SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FS-973541-02
DATE: 2014-08-06

RE: TRUSCELLO V. TRUSCELLO

BEFORE: JUSTICE VAN MELLE

COUNSEL:
J. Treloar, for the Applicant/Responding party
P. Bateman, for the Respondent/Moving party

DATE HEARD: July 10, 2014

E N D O R S E M E N T

[1] Giovanni (John) Truscello brings this Motion to Change a final order. He seeks to reduce or eliminate spousal support payable to his former wife pursuant to a Divorce Judgment of Justice MacKenzie dated May 10, 2000. The Divorce Judgment was based on Minutes of Settlement.

[2] John Truscello married Paola Truscello on July 29, 1972. They raised two children who are now independent. They divorced on June 10, 2000.

[3] The relevant portion of Justice MacKenzie’s Judgment is at paragraphs 5 and 6. John was ordered to pay Paola $1,000.00 per month until there is a variation resulting from a material change in circumstances or until Paola dies. The Judgment stipulated that John was a Branch Manager for Ryder Truck Rental, earning a salary of $75,800.00 in 1998.

[4] Paragraph 9 of the Judgment set out that the spousal support payments were to be adjusted annually by the lesser of the percentage increase in John’s wage or the cost of living in accordance with the All items Consumer Price Index for the City of Toronto using the most current base year equal to 100 as provided by Statistics Canada.

[5] John faithfully paid child and spousal support pursuant to the Judgment but did not increase the payments by the cost of living percentage. In 2011 Paola discovered that the Family Responsibility Office had not been indexing the spousal support payments and that arrears had therefore accumulated. John acknowledges these arrears ($18,500.00) and has been making payments toward them. The current monthly payments, taking into account COLA, are $1,308.28.

[6] John seeks a variation based on a material change in circumstances. He says that he has retired from Ryder in August 2013 when he turned 65. He also states that he has had significant health issues including cancer, rheumatoid arthritis and Crohn’s disease. He was on long-term disability from August 2009 until his retirement in August 2013. His income consists of his employee pension, C.P.P. and Old Age Security. He remarried, but his wife has health issues as well. Her income is $22,518.00.

[7] John submits that the portion of his pension that was already divided as a result of the divorce should be excluded from his income when calculating his spousal support obligation. He submits that any spousal support obligation should be based on $29,000.00 which would be his income excluding the pension that was equalized on divorce.

[8] Paola resists John’s motion to vary. She says that although she worked in the retail sector during the marriage she has been unemployed and unable to work since 2002. She suffers from stenosis in three places in her back, a baker cyst behind her knees and arthritis in her joints. She says that her condition is deteriorating.

[9] Paola who is now 62 says that her only income is the support that she receives from John.

[10] John says that Paola should apply for CPP now. He also says that she should apply for CPP disability benefits now. He submits that if she were to apply for CPP disability benefits she would receive approximately $841.00 per month. If she were to apply for CPP now she would receive $615.00 per month. If she waits until she is 65 she will receive $708.00 per month.

[11] Paola has also had her daughter and grandson living with her. She receives $600.00 per month from her daughter.

[12] Both parties have assets. Paola owns her own house which she says is worth $500,000.00. Other than a Visa debt and an amount owing to CRA she has no debts.

[13] John owns a house with his wife. There is a mortgage on the house. He has an RRSP and some savings. He too does not have much debt.

ISSUES

[14] A few issues arise:

(a) Should John have to pay support from that portion of his pension that has already been equalized?

(b) Does Paola have to apply for CPP disability? Does she have to take her CPP now?

(c) Should Paola’s daughter, who is a teacher, be paying more to her mother for living in her house?

(d) Should the parties be expected to supplement their present incomes through part-time employement – John to pay support and Paola to contribute toward her living expenses?

ANALYSIS

[15] I find that John’s retirement and health issues constitute a material change in circumstances.

[16] Paola referred me to several cases where orders were made that spousal support should be paid from a pension even when the pension has been equalized.

[17] In Kingsley v. Kingsley 2006 CarswellOnt 3435, Justice Hennessy said:

To determine whether double-dipping is permissible, the court must consider the following factors:

a. Whether the claim for support is based on need or compensation;

b. Whether the payor spouse has the ability to pay;

c. Whether the payee spouse has made reasonable efforts to invest or use the

equalized assets to produce income and despite these efforts, the economic

hardship from the marriage or its breakdown persists;

d. Whether the principal asset transferred on equalization is the matrimonial

home, the home is not extravagant in relation to the standard of living, and the

costs of accommodation are not appreciably different from rental or other

accommodation.

[18] She went on to find that the rule against double-dipping did not apply to Mrs. Kingsley as her claim was based on need and the payor’s ability to pay. She had no assets other than the modest home in which she resided. She had no ability to earn income based on her age, health, education level and limited employment history.

[19] In Perry v. Perry 2008 CarswellOnt 1643 Justice Rogin held that Mrs. Perry was entitled to look to the already equalized portion of Mr. Perry’s pension for support.

Justice Rogin quoted Marinangeli v. Marinangeli 2003 27673 (ON CA), (2003), 66 O.R. (3d) 40 where at para. 38 Weiler J. said the following:

“A further elaboration of the principles respecting double dipping is articulated in Meiklejohn v. Meiklejohn 2001 21220 (ON CA), (2001), 19 R.F.L. (5th) 167 (Ont. C.A.), where Rosenberg J.A. held that a court will not automatically exclude consideration of a payor’s pension income from his or her ability to pay support because the capital value of the pension has been included in the equalization accounting. While it may be generally unfair that the income stream from an asset that has already been equalized be considered in determining support, there are a number of circumstances where a court is justified in awarding support from pension income although the value has already been included in equalization. There were a number of factors that led Rosenberg J.A. to conclude that the rule against double dipping did not apply to the case before him. A significant portion of the value of the pension accrued after separation; spousal support was based on need; the wife had limited ability to earn income; she had received only a modest amount from the equalization of the property and the wife’s share of the assets was tied up in the matrimonial home from which she had no ability to generate income. Based on the persisting economic hardship from the marriage or its breakdown, he ordered support out of the pension.”

[20] However Justice Rogin also found that despite the medical evidence Mrs. Perry was able to contribute to her own support by working on at least a part time basis.

[21] The case at bar is distinguishable in that the wife received an appropriate amount for equalization and has been able to accrue an asset consisting of a home worth approximately $500,000.00 with no mortgage. I also cannot find that there has been persisting economic hardship from the marriage or its breakdown.

[22] Paola must contribute and maximize her income to the fullest extent possible. It is therefore incumbent upon her to start taking her CPP pension now and to apply for a CPP disability income. I am therefore attributing an income of $615 per month for CPP and $841.00 for a CPP disability payment to her in addition to her other sources of income for a total annual income of $19,233.00 (not including the amount that she receives from her daughter).

[23] I recalculated the spousal support payable using the amounts that I have attributed to Paola for the CPP retirement allowance and for the CPP disability income. Based on those figures, taking into account the fact that the pension has already been equalized, the mid-range support payable would be $388.00. Leaving John’s whole pension in the equation, the mid-range support payable would be $748.00. As stated in the foregoing paragraph I have not taken into consideration the fact that Paola’s daughter and grandson reside with her. The daughter pays only a modest amount toward the monthly expenses. It would not be too much to expect her to pay a bit more. If she were to do that, John and Paola would have a similar income and spousal support would no longer be payable.

[24] It would be appropriate to vary the support payable on a graduated basis to give Paola an opportunity to apply for the CPP payments and for the CPP disability payments.

[25] In the result the final order of Justice MacKenzie is varied so that the spousal support obligation is varied to $1,000.00 per month for September and October; $750.00 per month for November and December; $500.00 per month for January and February with the support obligation being eliminated as of March 1, 2015. The amounts outstanding as of today are still due and payable.

[26] I will entertain brief, written costs submissions. John’s submissions are to be served and filed within 15 days, Paola has 15 days thereafter.

Van Melle J.

DATE: August 6, 2014

COURT FILE NO.: FS-973541-02

DATE: 2014-08-06

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TRUSCELLO V. TRUSCELLO

BEFORE: VAN MELLE J.

COUNSEL: J. Treloar, for the Applicant/Responding party
P. Bateman, for the Respondent/Moving party

ENDORSEMENT

Van Melle J.

DATE: August 6, 2014