Citation: Struthers v Struthers, 2016 ONSC 7063
COURT FILE NO.: 16-022(M1)
DATE: 2016 12 07
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: BEVERLY ANN STRUTHERS, Applicant
AND:
RONALD HAROLD STRUTHERS, Respondent
BEFORE: Emery J.
COUNSEL: Neil J. Arnold, for the Applicant
Ross H. Thompson, for the Respondent
HEARD: October 21, 2016 at Owen Sound
Endorsement
[1] Life at one time was very different for Ronald Harold Struthers. At one time he had the income from his ownership and operation of a gold mining company that afforded himself, his wife, Beverly Ann Struthers, and their family a life of comparative luxury.
[2] Mr. and Mrs. Struthers separated in 2010. After he and Mrs. Struthers separated, they entered a separation agreement and an amendment agreement to that separation agreement. These agreements were followed by an application that resulted in a final order granted, on consent, by Justice Conlan on May 5, 2014.
[3] Mr. Struthers has brought a motion to change the final order of Justice Conlan to terminate the spousal support he is required to pay Mrs. Struthers. He also seeks an order fixing the amount he is required to pay for outstanding arrears, and an order setting the monthly amount he is to pay towards that outstanding indebtedness.
[4] Mr. Struthers has brought the motion to change because his fortunes have changed over time. He seeks an order from this court to change his court ordered obligations in a commensurate manner.
[5] Unfortunately, changing court ordered obligations is not that simple.
Nature of the Motion and Background
[6] Within the motion to change, Mr. Struthers brought a separate motion returnable in Walkerton on October 19, 2016. That motion was not reached due to the length of the list that day. With the consent of counsel, the motion was traversed to Owen Sound and heard on October 21, 2016.
[7] The motion requested essentially the same relief as the orders requested in the motion to change. Proceeding in this manner was essentially asking the court for summary judgment. However, the motion was not framed or argued as a motion for summary judgment under Family Law Rule 16. Further, neither party filed a factum or a statement of fact and law. These are but two of the reasons why I consider Mr. Struthers’ motion to seek interim relief only, and not a final disposition of the motion to change itself.
[8] Some brief facts are in order. Mr. Struthers and Mrs. Struthers were married on December 30, 1983. They separated on March 30, 2010. They had three children who are now all over 18 years of age.
[9] Mr. Struthers and Mrs. Struthers entered into a separation agreement dated December 17, 2010. The separation agreement required Mr. Struthers to pay $2,500.00 a month to Mrs. Struthers for spousal support. That spousal support was to be indexed.
[10] Mr. Struthers was to pay child support for the youngest child, Jaclyn, in the amount of $400.00 a month commencing December 1, 2010. He was also to be fully responsible for the full costs of post-secondary education for all three children.
[11] The separation agreement also provided that the matrimonial home be listed for sale. Once the home was sold, Mr. Struthers was to receive $15,000.00 from the net proceeds.
[12] The separation agreement provided for other aspects of the financial settlement between the parties. The settlement included a term that Mr. Struthers would pay an equalization payment to Mrs. Struthers in the amount of $204,000.00 over time, and that Mrs. Struthers would be entitled to retain all but $15,000.00 of the net proceeds from any sale of the matrimonial home.
[13] The parties entered into an amendment to the separation agreement dated February 21, 2012. The parties had not listed the former matrimonial home for sale, as Mrs. Struthers would ultimately keep it as her home. The parties acknowledged in the amendment agreement that Mr. Struthers still owed Mrs. Struthers $70,000.00 for an equalization payment. They agreed to delete the payment of $15,000.00 that Mr. Struthers was to receive from the sale of the matrimonial home, thereby reducing the outstanding indebtedness he owed to $55,000.00.
[14] The amendments also provided that if Mr. Struthers did not pay the $55,000.00 on or before March 31, 2012, then interest would accumulate. The amendment agreement provided that Mrs. Struthers would take over the ongoing mortgage payments on the home but that Mr. Struthers would pay the insurance, property taxes and utilities.
[15] Mr. Struthers did not comply with the separation agreement, as amended, when he did not pay Mrs. Struthers the balance of the equalization payment. Therefore, Mrs. Struthers commenced an application dated September 5, 2012 to obtain judgment for the equalization payment of $55,000.00 against Mr. Struthers, an order that he comply with the life insurance provisions of the separation agreement, and an order requiring him to pay $2,000.00 in relation to the legal fees he agreed to pay.
[16] Mr. Struthers did not file an answer. He was served with a Notice to Applicant, Affidavit for Uncontested Trial and a draft order on January 30, 2014. He was also served with Notice of an Assignment Court to appear on February 3, 2014 to fix a trial date.
[17] On February 3, 2014, the matter was adjourned to a case conference on March 20, 2014 by Justice Thompson. Justice Thompson also ordered that Mr. Struthers attend at the case conference, failing which the order sought would be granted. Justice Thompson ordered Mr. Struthers to advise the court by letter to the trial coordinator as to what he did not agree with in the draft order.
[18] A case conference was held before Justice Conlan on March 20, 2014 and continued on May 5, 2014. The letter dated March 1, 2014 that Mr. Struthers wrote to comply with Justice Thompson’s order was before Justice Conlan at the time. On the second day of the case conference, Mr. Struthers reached an out of court settlement with Mrs. Struthers. The terms of that settlement were reduced to minutes of settlement. Those minutes of settlement were incorporated into Justice Conlan’s order dated May 5, 2014. This is the final order from which Mr. Struthers now seeks relief in his motion to change.
[19] Under Justice Conlan’s order dated May 5, 2014, the parties agreed, among other things, as follows:
a. Mr. Struthers would pay arrears of child support, arrears of post-secondary education costs and his contribution toward future post-secondary expenses for the children fixed in the total amount of $90,000.00 payable in various amounts by specific dates;
b. Spousal support was reduced to $1,500.00 per month, commencing May 1, 2014;
c. Any and all arrears of spousal support owing as at April 30, 2014 were rescinded; and
d. So long as the payments to satisfy the $90,000.00 owing were made, there would be no interest payable. If they were not paid, then interest would become due and payable from the date of the order.
[20] Since Justice Conlan made the final order, Mr. Struthers has paid Mrs. Struthers $8,500.00 directly, and she has received $6,671.25 through the Family Responsibility Office, for a total of $15,171.25. She states in her affidavit that Mr. Struthers is currently in arrears of child and spousal support in the amount of $117,470.00 as of August 1, 2016.
[21] Mrs. Struther has also given evidence that Mr. Struthers has resided with his common law partner, Evelyn Dutton, since December 2011. She deposes that he owns three boats and a 1974 Dodge Charger. She states that he has not provided proof that he has complied with the order of May 5, 2014 to irrevocably designate herself and the children as the beneficiaries of a life insurance policy.
[22] Mrs. Struthers further deposes that Mr. Struthers has gone on several trips, including to the Dominican Republic, St. Lucia, South Carolina, Vancouver and Florida on at least two occasions, the last occurring between February 5 and 25, 2016. Mrs. Struthers argues that these facts are evidence of Mr. Struthers’ disregard for his obligations under the final order, and evidence of a lifestyle that requires a greater income to support than Mr. Struthers has reported.
[23] Mrs. Struthers holds down two jobs to get by. She continues to be employed at both Tim Hortons and at the LCBO. Her income from both sources of employment totalled $22,265.00 in 2015.
[24] Mrs. Struthers has set out her own financial situation in an affidavit. Although she has $50,189.00 in her Royal Bank investment account, $13,091.00 in her Scotiabank accounts, and $40,869.00 in her Scotiabank investment account, the balance outstanding on her mortgage is currently $103,881.00. Her Royal Bank loan is now $14,054.00 and she has arranged a new Royal Bank loan in the amount of $3,000.00. She states that she continues to be in need of spousal support.
[25] Mr. Struthers gives a broader view of his financial circumstances to put his present situation in perspective. He retired from IBM in 2004. Prior to retiring, he started a newsletter regarding companies in the resource sector, particularly junior mining companies, called The Struthers Resource Stock Report. Following his retirement from IBM, he worked as a consultant for start-up mining companies. Together with other individuals, he founded a junior mining company called Paramount Gold. For assisting and securing the main asset of Paramount Gold in Mexico, Mr. Struthers received a total of one million shares in Paramount Gold, having a value of $20,000.00 at inception.
[26] Paramount Gold became a publicly traded company in August 2005. Initially, it traded for $0.50 USD per share. By the end of 2005, it was trading at $1.35 USD per share. Throughout 2006, Paramount Gold traded between $3.00 USD and $4.00 USD.
[27] After the share value of Paramount Gold rose in 2006, Mr. Struthers was suddenly a multimillionaire. He sold some of the Paramount stock and diversified into other junior mining companies. It was during this time that he and his family enjoyed a life of travel and luxury.
[28] In 2008, the price of shares in Paramount Gold dropped with the stock market. Paramount Gold ended the year with a stock value of $0.25 USD per share.
[29] Mr. Struthers swears in his affidavit that he was left with 200,000 shares at Paramount Gold. He liquidated this investment at the bottom of the market to continue to pay for the lifestyle he and his family had grown accustomed to.
[30] When Mr. Struthers and Mrs. Struthers separated in 2010, the value of assets between them had a net value of $408,000.00. Mr. Struthers agreed to pay Mrs. Struthers $204,000.00 through installments under the separation agreement. He also agreed to pay the mortgage, property taxes, insurance and utilities until that matrimonial home was sold.
[31] Mr. Struthers states that he sold off assets in 2010 and 2011 and paid Mrs. Struthers $134,000.00. He continued to liquidate various securities in 2011 to cover his obligations even though the market in the resources sector was falling.
[32] By 2012, he had a $50,000.00 tax bill and was still paying all of the expenses on the matrimonial home, together with monthly obligations of $2,500.00 for spousal support under the separation agreement.
[33] As a result of his poor financial situation, Mr. Struthers stopped paying the expenses of the matrimonial home in September 2012. During that time, he was living on his boat at the Owen Sound marina and shared a three bedroom apartment with his two oldest children in Toronto.
[34] In January 2013, Canada Revenue Agency froze all of his stock accounts and bank accounts and garnished money from them. This prevented him from selling any of his other investments.
[35] Mr. Struthers ultimately made a consumer proposal under the Bankruptcy and Insolvency Act and settled his debt with Canada Revenue Agency. The consumer proposal was finalized and agreed upon by all creditors on September 4, 2015. At the time of the consumer proposal, Mr. Struthers’ total assets had a value of $100,000.00, including a locked in RRSP with a value of $35,000.00 and an RRSP having a value of $5,000.00. He agreed to pay off the settlement established under his consumer proposal of $60,000.00 over five years at $600.00 per month, together with the payment of a lump sum of $25,000.00 at any time during that period.
[36] Pursuant to the minutes of settlement entered on May 5, 2014, the spousal support Mr. Struthers pays to Mrs. Struthers was reduced to $1,500.00 a month. However, he still had obligations to his children. Mr. Struthers states that “foolishly, I agreed to have the $55,000.00 equalization payment deemed child support so that it would survive my bankruptcy or any future bankruptcy and could be collected by the Family Responsibility Office.”
[37] Mr. Struthers is now seeking to obtain a court order terminating the spousal support effective June 1, 2015, and that arrears be fixed and payable in the amount of $200.00 a month.
[38] Mr. Struthers filed his 2015 income tax return that shows that he had a gross professional income of $12,288.81, and RRSP income of $2,399.06. His net total income for 2015 at line 150 income is shown as $6,933.86.
[39] Mr. Struthers states that has he attempted to revive his business with a new website, but this new venture has not brought in much income.
[40] Mr. Struthers filed a further affidavit sworn on September 14, 2016. In that affidavit, Mr. Struthers states that his ability to travel between 2010 and 2012 is no reflection of his financial situation at the time. During those years, he was making the required payments to Mrs. Struthers and his financial situation was “much better than it is today.”
[41] Mr. Struthers also addresses various aspects of the evidence given by Mrs. Struthers about his financial circumstances and his places of residence in 2012 and 2013. I do not consider the evidence given by either party prior to the events leading up to the final order in 2014 to be as relevant as the facts made known to Justice Conlan at the case conferences on March 20 and May 5, 2014.
[42] The evidence of the income Mr. Struthers was earning that was placed before Justice Conlan on May 5, 2014 came in the form of the letter written by Mr. Struthers dated March 1, 2014. This letter was attached as an exhibit to the affidavit of Mrs. Struthers. In the letter, Mr. Struthers states that his income for 2012 was $9,760.00, and that his income for 2013 was projected to be $15,000.00 to $20,000.00.
[43] The letter that Mr. Struthers wrote to the trial coordinator dated March 1, 2014 was written as a direct response to an order of the court. In that letter, Mr. Struthers disagreed with the claim against him for the sum of $76,186.55. In that letter, he claims, among other things, as follows:
a. He is claiming financial distress as he is on the verge of bankruptcy with approximately assets of just $24,000.00 and a debt of approximately $205,000.00. Revenue Canada has seized or garnished all of his bank and brokerage account and any workplace where he pursues a livelihood
b. As of “this writing”, Mr. Struthers had taxes owing, credit card and credit line debt of $128,910.00 plus $76,186.55 that Mrs. Struthers was claiming.
c. His assets were composed of $23,938 in cash held in the accounts frozen by Revenue Canada, $5,811.00 in an RRSP and $28,442 in a LIRA.
d. His net income in 2012 was $9,760.20.
e. He estimates an income for 2013 between $15,000.00 and $20,000.00
[44] Mr. Struthers takes the position that he has substantially met his obligations to Mrs. Struthers under the separation agreement, as amended. Mr. Struthers submits that she has significantly more assets than himself at the present time. Mr. Struthers seeks relief from this court to alleviate the financial pressure brought upon him by his reversal of fortune.
Analysis
[45] There was no submission made by Mr. Struthers that Mrs. Struthers should be self-sufficient as a ground for the motion to change. His only focus is his drop in income. His drop in income is the ground he relies upon to argue there has been a material change in his ability to pay spousal support, as well as the amount and rate of payments against the outstanding indebtedness he owes. There is no issue that Mrs. Struthers is still in need of support.
[46] Mrs. Struthers takes the position that Mr. Struthers has not demonstrated material change to his circumstances in terms of income, assets or liabilities between the time he signed the minutes of settlement on May 5, 2014 and his present circumstances. Mr. Arnold also suggested that when looking at the lifestyle that Mr. Struthers leads, the court should impute to him an income equal to or greater than his income in May 2014.
[47] The starting point in any motion relating to a motion to change spousal support obligations under a final order is generally the Supreme Court of Canada decision in Willick v. Willick, 1994 CanLII 28 (SCC), [1994] 3 SCR 670. In Willick, the court defined a material change to be “a change such that, if known at the time, would likely have resulted in different terms.”
[48] In Carter v. Carter, (1991) 1991 CanLII 819 (BC CA), 34 R.F.L. (3d)1, Justice Proudfoot of the B.C. Court of Appeal framed the test for a material change as being “a change that is substantial, unforeseen and of a continuing nature.”
[49] This case is not a situation where either party has made a change that was not foreseeable or foreseen. In my view, the factors to consider on the evidence before this court are whether Mr. Struthers situation and circumstances have changed since May 5, 2014, and if so, if that change is substantial and of a continuing nature such that the court would make a different order today based on those circumstances.
[50] Mr. Thompson submitted that Mr. Struthers income for 2014 was $21,548.00, and that his income for 2015 was $6,932.00 net of deductions, and $14,851.15 on a gross basis. Mr. Thompson also submitted that Mr. Struthers income for 2016 was on par with his income in 2015.
[51] It would appear from the letter dated March 1, 2014 and attached as an exhibit to the affidavit of Mrs. Struthers that Mr. Struthers had a known income on May 5, 2014, of between $15,000.00 and $20,000.00, based on his 2013 income. This is comparable to his annual income for 2015 and 2016 of approximately $15,000.00 without deductions. Mrs. Struthers challenges the propriety of those deductions against income, arguing that they should not be deducted from his personal income for spousal support purposes. I cannot make a determination of this nature on the conflicting evidence contained in the affidavits of Mr. Struthers and Mrs. Struthers on this point. In my view, the propriety of those deductions will need a trial.
[52] The actual or imputed gross income of Mr. Struthers from which those deductions are taken will also require a trial. Mrs. Struthers makes reference in her affidavit to the following deposits to the bank account held by Mr. Struthers at Royal Bank shown on his bank statements:
a. $43,117.00 from April 23, 2014 to December 23, 2014;
b. $47,220.00 in 2015; and
c. $26,139.00 as of April 22, 2016
[53] I therefore conclude for the purpose of this motion for temporary relief that there has been no material change in Mr. Struthers’ circumstances from the income he earned in 2013. His 2013 income constituted the measurement of his annual income for the full year immediately preceding May 5, 2014.
[54] It is also important to remember that Mr. Struthers agreed to the terms of the final order made by Justice Conlan when he signed the minutes of settlement. The courts have held that an order made on consent is contractual in nature because of the underlying agreement of the parties to that order: Teitelbaum v. Dyson,(2000), 7 C.P.C. (5th) 356, affirmed at (2001) 2001 Canlii 32771 (Ont. C.A.). See also Royal Bank of Canada v. Korman, 2009 ONCA 590 (Ont. C.A.) at par. 15.
[55] If Mr. Struthers seeks a change to Justice Conlan’s order to alleviate the amount of outstanding child support or to amortize that capital amount into monthly payments, he has provided no evidence on this motion as a basis for changing the final order on contractual principles. Evidence of that kind will likely be met with evidence given by Mrs. Struthers of a conflicting nature. In that event, the court will require the parties to give viva voce evidence at a trial. This will enable the presiding judge to assess the credibility of the witnesses, and to weigh the evidence given to make the necessary findings of fact.
[56] The motion for temporary relief is therefore dismissed. I would expect counsel having the stature and experience of Mr. Thompson and Mr. Arnold to make earnest efforts to reach an agreement as to the costs of this motion. If necessary, Mr. Arnold shall have until December 16, 2016 to file written submissions if his client seeks costs. Mr. Thompson shall then have until December 23, 2016 to file responding submissions. All submissions shall consist of no more than 2 pages, not including any offer to settle or a bill of costs. No reply submission shall be permitted without leave. All submissions may be made by fax to my judicial assistant, Ms. Priscilla Gutierrez, at 905-456-4834 in Brampton.
Emery J.
Date: December 7, 2016.
CITATION: Struthers v Struthers, 2016 ONSC 7063
COURT FILE NO.: 16-022(M1)
DATE: 2016 12 07
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: BEVERLY ANN STRUTHERS, Applicant
AND:
RONALD HAROLD STRUTHERS, Respondent
BEFORE: Emery J.
COUNSEL: Neil J. Arnold, for the Applicant
Ross H. Thompson, for the Respondent
HEARD: October 21, 2016 at Owen Sound
ENDORSEMENT
Emery J.
DATE: December 7, 2016