CITATION: Casas v. Lajoie, 2016 ONSC 5731
COURT FILE NO.: FC-16-685
DATE: 2016/09/19
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Isabel Casas, Applicant
AND
Michel Lajoie, Respondent
BEFORE: Justice A. Doyle
COUNSEL: Wade Smith, for the Applicant
Cecil J. Lyon, for the Respondent
HEARD: September 6, 2016
ENDORSEMENT
[1] This is a motion by the Applicant for spousal support, continued coverage on the Respondent’s medical and dental plan, and an order that the Respondent designate the Applicant as irrevocable beneficiary of his life insurance policy with a face amount of $250,000.
[2] The Respondent consents to maintaining the Applicant on his medical and dental plan and opposes the balance of the motion.
[3] The issues are:
Is the Applicant entitled to spousal support?
If so, what is the appropriate interim amount?
Should life insurance be ordered?
[4] For reasons set out below, the Court orders that on an interim basis, commencing September 1, 2016, the Respondent will pay spousal support in the amount of $1711 per month. The Respondent will also designate the Applicant as irrevocable beneficiary of his life insurance policy with a face amount of $250,000. This is without prejudice to the Applicant to claim retroactive spousal support at trial.
[5] On consent, the Court orders that the Respondent will maintain the Applicant on his extended health and dental plan until further order of this Court.
Background
[6] The parties commenced cohabiting in August 1998. They separated on November 30, 2014. They have no children.
[7] Both parties were previously married.
[8] At this time, the Applicant is a library technician working for Upper Canada District School Board and her income is $33,000 per year. She also receives employment insurance of approximately $2000 in the 6 weeks in the summer months when she is unemployed.
[9] The Applicant’s income has been as follows:
2012: $36,330;
2013: $35,270;
2014: $35,530, and
2015: $35,000, with an additional $7,500 received in spousal support from the
Respondent.
[10] The applicant was unemployed from 2000 to 2002 due to a disability as she was diagnosed with bipolar disorder, and received $800 per month from her previous husband along with an equalization payment of $23,800. She had a $17,000 GIC at the beginning of her relationship with the Respondent. She believes these funds were used to pay for household expenses.
[11] She completed two years of a three year Bachelor of Philosophy degree. She stated that since her support from her first husband was to end in 2004, she returned to school in 2002 and completed a two year diploma in Information and Library Sciences at Algonquin College in 2004.
[12] The Applicant has purchased a new home where she resides with her new partner. The Applicant received $120,000 from her father and $80,000 went towards the purchase of her new home. She considers this a debt which will be accounted for in any inheritance. The Applicant’s current partner pays for half of the household expenses but she is solely responsible for the costs of her psychologist.
[13] The Respondent was briefly a teller at Canada Trust at the time of cohabitation. Three months later, he became a financial advisor. He eventually pursued training through an employer and became a certified financial planner.
[14] The Respondent currently works for MD financial management and his income is $120,000 per annum.
[15] The parties entered into an interim without prejudice separation agreement dated January 21, 2015 in which the Respondent agreed to provide postdated support payments of $1,500 for five months from February 1, 2015 to June 1, 2015.
[16] The Ronson Road property was purchased by the parties in 2000. The interim separation agreement provided that the Respondent bought out the Applicant’s interest in the property. The Respondent resides there with his new partner who earns $57,637 per annum.
[17] The Respondent’s income has been:
2011: $ 82,846;
2012: $ 96,330;
2013: $ 99,846;
2014: $117,827; and
2015: $120,175.
[18] When the Applicant was diagnosed with bipolar disease in 2000, it affected her ability to work on her financial affairs and hence she transferred all responsibility for the finances and budgeting to the Respondent.
[19] The Respondent was involved in the negotiation of the equalization payment with the Applicant’s ex-husband and helped her finalize the division of property from the marriage. She received her equalization payment in 2002 and correspondence her lawyer at the time was addressed to her and the Respondent.
[20] The Applicant provided him with all her pay cheques that were used to pay expenses. They enjoyed vacations together during their cohabitation. The parties became very intertwined in their finances.
[21] The Applicant is asking for retroactive support to January 1, 2015, which allows him to claim the tax deduction and he can obtain credit for any payments.
Applicant’s position
[22] The Applicant states that after a 16 year relationship, her entitlement is based on need and compensatory elements in accordance with Bracklow v. Bracklow, 1999 715 (SCC), [1999] 1 S.C.R. 420, [“Bracklow”].
[23] Regarding compensatory support, she outlines the history of the parties. At the beginning of their relationship in 1998, they were both bank tellers at the same bank but he soon went on to become a certified financial planner.
[24] She submits that spousal support from her first husband ended in 2004 due to her new relationship with the Respondent. She admits that there is no direct evidence on this point.
[25] In addition, the Applicant submits that support is also needs-based. Mrs. Bracklow was involved in a seven-year relationship and she suffered from a mental illness resulting in an impairment and employability. The Applicant was involved in a 16 year relationship and made significant contributions.
[26] Their financial relationship was intermingled and cannot be easily unraveled. For example, in the 2001 schedule to the draft (unsworn) financial statement used in her first separation, she states that she shares expenses with the Respondent.
[27] There is no merit in the argument “once a bank teller always a bank teller” as suggested by the Respondent.
[28] His investments have increased from the date of separation from $158,000 to $188,000 and he has a monthly surplus of approximately $2,400 which will allow him to pay in the high range of the SSAGs.
[29] She submits that his bonus is part of his salary and his paystub ending July 2016 is $84,000, suggesting that he will earn $12,000 per month this year. She submits that the bonus is part of his employment package, which should be considered as income for the purpose of determining spousal support.
Respondent’s position
[30] The Respondent submits that the Applicant has failed to show that she has a prima facie entitlement to spousal support either on a compensatory or non-compensatory basis. There is a credibility issue as there are inconsistencies in her financial statement, she overstates her expenses and some of her household expenses have decreased.
[31] At questioning, she was vague and did not remember details.
[32] There is no basis for compensatory support as she did not contribute to his salary nor did she suffer economic loss.
[33] Her current income of $33,000 a year is the highest income she has ever earned.
[34] There is no evidence that spousal support ended because of a relationship with the Respondent. She obtained employment in 2004 because she knew spousal support was ending.
[35] They jointly own the Ronson property and he concedes that it is likely that her equalization payment and GIC went to household expenses.
[36] A disparity of income does not automatically entitle someone to spousal support. As per Farrar v. Farrar, 63 O.R. (3d) 141, 2003 15943 (ON CA), income difference is not a basis for spousal support.
[37] Even if she is entitled, she has not demonstrated need. She lives with her new partner who shares household expenses, is living in a larger home, drives a 2006 Cadillac and her debts are not increasing despite a reported monthly deficit in her financial statement.
[38] Her financial statements show various debt loads: her first financial statement dated August 17, 2016 showed debts of $205,000; her second financial statement dated August 15, 2016 showed $105,000 in debts; and her August 26, 2016 financial statement showed debts of $199,000 which includes a debt of $94,000 she owes to her father and will be deducted from her inheritance.
[39] She indicates that she receives $1,800 per month from her father but there are only two deposits in the bank accounts but states that he gives her cash at times.
[40] In the alternative, if entitlement is found and need is shown, then spousal support should be based on his base income of $90,000 as it is non-compensatory support. Support should be paid on the low end.
[41] His bonus is dependent on performance and she should not share those bonuses as she is not entitled to compensatory support.
Legal principles
[42] The relevant portions of the Family Law Act, R.S.O. 1990, c. F.3, s. 33, are reproduced below:
An order for the support of a spouse should,
(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;
(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and
[43] Section 33(9) directs the court when dealing with the determination of amount for support of spouses. The relevant sections are reproduced below:
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,
(a) the dependent’s and respondent’s current assets and means;
(b) the assets and means that the dependent and respondent are likely to have in the future;
(c) the dependent’s capacity to contribute to his or her own support;
(d) the respondent’s capacity to provide support;
(e) the dependent’s and respondent’s age and physical and mental health;
(f) the dependent’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;
(g) the measures available for the dependent to become able to provide for his or her own support and the length of time and cost involved to enable the dependent to take those measures;
(h) any legal obligation of the respondent or dependent to provide support for another person;
(i) the desirability of the dependent or respondent remaining at home to care for a child;
(j) a contribution by the dependent to the realization of the respondent’s career potential;
(k) Repealed: 1997, c. 20, s. 3 (3).
(l) if the dependent is a spouse,
(i) the length of time the dependent and respondent cohabited,
(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,
(iii) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,
(v.1) Repealed: 2005, c. 5, s. 27 (12).
(iv) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and
(m) any other legal right of the dependent to support, other than out of public money. R.S.O. 1990, c. F.3, s. 33 (9); 1997, c. 20, s. 3 (2, 3); 1999, c. 6, s. 25 (6-9); 2005, c. 5, s. 27 (10-13).
[44] In Bracklow at para. 1, the Court asked itself the following question:
What duty does a healthy spouse owe a sick one when the marriage collapses? It is now well-settled law that spouses must compensate each other for foregone careers and missed opportunities during the marriage upon the breakdown of their union. But what happens when a divorce -- through no consequence of sacrifices, but simply through economic hardship -- leaves one former spouse self-sufficient and the other, perhaps due to the onset of a debilitating illness, incapable of self-support?
It continued at para. 30:
The mutual obligation theory of marriage and divorce, by contrast, posits marriage as a union that creates interdependencies that cannot be easily unravelled. These interdependencies in turn create expectations and obligations that the law recognizes and enforces.
[45] Chief Justice McLachlin, held that there were three bases of support: compensatory, dependence-based and contractual. If a party is not able to satisfy one of these types of support, then he/she is not entitled to support.
[46] In Farrar, the Ontario Court of Appeal held that a person was not entitled to support simply because their spouse earned more income. In that case involving a 10 year marriage, the husband was receiving an annual income of $37,000 from various pensions and the wife was working and earning $74,000 per year. In this case, both spouses were economically independent during the marriage. The parties benefitted from the other party’s resources but neither party was dependent on the other spouse to maintain their enjoyed lifestyle. There was no economic dependence.
[47] As stated in Charbonneau v. Charbonneau, 2004 47773 (ON SC), 9 R.F.L (6th) 67, at para 15, interim support is a short term remedy to ensure that the Applicant has sufficient means to maintain a reasonable lifestyle until the trial is heard. The court need not embark on a full inquiry.
Analysis
[48] In this case, the Respondent earns substantially more than the Applicant. However, as the Courts have noted on many occasions, a mere income disparity does not mean that there is an entitlement.
[49] The Court must consider the factors set out in the Family Law Act and consider s. 33 (a) and (c) which are relevant:
(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;” and
(b) “(c) make fair provision to assist the spouse to become able to contribute to his or her own support.”
[50] The Applicant at this interim stage has not provided a compensatory element to her support. She has not proven any economic disadvantage from the marriage as a result of her role that she adopted during cohabitation nor has she shown that the Applicant conferred any advantage to the Respondent.
[51] However, the court finds that the Applicant has shown a prima facie entitlement to spousal support based on need. The Applicant was financially dependent on the Respondent to maintain her lifestyle during cohabitation. During the relationship, the Applicant suffered from a disability for which she was hospitalized. The Respondent admitted that: he handled finances; she had access to the joint account; and he took the money and transferred it to another account for household expenses. He was the higher income earner and the evidence indicates that their finances were intertwined and she was financially dependent on him.
[52] Interim support is being awarded to recognize the pattern of economic dependence which developed during the parties’ cohabitation.
If she is entitled, what is the appropriate interim amount?
[53] In determining entitlement, the Court has considered the length of the relationship. It was a 16 year relationship which is a relatively long relationship. She has demonstrated need in her budget and shows a shortfall on her monthly budget. The evidence indicates that she receives money from her father and her partner pays for half of some of the household expenses and to that extent, her need is decreased due to his contribution.
[54] As this support is needs-based, the Court must take into account all resources available to the Applicant and assess her needs. She has an expense of $682.50 per month for a psychologist which is not covered by any plan. Her current partner does not share in this cost.
[55] The Applicant is taking medication that is covered by the parties’ health plans. She is seeing a psychiatrist and psychologist. She earns an income as high as it ever has been. But her income is significantly lower than the Respondent’s and is not enough to allow her to be completely self-supporting.
[56] The Court considers the factors set out in section 33(9) of the FLA: her needs, her lifestyle, her re-partnering, conflicting evidence regarding her debts, her budget which does not include any discretionary spending, and her psychological bills of $682.50 per month.
[57] The Applicant is making reasonable efforts to become self-sufficient and is earning as much as she had in the past 10 years.
[58] On an interim basis, the Court is addressing her interim needs rather than providing an in depth analysis of comparing standards of living. The scope of the inquiry at an interim stage is more summary in nature than at a full trial. It is not concerned with discretionary spending such as vacations and entertainment.
[59] The Applicant shows a deficit position in her budget but no apparent increase of her debt load. She does receive financial assistance from her father but the evidence is not clear on this issue.
[60] The Applicant’s current budget is modest with discretionary spending for entertainment, gifts or clothing.
[61] The Court finds that the Respondent has the ability to pay. His financial statement shows a surplus, discretionary contribution to a registered pension plan (in addition to his employment pension plan), and contribution to the household of $810 per month from his partner.
[62] The Respondent’s financial statement shows a monthly income of $10,000 and monthly expenses of $8,400. Therefore he has a surplus of $1,600 per month and with his current new partner’s contribution of $810 per month, he has a surplus of $2410 per month. His surplus has manifested itself by an increase in his investments since separation. In fact, his budget shows that he contributes $650 per month voluntarily to a registered pension plan.
[63] The Respondent’s bonus is a consistent part of his income and should be considered as part of it when determining spousal support on an interim basis.
[64] The Court finds that a figure on the low range of spousal support of the SAGGs is the reasonable amount for the Applicant to receive on an interim basis pending trial in this matter. This is based on her re-partnering, her income, her needs and the length of the relationship.
[65] A low range of $1,711 per month would provide her with an after tax benefit of $968 per month which will meet her psychological fees and assist her in her deficit position until trial.
[66] Therefore, the appropriate level of spousal support at an interim stage should be $1,711 per month, commencing September 1, 2016. The Applicant has a right to make her retroactive claim at trial.
Should life insurance be ordered?
[67] As security for this support payment, the Respondent must designate the Applicant as irrevocable beneficiary of his life insurance policy of $250,000 and provide proof of the same within 30 days from the date of this Order.
[68] If the parties cannot agree on costs, the Applicant is to provide her two page submissions along with any relevant offers to settle and bill of costs by October 3, 2016 and the Respondent is to provide his two page submissions along with any relevant offers to settle and bill of costs by October 17, 2016.
Madam Justice A. Doyle
Date: September 19, 2016
CITATION: Casas v. Lajoie, 2016 ONSC 5731
COURT FILE NO.: FC-16-685
DATE: 2016/09/19
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Isabel Casas, Applicant
AND
Michel Lajoie, Respondent
BEFORE: Justice A. Doyle
COUNSEL: Wade Smith, for the Applicant
Cecil J. Lyon, for the Respondent
HEARD: September 6, 2016
ENDORSEMENT
Madam Justice A. Doyle
Released: September 19, 2016