ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS – 07 – FD331977
DATE: 20130219

BETWEEN:

Aston Reid

Applicant

– and –

Beverley Reid

Respondent

Sidney Klotz, for the Applicant
Jerome Harvey Stanleigh, for the Respondent

HEARD: February 11, 12 and 13, 2013

kiteley j.

[1] This was the trial of the motion to change brought on behalf of Aston Reid. For the reasons that follow, the motion is dismissed.

[2] The parties were married in 1978. Their children were born in 1980, 1982 and 1984. They separated in April 2007 when the Applicant left and the Respondent remained in the former matrimonial home with the children. In 2007, the Applicant started divorce proceedings.

[3] In October, 2010, Perkins J. began a trial of the support and property issues. Both parties called evidence. On October 20, 2010, Perkins J. made a final order on consent by which title to the former matrimonial home vested in the Respondent and the Respondent was not entitled to any net equalization payment. The Applicant was required to sign such documents as were necessary to convey title to the Respondent. The order contained the following terms with respect to spousal support:

2. THIS COURT ORDERS THAT the Applicant shall pay spousal support to the Respondent Beverley Reid in the sum of $1,000.00 per month retroactive to May 1, 2007 and payable each month thereafter until the Applicant retires from his present employment with the Toronto Transit Commission.

3. THIS COURT ORDERS THAT the Applicant shall pay arrears of spousal support in the amount of $42,000.00 as follows:

(a) The Applicant shall make a lump sum payment of $7,000.00 to the Respondent’s solicitor Jerome H. Stanleigh in trust on or before November 15, 2010.

(b) The Applicant shall pay $500.00 per month commencing November 1, 2010 and continue to pay for support arrears totaling $35,000.00 on a monthly basis thereafter until the said arrears have been paid in full.

4. THIS COURT ORDERS THAT the Applicant pay spousal support of $750.00 per month commencing the first day of each month following his retirement from the Toronto Transit Commission.

[4] The order was entered on November 25, 2010.

[5] At the time of the trial in October 2010:

• the Applicant had been born in September, 1951 and was 59 years old. The Respondent had been born in March, 1950 and was 60.5 years old;

• the Applicant was residing with his second wife and their children who were then aged approximately 6 and 9, both of whom had been born before he separated from the Respondent in 2007;

• the Applicant had been working for the TTC as a bus driver for approximately 26 years. His line 150 income for 2009 was $81,000; for 2010 it was $69,538;

• the Respondent was residing in the former matrimonial home with the older two children;

• the Respondent had been working for a manufacturing company for almost 26 years. Her line 150 income for 2009 was $35883; for 2010 it was $42826.

[6] At about the time that the order was entered, the Applicant paid to Mr. Stanleigh $2500 on account of his obligation pursuant to paragraph 3(a) of the order. On November 24, 2010, he signed a transfer of his interest in the matrimonial home and it was registered that day. In February, 2011, the Applicant began paying spousal support. The Applicant did pay $1000.00 per month until and including December, 2011. The Applicant’s last day of work was in November, 2011. He retired effective January 6, 2012 at 60 years and 3 months. Commencing in the month of January 2012, the spousal support payment was reduced to $750 per month.

[7] The Applicant’s current obligation is to pay $750 per month on account of ongoing spousal support and $500 per month on account of the arrears of spousal support which were fixed in October 2010 at $42000. The Applicant has paid some of the arrears, including an involuntary diversion of $10745 in August 2012. Counsel agree that the arrears as of February 2013 are $18301.

Motion to Change

[8] On June 1, 2011, the Applicant began this motion to change, originally returnable July 12, 2011. The grounds on which he asked for an order terminating all of his obligations were as follows:

REDUCTION IN INCOME

1. The Applicant’s regular income was significantly lesser than the income that was reported as at the time the court order was made. The Applicant was working overtime in order to have enough money to pay his legal fees at the time. The Applicant is back on his regular schedule since 2010.

2. The Applicant’s current yearly income will translate to $56,505.60 in 2011 whereas the yearly income upon which the spousal support order was based was the applicant’s income of $81,000 in 2009.

3. The Applicant due to medical reasons is unable to work overtime to make the kind of money reported in his notice of assessment in 2009.

UNDUE HARDSHIP

4. The Applicant has also remarried and has two (2) children from the current marriage to support. The Applicant spouse does not work as she takes care of the children at home. The Applicant and his family have since the commencement of the spousal support payment faced financial hardship to the point that they find it difficult to financially maintain their day to day living.

RENTAL INCOME

5. It has been uncovered that the Respondent was earning income by renting the former matrimonial home prior to and at the time the order was made. However, she denied ever renting the former matrimonial home prior to and at the time the order was made.

[9] The Applicant seeks to terminate ongoing spousal support of $750 per month and eliminate the arrears of $18301 which are being paid at the rate of $500 per month pursuant to the October 20, 2010 order.

[10] The Applicant was required to file a sworn financial statement with his Motion to Change but that was not provided to me. He did sign a financial statement sworn July 25, 2012 and on February 6, 2013, he filed an affidavit confirming that that financial statement remains the same and was still accurate.

[11] In her Response to Motion to Change dated August 8, 2011, the Respondent objected to termination and asked that the order continue. If the Respondent filed a financial statement with her Response to Motion to Change, it was not provided to me. She did sign a financial statement on November 14, 2012.

[12] The parties attended before the Dispute Resolution Officer on August 25, 2011 at which time the DRO made an endorsement that the parties were to deliver all medical reports and any other documentation relied on. He noted that if the Applicant’s doctor intended to charge for medical reports, records and clinical notes, that the Respondent would pay the cost, subject to advice from counsel. The endorsement also indicated that any specialist medical report produced would be subject to the other side having the right to an independent medical examination at his/her expense. The DRO also noted that the Respondent wanted to bring a motion for an order that the Applicant be found in contempt of the order of Perkins J. but that no such motion should be brought before a settlement conference had been held.

[13] The settlement conference was scheduled for May 28, 2012 but did not proceed. I adjourned it to June 6, 2012 with directions as to service of settlement conference briefs and offers to settle.

[14] On June 14, 2012, Czutrin J. heard a motion brought on behalf of the Respondent in effect, to compel the Applicant to provide clear title to the former matrimonial home. In September 2008, the Applicant had caused a Certificate of Pending Litigation to be registered. Czutrin J. made an order deleting the CPL from title and ordered the Applicant to pay costs of $1500.

[15] On July 27, 2012, Herman J. conducted a settlement conference. In her endorsement, she noted that each party still had disclosure outstanding. She ordered the Applicant to provide copies of all medical notes from doctors he had seen in the last three years and she ordered the Respondent to provide income tax assessments for 2010 and 2011, proof of year-to-date income in 2012, and proof of rental income, and proof of any RSP’s or other assets. Disclosure was required within 60 days. She set the trial date for February 11, 2013.

[16] In early February, 2013 counsel for the Respondent brought a motion to stay the trial because of outstanding arrears. He served that motion on or about January 30th. Counsel for the Applicant served a responding affidavit on February 1st notwithstanding a severe snow storm that day. On February 5th, Jarvis J. declined to deal with the motion because of the imminent trial. Mr. Stanleigh then served a notice of motion indicating that the motion would be dealt with at the opening of trial on February 11th. On that date Mr. Stanleigh advised that he had abandoned that motion in order to proceed with the trial.

[17] At the outset of the trial, I pointed out that the grounds upon which the Motion to Change had been issued were those set out above. In preliminary submissions before calling evidence, Mr. Klotz indicated that following the order of Herman J., the Applicant had obtained some medical documents and had obtained pharmaceutical records for a period of 3 years. Mr. Klotz had included those documents in a document brief that he intended to file. Mr. Stanleigh objected. I sustained the objection. Even if medical information had been produced in response to the order made by Herman J. (but not in response to the endorsement of the DRO in August, 2011), no notice of intention to introduce medical reports or records had been served or filed. I did not review the documents, but based on the submissions of Mr. Klotz it seemed that the documents included in the brief related to the Applicant’s decision to retire, not his decision to not work overtime as stated in his Motion to Change and were therefore not relevant to the grounds in the Motion to Change. Mr. Klotz asked to expand the grounds of the Motion to Change to include an assertion that the Applicant was unable to work at all. I declined to grant such a request given that the trial had been set on July 27, 2012 on the Motion to Change as it then stood. It was unfair and prejudicial to the Respondent to alter the grounds after the trial had commenced.

[18] The Applicant gave evidence about his circumstances. He is now 61 years old. His children are now 9 and 12 years old and attend school regularly. His wife is not employed outside the home. His pension income is $3505 per month which includes his TTC pension and CPP. He receives the Child Tax Benefit of $167 per month. His total income per year is estimated at $44064.

[19] The Applicant was asked about what medical conditions prevented him from working overtime. He said he had diabetes and high blood pressure. He described an incident that had occurred in November 2008 in which a passenger had a long butcher knife. He said from then he had been “like a vegetable”. He does not sleep and has depression and is under doctor’s care. He listed “a cocktail of medication” he said he was taking. I asked why that evidence about the November 2008 incident was relevant since it occurred before the trial in October 2010 and the Applicant said that it was “taking its toll now” and it was a “continuous thing”. Later in his evidence he appeared to weep and he said that that happens as well, that he can spontaneously begin to cry. I observed him weeping during the evidence of his son from whom he is estranged.

[20] Mr. Klotz asked if he had anything else in his body that was not working right. He said not that he recalled. Mr. Klotz then asked a leading question about his back and he answered that he has degenerative disc disease caused by driving the bus over bumpy roads for many years. The Applicant last worked on November 14, 2011. He said he had decided to retire because he could not carry on the work anymore because of pain and depression and not sleeping.

[21] The Applicant pays rent of $898 per month. He has a pension with the TTC that counsel agree was valued for purposes of the trial in October 2010 at $132,000. In his financial statement sworn July 25, 2012, he had debts that totaled over $81000 including a debt to Leon’s Furniture (which his current wife had incurred before the trial in 2010), visa cards collectively of almost $16000, arrears to the Respondent he estimated at $27000, a debt to Canada Border Services Agency which he explained was because he bailed a friend out who then skipped bail, leaving him with the debt. If the amount owed to the Respondent is subtracted, his debt was approximately $54000. I cannot determine how much of his debt has increased since October 2010.

[22] The Applicant had many “concerns” about the Respondent’s circumstances which he pointed out in examination-in-chief and in cross-examination.

[23] The Respondent is 62 years old and continues to live in the former matrimonial home. Their son lives with her. He has been largely unemployed but has recently obtained full time employment. He does not contribute to the Respondent’s household. One of their daughters is married. The other has just finished the real estate course and stays either at her sister’s or her mother’s home. She does not contribute to the household. The Respondent estimated that the former matrimonial home was valued at approximately $350,000 and that it had not gone up since the trial in October 2010 because it needed a lot of work. She does not have a pension through work but she does show deductions from income that are contributed to an RRSP. As of December 31, 2012, she had a deferred profit sharing plan valued at $51000 and an RRSP valued at $40000. She had a line of credit in the amount of approximately $238000, of which approximately $168000 was advanced so that she could assist her daughter to purchase a condominium. Neither she nor her daughter said how that debt was to be repaid but both agreed it was a debt not a gift. The Respondent showed debts to three individuals that totaled $24000 each of which was challenged by counsel for the Applicant. One of those individuals who she said she owed $9000 was called as a witness (as he had been called in October 2010) and he said that she had paid the debt some time ago (and before the date of her sworn financial statement) and he could not remember when. She gave evidence after him and she said that because she had borrowed the $9000 on her line of credit, she considered that she still owed the money to him and for that reason the debt was still on her financial statement.

[24] In cross-examination the Applicant was shown the handwritten Minutes of Settlement that had formed the basis of the October 20, 2010 order. He was asked about the settlement discussions that had taken place 3 or 4 days into the trial. The Applicant thought it had been after 4.5 days. He agreed that he had signed the page that had his signature but insisted that there was no writing on the paper when he signed. He remembered that Perkins J. had signed an order and had encouraged them to get over the family feud but he insisted that Perkins J. had not reviewed the contents of the Minutes of Settlement in open court before he had signed the order. This was the first time in over two years that he had challenged the fact that he had knowingly signed Minutes of Settlement.

[25] Mr. Stanleigh called the Respondent and two of their children. All three described the settlement discussions and said that Perkins J. had reviewed each part of the settlement when the parties (and the children) were in court.

Analysis

[26] In order to vary a support order under s. 17 of the Divorce Act an applicant must prove a material change in circumstances, that is, a change which if known at the time of the prior order would likely have resulted in a different support order. Facts which were known at the time of the order cannot be relied upon to prove a material change in circumstances. In cases of voluntary early retirement the courts have carefully scrutinized the surrounding circumstances where the support payor tends to rely on the decline in income to reduce the support obligations.[1]

[27] There are two issues in this Motion to Change: terminating the arrears of $18301 and terminating the ongoing spousal support obligation. As for terminating the arrears, the Applicant relies principally on three grounds.

[28] The first is that he has experienced a reduction in income. It is the case that the Applicant’s income has reduced to approximately $42000 which represents pension income of $34298 from TTC and $7607 from CPP (plus the child tax benefit which I disregard for this calculation). As indicated above, his 2009 income had been $81225; his 2010 income was $69538; and his 2011 income was $65244. In comparison with any of those three prior years, he has experienced a significant reduction. However, that does not necessarily mean that the reduction is a material change in circumstances. It was clearly contemplated by the parties in October 2010 that the Applicant would retire from the TTC. He was then 59 years old and had worked with the TTC for 26 years. The Minutes of Settlement indicate that upon retirement, the monthly spousal support would reduce from $1000 to $750. Having contemplated the change in the periodic amount, they could have contemplated a change in the payment of the arrears. They did not do so. The inference I draw is that retirement at whatever age would not lead to a reduction in the arrears.

[29] As for his medical circumstances, I declined to allow counsel to file whatever documents had been eventually served and I declined to permit an amendment that would allow him to expand his Motion to Change to refer to retirement as opposed to simply not being able to work overtime. The evidence that he did provide as to his health was weak. The incident with the passenger that he said caused him insomnia and depression and spontaneous weeping occurred two years before the trial in 2010. His diabetes has been long standing and I had the impression that his high blood pressure was also long standing. Until prompted by his counsel, he did not mention the back condition that he said was a factor that contributed to his retirement. Even if he had provided medical reports or documents, his own evidence indicated that all of these conditions had been in existence at the time of the trial in October 2010 and could not be material changes in his circumstances.

[30] The second reason relied on was that he has two children and a wife who is not employed. That has not changed since October 2010. That cannot constitute a material change in his circumstances.

[31] The third reason relied on was the rental income received by the Respondent. I am satisfied by her evidence and the evidence of the adult children that the basement had been rented prior to his leaving the former matrimonial home in April 2007 but has not been rented since he left. That was not established as a material change in circumstances.

[32] The Applicant had not paid spousal support between April 2007 and February 2011. The arrears of spousal support at the agreed upon rate of $1000 per month accumulated in the 3.5 years between the separation and the date of the consent order. Any change in the Applicant’s circumstances after the making of the order cannot justify altering his agreement and subsequent court order to pay those arrears because his obligation to pay was based on his then income and her then income. Neither counsel provided any authority where a consent order for retroactive spousal support was eliminated in similar circumstances.

[33] The Applicant has failed to prove that he has experienced a material change in circumstances that was not contemplated at the time of the consent order. I decline to grant the motion as it relates to the arrears.

[34] I turn now to whether the ongoing spousal support should be reduced or eliminated. The Applicant relies on two submissions: first, having taken early retirement, his income is less than contemplated in 2010; and second, that the circumstances of the Respondent are materially better than his.

[35] As for the first, Mr. Klotz argued that, having retired at age 60, the Applicant’s pension was materially less than if he had retired at age 65. I did not receive any evidence or documents to demonstrate that there was a change. I can infer that if one takes early retirement, that the benefits will last longer but be in a lesser amount. However, I have no basis upon which to conclude that such a lesser amount constitutes a material change in circumstances. Furthermore, the parties turned their minds to the effect of his retirement and agreed to reduce the monthly spousal support by $250.

[36] I turn to the second submission, namely the Respondent’s alleged material change in circumstances. As indicated above, in support of his Motion to Change the Applicant did not assert that the Respondent’s circumstances had materially improved. The only “hook” for making that submission is the rental income that I have rejected.

[37] Although not pleaded, I will consider the evidence and submissions. It is the case that the Respondent’s circumstances are better than the Applicant’s financial circumstances. She has the former matrimonial home with some equity which on her evidence is less than $100,000. She has retirement savings and deferred profit sharing that will total $91000. Other than the line of credit, she has questionable debts. She works as a foam fabricator and has some health concerns that were not documented.

[38] Mr. Klotz argued that the Respondent’s circumstances were equally as relevant as the circumstances of the Applicant. I am not persuaded that the Respondent’s circumstances are relevant until the Applicant establishes a material change in circumstances on one of the grounds on which he relied as indicated in paragraph 8 above. He has not done so. Even if I were persuaded to look at her circumstances, they do not constitute a material change in her circumstances since the consent order was made in October, 2010. She continues to work at the same job. She earns more in the fall of each year because that is her employer’s busy season and she works overtime. In October 2010 she was earning $17 per hour. She now earns $17.72 per hour. She continues to contribute roughly the same amount to an RRSP and to accumulate a deferred profit sharing plan. She has occasionally withdrawn funds from her RRSP. She is similar in age to the Applicant. She made choices since the making of the consent order, namely to keep the former matrimonial home and to continue to work and contribute to her own retirement. She has also made choices to contribute directly and indirectly to the support of all of her adult children, decisions which the Applicant criticizes. All of the choices made by the Respondent were foreseeable.

[39] The Applicant has made choices. The Respondent has made choices. None of them on either side constitute material changes in circumstances since October, 2010.

[40] Before concluding, I will comment on the strength of the evidence. Neither the Applicant nor the Respondent was wholly credible and reliable. The evidence by the Applicant about the Minutes of Settlement was incredible. It was as if he was making it up as he went along. He said that he had seen the consent order before he had paid the $2500 and transferred his interest in the matrimonial home in November 2010 but he had not seen the Minutes of Settlement until May 2011 when his then counsel was preparing the Motion to Change. Yet the Motion to Change and any subsequent affidavits are silent on the issue. He did know about the order and he acted on it by making an installment on the arrears, by transferring his interest in the former matrimonial home, and by paying ongoing spousal support and monthly installments of $500 against the arrears. It is not credible that he did not know and voluntarily sign the Minutes of Settlement. There is no part of that evidence which can be relied on. Instead, it demonstrated the lengths to which he would go to resist meeting his obligations to the Respondent.

[41] Although he had sworn an affidavit on February 6th, 2013 in which he confirmed that his financial statement sworn July 25, 2012 was still accurate, it clearly was not. Furthermore, it showed him with a monthly income of $3672 and monthly expenses of $8747. Obviously a serious arithmetic mistake was made somewhere but that was not explained.

[42] As for the Respondent, her explanation for the continuing debt of $9000 was equally as incredible. It did appear that she had taken a long time to produce financial disclosure apparently because her counsel took the position that her financial circumstances were not an issue, notwithstanding the order of Herman J. and the obligation to provide financial disclosure in response to a Notice of Change.

[43] The evidence on which credibility matters is whether the early retirement by the Applicant was done in good faith or to avoid his obligations pursuant to the consent order. At the outset, I declined to allow the Applicant to rely on medical documents for which formal notice had not been given. I also declined to allow the Applicant to expand on his grounds for his Motion to Change from not being able to work overtime to not being able to work at all. However, as the evidence unfolded, it was clear that both parties considered the issue to be retirement not working overtime. On the issue as to his reasons for retirement, I am not satisfied that it was done in good faith. I do not accept his evidence.

[44] The consent order was made October 2010. Within seven months, on June 1, 2011, he caused to be issued a Motion to Change that sought a variation based on not working overtime. When the Respondent filed her Response to Change, it was clear that she would oppose his motion. The DRO noted that medical information was necessary to support his claim that he could not work overtime. His last working day was November 14, 2011. He voluntarily retired effective January 6, 2012. I infer from the course of these events that he retired to enhance his chances of being successful on changing the order. His retirement under these circumstances, although not pleaded but nonetheless relied upon in evidence and in submissions, does not constitute a material change in his circumstances.

[45] However, whether he retired in good faith (due to medical circumstances) or not is irrelevant to the outcome of this motion. As I have held, his retirement was contemplated by the terms of the Minutes of Settlement and the consent order. The fact that he retired at 60 years and 3 months as opposed to some later point does not impact on the outcome of this motion.

Costs of the Abandoned Motion to Stay

[46] The Applicant is entitled to costs of the abandoned motion. Mr. Klotz asked that I fix them at $1500 and set them off against the costs ordered by Czutrin J. when he vacated the Certificate of Pending Litigation. Mr. Stanleigh conceded that the Applicant is entitled to costs.

[47] I will fix those costs when I hear submissions as to costs of the Motion to Change including the trial.

ORDER TO GO AS FOLLOWS:

[48] The motion to change is dismissed.

[49] Respondent shall pay costs of the motion returnable February 5th and 11th, 2013 and subsequently abandoned, in an amount to be fixed by me.

Kiteley J.

Released: February 19, 2013

COURT FILE NO.: FS – 07 – FD331977
DATE: 20130219

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Aston Reid

Applicant

AND

Beverley Reid

Respondent

REASONS FOR JUDGMENT

Kiteley J.

Released: February 19, 2013

[1] Willins v Willins (1997) CarswellOnt 3528