CITATION: Kelly v Kelly, 2016 ONSC 6476

COURT FILE NO.: FC-16-842

DATE: 2016/10/21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Penny Marie Kelly, Applicant

AND

Hasbrooke Charles Kelly, Respondent

BEFORE: Justice Marc R. Labrosse

COUNSEL: Julie Audet, Counsel, for the Applicant

Tanya C. Davies, Counsel, for the Respondent

HEARD: October 13, 2016

ENDORSEMENT

Overview

[1] The Applicant brings this motion for interim spousal support retroactive to March 1, 2016 and also seeks orders for the Respondent to maintain the Applicant as the beneficiary of his life and health insurance benefits. The Respondent brings a cross-motion for the sale of the jointly owned matrimonial home in which he resides.

[2] At the commencement of the motion, the Respondent withdrew his cross-motion for the sale of the matrimonial home. He also consented to an order that the Applicant be maintained as a beneficiary of the existing life insurance policies (if an interim spousal support order was made) and consented to an order that the Applicant be maintained as a beneficiary of the existing health and dental insurance available through his employment.

[3] The Applicant acknowledged as part of her financial statement sworn on April 1, 2016, that the amounts set out for repairs and maintenance in the amount of $1,500 per month together with the monthly house insurance premium of $172.32 should be removed as monthly expenses. However, she also consented to an order that she obtain her own insurance for the house on Walkley Road where she resides. If that is ordered, a similar expense would remain in her budget. Further, with respect to self-employment income, the Applicant acknowledged that her self-employment income of $38,631 per annum should be grossed up by $5,000 to account for business expenses written off that have a personal benefit aspect to them in order to comply with the method for calculating income pursuant to the Child Support Guidelines.

Evidence

[4] The affidavit evidence filed by the parties leaves me with no doubt that the Applicant has a strong compensatory claim for spousal support. The evidence before me does not support the Respondent’s contention that the Applicant had the opportunity to work during the marriage and that she chose to remain at home. In the absence of more compelling evidence, I can only conclude that this was a family decision. There is no credible evidence that would diminish the strength of the Applicant’s compensatory entitlement to spousal support.

[5] As far as the non-compensatory claim, her financial statement demonstrates that she has taken steps to live responsibly on her available income with lesser amounts spent on restaurants, travel and recreation\leisure activities. If she had included some of these expenses in the amounts found in the Respondent’s financial statement, the Applicant may well have demonstrated a greater non-compensatory entitlement to spousal support as a result of monthly budget deficits. These matters can be dealt with at trial.

[6] The Respondent has chosen to remain in the matrimonial home and as a result incurs more expenses to maintain this property. He has done so in part to offer a place to live to two of their adult daughters and he claims to charge them no rent although they are employed. He also pays for some of their expenses such as food.

[7] Much of the Respondent’s focus was on joint debts and his assumption of those debts. He focuses on the monthly payments of $1,628 associated with the matrimonial home which he calls the “joint line of credit”. However, the facts demonstrate that this line of credit is comprised of the base mortgage on the matrimonial home together with a debt of approximately $70,000 which was the consolidation of the debts of both the Applicant and Respondent. It was added to the base mortgage on the matrimonial home. As such, I do not accept that the full monthly payment of $1,628 represents a payment towards joint debts given as the Applicant is making her own mortgage payments on the house on Walkley Road where she resides.

[8] It is the evidence of the Applicant that the interest portion of the monthly costs associated with the joint line of credit is $300 per month and has to date been paid solely by the Respondent. The Applicant acknowledges this amount and consents to her monthly spousal support entitlement being reduced by $150 per month to account for the interest on the joint line of credit.

[9] The Respondent also focuses on a series of voluntary payments he has made for the Applicant since the date of separation whereby he paid off credit card debts and the mortgage on Walkley Road. He claims to have spent significant amounts from an inheritance to support the Applicant’s spending habits since the date of separation and he allowed her full access to his income. The evidence demonstrates that the Respondent’s ongoing voluntary payments made to the Applicant have delayed the need for any spousal support claim.

[10] The Respondent has demonstrated by his evidence that he has been through challenging times since the date of separation in dealing with prostate cancer, depression and recently heart problems. The Respondent has been placed on permanent disability, effective 2015. He was asked by his insurer to apply for CPP benefits which he receives and which are taxable. He states that his current income is $45,645 per annum (non-taxable) and $14,155 in taxable CPP benefits.

[11] The Applicant advances that for the purposes of calculating spousal support pursuant to the Spousal Support Advisory Guidelines (SSAG), the Respondent’s income is $13,988 in taxable CPP benefits, $11,648 in employer RRSP contributions and $45,832 in non-taxable disability benefits. While the figures vary slightly with those of the Respondent, the Respondent did not dispute at the motion that for the purposes of SSAG calculations, the Respondent’s income should be $88,171.

[12] With respect to the Applicant, she states that she has no particular skills to allow her to be gainfully employed in the workforce as a result of her many years of being a stay-at-home mother. She has been able to find a niche working as a senior’s advocate however this work provides no security, benefits or pension. For the purposes of SSAG calculations, the Applicant states that her income is $45,100 as per the DivorceMate calculations provided. The Respondent did not challenge that amount.

[13] The Applicant provided DivorceMate calculations based upon her income figures for the parties which provided a low range of spousal support of $1,346 (Percent of NDI 48.6% Respondent – 51.4% Applicant), a mid-range of $1,570 (Percent of NDI 46.1% Respondent – 53.9% Applicant) and a high range of $1,792 (Percent of NDI 43.5% Respondent – 56.5% Applicant).

The Law

[14] The general principles which govern an award of interim spousal support are straightforward. While the Court is to have regard to the factors set out in s. 15.2 of the Divorce Act, 1985, c. 3 (2nd Supp.), it is accepted that an interim spousal support motion does not benefit from the evidence which will be available at trial. As such, the Court must fix an amount which it deems to be reasonable in the circumstances.

[15] While the evidentiary record is sometimes limited at the interim stage, the interim order should still look to recognize the economic advantages or disadvantages arising from the marriage or its breakdown, relieve economic hardship of the spouses arising from the breakdown of the marriage and still seek to promote self-sufficiency.

[16] The Court should also seek to allow the parties to maintain the standard of living to which they were accustomed during the marriage.

[17] It is well established that interim support motions are not intended to involve a detailed examination of the merits of the case. Orders for interim support are based on a triable or prima facie case: see Knowles v. Lindstrom, 2015 ONSC 1408 at para 8.

[18] Where the applicant is able to put forward a good arguable case, the Court will assess support on the basis of the parties’ needs and means using a four-step analysis:

(a) Does the Applicant have standing to claim support?

(b) Is the Applicant entitled to support?

(c) What are the dependent’s needs?

(d) Does the payer have the ability to pay?

(see Robertson v. Hotte, 1996 CarswellOnt 1506 at para 7)

[19] It is also well established that in assessing the appropriateness of an interim spousal support award, consideration should be given to the payment by one party of joint debts. Where the payor makes such payments, these will reduce the Respondent’s means and also the Applicant’s needs: see Joyce v. Joyce 2015 ONSC 4311.

Analysis

[20] The evidence which is relevant to the present request for interim spousal support is not conflicting. The parties had a traditional marriage where the Applicant was the stay-at-home parent and the Respondent worked. They cohabitated for approximately 26 years. Throughout the marriage, the Applicant stayed at home on a full-time basis to fulfill household duties and raise the parties’ three children. Until about one year before the end of their marriage, the wife never worked outside the home.

[21] It is clear that with the Applicant at home caring for the children, the Respondent was able to focus on his career working full-time as a director for Innovapost and earning approximately $170,000 until September 2013 when the Respondent was diagnosed with prostate cancer.

[22] While there is a dispute as to the date of separation, being either April 2011 or March 2012, it is of no moment for the purposes of this decision. Further, much of the conflicting evidence relates to the payments made by the Respondent and the decisions made to the benefit of the Applicant which pre-date the period for which spousal support is being sought. These are matters which will be dealt with by the trial judge.

[23] The present claim for interim spousal support is made retroactively to March 2016. The evidence suggests that this was the time where the Respondent decided to stop allowing the Applicant to have access to his funds. This dispute is associated with a series of financial decisions made by the Respondent while he claims he was ill. The period of retroactivity is also impacted by the Respondent’s support of the two adult children who have been residing with him. He has chosen to have them reside with him and to pay for some of their expenses. While this may be a noble decision on his part, the decision to allow them to live rent-free as independent working adults and to pay some of their expenses may have been different in the face of an interim spousal support order. As such, I have decided to leave the issue of retroactivity to the trial judge to determine based on a complete record. My order will be effective November 1, 2016.

[24] When considering the four-step analysis set out in Roberson v. Hotte, there is no doubt that the Applicant has standing and that she has an entitlement to spousal support which is compensatory and likely also non-compensatory. She remained out of the workforce for over 20 years and was not able to make advances in the workforce. While she has secured work which is very close to being full-time, it depends on her ability to maintain clients and as a sole proprietor, there is little or no security in place for her future.

[25] As for the non-compensatory aspect of her claim, this will have to be considered more closely at trial however, I am satisfied that the Applicant has made out a triable case for non-compensatory support. The parties clearly enjoyed a comfortable lifestyle during their marriage and the Applicant has been forced to simplify things greatly, at least since March of 2016.

[26] With respect to the Applicant’s needs, her budget as adjusted during this motion suggests that she is close to breaking even between her available income and expenses. However, I accept the submissions of her counsel that this is only to allow her to break even on her expenses and does not account for her need to establish security for herself into the future. Further, there are normal items in her budget for which her spending is significantly lower than the Respondent such as restaurants, travel and leisure which may not reflect the lifestyle she enjoyed with the Respondent.

[27] Finally, I am able to conclude that the Respondent has the ability to pay. He may need to make some changes in his life with respect to the carrying costs of the matrimonial home and the support he provides to his two adult children who reside with him, however I am satisfied that he has the ability to pay given his income of $88,171 for spousal support purposes. I also do not accept that the full amount of the mortgage and line of credit payments should be considered as the payment of a joint debt for the Applicant. Only the line of credit portion should be considered and the Applicant has indicated that she is prepared to reduce her spousal support entitlement by $150 per month to account for her contribution to the interest owing on the joint debt. While this may not account for the Respondent’s contributions to the principal portion of the joint debt, this can be adjusted for at trial.

[28] In the end, I conclude that the Applicant is entitled to an order for the payment of interim spousal support. When I consider the appropriate range, while the applicant advocates for the high end of the range, I am of the view that the proper amount is $1,500 per month less the $150 per month the Applicant should contribute to the interest on the line of credit. While many of the expenses the Respondent claims may have been for the Applicant, these were voluntary payments made post-separation. I do accept that the Respondent’s expenses are higher and the Applicant’s reasonable lifestyle will allow her to manage properly on an amount which is at the lower end of the range.

[29] As such, I set the amount of interim spousal support at $1,350 per month. When the issues surrounding the matrimonial home and the line of credit are resolved, the spousal support should return closer to the mid-range at $1,500 per month.

Disposition

[30] For the reasons set out above, I hereby order:

(a) the Respondent shall pay monthly interim spousal support to the Applicant starting on November 1, 2016 in the amount of $1,350;

(b) the issue of retroactive spousal support is left to the trial judge;

(c) the Respondent will maintain the Applicant as the beneficiary of his available life and health benefits; and

(d) unless the parties agree otherwise, the Applicant will secure her own house insurance for the property on Walkley Road in the City of Ottawa.

Costs

[31] While the Applicant was substantially successful on her claim for interim spousal support, there may be offers which are relevant for the purposes of costs. Consequently, if the parties are unable to agree as to costs, the Applicant will have 15 days to provide written costs submissions of a maximum of 3 pages in length excluding attachments. The Respondent will then have 15 days to respond, subject to the same limitations for length of the written submissions.

Justice M. Labrosse

Date: October 21, 2016

CITATION: Kelly v Kelly, 2016 ONSC 6476

COURT FILE NO.: FC-16-842

DATE: 2016/10/21

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Penny Marie Kelly, Applicant

AND

Hasbrooke Charles Kelly, Respondent

BEFORE: Justice Marc R. Labrosse

COUNSEL: Julie Audet, Counsel, for the Applicant

Tanya C. Davies, Counsel, for the Respondent

HEARD: October 13, 2016

ENDORSEMENT

Justice M. Labrosse

Released: October 21, 2016