COURT FILE NO.: FS-13-0114

DATE: 2014-03-13

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Shana-Lee April Knapp,

Chris Arnone, for the Applicant

Applicant

• and -

Wayne Knapp,

Samantha Filipovic, for the Respondent

Respondent

HEARD: February 4, 2014, at Thunder Bay, Ontario

Mr. Justice D. C. Shaw

Reasons For Judgment

[1] There are three issues to be determined on this trial:

(1) the amount of spousal support to be paid by the respondent, Wayne Knapp, to the applicant, Shana-Lee April Knapp;

(2) the duration of spousal support;

(3) whether there should be an award of retroactive spousal support.

Background

[2] Ms. Knapp is 36 years of age. Mr. Knapp is 43 years of age. The parties began living together at approximately the end of 1999. They married on August 9, 2003. They separated on June 12, 2012.

[3] There were no children born of the parties’ relationship. However, Mr. Knapp has a son, Brandon Knapp, born May 16, 1995, from a relationship with Michelle Wright. Brandon was four years of age when Mr. Knapp and Ms. Wright separated. At various times, Brandon lived with Ms. Wright and with Mr. and Ms. Knapp. He now resides with his grandmother while he attends the Civil Engineering diploma program at Confederation College. After he receives his diploma, Brandon intends to enroll in the degree Engineering program at Lakehead University.

[4] Mr. Knapp and Brandon’s grandmother have agreed that Mr. Knapp should pay support directly to Brandon.

[5] The parties agree that Mr. Knapp’s support of Brandon is a factor to be considered in determining the amount of spousal support that he should pay to Ms. Knapp.

[6] Mr. Knapp pays Brandon $639 per month. He has also paid Brandon’s tuition and school expenses, totalling $5,785 for this academic year.

[7] Brandon has not been able to contribute to his post-secondary education costs. This summer he will be enrolled in a co-op program related to his studies. He will not be paid during the co-op program and he will have no earnings from employment during the summer.

[8] Brandon is entitled to a tax credit for his tuition. The credit is between $4,280 and $4,657. Although Brandon has no income and can transfer the tax credit to Mr. Knapp, Mr. Knapp wants Brandon to retain the entire credit to be carried over to future years when Brandon does earn an income.

[9] Ms. Wright has three other children. She is a single mother. Her income in 2012 was $13,635. It appears that her income for 2014, based on paystubs entered as exhibits at trial, may be in the area of $18,000. Ms. Wright does not contribute to Brandon’s support or to his post-secondary education costs. It is Mr. Knapp’s position that as a single mother, with responsibility for three other children, Ms. Wright does not have the financial resources to contribute to Brandon’s support and education costs.

[10] Mr. Knapp has worked for the past four years at Fort Gary Industries as a journeyman truck and coach technician and as a journeyman welder. His income in 2013 was $69,773. His salary in 2014 will be $71,500. In early 2014, Mr. Knapp received a bonus of $6,600 based on the company’s 2013 year. This was the first bonus which Mr. Knapp had received as an employee of Fort Gary Industries.

[11] Mr. Knapp currently resides with Paula Charette. Ms. Charette earns approximately $26,000 per year. Mr. Knapp pays Ms. Charette rent of $500 per month.

[12] Mr. Knapp’s Financial Statement, sworn January 27, 2014, shows expenses of $76,297. These expenses include the support which he pays to Brandon, plus Brandon’s post-secondary expenses, and $500 per month spousal support which he has been paying to Ms. Knapp, on a without prejudice basis, since July 1, 2013. The expenses also include $400 per month for debt owing to Canadian Tire.

[13] Mr. Knapp’s debts total $51,783, comprised of credit card debt, some of which is in collection, and $15,859 for a truck loan.

[14] The parties sold the matrimonial home in 2013. They received net proceeds of sale of $113,252. That money is being held in trust by the solicitors who acted on the sale. Pursuant to Minutes of Settlement settling the equalization of the parties’ net family property, Mr. Knapp will receive one-half of the net proceeds of sale, plus $19,372 from Ms. Knapp’s share, plus a transfer of $21,962 from Ms. Knapp’s OMERS pension to a locked-in retirement account.

[15] Ms. Knapp suffers from mental illness. In July 2012, she was certified by a psychiatrist to be incapable of managing her property. The Public Guardian and Trustee (PGT) became the statutory guardian of Ms. Knapp’s property in July 2012. The PGT charges a fee of 3% of incoming financial transactions and 3% of outgoing financial transactions.

[16] It was agreed by counsel that Ms. Knapp was incompetent to give evidence and that no adverse inference was to be drawn from her absence from the trial. A representative of the PGT testified at trial on behalf of Ms. Knapp.

[17] Ms. Knapp resides in an apartment in Thunder Bay. She lives on her own.

[18] Ms. Knapp last worked in 2011. She is in receipt of Canada Pension Plan Disability Benefits in the sum of $872.94 per month. The Ontario Disability Services Plan pays for the costs of her medication in the amount of approximately $1,400 per month. This currently represents 100% coverage of her medication costs. However, the coverage will be reviewed in July 2014. Continued coverage of 100% is not a certainty. Ms. Knapp is not eligible for coverage under Mr. Knapp’s extended health care plan through his employment.

[19] On May 17, 2013, an order was made, on consent, pursuant to which Mr. Knapp agreed to pay Ms. Knapp the above mentioned spousal support of $500 per month, commencing July 1, 2013, on a without prejudice basis. Mr. Knapp is up to date in his support payments.

[20] Mr. Knapp testified that Ms. Knapp began to have mental health problems in 2008. She was admitted to hospital in November of 2008. Medication was prescribed for her illness. This enabled Ms. Knapp to return to work. However, she quit taking her medication. Mr. Knapp said that she told him she did not like the taste of it and felt she did not need it. She was subsequently admitted to hospital on several other occasions. Mr. Knapp said that in April 2011 Ms. Knapp was placed on a monthly injectable medication. He said that this did not work as well as the oral medication. In June 2012, Mr. Knapp took Ms. Knapp to the hospital because she had missed taking her injections. The parties separated around this time.

[21] Before Ms. Knapp began to suffer from her mental illness in 2008, she had worked regularly. Her income in 2007 was $44,596. In 2011, the last year that she worked, her income had declined to $12,000.

Submissions

[22] Ms. Knapp submits that the equalization payment that Mr. Knapp will receive will be sufficient to pay off his debts. This would eliminate his Canadian Tire credit card payment of $400.00 per month, increasing his ability to pay support.

[23] Ms. Knapp submits that Mr. Knapp’s bonus of $6,600 should be included in his income for purposes of determining support.

[24] Ms. Knapp submits that Mr. Knapp’s expenses for Brandon’s post-secondary education should be reduced in three ways: (a) Brandon should make a contribution by obtaining an OSAP loan; (b) Brandon should transfer the tuition tax credit to Mr. Knapp; and (c) Ms. Wright should make a contribution to Brandon’s post-secondary expenses, proportionate to her income. Ms. Knapp calculates this contribution at 16% of Brandon’s expenses.

[25] Ms. Knapp contends that she suffered an economic disadvantage arising out of the marriage because she went through a bankruptcy in 2009 that affected her equalization payment.

[26] She points to the fact that the PGT will take 3% of her monthly support and a further 3% when the support monies are paid out for necessities.

[27] She requests monthly support of $730 which she calculates as the high end of the Spousal Support Advisory Guidelines (SSAG), based on Mr. Knapp’s employment income of $71,500, his bonus of $6,600, her CPP disability benefits of $10,475, a contribution by Ms. Wright of 16% of Brandon’s post-secondary expenses, the transfer to Mr. Knapp of Brandon’s tuition credit and 12.5 years of cohabitation. The SSAG range with these inputs is determined by Ms. Knapp to be a low of $547, a mid-range of $639 and a high of $730, per month.

[28] Ms. Knapp submits that support should be of indefinite duration, with a review to monitor the progress of her illness.

[29] Mr. Knapp submits that his bonus should not be taken into account in assessing his ability to pay support because it was the first bonus in four years and there is no certainty that it will be paid in future years.

[30] Mr. Knapp submits that there is no evidence that Ms. Knapp was disadvantaged by the marriage. He submits that this was not a traditional marriage but rather one where both parties were employed at similar incomes until Ms. Knapp’s illness.

[31] Mr. Knapp submits that there is no evidence that Brandon can access OSAP. He contends that Brandon should retain the tuition tax credit and that Ms. Wright does not have the ability to assist with Brandon’s support and expenses.

[32] Mr. Knapp is willing to pay non-compensatory support. He produces SSAG calculations, based on his income of $71,500, with no bonus, Ms. Knapp’s CPP disability benefits, no transfer of tuition credits, no contribution from Ms. Wright or Brandon, and cohabitation of 12 years. His calculations have a low of $410, a mid-range of $478 and a high of $547 per month. If the bonus is included, the range increases to a low of $495, a mid-range of $577 and a high of $659.

[33] Mr. Knapp agrees that there should be a review of support after Brandon finishes school. However, he submits that support should be paid only for a defined period. He points to the SSAG which suggests a duration of 6 to 12 years from the date of separation where there has been 12 years of cohabitation.

Discussion

[34] The relevant provisions of the Divorce Act on the issue of spousal support are contained in s. 15.2:

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.

(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.

[35] None of the four statutory support objectives set out in s. 15.2(6) is paramount. All must be considered (see Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420, at para. 35 [Bracklow]). The judge must consider the factors set out in s. 15.2(4) in light of those objectives “and exercise his or her discretion in a manner that equitably alleviates the adverse consequences of the marriage breakdown” (para. 36).

[36] There are three conceptual bases for entitlement to spousal support: (1) compensatory, (2) contractual and (3) non-compensatory. The starting position is that marriage is a “‘joint endeavour’, a socio-economic partnership” (Bracklow, supra at para. 49). In considering compensation, the court must ask what loss the marriage or marriage breakdown caused that would not have been suffered otherwise. “But even where loss in this sense cannot be established, the breakup may cause economic hardship in a larger, non-compensatory sense” (Bracklow, supra at para. 41).

[37] Entitlement is established if any one of the four statutory objectives are met.

[38] The same factors that go to entitlement also have an impact on the amount of support. (Bracklow, supra at para. 49.)

[39] Mr. Knapp acknowledges that Ms. Knapp is entitled to support on a non-compensatory basis. I agree. Although Ms. Knapp submits that her bankruptcy in 2009 constituted an economic disadvantage arising out of the marriage, there was no evidence led at trial to support that submission. Non-compensatory support in this case arises out of Ms. Knapp’s economic needs, even though those needs are not the result of the roles adopted during the marriage. Mr. Knapp has the ability to help meet those needs.

[40] Although the SSAG are not binding, they are a useful tool. In this case, both parties submit that the SSAG provide guidance as to the appropriate quantum of support, albeit each party has a different view as to the inputs relating to Mr. Knapp’s bonus, the tuition tax credits, and whether Ms. Wright should contribute to post-secondary education expenses. They disagree on whether support should be at the high or low end of the ranges. They also disagree on duration.

[41] With respect to quantum, I accept Ms. Knapp’s submission that support should be calculated on the basis that Brandon’s tuition tax credits should be transferred to Mr. Knapp. Mr. Knapp is paying Brandon’s post-secondary education costs in their entirety, plus periodic support. I see no reason why the tuition tax credit should not be transferred to Mr. Knapp when Brandon has no income and has made no contribution to the expenses which give rise to the tax credit. In the restricted financial circumstances of the parties, I do not find Mr. Knapp’s position to be reasonable. I impute the tax credits to Mr. Knapp in determining his income for support purposes.

[42] I accept Mr. Knapp’s submission that Ms. Wright does not have the ability, as a single mother, supporting three children on $18,000 per year, to contribute to Brandon’s expenses. It would not be reasonable to require her to contribute given her extremely limited means.

[43] I also accept Mr. Knapp’s submission that there is no evidence that Brandon would qualify for an OSAP loan.

[44] I will include Mr. Knapp’s bonus in his income. It is income that affects his ability to pay support. If Mr. Knapp does not receive a similar bonus in subsequent years, spousal support may be adjusted on the basis of a material change in circumstances.

[45] Mr. Knapp’s SSAG calculations show cohabitation of 12 years. However, cohabitation was actually 12.5 years. The actual length of cohabitation would result in a small increase in the SSAG calculations prepared by Mr. Knapp, inclusive of his bonus, where the range had been calculated at $495 - $577 - $659.

[46] I take into account that the PGT will take 3% of transactions in and 3% of transactions out which will reduce the support effectively available to Ms. Knapp.

[47] Mr. Knapp’s expenses shown in his Financial Statement of January 27, 2014, of $76,297, are almost equal to his salary of $71,500 plus his bonus, net of income tax, of $4,000. Those expenses include the $500 per month support that he presently pays to Ms. Knapp. After receiving his equalization payment, he will be able to pay off his Canadian Tire credit card debt, which would free up $400 per month. I am satisfied that Mr. Knapp has the ability to pay an amount of spousal support somewhat higher than the $500 per month which he is presently paying, while remaining able to pay the other expenses that he shows in his financial statement.

[48] There is no question about Ms. Knapp’s need. Even with support, Ms. Knapp will be under the poverty line for a single person in Ontario.

[49] I am not persuaded that the support award should be time limited. There is no evidence that Ms. Knapp will be able to achieve self-sufficiency within a fixed time. The parties had a relationship of significant length. Ms. Knapp became ill while the parties resided together.

[50] Both parties submit that the support order should be subject to review de novo. Ms. Knapp suggests a review in 2023. Mr. Knapp suggests a review in 2018. The Supreme Court of Canada in Leskun v. Leskun, [200] 1 S.C.R. 920 (S.C.C.) and the Court of Appeal in Fisher v. Fisher 2008 ONCA 11 have cautioned against review orders. Review orders should be the exception rather than the norm. They result in a re-argument of the case. It is preferable that the case be finalized, subject to a material change in circumstances. In this case, however, because of the uncertainty of the future course of Ms. Knapp’s mental illness, the issue of medications which may control her illness, her relatively young age and the fact that both parties worked during the marriage with relatively similar incomes and relatively similar roles in the marriage, I am prepared to accept the joint submission for a review. I find that a review de novo of spousal support after January 1, 2019 would be appropriate. That is approximately 6.5 years from the date of separation, which is the minimum duration for support shown by the SSAG calculations based on cohabitation of 12.5 years. It is also a date by which Brandon should have completed his education.

[51] I have determined that Mr. Knapp should pay spousal support of $650 per month. This is toward the high range of the SSAG calculations produced by Mr. Knapp, adjusting for the fact that cohabitation was for 12.5 years rather than the 12 years shown in his calculations.

[52] I appreciate that duration and quantum are both part of the SSAG formula. The SSAG calculations for quantum should not be adopted without taking duration into consideration. If there were not to be a review de novo, I would have adjusted the quantum downward to reflect the fact that the award is not time limited.

[53] This support order shall commence July 1, 2013. In MacKinnon v. MacKinnon, 2005 13191 (ON CA), [2005] O.J. No. 1552 (C.A.), the Court of Appeal clarified that a claim for support from the date of the application forward is properly described as prospective support. A claim pre-dating the application is retroactive support. Ms. Knapp’s claim for support going back to July 1, 2013, is prospective support. She requests that support start two months after her application was served.

[54] The parties have agreed that Mr. Knapp will designate Ms. Knapp as the beneficiary of 50% of the proceeds of his life insurance policy which has a face amount of $210,000, for so long as he is required to pay support to Ms. Knapp.

[55] The parties have also agreed that a divorce should issue. Evidence was led at trial which supports the granting of a divorce.

Conclusion

[56] For the reasons given, an order shall issue that:

(1) The parties shall be divorced, effective 31 days from this order.

(2) Mr. Knapp shall pay to Ms. Knapp support in the sum of $650 per month, commencing July 1, 2013. Mr. Knapp shall receive credit for support that he has paid to Ms. Knapp under the temporary order of Platana J., granted May 12, 2013.

(3) The spousal support payable herein shall be reviewable in the event of a material change in circumstances which may include but not be limited to:

(a) a material change in the legal obligation of Mr. Knapp to contribute to the support of his child Brandon, which he shall have an obligation to disclose to Ms. Knapp forthwith upon the happening of such change;

(b) a material change in the eligibility of Ms. Knapp for medical expense coverage available to her through ODSP;

(c) a material change in the incomes of either party.

(4) Regardless of whether there is a material change in circumstances, either party shall be entitled to review entitlement, quantum and duration of spousal support after January 1, 2019, on a review de novo basis. Pending any order on the review, spousal support shall continue to be paid in accordance with this order.

(5) The Public Guardian and Trustee shall advise Mr. Knapp forthwith if it ceases to manage the financial affairs of Ms. Knapp.

(6) Mr. Knapp shall maintain Ms. Knapp as a beneficiary of a policy of insurance on his life with Desjardins held through his employment, to the extent of 50% of the face amount of $210,000 for as long as he is required to pay spousal support to Ms. Knapp. Upon the termination of spousal support, Ms. Knapp shall execute all documents required to release Mr. Knapp’s obligations to maintain Ms. Knapp as a beneficiary of this policy of insurance on his life. By June 1 of each year, commencing June 1, 2014, Mr. Knapp shall provide proof to Ms. Knapp that she is a beneficiary of the policy of insurance as required herein. If Mr. Knapp fails to maintain this life insurance as required, upon his death Ms. Knapp shall have a first charge against Mr. Knapp’s estate for the amount of life insurance that he is required to maintain on her behalf.

(7) Until Mr. Knapp’s obligation to pay spousal support ends, each party shall produce to the other by June 1 of each year, commencing June 1, 2015 a copy of their income tax return and notice of assessment for the previous calendar year.

(8) By September 1 of each year, commencing September 1, 2014, Mr. Knapp shall disclose to Ms. Knapp his anticipated costs for Brandon’s upcoming academic year, including post-secondary education expenses and periodic support.

(9) A Support Deduction Order shall issue.

Costs

[57] If the parties are unable to agree on costs, they shall contact the Trial Co-ordinator within 30 days to take out an appointment to speak to the issue. If within 30 days they have not contacted the Trial Co-ordinator to take out an appointment, the issue of costs will be deemed to have been settled.

The Hon. Mr. Justice D. C. Shaw

Released: March 13, 2014

COURT FILE NO.: FS-13-0114

DATE: 2014-03-13

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Shana-Lee April Knapp,

Applicant

• and -

Wayne Knapp,

Respondent

REASONS FOR JUDGMENT

Shaw J.

Released: March 13, 2014

/mls