SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kenneth MacKenzie Nye, Applicant
AND
Shirleen Derilda Nye, Respondent
BEFORE: Shelston J.
COUNSEL: Suzanne Coté, counsel for the Applicant
John E. Summers, counsel for the Respondent
HEARD: February 9, 2016 (at Ottawa)
ENDORSEMENT
OVERVIEW
1This motion concerns the variation of spousal support under section 17 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.).
BACKGROUND
2The parties lived in a common-law relationship for approximately one year before they married on October 11, 1969.
3There was one child born of the marriage, namely Nathalie, born September 10, 1978. When the parties separated, Nathalie was 15 years of age.
4The parties separated on December 16, 1993, after over 25 years of cohabitation.
5At the time of separation, the applicant was 45 years of age while the respondent was 51 years of age. Throughout the marriage, the applicant developed an expertise in the nuclear power industry. He retired from Atomic Energy of Canada in 2005 and started his own business where he worked as a nuclear consultant on a contractual basis in Canada and abroad.
6The respondent followed the applicant to his postings in Ontario, Alberta, Saudi Arabia and Romania. The parties moved 13 times in 25 years. The respondent gave up good positions to follow the applicant.
7In February 1988, at age 45, the respondent started a clerical position with the Human Resource Centre in Oshawa, Ontario. By 1993, the parties separated. The applicant continued to accept assignments outside of Canada while the respondent lived in Canada and was the main caregiver of the child.
8The respondent commenced proceedings in 1994. On October 4, 1994, Justice Boyko ordered the applicant to pay arrears of spousal support at the rate of $800 per month for the months of May to September 1994, to pay $1500 a month in combined child and spousal support as of October 1, 1994, and to pay the monthly mortgage payments on the matrimonial home as of May 1, 1994.
9The parties entered into a separation agreement dated December 4, 1995, which provided, inter alia, an obligation by the applicant to pay $750 per month as child support until Nathalie completed one post-secondary undergraduate degree and $750 per month as non-taxable spousal support to the respondent commencing December 1, 1995. These provisions for child and spousal support were to be final, subject to variation because of a material change in circumstance.
10Pursuant to the terms of the separation agreement, the applicant transferred his interest in the matrimonial home, which had a net equity of $49,000, to the respondent, transferred ownership of a 1985 Ford Tempo GL to the respondent and agreed that the respondent retain all contents of the household. In addition, both parties released any claim with respect to the parties’ respective pensions.
11On February 14, 1996, the applicant married Florica Nye and later adopted her two dependent children. They started living together 11 months before the marriage and have been together ever since.
12On January 23, 1998, Justice Herold granted judgment, pursuant to minutes of settlement, whereby the applicant would pay $700 per month as taxable spousal support, $650 as child support and $6,000 towards the child’s post-secondary expenses.
13The judgment of Justice Herold provided that there be a mandatory review of spousal support on or after December 31, 2002.
14In 2003, the applicant commenced proceedings to terminate his spousal support obligation while the respondent claimed an increase of the spousal support from $700 per month to $2,000 per month.
Order of Justice Seppi dated January 22, 2004
15On January 22, 2004, Justice Seppi found that there had been a material change in the circumstances of both parties since the order of Justice Herold dated January 23, 1998. The court made the following findings of fact in arriving at its decision:
(a) The applicant’s income had increased from $80,000 at the time of the judgment of Justice Herold in January 1998 to $93,000 in 2003;
(b) The respondent was in receipt of long-term disability from her employment with the federal government with an income of $28,176, which was similar to her gross annual income of $28,355 at the time of the order in January 1998;
(c) At the time of the application, the applicant was 56 years of age and the respondent was 60 years of age; and
(d) As a result of the child support terminating since the last court order, the applicant was relieved of paying $1,150 per month towards the child support and post-secondary expenses, but this was replaced by the obligation of additional expenses on account of his two adopted children embarking on post-secondary education.
16Justice Seppi found it was necessary to recognize that this was a long-term marriage, the result of which was that the respondent had suffered a long-term economic disadvantage and that there was a continuing spousal support obligation. In making her decision, Justice Seppi took into account the fact that the applicant had been making significant contributions to the child’s post-secondary education expenses until December 2003. Based on all the factors, the court increased the spousal support from $700 per month to $1,500 per month commencing January 1, 2004.
Applicant’s Circumstances
17In 2013, at age 65, the applicant started to receive pension income from the Millwright Pension Plan. At age 66, on March 8, 2014, the applicant stopped working. He has not worked since that time. At the time of the hearing, the applicant was 68 years of age and the respondent was 72 years of age.
18On July 9, 2014, the applicant commenced this Motion to Change seeking to terminate spousal support. The applicant alleges that his circumstances have changed since the order of Justice Seppi in that he suffers from ill health and can no longer work.
19Firstly, with respect to his health, in the last ten years the applicant had three operations resulting in four stents being placed in his heart. In December 2011, he was diagnosed with leukemia and chronic hemolysis. He had chemotherapy in 2011 but the treatment could not be completed due to his deteriorating condition. He has suffered from shingles and type II diabetes. He states that he no longer has the energy to continue with consulting work.
20In support of his submission that he is in poor health and is no longer able to work, the applicant has provided five letters from medical providers as well as a consultation note from the cardiology department of the Ottawa Hospital.
21The first is a letter dated August 26, 2013 from Dr. Sabloff, Director of the Ottawa Hospital Leukemia Program. The letter confirms that the applicant has been under his care since May 2013; that the applicant has been diagnosed with chronic lymphocytic leukemia (CLL); that he is currently being monitored; and that in April 2013 he contracted shingles that left him with severe damage to his nervous system of his right hand and arm.
22The second letter, which is undated, is from Dr. Elias, who indicates that the applicant became his patient in May 2014 and that his past medical history included type II diabetes, hypertension, coronary artery disease (for which he had had three angioplasties and four stents), CLL and shingles.
23The third letter is from the Ottawa Collaborative Care Centre and is dated August 11, 2014. It indicates that the shingles left the applicant with severe nerve damage to his right arm and hand, resulting in loss of motor control and sensation in the upper extremity. As a result of ongoing treatment there had been a marked improvement in the upper extremity sensation and function but full resolution of the symptoms was uncertain.
24The fourth letter is dated September 21, 2015 from Dr. Beaton, Naturopathic Medicine, and states:
Mr. Nye presented to our clinic for treatment in April 2014 to address severe nerve damage in his right hand and arm. Due to this ongoing health concern, Mr. Nye has required frequent and ongoing care from our health team in order to restore function to his hand and arm.
After 18 months of treatment, while there has been significant improvement in Mr. Nye’s condition, it is unclear if he will recover full function of his hand and arm.
25The fifth letter is dated September 21, 2015, from Dr. Sabloff, who confirmed the applicant’s medical history and indicated:
… In April 2014, Mr. Nye contracted shingles due to his depressed immune system. The shingles left Mr. Nye with severe damage to his nervous system of his right hand and arm and I understand he is receiving therapy for this condition.
Sept 2015 - Mr. Nye continues to be monitored for CLL.
Mr. Nye as a minimum will be under observation treatment for CLL for the rest of his life.
26The final document is a cardiology consultation note from the Ottawa Hospital dated April 2014 that concludes with the following statement:
Mr. Nye has stable asymptomatic coronary artery disease. He has well controlled hypertension on his current medications. At this time, I cannot see discontinuing or decreasing any of his cardiac medications. I did tell him that if he managed to lose weight and reduce his blood pressure; we may be able to stop his atenolol. I have asked him to do a fasting lipid profile later this year to ensure that his LDL is below 2.0 mmol per liter as per the Canadian lipid guidelines. He will be reassessed in the cardiology clinic in 18 months.
27In addition, the applicant states that he can no longer work as a contractor. He had been working with Candu Energy Inc. as a consultant. Due to his medical issues, the applicant was unable to do much work in 2013 and decided to stop working altogether. He indicates that he finished off the remainder of his commitments in the early part of 2014 and his last day of work was March 8, 2014.
28The applicant’s financial statement dated July 2, 2014 showed assets totaling $373,177 of which $244,427 were RRSPs, cash, TFSA and RRIF. Included in his assets was a term life insurance policy with no cash surrender value. He had no debt.
29The applicant’s financial statement dated October 28, 2015 showed assets totaling $265,746.42 with no debt. The reduction in his net worth is due to deleting the face value of his term life insurance policy.
30The applicant’s income stream has been as follows:
(a) In 2011, the sum of $146,000;
(b) In 2012, the sum of $120,011 of which $26,951.04 was elected split pension with his wife;
(c) In 2013, the sum of $66,760.27, comprised mainly of old age security pension of $6,579.06; Canada Pension plan benefits of $10,680.24; employment pension benefits of $24,684.96; and net business income of $24,511.12;
(d) In 2014, the sum of $53,604.53, comprised mainly of old age security pension of $6,676.59; Canada Pension plan benefits of $11,303.28; employment pension benefits of $28,953.78 and net business income of $6,307.11; and
(e) In 2015, the sum of $47,238.00 comprised of $43,128 from similar sources of income, without any net business income, but with the addition of $4,109 as RRIF income.
31During questioning on November 12, 2015, the applicant testified as follows:
(a) He has worked since he was 15 years old and feels he is entitled to stop working as he can no longer physically take the stress of his job;
(b) He originally wanted to terminate support but changed his mind to decide that he could give the respondent something;
(c) He is not concerned about his finances … he has no knowledge as to how long he is going to live and it does not matter to him about spending his money;
(d) His form of leukemia is in remission, he has not had chemotherapy since 2011 and it has no impact on his life but he goes once a month for monitoring;
(e) In 2011 he received chemotherapy treatments but earned $146,000 in just nine months of work;
(f) The respondent’s needs are more today than in 2004; and
(g) He was asked about indexing the spousal support a couple years ago by his daughter, but he refused to do so because he believed he had been fair with the respondent.
32The applicant’s wife, Florica Nye, is a professional engineer who has been employed off and on since the parties married in 1996. Since 2004, she has been employed. She earned $185,023 in 2013; $111,561 in 2014 and $130,000 in 2015. She is currently a project manager for SNC Lavalin Inc. in Ottawa working on the OC Transport light rail project.
33Ms. Florica Nye no longer has any dependent children but is taking care of her elderly mother at a cost of $36,000 per year. She has purchased the three matrimonial homes, including the current matrimonial home located at 114 Maple Key Private, Ottawa, Ontario which was purchased for $478,000 in 2013.
34The evidence discloses that the applicant shares in the expenses with respect to the matrimonial home and other monthly expenses. In reviewing the continuing record, the applicant has provided disclosure regarding his banking and bank accounts for his business account, personal account and the joint account that he shares with his wife.
35The respondent argues that the applicant has not provided complete financial disclosure of his wife’s finances and consequently has not provided a clear picture of his current financial situation. The evidence discloses that the applicant has provided the income information regarding his wife and has provided significant disclosure regarding his assets and liabilities.
36With respect to his lifestyle, the respondent alleges that the applicant has a lavish lifestyle. The applicant owns a 2012 Ford Mustang which is driven by his wife while he drives his wife’s car. He admits that in June 2015 he went to England for his adopted daughter Christina’s wedding, but says that the flights were purchased on points and he stayed one week with his new daughter-in-law’s family.
37With respect to the matrimonial homes purchased with his wife, the evidence is that the applicant’s wife purchased the first home in Mississauga from savings accumulated by her while the parties were living in Korea. That property was sold and another property was purchased in Burlington, Ontario. The Burlington, Ontario property was sold in 2013 and the profit from that property was used to purchase the current matrimonial home.
Respondent’s circumstances
38Since the order of Justice Seppi in 2004, the respondent has had her own health issues such as suffering from severe anxiety, osteoarthritis, two types of cancer requiring chemotherapy, serious heart issues, tuberculosis, shingles and acute appendicitis. She has a stent in her heart and suffers from depression. She is currently monitored for heart issues and her cancer is in remission. Recently, she moved from Oshawa to Ottawa, at the request of her daughter, so that her daughter could continue to assist with their care.
39The respondent’s evidence is that after separation she could no longer afford the type of lifestyle that she had during the marriage. She indicates that she travels very infrequently, lives in a one-bedroom apartment and has few assets.
40Her evidence is that she lives a very frugal lifestyle. She has been renting since she sold the matrimonial home in 1997 and lost her severance pay from her former employer in the recession. She alleges that any savings that she had were spent towards the litigation with the applicant over the years.
41The respondent has earned, net of spousal support, the following amounts:
(a) $28,610 in 2011;
(b) $30,306 in 2012;
(c) $30,759 in 2013 comprised of old age security benefits of $6,579.06; Canada Pension Plan benefits of $10,053.72; and pension benefits of $14,127.24;
(d) $30,047 in 2014 comprised of her old age security benefits, Canada Pension Plan benefits and pension; and
(e) $29,168 in 2015 being $27,160 from her pension and $2,000 from her RIFF.
42The respondent’s financial statement sworn September 24, 2014, showed assets of $47,794 of which $10,000 were in a RRIF. The respondent’s financial statement sworn November 11, 2015 indicates that her net worth is $16,241.58 of which $8,000 was in a RRIF.
43The respondent’s monthly budget, in her financial statement dated November 11, 2015, showed monthly expenses of $4,090.71. Excluding her spousal support, her only income is $2,514.03 per month. With the spousal support of $1,500 she has a small deficit of approximately $76 per month.
44The respondent alleges that the applicant has had a decrease in his income not because of his health but because of his desire to retire and stop working.
45The respondent argues that the applicant has decided to retire because he has significant wealth, no debt, his current spouse earns over $110,000 per year and he has no financial concerns.
Current legal proceedings
46On July 9, 2014, the applicant commenced the current Motion to Change seeking the termination of spousal support as of May 27, 2014.
47On November 12, 2015, at questioning, the applicant gave notice that he intended to pay some spousal support and was no longer seeking a termination of spousal support. The applicant never filed an amended Motion to Change but on February 9, 2016, at the hearing of this motion, the applicant, in his factum, sought the following relief:
(a) That the spousal support of $1,500 per month be varied effective June 1, 2014 to $809 per month;
(b) That spousal support of $1,500 per month be varied effective January 1, 2015 to $597 per month and on the first day every month thereafter;
(c) Costs on a full indemnity basis; and
(d) Such further and other order as the court deems just.
48The respondent filed a Response to Motion to Change contesting the termination of the spousal support; seeking an order that indexation be applied retroactively to spousal support from January 2004 and on a prospective basis; an order that the applicant maintain life insurance naming the respondent as the irrevocable beneficiary in an amount sufficient to provide the respondent with security for spousal support; and costs.
Jurisprudence and legislative provisions
49Section 17(1)(a) of the Divorce Act provides that a court may make an order varying, rescinding or suspending, prospectively or retroactively, a support order or any provision thereof on application by either or both former spouses.
50Section 17(4.1) of the Divorce Act states that before a court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration.
51Section 17(7) of the Divorce Act states that a variation order varying a spousal support order should:
(a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;
(b) apportion between the former 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 former spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.
52In Chalmers v. Chalmers, 2009 BCSC 517, at para. 21, Justice Bruce summarized the principles to be applied in determining whether the threshold “change in the condition, means, needs or other circumstances of either former spouse” is satisfied, which were first set out in Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670, and L.G. v. G.B., 1995 65 (SCC), [1995] 3 S.C.R. 370, as follows:
(a) The change must be a material one; such that if known at the time it would have likely resulted in a different order;
(b) What is a material change will in each case be determined on the particular facts. The court should not endeavour to divide into categories those changes that are material and those that fail to satisfy this standard;
(c) What is a sufficient change must be measured against the parties’ overall financial situation;
(d) The fact that a change was objectively foreseeable does not mean that it was contemplated by the parties and forms part of the underlying basis for the original order; and
(e) The onus rests with the applicant to prove a material change in the condition, means, needs or other circumstances warranting a review of spousal support; however, the court should maintain a flexible approach to the exercise of this discretion to ensure all of the relevant facts in a given case are considered.
53The issue of retirement as a material change in circumstance in applications to vary spousal support has recently been reviewed by two Divisional Court decisions in the province of Ontario. Firstly, in Cossette v. Cossette, 2015 ONSC 2678 (Div. Ct.), 58 R.F.L. (7th) 12, the Divisional Court held at para. 13:
Given this, and other factual findings made by the motions judge, we agree with his conclusion that retirement was not a material change. Parties cannot sidestep support obligations by unilaterally deciding to leave the workforce: As stated in Bullock v Bullock, 2004 16949 at para 13: “A support payor cannot choose to be voluntarily underemployed, whether by retirement or otherwise and thereby avoid his or her spousal support payment obligations”.
54The court in Cossette held at para. 14:
This is not to say that voluntary retirement can never constitute a material change in circumstances. Every case must be determined on its own facts, with consideration of all relevant factors, including the language of settlement documents. In this case, the minutes of settlement were silent on the issue of retirement. It would be beneficial for parties to turn their minds to this eventuality when crafting terms of resolution. We adopt the comments of Bullock v. Bullock at para 1:
Does withdrawal from the workforce at age 62 qualify as a “material change of circumstances” justifying variation of spousal support? While every case must be looked at on the basis of the unique circumstances of the parties, as a general proposition, a payor of spousal support should make his or her retirement plans on the basis that support will continue until aggregate retirement savings can be expected to keep both former spouses at reasonable standards of living. Otherwise, our regime of spousal support will tend to leave payee spouses in positions of financial need, often dire need, at a time in their lives when they cannot take meaningful steps to ameliorate their own condition.
55Secondly, in Hickey v. Princ, 2015 ONSC 5596 (Div. Ct.), 127 O.R. (3d) 356, the Divisional Court set out a two-step process for dealing with variations of spousal support, at para. 50:
This mandates a two-step process, as described in Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670 (S.C.C.) and Droit de la famille – 091889, 2011 SCC 64, [2011] 3 S.C.R 775 (S.C.C). First, the court must consider whether the conditions for variation exist, i.e. whether there has been a change in the condition, means, needs or other circumstances of either former spouse since the order was made. The change must be “material”, meaning that it must be a change that, if known at the time, would likely have resulted in different terms. The corollary to this is that if the matter which is relied on as constituting a change was known at the relevant time, it cannot be relied on as the basis for variation. The onus of proving a material change is on the party seeking variation. Once the court decides that the threshold for variation has been met, the court must decide on the variation to be made in view of the change, based on the objectives set out in s. 17(7) of the Act.
56At paras. 56-57 of the Hickey case, the court went on to quote para. 61 of Boston v. Boston, 2001 SCC 43, [2001] 2 S.C.R 413:
The purpose of spousal support in cases such as this is to relieve the economic hardship suffered by reason of the marriage or its breakdown. There is no reason per se that spousal support cannot continue past the date of retirement of the pension-holding spouse. However, several factors must be considered in making that decision. On retirement, the pension-holding spouse may apply to vary the support order if his ability to pay support is compromised (see Linton, supra, at p. 31, and Rivers, supra, at para. 17). The decision of whether to vary support depends on whether the applicant can demonstrate that there has been a material change in circumstances pursuant to s. 37(2) of the Family Law Act.
57In Gray v. Rizzi, 2016 ONCA 152, the Court of Appeal stated, at para. 39:
Turning to those issues, to ascertain whether a change in circumstances has occurred, a court must consider whether the change advanced was “material”—meaning a change that, “if known at the time, would likely have resulted in different terms”—and a change with some degree of continuity, and not merely a temporary set of circumstances: L.M.P., at paras. 32 and 35. A material change in the financial means or circumstances of a payor can constitute a change in circumstances for the purposes of a motion to change child or spousal support: Federal Child Support Guidelines, s. 14(a); Divorce Act, s 17(4.1).
ANALYSIS
Has there been a material change in circumstances?
58The applicant argues that there has been a material change in circumstance because his income has been reduced as a result of his poor health and he can no longer work. The respondent argues that the applicant has intentionally retired to avoid paying the proper amount of spousal support.
59The respondent asserts based on the Hickey v. Princ and Cossette v. Cossette decisions of the Divisional Court that where a payor has voluntarily decided to retire and was not compelled to do so because of mandatory retirement or health limitation, his decision to retire is not a material change in circumstance.
60The issue before me is whether the circumstances of this payor qualify as a material change in circumstances within the meaning of the Divorce Act.
61The facts of this case are significantly different from those of Hickey and Cossette. In the Hickey decision, the parties were married for 17 years, the payor retired at age 51 and had only paid support for seven years. In the Cossette matter, the parties were married for 22 years, the payor retired at age 62 and he had paid support for seven years. In both cases, the Divisional Court found that the payor had voluntarily retired and consequently failed to establish a material change in circumstances.
62There are five factors that distinguish the case at bar from those Divisional Court decisions. Firstly, in this case, the applicant has been paying spousal support since the order of Justice Boyko dated October 4, 1994. By the commencement of these proceedings on May 27, 2014, the applicant had been paying spousal support for 20 years. Secondly, the applicant was 45 years of age in 1993 and commenced this proceeding to vary when he was 66 years of age. Thirdly, in 2013, the applicant was 65 years of age when he started to draw his pension through the Millwright Pension Plan. Fourthly, the applicant suffers from a multitude of medical issues which combine to affect his ability to work. Fifthly, the applicant is not seeking to terminate spousal support but to vary the amount as a result of the reduction in his income.
63Marriage in itself does not entitle a spouse to spousal support. Disparity in incomes does not automatically lead to entitlement. Entitlement is either based on compensatory or non-compensatory grounds or contractual.
64In this case, the respondent is clearly entitled to indefinite spousal support. But that entitlement is subject to variation based on a material change in circumstances. Further, her ongoing entitlement does not obligate the applicant to work full-time forever. Put another way, spousal support payors may retire and seek appropriate reductions in spousal support payments.
65In this case, there has been a material change in the applicant’s income. It has dropped from $93,600 at the time of the last order to $53,604.53 in 2014 with a further reduction to $47,238 in 2015.
66The next issue is to determine if the applicant has voluntarily ceased employment.
67Upon review of the medical evidence, the applicant is no longer required to take chemotherapy treatment for his leukemia. However, his resistance to infection is very low. He has issues with respect to the ongoing effect of shingles and has difficulty using his right hand. He is taking therapy to deal with his right hand issues. In my view, a review of the medical evidence supports the finding that the applicant suffers from poor health that affects his ability to work.
68With respect to the allegation that the applicant has retired early to avoid paying spousal support, at the time of separation the husband had an interest in the Millwright Pension Plan. In 2013, at age 65, the applicant started to receive income from the Millwright Pension Plan. I have not been provided with the particulars of the pension plan to be able to determine if the applicant’s pension is a reduced pension. The only information that I have been provided with regarding the applicant’s pension fund is in paragraph 18.1 of the separation agreement dated December 4, 1995 which states:
18.1 The parties acknowledged the husband has a pension under the Millwright Pension Plan and the husband has provided an evaluation prepared by Frank Lee dated July 29, 1994. The wife releases any interest she has in his pension fund or benefits payable thereunder.
69I have no information as to when the applicant was entitled to receive his pension, retire or when he stopped contributing to the pension fund. I have no information as to what age of retirement was used in the actuarial appraisal of the applicant’s pension. I do know that part of the pension income that is being received by the applicant is reflective of contributions made up until the date of separation. However, I do not have evidence as to what dollar amount or percentage relates to contributions during the marriage.
70This is not a case of early retirement motivated by a desire to terminate spousal support. The applicant has been paying support since 1994. The applicant started to draw his pension at age 65. At age 66, the applicant sought to reduce his spousal support obligation.
71I find that the applicant has established a material change in his circumstances based on his age, his medical conditions that affect his ability to work and the consequent reduction in income.
72I find no evidence that the applicant retired to avoid his spousal support obligations. To the contrary, the evidence overall supports the finding that the decision to retire was a reasonable one.
Variation of the quantum of spousal support
73Having found that there is a material change in circumstance, the next step is to determine the amount of spousal support taking into consideration the objectives of section 17(7) of the Divorce Act.
74Counsel have provided me with calculations under the Spousal Support Advisory Guidelines (“SSAGs”). The Ontario Court of Appeal in Gray v. Gray, 2014 ONCA 659, 122 O.R. (3d) 337, confirmed that the court may take into account the SSAGs in a variation of spousal support proceeding.
75I have considered the following factors in deciding to apply the high range of these SSAGs calculations:
(a) the respondent’s need as set out in her financial statements;
(b) the applicant’s financial contribution by his wife to his monthly expenses;
(c) the respondent’s entitlement to both compensatory and non-compensatory support; and
(d) the amount of spousal support ordered will equalize the parties’ net disposable incomes.
76As the applicant commenced his proceedings on July 9, 2014 seeking a variation of the spousal support as of May 27, 2014, based on the applicant’s income of $53,600 and the respondent’s income of $30,047, I order the applicant to pay to the respondent the sum of $809 per month commencing June 1, 2014. Commencing January 1, 2015 and on the first day of each month thereafter, based on the applicant’s income of $47,238 and the respondent’s income of $30,168, I order the applicant to pay to the respondent the sum of $683 per month as spousal support.
Respondent’s request for indexation
77The order of Justice Seppi did not include an annual indexation of the monthly spousal support. In 2009-2010, the respondent was advised by her former counsel that the support order did not have an automatic indexation clause.
78The respondent then asked the applicant to agree to index the support and he refused.
79The respondent did not seek indexation until she filed her Response to Motion to Change dated October 6, 2014 and explains her delay was due to her “precarious” financial situation which prevented her from retaining counsel to seek the indexation.
80The applicant does not deny any of these facts.
81In this proceeding, the respondent has provided calculations indexing the monthly spousal support of $1,500 from the year 2004 to the year 2015 in accordance with the Consumer Price Index. Based on those calculations, the monthly spousal support would have increased to $1,812.87 per month by the year 2015.
82The factors to be taken into account when determining retroactive support applications were canvassed by the Supreme Court of Canada in D.B.S. v. S.R.G. 2006 SCC 37, [2006] 2 S.C.R. 231. The court set out four factors to take into consideration on these applications, being:
(a) The reasonableness of the excuse for why support was not sought earlier;
(b) The conduct of the payor parent;
(c) The circumstances of the child; and
(d) The hardship occasioned by a retroactive order on the payor parent.
83The court emphasized that in considering the commencement date of the retroactive support, an award should generally be retroactive to the date when the recipient gave the payor effective notice of his or her intention to seek an increase in support payments. Further, the court went on to indicate that “effective notice” is defined as an indication by the recipient parent that support in its current amount needs to be renegotiated.
84But the giving of the effective notice is not the end of the analysis. The recipient must pursue the variation of support by commencing legal action. If there is no legal action for a significant period, the court should take that into consideration in determining the commencement date of the variation of the support.
85The entire analysis must be holistic and must balance the payor’s interests in certainty against the recipient’s interests in the support being fair in the circumstances.
86The court set certain ground rules, such as: it would be inappropriate to award a support variation retroactive to more than three years before formal notice was given to the payor, save and except in circumstances where the payor had engaged in blameworthy conduct.
87The guidelines set out in D.B.S. were incorporated into cases involving the variation of spousal support on a retroactive basis in Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269. In that case the following principles were established:
D.B.S. factors apply as modified for spousal support (circumstances of the spouse are relevant as opposed to circumstances of the child).
Presumptively, the date of the claim being issued is the start date for support, unless there is a reason to order otherwise.
The failure to bring a temporary motion should not be penalized as we should be encouraging people to avoid the cost of bringing temporary motions. This is particularly the case where the claimant moves the matter quickly to trial after obtaining disclosure.
There is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legal obligation to look out for the separated spouse’s legal interests. Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support.
D.B.S. emphasized the need for flexibility and a holistic view of each matter on its own merits; the same flexibility is appropriate when dealing with “retroactive” spousal support.
88Taking into consideration all of the factors set out in the jurisprudence and the facts in this case, I find that the respondent gave the applicant effective notice of her desire to have the spousal support indexed in the period 2009-2010. Despite giving the notice, the respondent failed to commence legal action until 2014.
89Balancing the rights of both parties, I am prepared to vary the spousal support as of October 2011 by adding an indexation factor. The commencement date of October 2011 is three years from the time that the respondent gave formal notice to the applicant in October 2014 that she was pursuing the indexation of the spousal support. I have no evidence that this retroactive order would create a hardship to the applicant.
90Consequently, the spousal support will be increased on October 1 of each year commencing with October 1, 2011 in accordance with the increase in the Consumer Price Index for all items from May of the previous year as established by the respondent’s evidence of the increase in the Consumer Price Index.
91I acknowledge that the revised monthly spousal support for the years 2011, 2012, 2013 and 2014 are not tax-deductible by the applicant. I direct counsel to calculate and seek an agreement on the amount of monthly spousal support commencing October 1, 2011 as increased by the indexation as well as an agreement on the lump sum payment owed by the applicant. If they cannot agree, I may be spoken to.
Respondent’s request for life insurance
92The respondent seeks an order that the applicant obtain $100,000 of life insurance to secure his obligation of spousal support.
93Based on the applicant’s medical condition as well as his age it is very unlikely that he would qualify to obtain any insurance and consequently I reject this request.
COSTS
94The applicant shall provide his submissions on costs not to exceed three pages plus his bill of costs and any offer to settle no later than April 13, 2016. The respondent will file her submissions on costs not to exceed three pages plus her bill of costs and any offer to settle no later than April 20, 2016. The applicant shall have the right to file reply submissions by April 27, 2016.
Shelston J.
Released: March 31, 2016
CITATION: Nye v. Nye, 2016 ONSC 1853
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Kenneth MacKenzie Nye, Applicant
AND
Shirleen Derilda Nye, Respondent
BEFORE: Shelston J.
COUNSEL: Suzanne Coté, counsel for the Applicant
John E. Summers, counsel for the Respondent
ENDORSEMENT
Shelston J.
Released: March 31, 2016