Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: TRACEY LEE LAWDER, Applicant
AND:
CHRISTOPHER MARK WINDSOR, Respondent
BEFORE: The Honourable Mr. Justice D.A. Broad
COUNSEL: Applicant self-represented
Michael Wilson, for the Respondent
HEARD: August 21, 2013
ENDORSEMENT
Background
1The Applicant and Respondent were married on June 27, 1981. They separated in the spring of 1997 (the precise date is unclear). Justice Czutrin delivered a Divorce Judgment dated July 7, 1998.
2On March 8, 2000 Justice Czutrin made an Order (the “2000 Order”) dealing with a number of issues which remained outstanding as a result of the Divorce Judgment, including the question of whether spousal support should be time-limited or a review should be considered. Justice Czutrin deferred this issue at the time of the Divorce Judgment until the equalization payment was completed.
3In the 2000 Order Justice Czutrin set spousal support at $800.00 per month, to be indexed annually. After noting that the parties were married for sixteen years and were still relatively young, Justice Czutrin observed in his endorsement that “there is no basis upon which I can be reasonably certain when it may be appropriate for support to be ended if at all.”
4Justice Czutrin went on to note that, although both parties were obliged to take whatever appropriate steps were necessary to make themselves financially independent, it was not clear whether or not, in all the circumstances, the Applicant would be able to make herself financially independent in a reasonable period of time.
5Justice Czutrin found that it was appropriate to review spousal support in 2005 being five years after his Order. He stated that the considerations on the review should include the statutory considerations with respect to spousal support and that “each party will be expected to provide evidence of reasonable efforts taken to make themselves financially independent.” In the end, he ordered that either party, unless there was a change of circumstances prior to that date, would have the right to apply not earlier than July 1, 2005 to have the spousal support issue considered once again, without either one of them having to prove a change in circumstances.
6The Respondent made all payments of spousal support under the 2000 Order, except for the increases referable to the indexing provision. The Applicant did not take any steps to enforce the indexing provision and neither party made application for a review of spousal support in 2005 or thereafter until the Respondent brought this Motion to Change on August 24, 2012. The Respondent seeks termination of spousal support, or in the alternative, variation of spousal support effective April 1, 2011, being the date that his counsel wrote to the Applicant requesting her consent to termination of spousal support. He also seeks repayment of all overpayments of spousal support made by him to the Applicant.
Positions of the Parties
7The Respondent, in making his Motion to Change, relies upon the review provision in the 2000 Order, arguing that, on the review, no material change in circumstances is required to be shown, but in any event, argues that there has been a change in circumstances justifying termination or variation of spousal support.
8The Respondent argues that there should be no order made for payment of a further lump sum on account of indexing, given the Applicant's failure to make annual disclosure of her income over the years which would have supported an earlier application by him to vary the amount of spousal support. He states that the increase in the Applicant's income over the years would have resulted in a gradual decrease in support, nullifying any additional sums owing on account of indexing. He says that it would therefore be unfair to now order any further amount to be paid on account of indexing. In the alternative he states that any amount found to be owing on account of indexing would be more than offset by his overpayment of spousal support following his initial request made to the Applicant that she consent to the termination of spousal support effective April 1, 2011.
9For her part, the Applicant argues that there should be no termination or variation of the spousal support ordered in the 2000 Order and that the Respondent should be ordered to pay a lump sum on account of the accumulated indexing. She argues that her financial situation since the 2000 Order has worsened whereas the Respondent's has improved dramatically, and that termination or variation of spousal support is therefore not warranted.
Analysis
10The Respondent is currently 56 years of age and is retired, but maintains two part-time jobs, firstly as a retail merchandiser earning $10.40 per hour and secondly as an usher at an entertainment venue earning $10.25 per hour. He took early retirement at the time that he was terminated from his employment at U.S. Steel in 2009 due to the economic downturn. He was able to find work for a short time in the steel industry with another company MANA but was let go from that position in June 2011, also due to economic conditions. He collects pension income from U.S. Steel in the sum of $34,305.36 per year, although he asserts that the more correct amount to be considered is $27,174.48 (or $2264.54 per month) on account of pension value accumulated post-separation which has not already been equalized.
11In 2012 the respondent earned $14,880.64 per month from employment, primarily from his two part-time jobs. He argues that, since his pension income was either equalized or earned post-separation, it should be excluded for the purpose of the consideration of spousal support, and therefore only his employment income should be considered. However if it is determined to be appropriate to include his pension income it should not exceed the annualized unequalized amount of $27,174.48 per year. His maximum income should therefore be $42,063.10, comprised of his 2012 employment income plus his unequalized pension income.
12The Applicant asserts that the Respondent is deliberately underemployed and income should be imputed to him commensurate with his former occupation as a steelworker.
13The Applicant is currently 51 years of age. The evidence indicated that her employment income was $38,830.22 in 2007, $48,885 in 2008, $49,067.44 in 2009, $52,069 (estimated) in 2010, $47,583.92 in 2011 and $62,208.88 (according to her T4 slip) in 2012.
14The Applicant did not produce evidence of her income prior to 2007. She was employed as an account manager for a food distribution company, responsible for national accounts of the company. She was terminated from her position on May 2, 2013 due to a corporate restructuring and accepted a termination package providing for continuation of her regular base salary plus bonus until January 24, 2014, provided that should she secure alternative employment during that period she would receive a lump sum payment of 50% of the balance of the remaining payments.
15The Applicant's 2013 income is difficult to determine based upon the record in light of the termination arrangements with her former employer. For the purpose of the analysis I am prepared to treat her 2012 income of $62,208.88 as indicative of her maintainable employment income, subject to a consideration of the change of circumstances represented by the recent termination of her employment.
16The evidence indicated that the Applicant has experienced health concerns, including treatment for cancer and diabetes. However, in submissions, she candidly acknowledged that she had never indicated that she cannot work due to her medical conditions.
17In my view, there is no present impediment to the Respondent applying for a review of the issue of spousal support. Although it is apparent that it was the expectation of Justice Czutrin that spousal support would be reviewed in 2005, being five years after the his 2000 Order, he did not specify that it must be reviewed then, nor that there was a time limit for one of the parties to apply for a review. Rather, he ordered that either party may come back not earlier than July 1, 2005 to have the spousal support issue considered once again, without either of them having to prove a change in circumstances.
18In the case of Fisher v. Fisher 2008 ONCA 11, [2008] O.J. No. 38 (CA) at para. 63, Lang, J.A. observed that "a review allows an application for support without the need to prove the material change in circumstances required in a section 17 variation application. Unless the review is restricted to a specific issue, it is generally equivalent to an initial application for support and necessitates a complete rehearing of every issue from entitlement to quantum."
19It is evident from a review of Justice Czutrin’s Endorsement that he provided for a review of spousal support due to a lack of certainty with respect to two related issues, firstly, when it may be appropriate for support to be ended (i.e. duration), and secondly, whether the Applicant would be able to make herself financially independent in a reasonable period of time. He specifically directed that on the review “each party will be expected to provide evidence of reasonable efforts taken to make themselves financially independent.”
20In this case the Applicant has been able, in the years following the 2000 Order, to achieve economic self-sufficiency as evidenced by her securing employment with a relatively high degree of responsibility and a steadily increasing level of income during the years in which she has disclosed her income, rising from $38,830.22 in 2007 to $62,208.88 in 2012.
21I agree with the submission of the Respondent that, based upon the sixteen year duration of the marriage and the post-separation period of sixteen years that support has been paid by the Respondent, any economic disadvantages to the Applicant arising from the marriage or its breakdown have been satisfied some time ago, and accordingly, a compensatory basis for support is no longer relevant. Any support payable would therefore need to be on a non-compensatory basis. This point is usefully explained in the Spousal Support Advisory Guidelines (SSAG) at paragraph 13.6 as follows:
At some point, the recipient's disadvantage may be fully compensated and complete "self-sufficiency" obtained, such that spousal support can terminate in a compensatory case. Under the with child support formula, any termination of support will usually happen through the process of variation or review, as there must be evidence on these issues before the court can terminate or time limit support. In this sense, time limits under the with child support formula are "softer", more flexible than in most cases under the without child support formula.
22As indicated above, in the post-separation period, the Applicant has achieved self-sufficiency. The concern as to whether she would be able to do so within a reasonable period of time led Justice Czutrin to decline to impose a time limit on spousal support in the 2000 Order, in favour of providing for a review after five years. That concern has now been alleviated, and it is now appropriate, on review, to impose a time limit on the spousal support obligation.
23The difficult question in this case is the significance of the recent termination of the Applicant's employment on the factors to be considered on the review. Subsection 15.2(4) of the Divorce Act directs the court, in making an order for spousal support, to take into consideration "the condition, means, needs and other circumstances of each spouse." It is uncertain whether the Applicant, having achieved self-sufficiency, has now lost it due to the termination of her employment.
24The Applicant has not presented detailed evidence of her efforts to find alternate employment following the date of her termination, notwithstanding requests made by the Respondent that she do so.
25The objectives of a spousal support order are listed at 15.2(6) of the Divorce Act. Under that subsection an order for spousal support 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) insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
(emphasis added).
26The recent change to the Applicant's economic situation resulted from the restructuring of her former employer's business leading to her termination, and not to anything arising from the marriage or its breakdown. In my view, with the Applicant having achieved self-sufficiency some time ago, it would not be appropriate, given the length of the marriage and the period since separation that the Respondent has paid support, to further extend the Respondent's support obligation on account of the recent change in the Applicant's employment status.
27This is not to say that a recipient, having previously achieved self-sufficiency but having lost it due to no fault of his/her own, may not be entitled to have support extended in appropriate circumstances. However in this case, the Applicant has not laid an evidentiary basis for a conclusion that her self-sufficiency has been lost and that it may not be recovered in a reasonable time through her own effort and diligence. It is therefore appropriate that the Respondent's obligation to pay spousal support be terminated.
28The Respondent seeks the termination to be effective on April 1, 2011, being shortly following his request to the Applicant that she consent to the termination. However, the Motion to Change was not filed until August 24, 2012. The reason for the delay in bringing forward the Motion to Change is not apparent.
29The Supreme Court of Canada, in the case of Kerr v. Baranow 2011 SCC 10, offered guidance on the issue of retroactive spousal support. At para. 207, Cromwell, J. stated that similar considerations to those set out in the context of child support in the case of D.B.S. v. S.R.G. 2006 SCC 37 are also relevant to deciding the suitability of a "retroactive" award of spousal support. These factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship of the retroactive award may occasion on the payor spouse.
30However, Justice Cromwell, at para. 208 of Kerr, noted the different legal foundation that spousal support has from that of child support. Unlike child support, there is no presumptive entitlement to spousal support, and the spouse is in general not under any legal obligation to look out for the separated spouse's legal interests. Accordingly, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support.
31In the case of a request for retroactive reduction or elimination of spousal support the issue of hardship on the recipient spouse is also an important consideration.
32In my view, it would not be appropriate to make the termination of the Respondent's support obligation effective on April 1, 2011, as it would create unacceptable hardship for the Applicant. In weighing the various factors in D.B.S., the appropriate date for the termination of spousal support to take effect would be September 1, 2013, being the month following the argument of the Motion. However in light of this, I would not give effect to the Applicant's claim for enforcement of the indexing provision in the 2000 Order. Any amount that may have accrued on account of indexing would be sufficiently offset by the setting of the effective date of termination of spousal support at September 1, 2013, rather than an earlier date.
Disposition
33The Respondent's Motion to Change is therefore allowed and spousal support is terminated effective September 1, 2013. Any arrears of spousal support attributable to the indexing provision in the 2000 Order are eliminated.
Costs
34If the parties cannot agree on costs, the Respondent may make written submissions as to costs within 30 days of the release of this endorsement. The Applicant has 14 days after receipt of the Respondent’s submissions to respond. The submissions of each party shall not exceed three double-spaced pages, excluding any Offers to Settle, Costs Outlines and authorities. All such written submissions are to be forwarded to me at my chambers at 85 Frederick Street, 7th Floor, Kitchener, Ontario N2H 0A7. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.
D. A. Broad J.
Date: September 20, 2013