ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FS-11-72820
DATE: 20151009
BETWEEN:
T.R.
Ms Stella Hines, for the Applicant
Applicant
- and -
A.K.
Mr. Peter Dubas, for the Respondent
Respondent
HEARD: October 6, 7 & 8, 2015
REASONS FOR JUDGMENT
Conlan J.
I. INTRODUCTION AND THE BASIC FACTS
The Parties and Their Children
[1] These parties came to Canada in 1989 and have been productive members of our society ever since. They have raised two accomplished children.
[2] Unfortunately, their marriage broke down, and here we are.
[3] The Applicant husband, T.R., is 56 years old. The Respondent wife, A.K., is 51 years old. There are two children of the marriage – H.R. (a young lady), born in […] 1990 (now 24 years old), and A.R. (a young man), born in […] 1994 (now 21 years of age).
[4] The parties were married in Italy in November 1987. They cannot agree on the date of separation. The husband says that they separated in September 2009, although they continued to live under the same roof until he moved out in April 2011. The wife says that they separated in April 2011.
[5] The parties do not agree on who was the primary caregiver for the children when they were young. T.R. alleges that those responsibilities were relatively evenly split. A.K. states that she was the primary caregiver.
[6] The parties have moved around a fair bit since coming to Canada in 1989. They lived at first in Winnipeg. Then Saskatoon. Then Toronto. Then Kitchener. Then at the matrimonial home in Mississauga commencing in October 2003.
[7] The wife now lives in the matrimonial home in Mississauga. She bought out the husband’s interest. The daughter lives with A.K. and attends university, post-baccalaureate. The son is also attending university and stays at A.K.’s home on weekends, holidays and during the summer.
[8] The husband lives in Stratford and is currently on a leave of absence from work until December 2015.
[9] Since September 2002, after a brief stint in a contract position in Atlanta, Georgia, T.R. has worked in various locations with the Canadian Food Inspection Agency (“CFIA”). For three months starting September 2015, he is off work without pay. He is a veterinarian. He was first schooled for that in the former Soviet Union, where he met A.K. in 1982. After coming to Canada, he completed a four-year program at the University of Saskatchewan.
[10] The husband’s current total annual income is $96,840.00, according to his most recent Financial Statement. His 2014 tax year Notice of Assessment shows a line 150 total income of $114,281.00.
[11] The wife, an educated veterinarian in the former Soviet Union but never formally schooled in Canada except for a one-year college diploma as a pharmaceutical technologist, has worked for about one year now at a company called GSK. The actual employer is a temporary employment agency that the wife has been with for many years now. Her current posting at GSK is as a quality control inspector for pharmaceuticals. She earns $12.00 per hour, infrequently $14.00 hourly in another department, and works Monday through Friday, eight hours per day. She estimates her current annual income at between $17,000.00 and $22,000.00.
[12] The wife’s pay stub from April 2015 was marked Exhibit 8 at trial. It shows a gross pay for 35 hours worked of $436.80.
The Pleadings
[13] In August 2011, T.R. commenced an Application. He sought a divorce, an Order that he pay child support according to the Guidelines, an Order that the parties share the section 7 expenses for the children proportionate to their incomes, equalization of net family property, an Order regarding the matrimonial home (which relief is no longer an issue at trial), and costs.
[14] In her Answer dated October 2011, A.K. sought sole custody of the children (which relief is no longer an issue at trial), an Order that the husband pay child support according to the Guidelines, an Order that the parties share the section 7 expenses for the children proportionate to their incomes, an Order that the husband pay spousal support commencing on the date of separation, an Order regarding the matrimonial home (which relief is no longer an issue at trial), equalization of net family property, an Order that the husband maintain the wife and the children as beneficiaries under his employment benefits plan, an Order that the husband obtain life insurance coverage to secure his support obligations, an Order that the husband not deplete family property, prejudgment interest and costs.
The Litigation History
[15] There have been several Temporary Orders made in this proceeding. Summarized below are only the most salient portions of those prior Orders.
[16] On March 20, 2012, Justice Price, on consent of both parties, ordered that T.R. pay child support for both children in the total amount of $1379.00 per month, commencing April 1, 2012. The section 7 expenses for the children were to be divided 67.2 per cent for the husband ($96,673.00 annual income) and 32.8 per cent for the wife ($22,490.00 annual income). The husband was to receive a credit from May 1, 2011 for half of any payments that he may have made for the mortgage, property taxes and insurance expenses regarding the matrimonial home.
[17] On December 20, 2013, Justice Price, on consent of both parties, ordered that T.R.’s payments with regard to the matrimonial home shall cease as of December 31, 2013. Thereafter, the wife was to be solely responsible for those expenses. By the end of February 2014, the wife was to purchase the husband’s interest in the matrimonial home based upon a value of $365,000.00. The husband was ordered to pay spousal support in the amount of $1775.00 monthly, starting on January 1, 2014, and child support for the boy in the amount of $844.00 per month, commencing on the same date. The child support was to be paid to the wife. Child support for the daughter was terminated effective December 31, 2012.
[18] On January 29, 2014, Justice Ricchetti, on consent of both parties, amended the termination date for the daughter’s child support to a year later than previously ordered – to December 31, 2013.
[19] Leading up to trial, the parties were ordered to obtain appraisals with regard to property owned/leased by T.R. in Ethiopia.
[20] The proceeding finally meandered its way to trial before me in Brampton over three days on October 6, 7 and 8, 2015. Only two witnesses testified – the parties. Few Exhibits were filed.
II. THE ISSUES AND THE POSITIONS OF THE PARTIES
[21] In her opening statement, counsel for the husband identified the following issues.
[22] First, the date of separation. T.R. alleges that the parties separated in September 2009, well before he actually moved out of the home in Mississauga.
[23] Second, spousal support. The husband submits that the wife is underemployed and ought to have a much higher income attributed to her. Further, she is entitled to spousal support only on a need basis (not on a compensatory basis). Finally, the current amount of spousal support being paid by the husband, $1775.00 monthly, is far too high, and there are no arrears.
[24] Third, child support. The husband wants to be able to pay the son directly.
[25] Fourth, T.R. is owed a substantial credit for the home expenses that he paid starting May 1, 2011, as per the consent Order of Price J. made in March 2012.
[26] Fifth and finally, the husband submits that he is owed a credit for section 7 expenses that he paid.
[27] In his opening statement, counsel for the wife outlined the following issues.
[28] First, the date of separation. A.K. alleges that the parties separated in April 2011, when she received a letter from T.R.’s lawyer.
[29] Second, spousal support. The wife submits that she is doing the best that she can and should not have any extra income imputed to her. Further, the existing $1775.00 spousal support per month award in her favour ought to continue, indefinitely. In addition, the husband owes substantial spousal support for the period of time between May 2011 and December 2013, when he paid none:
$10,712.00 for the eight months between May 2011 and December 2011 ($1339.00 monthly), plus $20,148.00 for the twelve months in 2012 ($1679.00 monthly), plus $18,432.00 for the twelve months in 2013 ($1536.00 monthly).
[30] Third, child support. A.K. wants all payments for the son to be made to her. Further, she submits that the husband owes child support for the period of time between May 2011 and March 2012, when he paid none:
$10,900.00 for the eight months between May 2011 and December 2011 ($1363.00 monthly), plus $4092.00 for the three months between January and March 2012 ($1364.00 monthly).
[31] The wife’s position is that T.R. owes a grand total of support arrears, spousal and child, in the amount of $64,284.00.
[32] Fourth, the wife disputes that the husband is owed any credit for home expenses that he paid because she also paid for household expenses during the same period of time.
[33] Fifth and finally, A.K. disputes that the husband is owed anything for section 7 expenses because, during the same period of time, she paid enough for the children’s benefit such that the issue would be “a wash”, and further, some of the items paid for by T.R. are not proper section 7 expenses in any event.
[34] There is one more looming issue that needs to be addressed – the valuation of property owned by T.R. in Ethiopia. The parties each have appraisals. They are very far apart. In short, the “best” evidence before the Court is far from compelling on either side.
[35] By the time that we reached closing submissions by counsel, the positions of the parties varied somewhat, as can be expected. Those concessions are noted below when I deal with each issue to be resolved.
III. ANALYSIS
Date of Separation
The Law
[36] Section 8 of the Divorce Act provides as follows.
Divorce
- (1) A court of competent jurisdiction may, on application by either or both spouses, grant a divorce to the spouse or spouses on the ground that there has been a breakdown of their marriage.
Breakdown of marriage
(2) Breakdown of a marriage is established only if
(a) the spouses have lived separate and apart for at least one year immediately preceding the determination of the divorce proceeding and were living separate and apart at the commencement of the proceeding; or
(b) the spouse against whom the divorce proceeding is brought has, since celebration of the marriage,
(i) committed adultery, or
(ii) treated the other spouse with physical or mental cruelty of such a kind as to render intolerable the continued cohabitation of the spouses.
Calculation of period of separation
(3) For the purposes of paragraph (2)(a),
(a) spouses shall be deemed to have lived separate and apart for any period during which they lived apart and either of them had the intention to live separate and apart from the other; and
(b) a period during which spouses have lived separate and apart shall not be considered to have been interrupted or terminated
(i) by reason only that either spouse has become incapable of forming or having an intention to continue to live separate and apart or of continuing to live separate and apart of the spouse’s own volition, if it appears to the court that the separation would probably have continued if the spouse had not become so incapable, or
(ii) by reason only that the spouses have resumed cohabitation during a period of, or periods totalling, not more than ninety days with reconciliation as its primary purpose.
[37] Two seminal Court decisions which are of assistance in determining the meaning of “separate and apart” are Greaves v. Greaves, 2004 25489 (ON SC), [2004] O.J. No. 2522 (S.C.J.) and Oswell v. Oswell, 1990 6747 (ON SC), [1990] O.J. No. 1117 (H.C.J.), affirmed by the Court of Appeal for Ontario at [1992] O.J. No. 3563.
[38] Using those two decisions as guideposts, and with some elaboration by me, these principles apply. This is not an exhaustive list.
[39] First, there must be some form of a physical separation between the spouses, although not necessarily in different households.
[40] Second, one or both spouses must withdraw from the matrimonial obligation with the intent of ending the marriage or repudiating the relationship.
[41] Third, the absence of sexual relations is one factor but is not determinative.
[42] Fourth, the degree to which the spouses discussed their family issues and the frequency, manner and depth of their communication with each other are factors but are not conclusive.
[43] Fifth, the presence or absence of joint social activities, including vacations, is a factor but is not determinative.
[44] Sixth, the meal pattern of the spouses is a factor but is not conclusive.
[45] Seventh, a change to the performance of household tasks is a factor but is not determinative.
[46] Eighth, how the spouses held out their relationship to third parties is a factor but is not conclusive. For example, we might look to the tax returns of the parties to see whether they described themselves as married or separated or something else.
[47] Ninth, and most important, the true (as opposed to stated) intent of each spouse must be analyzed. Was there really a breakdown of the marriage? Was there really an intention by either spouse to live (not just physically) separate and apart from the other?
[48] Married spouses, just like common-law partners, have problems. I think that we should be careful about treating the first sign of a physical separation of the spouses as a breakdown of the marriage.
The Law as Applied to the Facts in this Case
[49] This issue ought not to have been litigated.
[50] By a consent Order made by Lemon J. on December 12, 2014, the valuation date for T.R.’s pension was agreed to be July 1, 2010 (the approximate mid-point between September 2009 and April 2011, the respective positions of the parties).
[51] There is no reason to use one valuation date for the pension but another valuation date for other property. The valuation date and the date of separation are one in the same.
[52] Besides, the evidence at trial does not establish on balance either position advanced by the parties. Thus, it makes perfect sense to use a compromise as the separation/valuation date.
[53] First, the wife testified that the parties were not physically separated as of September 2009. They continued to share the same bed. The husband testified that they were physically separated, although under the same roof.
[54] Second, the wife testified that she intended to repudiate the marriage only after receiving a letter from the husband’s lawyer. That was in April 2011. Prior to that, neither party signalled to the other any intention to withdraw from the marriage. T.R. testified that he made the decision to withdraw from the marriage in September 2009.
[55] Third, A.K. testified that the parties’ level of intimacy and sexual relations did not change in September 2009. The husband stated otherwise.
[56] Fourth, the wife testified that nothing changed in September 2009 in terms of the parties’ level of communication with each other. T.R. stated otherwise.
[57] Fifth, A.K. testified that nothing changed in September 2009 regarding the parties’ joint activities – they never spent much time together in the community, before and after September 2009. T.R. stated otherwise.
[58] Sixth, the wife testified that nothing changed in September 2009 with regard to the household meals – the spouses never ate together on a regular basis, before and after September 2009. T.R. stated otherwise.
[59] Seventh, I have no evidence as to whether anything changed in September 2009 concerning the distribution of household tasks.
[60] Eighth, I have no evidence as to how the spouses held out their relationship to other members of the community, before or after September 2009. The tax returns for the husband do not assist much. He filed as “married” for the tax years 2009 and 2010 and as “separated” in the tax years starting in 2011. That pattern could be consistent with a separation date in mid-2010 or in 2011.
[61] Ninth, each party is equally adamant that the marriage suffered its breakdown in September 2009 (the husband) and April 2011 (the wife).
[62] On every relevant factor, the parties’ evidence is conflicting. I have no other evidence to rely upon. And I have no clear reason to prefer one party’s evidence over the other.
[63] I suspect this is precisely why the parties consented to a valuation date of July 1, 2010. That should have been the end of the matter.
[64] That is the date of separation – July 1, 2010. That shall be the valuation date for all purposes. So ordered.
Spousal Support
The Law
[65] The objectives of a spousal support award, relevant to the discussion in this case, include (i) recognizing economic advantages and disadvantages to the spouses of the marriage and its breakdown, (ii) relieving economic hardship caused by marriage breakdown, and (iii) the promotion of self-sufficiency of separated spouses within a reasonable period of time. Subsection 15.2(6) of the Divorce Act.
[66] There are three distinct conceptual bases for entitlement to spousal support: on the basis of need [Bracklow v. Bracklow, (1999) 1999 715 (SCC), S.C.J. No. 14], on a compensatory basis (Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813) and on a contractual basis. The third basis is not relevant here.
[67] “Need is not measured solely to ensure a subsistence existence, but rather should be assessed through the lens of viewing marriage as an economic partnership”. Gray v. Gray, 2014 ONCA 659, at paragraph 27.
[68] In determining need, we are guided by the principle that the recipient spouse is entitled to maintain the standard of living that (s)he was accustomed to just prior to the time of separation. Marinangeli v. Marinangeli (2003) 2003 27673 (ON CA), 66 O.R. (3d) 40 (C.A.), at paragraph 74.
[69] As outlined in Moge, supra, the principle underlying the compensatory model of spousal support is, in part, that a spouse who foregoes educational and employment opportunities to care for the children and maintain the household may very well enhance the earning potential of the other spouse in pursuing his or her economic goals (paragraph 70).
[70] The test for imputation or attribution of income to a spouse is set out at paragraph 23 of the decision of the Court of Appeal for Ontario in A.M.D. v. A.J.P., 2002 41868 (ON CA), [2002] O.J. No. 3731:
[23] In my view, in applying this provision, the trial judge was required to consider the following three questions.
Is the spouse intentionally under- employed or unemployed?
If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
If the answer to question 2 is negative, what income is appropriately imputed in the circumstances?
The Law as Applied to the Facts in this Case
[71] The husband concedes that A.K. is entitled to spousal support on the basis of need. Compensatory entitlement is disputed.
[72] The wife submits that she is entitled on both bases. I agree.
[73] In terms of need, I accept the wife’s evidence that she has substantial debt. For reasons explained more fully below, I refuse to impute any extra income to her. She earns little money – about $22,000.00 per year (based on Exhibit 8). There is no question that she needs financial assistance from T.R.
[74] Regarding the compensatory basis for entitlement, I make the following findings of fact.
[75] First, A.K. was the primary caregiver for the children. On that point, I prefer the wife’s evidence over that of the husband. I accept that the children were in daycare, however, it is obvious to me that the wife had more time to devote to the children than the husband.
[76] Second, because of her childcare responsibilities, A.K. had insufficient time to devote to improving her English language skills. Further, it was impractical for her to consider attending university for a few years to become a licensed veterinarian in Canada.
[77] Third, because of A.K.’s commitment to being the primary caregiver for the children, the husband had more time and more energy to devote to his professional ambitions. He went to Atlanta, for example. He went wherever he was posted by the CFIA, as another example.
[78] In short, (i) A.K. sacrificed her own employment and educational opportunities in order to care for the children, and (ii) those sacrifices by the wife enabled T.R. to complete the veterinary medicine program at the University of Saskatchewan from 1994 to 1998 and to advance professionally in the years that followed.
[79] A.K. is entitled to spousal support on both a need and compensatory bases.
[80] On the issue of quantum of ongoing spousal support, I must first determine what incomes to use for the parties.
[81] It is simple: their actual current incomes. There is no reason to attribute extra income to either party. Neither is intentionally underemployed. T.R. is a hard worker. He earned more in 2014 because of overtime and retroactive pay, neither of which is expected to recur (I accept that evidence given by the husband). A.K. is also a hard worker. She is doing the best that she can. She makes modest money, however, she works full-time and applies for other positions, without success (I accept that evidence given by the wife).
[82] Thus, the annual incomes for the parties for the purposes of ongoing spousal support are fixed at $96,840.00 for the husband and $22,000.00 for the wife.
[83] Regarding whether spousal support in favour of A.K. ought to be at the low, mid or high level, I have determined that it shall be at the mid amount. This was a long relationship – more than twenty years. And the wife is entitled to spousal support on both bases.
[84] Thus, the amount of monthly spousal support to be paid by T.R., starting November 1, 2015 and on the first day of each month thereafter, is to be calculated by counsel using the Spousal Support Advisory Guidelines and in accordance with the above.
[85] A Support Deduction Order shall issue for enforcement through the Family Responsibility Office (“FRO”).
[86] The within award of spousal support is indefinite. The Guidelines provide for that. Further, the setting of any termination date by the Court or a gradual reduction in the quantum, at this time, would be unreasonable and completely arbitrary given the wife’s current financial and employment circumstances. She is not even employed permanently but rather through a temp agency.
[87] On a material change in circumstances, either party will be at liberty to bring the matter back to Court.
[88] The husband shall maintain the wife and the children as beneficiaries under his employment benefits plan and shall maintain the wife as the beneficiary under his insurance plan for so long as support is payable.
Spousal Support Arrears
[89] By the time of closing submissions, both sides appeared content with an Order that we set-off any “arrears” of spousal support, pre-January 2014, with the fact that the wife had exclusive possession of the matrimonial home during that period of time, with all of the major household expenses being paid for by the husband.
[90] I agree with that approach.
Child Support
Ongoing, including whether payments ought to be made to the son directly
[91] There is no good reason to have the husband make payments to the son directly. I am not satisfied that A.K. has been irresponsible with child support funds in the past.
[92] Based on a current income of $96,840.00, T.R., starting November 1, 2015 and on the first day of each month thereafter, shall pay child support to A.K. in accordance with the Federal Child Support Guidelines.
[93] Enforcement shall be done through the FRO.
[94] The within award of child support is indefinite.
[95] On a material change in circumstances or when the young man ceases to be a dependant, either party will be at liberty to bring the matter back to Court.
Arrears
[96] Rather than submit that the husband ought to be saddled with nil arrears of child support for the period of time pre-April 2012, Ms. Hines, in closing submissions, suggested that T.R. be ordered to pay a reduced amount of child support for that time period, given his other financial obligations.
[97] I agree with that submission. Counsel for the wife did not argue otherwise.
[98] For the time period between May 1, 2011 (the first month after the husband moved out of the Mississauga home) and March 1, 2012 (the last month before the Temporary Order for child support took effect), T.R. shall pay child support for both children in the amount of $1000.00 (rather than $1379.00) per month.
[99] Enforcement shall be made through the FRO.
[100] Counsel shall work out and include in the Final Order the date that those payments against arrears shall commence and at what rate, if different than $1000.00 monthly. It has to be affordable for the husband.
Whether the Husband Ought to Receive a Credit for Home Expenses
[101] There will be no credit for these home expenses paid for by the husband, aside from the set-off against spousal support “arrears” dealt with above. There can be no “double-dipping”. This was acknowledged by both counsel in closing submissions at trial.
Whether the Husband Ought to Receive a Credit for Section 7 Expenses
[102] There will be no credits for the cost of the son’s educational program in the United Kingdom, including the air travel expenses.
[103] Having regard to the best interests of the children, those items were not reasonably necessary. Further, having regard to the means of the parents, they were not reasonably affordable.
[104] Counsel for the husband seemed to acknowledge those things in closing submissions at trial.
[105] There will be no credits for the bills paid by the husband on behalf of H.R. ($454.00 and $400.00). Those are relatively smaller-ticket items. I am sure that the wife paid similar amounts for the children during the same time period.
[106] There will be credits for the other items listed at tab 21 of Exhibit 1: $4500.00, plus $4220.00, plus $770.00, all for the daughter’s university costs, plus $3710.00 for the daughter’s orthodontics.
[107] A.K. shall pay to the husband her 32.8 per cent share of those proper section 7 expenses. That amount due and payable by the wife shall be set-off against spousal support owing to her.
The Property in Ethiopia
[108] This issue is a mess.
[109] I know nothing about the qualifications of the appraisers. I know nothing about their methodologies or experience.
[110] I could simply ignore this issue given the absence of any credible and reliable evidence as to the value of the property in Ethiopia, however, that would be unfair to the wife.
[111] Even the husband concedes that he owns a foundation on a plot of leased land in Ethiopia. His own appraisal gives a value for that of $6537.22 Canadian (converted from the birr currency).
[112] That is the value that shall be assigned to that property.
Divorce
[113] The wife opposes this relief because she is afraid that the husband will sell what he owns in Ethiopia without her consent.
[114] I am not satisfied that T.R. owns anything in Ethiopia except the foundation valued at the above figure.
[115] There is no good reason to stall the divorce. The parties have been separated for years. There is no prospect of a reconciliation. The Final Order with the relief granted herein in favour of A.K. will adequately protect her interests.
[116] The parties are hereby divorced. The Order takes effect 31 days after the release of these Reasons.
IV. CONCLUSION
[117] A Final Order shall issue in accordance with these Reasons for Judgment.
[118] Success has been largely divided. Normally in those circumstances, there would be no Order as to costs, however, I do not know about any relevant settlement offers.
[119] If the parties cannot resolve the issue of costs, I will accept written submissions as follows. Each submission shall be limited to two pages, excluding supporting documents (such as a Bill of Costs and, if applicable, Offer(s) to Settle). A.K.’s submissions are due within fifteen days of the release of these Reasons. T.R.’s submissions are due within ten days thereafter. No Reply.
[120] The submissions shall be forwarded by electronic mail to Melissa.Curtis@ontario.ca.
Conlan J.
Released: October 9, 2015
COURT FILE NO.: FS-11-72820
DATE: 20151009
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
T.R.
Applicant
- and -
A.K
Respondent
REASONS FOR JUDGMENT
Conlan J.
Released: October 9, 2015