ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: D 20100-12
DATE: 2014-01-16
BETWEEN:
Linda Mary Dufour
Applicant
– and –
James Garnett Dufour
Respondent
Lisa Parisé, for the Applicant
Self-Represented
HEARD: November 25 and 26, 2013
REASONS FOR JUDGMENT
CORNELL J.:
[1] This application involves a claim by the applicant for retroactive spousal support from October 2011 until November 2013. For the reasons which follow, the claim for retroactive support is dismissed.
Background
[2] The applicant and the respondent began living together in May 1993 and were married in September 1995. At that time, the applicant was working full-time for a dry cleaning company.
[3] There are no children of this union.
[4] A joint decision was made to relocate from Sudbury to Harrow, a small community just outside Windsor, Ontario. The applicant indicated that she did not work after the move as there was no work in the Harrow area. By the spring of 2005, the respondent was required to return to Sudbury to find work. The parties’ lifestyle was such that the respondent did not work every year.
[5] The applicant has suffered from a hearing loss for many years. In recent years, the condition has become worse. She has suffered from tremors which began 15 to 20 years ago. These tremors have also become worse in recent months with the result that she is now being tested for Parkinson’s disease. Although not confirmed by medical evidence, she testified that she suffered a minor stroke on December 25, 2010. The applicant indicated that given her age and these health issues, she is now unable to be gainfully employed. Her application for CPP disability benefits was initially refused. She has appealed this decision. She has not applied for O.D.S.P. Benefits.
[6] On October 8, 2011, the parties separated. At that time, the applicant was 51 and the respondent was 74 years of age. Following the separation, both parties relocated to Sudbury. The matrimonial home in Harrow was rented for $500 a month. The applicant received this rental income from April 2012 until January 2013. The respondent helped the applicant move back to Sudbury and gave her $100 at that time. As no further financial assistance was provided by her husband, she applied for and received Ontario Works assistance for approximately two months.
[7] Following the application for public assistance, a family support worker from Ontario Works met with the parties in late December 2011 and early January 2012 to arrange for spousal support to be paid.
[8] At that time, the respondent was approximately 74 years of age. He was no longer a member of the Steam Fitters Union. His efforts to find work had been unsuccessful due to his age and lack of union membership. He was living on various sources of pension income which amounted to approximately $36,000 per year. Based upon this information, a simple separation agreement was prepared by the family support worker whereby the respondent was to pay to the applicant spousal support in an amount of $800 per month commencing March 1, 2012. The commencement date for the payment of support was delayed a few months to allow the parties to re-establish themselves in Sudbury as they were still attempting to sell the matrimonial home in Harrow.
[9] Upon her return to Sudbury, the applicant moved in to live with and take care of her elderly father who is now 88 years of age. In order to permit her father to remain in his home, she takes care of him by doing the laundry, cooking, cleaning, and taking him to his medical appointments. She has one brother, but they have had no contact with him for a considerable period of time.
[10] The budget of actual expenses submitted by the applicant indicates that she pays rent in an amount of $200 per month. Her grocery expenses are $250 per month. Her additional monthly expenses are gas-$300, car insurance-$112, car loan-$295, and personal expenses of $180. She drives a 2012 Volkswagen against which she has a car loan of approximately $15,000. She has no other debts. She has no pension and no savings to speak of.
[11] She acknowledges that she received $800 per month in spousal support until May 2013 when it was increased to $1000 per month.
[12] Mr. Dufour testified. He was a self-represented litigant.
[13] Prior to and following the separation, he paid the expenses associated with the matrimonial home in Harrow until he was unable to do so. The house was purchased in 2006 jointly with the applicant for the sum of $117,000. He estimated that the fair market value of the home at separation was approximately $125,000. The outstanding mortgage was in an amount of $120,000. Now that the property has been repossessed by the mortgagee, it is clear that the resulting power of sale proceedings will result in a deficiency which will be a significant joint obligation of the parties.
[14] About one week after signing the separation agreement, the respondent received a job offer to work the “tool crib” at Detour Lake Mine on a temporary basis until someone else could be found to fill the position. The respondent continued to work in this position until December 2012 when he was hospitalized. As a result of this employment, the respondent earned $172,585 in 2012 inclusive of his pension income. His taxable income in 2011 was $37,562.
[15] The parties have the same circle of friends. It was common ground that the applicant was aware that the respondent secured employment in January 2012. A lawyer’s letter requesting financial disclosure in July 2012 went unanswered. As a result, this application was commenced in October 2012.
[16] On April 18, 2013, Hennessy J. made a temporary order at a case conference which required the respondent to pay spousal support in an amount of $1000 per month commencing May 1, 2013. The respondent was also to pay the sum of $2,500 on account of “retro” support, without “resolution of the balance of the claim for retroactive spousal support.”
[17] At a trial management conference held on November 6, 2013, an order was made that required the respondent to provide bank records and a financial statement. On consent, the respondent agreed to increase the spousal support to $1,086 per month effective December 1, 2013, “to allow the applicant to purchase Trillium Ontario benefits” as he was no longer able to provide benefit coverage to her. The endorsement goes on to indicate: “Issues for trial; (1) retroactive spousal support; (2) additional spousal support to cover medical and health care coverage not an issue any longer.” Other than by implication, there is nothing in the endorsement to indicate that it was intended to be a final order.
[18] Neither the order made at the case conference on April 18, 2013 nor the order made at the trial management conference on November 6, 2013 had been taken out at the time of the trial.
[19] On November 15, 2013, the respondent paid the sum of $3,800 to the applicant which represented approximately one half of the employment insurance benefits that he had received up to that point in time. Assuming that he continues to meet the eligibility requirements, the evidence suggests that the respondent will continue to be in receipt of employment insurance benefits until April or early May of 2014.
The Law
[20] Counsel for the applicant drew my attention to Bremer v. Bremer, 2005 3938 (ON CA), [2005] O.J. No. 608, 13 R.F.L. (6th) 89, a decision of the Ontario Court of Appeal. The trial judge had ordered retroactive spousal support in the amount of $30,000 but had failed to set out the basis upon which such award was made. In remitting the matter to the trial judge for consideration, the court indicated at para. 9:
The considerations governing an award of retroactive spousal support include: i) the extent to which the claimant established past need (including any requirement to encroach on capital) and the payor’s ability to pay; ii) the underlying basis for the ongoing support obligation; iii) the requirement that there be a reason for awarding retroactive support; iv) the impact of a retroactive award on the payor and, in particular, whether a retroactive order will create an undue burden on the payor or effect a redistribution of capital; v) the presence of blameworthy conduct on the part of the payor such as incomplete or misleading financial disclosure; vi) notice of an intention to seek support and negotiations to that end; vii) delay in proceeding and any explanation for the delay; and viii) the appropriateness of a retroactive order pre-dating the date on which the application for divorce was issued: see Horner v. Horner, 2004 34381 (ON CA), [2004] O.J. No. 4268 (C.A.); Marinangeli v. Marinangeli 2003 27673 (ON CA), (2003), 66 O.R. (3d) 40 (C.A.) and Price v. Price, [2002] O.J. No. 2386 (C.A.).
[21] In Fisher v. Fisher, [2008] O.J. No. 38, 2008 ONCA 11, the Ontario Court of Appeal at para. 76 addressed the issue of retroactive spousal support in the following manner:
In my view, the trial judge erred in refusing that relief. I say this for three reasons. First, as was established at trial, the appellant was in need of support and the respondent had the ability to pay. While the trial judge referred to the $12,000 debt the appellant incurred in this period, he saw this as offset by the $19,500 of disability insurance. However, in my view, retroactive support to replace an interim support order should not be restricted to situations where the recipient spouse has incurred a crippling amount of debt. Rather, retroactive support should be available when the recipient establishes at trial that he or she was entitled to a greater amount of interim support, the respondent had the ability to pay, and the imposition of retroactive support would not create undue hardship for the payor. (emphasis added)
[22] In MacKinnon v. MacKinnon, 2005 13191 (ON CA), [2005] O.J. No. 1552, 75 O.R. (3d) 175, the claimant wife had an annual income of $33,000 in 2002 and 2003. During those years, she also received $22,000 in government benefits and credits. The husband’s income was $441,928 in 2002 and $327,146 in 2003. In awarding retroactive support, the court determined that the wife had established entitlement and need and that the husband had the financial means to pay.
[23] Finally, the test for granting retroactive spousal support was recently considered by the Supreme Court of Canada in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. Cromwell J. noted at para. 207 that:
While D.B.S., 2006 SCC 37, [2006] 2 S.C.R. 231, was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similar considerations to those set out in the context of child support are also relevant to deciding the suitability of a “retroactive” award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse. However, in spousal support cases, these factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support.
Analysis
Retroactive Support
[24] Counsel for the applicant acknowledged that the respondent should receive credit for a cash payment in an amount of $2,500 (presumably pursuant to the order of Hennessy J.), rent in an amount of $5,000, and one-half of the employment insurance benefits in an amount of $3,800. After giving credit for these amounts, the applicant was claiming retroactive spousal support in an amount of $44,205 according to a spousal support advisory guideline midpoint amount of $4,530 per month, based upon the respondent’s 2012 income of $172,585.
[25] There can be no doubt that the respondent earned a very substantial income in 2012. Counsel for the applicant points to the fact that the separation agreement provided that “James will advise Linda of any change in his financial circumstance within five days of said change occurring. Further the parties agrees (sic) to exchange their notice of assessment from Revenue Canada annually by no later then (sic) June 30.” The applicant indicates that she was diligent in her requests for financial disclosure as confirmed by the lawyer’s letter which was sent to the respondent in July 2012. These requests for disclosure went unanswered leaving the applicant with no alternative but to commence this application.
[26] During a thorough cross-examination, the respondent was questioned about many cheques which were written to cash and payments that were made to his sisters. He indicated that the payments to his sisters were to permit them to pay his bills. He indicated that he was heavily in debt including bills for the matrimonial home and income tax which was “thee years behind”. He had no proof of payment for such bills. He went on to say that the balance of the money was spent on lifestyle expenditures for meals and restaurants, buying rounds in the union hall and some gambling in Sault Ste. Marie.
[27] Since he stopped working, the respondent has lived in his sister’s basement. He pays rent to her in an amount of $600 per month. His only asset is a 2002 truck that may be worth approximately $2000. He has no debts. Due to his 2012 income, his old age pension has been clawed back in its entirety for 2013 and perhaps 2014. This will leave him with a 2013 income in an amount of approximately $30,500. According to his budget, his expenses amount to $34,500 a year including his spousal support obligation. At the moment, the difference is being made up by the employment insurance payments that he receives.
[28] As previously set out, the applicant’s modest expenses according to her financial statement amount to $1,337 per month. This is possible due to the shared living arrangement that she has with her elderly father. The evidence indicates that even these modest expenses appear to have been overstated in that apart from her car loan, she has no accumulated debt following the separation. Her proposed budget remains modest at $1,716 per month.
[29] I now turn to a consideration of the factors to be taken into consideration when a request for retroactive spousal support is made.
Applicant’s Needs
[30] I find that given her living arrangements following the separation, the applicant’s needs have been modest and these needs have been met by the financial assistance that has been provided in various forms by the respondent. This finding is supported by the fact that the applicant has no accumulated debt with respect to her day to day living expenses.
Respondent’s Conduct
[31] The conduct of the respondent with respect to financial disclosure is worthy of criticism. The separation agreement provided that he would advise the applicant of any change in his financial circumstances within five days of the change occurring. He failed to do this. He failed to respond to requests made directly by the applicant with the result that she sought legal assistance. He ignored the request for disclosure made in the lawyer’s letter dated July 27, 2012, with the result that this application was commenced in October of that year. Apart from that, the respondent’s reckless spending habits are also worth noting.
Delay
[32] Given the difficulties that the applicant encountered in seeking legal assistance, I find that she moved as expeditiously as possible and accordingly there was no effective delay in her pursuing her claim for spousal support.
Financial Hardship
[33] The issue of financial hardship that any retroactive award might cause is one that I have considered carefully, particularly in light of the respondent’s failure to make timely financial disclosure.
[34] During the course of a very thorough cross-examination, the evidence disclosed that prior to the separation, the parties enjoyed a comfortable lifestyle. This included frequent travel, restaurant meals, as well as the ownership and use of motorcycles and an airplane. It became clear during the course of the evidence that the respondent has never met a dollar that he did not care to spend. Even after being unemployed for a considerable period of time and earning a substantial income in 2012, the respondent did not see fit to put aside any money for himself let alone for his estranged spouse. In his words, he worked in a “high paid trade and they spent a lot of money on trips and other things”. The respondent’s 1999 Harley Davidson motorcycle was transferred to his brother-in-law in April 2012 as repayment for work done by him. At that time, the motorcycle had 180,000 kilometers on it. The respondent estimated that it had a fair market value of $1,000 to $1,500.
[35] The aircraft was a 1965 Citabria which he purchased 20 years ago for the sum of $9,500. He sold it in the summer of 2011 for the sum of $20,000. The proceeds were used to pay outstanding bills.
[36] Apart from that, the only assets that the respondent had at the time of separation were his truck and the matrimonial home which has or will be sold by the mortgagee. Given the absence of equity in that property, it can only be assumed that the property will be sold at a loss to the mortgagee.
[37] Counsel for the applicant subpoenaed a representative from Scotia Bank who produced the respondent’s 2012 and 2013 bank statements as well as copies of 14 cheques which were entered into evidence. Although this evidence raised questions about whether the respondent had secreted money away to defeat the applicant’s spousal support claim, I am satisfied that such is not the case. When looked at within the totality of all of the evidence, the banking records in the end did nothing more than confirm that the respondent is a spendthrift.
[38] The respondent is now 76 years of age. He lives in very modest circumstances in his sister’s basement apartment. There is little likelihood that he will ever be gainfully employed in any meaningful way. He has no assets to his name other than a truck that might be worth $2,000. His pension income will amount to approximately $37,500 in future years subject to some further observations to be made. Unlike the payors in Fisher and MacKinnon, the respondent does not have and will not have the ability to pay a retroactive award.
[39] When I weigh and consider all of the factors to be taken into account, I am of the opinion that this is not an appropriate case to award retroactive support.
Ongoing Support
[40] Counsel for the applicant took the position that the endorsement made at the trial management conference with respect to the amount of ongoing support was a final order and that the only issue for this court to consider was the claim for retroactive spousal support. The order has not been taken out. There is nothing in the endorsement to specifically state that it is a final order. The respondent is an elderly self-represented individual who had very little appreciation of the nature of the proceedings within which he found himself. When asked if the endorsement made at the trial management conference was intended to be a temporary or final order, I was met with a confused expression, a shrug of the shoulders and a statement “that is all I can pay”. Given this background, I am of the view that the consent order made at the trial management conference was not a final order.
[41] The evidence indicates that the respondent’s pension income in 2014 will amount to $30,538.56. To this must be added employment insurance benefits of approximately $7,000 with the result that the respondent’s estimated 2014 income is approximately $37,538. The spousal support advisory guidelines indicate a low payment of $845, a mid-payment of $986 and a high payment of $1,127. Taking into account the terms of the separation agreement, the consent order which was made at the time of the trial management conference and the financial circumstances of the parties, I order that the respondent pay to the applicant spousal support in an amount of $1,086 commencing December 1, 2013.
Review
[42] There will be further changes to the respondent’s financial position. It is anticipated that his employment insurance benefits will end in April or May 2014 at the latest assuming that he continues to seek work until that time. Once the claw-back period has expired, the respondent’s old age pension payments will resume.
[43] It is open to the applicant to seek a division of the respondent’s Canada pension plan credits. If the applicant’s appeal from the denial of Canada pension plan benefits is allowed, or if she successfully applies for O.D.S.P. benefits, the applicant’s financial position will change. It is appropriate that if any of these changes occur, the amount of spousal support to be paid by the respondent shall be reviewed.
Disposition
[44] I make the following order:
(1) a divorce is to issue;
(2) the respondent is to pay the applicant spousal support in an amount of $1,086 per month commencing December 1, 2013;
(3) the respondent’s spousal support obligation shall be a first charge on his estate;
(4) any change to the respondent’s financial position as a result of the termination of employment insurance benefits, division of his Canada pension plan credits or resumption of his old age pension benefits or any successful application by the applicant for disability benefits shall entitle either party to seek a review of spousal support; and
(5) the balance of the applicant’s claims are dismissed.
Costs
[45] Although the respondent has been successful in resisting the claim for retroactive support, it is not an appropriate case to make a cost order in his favour in view of his failure to provide timely financial disclosure and his reckless spending habits.
The Honourable Mr. Justice R. Dan Cornell
Released: January 15, 2014
COURT FILE NO.: D 20100-12
DATE: 2014-01-16
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Linda Mary Dufour
Applicant
– and –
James Garnett Dufour
Respondent
REASONS FOR JUDGMENT
Cornell J.
Released: January 16, 2014