ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

COURT FILE NO.: FC-08-030322-01

DATE: 20130716

BETWEEN:

Irina Kirilova Iordanova
Applicant

– and –

Borislav Svetoslavov Iordanov
Respondent

Valerie Brown, for the Applicant

Manju Gurjot Sekhon, for the Respondent

HEARD: July 10, 2013

RULING ON MOTION TO CHANGE

gilmore J.:

[1] This is the respondent father’s motion to change. He seeks a termination of support for the parties’ eldest child, commencing June 30, 2011 and a corresponding change based on support being paid for only one child, commencing July 1, 2011. The respondent also seeks a retroactive adjustment with respect to the section 7 expenses for child care for the parties’ youngest child, retroactive to January 1, 2011, as well as a change in spousal support by way of a termination, commencing January 1, 2012. Alternatively, the respondent seeks an order requiring spousal support to be paid in the mid-range on the grounds that the applicant has become self sufficient and has no further need of spousal support.

[2] The parties agreed that the motion to change would be heard on affidavit evidence and that any order made by the court would be a final one.

Background

[3] The respondent is employed as an engineer for the Thales Group in Toronto. He is forty-five years old. The applicant is employed full time as a recreational therapist at Baycrest Hospital in Toronto. She is forty-four years old.

[4] The parties have a twenty-five year old son, named Svetoslav Borslavov Iordanov, born January 15, 1988. Svetoslav completed his first university degree on June 30, 2011 and ceased being a dependant on that date. The parties also have a daughter, Sarah Borislavova Iordanova, born June 3, 2003. The children have resided with the applicant since the date of separation on September 15, 2007.

[5] After separation, the applicant commenced a court proceeding and a settlement was reached, which resulted in a final order, dated March 3, 2010. The relevant portions of that order are as follows:

(a) That the respondent pay child support to the applicant for two children in the amount of $1,372 per month, commencing February 1, 2010, based on his 2009 income of $97,366.52;

(b) That the respondent contribute to Sarah’s child care expenses of $6,680 in the amount of $236 per month (being the net after tax amount), commencing January 1, 2010, based on his 2009 income of $97,366.52 and the applicant’s 2009 income of $44,058;

(c) That the respondent pay the applicant spousal support in the amount of $550 per month, commencing February 1, 2010, based n his 2009 income of $97,366.52 and the applicant’s 2009 income of $44,058; and,

(d) The issues of child and spousal support may be reviewed in the event of a material change of circumstances, which may include a change in either party’s income or the number of children eligible for support changing.

[6] The respondent commenced his motion to change in July 2011 to seek a termination of child support for the parties’ son as of June 30, 2011 because of the completion of his post secondary education. He also sought a variation of the March 3, 2010 order to request a corresponding reduction in child support, commencing July 1, 2011, based on his 2010 income of $101,666. The applicant did not disagree with the relief sought by the respondent with respect to a variation of child support. However, the applicant, in her response to the motion to change, sought an upward adjustment of spousal support on the basis that she continued to be a dependant and that her need for support continues. As a result of the applicant’s claims in her response to the motion to change, the respondent amended his motion to change to include a claim for a termination of spousal support as of January 1, 2012.

[7] The parties were unable to reach an agreement with respect to the issue of spousal support, and therefore the respondent continued to pay child support for two children, child care expenses of $266 per month and spousal support of $550 per month in accordance with the March 2010 order. The respondent now takes the position that he is owed an overpayment of $22,716.

[8] The applicant’s position is that there is no overpayment, but if there is an overpayment as a result of the court ordering spousal support in the low or mid-range, the overpayment would be no greater than approximately $6,205.40, based on the applicant’s calculations. The applicant further argues that she offered to reduce support on an interim basis to avoid finding herself in the position of having to repay the respondent. The respondent argues that he also made various offers, but the issue of spousal support prevented any settlement and as a result, he continued to pay in accordance with the March 2010 order.

Material Change in Circumstances

[9] The March 2010 order contemplates a review of child and spousal support in the event of a material change in circumstances. The material change may include a change in either party’s income or the number of children eligible for support changing.

[10] The respondent argues that the change in the parties’ income would allow him to effect a retroactive change back to January 1, 2011. The applicant argues that the only material change as contemplated by the March 2010 order would be the change in the number of children eligible for support and therefore the commencement date for any retroactive calculation would be July 1, 2011.

[11] I find that there has been a material change in both parties’ incomes and as such, the respondent is entitled to a review of support in accordance with the March 2010 order back to January 1, 2011.

The Parties’ Incomes

(a) The Respondent’s Income

[12] There is no dispute the respondent’s income in 2009 was $97,677, $101,666 in 2010 and $90,298.62 in 2012. There was an issue raised by the applicant concerning the respondent’s 2011 income. His 2011 income notice of assessment shows an income of $90,669. A pay stub produced by the respondent to the applicant for the period ending June 4, 2011 shows regular year to date earnings of $37,343.36 and a project bonus of $12,393.40. A further earnings statement for the period ending December 3, 2011 does not make any mention of a bonus. The applicant argues the respondent has not fully disclosed his income as he received a bonus that was not included in his 2011 income.

[13] The respondent argues that he has fully disclosed all of his income. His employer changed payroll service providers half way through 2011, and he works for a reputable company who could not issue T4s upon which his income tax was calculated without including all earned income.

[14] The applicant also complains that the respondent has not provided his 2012 income tax return or notice of assessment, he has only provided a T4 slip. The respondent submitted that he has not filed his 2012 income tax return because he is awaiting the outcome of this motion. His income tax return naturally reflects a tax deductable spousal support payment and he does not wish to be in a position of filing a return and then having to re-file in the event that spousal support is adjusted as a result of his motion to change.

[15] While I have noted the reference to a bonus in the respondent’s June 2011 earnings statement, I cannot accept, based on the information given to me, that a reputable company such as Thales would issue documents to their employees which did not account for earnings by way of a bonus. I therefore accept the income noted in the respondent’s 2011 notice of assessment at $90,669.

(b) The Applicant’s Income

[16] There is no dispute with respect to the applicant’s income in 2010, which the parties agree was $47,015. There is also no dispute that her income in 2012 was $58,905.02; however, there is a dispute with respect to her 2011 income. The applicant seeks to have support based on an income of $54,621 for 2011. However, in 2011, the applicant received a one-time retroactive increase in pay of $6,602. The applicant argues that this should not be included solely in her 2011 income, but should be distributed with respect to the years in which it represents. That is, according to a letter dated October 31, 2011 from Baycrest Centre for Geriatric Care, a 3.25 per cent increase as of April 1, 2008, a 2.5 per cent increase as of April 1, 2009 and a 2.5 per cent increase as of April 1, 2010.

[17] I do not find it is realistic to retroactively calculate the applicant’s income based on the manner she suggests; however, I acknowledge that part of the retroactive increase related to years when the parties were not separated, namely 2008 and 2009. Therefore, I agree that it would be unfair to the applicant to include the full amount of the retroactive increase in her 2011 income. Therefore, the sum of $2,000 shall be included in the applicant’s 2010 income, thereby representing approximately one-third of the retroactive increase and bringing her income for 2010 for support purposes to $49,015.00.

Quantum and Duration of Spousal Support

[18] The respondent has been paying spousal support in the amount of $550 per month since February 1, 2010. The issue of the applicant’s ongoing entitlement to spousal support and the appropriate range of any support ordered was the most contentious issue in this case. Some review of the parties’ work history is in order to fully understand their employment positions at the beginning and end of the marriage and currently.

[19] The parties married when they completed high school. After finishing high school, the applicant attended a physiotherapy program in Bulgaria between 1988 and 1991. Upon completion of that program, she was qualified to be a physiotherapist in European countries. She then began working at the National Oncologic Centre in Sofia, Bulgaria, from May 1991 to 1995. She also worked there from late 1996 to 2000. In May 1995, the applicant was offered an eighteen month contract in Germany. She was offered a renewal of that contract, but declined the offer, notwithstanding that the pay was higher than what she was earning in Bulgaria, as the respondent could not work in Germany. The applicant then commenced a Masters program at the University of St. Kliment Ohridski in Sofia, Bulgaria, in 1994 and completed her Masters in 1996. This allowed the applicant to move into the position of director of physiotherapy at the National Oncologic Centre from 1997 to 2000. During the same period of time, the respondent did an engineering degree on a part time basis and obtained a job working for Bulgaria Telecom.

[20] There is a dispute on the evidence as to whether the parties jointly decided to immigrate to Canada for better prospects, or whether the idea was solely the respondent’s. However, the fact is that the parties migrated to Canada in late 2000 and both began looking for employment. Neither party was initially able to find employment in their respective fields of expertise.

[21] In January 2001, the applicant obtained part time employment at Winners and other part time work at a weight loss clinic. The Winners job lasted for six months, but she continued to work at the weight loss clinic until 2003, when the parties’ daughter was born. The applicant then took maternity leave and received employment insurance benefits. After her maternity leave, she attended Georgian College in a recreational therapist program between September 2004 and July 2005. The parties determined that this was the most effective way for the applicant to obtain additional qualifications in Canada which would allow her to apply for work in her field. After obtaining her diploma from Georgian College, the applicant obtained part time employment with Baycrest Hospital on October 11, 2005. After the parties separated in 2007, she began to work at Baycrest full time.

[22] The applicant’s position is that while she was self sufficient during the parties’ life in Bulgaria, she lost that ability in order to come to Canada with the respondent. She came to Canada to keep the family intact and support the respondent’s career. She submits that she went from being a respected professional, role model and teacher in Bulgaria to a sales clerk at Winners in Toronto and is offended that the respondent denies that she sacrificed her career so that he could advance his goals. The applicant submits that no amount of spousal support can truly compensate her for the real and professional loss that she has suffered by sacrificing her career to allow the respondent to pursue his own.

[23] Not surprisingly, the respondent has a different view of the parties’ employment history and mutual goals. He submits that when the parties were married, they lived with his parents in a two bedroom apartment, which allowed the applicant to study because his mother was taking care of their son. The respondent began his university education on a part time basis, so that he could continue to work. When the applicant went to Germany on her eighteen month contract, the respondent and his parents took care of the parties’ son.

[24] In 1996, the respondent finished his university degree in engineering and was hired for an engineering position full time with Bulgarian Telecom. Prior to that, he had been working for Bulgaria Telecom, but only part time, and as an associate and not yet graduated engineer.

[25] After the parties immigrated to Canada in September 2000, they remained unemployed until March 2001, when the applicant found the job at a weight loss clinic. The respondent found his first job in April 2001 with Thales, where he remains today. At the end of 2001, the parties moved to Newmarket and in March 2003, they bought a home in Newmarket.

[26] The applicant submitted that notwithstanding the Spousal Support Advisory Guidelines, ultimately the quantum of spousal support remains within the discretion of the court. The respondent has made an assumption that the applicant’s housing costs have been decreased by 50 per cent as a result of cohabitation with her partner. The applicant submits that her housing costs are similar to when she was residing alone because she has moved to a more expensive and larger home with a bigger mortgage and therefore her share of household expenses is essentially the same as when she was shouldering all of the household expenses while living alone. She and her partner purchased the home in June 2012. Her partner has no legal obligation to support her as they have not been living together as common law spouses for three years.

[27] The applicant urges the court to review the Divorce Act objectives and take a comprehensive approach to the financial consequences of the marriage. A compensatory approach should be taken to this case. This is not a case about what the parties may have given up when they immigrated to Canada, rather, the court should focus on what the applicant has given up repeatedly for the sake of her family and her marriage. First, she gave up the opportunity to continue working in Germany at a higher rate because she wanted to return and be involved in the care of the parties’ son. Then she left a teaching job at a hospital in Bulgaria and followed the respondent to Canada for the sake of the family. She went from a highly respected position to working at a retail store. Her qualifications did not translate into a similar Canadian equivalent, so she returned to school and obtained a further diploma. As a physiotherapist, she would be earning in the range of $80,000 in Canada, but is only now earning an income of approximately $60,000.

[28] The applicant suggests that the respondent does not appropriately acknowledge her sacrifice and there should be no limitation on spousal support after a twenty year marriage. Essentially, the respondent is seeking a termination of support less than two years after the 2010 order and that is inappropriate. Finally, the applicant still has the majority of care of the parties’ ten year old daughter, as the respondent no longer takes her for access on Wednesdays.

[29] The respondent argues that the applicant has achieved self sufficiency and that there has been a material change, not only as a result of the parties’ son no longer being a dependent, but also because of the change in the parties’ incomes, the applicant residing with a new partner, and the respondent’s new responsibilities for his wife and baby. The applicant has been able to increase her home equity and increase her savings, as shown by her financial statement. Her savings have gone from $20,000 to $40,000. The applicant responds by saying that the respondent is able to contribute over $800 per month towards his pension and RRSP, as shown by his payroll deductions.

[30] The respondent argues that although the parties were married for twenty years, the applicant has always been employed, other than a maternity leave for each child. She has a good professional background from Bulgaria, which has helped her in her Baycrest job. She was able to go to school and obtain credits at Georgian College and receive a job in a field related to her professional background. The respondent argues that the applicant has not made sacrifices of the magnitude that she claims, nor do such sacrifices, if there were any, entitle her to high end spousal support. She has reached a level of self sufficiency within a reasonable period of time and has not suffered any disadvantage from the marriage. Further, the applicant and her new partner jointly purchased a home in June 2012 and were together prior to that date. They purchased the home for $550,000 with a mortgage of $435,000. Prior to that the applicant purchased her own home post separation in November 2008, which she then sold at a profit in June 2012. The respondent notes that the applicant has been able to increase her savings and equity in her respective homes. She is also in a position to be able to share expenses with her new partner. The respondent complains that the applicant has been vague about the manner in which she shares expenses with her new partner and has failed to provide information about her partner’s income.

[31] The respondent has remarried and has a new child born in January 2012. He argues that although his second family would not be an overwhelming consideration for the court, it cannot be ignored as he now has other financial obligations.

[32] Finally, the respondent submits that coming to Canada was a joint effort and joint decision by the parties. They came to Canada for better opportunities. They used their education in Bulgaria to their advantage and both of their incomes have increased over time since arriving. It is improper for the applicant to now view this decision as one which would entitle her to any form of compensatory spousal support. She is completely self sufficient, employed full time with a rising income and has the benefit of sharing expenses with a new partner.

Section 7 Expenses

[33] The final order, dated March 3, 2010, requires that the respondent pay the applicant $236 per month (net of tax) for section 7 expenses for child care, based on his 2009 income of $97,336.52, and the applicant’s income of $44,058. Total child care costs in 2009 were $6,680.

[34] The applicant has provided documentation to prove child care expenses for 2011 and they are not in dispute. Those expenses were $5,411. The 2012 child care expenses were $5,236.99. The applicant projects child care expenses for 2013 to be $5,225, based on a three year average of child care expenses.

[35] While the respondent does not object to contributing to section 7 expenses for child care, he takes issue with the manner in which child care is arranged during the summer. The applicant submits that the child is enrolled in summer day camps, which is simply an extension of the regular daycare required while she is in school. The respondent’s position is that he is simply provided with a bill for this without any consultation. He reminds the court that the parties have joint custody, which means that his input should be sought for such decisions. While the applicant does not necessarily disagree with this, she does not wish to be fettered in her ability to enroll the child in summer daycare programs.

[36] Finally, there is an issue with respect to dental expenses for Sarah in 2011. Sarah’s dental expenses in 2011 were $1,480. The respondent’s insurer paid for a portion of this, leaving the uninsured sum of $740. The applicant takes the position that the parties should share this proportionately. The respondent’s view is that his insurer’s contribution should count as part of his proportionate share. With respect, I disagree. The parties should share proportionately, the uninsured balance of $740.

Analysis and Orders

[37] Based on the above reasoning, I find that the parties’ incomes for support purposes are as follows:

2010

2011

2012

Applicant

$49,015

$54,621

$58,905

Respondent

$101,666

$89,185

$90,298

[38] I find that this is not a case in which a termination of spousal support should be ordered at this time given the length of the marriage. However, I find that it is a case where, based on the parties’ incomes, no spousal support or nominal support would be payable by the respondent based on the Spousal Support Advisory Guidelines mid-range calculations.

[39] I find that the spousal support in the higher range is not in order for the following reasons:

(a) While the applicant may have suffered some economic disadvantage from the marriage, she is a qualified professional and able to earn a reasonable income. To her credit, she has worked very hard and increased her assets since the date of separation. Based on the information available and the affidavit material filed (there were no cross-examinations), it appears that both parties suffered setbacks when they decided to immigrate to Canada. Both parties were employed as professionals in Bulgaria and each would likely have achieved greater incomes and more senior positions had they remained there.

(b) The applicant is still the primary caregiver for the parties’ daughter, Sarah. That must be considered with respect to any order for spousal support and is part of the reason why it is not appropriate to terminate spousal support at this point.

(c) I do not find that this is a case where there has been any extreme economic hardship arising from the breakdown of the marriage. Both parties have moved on with their personal lives and maintained employment. This is not a case where the support recipient remained at home with the children for many years and is faced with reintegrating into the job market.

(d) The applicant has achieved a large degree of self sufficiency. I agree with counsel for the respondent that information regarding the applicant’s new partner was vague with respect to his income and contribution to household expenses. While the applicant takes the position that her contributions towards expenses work out to the same as when she was on her own, the fact remains that she is in a larger and more valuable home and has been able to increase her savings.

(e) While the respondent has taken on the obligation of a new wife (who does not work) and child, I do not view this as a factor which should, in these circumstances, be given significant weight with respect to the termination of spousal support. Both parties’ new relationships may well be factors which will give more weight if spousal support is reviewed in the future.

Orders

[40] Spousal support shall not be terminated.

[41] The respondent to prepare a new calculation of retroactive support (set out as per the “Amended Chart of Overpayment” dated July 10, 2013 on the day of the hearing) for the period up to and including July 1, 2013. The income amounts for the parties in paragraph 37 above shall be used for the calculation as well as the section 7 expenses set out at paragraph 13 of the applicant’s factum. Spousal support shall be calculated at the mid-range as per the Spousal Support Advisory Guidelines. The respondent shall attach to the calculation a DivorceMate printout for each period. The respondent shall also recalculate the overpayment (if any) in each period. The calculation shall be served on the applicant and submitted with the parties’ written costs submissions. Both parties may reference the calculation in their costs submissions with respect to what overpayment amount (if any) the applicant should pay including terms of payment and the effect of any offer to settle on the overpayment amount. An order relating to any overpayment amount will be made by way of supplementary endorsement.

[42] The applicant shall consult with the respondent concerning the summer day camps in which Sarah will be enrolled commencing 2014.

[43] Ongoing support for Sarah Iordanova, born June 3, 2003, shall be $803.00 per month commencing August 1, 2013, based on the Respondent’s 2012 income of $90,298.62.

[44] Support for Svetoslav Iordanov, born January 15, 1988, shall terminate as of June 30, 2011.

[45] The uninsured portion of Sarah’s dental expense ($740.00) shall be shared proportionately by the parties.

[46] All other terms of the March 3, 2010 shall remain unchanged.

[47] Written costs submissions (including submission of the revised support calculation) shall commence with the respondent on a seven day turnaround, commencing July 30, 2013. All costs submissions shall be delivered via email through my assistant at jennifer.beattie@ontario.ca.

Justice C.A. Gilmore

Released: July 16, 2013