COURT FILE AND PARTIES

COURT FILE NO.: D691/13

DATE: 2014-02-18

SUPERIOR COURT OF JUSTICE – ONTARIO
FAMILY COURT

RE: Kimberly Newcombe, Applicant

AND:

Ian Newcombe, Respondent

BEFORE: Heeney R.S.J.

COUNSEL:
Michael P. Clarke, Counsel for the Applicant

Laura E. Oliver, Counsel for the Respondent

HEARD: February 6, 2014 at Hamilton

ENDORSEMENT

[1] There are two motions before the court. The Applicant (“Wife”) seeks interim spousal support, retroactive to December 1, 2012. The Respondent (“Husband”) seeks an order for summary judgment against himself, obligating him to pay an equalization payment to the Wife in the amount of $110,171.38, less the advance payment of $50,000 previously paid by him, resulting in a net payment of $60,171.38. In his affidavit, but not in his Notice of Motion, he also requests an order that the matrimonial home be transferred into his name alone, since his calculation of the equalization payment presumes a buyout by him.

[2] This is a second marriage for both parties. They cohabited for 2 years before marrying on September 16, 2006. They separated 6 years later, on November 16, 2012.

[3] The central issue on the Wife’s motion is entitlement. The Husband takes the position that the Wife is self-supporting and has no need for interim support. The Wife takes the position that she is very much in need, relative to the standard of living enjoyed by both of them during cohabitation. She also claims entitlement on a compensatory basis. She seeks retroactive interim support back to the first month following the separation.

[4] The Husband is a successful lawyer. His income for 2012 was $412,000. He has yet to disclose his 2013 income. If support is ordered, it will be based on the presumption that his income is at least as high as it was in 2012. Either party will be at liberty to apply to vary any order I make if his income for 2013 turns out to be materially different.

[5] The Wife is a nurse. According to the affidavit of the Husband, she was dependent on her first husband at the time they met, working in his medical office as a nurse on a part-time basis primarily for the purpose of income splitting. One may infer, therefore, that this dependency was transferred onto the Husband after they began cohabiting.

[6] She earned income of $85,440 during the year following the separation, working as a flight nurse for a medevac service in northern Manitoba. However, on November 24, 2013 she slipped on the tarmac and severely injured her knee. She will be unable to work for about one year. She has been approved for WSIB benefits, and her current income will be $49,610 tax-free. This is equivalent to taxable income of $66,781 per year.

[7] This support claim is made within the context of an application for divorce. The starting point, therefore, is s. 15.2 of the Divorce Act. It reads as follows:

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

(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.

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

(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.

[8] The statute and the caselaw that interpreted and applied it was found by McLachlin J. (now C.J.) in Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420, to create three conceptual bases for entitlement to spousal support: (1) compensatory, (2) contractual, and (3) non-compensatory. The contractual basis for support is not relevant here.

[9] The Wife advances a compensatory basis for entitlement. She states that the Husband has been able to steadily increase his annual earnings during the course of the marriage due to her support and encouragement, which has involved running the household as well as transporting, feeding and supervising the Husband’s children, who were only 4 and 6 years old when they began cohabiting. This enabled the Husband to work evenings and weekends and increase his income. She maintained only part-time employment throughout the relationship, at the insistence of the Husband, save for the final 2 months of their relationship.

[10] The Husband, on the other hand, states that the Wife’s educational aspirations and career objectives were either met or exceeded, in part due to the roles adopted during the marriage. She began the relationship holding an R.N. designation, and was able to complete her B.Sc.N. at McMaster University. She obtained or maintained specialized designations in infusion nursing, aeromedical transport, and took courses toward her Nurse Practitioner Degree. She chose to pursue the position as a medevac flight nurse, and found the job to be exhilarating and exciting. In short, he argues that she made no career sacrifice whatsoever during the course of the marriage.

[11] It appears clear that the Wife’s entitlement to support on a compensatory basis is an issue for trial. What remains to be considered is whether she has shown a prima facie case for entitlement on a non-compensatory basis. As McLachlin J. said at para. 43 of Bracklow:

But while the focus of the Act may have shifted or broadened, it retains the older idea that spouses may have an obligation to meet or contribute to the needs of their former partners where they have the capacity to pay, even in the absence of a contractual or compensatory foundation for the obligation. Need alone may be enough.

[12] The relationship, including cohabitation and marriage, lasted 8 years. In discussing the length of the marriage in Bracklow¸ McLachlin J. said: “While the combined cohabitation and marriage of seven years were not long, neither were they (by today's standards) very short.” Those words apply equally here. The length of the marriage is certainly long enough to qualify for non-compensatory support arising from the marriage relationship itself.

[13] The Husband argues that the Wife does not have any “need” for support because her Financial Statement shows her budget to essentially be in balance, given her income from her own employment. However, I accept the Wife’s evidence that she is only able to balance her budget by drastically lowering the standard of living she enjoyed during the marriage.

[14] She points out that she is compelled to live in a walk-up apartment in Hamilton which she shares with another couple, at a cost of $640/m, because she cannot afford to purchase anything better. Meanwhile, the Husband resides, with the girlfriend that he left the marriage for, in the luxurious 4,000 sq. ft. matrimonial home, which is worth somewhere around $750,000, complete with interior renovations and furniture, a hot tub and gardens which were the result of an extensive improvement project completed in the summer of 2011.

[15] She states that during cohabitation, she and the Husband normally enjoyed 2 to 3 luxurious vacations per year. On her present limited resources, she can no longer afford to travel.

[16] “Need” is a relative concept, and is assessed based upon the standard of living that the parties were accustomed to during the marriage: see Gardner v. Gardner, 2008 ABQB 527, [2008] A.J. No. 954 (Q.B.) at para. 30 and authorities referred to therein. An interim spousal support award is not intended merely to “stop the bleeding” pending trial, as Ms. Oliver, for the Husband, submitted. In Haney v. Haney, [2005] O.J. No. 2329 (S.C.J.), Smith J. put it this way, at paras. 50 – 51:

The purpose of an interim support award is to allow a dependant to maintain a reasonable lifestyle pending trial. Recently, however, there has been a movement towards a more generous level of interim support. A dependant is no longer expected to live modestly until trial. (See: Lebovic v. Lebovic (2001), 2001 28183 (ON SC), 15 R.F.L. (5th) 115.)

To allow one spouse to live a lifestyle considerably better than the other for several months pending trial makes little sense particularly in cases on (sic) long term marriages. To properly address the objectives of the Divorce Act set out above, albeit on an interim basis, there must be a reasonable or fair balance achieved.

[17] There is no question that the Husband is enjoying a standard of living that far exceeds that of the Wife. That can be demonstrating by looking at how much each party spends each month to support their lifestyle. The Husband’s Financial Statement shows monthly living expenses, not including income tax or CPP contributions, of $18,184. That includes $1,500/m for meals outside the home, $1,000/m for vacations, and RRSP contributions of $1,195/m. By contrast, the Wife’s Financial Statement shows that she incurs monthly living expenses, after income tax and payroll deductions, of only $4,910. That figure includes $800 for meals outside the home (which is not surprising given that she was on the road working for 2 weeks of every month), $350/m for vacations and $500/m for RRSP contributions.

[18] The drastic drop in lifestyle that has been experienced by the Wife is, without doubt, a form of “economic hardship … arising from the breakdown of the marriage”, within the meaning of s. 15.2(6)(c) of the Act. She has, in my view, proven her entitlement to receive interim spousal support to relieve that hardship.

[19] While I have not referred to the authorities cited by the Husband, I have read and considered them. I have not found them to be of assistance, because in general they dealt with situations where the disparity in the income of the parties was not great, and the entitlement of the moving party to spousal support was in doubt, such that prudence dictated that the matter be dealt with at trial. However, after an 8 year relationship, where the Husband earns roughly 5 times as much income as does the Wife, the Wife’s entitlement to spousal support is crystal clear.

[20] The remaining questions are quantum and commencement date.

[21] Both counsel based their submissions on the Spousal Support Advisory Guidelines, and I agree that interim support in this case should be determined within the parameters suggested by that very useful tool. Among other attributes, the SSAGs take account of the length of the marriage. An 8 year relationship, on the income figures we are dealing with here, generates a mid-point spousal support figure of $3,000/m, under which the Husband would keep 75.6% of the net disposable income (“NDI”) of the parties, while the Wife would receive only 24.6%. By contrast, a 25 year marriage generates a mid-point spousal support figure of $9,376/m on the same income numbers, with the Husband retaining only 60.2% of the NDI, and the Wife receiving 39.8%.

[22] I have done my own Divorcemate calculations because the ones provided by counsel contained input figures that are somewhat different than the ones I deem appropriate. I have done one calculation representing the Wife’s pre-accident support. The Husband’s income has been inputted at $412,000/yr, with the Wife’s income at $85,440/yr. I have not included the living allowance of $40/day that the Wife received as a flight nurse. I accept her evidence that this supplement is given to compensate for the extremely high cost of living in Northern Manitoba. As examples, she notes that a 2 litre bottle of pop costs $10 and a small box of Tide costs $37.89.

[23] The Husband has been credited with the child support of $21,600/yr that he pays for his two children. In addition, under “Adjustments: SSAG – Prior Children (for notional)”, I have credited the Husband with one child. His evidence is that his son Eric “shares his time between his mother and me”, while his son Connor “lives with me most of the time”. While that evidence is not as precise as it could be, it does indicate that he bears the economic burden of caring for his two children from his prior marriage more than an access parent normally would. That is supported by the fact that he pays child support of only $1,800/m. If the children were residing with their mother on a full-time basis, that figure would be vastly greater, given his annual income. To give the Husband some credit for this, I have attributed the equivalent of one child residing with him on a full-time basis.

[24] The range of monthly support suggested by Divorcemate runs from a low of $2,572 to a high of $3,429, with a mid-point of $3,000.

[25] I have done a similar calculation with respect to post-accident support. All figures are the same, except that the Wife’s annual income has been inputted at her WSIB income of $49,608. Since it is non-taxable, the program automatically grosses it up to $63,023. This generates a range of monthly support from a low of $2,796 to a high of $3,728, with a mid-point of $3,262.

[26] In both cases, the program suggested a duration of 4 to 8 years, which is well beyond the period when this case is expected to reach trial. Duration is, therefore, not an issue with respect to interim support.

[27] A figure at the mid-point commends itself in each case. It will enable the Wife to obtain more suitable accommodation, and generally improve her standard of living. At the same time, it is not unfair to the Husband, since this will allow him to retain the lion’s share of the NDI available to both parties, which is commensurate with the 8-year length of the relationship.

[28] As to the commencement date, the Ontario Court of Appeal in MacKinnon v. MacKinnon, 2005 13191 (ON CA), [2005] O.J. No. 1552 (C.A.) established what amounts to a presumptive commencement date for spousal support. At paras. 22 – 24, Lang J.A., speaking for the court, said the following:

Absent any unusual reason arising from the factors and objectives set out in the Divorce Act, an applicant who requests financial disclosure in preparation for the negotiation or litigation of a support claim, and who then proceeds reasonably to a disposition of the claim, presumptively is entitled to prospective support from the date of notice that a support claim is being pursued.

Such a presumption serves to encourage payors to make early and accurate financial disclosure and to move promptly to resolution or disposition. It also serves to caution payors that there is no benefit to be gained from avoiding support obligations.

In this case, there were no circumstances that supported a departure from the usual commencement date for support. The wife established entitlement and need. Evidence of need was apparent from her reliance on government benefits and credits. Further, the wife cited her need for funds to meet debts and unpaid bills, to purchase items that she had delayed purchasing, for R.R.S.P. contributions, to purchase life insurance, to minimize or eliminate the need for a mortgage on their new home and to repay money received on account of the government benefits and tax refunds in the amount of about $22,000. The wife should not be penalized simply because, pending trial, she lived frugally and postponed non-recurring expenses.

[29] In this case, counsel for the Wife wrote to the Husband promptly on December 12, 2012 to put him on notice that she was claiming spousal support and equalization of net family property. Financial disclosure was requested.

[30] Over the months that followed, the Husband was anything but forthcoming with his financial disclosure. Five letters from counsel for the Wife between Dec. 12, 2012 and Feb. 26, 2013 produced an agreement to exchange Financial Statements by March 1. The Wife complied. The Husband did not. After six further letters produced no results, the Wife commenced these proceedings on April 23, 2013. The Husband did not provide his Financial Statement until June 27, 2013. Thereafter, a case conference was scheduled, but was adjourned due to the unavailability of the Wife’s counsel. Delay was encountered thereafter due to the difficulty in scheduling a long motion at court. The motion for interim support was heard on February 6, 2014.

[31] I see no basis for departing drastically from the presumptive commencement date. The Wife made her demand promptly, and the Husband was slow to comply with his disclosure obligations. There is one limiting factor, in that the Wife has not incurred debt to meet her needs over the period since her initial demand. However, that is only the case due the fact that she chose to live frugally, and she should not be penalized for having done so. Had the Husband provided prompt disclosure and begun paying interim spousal support, she could well have financed the purchase of more appropriate accommodation in which to live.

[32] In my view, the appropriate commencement date for interim spousal support is March 1, 2013. That is the date on which the parties agreed to exchange Financial Statements, and the Wife complied with their agreement. Had the Husband done so, it would have been immediately apparent to all that the Wife was entitled to interim spousal support. The Wife’s claim for retroactive interim support prior to that date is preserved, and can be dealt with at trial.

[33] Accordingly, the Husband shall pay interim spousal support in the amount of $3,000 per month commencing March 1, 2013 up to and including November 1, 2013. Commencing December 1, 2013 and on the first day of each month thereafter, the Husband shall pay interim spousal support of $3,250 per month.

[34] The remaining matter is the Husband’s motion for summary judgment. It can be quickly dealt with.

[35] Summary judgment is available under Rule 16(6) of the Family Law Rules where “there is no genuine issue requiring a trial of a claim or defence”.

[36] The Husband calculates the net amount owing to the Wife to equalize their net family property to be $60,171.58, on the basis that the jointly owned matrimonial home is transferred to him. The Wife has during these proceedings indicated her willingness to agree to a buy-out of her interest in the home.

[37] However, the Wife does not agree with that calculation. The parties disagree on several components of the calculation, such as notional income tax deductions on the Husband’s RRSPs, the value of the matrimonial home, notional disposition costs, and the value of the Husband’s partnership interest. In her affidavit, she claims that the amount owing to her, based on her own calculations, is $162,221.50.

[38] Clearly, a trial is required to resolve these issues.

[39] Ms. Oliver suggests that I should order that the matrimonial home be transferred to the Husband and that the Husband pay the equalization payment he has calculated, leaving the parties to litigate what additional monies are owing at trial. However, there is no basis upon which I can or should order the Wife to divest herself of her interest in the matrimonial home without her consent, and she is not consenting. If the value of the home increases between now and the trial date, she should, as a joint owner, be entitled to share in that increase, although there are other competing claims that would have to be considered, such as occupation rent payable by the Husband, and compensation potentially due to the Husband for paying down the mortgage and maintaining the other carrying costs of the home.

[40] Furthermore, while she has, to date, indicated her willingness to agree to a buy-out, she is not compelled to do so. Where the parties cannot agree on the value of the matrimonial home, the court frequently orders that it be listed for sale on the open market, since that is the only way to establish the fair market value of the asset with certainty.

[41] In short, it would be wrong to grant an order for summary judgment that compels the Wife to transfer the matrimonial home to the Husband, unless and until the parties agree as to the amount she should be paid for her interest, or that amount is determined at trial.

[42] The Husband’s cross-motion is therefore dismissed.

[43] If the parties cannot agree on costs, I will accept written submissions from the Wife within 15 days, with the Husband’s response within 10 days thereafter and any reply within 5 days thereafter.

“T. A. Heeney R.S.J.”

Regional Senior Justice T. A. Heeney

Date: February 18, 2014