CITATION: Kadolph v. Kadolph, 2015 ONSC 900

COURT FILE NO.: FC-14-1344

DATE: 2015/02/11

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ruth Anne Kadolph – Applicant v. Stephen Lloyd Kadolph - Respondent

BEFORE: M. Linhares de Sousa J.

COUNSEL: Fan MacKenzie, for the Applicant

Rod Vanier, for the Respondent

HEARD: February 5, 2015

ENDORSEMENT

[1] I have before me a motion brought by the Applicant, Ruth Anne Kadolph, for spousal support based on an imputed income to her husband, the Respondent, Stephen Lloyd Kadolph.

[2] This motion is contested by Mr. Kadolph on both requests. Furthermore, he brings a cross-motion seeking an interim order for child support for his youngest son, Matthew, based on an imputed income of his wife.

[3] Having now had the opportunity of examining the substantial evidence presented on these highly contested motions and cross-motion, and having heard the arguments of counsel, I come to the following conclusions and make the following orders:

(1) Matthew, aged 23, cannot be found to be a “child of the marriage” pursuant to the Divorce Act RSC 1985, c 3 (2nd Supp) for whom there is an entitlement for child support. On the evidence, which is conflicting, Mathew is an adult child who has a diploma form Algonquin College and who was employed for some two years, earning somewhere between $20,000 and $30,000 per annum, before he voluntarily gave up his employment to pursue his current expensive studies in the United States. Canadian education was available to him.

Mr. Kadolph maintains that there was an agreement between the parties to support their son in his current studies, which Ms. Kadolph strongly denies. I can find no persuasive evidence of any such agreement.

I have absolutely no reliable independent evidence, either from Matthew himself or from either of his parents, as to what were or are Matthew’s own resources for the payment of his own education. This is a family in financial crisis, with Mr. Kadolph claiming that he cannot afford to pay spousal support, entitlement to which by his wife, he does not contest. If Mr. Kadolph has been and is contributing to his son’s education (payment of $17,000 in 2014) he is doing so on his own initiative in priority to his spousal support obligations. There is no legal obligation on Ms. Kadolph to pay to Mr. Kadolph child support for their son Matthew.

(2) As indicated, the issue of entitlement to interim spousal support, pending the final hearing on this matter is not contested. This is a longstanding and traditional marriage. Ms. Kadolph, until the separation of the parties in 2012, did not have employment outside of the home.

Prior to the parties’ final separation Ms. Kadolph obtained a Social Work College diploma but has not been able to find employment in this field. How diligently Ms. Kadolph has looked for such work will be an issue for trial. In the meantime, since the separation, Ms. Kadolph has worked at Tim Horton’s and currently has part-time work driving a school bus earning approximately $10,000 in 2013. For purposes of this motion, Ms. Kadolph concedes that an annual income of at least $15,000 may be attributed to her.

Ms. Kadolph claims that she is not able to work more fully for medical reasons and some medical evidence has been presented by her, suggesting her limited ability to work. This fact is contested by Mr. Kadolph who claims his wife can command an income in the social work field of at least $40,000 per year because this is what she told him she could earn when she started her course in social work. No reliable evidence was presented in support of this position.

While Ms. Kadolph must continue to work towards her greater self-sufficiency, I find that her earning capacity for the purposes of this motion is $15,000 per annum.

Based on her financial statements filed on this motion, Ms. Kadolph is clearly in need of spousal support.

Mr. Kadolph has always provided for the family financially during the whole of the marriage and provided well for the family. He continued to do so at the separation of the parties in 2012. In 2013, Mr. Kadolph’s line 150 income was $170,138.02.

For the year 2013, the parties were able to reach a Partial Interim Separation Agreement, without prejudice, regarding the payment of spousal support and the payment of the expenses relating to the matrimonial home, being occupied by Mr. Kadolph. Mr. Kadolph remained in the possession of the matrimonial home upon the separation of the parties while Ms. Kadolph went to live in the home of her brother. Mr. Kadolph remained in possession of the home from January, 2012 to August, 2014. In September, 2014 Ms. Kadolph returned to live in the matrimonial home; Mr. Radolph moved out and Ms. Radolph has been preparing it for sale, about which there has also been other litigation with directions for sale required to be made by this Court.

The matrimonial home is now scheduled to be listed for sale at the end of next month. At the end of 2013 the parties’ partial interim separation agreement expired. The parties were not able to reach another agreement after its expiration. Some voluntary support payments were made by Mr. Kadolph to Ms. Kadolph and he has continued to pay approximately $2,200 per month to pay for the mortgage, taxes and insurance on the matrimonial home even after Ms. Kadolph returned to live in it. The amounts paid voluntarily by Mr. Kadolph to Ms. Kadolph in the year 2014 were not disputed and can be found at tab 3C of vol. 2 of the Continuing Record. It amounts to approximately $18,000.

Since the August, 2014 payment, no support monies have been given to Ms. Kadolph. It is evident she has had to incur debt in order to live and has suffered a substantial reduction in her standard of living. As a result of the parties’ inability to reach an agreement on the question of interim spousal support, Ms. Kadolph commenced her matrimonial proceedings in June, 2014 and launched this motion.

There is no question on the evidence that Mr. Kadolph delayed in providing all of the financial disclosure which was asked of him and had been ordered against him, which of course, has also delayed the hearing of this motion. I also add here, that he must take much responsibility for the delay in the sale of the matrimonial home. He had possession of the matrimonial home for close to two years from the time of the parties separation and it was only when Ms. Kadolph took possession of the home that it is finally close to a listing for sale next month. Once the complete disclosure was made by Mr. Kadolph, the evidence shows that his income for 2014 was not substantially different from that of his 2013 income. In fact, his income for that year was slightly higher since in his own evidence Mr. Kadolph indicates that he estimates his income to be somewhere between $185,000 and $190,000.

There is no question that Mr. Kadolph has been underpaying spousal support for the year 2014 when one considers the Spousal Support Advisory Guideline amounts which are a useful guide to be seriously considered by this Court. I am persuaded that Ms. Kadolph should receive retroactive interim spousal support, to the commencement of her matrimonial proceedings in amounts much closer to the SSAG amounts. Therefore, for the year 2014, effective June 1, 2014, Mr. Kadolph is ordered to pay spousal support in the amount of $6,800 per month. Mr. Kadolph is, of course, to be given credit for what spousal support payments he has made to Ms. Kadolph in that year as well as credit for the payments made by him in 2014 for Ms. Kadolph’s one-half amount of the costs relating to the matrimonial home mortgage, taxes and insurance which amount to $1,100 per month.

Mr. Kadolph shall also reimburse Ms. Kadolph for the payment of the premiums which she has been making on the insurance policy on his life since May, 2014 to date. Mr. Kadolph will be obligated to continue to make the monthly payments on that life insurance policy until further order of the Court. Mr. Kadolph claims that this policy is no longer necessary because it was taken out in 2004 when both children were still dependent and that circumstances have changed. However, the evidence shows that the parties both agreed to transform the existing life insurance policy owned by the parties to the current policy in the spring of 2014. It may well be that circumstances may justify the change of this security for spousal support. However, this issue should be left to the trial.

In the meantime the life insurance policy shall remain in force and be paid by Mr. Kadolph. After all of the above mentioned credits are accounted for, any arrears of spousal support and reimbursement for payment of life insurance policy owed to Ms. Kadolph by Mr. Kadolph is to be paid forthwith to Ms. Kadolph from the monies, withdrawn by Mr. Kadolph from the parties’ joint line of credit (approximately $66,905.00) and being held by his counsel in trust, to be later repaid, together with interest on the repayment, from Mr. Kadolph’s portion of the net proceeds of the sale of the matrimonial home. Counsel for Mr. Kadolph is directed to make the payment to Ms. Kadolph forthwith.

(3) The more problematic issue on this motion is: what is the appropriate quantum of spousal support to be paid by Mr. Kadolph to Ms. Kadolph, on-going until this matter can be heard on a final basis on its merits? There is no question that Mr. Kadolph has some serious health problems. He was on medical leave for a number of months, from approximately May, 2013 until July, 2014. He returned to work in the fall of 2014 and has had some day hospital treatments since that time. Mr. Kadolph takes the position that his health problems do not permit him to work at this time and that his doctor has advised him not to work. On the motion Mr. Kadolph has filed some medical records, some of which appear to be related to his application for disability which he commenced in August 23, 2014 (see Exhibit #1 on the motion).

While the medical records filed by Mr. Kadolph do indicate some serious health issues, the prognosis is declared to be “good”. There is reference to his matrimonial breakup and the stress involved in that. Nowhere in those documents, however, does it indicate that Mr. Kadolph is not able to work.

A complicating factor in this evidence is that Mr. Kadolph was advised by his employer in May of 2014 that his job position was eliminated and that he would have a “working notice agreement for a four (4) week period ending June 13, 2014 during which time [he] would actively search for an alternate position within SAP [his employer]” (See letter to Mr. Kadolph dated May 14, 2014, filed on motion). Furthermore, the letter went on to say, that if Mr. Kadolph was not able to find alternate employment within SAP, as of June 13, 2014, then his employment with SAP would be at an end. There is evidence to indicate that Mr. Kadolph’s working notice agreement was extended beyond the 4 weeks to allow Mr. Kadolph to consider an offer of employment made to him by SAP which Mr. Kadolph did not accept. His employment with SAP was terminated on September 22, 2014 (See tab 3A of vol. 2 of the continuing record) and Mr. Kadolph is now in litigation with his former employer seeking his reinstatement and/or damages.

According to Mr. Kadolph he is not able to work and is now just becoming eligible for Employment Insurance which may require him to be available for work. He continues to operate his hockey team and anticipates a minimal profit from this enterprise. Having taken this position Mr. Kadolph does not appear to have made any efforts to find other employment. Mr. Kadolph has provided absolutely no evidence on the details of the alternate job offer and its salary which he received from SAP in the summer of 2014. Nor has he offered any evidence as to why he refused the alternate job offer. In the absence of this significant explanatory evidence, one can very reasonably come to the conclusion that Mr. Kadolph could at this time very well be employed, had he not refused the alternate job offer from his former employer.

For that reason, I impute to Mr. Kadolph the minimum income of his base salary which he earned in 2014 with his former employer, namely $157,000 per annum for the purpose of determining spousal support. Effective January 1, 2015 Mr. Kadolph is obligated to pay Ms. Kadolph interim monthly spousal support of $5,500. Upon the receipt of that monthly support she shall then be responsible for the payment of all of the carrying costs of the matrimonial home, including the mortgage, taxes and insurance. As the parties have agreed, the necessary costs required to bring the matrimonial home to its sale date are to be paid from whatever funds are left in trust, once Ms. Kadolph has been paid her spousal support arrears.

(4) The last issue is costs. Ms. Kadolph shall have two weeks from the date of the release of this endorsement to serve and file her written submissions on costs. Mr. Kadolph shall then have two weeks from that date to serve and file his written submission on costs. Ms. Kadolph shall then have one week from that date to serve and file a reply if she so wishes.

M. Linhares de Sousa J.

Date: February 11, 2015

CITATION: Kadolph v. Kadolph, 2015 ONSC 900

COURT FILE NO.: FC-14-1344

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Ruth Anne Kadolph

Applicant

AND

Stephen Lloyd Kadolph

Respondent

BEFORE: M. Linhares de Sousa J.

COUNSEL: Fan MacKenzie, for the Applicant

Rod Vanier, for the Respondent

ENDORSEMENT

M. Linhares de Sousa J.

Released: February 11, 2015