Ward v. Jones, 2015 ONSC 2752

CITATION: Ward v. Jones, 2015 ONSC 2752

COURT FILE NO.: 686/10

DATE: May 11, 2015

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Cindy Marie Ward

Applicant

– and –

Stephen William Jones

Respondent

Self-Represented

Self-Represented

HEARD: April 15 and 20, 2015

THE HONOURABLE MR. JUSTICE R. J. NIGHTINGALE

1The Applicant Cindy Ward brings this motion to change the terms of spousal support payable to her under a Separation Agreement entered into between herself and the Respondent, her former common-law spouse and filed by her under s. 35 of the Family Law Act ( FLA) for enforcement purposes. She wishes to set the Agreement aside or vary it and have this Court make a determination as to the quantum and duration of spousal support payable to her by the Respondent.

2The parties cohabited as spouses from May 1995 until the Respondent left the jointly held home in December 2009. They started having separate bedrooms in February 2009 but no evidence was provided as to whether they then stopped communicating as spouses, having sexual relations, discussing family problems, eating meals together or being involved in social activities together until December, 2009. I find that their cohabitation as spouses continued until December, 2009.

3Both parties initially worked full-time and enjoyed a good lifestyle and relationship together. Unfortunately, the Applicant was in a motor vehicle accident in 2001 resulting in serious injuries including severe migraine headaches which rendered her disabled from working. She has not worked since. She was successful in her application for Canada Pension Plan (“CPP”) disability benefits in 2007. The Respondent admitted he assisted her in attending her medical appointments and gave evidence confirming her disability at the CPP hearing.

4She received a lump sum settlement from the car accident case of approximately $150,000 with the Respondent receiving $10,000 himself. Her uncontradicted evidence, which I accept, was that she used approximately $120,000 from that settlement for renovations and improvements to the parties’ jointly held home. Her only source of income for the past number of years including her cohabitation with the Respondent, other than spousal support, has been the CPP disability benefits of approximately $860 per month. An approximate $25,000 retroactive CPP benefit received by her in 2007 was used by her to purchase furniture for their home.

5The Respondent works full time as a salesman earning approximately $100,000 in 2009 and likely similar incomes prior to that. The evidence clearly establishes that the Applicant was dependent on the Respondent for financial support during their cohabitation for a significant period of time before separation because of her car accident injuries and consequent diasability. They enjoyed a good life taking vacations outside Canada and regularly dining out at restaurants.

6The Respondent was obviously aware of the Applicant’s continuing disability from working when their relationship started to break down in 2008. He alleges it was because of several affairs the Applicant was having with male friends she knew or met online although he admits he forgave her for them in 2008 after which time they vacationed together in Mexico. He alleges she had another affair in January 2009 but also indicates he again tried to “patch up” their relationship after that. They started using separate bedrooms in early 2009 and he moved out of the house in December 2009.

7There was some limited evidence at trial that after separation the Applicant had a relationship with another man. Her evidence was that if the relationship went well, she would likely move to the United States with him but didn’t know if that was going to happen. It didn’t and that relationship ended. However, there was no evidence that they ever cohabited or when that relationship ended although a reasonable inference was that it didn’t last long.

8The parties’ evidence was somewhat contradictory as to the circumstances of the signing of the Separation Agreement. The Applicant’s evidence was that they discussed the issue of her support and actually researched that together online including the Spousal Support Advisory Guidelines (“SSAG”). Her evidence was that her spousal support was supposed to be paid in accordance with the SSAG for 7 to 13 years based on how long they lived together. They both agreed that the Respondent would pay $1800 per month for her support in addition to her disability pension in accord with the SSAG once their jointly held home was sold. She said it was not to be restricted to 3 years support.

9The Applicant stated that the Respondent insisted on a clause in the Agreement limiting his support obligation if she moved to the USA with her male friend.

10Her evidence was that she insisted on receiving a greater share of the proceeds of the house because of her putting $120,000 of her car accident proceeds into it but he refused.

11The Respondent’s evidence is that he was told by the Applicant that she wanted to sign a Separation Agreement and he then went to her place. There, the Applicant and her friend Tammy Lawrence showed him on the computer a draft form of a Separation Agreement. As she didn’t have a printer, he said the Agreement was put on a computer USB stick which he took down to a printing store bringing back two copies in very small print. He said he did not make any changes to the Agreement.

12He then signed the Agreement which he said required him to pay $1800 in spousal support per month for two years but potentially three years and the Applicant’s friend Tammy Lawrence signed it as a witness. Tammy Lawrence was not called by either party as a witness at trial.

13It makes no common sense that the Respondent simply signed the Agreement without the parties first discussing at some length its terms as indicated by the Applicant. The agreement, as indicated below, included details on the sale of the matrimonial home and split of the proceeds between the parties without the Applicant getting a greater share because of her payment of $120,000 into it. The Respondent did not dispute that evidence in his testimony. I accept the Applicant’s version that both parties had discussed the terms to be included well before the Agreement was signed and that the Respondent was aware of the SSAG and the duration of spousal support as indicated by her.

14This Separation Agreement was obviously prepared and signed without either having consulted legal counsel on May 18, 2010.

15The 2-page Agreement is very poorly drafted and may have come from a poorly worded online form. It provided for the sale of the parties’ jointly held matrimonial home anticipating a net balance of $40,000 after payment of the mortgage. It provided that the Respondent accepted sole and exclusive liability for the property taxes of $6000, money owed to a friend of $3000 and payment of legal fees from the sale of the house. The Applicant had the right of exclusive occupation and possession of the matrimonial home without paying rent until the completion of the sale. The Agreement did not say that the Respondent would pay the mortgage payments until the sale although the parties obviously agreed to that verbally. Upon the sale, the proceeds would be distributed with the Applicant receiving $18,000 and the remainder after taxes and lawyers’ fees were paid would go to the Respondent.

16The relevant spousal support clauses state as follows:

“Spousal Support

Steve Jones will pay Cindy Ward $1800 a month spousal support for 2 years or until Cindy moves from Canada.

In the event Cindy does not move from Canada, payments will continue for another year in accordance with the SSAG guidelines.”

17On the next page, the Agreement provides that “Steve Jones party 1 will keep Cindy Ward party 2 on his health and dental insurance until support ceases” and “as beneficiary of life insurance until support ceases”.

18Back on the first page, a term states:

“In addition, the parties intend the terms of this agreement to be: (1) A final settlement of their respective rights to property. (2) The assets and liabilities of the Party 1 and Party 2 are accurately and completely described in this agreement. (3) Final settlement of custody, access, guardianship and support”.

19However, the Agreement specifically provided that once signed and witnessed, it may be amended or varied by a court order or by written agreement between the parties. It did not specify that it could only be amended in the event of a material change in circumstances. The parties also agreed that “when executed, this agreement is a domestic contract without need to file it in a court unless requested as evidence”.

20Other than a reference to the jointly held matrimonial home, mortgage and a debt to a friend, there was no disclosure of the assets and liabilities or incomes of the parties in the Agreement.

21The Applicant stated that the Respondent changed the wording of the Agreement when he took the computer to the printing service restricting the duration of her support to 3 years. She said she did notice the change when she signed it. I do not accept that part of her evidence that the Respondent changed the wording in the agreement although I do accept her evidence that the parties did discuss the payment of her spousal support in accordance with the SSAG including amount and duration as she indicated prior to signing it.

22The Respondent stated he believed he had to pay support in accordance with the Agreement only for three years if the Applicant didn’t move to California. However, the Agreement does not clearly and unequivocally say that as it also makes reference to support being paid “in accordance with the SSAG guidelines”. The SSAG of course comprise both quantum and duration of support.

23However, a SSAG calculator dated September 30, 2010 was obtained by the Applicant the day before she filed the Agreement under section 35 of the FLA to have it enforced because of the immediate default in payment by the Respondent. That document suggested that the appropriate amount of spousal support, given the annual income of the Respondent spouse of $110,000, the recipient Applicant’s age of 52 and annual CPP income of $9400 after 13 years of cohabitation was a low end amount of $1635 per month, a mid-range amount of $1907 and a high-end amount of $2180 per month. In particular, it noted that the support was payable on an indefinite basis subject to variation and possibly review.

24Although the SSAG are simply advisory and not law, given the 14 years of cohabitation of the parties and the Applicant’s age of 51 at the time of separation, the agreed upon quantum of support of $1800 monthly was appropriate but the duration for her support was clearly inadequate and ought to have been well beyond two or three years only. The applicant’s entitlement to spousal support was likely of indefinite duration especially in light of her age, medical condition and inability to work at all.

25After their jointly held home was sold in August 2010, the Applicant received her $18,000 share. Despite the Applicant’s contribution to the house of $120,000 during cohabitation, the Respondent received $28,000 but then breached the Agreement obligating him to pay the debts of the parties including a joint bank loan debt from the balance of the funds he received. He also immediately refused to pay the applicant the $1800 per month in spousal support. He only paid $1600 to her stating they had a verbal agreement that he would instead pay $200 per month towards this joint bank loan debt instead of that amount to her as support. His evidence was that he did not understand that he was obliged to pay that debt himself under the Agreement. I do not accept that evidence.

26Because he didn’t pay the first monthly payment of $1800 after the sale of house, the Applicant immediately filed the Separation Agreement for enforcement purposes as a Court Order on October 1, 2010. The Respondent only paid her $1600 per month for three years until September 2013 based on this alleged verbal agreement which the Applicant emphatically denied stating that he simply told her initially that that was the way it was going to happen. The Applicant contacted the Family Responsibility Office (“FRO”) in approximately October 2013 to enforce payment of the arrears then outstanding of between $7200-$9000 under the Agreement.

27The Respondent did not then contest that he owed that money as arrears to FRO stating at trial he didn’t have a leg to stand on as this alleged agreement was “verbal” only. He has been repaying the arrears owing at $400 per month which are expected to be paid off at the end of 2015. As indicated above, I accept the Applicant’s evidence that there was no such verbal agreement made.

28The Respondent also terminated the health and dental insurance benefits at his place of employment for the Applicant sometime in 2014 even though he was still paying the support arrears owing under the Agreement that he should have been paying from the outset.

Parties Present Circumstances

29The Applicant is now 57 years old. Her only income that she has is her CPP disability benefits of $860 per month ($10,320 annually) and $400 per month arrears of support paid by the Respondent. She wisely purchased a small and very modest home from her proceeds of sale of the matrimonial home which has very little equity. She makes monthly mortgage payments now of $829. She cannot afford to operate a motor vehicle or pay an outstanding dental bill of $300 which would have been covered by the Respondent’s plan at his place of employment.

30I accept her evidence that she lives essentially in poverty and is still disabled from working as she has been since 2004. Her expenses shown on her financial statement are very modest and confirm she cannot even pay for her telephone, cable and Internet service which have been disconnected. She does not dine out in restaurants and she cannot afford to take a taxi for transportation, afford new clothes or presents for her grandchildren or take a vacation. She lives on peanut butter sandwiches and rice and regularly attends the food bank. She cannot go anywhere and obviously cannot afford the comfortable lifestyle she and the Respondent previously enjoyed.

31The Respondent is presently 61 years of age. His income tax returns and T4 slip confirmed he earned the following incomes since the parties’ separation:

2009 - $95,726

2010 - $125,516

2011 - $123,615

2012 - $99,748

2013 - $144,370

2014 - $137,753

32After separation, he lived with another common-law partner and her child financially supporting them. He presently resides in a common-law relationship with another partner who is not employed or contributing to the expenses of his household.

33His financial statement confirmed he has far more significant expenses including monthly rent of $2100, $800 for groceries, $300 for meals outside the home, clothing expenses of $200, and car insurance of $342 because of his significant speeding convictions. He also allots monthly amounts of $100 for books and magazines, $100 for gifts for his clients, $50 for charities, $200 for alcohol and tobacco, $100 for pet expenses as well as $200 for entertainment and recreation and $200 for vacations.

34Essentially, he stated he was spending all of his income for himself and his present common-law spouse and is living paycheck to paycheck. He has significant credit card debts but the respective lifestyles of the Respondent and the Applicant are obviously drastically different.

Analysis

35The Applicant, by filing the domestic contract with the Court under s.35 of the FLA on October 1, 2010, did so for the purpose of enforcing the Agreement because of the arrears already then owing by the Respondent.

36Section 35 (3) of the FLA provides that section 33 (4) applies to a contract that is filed in this manner. That section provides that the Court may set aside the provision for support or a waiver of the right to support in a domestic contract and may determine an order for support if the agreement for support results in unconscionable circumstances or if the payor is in breach of it at the time the application is made.

37By filing the agreement, the applicant is also entitled to bring an application to vary that agreement under s. 37 of the FLA. In order to do so, the Applicant must establish that there has been a material change in her or the Respondent’s circumstances or that evidence not available in the previous hearing has become available. If so, the Court may vary the order prospectively or retroactively and make any other order under section 34 that the Court considers appropriate in the circumstances.

38Under cause 33 (4), it does not matter if the support provision was reasonable at the time the Agreement was made. Thomas v. Thomas 1988 8676 (ON SC), 1988 12 RFL (3d) 88. If the support provisions result in unconscionable circumstances at the time of the application to set aside the agreement, the Court can grant relief.

39In addition, the Respondent was in default of his obligations under the Agreement at the time the application was commenced in July 2014. He owed then and still owes significant arrears under the Agreement even though he is paying them back in a $400 monthly amount to FRO.

40Although the parties are free to contract out of the support provisions of the FLA and the Agreement stated that the intent of the terms of the Agreement was to be a final settlement of support, they nevertheless agreed that the Agreement could be amended or varied by a court order or written agreement without specifically requiring that there be a material change circumstances to do so.

41The Respondent conceded in his submissions that he was told by the Applicant before he signed the agreement what the SSAG said. The inference is that he at least understood that the SSAG required support to be paid by him to her for 7 to 13 years or even on an indefinite duration when the Agreement was signed in May 2010.

42The Applicant is currently disabled from working and in receipt of CPP disability benefits. She was clearly financially dependent on the Respondent during their cohabitation because of her medical disability and was in need of significant spousal support on termination of their cohabitation. She also suffered from economic disadvantage on separation because of her pouring $120,000 of her motor vehicle accident settlement funds into the jointly held house during the cohabitation while only receiving $18,000 back on the sale of the property.

43I find that the Agreement, even if its wording can be construed as restricting the Applicant’s entitlement to spousal support for three years maximum after separation which is doubtful, was clearly not reasonable then. In addition, unconscionable circumstances have resulted now given the Applicant’s present state of poverty and destitution and continuing disabling condition. Scheel v. Henkelman, 2001 24133 (ON CA), [2001] O.J. No.55 (Ont.C.A.). Lastly , as indicate above, the Respondent was in default of that agreement at the time the Applicant commenced her application and still is now as arrears are still owing.

44It is clear that neither party was represented by counsel leading up to signing of the Agreement which they prepared themselves. The Respondent received a greater share of the sale proceeds of the house notwithstanding the Applicant’s substantial lump sum contribution from her settlement proceeds into the home. The Applicant expected support would continue in accordance with the SSAG at that point and believed, perhaps mistakenly, that the Respondent had changed the wording of the Agreement before it was signed. The Respondent was obviously aware of the wording of the applicability of the SSAG as he admitted in submissions that the Applicant told him about it and the Agreement itself refers to them. He gave no explanation at trial as to what he thought the duration of support under those guidelines was.

45The stoppage by the Respondent of the support payments after three years has resulted in devastating consequences for the Applicant. She lives in abject poverty and cannot become self-sufficient because of her medical condition which she had during their cohabitation.

46On the other hand, the Respondent’s position has not changed and his income has in fact increased to approximately $140,000 per year. He remains gainfully employed with no prospect of the cessation of that income before he retires. His starting a relationship with another woman who is staying at home cannot be relied upon by him to reduce his support obligations to the Applicant spouse. He clearly has the ability to pay spousal support and is in fact maintaining the same lifestyle as during his cohabitation.

47The law is clear that in some circumstances, a healthy party is required to continue to support a disabled party even absent contractual or compensatory entitlement. Justice and consideration of fairness may demand no less. Bracklow v. Bracklow (1999) 1 SCR 40; Gray v. Gray 2014 ONCA 659. A sick or disabled spouse is entitled to spousal support when the marriage ends and a spouse has an obligation to support a former spouse over and above what is required to compensate the spouse for her loss incurred as a result of the marriage and its breakdown or to fulfill contractual support agreements.

48McLachlin J, as she then was, in Bracklow quoted Prof. Rogerson’s conclusion with approval:

“The message coming from the cases adopting this approach appears to be that one takes one spouse as one finds him or her, subject to all his or her weaknesses and limitations with respect to income earning capacity; and a spouse with higher earning capacity has a basic obligation to make continuing provision for a spouse who is unable to become self-sufficient at the end of the marriage. One is simply not allowed to abandon a spouse to destitution at the end of the marriage if one has financial resources which might assist in relieving the other spouse’s financial circumstances.

It is essential that any system should be acceptable to public opinion and it is clear from the comments we have received that many people would find it hard to accept a system which cut off, say, an elderly or disabled spouse with no more than a three-year allowance after divorce, no matter how wealthy the other party might be.”

49Although these decisions refer to cases dealing with spousal support under the Divorce Act, they similarly apply to this application for spousal support for under the FLA for the parties as common law spouses.

50The Respondent feels that he has fulfilled his obligations to the Applicant and wants to get on with his life. The point simply is that he has not. The reality is that the applicant is 57 years of age and has been disabled from working for 11 years with her only present source of income being CPP disability benefits of $10,320 per year. She has no prospects of ever obtaining employment given her medical condition.

51In the decision of Schaldach v. Schaldach 2015 ONSC 1574, the husband after a marriage lasting only 13 years, paid spousal support for 18 years. His application to terminate his spousal support obligations at that time to his former spouse who was medically disabled from working at the time of their divorce and at the time of the application was dismissed. Heeney R.S.J. found that the result of his being allowed to discontinue spousal support in those circumstances would be to abandon his wife to destitution and he was required to continue with his spousal support obligations.

52With respect to the conduct of the Applicant, section 33 (10) of the FLA provides that the obligation to provide support for a spouse exists without regard to the conduct of either spouse but that the Court may in determining the amount of support have regard to a course of conduct that is so unconscionable as to constitute an obvious and gross repudiation of the relationship. The evidence noted above, including the absence of any evidence of cohabitation by the Applicant after separation with and her being financially supported by someone else, in my view does not warrant a finding of unconscionable conduct on the part of the Applicant to affect the amount of spousal support payable. B. (S.) v. B. (L.), 1999 35012 (ON SC), [1999] O.J. No. 3690.

53The Ontario Court of Appeal in Gray v. Gray 2014 ONCA 659 made it clear that the SSAG are a useful tool in assessing the quantum and duration of spousal support not only in initial applications for support but on variation applications as well and should be routinely consulted.

54As indicated above, the SSAG presented to the Court for September 2010, assuming the Respondent’s income of $110,000 and the Applicant’s CPP income of $9,400, suggested a range of spousal support from $1635 at the low-end, a midrange of $1907 and an upper amount of $2180 for an indefinite duration.

55The SSAG based on his present income of $138,000 for 2014 and her income of $10,320 indicate a range of monthly spousal support from a low of $2234 to a high of $2979 with the midpoint of $2607, all for an indefinite duration.

56There is a compensatory element to the Applicant’s entitlement to spousal support because of her contributing the $120,000 to the jointly held home but her primary entitlement to spousal support is based on her needs because of her medical condition and disability.

57The Applicant has requested continued spousal support of $2000 per month with the Respondent being required to maintain the extended health care benefits for her. She is not asking for indefinite duration support although she would likely be entitled to it. Djekic v. Zai 2015 ONCA 25. Rather, she is asking for it to continue for four more years.

58With respect to the quantum, the amount she requests is certainly totally reasonable and is in fact lower than the range of the SSAG for the Respondent’s present income. She is living at a poverty level and even with payment of that amount of support, she nevertheless would still be confined to a very modest living at best. Her combined income would then be approximately $34,000 annually and the Respondent’s would be approximately $114,000 after payment of this support obligation.

59The Applicant is only asking that the support commence now rather than retroactive to the date of her application in July 2014 or to the date of the cessation of her monthly support in September 2013. That position is also more than fair to the Respondent given that the usual starting point for commencement of the order would be the date of application and potentially back to the cessation date of her original support in 2013. He is paying $400 per month already towards the arrears which will be paid off this year and he should have no difficulty in making future $2000 monthly support payments without having the burden of a substantial amount owing for arrears if this Order was made retroactive.

60The requested four years of support asked for would result in the Applicant receiving a total of approximately seven years of spousal support after separation.

61The Applicant is not asking that the spousal support continue indefinitely into the future now or after that four years notwithstanding the provisions of the SSAG suggesting her entitlement to an indefinite duration of spousal support especially because of her disabling medical condition. Gray v. Gray, above. That position is also more than reasonable and fair to the Respondent as well as he would be 65 years old at that time and likely then considering retirement from his employment.

62The economic self-sufficiency of the Applicant before that time is simply not realistic in this case.

63Accordingly, an Order will issue setting aside and varying the provisions of the Separation Agreement of the parties dated May 18, 2010 filed under section 35 (4) of the FLA purporting to terminate her spousal support and fixing the Respondent’s spousal support payable as follows:

1. Commencing May 1, 2015, the Respondent shall pay spousal support to the Applicant in the amount of $2000 per month until April 1, 2019.

2. The Respondent shall maintain the extended health, dental and life insurance coverage available to him at his place of employment for the benefit of the Applicant for so long as he is required to provide for her support.

3. A support deduction order will issue.

64If either party wishes to make a claim for costs, he or she can do so within 10 days from the date of this decision with the other party to have five days thereafter to respond. Submissions will be no longer than three pages in length and include a bill of costs and any relevant offers to settle.

65If no submissions are made, each party will bear their own costs of this proceeding.

The Honourable Mr. Justice R. J. Nightingale

Released: May 11, 2015

CITATION: Ward v. Jones, 2015 ONSC 2752

COURT FILE NO.: 686/10