ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FC-12-169-0
DATE: 20130710
BETWEEN:
Ladislav Kovac
Applicant
– and –
Vierka Kovac
Respondent
Philip W. Augustine, for the Applicant
Beverley Johnston, for the Respondent
HEARD: January 29, 30 and 31, 2013
REASONS FOR JUDGMENT
Blishen, J.
Introduction
[1] This case deals with entitlement, quantum and duration of spousal support.
Background Facts
[2] The parties were married February 1, 1986 in the former Czech Republic, now Slovakia. They have two children, Berenika, born February 19, 1987 and Lester, born July 11, 1988.
[3] Just prior to marriage, both parties graduated from university with degrees in computer science. After compulsory military service, Mr. Kovac was able to find work in the computer field while Ms. Kovac held mostly clerical positions. She stopped work in January 1987 as she had a high risk pregnancy. She returned to a clerical position in the summer of 1989, after her maternity leaves.
[4] The revolution in the Czech Republic commenced in 1989 to 1990. Mr. Kovac began to think of making a life elsewhere for the sake of the family. He continued working in the computer field and made efforts on his own to learn English.
[5] In January 1992, Mr. Kovac left Slovakia for Toronto. He obtained employment writing software and, in August 1992, Ms. Kovac and the two children emigrated from Slovakia to join him. Ms. Kovac, who knew little English, took some English classes while her husband worked.
[6] In the spring of 1993, Mr. Kovac got a job offer with an Ottawa computer firm at a higher rate of pay and the family moved. Ms. Kovac continued to take English classes and to look after the children both before and after school.
[7] In June 1994, the couple bought their first home. Ms. Kovac, who was still struggling to learn English, began to work at Wal-Mart for minimum wage as a sales clerk and stocking shelves. She felt it important to get out in public and practice her English. The children attended daycare before and after school. In 1996, given the daycare costs, Ms. Kovac switched her hours to nights in order to be home with the children before and after school. She continued to perform most of the household tasks. The family’s focus was paying off debts, saving and living within a strict budget.
[8] In February 1997, Mr. Kovac incorporated his own software company, Blue Wolverine Software Incorporated (“Blue Wolverine”). Ms. Kovac left Wal-Mart in 1999 and began doing some clerical work for Blue Wolverine. The parties were able to income split and put more money towards paying off the mortgage on the home. Mr. Kovac’s income steadily increased and the household standard of living improved. By 2000, the mortgage was paid off, the parties had few debts, and their financial situation was stable.
[9] In the summer of 2000, Mr. Kovac returned to Slovakia for a high school reunion, while Ms. Kovac and the children remained in Ottawa. While there, he reconnected with his high school girlfriend. In February 2001, Mr. Kovac told Ms. Kovac he was in love with his former girlfriend. Ms. Kovac proposed counselling but the couple did not attend.
[10] On July 1, 2001, the parties separated but continued to reside together in the matrimonial home until Mr. Kovac moved to an apartment on October 1, 2001. His girlfriend came to join him there in the spring of 2002. Ms. Kovac remained in the matrimonial home with the children who visited with their father every second weekend.
[11] Shortly after leaving the home, Mr. Kovac began to pay Ms. Kovac $3,000 per month for spousal support. He also paid child support for 14 year old Berenika, and 13 year old Lester, although the amounts were not in accordance with the Federal Child Support Guidelines, S.O.R./97-175, as am. (“Guidelines”).
[12] Ms. Kovac was devastated by the separation and began to take medication for depression. In 2002, she began to work as a part-time receptionist for her doctor while retraining by taking courses at Algonquin College in bookkeeping and accounting. She finished the courses in 2005 and applied for a number of jobs.
[13] In 2006, Mr. Kovac reduced the monthly spousal support payments to $2,500. At that time, Ms. Kovac began testing for a job as a call center agent with the Canada Revenue Agency (“CRA”), while continuing to work as a part-time receptionist. In February 2008, she finally obtained employment as a call center agent with CRA. She continues to work there on six month contracts.
[14] Ms. Kovac’s income from employment increased after obtaining the job at CRA and on February 1, 2009, Mr. Kovac stopped paying spousal support. He continued to pay child support until July 2010 and assisted the children with post-secondary education costs. The parties settled their property issues. There was never a separation agreement nor a court order dealing with child or spousal support.
[15] After separation, Mr. Kovac continued to operate his software company, Blue Wolverine, until January 2004 when he began employment with Siebel Systems, which was acquired by Oracle in 2006. His 2012 income, as disclosed on his December 31, 2012 paystub, including benefits, was $163,975. His financial statement from January 2013 indicates a net worth of $852,332. Mr. Kovac now lives with a new partner in her home; pays her $750 per month rent and shares other household expenses.
[16] Ms. Kovac continues to work on six month contracts as a CRA call center agent. Her January 2013 financial statement indicates an annual income of $49,335 and a net worth of $266,338. Ms. Kovac bought out Mr. Kovac’s interest in the matrimonial home and received a property settlement for her interest in Blue Wolverine.
[17] Both children are now independent although Berenika resides with her mother, having completed her Commerce Degree at the University of Toronto. Lester is in third year law at the University of Toronto and Mr. Kovac continues to assist him with education and living expenses.
Positions of the Parties
[18] As previously noted, there has never been an order nor a separation agreement dealing with spousal support. In January 2012, Mr. Kovac filed an Application requesting only a divorce. In March 2012, Ms. Kovac filed an Answer requesting:
- Periodic spousal support of $3,000 per month or, in the alternative, lump sum spousal support;
- An order that Mr. Kovac transfer his interest in the former matrimonial home to her; and
- Life Insurance in order to secure the spousal support obligation.
[19] On December 21, 2012, Ms. Kovac obtained leave to amend her Answer to request an order for spousal support retroactive to April 2009.
[20] Prior to trial, Ms. Kovac bought out Mr. Kovac’s interest in the matrimonial home leaving only the issue of spousal support.
[21] Ms. Kovac argues she has suffered an economic disadvantage due to the role she played during the marriage and due to the marriage breakdown. She requests ongoing and retroactive spousal support on a compensatory and non-compensatory basis for an indefinite period. Ms. Kovac argues, given the fluctuation in Mr. Kovac’s income due to investment income, stock options and bonuses, it would be appropriate and reasonable to average his income over the past five years in determining spousal support.
[22] Mr. Kovac requests a dismissal of Ms. Kovac’s spousal support claim or, in the alternative, a modest time-limited amount of periodic support or a discounted lump sum spousal support order. He states he has paid sufficient spousal support since the date of separation to satisfy his obligations under the Divorce Act, R.S.C. 1985, c. 2 (2nd Supp.), as am. Mr. Kovac argues that the seven and a half year period he paid spousal support was sufficient for Ms. Kovac to transition into self sufficiency relative to the standard of living of the parties during the marriage and that she no longer requires spousal support to meet her needs, including her need for long term financial security. He requests a dismissal of her claim for retroactive spousal support arguing she did not pursue spousal support after he ceased paying nor did she make any formal claim for spousal support until filing her Answer to the divorce Application in March 2012. No claim for retroactive spousal support was made until December 2012.
Law and Analysis
Entitlement
[23] The factors and objectives the Court must consider in making an order of spousal support are outlined under subsections 15.2(4) and (6) of the Divorce Act:
15.2 (4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[24] All factors under s. 15.2(4) must be carefully considered by the Court in light of the objectives of spousal support listed in s. 15.2(6). The objectives must be balanced in the context of the facts of the case. The Court must exercise its discretion in order to relieve the adverse consequences and economic hardship that results from marriage or its breakdown. No single objective, including economic self sufficiency, is paramount.
[25] As noted by the Supreme Court of Canada in Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813 at para. 79:
79 The exercise of judicial discretion in ordering support requires an examination of all four objectives set out in the Act in order to achieve equitable sharing of the economic consequences of marriage or marriage breakdown. This implies a broad approach with a view to recognizing and incorporating any significant features of the marriage or its termination which adversely affect the economic prospects of the disadvantaged spouse. ...
See also Fisher v. Fisher, 2008 ONCA 11, Bracklow v. Bracklow, 1999 715 (SCC), and Miglin v. Miglin, 2003 SCC 24.
[26] The Supreme Court of Canada in Bracklow outlines three conceptual bases for entitlement to spousal support: compensatory, contractual and non-compensatory. In this case, there is no contractual basis for spousal support.
[27] In Bracklow, the Supreme of Court of Canada discussed the concepts of compensatory and non-compensatory spousal support as follows:
39 ...Under the Divorce Act, compensation arguments can be grounded in the need to consider the "condition" of the spouse; the "means, needs and other circumstances" of the spouse, which may encompass lack of ability to support oneself due to foregoing career opportunities during the marriage; and "the functions performed by each spouse during cohabitation", which may support the same argument. ...
40 ...To be sure, these factors may support arguments based on compensation for what happened during the marriage and its breakdown. But they invite an inquiry that goes beyond compensation to the actual situation of the parties at the time of the application. Thus, the basic social obligation model may equally be seen to occupy the statutory provisions.
41 Section 15.2(6) of the Divorce Act, which sets out the objectives of support orders, also speaks to these non-compensatory factors...
42 Similarly, the fourth objective of s. 15.2(6) of the Divorce Act — to promote economic self-sufficiency — may or may not be tied to compensation for disadvantages caused by the marriage or its breakup...
[28] A careful review of the condition, means, needs and other circumstances of each party in this case along with the objectives of spousal support results in a finding that Ms. Kovac is entitled to spousal support on both a compensatory and a non-compensatory basis.
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Conclusion
[83] In considering and balancing all of the above factors in the context of the principles and foundation for spousal support, I find Ms. Kovac entitled to spousal support retroactive to the date of the initiation of her request, which was the first formal notice Mr. Kovac had of her desire to continue spousal support since he terminated his payments at the end of January 2009. Therefore, I find Ms. Kovac entitled to spousal support for an indefinite period commencing March 1, 2012, the month she filed her Answer.
[84] Based on Mr. Kovac’s 2012 income, I find the appropriate amount to be $2,508 per month commencing March 1, 2012 and payable on the first of every month thereafter.
[85] Both parties are to provide copies of their income tax returns and Notices of Assessment to one another by June 30th of each year.
Costs
[86] Should the parties wish to make submissions on the issue of costs, they should arrange to do so through the trial office for a hearing of up to two hours with written materials to be provided by both parties by 2:00 p.m. two days in advance.
Blishen, J.
Released: July 10, 2013
COURT FILE NO.: FC-12-169-0
DATE: 20130710
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ladislav Kovac
Applicant
– and –
Vierka Kovac
Respondent
REASONS FOR JUDGMENT
Blishen, J.
Released: July 10, 2013