BRACEBRDIDGE COURT FILE NO.: FC-09-74-01 DATE: 20160527 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DONNA MORROW, Applicant AND: EUGENE FINCH, Defendant

BEFORE: THE HON. MR. JUSTICE J.P.L. McDERMOT

COUNSEL: Michael Sirdevan, for the Applicant David Winnitoy, for the Respondent

HEARD: April 28, 2016

ENDORSEMENT

Introduction

[1] The respondent Eugene Finch was married to the applicant Donna Morrow for 14 years. They cohabited for a total of 17 years and separated in May 2007. The marriage was childless although Mr. Finch brought several teenaged children into the marriage.

[2] By consent order made by Wood J. on May 9, 2011, Mr. Finch agreed to pay spousal support of $2,200 per month to Ms. Morrow. The support was indefinite but subject to either party’s right to review of spousal support after three years. The order is silent as to the terms of the review. The order also provided for an equalization payment up to Ms. Morrow of $227,206.

[3] Mr. Finch brings this Motion to Change. He seeks a review of spousal support. He says “enough is enough” as he says that he has paid more than $500,000 to Ms. Morrow including the equalization payment since the parties separated. He says that Ms. Morrow ought to be self-sufficient and if not that is her problem due to her own decisions. He seeks a termination of spousal support.

[4] Since the order, Ms. Morrow has used up the equalization payment in an unsuccessful horse breeding venture. She is destitute and has no income other than a small income as an apprentice animal control officer as well as the spousal support. She agrees that there should be a termination date for spousal support. She does not believe it should be immediate. She wishes spousal support to be payable for at least four more years.

[5] This matter was argued by way of a motion. That is because counsel correctly assessed that there were not a lot of facts in issue between the parties. Counsel also agreed that because this is a review clause, there need not be a change in circumstances proven as a pre-condition for varying the spousal support. Counsel also agreed that although this is a review, the court need not inquire or go behind the order of May 9, 2011.

Issues

[6] The only motion before this court is the respondent’s Motion to Change spousal support. Ms. Morrow did not bring a motion and does not seek any increase or change to spousal support. As I have already noted, both parties understand that spousal support will terminate. The issue is really how and when.

[7] For the reasons set out below, I have determined that spousal support shall end in three years on April 30, 2019, with payments of support to be stepped down over that three year period of time.

Analysis

[8] This is a Motion to Change spousal support under the Divorce Act. The parties agreed that the criteria to be addressed in this case for changing spousal support are set out in s. 17(7) of the Divorce Act [1] which reads as follows:

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.

[9] Mr. Winnitoy submits on behalf of the respondent husband that the provisions in this subsection mandate that support should end immediately. He abandoned any claim for a retroactive cessation of support and suggests support be terminated from the date of this order. He says that there is little or no evidence that this was a compensatory award of support and that the economic consequences of the marriage were recognized by payment of the equalization payment and the payment of spousal support to date. He again reiterated that Ms. Morrow received more than $500,000 in through the combined equalization payment and spousal support and that she has frittered away most of that money.

[10] When I asked Mr. Winnitoy about the hardship that would result from the termination of support, he said that any consideration of present need would set a dangerous precedent. He suggests that the applicant’s hardship at this point in time was her sole responsibility and was unrelated to the marriage or its breakup, but rather to the failure of the wife’s post-separation business of horse breeding. He pointed out that that the writing was on the wall for the applicant wife’s business prior to the order being entered into and that this was confirmed by the eventual failure of that business by 2014.

[11] Mr. Sirdevan on behalf of Ms. Morrow acknowledges that support will come to an end. Indeed this is inevitable as Mr. Finch is now 59 years of age and will be entitled to retire in six years. That being said Mr. Sirdevan submits that this was a compensatory award and that the review clause does not entitle the respondent husband to an automatic termination of support. Although he agrees that the Spousal Support Advisory Guidelines should be applied with caution, the duration of support which would have governed when the order was given should continue to have force and effect and can be looked at from the perspective of the original order. He notes that, under the SSAGs, spousal support for a marriage of this duration would have terminated between 8.5 and 17 years after the date of separation and that we are barely at the nine year mark from the date of separation.

Review of Spousal Support

[12] As discussed above this is a motion to review spousal support. The entitlement to the review is set out in the order of May 9, 2011. That review clause does not contain any conditions under which either party would be entitled to a review or alternatively any perimeters of the proposed review. It is a simple standalone review clause.

[13] As acknowledged by the parties no change in circumstances is needed for a review. However the parties have also agreed that this is not a trial de novo. The parties do not wish to go behind the 2011 consent order except as mandated by s. 17(7) of the Divorce Act.

[14] This means that entitlement to spousal support at the time of the order is therefore acknowledged as well as quantum at that time. Duration was addressed, in a sense, by the entitlement by either party to a review. Both parties have acknowledged that there will be an end to spousal support. The real issue under this heading is the changes in circumstance which have occurred since the consent order was made.

[15] By way of background is the fact that, during marriage, the parties together operated a working farm. Mr. Finch worked full time at another job (as he continues to do today); accordingly it is acknowledged that Ms. Morrow ran the farm. It was originally a beef operation which eventually turned into a horse breeding business. Ms. Morrow was able to successfully run the farm. She cleaned stalls, stacked bales of hay, managed the animals and the general business of the farm. It is acknowledged she was responsible for both the business and physical aspects of the farming business.

[16] Ms. Morrow wanted to continue operating a horse breeding business after separation. She acknowledged that this was her “dream”. She continued in this enterprise after separation by renting a 137-acre farm and operating that farm until 2014.

[17] Unfortunately that business was a failure. An examination of her line of credit statements, into the which the equalization payment was deposited, shows a steady decline in the amount of the available funds in that line of credit. By 2014, she was close to the line of credit limits of $26,000 and all of the equalization payment was gone. She closed her farm operation during the spring of that year. She presently works part time as an animal control officer and is taking a course in canine control. She is finished the classroom portion of that course and is now completing her practicum.

[18] Mr. Winnitoy also points out Ms. Morrow is a relationship with another man. However there is no evidence that this gentleman lives with Ms. Morrow or assists in her support. She does not deny that she is in “relationship” but his does not mean that Ms. Morrow is cohabiting with anyone. Her own financial statement confirms that she lives alone.

[19] The issue in a review of this nature concerns the applicability of the provisions of s. 17(7) of the Divorce Act considering the history since the order sought to be changed or varied. Mr. Winnitoy suggests that Ms. Morrow has made decisions which disconnect her present circumstances from those criteria. He suggests that the circumstances of the marriage are now at this time largely irrelevant due to Ms. Morrow’s poor business decisions. He notes that she was free to follow her dream; however she cannot ask Mr. Finch continue paying for that failed dream.

[20] Mr. Sirdevan, on the other hand, states that those circumstances reflect the skills that ms Morrow left the marriage with, and that what she did was exactly what the marriage prepared her for. Her skills accumulated during marriage allowed her to manage a farm operation, which naturally enough, she gravitated to after separation. To do anything else would have required a significant period of retraining and reduced income. In other words, considering the skills with which she left the marriage, it was reasonable for ms Morrrow to attempt to realize her asperations in horse breeding, as it is reasonable for her to now to attempt to work in animal by-law enforcement, her present chosen career.

[21] I note that this is a consent order. There are no reasons for judgment to review in order to determine the basis of entitlement for support. There were also no criteria in the order as to the nature of the review to be undertaken or conditions upon which a review would be based. As pointed out by Mr. Sirdevan during argument, the review may have been a “faint hope” in order to permit settlement. I am not going to speculate as to the reasons why the consent was entered into or enter into any fiction as to the purposes of the review in this matter. I analyze the claim for termination of spousal support from the perspective of the free standing review clause along with the indefinite award taking into account changes in circumstances which have occurred since the date of the original order: see Mercel v. Bouillon, 2012 ONSC 6557 at para. 14.

[22] As there are no specified perameters for the review of spousal support, the court is left with the relevant factors under s. 17(7) of the Divorce Act as applied to the parties’ present circumstances as compared to the circumstances that existed at the date of the order under review. I am therefore going to examine this issue from the perspective of this being a review of spousal support taking into account the criteria for a change in spousal support set out in s. 17(7) noted above, and taking into account the parties’ respective situations at present as well as any change in circumstances since the order as disclosed by the materials filed on this motion to change.

Section 17(7)(a) - Economic disadvantages arising from the marriage or its breakdown

[23] Mr. Winnitoy points out that although cohabitation was for 17 years, these parties did not have children and Ms. Morrow did not have to care for the parties’ children. Although Ms. Morrow claims to have cared for the respondent’s teenaged children during marriage, she provided few particulars about this. She devoted only one paragraph of her affidavit to this issue, saying that Mr. Finch “wanted me to be at home to raise his children from his first marriage.” However, she acknowledged that the children were with them only on a “part-time basis and for the summer holidays.” [2] It was acknowledged during argument that these children were teenagers during the marriage. Ms. Morrow does not provide particulars of any economic consequences of her responsibilities if any to care for Mr. Finch’s children during cohabitation. There is insufficient evidence for me to make any sort of finding that Ms. Morrow’s child care responsibilities resulted in a loss which arose from the marriage.

[24] There remains, however, a compensatory element to the spousal support. After cohabitation, Ms. Morrow worked for about a year for a dentist’s office. She then began to manage the farming operation begun by the parties during cohabitation. It is common ground that Ms. Finch worked full time during cohabitation and accordingly the responsibility for operating the farm fell on Ms. Morrow. She managed both physical and business aspects of the farming operation. She paid the bills, did the books, mucked out stalls and cared for the animals.

[25] The economic consequence of this is obvious. Ms. Morrow left the marriage with skills in animal husbandry and farm operations. She also wished to continue this activity after the marriage ended. Her skill sets were limited to this and she attempted to earn income by this means once she received the equalization payment. Unfortunately, however, her business failed.

[26] There was therefore an economic consequence of the marriage directly related to the unsuccessful farming business that she had operated. This was not only a dream of hers; the evidence confirms that this was all she knew how to do after the marriage ended. She attempted to use these skills to earn income and was unable to do so. She is not to be blamed for attempting this venture although she should perhaps have seen the writing on the wall sooner.

[27] I am not convinced that her limited experience in the dentist’s office gives her the skills as a hygienist as suggested by Mr. Finch. There is no evidence that she was qualified to work as a hygienist and the only evidence was that she worked for a dentist for about a year. That was near the beginning of cohatibation and I do not find that there is evidence that Ms. Morrow would have been able to immediately work in the dental field or that her qualifications were then sufficiently current when the marriage ended.

[28] This is not the same situation as suggested by S.E. Lang J.A. in Fisher v. Fisher, 2008 ONCA 11 where she states at para. 54:

Self-sufficiency is often more attainable in short term marriages particularly ones without children where the lower income spouse has not become entrenched in a particular lifestyle or compromised their career aspirations. In such circumstances the lower income spouse is expected either to have the tools to become financially independent or to adjust his or her standard of living.

[29] That particular phrase speaks to a situation where the claimant has throughout the marriage pursued his or her own career aspirations which presumably allows him or her to continue to earn income after the separation of the parties. In the present case, Ms. Morrow did take up a career in farming and animal husbandry during marriage. Although Mr. Winnitoy is correct that she was compensated for the loss of the farm through the equalization payment, spousal support is is a claim which reflects a party’s ability to earn income after separation arising from the circumstances of the marriage. In this case, Ms. Morrow attempted to make a go of a business that she was familiar with after separation and failed. Mr. Winnitoy notes that this may not have been her fault; the business probably failed as a result of economic conditions surrounding the 2008 recession and the Ontario government’s recent decisions regarding race tracks and gambling at those race tracks. However the direct result is that Ms. Morrow has now had to take up another career option in order to attempt to become self-sufficient.

[30] As a result, Ms. Morrow’s present situation arises, partially at least, from the economic disadvantages that Ms. Morrow suffered as a result of the marriage. Those disadvantages were the fact that she worked through much of the marriage on the farming operation which was her sole skill set at the end of the day. Mr. Finch would have Ms. Morrow working in dentistry in which she worked for only one year during marriage. He cannot now complain about Ms. Morrow attempting to continue with the skills that she obtained during most of the cohabitation which is the agricultural skillset that she attempted to use in her farming operation.

[31] Accordingly I find that a portion of this claim continues to be a compensatory spousal support claim. Compensatory claims do not only have to arise from child care; they can arise from the roles during the marriage and Ms. Morrow had undertaken the role of operating the family farm during marriage. I also find that her economic circumstances today are related to the marriage and the role she undertook during the marriage.

Section 17(7)(b) - Child care during the marriage

[32] I have already spoken of this above. I do not find that any child care responsibilities which Ms. Morrow may have had affects her presently is related to her spousal support claim. She has not provided evidence of this and does has not provided evidence as to how her responsibility to assist caring for the respondent’s teenaged children has affected her career opportunities or her ability to earn income to date.

Section 17(7)(c) - Relieving economic hardship arising from the breakdown of the marriage

[33] It is undoubted that termination of spousal support would cause hardship at this time. Mr. Winnitoy takes exception, however, to it being related to the breakdown of the marriage. He says that if there is hardship, it is attributable to solely to poor post-separation decisions made by Ms. Morrow. He says that Ms. Morrow ought to have recognized that a farming business was not viable after separation largely because of the factors noted above.

[34] I note however that Mr. Finch has continued to operate his farming operation. He works at a job full time and continues to farm. The losses from that farm are written off against his income and are reflected in his tax returns.

[35] Section 17(7)(c) of the Divorce Act is intended to address non-compensatory elements of spousal support. As stated in Bracklow v. Bracklow, [1999] 1 S.C.R. 420 at para. 41 (quoted in Raymond v. Raymond, 2012 BCSC 1747 at para. 20), this section is to recognize the “principle of compensation for the economic disadvantages of the marriage breakdown as distinct from the disadvantages of the marriage as an explicit recognition of ‘non-compensatory’ support” (emphasis mine). The section is, in other words, intended to address hardship arising from marriage breakdown.

[36] I have already noted the position that the applicant finds herself in largely relates to the skills that she built up during the marriage as well as her role within the marriage but her present situation also relates to what she did after the marriage. She appears to have continued to operate the horse breeding operation in the face of mounting losses. Therefore, because of what might be seen as poor business decisions, she finds herself in the same position that she perhaps would have found herself in a number of years ago had she not made those decisions.

[37] It appears to me that the present hardship being suffered by the applicant although it may be related to compensatory factors noted above, is not now related to the marriage breakdown itself. There is no connection between the marriage breakdown and the applicant’s present circumstances. She is in the fix she is in because of her post separation business decisions combined with her career that she was left with at the end of the marriage.

[38] However, the duration of support as set out in the Spousal Support Advisory Guidelines is partly to deal with the economic consequences of marriage breakdown. Once a marriage breaks down, the Guidelines suggest an amount of time before spousal support ends in order to deal with the presumed consequences of the end of marriage for the claim to become self-sufficient. I will discuss these issues under the heading of self-sufficiency below.

Section 17(7)(d) – Self-Sufficiency Factors

[39] The final factor to be considered is self-sufficiency. Self-sufficiency is where the length of the marriage comes into the equation. It is to be noted that the length of the marriage itself is not a factor to be taken into account in a variation order of support. However the length of the marriage and the recipient’s role undertaken during marriage is related to self-sufficiency: see Fisher v. Fisher at para. 54 and 55.

[40] It seems trite to say that a termination of spousal support promotes self-sufficiency. It can be seen as a “kick in the pants” to make a claimant spouse go out and get a job. That, however, begs the question and is not the situation in the present case.

[41] It is apparent that a termination of spousal support will result in the claimant being forced to perhaps rely upon public assistance or alternatively family and friends. Her income presently is in the range of between $14,000 and $16,000 a year working part-time for a municipality as an animal control officer. She is the midst of taking a course which she hopes will lead to full time employment.

[42] It may very well be that to terminate spousal support immediately will actually impair the goal of self-sufficiency. As suggested by Mr. Sirdevan, to throw Ms. Morrow onto the public purse may in fact result in her not proceeding on the job path she has right now. It may in fact not promote self-sufficiency but impair it.

[43] A graduated reduction in spousal support taking into account the respondent’s retirement in six years as well as the claimant’s present circumstances would promote self-sufficiency rather than a precipitous ending of spousal support causing present extreme economic hardship to the applicant.

Order

[44] The parties have agreed that spousal support must terminate. The question is when and how.

[45] The Spousal Support Advisory Guidelines state that spousal support in a marriage of this duration should have had a duration of between 8.5 years and 17 years. To terminate spousal support at this time would be to terminate at the nine year mark, which is close to the minimum duration.

[46] I do not agree with Mr. Winnitoy that the equalization payment is to be taken into account in determining the duration of spousal support. Spousal support is income replacement while an equalization payment is capital replacement. The fact that the business failed and the equalization is spent should not affect the duration of support either way. Ms. Morrow has used up her capital in her failed business; should she also be deemed to have exhausted her income replacement at the same time? I do not think so.

[47] I agree as well that the Spousal Support Advisory Guidelines should be used with caution on a variation application: see Thompson R., “To Review, Perchance to Change: Changing Spousal Support”, 31 CFLQ 355. Certainly the Spousal Support Advisory Guidelines have been applied in a variation context: see Gray v. Gray, 2014 ONCA 659 at paras. 44 – 45. Although there are “complicating factors that must be considered before a court applies the SSAG wholesale”, they were seen by Lauwers, J.A. as a “useful tool” in the variation application in that case.

[48] Moreover, if this is a review, the matter can be viewed as a new hearing permitting the SSAGs to be used in determining the duration and quantum of support.

[49] There is no request for an increase in quantum of support by Ms. Morrow. However she wishes me to take the SSAGs into account in setting the duration the support.

[50] It is rare, even in a non-compensatory claim, that a court will adhere to the minimums in quantum and duration under the Spousal Support Advisory Guidelines. To allow Ms. Morrow only nine years support would be doing just that. There is no reason why the minimum duration of spousal support should be imposed in this situation especially as there are compensatory elements to the claim by Ms. Morrow. I therefore find that the minimum duration of spousal support is not an appropriate measure to be used in the present case irrespective of the post-separation circumstances.

[51] Mr. Winnitoy argues however that Ms. Morrow ought to be self-sufficient at this point in time. He notes that taking into account the SSAG amounts contained in the calculations attached to the material (which call for spousal support in excess of that being paid by Mr. Finch) the mid-point of those calculations for nine years of support lies at around $210,000 for a lump sum support. He suggests that, as Ms. Morrow has received $226,000 approximately in spousal support, she has been fully paid what she would have received by way of lump sum support.

[52] The mid-point in the lump sum support calculation indicates not what Ms. Morrow should have received as a net amount of spousal support but what the parties’ compromised position might have been. What Ms. Morrow has received from Mr. Finch was, as well, taxable in her hands and deductible in his, rather than lump sum support. Mr. Winnitoy asks me to compare apples to oranges. Furthermore, and based upon midpoint spousal support amount contained in the calculation referred to by Mr. Winnitoy in argument, Ms. Morrow should have actually received about $241,000 in net spousal support over a nine year period. [3] I have already stated that nine years’ duration is inadequate in the present circumstances.

[53] However I must also take into account the fact that Mr. Finch will be retiring. In the interest of his own self-sufficiency, he should have time to prepare for that retirement.

[54] I am accordingly going to order that spousal support terminate in three years with a step-down provision. That brings us to 12 years of spousal support duration and gives Ms. Morrow a chance to become self sufficient in her new career. That also permits Mr. Finch time to prepare for retirement.

[55] Accordingly, there shall be a final order to go as follows:

(1) The order of Wood, J. dated May 9, 2011 shall be varied to provide as follows:

(a) Spousal support shall terminate April 30, 2019;

(b) Spousal support shall be payable as follows:

(i) From May 1, 2016 to April 30, 2017 spousal support shall continue at $2,200 per month;

(ii) From May 1, 2017 to April 30, 2018 spousal support shall be reduced to $1,250 per month;

(iii) From May 1, 2018 to April 30, 2019 spousal support shall reduce to $750 per month.

[56] The parties may speak to the issue of costs on a ten day turnaround with the applicant and then the responding providing Costs Submissions. Costs Submissions to be no more than five pages in length not including Offers to Settle and Bills of Costs.

McDERMOT J.

Date: May 27, 2016

[1] R.S.C. 1985, c. 3 (2nd Supp.)

[2] See applicant’s affidavit sworn July 24, 2015 at para. 4.

[3] Mr. Winnitoy referred to a SSAG calculation which indicated that, at the lowest range of spousal support ($2,550 per month, less than the amount being paid under the order of Wood J.), Ms. Morrow should have received about $210,000 in lump sum support. The calculation also indicates that, at the midpoint amount of $2,975 per month, Ms. Morrow would have received $241,123 by way of lump sum spousal support. Both of those figues come from the midpoint of lump sum spousal support.