SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 462/15
DATE: 20150703

RE: Kellie Frances Joyce, Applicant

AND:

David Michael Joyce, Respondent

BEFORE: Ricchetti, J.

COUNSEL: Julian Lipkowski, Counsel for the Applicant (Wife)

Ian Brown, Counsel, for the Respondent (Husband)

HEARD: June 30, 2015

ENDORSEMENT

THE MOTION

[1] This matter came before me as an urgent motion before a case conference was heard. I accept that there was some urgency in dealing with this matter given the current financial affairs of the parties. That, coupled with the extensive materials filed by the parties, persuaded me to deal with the two outstanding issues at this time.

[2] The Wife’s motion sought:

a) Interim spousal support;

b) Interim child support;

c) An advance payment of $8,000 “to accommodate the Applicant’s emergency need for funds”.

[3] At the beginning of the motion, it was conceded by the Husband that he would pay $1,321 monthly child support for Idamae Elizabeth Joyce (July 10, 1999) and Alyssa Deanna Harvey (February 27, 1997). This was not disputed by the Wife.

[4] The Husband has been paying child support at the Guideline amount (albeit it was $1,297 based on his $90,344 income for 2014). The amount of $1,321 per month shall be payable commencing June 1, 2015. This is based on the Husband’s reported employment income of $92,250 for 2015.

[5] The Husband and Wife have equally shared in the care of Alyssa and Idamae in a week-about arrangement since May 3, 2015.

THE POSITION OF THE PARTIES

[6] The Wife submits that the Husband should pay the sum of approximately $2,000 per month for interim spousal support, this amount based on the high range of the SSAG on the Husband’s 2015 income of $92,250.

[7] The Wife submits that she requires an $8,000 advance from her entitlement to equalization of family property for her immediate financial needs.

[8] The Husband submits that he is paying full child support despite the week about parenting, paying the entire amount of the joint family debts, the Wife’s home and auto insurance needs and has his own considerable accommodation expenses which should be taken into account in determining a reasonable interim spousal support award. The Husband submits that the appropriate amount of interim spousal support is $598, which is the amount he has been paying and is prepared to continue to pay until the matter is resolved or judicially decided.

[9] The Husband submits that he does not have the funds to pay the Wife the advance payment requested.

THE FACTS

[10] The parties started living together in October 1997. They were married on September 26, 1998. The parties separated on November 3, 2014. The parties continued to live under the same roof until May 3, 2015.

[11] There are 3 children: Sarah Angela Harvey (December 21, 1995), Alyssa Deanna Harvey (February 27, 1997) and Idamae Elizabeth Joyce (July 10, 1999) hereafter referred to as the “Children”. Sarah and Alyssa are children from the Wife’s prior relationship. The Husband is the biological father of Idamae.

[12] The Wife’s prior spouse, on or before his death, arranged for the creation of a trust fund, with substantial funds, for Sarah and Alyssa. Sarah is presently in college and, it is stated by the Husband, that her trust fund is approximately $200,000 which he alleges is sufficient to meet her expenses to complete her education. It is for this reason that child support for Sarah was not an issue before me.

[13] The Wife is 48 years old.

[14] The Husband is 46 years old.

[15] The Wife was not employed during the marriage.

[16] The Husband is an engineer and is currently employed.

[17] The Wife is the exclusive owner of the matrimonial home arising from a previous relationship. There are no encumbrances against the matrimonial home. The Husband executed a domestic contract that the matrimonial home would remain the Wife’s property free from any claims of his. He makes no claim to the matrimonial home.

[18] From November 2014 until May 3, 2015 the parties lived in the matrimonial home. As usual, this situation became unbearable when at least one of the parties found a new partner.

[19] On May 3, 2015, the Husband moved out of the matrimonial home.

[20] The Husband moved into a rental property, a four bedroom home close to the Children’s school. He states he obtained a four bedroom home to accommodate the Children’s needs. He pays rent of $1,750 inclusive of utilities. The Husband states he paid the first month’s rent and had to borrow money from his parents for the last month’s rent.

[21] This separation has resulted in a high conflict situation. There are numerous allegations, made by each of them against the other, that were neither necessary nor warranted on a motion for interim financial relief.

[22] This application was commenced on June 22, 2015. This motion was brought on June 22, 2015. Both were served late on the Husband that day, returnable on June 30, 2015.

[23] The Wife says the Husband’s departure from the matrimonial home created a “financial crisis” for her.

[24] The Wife’s financial statement sets out that:

a) She has virtually no income;

b) She had monthly expenses of approximately $3,000;

c) She owns the matrimonial home with a value of approximately $390,000. The Husband submits that the matrimonial home is currently worth approximately $525,000; and

d) Aside from the joint family debts, the Wife has no other debts.

[25] The Wife submits that she has medical issues which prevent her from obtaining gainful employment. The Husband disputes this. I accept this statement by the Wife that she cannot be employed but only for the purpose of determining an appropriate level of interim spousal support.

[26] The Husband has not yet filed his 2014 income tax return. The Husband has not filed a Financial Statement (but one had been given to the Wife’s counsel in April 2015). However, given that the Application was only served several days ago, this failure does not call for a significant adverse inference given that the Husband has sworn in his affidavit that, aside from the income shown in last year’s T4, he has no other income. The Husband acknowledged that his income for 2015 will increase to $92,250. Finally, I find it difficult to believe the Wife has any doubt about the Husband’s income as, until very recently, his employment income was deposited into the joint account, accessible to both of them.

[27] It is clear from the Husband’s financial disclosure that aside from his RRSP and RESP and pension (which has yet to be valued), he has no other significant assets. There is no evidence that his pension value is readily accessible or what the value of the pension is.

[28] The Wife submits that “Both the Guidelines and indeed common sense” directs that the Husband’s income be divided approximately ½ each. She states this would allow “each [to] support ourselves, pay our living expenses and our debts and carry on with our separate lives.”

[29] There is no dispute that:

a) There are two outstanding lines of credit totalling approximately $75,000 which were incurred by the parties while married and living together. In other words, these lines of credit are family debts. The Husband has paid the minimum monthly payments on these two lines of credit which are approximately $680 per month for the CIBC line of credit and $650 per month for the RBC line of credit. The Husband proposes to continue paying these amounts in full;

b) The Husband has paid the Wife’s car insurance ($214 per month) and home insurance ($153 per month) until the end of June; and

c) The Husband has continued to pay some other family related expenses (i.e. Union Gas for the matrimonial home).

THE LAW

[30] S. 15.2 of the Divorce Act provides:

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.

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim 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, pending the determination of the application under subsection (1).

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

(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.

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

(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.

[31] Section 15.2(2) of the Divorce Act empowers a court to grant an interim order requiring a spouse to pay periodic sums as the court deems reasonable for the support of the other spouse. Interim spousal support orders are in the nature of a “holding” order intending to provide a reasonably acceptable short-term financial solution for the parties until trial. Such interim orders are not binding on the trial judge and the trial judge can vary the amount of interim spousal support paid, either to increase or decrease the amount which should have been paid and adjust the financial obligations accordingly, so that justice can be done to either or both parties on a full and complete evidentiary record at trial.

[32] What is a precondition to an interim spousal support award is the establishment of a prima facie entitlement to spousal support under s. 15.2 of the Divorce Act.

[33] Interim spousal support motions are often made on conflicting evidence and the lack of a complete record. Since many of the factors in s. 15.2 of the Divorce Act cannot be ascertained at the stage of an interim spousal support motion, the needs of the applicant and the respondent’s ability to pay take on a greater significance on such motions. Further, the consequences of the separation of the parties are often “fresh” with parties making financial decisions in a stressful situation. The financial affairs of the parties are often in “flux”. A careful review of the means, needs and all the surrounding circumstances, particularly financial circumstances, is a must for this court to make a reasonable interim spousal support order.

[34] In Samis v. Samis, 2011 ONCJ 273 the court dealt with the considerations in making an interim spousal support award:

[43] In Kowalski v. Grant, 2007 MBQB 235, 219 Man. R. (2d) 260, 43 R.F.L. (6th) 344, [2007] M.J. No. 386, 2007 Cars­well­Man 422 (Man. Q.B.), the court set out the following principles in dealing with temporary spousal support motions:

Interim support is to provide income for dependent spouses from the time the proceedings are instituted until trial.

The court need not conduct a complete inquiry into all aspects and details to determine what extent either party suffered economic advantage or disadvantage as a result of the relationship. That is to be left to the trial judge.

Interim support is a holding order to maintain the accustomed lifestyle if possible pending final disposition as long as the claimant is able to present a triable case for economic disadvantage.

Interim support is to be based on the parties’ means and needs, assuming that a triable case exists. The merits of the case in its entirety must await a final hearing.

[44] In Robles v. Kuhn, 2009 BCSC 1163, [2010] B.C.W.L.D. 1935, [2010] W.D.F.L. 1330, [2009] B.C.J. No. 1699, 2009 Cars­well­BC 2239 (B.C.S.C.), the court added the following considerations:

On interim support motions, needs and ability take on greater significance.

On interim motions, the need to achieve self-sufficiency is of less importance.

Interim support should be ordered within the range of the Spousal Support Advisory Guidelines, (Ottawa: Minister of Justice and Attorney General of Canada, July 2008), unless exceptional circumstances dictate otherwise.

Interim support should only be ordered where a prima facie case for entitlement has been set out.

[35] I accept that Samis generally sets out the factors to be considered in making an interim spousal support award. However, I have serious reservations that “Interim support should be ordered within the range of the” SSAG “unless exceptional circumstances dictate otherwise” (emphasis added) as described in Robles’ 3rd additional factor. In my view, the wording of this consideration appears to be mandatory and places the onus on the respondent to establish “exceptional circumstances”.

[36] This consideration, as set out in Robles, would have the effect of giving the SSAG a much greater importance in the determination of an award of interim spousal support than the use of SSAG in determining a final spousal support order. In determining a final spousal support award, the SSAG calculations are a useful tool as a “check” of the court’s conclusion arrived after the application of the factors set out in the Divorce Act. The proper approach to the determination of spousal support was described by the Ontario Court of Appeal in Racco v. Racco, 2014 ONCA 33:

[25] The application of these principles makes the determination of spousal support highly individual and discretionary. As Professors Rogerson and Thompson state in their introduction to the Spousal Support Advisory Guidelines (Ottawa: Department of Justice, 2008) (SSAG):

Bracklow emphasized the highly discretionary, individualized nature of spousal support decisions. The Court was clear that the Divorce Act endorses no single theory of spousal support and must retain flexibility to allow judges to respond appropriately to the diverse forms that marital relationships can take. The Court presented spousal support determinations as first and foremost exercises of discretion by trial judges who were required to “balance” the multiple support objectives and factors under the Divorce Actand apply them in the context of the facts of particular cases.

[44] The principles articulated in the Supreme Court of Canada in connection with the Divorce Act provide a framework within which equitable support awards are to be made. Although the SSAG offer a certain level of predictability and consistency once the basis for entitlement has been established, they are advisory only. The court cannot lose sight of the individual circumstances of a case in determining both entitlement and quantum under section 15 of the Divorce Act.

[37] I see no reason why the approach described by the Court of Appeal in Racco would not also apply to the determination of interim spousal support awards.

[38] The interpretation set out in Robles regarding the mandatory application of SSAG unless exceptional circumstances exist is contrary to existing authority and, in my view, is neither necessary nor desirable.

THE ANALYSIS

[39] There is no issue that the Wife is entitled to interim spousal support. The issue is quantum.

INTERIM SPOUSAL SUPPORT

[40] What are the Wife’s needs? She sets out her needs at approximately $36,000 per annum or $3,000 per month. The difficulty is that the Wife’s Financial Statement includes car insurance and property insurance which the Husband is paying. This can be dealt with easily by permitting the Husband to stop paying these expenses, include these as expenses the Wife will incur and properly include them in the Wife’s Financial Statement.

[41] The Wife’s Financial Statement also includes groceries, clothing for the children, children’s activities which will properly be covered under the interim child support order which is payable under the terms ordered hereunder.

[42] Even with a deduction of these amounts, the Wife’s needs are approximately in the $1500 to $2000 range.

[43] What of the Husband’s means? A $92,000 a year income is approximately $7,700 per month gross income.

[44] These are the obvious monthly expenses which will be incurred by the Husband:

• Taxes and deductions are $1,945 ( estimated as per the SSAG calculation provided);

• $1,750 rent. I do not have sufficient evidence before me to suggest this amount is unreasonable in the circumstances;

• $1,300 for servicing the joint debt. It is recognized that half of this debt is the obligation of each of parties. By having the Husband pay this amount directly, rather than increase his spousal support and requiring both parties to equally pay this debt, it provides a significant benefit to the Wife as she will not have to include her half of this amount (if paid as spousal support) as income and the Husband will not get the corresponding income tax deduction;

• $0 for the Wife’s car insurance and home insurance on the basis that these expenses will be paid by her in the future. No doubt the Husband will have his own insurance expenses; and

• $1,321 child support.

[45] These amounts alone total $6,300 per month. This leaves the Husband with approximately $1,400 per month for all his other expenses including spousal support.

[46] On this basis, the amount proposed by the Husband for interim spousal support of $598 per month appears to be reasonably close so long as the joint debt arising from the lines of credit is being paid by the Husband. Once this joint debt is retired, the amount of interim spousal support will have to be revisited if the parties cannot agree on a revised amount of interim spousal support.

[47] To be clear, the Husband does not have to continue to pay the Wife’s auto or home insurance.

[48] Even if it were necessary to establish “exceptional circumstances”, for the reasons set out below, I am satisfied that the Husband has established exceptional circumstances in this case because of the payments which the Husband will continue to pay to service the joint lines of credit and the disparity in the accommodation costs of the parties greatly affects the means and needs of the parties.

[49] Let me deal specifically with the Husband’s payment of the joint lines of credit and disparity of the accommodation expenses.

Lines of Credit

[50] The Wife submits that the Husband has “artificially” structured his finances so as to deprive the Wife of substantial spousal support. The Wife’s counsel submits that these payments are “voluntary” and should not be taken into account in determining spousal support.

[51] I cannot agree with either of these submissions. The lines of credit are family debts. Someone has to pay them. These debts are the responsibility of both parties. To the extent that the Husband makes these payments, the payments reduce his means and reduce the Wife’s needs (i.e. her obligation in paying down the family debts).

[52] The Wife submits that these lines of credit should be paid off by the collapse of the Husband’s RRSP and the RESP. The effect of this would be to eliminate ANY assets owned by the Husband. In fact, it would create a tax liability to the Husband when he collapses his RRSP. On the other hand, the Wife would continue to have ownership of the matrimonial home free and clear. As for the RESP, given the trust account established for the two oldest children, this would create a present liability for the collapse and a liability in the future for the third child’s education. I am not persuaded this is the best option at this time any more than it would have been to suggest that the Wife take out a mortgage on the matrimonial home to repay her half of the lines of credit.

Accommodation Expenses

[53] As for accommodation expenses, the Wife submits that the Husband’s rental home is too expensive. The Husband suggests that the rent is reasonable in a “university town” such as Guelph. There is no evidence for me to determine that the Husband’s rent is unreasonably high. However, what is clear is that the Wife has a significantly lower accommodation cost (approximately $1,000 per month for insurance/repairs/utilities) than does the Husband ($1,750 all-inclusive except insurance possibly). Again, this affects the means and needs of both parties.

Conclusion on Interim Spousal Support

[54] In dealing with spousal support, which includes interim spousal support, this court is required to consider the factors in s. 15.2(4) of the Divorce Act and the objectives of spousal support set out in s. 15.2(6).

[55] These factors include the condition, means, needs and other circumstances of each spouse.

[56] In arriving at the spousal support set out in these reasons, I have considered the factors and also the objectives of an interim spousal support order and conclude that, while the Husband is servicing the lines of credit, the amount of $700 per month commencing June 1, 2015 is reasonable.

[57] The SSAG calculation, with the Husband’s income at $92,250, the Wife’s income at $0, and child support of $1,321, generates a range of spousal support of $1,620 to $2,081.

[58] How does this compare with the $700 per month, I have determined using the factors in the Divorce Act? Actually, when you add the Husband’s payment of the Wife’s portion of the line of credit debt of approximately $600 per month (without consideration of the favourable tax consequences to the Wife) and the disparity in their accommodation expenses which is approximately $300-400 (being half of the difference between their approximate accommodation expenses), the amount is within the SSAG range.

[59] The Husband shall pay the Wife interim spousal support in the amount of $700 per month commencing June 1, 2015. The Husband shall have credit for the amounts already paid on account of spousal support.

ADVANCE PAYMENT ON EQUALIZATION PAYMENT

[60] It is entirely unclear whether, in these circumstances, there will be an equalization payment from the Husband to the Wife. As a result, a credit towards equalization is not an attractive prospect.

[61] The Husband has no readily accessible asset he can access funds to provide this advance to the Wife. He testifies that he had to borrow his last month’s rent.

[62] On the other hand, the Wife has a significant unencumbered asset. Her home. There is no evidence that the Wife cannot access the equity in the home to deal with any expenses she now needs to incur and later seek to recover them in this application.

Conclusion on Advance Equalization Payment

[63] I am not persuaded that an interim payment by the Husband to the Wife is reasonable or appropriate in these circumstances.

COSTS

[64] Any party seeking costs shall serve and file written submission on entitlement and quantum within two weeks of the release of these reasons. Written submissions shall be limited to 3 pages, with attached Costs Outline and any authorities.

[65] Any responding party shall have one week thereafter to serve and file responding submissions. Written submissions shall be limited to 3 pages with any authorities relied on attached.

[66] There shall be no reply submissions without leave.

Ricchetti, J.

Date: July 3, 2015

COURT FILE NO.: 462/15

DATE: 20150703

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kellie Frances Joyce

• and -

David Michael Joyce

BEFORE: Ricchetti, J.

COUNSEL: Julian Lipkowski, for the Applicant

Ian Brown, for the Respondent

ENDORSEMENT

Ricchetti, J.

DATE: July 3, 2015