SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: FC-12-2277-2

DATE: 2014/09/12

RE: KEVIN MARK CANNON, Applicant

AND

KAREN DARLENE MARTIN, Respondent

BEFORE: Mr. Justice Marc R. Labrosse

COUNSEL: Ron Paritzky, for the Applicant

Rodney B. Cross, for the Respondent

HEARD IN OTTAWA: August 25, 2014

ENDORSEMENT

Overview

[1] In September 2012, the Applicant and the Respondent entered into a Separation Agreement which resolved all issues relating to their divorce after approximately 25 years of marriage. On July 31, 2013, the Applicant father was terminated from his employment and rather than actively seeking equivalent employment, chose to relocate to Vancouver and start a new business, which has yet to generate meaningful revenues. When he moved to Vancouver, the Applicant father brought the parties’ dependent adult daughter with him.

[2] The Applicant father now brings this Motion to Change to vary the Separation Agreement seeking that the Respondent mother pay child support for Katherine Amaya Martin‑Cannon (“Amaya”), the termination of his spousal support obligation and an Order that the Respondent mother pay spousal support to the Applicant father.

[3] For the following reasons, I am of the view that there has been no material change in circumstance which requires a variation of the Separation Agreement. The provisions of the Separation Agreement call for adjustments to spousal support based on each party’s annual income. The Applicant should have an annual imputed income of $50,000 and the provisions of the Separation Agreement should be applied. With respect to child support, the Applicant has confirmed that the amount she receives in benefits per month is sufficient to meet her needs. The Applicant has not established that there has been a sufficient change in Amaya’s circumstances to warrant an order for child support.

Background

[4] The parties were married on May 25, 1985 and separated on October 1, 2010. They have two children, Amaya, born April 12, 1992 and Jennifer Kira Martin‑Cannon (“Kira”), born July 4, 1994.

[5] Amaya suffers from Asperger’s Syndrome and has resided with the Applicant since the separation. She is not able to live independently and this was recognized by the parties in the Separation Agreement. While she resided in Ontario, she was in receipt of ODSP benefits and is now in receipt of similar benefits in British Columbia.

[6] Kira is a full‑time student at the University of Western Ontario. She does not reside with her parents and is not the subject of this Motion to Change.

[7] At the time of separation, the Applicant father was earning approximately $82,200 per year and the Respondent mother was earning approximately $64,000. In accordance with the Spousal Support Advisory Guidelines (“SSAG”), the Separation Agreement provides that the Applicant pay spousal support to the Respondent of $655 per month.

[8] The Separation Agreement includes the following relevant provisions:

a. Section 1.4 recognizes that it is unlikely that Amaya will ever achieve financial independence and that she is in receipt of ODSP benefits;

b. Section 5.3 states that regardless of with whom Amaya resides, neither party will pay child support to the other for Amaya. However, this is subject to annual review (s. 5.14);

c. Section 7.1 requires the Applicant to pay spousal support to the Respondent of $655 per month. The amount reflects the mid‑range of the SSAG;

d. Section 7.4 allows for a change to the spousal support in the event of a material change of circumstance;

e. Section 7.7 calls for an adjustment to spousal support based on the parties’ incomes for the previous calendar year; and

f. Section 7.9 allows for adjustments where spousal support is either underpaid or overpaid by the time the parties’ respective income for the previous calendar year is finalized.

[9] The Applicant father was terminated from his employment with Viewnyx on July 31, 2013.

Position of the Parties

[10] The Applicant father states that the end of his employment with Viewnyx on July 31, 2013 is a material change in circumstance under the terms of the Separation Agreement. As such, he is entitled to be paid child support for Amaya and spousal support effective August 1, 2013.

[11] The Applicant disputes the Respondent’s allegations that he effectively requested termination in order to move the Vancouver with his girlfriend. He states that he tried to find equivalent employment following his termination and that after making a number of applications he turned towards the option of starting his own business with his girlfriend in Vancouver.

[12] The Applicant admits that he could have found employment between $40,000 and $50,000 per year but feels that this would have been meaningless. He was better off proceeding with the new business in the hopes of making it successful. In the meantime, he has no income and is living off his capital assets. While he states that he has a need for spousal support, the Applicant did not forcefully pursue an award of spousal support at the Motion to Change. The Applicant’s position was focused on the termination of his spousal support obligation and need to continue building up a trust fund for Amaya by having the Respondent pay child support. The Applicant relies upon the matter of Parker v. Parker, 2014 ONSC 4211 in stating that his departure from Viewnyx was not done in bad faith and that he should not be required to make spousal support payments out of his capital.

[13] With respect to child support, the Applicant father states that while ODSP benefits were sufficient to meet Amaya’s needs, it is important to build up a trust account for her and her future needs. As such, the Respondent mother should be paying child support to allow him to maintain contributions to her trust fund. The Applicant admits that the current amount of benefits being received in British Columbia is sufficient to meet her needs but not sufficient to contribute to the trust fund.

[14] The Respondent advances that this Motion to Change should never have been brought. The Applicant has failed to demonstrate any effort to seek equivalent employment and the Respondent should not be saddled with the financial difficulties of the Applicant’s new business venture.

[15] The Respondent states that the termination of the Applicant’s employment with Viewnyx was planned and was, in fact, a resignation. The Respondent relies on the fact that Viewnyx went so far as to qualify the termination as mutual. As a result of the deemed resignation, the Respondent relies upon the findings of this Court in Mikkelsen v. Mikkelsen, 2005 BCSC 1796 and that it is not for the Respondent to assume the financial consequences of the Applicant’s choice to start a new business venture and have no income. The spousal support obligation should be maintained.

[16] With respect to Amaya, the Respondent states that there is no reason to apply section 5.14 of the Separation Agreement to alter the provisions relating to Amaya’s care. If Amaya was required to be without benefits for a period of time after moving from Ontario to British Columbia, this was caused by the Applicant and, as such, he should bear the financial consequences. At the time of the motion, the Applicant admitted that Amaya was receiving benefits in British Columbia, which were sufficient to meet her needs. The Respondent relies on this and argues that there is no basis for an Order that she be required to pay child support for Amaya, as no need has been demonstrated.

Analysis

[17] With the exception of determining the Applicant father’s income, the issues raised in this Motion to Change are essentially decided by the terms of the Separation Agreement. Sections 5.14, 7.7 and 7.9 contemplate certain changes over time and I am of the view that the changes which have taken place since the signing of the Separation Agreement simply need to be applied to the terms of the agreement.

[18] When considering child support, section 5.14 contemplates that Amaya’s needs may change and that the parties need to consider her needs on an annual basis. Based on the record before me and the Applicant’s confirmation that the current benefits being received in British Columbia are sufficient to meet her needs, there has been no sufficient change in Amaya’s circumstances. I agree with the Respondent that any short‑fall in benefits, caused by the relocation to British Columbia, are the responsibility of the Applicant.

[19] Further, I am of the view that child support for a dependent adult child is not meant to be used to build a trust fund for Amaya. Section 3(2)(b) of the Federal Child Support Guidelines requires that the Court analyze the issue based on a means and needs analysis (see Senos v. Karcz, 2014 ONCA 459). Neither party has done this analysis. In addition, it is not required as Amaya’s current needs are being met by the benefits received. There shall be no order for child support.

[20] With respect to spousal support, the Separation Agreement provides for an adjustment to the spousal support paid by the Applicant based on the parties’ actual 2012 income effective on September 1, 2013 and for each subsequent year. Assuming that this was done for their 2012 income, the calculation should be continued for 2013 with the Applicant’s reported income of $53,015, being a combination of salary with Viewnyx and employment insurance benefits.

[21] When they consider 2014, I rely on the Applicant’s admission that he could have obtained employment which would have paid him between $40,000 and $50,000 per year. He chose not to do so. While the Respondent questions if the Applicant made significant efforts to seek employment with equivalent income, there is evidence that some efforts were made. I also accept that there are technical issues about the type of work which the Applicant is qualified to do, which may result in his qualifications for work being at a lesser income. The evidence shows that the Applicant is making capital investments in his new business venture and I find that the efforts to generate income are legitimate. Although there is evidence to suggest that the move to British Columbia was always the plan, I am of the view that overall, the evidence does not warrant a finding of bad faith or that the Applicant should continue to pay support at an imputed income of $82,200 per year. There is no need to make a finding of a material change in circumstance when it comes to the spousal support paid by the Applicant. The obligation continues and the amount is adjusted pursuant to their respective incomes as per sections 7.7 and 7.9 of the Separation Agreement.

[22] When it comes to imputing income, the Applicant’s admission that he could be employed at a lesser income than he was making while at Viewnyx allows me to impute income to him for the purposes of section 7.7 of the Separation Agreement at $50,000. I have reviewed the evidence of the Respondent as to the income which can be earned by a senior computer programmer; however, I do not find that there are grounds to impute income at a higher level at this time.

[23] As such, in applying sections 7.7 and 7.9 of the Separation Agreement, the parties should calculate the mid‑range of support under the Spousal Support Advisory Guidelines based on the Applicant having an income of $53,015 for 2013 and the greater of $50,000 or his actual annual income for each subsequent year. In the event that the Applicant’s new business generates more income, the adjustment will be made on an annual basis. While the imputation of income may not be relevant at this stage, as it simply reduces the spousal support amount to zero, it may become relevant in the event the Respondent’s income goes down.

[24] If the Applicant finds the imputation of income to be excessive, a Motion to Change may be brought whereby he could present proper evidence that he is no longer able to be employed at the imputed level. Conversely, if the Applicant’s business venture does not lead to reasonable revenues for him and he does not make efforts to become employed at a reasonable income given his skills, the Respondent may present a Motion to Change on the imputation of income. However, better evidence would be required of the type of work for which the Applicant is qualified to do and the availability of such work.

[25] It is important to note that the Separation Agreement does not provide for payment of spousal support by the Respondent. The adjustment provision in section 7.9 only allows for an adjustment to the Applicant’s spousal support obligation. As such, while section 7.9 may reduce the Applicant’s spousal support payment to zero, it is not meant to create an obligation on the Respondent to pay spousal support. This could only be accomplished by way of a further Motion to Vary.

[26] Although an award of spousal support in favor of the Applicant was not seriously pursued during the motion, it must be addressed. The Applicant has indicated that with the new business venture failing to generate income, he is living off his capital. The Applicant’s choice to pursue a new business venture, which is slow in generating revenues at the outset, does not give rise to a material change in circumstance which would warrant an award of spousal support in his favor. The Applicant has failed to demonstrate that the criteria in section 33(9) of the Family Law Act have been met and that an award of spousal support should be made.

[27] Even when considering the income of the parties at $50,000 for the Applicant and $62,500 for the Respondent, I do not find this to be a material change in circumstance which would warrant a change to the Separation Agreement and an award of spousal support to the Applicant. The adjustment to spousal support was not drafted to be mutual and the evidence before me does not warrant such a change.

[28] In the end, neither party has satisfied me that there are grounds to either impute income to the Applicant to maintain his obligation to pay spousal support or to make an award of spousal support in favor of Applicant. While the Applicant should have an opportunity to make his new business successful before the Court should consider imputing a higher income, he should also take the necessary steps to attempt to find equivalent employment if the business is not successful within a reasonable time.

Disposition

[29] I hereby order that:

a. the Applicant’s income for the purposes of sections 7.7 and 7.9 of the Separation Agreement shall be $53,015 for 2013 and the greater of $50,000 or his actual income under the SSAG going forward;

b. The Applicant’s claim that the Respondent pay spousal support is denied; and

c. The Applicant’s claim that the Respondent pay child support for Amaya is denied.

Costs

[30] Success in this Motion to Change has been divided and I am not inclined to make an award of costs. However, there may be offers made by the parties which may influence my final decision on costs. If the parties cannot agree on the costs of this Motion to Change, the parties may write to me. The Applicant shall provide written costs submissions within 14 days of the date of release of this Endorsement. Thereafter, the Respondent shall provide written costs submissions within 14 days. Thereafter, the Applicant shall have a right of reply within 7 days. Each costs submission shall be no longer than three pages in length, excluding the Costs Outline. The parties shall comply with Rule 4.01 of the Rules of Civil Procedure.

Mr. Justice Marc R. Labrosse

Date: September 12, 2014

COURT FILE NO.: FC-12-2277-2

DATE: 2014/09/12

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: KEVIN MARK CANNON, Applicant

AND

KAREN DARLENE MARTIN, Respondent

BEFORE: Mr. Justice Marc R. Labrosse

COUNSEL: Ron Paritzky, for the Applicant

Rodney B. Cross, for the Respondent

ENDORSEMENT

Labrosse J.

Released: September 12, 2014