basis. She stated she left this employment in 2002 to look after her then ailing, now deceased, father. She has had no work experience or employment since 2002.

[ 9 ] She noted that since the date of separation in July of 2008, she had looked for factory work of a semi-skilled nature, but without success. She acknowledged that since the summer of 2011, she had submitted four or five applications for employment containing her resume seeking general office work as a filing clerk but these applications were also without success. When she was asked why she had not taken the business and other upgrading courses after the separation in 2008, she indicated that she was too involved in the sale proceedings relating to the matrimonial home and this involvement required such of her time that she was unable to actively look for employment.

[ 10 ] The respondent also testified. He confirmed that the date of the marriage was 1985, there were three children (no adults) born of the marriage, and that the date of separation was in July, 2008.

[ 11 ] The respondent is an electrical maintenance technician, having received training as an electrician and having worked continuously from 1980 to date at various employers doing that type of work. Since 2003 he has been employed with Toyota Canada at the Cambridge plant as an electrical mechanical maintenance technician on the plant’s production line.

[ 12 ] An Agreed Statement of Facts filed by the parties establishes the respondent’s income for income tax purposes since he commenced working in 2003 for Toyota Canada is as follows:

2003
$ 91,543.00

2004
$103,753.00

2005
$110,614.00

2006
$105,116.00

2007
$102,752.00

2008
$ 98,373.00

2009
$ 87,361.00

2010
$ 89,285.00

2011
$ 67,571.00

[ 13 ] The respondent relates that his reduced income for 2011 was a result of his absence from work from the beginning of May 2011 until the end of November 2011, due to clinical depression. During this period, he received disability benefits.

[ 14 ] Upon his return to work in late November 2011, he has worked about 40 hours a week at his base rate of $40.00 per hour. Although he has thus far in 2012 lost 3 days due to his clinical depression, he will earn in 2012 $83,200.00 comprising an average of 40 hours per week at his hourly rate of $40.00, provided that he doesn’t lose any more work days as a result of his clinical depression.

[ 15 ] He explained that his higher income in the years 2003 through 2008 was due to overtime availability and resulting increased compensation for such overtime. He explained the income reduction since 2008 in terms of the overtime availability being reduced due to market conditions and slackening demand for the Corolla automobiles manufactured at the Toyota Cambridge Ontario plant.

[ 16 ] He acknowledged the primary role of the applicant during marriage as the domestic and childcare provider; however, he did indicate that during the younger years of the children and their post-secondary education, there was considerable argument and friction between the applicant and him in relation to her returning to work to assist in defraying some of their expenses since 2002.

[ 17 ] His employment benefits are outlined in detail in Exhibit 2. One of the items in this exhibit shows the term life insurance available on his life. He notes that notwithstanding the separation, the applicant continues to be the beneficiary of the death benefit on such policy, the amount of such death benefit being three times his annual earnings. In this regard, he notes that he pays for this level of coverage an annual premium of $336.00. He points out that if he did not pay this premium, the death benefit would be twice his annual earnings.

[ 18 ] Both parties acknowledge this is a long-term marriage (23 years) and there is no issue between the parties as to the applicant’s entitlement to spousal support, nor is there any issue as to such support obligation being indefinite in time.

[ 19 ] The real issue here is whether the amount of the applicant’s entitlement to spousal support from the respondent must take into account her circumstances as it pertains to an objective under the Divorce Act , i.e. the applicant attaining economic self-sufficiency. This in turn engages the question as to whether on the facts of this case the applicant has made reasonable efforts to obtain self-sufficiency and in default of such efforts what, if any, income should be imputed to her in order to arrive at the appropriate amount of the respondent’s spousal support obligation.

Position of the Parties

[ 20 ] The position of the applicant is that there is no obligation on her to obtain economic self-sufficiency for the three year period since the separation and divorce of the parties. Counsel points out that because this is a long-term marriage, the compensatory aspect set out in Moge v. Moge, 1992 25 (SCC) , [1992] 3 S.C.R. 813 and cases following Moge is determinative here. Based on the respondent’s income of approximately $83,000.00 per year, prior to any over-time pay, counsel for the applicant contends the spousal support obligation should be a charge against any insurance policies the respondent currently carries on his life and in default, the respondent shall be required to obtain sufficient insurance to secure his spousal support obligation.

[ 21 ] As previously indicated, the position of the respondent is that although the entitlement of the applicant to spousal support is not in dispute and that the nature of such entitlement will be of an indefinite period (subject to future circumstances of the parties), there should be in this case income imputed to the applicant which will have an impact on any amount of the respondent’s continuing spousal support obligations of an indefinite duration.

Analysis

[ 22 ] Counsel for both parties have cited various cases in support of their respective positions.

[ 23 ] Some of the case law described the nature of the obligation on the part of a payee spouse to satisfy the court that he or she has attempted to generate economic self-sufficiency as one of the objectives stipulated in the Divorce Act, s. 15.2(6)(d).

[ 24 ] In assessing and considering the ‘needs’, ‘means’ and ‘other circumstances’ of the spouses in accordance with s.15.2 (4) of the Divorce Act , ‘means’ includes the income and earning capacity of the spouses: see English v. English , 2011 BCSC 90 () , 2011 B.C.S.C. 90. Income which is the salient factor in this case can include not just employment income but other forms of payment received periodically by a spouse from a business and/or investment. No evidence has been led as to any form of income on the part of the respondent as spousal support payor other than the earnings from his employment.

[ 25 ] In addition to income received, the court may also consider potential or notional income, that is, income that a spouse could reasonably be expected to receive if that spouse were to exercise his or her capacity to earn income from employment or obtain income from available sources.

[ 26 ] From this it follows that a spouse must maximize his or her earning capacity and income may be imputed to a recipient spouse or in fact a payor spouse who has failed to maximize his or her earning capacity.

[ 27 ] There is no question that the court may impute income to a spouse for the purpose of determining spousal support, even though there is no express provision in the Divorce Act which sets out how this is to be done. The Spousal Support Advisory Guidelines ( SSAGs ) refer to imputing income along the lines of the Child Support Guidelines (CSGs) and the courts have therefore applied the same methodology in imputing income when determining spousal support: see Poirier v. Poirier , 2010 ONSC 920 .

[ 28 ] The factors to be utilized in determining economic self-sufficiency are set out in two decisions of the Ontario Court of Appeal. In Fisher v. Fisher , 2008 ONCA 11 , the court made the following observation, at para. 53:

Thus, a determination of self-sufficiency requires consideration of the parties’ present and potential incomes, their standard of living during marriage, the efficacy of any suggested steps to increase a party’s means, the parties’ likely post-separation circumstances (including the impact of equalization of their property), the duration of their cohabitation and any other relevant factors.

[ 29 ] In an earlier decision, Brophy v. Brophy , 2004 25419 (ON. C.A.) , the Court of Appeal adopted and confirmed the findings of the trial judge in that case in the following terms, at para. 28:

The promotion of self ‑ sufficiency is “in so far as practicable” an objective of spousal support. It is questionable whether Ms. Brophy will ever be completely self-sufficient in relation to the lifestyle she enjoyed during the marriage, particularly durin g the last few years of the cohabitation as Brophy Financial began to command a substantial income. Part time employment for Ms. Brophy in the future, once the demands of her family have diminished, is indeed expected of her . The matter can always be reviewed by the court at that time. Needless to say, if there is ever a material change in either of the parties’ circumstances, a motion to change may be brought. (Emphasis added)

[ 30 ] These extracts from the above cases illustrate the general principles on the issue of self-sufficiency. The court must apply these general principles to the facts of each case as established in the evidentiary record and in the exercise of its discretion in determining issues of imputing income, the court must rely on the facts established in the evidentiary record.

[ 31 ] In the present case, the applicant has not worked since 2002 and has not had any employment prospects or endeavours in the period following the separation of the parties. There is no question on the basis of her educational achievement that she is not in a position to obtain employment of a significant remunerative nature without significant retraining. However, she is not now in a situation where she has young children or other responsibilities that would impede her from making reasonable efforts, firstly to obtain employment commensurate with her experience and educational level, and secondly, to embark upon a serious retraining program. There is no evidence she is suffering from any health disabilities; she is a 48 year-old woman whose testimony establishes she does not appear to have any difficulties with comprehension and expression in English, notwithstanding her suggestions that she regards herself as having a weak command of the English grammar.

[ 32 ] Her evidence is that since the date of separation in 2008, the applicant was involved in the sale of the family home, although the precise nature of the time expended by her in that involvement was not made abundantly clear. However, and more importantly, since the summer of 2011 at or about the time of the order of Seppi J. previously referred to, she has submitted about four or five applications for employment, plus her resume, for employment as a filling clerk or general office work, but without success. Her evidence is that she had searched for unskilled factory work since 2008 with no success; however, no details of such searches were given.

[ 33 ] In these circumstances, I am not persuaded that the applicant has made reasonable efforts to become self-sufficient. Accordingly, the next issue to be addressed is what amount of income should be imputed to her.

[ 34 ] There is no question but that a person in the position of the applicant might not reasonably be expected to obtain employment in the work or employment suited to her educational level in light of her lack of involvement in the labour market over the period in question. Any such employment would not likely at this point be remunerated at a level higher than the current minimum wage in Ontario at approximately $10.00 per hour. Both counsel in the course of their submissions agreed that the annual income from someone at the minimum wage in Ontario at this time would be approximately $20,000.00-21,000.00 per annum. In these circumstances, I will impute income to the applicant at $20,000.00 per annum. This then leads to the next point, namely, what should be the ongoing spousal support obligation of the respondent.

Disposition

[ 35 ] I accept the submissions of counsel for the respondent that the mid-point of the SSGs at this time should be in the range of $2,000.00. I therefore vary the spousal support obligation of the respondent from the order stipulated by Seppi J. in August of 2011 by reducing the same from $2,900.00 per month to $2,000.00 per month.

[ 36 ] This adjustment will require some further calculations.

[ 37 ] Paragraph 3 of the order of Seppi J. provided that the order of $2,900.00 per month would be without prejudice to review and further variation if the respondent’s disability did not permit him to be back at work full-time by at least the end of October 2011.

[ 38 ] The evidence establishes that the respondent did not return to full-time work from his disability until the end of November 2011.

[ 39 ] Counsel for the respondent has submitted that in these circumstances the respondent is entitled to a reduction of his income obligation under para. 3 of the order of Seppi J. of approximately $1,700.00, after taking into account the net effect of his disability income over his regular income.

[ 40 ] In these circumstances, that sum of $1,700.00 shall be a credit against the ongoing obligation of $2,000.00 per month spousal support effective February 1, 2012.

[ 41 ] The question of securing the respondent’s ongoing spousal support obligation by way of a charge or other designation against his death benefit policy has not been satisfactorily addressed in the evidence. I am persuaded that such obligation should be secured against any death benefit insurance on the respondent’s life. The only evidence of such life insurance coverage is his employee benefit term insurance, but there was no satisfactory evidence as to whether the current designation of the applicant as beneficiary of such policy has been made irrevocable or is subject to change by the respondent. If the designation is subject to change, then the respondent shall forthwith cause the beneficiary designation to be made in favour of his wife on an irrevocable basis, to secure his spousal support obligation. The parties will have to address this matter further and may, if they so choose, obtain the courts’ advice and direction as to the methodology to secure this obligation.

Costs Issues

[ 42 ] I address the question of costs. The respondent has been significantly successful in responding to the wife’s claims in this matter. If there have been any offers to settle within the meaning of Rule 18 of the Family Law Rules , I will address those matters. In any event, I will entertain submissions on the question of costs along the following lines and schedule:

submissions in writing are not to exceed 4 pages in length, exclusive of supporting materials,

(a) by the respondent, to be served and filed within 21 days of the date
of this endorsement;

(b) responding submissions by the applicant, to be served and filed
within 10 days of the receipt of the respondent’s submissions; and

(c) reply, if any, submissions by the respondent, to be served and filed, within 7 days of receiving the responding submissions of the
applicant.

MacKenzie J.

DATE: March 7, 2012

COURT FILE NO.: FS-0825-00
DATE: 20120307

SUPERIOR COURT OF JUSTICE - ONTARIO RE: Berta Costa (applicant) v. Moises Costa (respondent) BEFORE: MacKenzie J. COUNSEL: Mr. Rodenburg, for the applicant Mr. J. Eason, for the respondent HEARD: February 14, 2012 ENDORSEMENT MacKenzie J.

DATE: March 7, 2012