CITATION: Kirvan v. Kirvan 2016 ONSC 7712
COURT FILE NO.: FC-12-2817
DATE: 2016/12/9
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mary Anne Kirvan
Applicant
– and –
Myles John Kirvan
Respondent
Gregory A. St. Marie, for the Applicant
Pam MacEachern, for the Respondent
HEARD: November 30, December 1–4, 2015, January 18, May 17–18, 2016
REASONS FOR JUDGMENT
Shelston J.
OVERVIEW
[1] The applicant and the respondent married in 1978, and had three children born in 1982, 1986, and 1988. The parties separated in July 1, 2009 and, over the past seven years, they have attempted to resolve their disputes arising from their marriage and subsequent separation without success.
[2] The issues for trial were:
(a) Is the applicant entitled to spousal support?
(b) If so, when should the support have started?
(c) What are the party’s respective incomes, taking into consideration the issues of double dipping, post-separation income, and the substandard mortality of the respondent and its effect on his income?
(d) What is the quantum and duration of support?
(e) Is a lump-sum spousal support order appropriate in these circumstances?
(f) If spousal support is ordered, should the court order the respondent to provide life insurance and, if so, in what amount?
(g) What is the equalization of the net family property?
(h) Should there be an unequal division of the parties’ respective net family property on the basis that any equal division would be unconscionable due to the valuation of the respondent’s pension? and
(i) Should costs be payable by one party and, if so, in what amount?
Applicant’s Position
[3] The applicant’s position on the issues are as follows:
(a) The respondent should pay the applicant spousal support commencing January 1, 2010 and on the first day of each month thereafter, in an amount that recognizes a marriage of 31 years, merger of their lives over time, and the principle that there should be an equal quality of living standard between them after 31 years of marriage;
(b) The respondent should pay to the applicant a lump-sum payment on account of spousal support arrears, retroactive to July 2009 to and including December 31, 2015, in an amount to be determined. This sum shall be payable to the applicant within 180 days of the date of the order, with interest pursuant to the Courts of Justice Act, R.S.O., 1990, c. C. 43;
(c) The spousal support order should be secured against the estate of the respondent;
(d) The respondent should provide life insurance coverage with a face value of $500,000 as security for spousal support, wherein the applicant shall be named as a revocable beneficiary which coverage shall be maintained as long as the applicant is entitled to spousal support;
(e) The respondent should pay the applicant an equalization payment of $116,831;
(f) The respondent should receive credit against that amount for what the applicant owes the respondent; and
(g) Costs.
[4] The respondent’s position on the issues are as follows:
(a) The applicant’s claim for retroactive spousal support and ongoing periodic spousal support should be dismissed;
(b) The respondent should be free to designate any person of his choice as the beneficiary of the Supplementary Death Benefit payable on the respondent’s death pursuant to the Supplementary Death Benefit Plan under the Public Service Superannuation Act;
(c) The applicant should pay the respondent the sum of $4,000 with respect to division of contents and the sum of $52,057.81 with respect to the transfer of the matrimonial home to the applicant, which is secured as a mortgage against her home at 422 Hamilton Avenue South, Ottawa;
(d) Upon payment of the sum of $56,057.81, the respondent shall consent to the discharge of the mortgage. The applicant shall be responsible for preparing and registering the documents necessary for this discharge and the costs with respect thereto;
(e) There should be no equalization payment owed between the parties; and
(f) Costs.
HISTORY OF THE MARRIAGE
[5] The parties met at Carleton University when the applicant was 19 years of age and the respondent was 20 years of age. The parties married on June 17, 1978 and separated on July 1, 2009.
[6] The parties graduated from the University of Ottawa law school in 1979 and were called to the Ontario bar in 1981. Upon graduation, both parties found contract positions with the Department of Justice in Ottawa. Then, in 1981, the respondent found employment at the research office in the Office of the Official Opposition (at the time, the Conservative Party of Canada). The respondent admits that this was a very busy job requiring working evenings but rarely on weekends.
[7] The applicant found employment with the Solicitor General as a policy analyst in the Young Offenders Directorate. She remained in that position until 1987. The applicant’s work engagements would require some evening work and weekends, as needed.
[8] The first child, Ryan, was born on February 16, 1982. The applicant went on maternity leave for 4½ months returning to her employment in the summer of 1982. The parties retained an in-home daycare provider who would arrive at the family home at approximately 8 a.m. on week days. The respondent would wait until that individual arrived before leaving for work. The applicant would leave for work earlier and would be home normally at 4 p.m. The respondent would come home in the evening and, at times, he was quite late.
[9] When Ryan turned three years of age, the parties switched to an outside daycare. It was a joint responsibility to drop Ryan off at daycare in the morning but the pickup was invariably done by the applicant because of her work schedule. Both parties were involved in caring for Ryan during this period of time based on their availability.
[10] When Ryan started school, the parties switched back to an in-home daycare. Both parties would go to work but it was the applicant who was to return home between 5 p.m. and 6 p.m. to care for the children. The respondent’s employment at the Department of Justice required that he work long hours that included evenings, as well as attending social functions, some of which the applicant would attend.
[11] In 1984, the respondent changed employment to work as a legislative assistant to the Solicitor General. He was responsible for House of Commons legislation and prepared the minister for question period. This job was very demanding, requiring more evening work and getting home later. He remained in this role until 1985, when he followed the Solicitor General to his new posting as the Minister of Revenue, becoming a senior policy advisor.
[12] The parties’ second child, Alexandra, was born October 21, 1986. The applicant was on maternity leave for approximately ten months. During this period of time, the parties moved homes to the applicant’s current residence, being the matrimonial home located at 422 Hamilton Avenue South, Ottawa, Ontario.
[13] In 1986, the respondent became a judicial affairs officer in the Department of Justice. The respondent typically worked past 5 p.m., but rarely on weekends. In 1988, he was asked to be the chief of staff to the new Minister of Justice. The respondent took on more responsibility, which resulted in him working many evenings and weekends. He remained in both positions until the summer of 1990.
[14] In 1987, the applicant moved from the Solicitor General’s office when she was promoted to Senior Counsel in the Youth Justice Branch at the Department of Justice. She remained in that position until 1997. As required, the applicant would occasionally work evenings. When she did, the respondent would watch the children.
[15] The third child, Anne, was born on May 3, 1988. The applicant went on maternity leave for six months and retained the same in-home daycare provider.
Period 1990 to 2003
[16] In August 1990, with the applicant’s support, the respondent left the Department of Justice as he could no longer maintain the hectic pace required for his position and wanted time to reflect about what his future would hold. He was tired and wanted a change. The respondent made inquiries as to what he would do with his career, including the possibility of seeking employment in private practice. He spent time with his parents, went on a trip, and spent good quality time with his three young children.
[17] After this short period of reflection, in February 1991, he joined the public service as a general counsel with the Federal-Provincial Relations office. This job permitted him to improve his French language skills while working normal hours of work. This employment lasted from 1991 to 1993.
[18] In 1991, the applicant was appointed Senior Counsel, Youth Justice, Criminal and Family Law Policy, Department of Justice, where she remained until 1997. This job required her to work normal business hours with occasional evening and weekend work.
[19] In January 1993, the respondent became the Deputy Chief of Staff to the then Prime Minister Campbell. The respondent describes this period of time as very chaotic, including having to work many evenings. That summer, the applicant and the children went to a family cottage. The respondent could not go because of his work requirements related to the 1993 election.
[20] After the 1993 election, the respondent returned to the public service as a senior advisor to the Associate Deputy Minister, Public Law at the Department of Justice. His hours of work were between 8:30 a.m. and 3:30 p.m. He remained in that position until 1994.
[21] From 1994 to 1998, the respondent became the General Counsel, Dispute Resolution Services at the Department of Justice. He described his hours of work as being normal, with weekend and evening work being the exception rather than the rule.
[22] In 1997, the applicant had a lateral transfer to the National Crime Prevention Centre as Senior Counsel at the Department of Justice and remained there until December 2003.
[23] From 1998 to 2003, the respondent was senior general counsel at Health Canada. After a number of years of a regular and normal work schedule, according to the respondent, his position at Health Canada was very demanding and required working evenings on a regular basis and on weekends when required.
[24] In the mid-1990s, the applicant considered applying for a judicial appointment to family court. She had an excellent reputation and both parties believed that she had a good chance of being appointed. However, the applicant decided not to pursue that career path based on a variety of considerations, including that she had started a new job at National Crime Prevention Centre at the Department of Justice, the respondent had started a new job at Health Canada, Ryan was in high school, and the girls were in elementary school. She did not consider it a good time to make such a significant change in her career. The respondent supported the applicant in that decision.
Period 2003 to 2016
[25] In 2003, both parties changed their employment. In December 2003, the applicant moved to Department of Public Safety and Emergency Preparedness. Unbeknownst to her, in 2008, her position was flagged for elimination. This was not brought to the applicant’s attention until 2011 or 2012.
[26] At the time of separation, the applicant had no chance of advancement as management was hoping to terminate her position and the positions of other senior managers were also being terminated.
[27] The applicant grieved in 2011 to 2012 about her pay scale. The matter was resolved. The resolution was that she would seek to find a job outside of Public Safety and Emergency Preparedness. Eventually, her employers decided to offer the applicant a retirement package which she accepted in 2014 and subsequently retired.
[28] In 2003, the respondent became the Assistant Deputy Minister of Justice in Business and Regulatory Law. The respondent admitted that the position was not as challenging and demanding as his position at Health Canada and that he spent less time at work, but maintained that he would work into the evenings on a regular basis at home.
[29] In 2007, he was appointed Associate Deputy Minister of Public Safety, which required the respondent to regularly work into the evenings and on weekends. During this period of time, the parties discussed retirement. All three children were in university. The respondent wanted to acquire two years of pensionable time for every year served, in case he ever became a deputy minister.
[30] In 2010, the respondent was appointed Deputy Minister of Justice and Deputy Attorney General of Canada. This position required the respondent to work from 7 a.m. to approximately 7 p.m. or 9 p.m. on weekdays and, normally, from approximately 9 a.m. to 3 p.m. on Sundays.
[31] In December 2010, there was an initial diagnosis that the respondent was suffering from a disease that was similar to Chronic Lymphocytic Leukemia (“CLL”). In April 2011, the diagnosis of CLL was confirmed. The respondent told the applicant in 2012 of this disease and that he intended to retire in 2012. The applicant was supportive of the respondent’s decision to retire in face of his illness.
[32] He decided to retire to refocus his life on family and friends, based on an anticipated shorter life expectancy. He retired on November 5, 2012. A medical report from Dr. Pierre Tessier, dated February 21, 2012, estimated that the respondent’s median survival from the time of diagnosis at age 56 in 2010 would be 14 years, or age 70.
[33] He did not work in 2013 and 2014.
[34] In 2015, he was appointed to the Board of Directors of Desjardins (the “Board”), where he was paid for attending board meetings and completing committee work. While on the Board, he suffered a mini-stroke. In April 2015, he suffered a stroke and was advised that he needed to have a valve in his heart replaced. He resigned from the Board, effective January 1, 2016, for health reasons. He earned $22,545.36 from Desjardins in 2015.
[35] In 2015 and part of 2016, the respondent worked for Health Canada. He anticipates that he will be paid $6,149 for work done in 2015 and paid in 2016. He earned $2,890.21 from Health Canada in 2016. He has no expectation to seek other employment based on his various health issues.
[36] The applicant continued working until May 2014, when she retired. After separation, her health deteriorated. She saw a psychologist and a therapist. She started having stress-related illnesses, including a twitch in her face and in her eye, and irritable bowel syndrome.
[37] In 2016, the respondent had pension income from his public service pension, as well as pension income from a Deputy Minister’s pension plan and his Canada Pension Plan. The Deputy Minister’s pension was based on his service from April 2010 to November 2012.
EQUALIZATION OF THE NET FAMILY PROPERTY
[38] The applicant admits that she owes the respondent the sum of $57,557, representing $52,057 for the respondent’s interest in the matrimonial home, $4,000 related to the contents, and $1,500 regarding a Royal Bank account. The applicant submits that this amount is to be deducted from any equalization payment owed by the respondent to the applicant.
[39] Prior to calculating the Net Family Property, there are five property issues that must be decided. They are as follows:
(a) Is the respondent’s at-risk performance pay “property” within the meaning of the Family Law Act, R.S.O. 1990, c. F.3, and, thus, to be included in the calculation of the respondent’s Net Family Property?
(b) Is the applicant entitled to claim a disposition cost of $3,000 as a liability in respect of capital gains on vacant property?
(c) What is the applicable tax rate to be applied as a disposition cost with respect to the parties’ respective pension and register retirement saving plans tax liability?
(d) What is the appropriate tax rate to be used with respect to the notional costs with respect to the parties’ severance pay? and
(e) What is the value of each party’s pension?
Respondent’s “At-Risk” Performance Pay
[40] In October 2007, the respondent was appointed Associate Deputy Minister of Public Safety. In 2010, he was appointed Deputy Minister of Justice and Deputy Attorney General of Canada. Deputy ministers and associate deputy ministers were entitled to, as part of the remuneration, an “at-risk” performance pay. The pay would be determined by the Clerk of the Privy Council, who would undertake, through a committee, an evaluation of each Deputy Minister and Associate Deputy Minister to determine if they were entitled to an “at-risk” performance pay. The decision to award such pay was wholly discretionary. There was no statutory or contractual entitlement to such pay.
[41] The respondent received “at-risk” performance pay in the fall of 2008. At the date of separation on July 1, 2009, the process to determine if the respondent was entitled to any such future pay had not yet commenced.
[42] The applicant argues that the sum of $51,204 should be included as an asset of the respondent on the date of separation. She calculates that amount as follows:
(a) $29,400 received by the respondent in October 2009 as “at-risk” performance pay for the fiscal year ending March 31, 2009;
(b) $7,925, representing one quarter of the total of $31,700 received by the respondent for the “at-risk” performance pay for the fiscal period ending March 2010; and
(c) $13,879.95, representing a retroactive pay adjustment received by the respondent in November 2010.
[43] The applicant also argues that, since she included, in her assets as of the date of separation, an arbitration award of $18,892 representing a retroactive pay adjustment and a compensatory payment of $64,584 related to a grievance filed in 2009, the respondent’s “at risk pay” should also be included.
[44] The respondent opposes any inclusion of the “at-risk” performance pay. He says the decision to award such a performance pay was in the absolute discretion of the Prime Minister, who acted upon advice from the Clerk of the Privy Council. The respondent argues that, since he was not entitled to such a performance pay at the time of separation and the award was received months after separation, then the “at-risk” performance pay was not an “asset” owned by the him on the date of separation.
[45] Was the “at-risk” performance pay “property” of the respondent on the date of separation?
[46] Subsection 4(1) of the Family Law Act defines “property” as follows:
“property” means any interest, present or future, vested or contingent, in real or personal property and includes,
(a) property over which a spouse has, alone or in conjunction with another, a power of appointment exercisable in favour of himself or herself;
(b) property disposed of by a spouse but over which the spouse has, alone or in conjunction with another person, a power to revoke the disposition or a power to consume or dispose of the property, and
(c) in the case of a spouse’s rights under a pension plan, the imputed value, for family law purposes, of the spouses interest in the plan, as determined in accordance with section 10.1, for the period beginning with the date of marriage and ending on the valuation date.
[47] In Marquardt v. Marquardt (1996), 19 O.T.C. 69 (C.J.), at para. 13, Perkins J. stated:
I think it is stretching the definition of “property” in s. 4(1) of the Family Law Act to conclude that something that did not exist and to which the husband had no right at the time of separation should be considered his property, as of separation, merely because the method of calculating his entitlement to severance some 16 months later includes time during which the parties were married and living together.
[48] In Leckie v. Leckie (2004), 2004 CanLII 10487 (ON CA), 238 D.L.R. (4th) 571 (Ont. C.A.), at para. 4, the Court stated, in dealing with a severance package:
The severance packages did not exist at the date of separation. Neither party had any entitlement to such a package as at the date of valuation. They are not property as of separation.
[49] In Gasparetto v. Gasparetto (1988), 1988 CanLII 8626 (ON SC), 15 R.F.L. (3d) 401 (Ont. S.C.), benefits available under an early retirement plan that were completely discretionary on the part of the Department of National Defence were found to be “a possible discretionary payment and not as an entitlement” (at para. 29) and found that the husband had no present or future right to receive them. Similar results occurred in Slack v. Slack (2001), 2001 CanLII 28170 (ON SC), 23 R.F.L. (5th) 207 (Ont. S.C.), per Polowin J., and Swanson v. Swanson, 2004 CanLII 48679 (Ont. S.C.), per P. Smith J.
[50] In Cosentino v. Cosentino, 2015 ONSC 271, Perkins J. dealt with the issue of whether real estate sale commission that the husband had earned, but had not been paid, on the valuation date fell within the definitions of “property” and “net family property” in the Family Law Act. Perkins J. found that the commission was earned during the marriage before the separation occurred and was not subject to any discretion about whether it would be paid:
The commission was not uncertain, contingent, discretionary, hard to value, or of a periodic or recurring nature. It was a right – a chose in action – well within the ordinary meaning of “property” (at para. 31).
Analysis
[51] The respondent’s compensation for his position as Associate Deputy Minister and then Deputy Minister included the possibility that he would be entitled to receive an “at-risk” performance pay. The process was undertaken by a committee headed by the Clerk of the Privy Council who would make recommendations to the prime minister to determine whether the respondent was entitled to any such pay.
[52] At the time of separation, the respondent’s entitlement to an “at-risk” performance pay was not certain or contingent, but rather was totally discretionary. He did not have either a statutory or contractual right to receive such pay.
[53] While the respondent did receive “at-risk” performance pays in 2008, there was no guarantee that he would receive it in the future. I cannot conclude that there was a consistent history of receiving such pays based on one year of receipt.
[54] I find that the “at-risk” performance pay is not “property” within the meaning of the Family Law Act at the time of separation and, thus, is not to be included in the calculation of his net family property.
[55] I find that the sum of $13,879.95 shall be included as retroactive salary adjustment for the respondent on the date of separation.
Disposition costs of $3,000 claimed by the applicant for capital gains payable on the eventual sale of her cottage
[56] The applicant owns vacant land in the province of Quebec. The property was purchased for $45,000 and had a fair market value at the time of separation of $75,000. The applicant submits that the projected capital gain tax would be $6,000 but that such amount should be discounted by 50%, The applicant seeks to claim a disposition cost of $3,000 as a contingent tax liability owed on the date of separation.
[57] The respondent opposes such an allowance on the basis that, on the balance of probabilities, the applicant will not incur such cost given her desire to keep the land, build a cottage, and receive rental income.
[58] The evidence of the applicant on this issue was very sparse. She did not provide any evidence of her intention to sell the property, plans to build on the property and possibly use it as a method to generate rental income.
[59] By email dated February 23, 2015, counsel for the applicant, in replying to a request as to what the applicant intended to do with her cottage, wrote that “her plans, if any, for the cottage property are not relevant.” However, the applicant’s plans regarding the sale of the cottage are very relevant in determining whether or not she is entitled to a deduct $3,000 for a potential capital gain.
[60] The issue of notional costs was canvassed in Sengmueller v. Sengmueller (1994), 1994 CanLII 8711 (ON CA), 17 O.R. (3d) 208 (C.A.), by the Court of Appeal. Satisfactory evidence must be led of a likely disposition date before the Court can take into consideration disposition costs. The Supreme Court of Canada in Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 29, refused to grant a debt to the owner of a business for capital gains where he tendered no evidence as to the likelihood or date of the eventual sale. Specifically, the Court stated, at para. 56:
In fact, the husband tendered no evidence as to the likelihood or date of an eventual sale. While it is true that at some point capital gains tax may become payable, in the absence of evidence from the husband of an imminent or eventual sale so as to justify any deduction, the trial judge’s decision not to make a deduction was completely supportable. [Emphasis in original.]
[61] The applicant submits that I should allow some amount for capital gains. She relies on Schild v. Kassian, 2010 ABQB 572, where Strekaf J. allowed half of the capital gains requested because capital gains would inevitably be incurred despite no evidence of any current intention to sell.
[62] There is no evidence from the applicant as to her plans on selling the cottage. I am not prepared to allow a claim for disposition costs for possible capital gains without some evidence as to a potential sale. Consequently, I reject the applicant’s request for the $3,000 debt for anticipated capital gains as she has not met her evidentiary burden of proof.
Applicable tax rate for notional disposition costs regarding the parties’ pensions, RRSP tax liability, and severance pay
[63] The parties differ on the applicable tax rate for notional costs regarding their employment pensions, RRSPs, and severance pay.
[64] The applicant submits that her tax rate should be 32.7% and that the respondent’s tax rate should be 26.3% on the basis that it was reasonably foreseeable that she would receive spousal support as of the date of separation and, consequently, that her tax rate would be higher than the respondent’s.
[65] The respondent submits that the applicable tax rate should be 33.7% for him and 26.4% for the applicant, and that the Court should not take into consideration potential spousal support paid to the applicant as of the date of separation.
[66] The parties retained Mr. Guy Martel as a joint expert regarding the values of their respective employment pensions and tax issues related to the valuation of their assets and liabilities.
[67] Mr. Martel testified that, if the parties had no income other than their employment pensions, Canada Pension Plan payments, and Old Age Security payments, the respondent’s tax rate would be 33.7% and the applicant’s tax rate would be 26.4%.
[68] These are the average tax rates he used in the pension valuation reports he prepared. In his report dated November 29, 2015, he also calculated the impact on the projected tax rate, having assumed that the applicant would receive various ranges of spousal support after separation, as set out below:
| Monthly Support | Applicant | Respondent |
|---|---|---|
| $1000 | 28.5% | 32.6% |
| $1500 | 29.3% | 31.9% |
| $2000 | 30.0% | 31.3% |
| $2500 | 30.7% | 30.7% |
[69] The applicant submits that it was reasonably foreseeable that the applicant would be entitled to spousal support as of the date of separation and that, consequently, the tax rates must be adjusted accordingly.
[70] In support of that submission, the applicant relies on the Court of Appeal decision in Greenglass v. Greenglass 2010 ONCA 675, 99 R.F.L. (6th) 271, where the court permitted a $300,000 deduction for future legal fees related to another litigation in which the husband was involved. The court stated two important principles:
(a) Contingent liabilities are to be taken into account as long as they are reasonably foreseeable; and
(b) In determining the present value of a contingent liability, courts look at what was reasonably foreseeable on the valuation date.
[71] In Munro v. Munro (1997), 1997 CanLII 14552 (ON CA), 33 R.F.L. (4th) 464, the Court of Appeal, at para. 9, cited the following findings by the trial judge and held that the trial judge’s choice of discount rate was reasonable and supported by the evidence:
There was also argument over the rate to be used in discounting the value of the pension for income tax purposes. The actuary had proposed discounting at 17%, being the projected rate of income tax for Mr. Munro, assuming his income was his pension, Canada pension and eventually Old Age Pension. Mr. Malan, a chartered accountant, testified that with his pension and C.P.P. at age 60, his income would be around $26,000 and is marginal tax rate would be 27%. He explained that the marginal rate, the effective rate of the last dollar of income, is the rate used for business planning, and therefore the one usually used by accountants. But Mr. Monroe will most likely be living on his pensions, and not making business plans for the production of future profits. I conclude that the average of 17% is the proper one to use, to discount the value of the pension and allow for the effective income tax on it.
[72] In Salib v. Cross (1993), 1993 CanLII 5465 (ON SC), 15 O.R. (3d) 521 (S.C.), Chapnik J., in determining the appropriate tax rate to be applied as a notional costs on the wife’s pension, stated, at p. 555:
To ascertain the most appropriate approach in any particular case, Mr. Dibben opined that, if the pension income is likely to be the only income at retirement, average tax rates during retirement should be applied to the gross pension valuation; whereas, if the holder takes early retirement is likely to hold other employment, the more probable taxation rate on the pension would be the marginal rate.
It may well be that in certain situations when retirement is pending or, at least, closer at hand, and there is evidence of the pension holder’s intent and ability to earn other income, the marginal tax rates would be a more appropriate measure. [Emphasis in original.]
[73] In this case, the parties were married 31 years as of the date of separation. There was a difference in their employment incomes at the time of separation. The issue of entitlement to spousal support had not been decided or even advanced.
[74] Proceedings were not commenced until November 20, 2012. Entitlement to spousal support was disputed by the respondent. There has been no spousal support paid to date.
[75] I do not accept that future spousal support should be factored into the value of the parties’ pension, RRSP and severance pay at the date of separation. Neither party had indicated a desire to retire. Neither party retired until 2012 and 2014.
[76] The applicant has been unable to provide me with any jurisprudence that supports the contention that an entitlement to spousal support should be factored into in calculating the notional tax to be applied to parties’ pensions.
[77] While I have the evidence as to the value of the parties’ pensions at the date of separation, I find that factoring in spousal support payments at the date of separation is far too speculative.
[78] Considering all the factors, I find that the applicable tax rates should be 33.7% for the respondent and 26.4% for the applicant.
Value of the Parties’ Pensions
[79] The parties differ on the value of their employment pensions. The parties retained Mr. Martel to provide valuations of their respective pensions based on certain assumptions, including standard versus substandard mortality, as well as different scenarios based on how the Court will value the pensions depending on the amount bought back by each party.
[80] Both pensions are governed by the Public Service Superannuation Act, R.S.C. 1985, c. O-36 (“PSSA”).
[81] The respondent provided a letter dated February 21, 2012 from Dr. Tessier addressed to Mr. Martel, the actuary, concerning the respondent’s life expectancy assessment. Dr. Tessier makes the following comments in his two-page report:
His general health appears to be a standard life risk but the most significant threat to his life and health has been the discovery of a chronic lymphocytic leukemia (cll) in the last two years. Upon diagnosis, the disorder was characterizes classic stage 0B-cell length for acidic leukemia with favourable FISH genetics (including a 13 chromosome change)
There is no treatment for this condition and only warrants regular supervision according to Dr. Huebsch. The estimation of the specialist is roughly that Mr. Kirvan has a median survival of more than 10 years.
I would estimate that Mr. Kirvan’s median survival can be projected to be 14 years from the date of diagnosis at age 56, in 2010, at age 70. This contrasts with the standard life expectancy of 25.4 years at Mr. Kirvan’s current age of 58.1 years according to the most current Canadian life insurance mortality tables for male non-smokers.
[82] The respondent was diagnosed with CLL in April 2011 and retired in November 2012. Because of his desire to keep his diagnosis private, he did not seek sick leave or apply for a pension on a medical disability certificate. He decided to retire at the age of 58, resulting in a 6% reduction in his yearly pension.
[83] In January 2012, the Pension Benefits Act, R.S.O. 1990, c. P.8, was amended to remove substandard mortality as a factor to consider in valuing pensions except in specific circumstances.
[84] Pursuant to s. 25(2) of the Federal Pension Benefits Standards Act, 1985, R.S.C. 1985, c. 32 (2nd Supp.),
subject to subsections (4), (7) and (8), pension benefits, pension benefit credits and any other benefits under a pension plan are, on divorce, annulment, separation or breakdown of common-law partnership, subject to the applicable provincial property law.
[85] Pursuant to sections 12 and 13 of Family Law Matters, O. Reg. 287/11, made under the Pension Benefits Act, there are two circumstances where shortened life expectancy may have an effect on the value of a pension covered by the Pension Benefits Act. These sections apply when the administrator receives an application, meeting certain requirements, for the withdrawal of the commuted value of pension benefits, a deferred pension, or a pension from a pension fund in circumstances of the shortened life expectancy of a member.
[86] Section 12 of Family Law Matters deals with applications prior to the family law valuation date — here, the date of separation — which is not applicable in this case.
[87] Section 13 of Family Law Matters applies where the administrator receives the application within six months after the family law valuation date (i.e. the date of separation), but before the date on which the administrator receives an application for a statement of imputed value under s. 67.2(6) of the Pension Benefits Act.
[88] There are certain conditions that must be met before the latter regulation is applicable. First, there is a requirement to include, with the application, a statement signed by a physician who is licensed to practice medicine in the jurisdiction in Canada that, in the opinion of the physician, the circumstances of the shortened life expectancy existed on the family law valuation date.
[89] Secondly, the administrator must have approved the application for the withdrawal of the commuted value prior to receiving an application for a statement of the imputed value, and the commuted value of the pension benefits, deferred pension, or pension must not have been withdrawn from the pension fund.
[90] Even if a party has met the legal test set out in the regulations, there is a further determination that must be made under s. 51.1 of general, r.r.o. 1990, reg. 909, made under the pension benefits act, which states:
(1) this section applies with respect to a variation in the terms of payment of a pension or deferred pension under section 49 (2) of the act (shortened life expectancy).
(2) the following are prescribed as the circumstances of shortened life expectancy in which a pension plan shall be deemed to permit variation in the terms of payment of a pension or deferred pension:
- a former member or retired member has an illness or physical disability that is likely to shorten his or her life expectancy to less than two years.
[91] None of these circumstances exist in this case. The respondent did not make an application before separation or within six months of separation. Further, the medical evidence indicates that his life expectancy has been reduced by 14 years, and not “less than two years”.
[92] Consequently, the legislation does not provide for a variation of the value of a party’s pension for substandard mortality except in very restricted circumstances.
[93] Mr. Martel testified and it was conceded by counsel for the respondent, that the court does not have jurisdiction to value his pension using a substandard mortality calculation given the provisions of the Pension Benefits Act.
[94] Consequently, I have valued the respondent’s pension based on a standard mortality basis.
Applicant’s Pension
[95] Mr. Martel prepared two valuations based on two separate scenarios. As of the date of separation, the applicant had elected to buyback one year and 29 days of past service during the cohabitation but not completely paid for by the date of separation.
[96] In scenario number one, Mr. Martel assumed that the elective service purchase had entirely accrued up to the date of election and treated the repayment of the outstanding amortization payments as a refund of a loan. The entire period of elective service was deemed accrued during the marriage, since the election was made during the marriage. The present value of the arrear payments owing on the date of separation was $19,996, which was subtracted from the preliminary value of the pension.
[97] The preliminary value the pension was $1,039,872. After deducting the $19,996, the new value was $1,019,876.
[98] In scenario number two, the actuary assumed that the elective service was accrued over time as the cost of the election was being repaid. Only the portion of the elective service paid for during the marriage was deemed accrued during the marriage. The actuary estimated that, during the marriage, the applicant bought back 34.5 days of past service. Based on the preliminary value of $1,039,872, the actuary deducted $35,695 to arrive at a value of $1,004,177.
Respondent’s pension
[99] The respondent elected to buy back seven years and 111 days of past service on August 24, 2005, and had outstanding arrears payments as of the date of separation. The actuary initially provided the preliminary value of the respondent’s pension at $1,443,111. He then proceeded to provide two separate scenarios.
[100] In scenario number one, he assumed that the elective service purchased had entirely accrued up to the date of election and treated the repayment of the outstanding amortization payments as a refund of a loan. The entire period of elective services was deemed accrued during the marriage, since the election was made during the marriage. As of the date of separation, the outstanding present arrears total $35,205, a figure that he subtracted from the preliminary value to arrive at a family law value of $1,407,906.
[101] In the second scenario, the actuary assumed that the elective service was accrued over time as the cost to the election was being repaid. Only the portion of the elective service paid for during the marriage was deemed accrued during the marriage. During the marriage, the respondent bought back five years and 205 days, totalling $97,940, a figure that he deducted from the preliminary value to arrive at a family law value of $1,345,171.
[102] Mr. Martel testified that the government uses scenario two when calculating the actual amount of service bought back during the marriage to determine the value for a pension.
Position of the parties
[103] The applicant submits that scenario one should be used while the respondent submits that scenario two should apply. Neither party provided the court with any case law on this issue.
Analysis
[104] Pursuant to the Family Law Act, the court is required to value assets and liabilities as of the date of separation. In this case, the date of separation is July 1, 2009.
[105] As of the date of separation, the applicant had bought back 34.5 days, while the respondent had bought back five years and 204 days.
[106] The Court ought not to use hindsight in determining the value of an asset but, rather, ought to calculate the value of that asset based on information that existed at the time of separation.
[107] I find that using scenario 2, which calculates the value of the parties’ pensions based on the amount of days bought back as of the date of separation, is consistent with the principles of the Family Law Act.
CALCULATIONS OF THE NET FAMILY PROPERTY
[108] Based on my findings, I calculate the net family property as follows:
| Asset | Applicant | Respondent |
|---|---|---|
| Jointly owned matrimonial home | $220,000.00 | $220,000.00 |
| Vacant island lot | $75,000.00 | |
| Car: 1998 Audi A4 | $5,000.00 | |
| Boat: Maxim 90 | $4,400.00 | |
| Alterna Bank chequing account | Nil | |
| Alterna Bank savings account | $273.24 | |
| TD Canada Trust chequing account | $826.76 | |
| BMO chequing account | $7,884.30 | |
| RBC savings account | $520.00 | |
| Investor’s Group investment | $313.87 | |
| Manulife Financial RRSP | $50,098.15 | |
| Government of Canada annual leave | $2,138.47 | $5,321.00 |
| Government of Canada severance pay | $63,898.92 | $66,061.00 |
| Government of Canada pension | $1,004,177.00 | $1,345,171.00 |
| Retroactive pay adjustment per arbitral award | $18,892.00 | |
| Compensatory settlement | $64,584.00 | |
| Retroactive salary | $13,879.95 | |
| Total | $1,509,288.54 | $1,659,151.12 |
[109] Debts and liabilities are calculated as follows:
| Debt or Liability | Applicant | Respondent |
|---|---|---|
| BNS mortgage on matrimonial home | $65,479.85 | $65,479.85 |
| Scotia mortgage on matrimonial home | $35,742.03 | $35,742.03 |
| Scotiabank joint secured personal line of credit | $5,648.50 | $5,648.50 |
| Royal Bank joint personal line of credit | $4,850.00 | $4,850.00 |
| Alterna Bank personal line of credit | $4,982.00 | |
| CIBC Visa credit card | $4,140.00 | |
| BMO MasterCard credit card | $208.00 | $12,039.22 |
| Personal loan owed to A. Kirvan | $2,500.00 | $2,500.00 |
| Cottage Association Dues | $400.00 | |
| Capital gains tax on vacant land | Nil | |
| Tax on annual leave | $1,005.08 | $2,500.87 |
| Tax on Applicant’s severance pay ($32,000 RRSP) | $8,320.00 | |
| Tax on Applicant’s severance pay ($31,899 × 47%) | $14,992.53 | |
| Tax on Respondent’s severance pay ($26,000 RRSP) | $8,762.00 | |
| Tax on Respondent’s severance pay ($40,061 × 47%) | $18,828.67 | |
| Tax on Applicant’s pension | $265,102.73 | |
| Tax on Respondent’s pension | $453,322.63 | |
| Tax on Manulife Financial RRSP | $13,225.87 | |
| Tax on retroactive pay adjustment | $8,921.54 | |
| Tax on compensatory settlement | $30,354.48 | |
| Tax on retroactive salary | $6,523.58 | |
| Total | $465,872.61 | $616,197.35 |
| Net family property | $1,043,415.93 | $1,042,953.77 |
[110] The difference between the parties net family property is $462.16.
[111] The applicant owes the respondent an equalization payment of $231.08.
[112] In addition, the applicant owes the respondent the sum of $57,557, representing the balance owed under the partial separation agreement: $52,057, plus $4,000 for furniture and $1,500 in a Royal Bank account. Consequently, the applicant owes the respondent the sum of $57,780.08.
SPOUSAL SUPPORT
Entitlement of Spousal Support
Legal Framework
[113] Subsection 15.2(1) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), provides that “[a] court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sums and periodic sums, as the court thinks reasonable for the support of the other spouse”.
[114] Subsection 15.2(2) states that, where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of an application under subsection (1).
[115] Section 15.2(4) states that a court, in making an order under subsection (1) or an interim order under subsection (2), shall take into consideration the condition, means, needs, and other circumstances of each spouse and, more specifically,
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
[116] Section 15.2(6), states that an order under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportioned between the 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 spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[117] In order to achieve a fair and equitable distribution of resources, all four of the objectives of section 15.2(6) should be examined: see Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813, at p. 866.
[118] In Chutter v. Chutter, 2008 BCCA 507, 301 D.L.R. (4th) 297, held, at paras. 50–51:
Compensatory support is intended to provide redress to the recipient spouse for economic disadvantage arising from the marriage or the conferral of an economic advantage upon the other spouse. The compensatory support principles are rooted in the “independent” model of marriage, in which each spouse is seen to retain economic autonomy in the union, and is entitled to receive compensation for losses caused by the marriage or breakup of the marriage which would not have been suffered otherwise (Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420], at paras. 24, 41). The compensatory basis for relief recognizes that sacrifices made by a recipient spouse in assuming primary childcare and household responsibilities will often result in a lower earning potential and fewer future prospects of financial success (Moge, at 861-863; Bracklow, at para. 39)....
In addition to acknowledging economic disadvantages suffered by a spouse as a consequence of the marriage or its breakdown, compensatory spousal support may also address economic advantages enjoyed by the other partner as a result of the recipient spouse’s efforts. As noted in Moge at 864, the doctrine of equitable sharing of the economic consequences of marriage and marriage breakdown underlying compensatory support “seeks to recognize and account for both the economic disadvantages incurred by the spouse who makes such sacrifices and the economic advantages conferred upon the other spouse”. [Emphasis in original.]
[119] I adopt the analysis of the principles regarding compensatory and non-compensatory support stated by Chappel J. in Thompson v. Thompson, 2013 ONSC 5500, at paras. 55–59, as follows (footnotes omitted):
ii. Compensatory Support
The compensatory basis for spousal support entitlement recognizes that upon marriage breakdown, there should be an equitable distribution between the parties of the economic consequences of the marriage. The objective of a compensatory award is to provide some degree of compensation for the sacrifices and contributions which a spouse made during the marriage, for economic losses which they experienced and may continue to experience as a result of the marriage, as well as the benefits which the other spouse has received as a result of the sacrifices and contributions. A compensatory award recognizes that such sacrifices, contributions and benefits conferred often lead to an interdependency between the spouses and merger of their economic lives.
Compensatory support claims arise most typically in situations where one spouses suffered economic disadvantage and contributed to the other spouse’s income earning potential as a result of assuming primary responsibility for child care and/or home management obligations. However, a compensatory claim can also be founded on other forms of contribution to the other party’s career, such as supporting the family while the other party obtained or upgraded their education, selling assets or a business for the benefit of the family unit, or assisting a party in establishing and operating a business that is the source of that party’s income.
In considering whether a compensatory claim exists, the court must undertake a broad and expansive analysis of advantages and disadvantages which each party experience throughout the relationship as a result of the marital union. In some situations, a compensatory claim may be defeated or weakened by the fact that the disadvantage suffered by the claimant spouse is offset by disadvantage of a different type experienced by the other spouse.
A compensatory claim for spousal support may be established even where the recipient spouse is employed and reasonably self-supporting at the time of the parties’ separation. This situation can arise where, despite that spouse’s ability to meet their own needs, their financial advancement has been impaired as a result of subordinating their career to that of the other spouse or from adopting a less lucrative career path in order to accommodate the needs of the family.
iii. Non-Compensatory Support
Spousal support entitlement can also arise on a non-compensatory basis, as a result of the needs of the spouse. The Supreme Court of Canada discussed this basis of entitlement in Bracklow v. Bracklow. It emphasized in that case that a spouse may be obliged to pay support based on the other spouse’s economic need alone, even if that need does not arise as result of the rules adopted or sacrifices made during the marriage. Rowles, J.A. of the British Columbia Court of Appeal summarized the general concepts underlying this basis of entitlement in Chutter v. Chutter as follows:
Non-compensatory support is grounded in the “social obligation model” of marriage, in which marriage is seen as an interdependent union. It embraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantage spouse falls on his or her former partner, rather than the state (Bracklow, at para. 23). Non-compensatory support aims to narrow the gap between the needs and means of the spouses upon marital breakdown, and as such, it is often referred to as the “means and needs” approach to spousal support.
[120] In Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, the Ontario Court of Appeal, in dealing with self-sufficiency, stated, at para. 53:
Self-sufficiency, with its connotation of economic independence, is a relative concept. It is not achieved simply because a former spouse can meet basic expenses on a particular amount of income; rather, self-sufficiency relates to the ability to support a reasonable standard of living. It is to be assessed in relation to the economic partnership the parties enjoyed and could sustain during cohabitation, and that they can reasonably anticipate after separation.
[121] In Moge, L’Heureux Dubé J. stated, at pp. 864–65, 870 (references omitted):
Presumably, there will be the occasional marriage were both spouses maximize their earning potential by working outside the home, pursuing economic and educational opportunities in a similar manner, dividing up the domestic labour identically, and either making no economic sacrifices for the other or, more likely, making them equally. In such a utopian scenario there might be no apparent call for compensation. The spouses are able to make a clean break and continue on with their respective lives. Such cases would appear to be rare.
Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement…. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards
of living upon its dissolution.
[122] In Papasodaro v. Papasodaro, 2014 ONSC 30, McGee J. stated, at para. 59:
The Divorce Act does not measure individual contribution as much as it measures financial connectedness and the resulting circumstances when the marriage ends. Provided that need is found, the basis for non-compensatory support is firmly mandated by the Act.
Position of the parties
[123] The applicant submits that she is entitled to spousal support both on compensatory and non-compensatory grounds. In support of her claim, she indicates that this was a 31-year marriage, where both parties were professionals. The parties had three children in a relatively short period of time of one-another: born 1982, 1986, and 1988. The parties supported each other, worked as “a team”, and treated their marriage as “a partnership”. She indicates that the parties “ran full out”. She devoted most of her life to the children and to the domestic functions, which permitted the respondent to enhance his career and which resulted in him rising to the position of Associate Deputy Minister of Justice at the time of their separation. Her career path never rose to the level that the respondent achieved because she assumed the majority of the responsibility for the children and the majority of domestic functions.
[124] The applicant states that there was an agreement when they married that they would have children and that there was an agreement of the division of labour which allowed the respondent to further his career. She indicates she supported all his jobs and that they were a team together.
[125] With respect to her claim for non-compensatory support, the applicant submits that she is unable to maintain the standard of living to which the parties were accustomed as a result of the separation.
[126] The respondent submits that both parties pursued their career paths and that neither sacrificed their earning potential or career for the sake of the other or their children. While the respondent rose to the position of Associate Deputy Minister of Justice by the time of separation, the applicant had attained the high level of Senior Counsel by 1991 and achieved substantial specialization in youth justice that provided her with both national and international recognition. He argues that both parties were engaged with the children and that both parties had significant workloads at different periods of time. He denies that the applicant’s maternity leaves had any negative impact on her career. On that basis, the respondent submits that there is no entitlement to compensatory spousal support.
[127] With respect to non-compensatory spousal support, the respondent submits that the applicant has ample means to maintain a high standard of living comparable to that enjoyed by the parties prior to separation. He argues that the purpose of non-compensatory support is to remedy the recipient spouse’s inability to maintain self-sufficiency in light of the marital standard of living. The respondent seeks the dismissal of the applicant’s claim for non-compensatory support.
Analysis
Compensatory support
[128] Upon being called to the Bar of Ontario in 1981, the applicant worked as a public servant in the following areas:
(a) Policy analyst with the Young Offenders Directorate in the Ministry of the Solicitor General (from 1981 to 1987);
(b) Counsel LA-2, Criminal Law Policy with the Department of Justice with responsibility for youth justice law (from 1987 to 1991);
(c) Senior Counsel, Youth Justice, Criminal and Family Law Policy, Department of Justice (from 1991 to 1997);
(d) Senior Counsel, National Crime Prevention Centre, Department of Justice (from 1997 to December 2003); and
(e) Senior Counsel, Public Safety and Emergency Preparedness (from December 2003 until her retirement on May 15, 2014).
[129] Between the years 1981 and 1997, the applicant rose to be the Government of Canada’s lead counsel for youth justice. When she worked at the National Crime Prevention Centre and Public Safety and Emergency Preparedness Canada, she was responsible for advancing comprehensive and evidence-based crime prevention planning at the city level in Canada and for the international dimensions of the Centre’s work. She co-chaired the United Nation Experts Working Group, which produced draft United Nations guidelines for the prevention of crime, and worked closely with governments, NGOs, and specialized institutes. During the 1980s, while on maternity leave, she wrote a book on youth justice that has been quoted by the Supreme Court of Canada.
[130] When the applicant started working for the National Crime Prevention Centre, she was required to travel more for work. In the early 2000s, she would attend United Nations conferences. If the applicant could perform the tasks from Ottawa without attending the conference, she did so. If she was away when it was her week to carpool, she would make arrangements to switch with the neighbour. This increased travel commitment became heavier from 2000 to 2009.
[131] On the other hand, the respondent worked from 1981 to 1991 outside of the public service, and has worked for the Solicitor General, the Minister of Health, and the Minister of Justice. From 1991 to 2009, he was primarily in the public service, except for a brief period of time in 1993 when he was Deputy Chief of Staff to the Prime Minister.
[132] From 1991 to 2009, the respondent rose through the ranks of the public service as follows:
(a) General Counsel, Federal-Provincial Relations Office (from 1991 to 1993);
(b) Senior advisor to the Associate Deputy Minister, Public Law, Department of Justice (from 1993 to 1994);
(c) General Counsel, Dispute Resolution Services, Department of Justice (from 1994 to 1998);
(d) Senior General Counsel, Health Canada (from 1998 to 2003);
(e) Assistant Deputy Minister of Justice, Business and Regulatory Law (from 2003 to 2007);
(f) Associate Deputy Minister of Public Safety (from 2007 to 2010);
(g) Deputy Minister of Justice and Deputy Attorney General of Canada (from 2010 to 2012).
[133] At the time of separation in 2009, the applicant earned $121,069 and the respondent earned $235,379.
[134] By the year 2000, Ryan was attending university, while Alexandra and Anne were attending elementary school. Both girls were attending a private school, requiring the children to be dropped off and picked up at school. It was the applicant who arranged for a carpool in the morning with a neighbour: one week the applicant would drive the children and the next week the neighbour would drive the children. In the afternoon, the pickup and drop off was between 5 p.m. and 5:30 p.m. and would be executed based on which parent was home, the location of the children’s activities, and who was available. Normally, it was the applicant.
[135] Both parties acknowledge that their marriage was a partnership and that that they worked as a team. Both parents were devoted to their children, but the applicant’s employment permitted her to leave work to be home for supper and to assume most of the childcare domestic duties. The respondent benefited from the role assumed by the applicant as he was able to take on new positions that required more time at work and less time at home. These new positions required the respondent to face steep learning curves at his new positions.
[136] It was the applicant who took her annual leave to stay home with the children during the summer when they were younger. The respondent was working during these periods of time.
[137] There were times when the respondent was responsible to run the household, such as when the applicant worked late or travelled abroad for work, but this was the exception rather than the rule.
[138] When the children were younger, the evidence is clear there were many educational issues, the applicant investigating and researching such issues as they arose. Whether it was organizing a special assessment, arranging for the child to change schools, or arranging for tutoring, the applicant was the party initially responsible for dealing with these issues. The applicant admits that the respondent was involved in every decision regarding all three children but that she attended most of the meetings and was the contact person with the school authorities. As her job did not require managerial responsibility, she had more flexibility and could attend these appointments.
[139] I accept the evidence of the applicant that the schooling issue for all three children had an impact on her career. I find that it was the applicant who adjusted her working hours to assume a greater proportion of the domestic and child-related issues. On the other hand, I find that, as a result of the assumption of these responsibilities by the applicant, the respondent’s career path was unfettered and he was thus able to focus on his career, resulting in his attainment of the position of Deputy Minister of Justice.
[140] The respondent concedes that the applicant’s role was to initially investigate, on behalf of both of them, any issues affecting the family, such as meeting the children’s special needs when they were young children, hiring of contractors, obtaining the best mortgage rates, and the like. However, in keeping with the partnership that the parties saw as their marriage, the respondent was always involved in any final decisions. Even so, the applicant assumed a large role in this area.
[141] Even when the applicant considered making an application for a judicial appointment in the mid-1990s, it was her decision not to pursue that career because it was not a good time for the family with three children at home. The respondent was fully supportive of either decision she would make with respect to that career change.
[142] The respondent was also involved in the children’s activities, such as attending Beaver Scouts with Ryan (where he became a troop leader), acting as assistant coach to Ryan’s hockey team, and coaching the house league basketball team for Ryan.
[143] The respondent took all children skiing and swimming lessons; would attend the girls’ rugby games, practices, and tournaments; and attempted to make as many volleyball and basketball games that he could.
[144] Both parents would assist with the children’s homework and attend parent-teacher interviews.
[145] I find that both parties had excellent careers in their chosen fields of endeavour. The applicant has stated that she was unable to advance in her career because she lacked managerial experience that prevented her from applying for advancement. However, the applicant was able to reach the level of senior counsel in the Department of Justice in two different positions.
[146] I have considered the four factors in s. 15.2(6) of the Divorce Act. I find that the respondent has received an advantage as a result of the roles assumed as between the spouses during their marriage. I find that there were financial consequences to both spouses as a result of the apportionment of child care over the course of the marriage. I conclude that the applicant is entitled to spousal support on a compensatory basis.
[147] The respondent argues that the fact that his pension was valued on a standard mortality basis should be a factor in reduction of the applicant’s claim for spousal support. The difference between the standard and sub-standard values of the respondent’s pension is $467,450.00. He says that this is a significant benefit to the applicant. I reject the respondent’s argument because it is based on the erroneous premise that the Court has the discretion to value the respondent’s pension on a substandard mortality basis. In other words, there is no additional value to the applicant other than her legal entitlement.
[148] Further, as a result of my findings regarding the calculation of the net family property, each party has approximately the same net family property at the date of separation.
Non-compensatory support
[149] On the issue of non-compensatory support, in every year from 2004 to 2009, the applicant’s income was less than the respondent’s. The parties were financially dependent on each other, something that occurred from their first jobs in 1981 until their separation in 2009. In reviewing their income levels from 2004 to 2009, that evidence is confirmed as follows:
| Year | Applicant | Respondent |
|---|---|---|
| 2004 | $122,041 | $173,293 |
| 2005 | $126,603 | $196,118 |
| 2006 | $122,509 | $204,471 |
| 2007 | $127,936 | $201,917 |
| 2008 | $121,146 | $215,771 |
| 2009 | $121,069 | $235,379 |
[150] Both parties viewed this marriage as a partnership and that they were a team. They lived a lifestyle based on the combined incomes of both parties. By the time of separation, their combined annual income was $356,448.
[151] I find that the applicant has a need for support in relation to the parties standard of living and the respondent has an ability to pay.
Commencement Date of Support
[152] The applicant submits that payment of spousal support should have commenced January 1, 2010. The respondent denies any liability for spousal support but, in the alternative, argues that the commencement date should be November 12, 2012 or, in the further alternative, March 16, 2011, the date of the letter from Ms. Labrosse.
[153] When the respondent advised the applicant that he wished to separate, she admits that she was devastated. She was concerned about her future due to the large disparity in incomes between the parties. She decided to obtain legal advice as to her legal rights and met Ms. Labrosse, a family law lawyer in Ottawa. The respondent did not retain counsel at that time. After meeting with the lawyer, the applicant advised the respondent that, according to the legal advice she obtained, she was entitled to spousal support. The respondent told the applicant that he viewed her as an independent person and that he did not view her as a dependent person and did not feel that she was entitled to any spousal support.
[154] The applicant’s focus in the fall of 2009 was to act financially prudently. She wanted to retain the matrimonial home so she had an appraisal completed. She filed a grievance at work because her employer used the wrong pay schedule based on the wrong collective agreement.
[155] Counsel for both parties then began obtaining the necessary documentation to deal with the issues arising from the separation. On July 22, 2009, Ms. McEachern, counsel for the respondent, wrote to Ms. Labrosse raising a series of issues that needed to be addressed in order to move forward with the property division.
[156] On October 6, 2009, Ms. McEachern provided financial disclosure regarding the respondent’s pension and income information for 2006, 2007, 2008, along with pay stubs for 2009 and other financial documentation.
[157] On October 13, 2009, Ms. Labrosse provided information to Ms. McEachern regarding the applicant’s income information for 2006, 2007, and 2008, as well as a pay stub for 2009, in addition to other financial disclosure.
[158] From July 1, 2009 to November 20, 2009, the parties remained together in the matrimonial home. The parties agreed that they arranged their finances such that each party bought his or her own groceries; that the parties would alternate in making the biweekly mortgage payments; and that the applicant pay the utilities and certain automatic deductions, including payments for car insurance and their security system fences.
[159] For July, August, September, October, and November 2009, the parties continued providing disclosure and focused their attention to the applicant purchasing the respondent’s interest in their matrimonial home.
[160] In November 2009, the respondent left the matrimonial home and rented a two-bedroom apartment on Metcalfe Street.
[161] On February 18, 2010, Ms. Labrosse wrote to Ms. McEachern, again raising the issue of the applicant’s desire to purchase the respondent’s interest in the matrimonial home. The letter makes no mention of any claim of spousal support by the applicant but does request that the respondent continue to pay his share of the mortgage payments until the matter is resolved. Further, the letter states, on page 3, at the third paragraph:
As indicated above, the only issue holding up more comprehensive settlement discussions is that of the pension information which is hopefully forthcoming.
[162] By June 2010, the parties entered into a partial separation agreement, dated June 28, 2010, wherein the respondent transferred his interest in the matrimonial home to the applicant. Pursuant to paragraphs 2.2 and 2.3 of the interim separation agreement, the parties agreed as follows:
2.2 Mary-Anne will pay to Myles, for his interest in the matrimonial home, an amount equal to Myles’s one-half share of the net value of the property. Myles’ one-half share of the net value of the property will be calculated by deducting the principle owing on the mortgages and line of credit with Scotia Bank as of the date of transfer, from the purchase price of $440,000, and dividing by two, and adding a credit to Myles for his one half of the property taxes that have already been paid for the remainder of 2010, as of the date of transfer.
2.3 Pending the determination of the issue of net family property, Mary-Anne and Myles have agreed that Myles will transfer all of his interest in the
matrimonial home, except for its contents, to Mary-Anne, upon,
a. Mary-Anne paying to Myles the sum of $75,000;
b. Mary-Anne providing Myles with a collateral mortgage registered against the matrimonial home in an amount equal to Myles’s one half share of the net share of the property less the sum paid under 2.3 a above, being $75,000. Mary-Anne will pay for the cost of the preparation and registration of this mortgage, which will be payable by her to Myles upon the net family property issues between the parties being finalized by court order or agreement.
[163] The respondent continued to pay for half of the mortgage and property taxes for the matrimonial home until July 31, 2010, when he transferred his interest in the matrimonial home to the applicant. Pursuant to the agreement, Mary-Anne owed Myles the sum of $52,057.81, which was to accrue without interest from July 2010 onward.
[164] The negotiations continued and, on August 6, 2010, Ms. Labrosse wrote to Ms. McEachern requesting further information in order to determine the value of the respondent’s pension. She specifically stated, “We must now address the remaining property and support issues in this matter”.
[165] By email dated November 10, 2010, Ms. McEachern responded to the request for further information regarding the pension.
[166] On November 19, 2010, Ms. Labrosse emailed Ms. McEachern to request the disclosure of the respondent’s current income information in order to address the support issues. Specifically, she requested the 2009 income tax return and notice of assessment as well as his three most recent pay stubs. Ms. McEachern apologized and requested the same information from the applicant.
[167] By letter dated December 6, 2010, Ms. Labrosse raises the issue of disclosure, again requesting information related to the valuation of the respondent’s pension and raising the lack of a response for disclosure on the issue of support. On page 2, she writes as follows:
Finally, on the issue of support, I have repeatedly requested Mr. Kirvan’s current income information, including his 2009 T-1 and notice of assessment, a current pay statement, and any available additional information or performance pay received during the course of the 2010 year period.
[168] By letter dated December 16, 2010, Ms. McEachern responded to the requests regarding the respondent’s pension information, but her letter failed to address and respond to the request for his current income information.
[169] By letter dated January 11, 2011, Ms. McEachern provided a copy of the respondent’s 2009 income tax return.
[170] By letter dated March 16, 2011, Ms. Labrosse, for the first time, made a request for a specific amount of spousal support and set March 25, 2011 as the deadline for a response. By letter dated March 18, 2011, Ms. McEachern requested an extension to reply until April 1, 2011, as she would be unable to meet the deadline requested by the applicant. No reply was provided by Ms. McEachern. By May 3, 2011, having not received a reply, Ms. Labrosse again wrote to Ms. McEachern seeking interim spousal support.
[171] From May 2011 until early 2012, there is no further exchange of correspondence. In early 2012, the applicant retains new counsel, Mr. Gary Steinberg. No agreement is forthcoming and proceedings are commenced in November 2012.
Legal framework
[172] In MacKinnon v. MacKinnon (2005), 2005 CanLII 13191 (ON CA), 75 O.R. (3d) 175 (C.A.), the Ontario Court of Appeal stated three principles applicable to spousal support:
(a) Spousal support usually commences from the date of the application or from the date of the demand for financial information;
(b) Retroactive spousal support only applies to any claim made for the period of time prior to the commencement of proceedings; and
(c) Any claim after the commencement of proceedings is a prospective claim.
[173] In Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, the Supreme Court of Canada confirmed that the principles applicable to claims for retroactive child support set out in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, [2006] 2 S.C.R. 231, were relevant in deciding the suitability of retroactive spousal support. The four considerations are as follows:
(a) Whether there was a reasonable excuse for why the claimant did not pursue child support or increased child support earlier;
(b) The conduct of the payor parent. The court characterized “blameworthy conduct” as “anything that privileges the payor parent’s own interests over his/her child’s right to an appropriate amount of support” (D.B.S., at para 106). It emphasized that a payor cannot simply hide their income increases from the recipient parent in hopes of avoiding larger child-support payments;
(c) Consideration of the present circumstances of the child; and
(d) Any hardship that may be occasioned by a retroactive order.
[174] In Kerr, the Court cautioned that there are different principles and objectives with respect to the right to spousal support and the right to child support, and that any retroactive claim must be analysed within this framework.
[175] In addition, the Court identifies the two competing interests that must be taken into consideration. Firstly, the interest of the payor of having certainty knowing his or her legal obligations and, secondly, the general policy of having an incentive for spousal support claimants to advance their claim promptly.
[176] When considering a retroactive spousal support award, the Court still must conduct an analysis of the recipient’s needs and the income tax considerations of a lump-sum spousal support award.
Analysis
[177] In this case, the applicant was provided with the respondent’s 2006, 2007, and 2008 notices of assessment, along with pay stubs for 2009, by letter dated October 6, 2009. On October 13, 2009, Ms. Labrosse provided her client’s financial disclosure with respect to income.
[178] Despite both parties exchange of financial information in October 2009, there was no formal request for spousal support. Between July 2009 and July 30, 2010, there was no request for support.
[179] By November 2010, counsel for the applicant requested updated financial information regarding the respondent’s income to address the issue of spousal support. By letter dated December 6, 2010, a follow-up letter was then sent. Despite not receiving any financial information, no proceedings were commenced. Finally on March 16, 2011, the applicant submitted, by letter, her formal request for spousal support.
[180] The applicant has alleged that she delayed in commencing proceedings because she wished to avoid litigation. Throughout this litigation, the parties spent a significant amount of time trying to obtain disclosure with respect to the respondent’s pension to have it actuarially appraised.
[181] I cannot conclude that the respondent delayed in initially providing the disclosure regarding his financial information. He had provided his notices of assessments for the years 2006, 2007, and 2008, as well as pay stubs for 2009 in October 2009. By August 6, 2010, correspondence had been exchanged with requests for disclosure to deal with issues, including support. In November and December 2010, specific requests were made for disclosure, with which the respondent did not comply until January 2011.
[182] I am not prepared to find that the spousal support should have started as of January 1, 2010. The parties focused on property issues until July 31, 2010, as the respondent was contributing to the mortgage and municipal taxes. Once the house was transferred, the issue of support became an important factor.
[183] However, it was only late in 2010 that the specific requests for disclosure were made. For those reasons, I find the spousal support should have commenced as of January 1, 2011.
Income Determination
[184] In this case, there are certain issues that I must address in determining each parties income. These include double dipping, post-separation increases in income and whether I should use the respondent’s pension income based on a standard or substandard mortality basis.
Legal framework
[185] On double dipping, in Boston v. Boston, 2001 SCC 43, [2001] 2 S.C.R. 413, the Supreme Court of Canada held that that portion of the pension in receipt that relates to the value included in the calculation of a party’s net family property should be excluded in determining a party’s income for spousal support purposes, subject to specific exceptions.
[186] On post separation income, the basis of the recipient’s entitlement is important in deciding quantum and duration of spousal support, and whether the recipient can benefit from any post-separation increases in the payor’s income: see Thompson v. Thompson, supra, at para. 53.
[187] In Thompson, at para. 103, Chappel J. provides an excellent summary of the principles to be taken into account when one considers post separation income. They are as follows (footnotes omitted):
(a) A spouse is not automatically entitled to increased spousal support when a spouse’s post-separation income increases.
(b) The right to share in post-separation income increases does not typically arise in cases involving non-compensatory claims, since the primary focus of such claims is the standard of living enjoyed during the relationship.
(c) Compensatory support claims may provide a foundation for entitlement to share in post-separation income increases in certain circumstances. The strength of the compensatory claim and the nature of the recipient’s contributions appear to be the major factors which may tip the balance either for or against an entitlement to share in the increased income.
(d) The recipient spouse may be permitted to share in post-separation increases in earnings if they can demonstrate that they made contributions that can be directly linked to the payor’s post-separation success. The nature of the contributions does not have to be explicit, such as contribution to the payor’s education or training. The question of whether the contributions made by the recipient specifically influenced the payor’s post-separation success will depend on the unique facts of every case.
(e) A spousal support award is more likely to take into account post-separation income increases where the relationship was long-term, the parties’ personal and financial affairs became completely integrated during the course of the marriage and the recipient’s sacrifices and contributions for the sake of the family and resulting benefits to the payor have been longstanding and significant. When this type of long history of contribution and sacrifice by a recipient spouse exists, the court will be more likely to find a connection between the recipient spouse’s role in the relationship and the payor’s ability to achieve higher earnings following the separation.
(f) In determining whether the contributions of the recipient were sufficient, the court should consider such factors as whether the parties divided their family responsibilities in a manner that indicated they were making a joint investment in one career, and whether there was a temporal link between the marriage and the income increase with no intervening change in the payor’s career.
(g) If the skills and credentials that led to the post-separation income increase were obtained and developed during the relationship while the recipient spouse was subordinating their career for the sake of the family, there is a greater likelihood of the recipient deriving the benefit of post-separation income increases.
(h) By contrast, the likelihood of sharing in such increases lessens if the evidence indicates that the payor spouse acquired and developed the skills and credentials that led to the increase in income during the post-separation period, or if the income increase is related to an event that occurred during the post separation period.
(i) Assuming primary responsibility for child care and household duties, without any evidence of having sacrificed personal educational or career plans, will likely not be sufficient to ground an entitlement to benefit from post-separation income increases.
(j) Evidence that the post-separation income increase has evolved as a result of a different type of job acquired post-separation, a reorganization of the payor’s employment arrangement with new responsibilities, or that the increase is a result of significant lifestyle changes which the payor has made since the separation may militate against a finding that the recipient should share in the increase.
(k) Where the payor’s post-separation advancement is related primarily to luck or connections which they made on his own, rather than on contributions from the recipient, the claim for a share in post-separation income increases will be more difficult.
(l) The court may also consider the amount of time that has elapsed since separation as an indicator of whether the recipient’s contributions during the marriage are causally related to the post-separation income increases.
(m) Evidence that the payor also made contributions to the recipient’s career advancement, or that the recipient has not made reasonable steps towards achieving self-sufficiency are also factors that may preclude an award that takes into account post separation income increases.
Analysis
Year 2011
[188] In 2011, both parties were employed, with applicant earning $140,003 and the respondent earning $285,938. Both parties’ incomes were derived from employment.
[189] The applicant seeks mid-range support of $5,321 per month, representing a lump-sum payment of $34,105. Any decision on spousal support, even since the advent of the Spousal Support Advisory Guidelines (“SSAGs”), still requires the court to apply the “means and needs” test.
[190] I have taken the following factors into consideration:
(a) I have not deducted the registered pension plan contributions, in accordance with the SSAGs. In calculating the lump-sum support in the years 2011, 2012, and 2015, I have used the midpoint between the parties. Those guidelines provide a range of spousal support as follows:
Low-range $4,560 lump-sum amount $28,286
Mid-range $5,321 lump-sum amount $34,091
High-range $6,081 lump-sum amount $38,895
(b) The net disposable income (“NDI”) of the parties, as follows:
(i) Low-range applicant, 47.5%; and respondent, 52.5%
(ii) Mid-range applicant, 49.5%; and respondent, 50.5%
(iii) High-range applicant, 50%; and respondent, 50%
(c) Due to the length of the marriage and the financial interdependency of the parties, I find that the spousal support award should provide each party with approximately equal standards of living.
(d) I have included the increase in the respondent’s employment income from 2009 to 2011 because I find the employment was directly related to the skills and experience obtained by the respondent during the marriage;
(e) the mid-range of spousal support would give the applicant 49.5% of the net disposable income and the respondent, 50.5%.
(f) No financial statement was prepared for the year 2011. The applicant only filed financial statements for October 2009 and October 2012.
(g) The compensatory and non-compensatory nature of the spousal support.
(h) The applicant’s need and the respondent’s ability to pay.
[191] Taking all the factors into consideration, I order the respondent to pay to the applicant the mid-range of spousal support, in the amount of $5,321 per month, for the period of January 1, 2011 to and including December 1, 2011. Considering that the spousal support paid by the respondent will not be tax-deductible, I order the respondent to pay to the applicant a lump-sum payment in the amount of $34,085 for the year 2011.
Year 2012
[192] In 2012, the applicant continued working and earned employment income of $133,901.
[193] On November 5, 2012, the respondent retired from the public service. In 2012, his total income from all sources was $459,326, derived from the following four sources: salary and performance pay ($273,120); severance pay ($128,516, of which $66,061 was accounted for in the net family property calculation); vacation pay ($33,653, of which $5,321 was accounted for in the net family property calculation); and pension income ($17,065).
[194] I find that in 2012 respondent’s income for support purposes is $374,564, calculated as follows:
(a) $273,120 in salary and performance pay;
(b) $62,455 of severance pay not equalized;
(c) $28,332 of vacation pay not equalized; and
(d) $4522, being that portion on non-equalized pension income from the $17,065 of pension income for the year.
[195] The respondent submits that the sum of $17,065 in pension income should not be included in the calculation of income for support purposes to avoid double dipping. I agree that any pension income derived from the part of the pension that was equalized should not be included. The applicant submits that the sum of $4,522 should be included, as it was not part of the equalized pension.
[196] I find that, in calculating both parties income, the part of the parties’ pensions that have been equalized should not be included as income for determining the quantum of spousal support.
[197] The applicant seeks mid-range support of $8,774 per month, representing a lump-sum payment of $56,261.
[198] I have taken the following factors into consideration:
(a) The SSAGs provide a range of spousal support as follows:
Low-range $7,521 lump-sum amount $48,210
Mid-range $8,774 lump-sum amount $56,261
High-range $10,028 lump-sum amount $64,305
(b) The NDI of the parties, as follows:
(i) Low-range applicant, 45%; and respondent, 55%
(ii) Mid-range applicant, 47 %; and respondent, 53%
(iii) High-range applicant, 50%; and respondent, 50%
(c) The applicant’s financial statement, dated October 25, 2012, shows a monthly deficit of $1,517.67 per month, while her proposed budget shows a monthly deficit of $3,643.55, or a yearly deficit of $43,722.60. The respondent does not have a financial statement for 2012, and his financial statement, dated January 20, 2013, is based on the respondent’s retirement income alone, rendering it of no assistance.
(d) I have included the increase in the respondent’s employment income from 2009 to 2012 because I find the employment was directly related to the skills and experience obtained by the respondent during the marriage;
(e) The compensatory and non-compensatory nature of the spousal support.
(f) The applicants need and the respondent’s ability to pay.
[199] I have taken into consideration that the applicant’s monthly deficit, even based on her proposed budget, does not exceed $43,722.60 per year. For that reason, I have applied an amount that is below the low-range of support. I order the respondent to pay to the applicant a lump-sum payment in the amount of $40,000 for the year 2012.
Year 2013 and 2014
[200] The applicant’s income from all sources in 2013 was $210,072.05 consisting of employment income of $157,619.96, interest income of $123.73 and RRSP income of $52,328.36.
[201] The applicant’s income from all sources in 2014 was $273,403.86 consisting of employment income of $99,287.31, pension income of $58,437.38 and other income of $215,679.17 related to her retirement package.
[202] The respondent’s income from all sources in 2013 was $191,0768.34 consisting of employment income of $32,000, pension income of $120,928.14 and other income of $38,140.20
[203] The respondent’s income from all sources in 2014 was $174,072.46 consisting of CPP benefits of $7,174.86, pension income of $105,987.11 and other income of $60,910.46.
[204] No spousal support was sought by the applicant for the years 2013 and 2014, as her income exceeded that of the respondent.
[205] The respondent submits that these years are relevant because based on SSAG’s calculations, prepared by the respondent, the applicant would have owed the respondent spousal support of $17,012 in 2013 and $53,628 in 2014 based on their income differences. Consequently, the respondent’s entitlement to $70,640 should be a factor in determining quantum of spousal support and retroactivity.
[206] However, the respondent has not advanced a claim for spousal support at any time. His entitlement has not been decided. The SSAG calculations are speculative at this point while the income evidence of the party’s incomes for those two years is not. In 2013, the parties had similar incomes albeit from different sources. In 2014, the applicant earned significantly more than the respondent in great part related to her retirement package. However, I agree that this income difference should be a factor in consideration of prospecting spousal support.
Year 2015
Applicant’s income
[207] The applicant earned $107,053, or $8,921 per month, comprised of her pension income of $94,222.92, executor fees of $679.80, government paid health benefits of $4183.04, and an imputed Canada Pension Plan (“CPP”) income of $7,968.
[208] Mr. Martel prepared a letter dated November 4, 2015, where he calculated the pension that was not equalized after adjustment for the actual retirement age of each party.
[209] The amount of the applicant’s pension that was equalized was $6,520 per month. Deducting that amount from the total pension income of $8,921 per month leaves a balance of $2,401, or $28,812 for the year.
[210] I find that the applicant’s income in 2015 was $28,812 for spousal support purposes.
Respondent’s income
[211] The respondent earned $195,676, or $16,306 per month, composed of his CPP income of $7,968, his public service superannuation and Deputy Minister pension of $121,868, his RCA pension of $43,294, and income from the Desjardins Board of $22,545.
[212] The applicant submits that the amount of the respondent’s pension that was equalized was $8,062 per month. Deducting that amount of the total monthly income of $16,306 leaving a balance of $8,244 per month or $98,928 for the year.
[213] The respondent submits that the respondent’s non-equalized pension income should be based on a substandard mortality calculation which according to Mr. Martel is $35,880 for the year.
[214] Based on the respondent’s income of $35,880 and the applicant’s income is $16,653, the respondent submits that the monthly range of spousal support is as follows: $542 (low end), $632 (mid-range), and $723 (high end).
[215] I reject the submission that, in calculating the respondent’s income, I should base it on his actual retirement age and substandard mortality. I have previously found that there was no factual or juridical basis to consider a substandard mortality calculation for the respondent’s pension. Further, if the respondent is anticipated to have a reduced life expectancy of age 70, rather than age 83.5, the applicant will be receiving less spousal support than she ordinarily would have had the respondent had a standard mortality expectation.
[216] The respondent seeks to exclude the income earned from being on the Desjardins Board of Directors and the Deputy Ministers pension.
[217] The decision as to whether or not to include post-separation income is discretionary. I have considered the following factors:
(a) The applicant is entitled to spousal support both on a compensatory and non-compensatory basis;
(b) This is a 31-year marriage, where the parties personal financial affairs were completely integrated during the marriage;
(c) The income derived from Desjardins was earned six years after separation, was related to a different type of job acquired post-separation, the income was short-lived and non-recurring. The respondent has since resigned from that position.
(d) The Deputy Minister’s pension income was earned post-separation. However, the respondent’s rise in his professional career, which culminated in his appointment as Deputy Minister of Justice in 2010, one year after separation, was a long and gradual one. The respondent was appointed the Associate Deputy Minister of Justice in Business and Regulatory law in 2007, before separation. The respondent’s skills and experience were developed over the 31 years of marriage. The party’s financial affairs were integrated and finally the respondent received an advantage in his career as a result of the role assumed by the applicant.
[218] Based on these findings, I will not include the Desjardins income in the year 2015 but will include the Deputy Minister’s pension income.
[219] I find that the respondent’s income in 2015 for support purposes is $76,383. In deciding the quantum of spousal support, I have taken the following factors into consideration:
(a) The SSAGs provide a range of spousal support on the non-equalized pensions as follows:
Low-range $1,487 lump-sum amount $12,891
Mid-range $1,734 lump-sum amount $14,862
High-range $1,904 lump-sum amount $16,264
(b) The NDI of the parties, based only on the non-equalized pension income, is as follows:
(i) Low-range applicant, 46%; and respondent, 54%
(ii) Mid-range applicant, 48%; and respondent 52%
(iii) High-range applicant, 50%; and respondent, 50%
(c) I find that, upon a review of the applicant’s financial statements, dated February 11 and November 6, 2015, she has a need for support. On the other hand, the respondent’s financial statements of February 9 and November 9, 2015 show a surplus and an ability to pay.
(d) I have considered the income differences between the parties in 2014 which should have afforded the applicant an opportunity to address some of her needs in that year and going forward.
(e) The compensatory and non-compensatory nature of the spousal support.
[220] Taking all these factors into consideration, I order the respondent to pay to the applicant the low-range of spousal support, in the amount of $1,487 per month, for the period of January 1, 2015 to and including December 1, 2015. I order the respondent to pay to the applicant a lump-sum payment in the amount of $12,891 for the year 2015.
Periodic Spousal Support for the Year 2016
[221] The applicant submits that her income for 2016 will be pension income of $94,222; benefit income of $4,183; and an imputed CPP income of $7,968: a total income of $106,373, or $8,864 per month. The equalized portion of her pension is $6,520 per month, leaving the non-equalized portion to be $2,344 per month, or $28,128 for the year.
[222] With respect to the respondent’s income, the applicant submits that the respondent’s income will be $193,000, comprised of CPP income of $7,968, pension income of $121,868, RCA pension of $43,294, and $20,000 of additional work. The respondent indicated that he worked for Health Canada in 2015 but that the work was billed in 2016. He also did some additional work in 2016 and anticipates receiving a total payment from Health Canada in 2016 in the amount of $9,400. The equalized amount of the pension income is $8,062. Subtracting the non-equalized amount leaves a value of $8,021 per month or $96,252 for the year. If there is no adjustment for the income earned by the respondent at Health Canada, the applicant submits that the respondent’s income will be $76,256.
[223] For the reasons previously given with respect to the post-separation income earned at Desjardins, I will not include the income earned by the respondent at Health Canada but I will include the Deputy Ministers pension.
[224] The respondent submits that his income will be $35,888, representing the unequalised portion of his pension using substandard mortality. For the reasons previously given, I reject this submission.
[225] For 2016, I find that the applicant’s income will be $28,128 and the respondent’s income will be $76,256.
[226] Currently, the respondent pays $430.62 per month for his Great-West Life insurance policy of $200,000, which has no term; $318.67 per month for his Industrial Alliance life insurance policy of $765,000, with a term of ten years, ending in November 2022; and two times his former employment salary for his Supplementary Death Benefit. The respondent submits that the cost of the monthly premiums must be taken into consideration in determining the quantum of spousal support.
[227] I have taken the following factors into consideration:
(a) The SSAGs provide a range of spousal support as follows:
Low-range $1,504 lump-sum amount $13,262
Mid-range $1,756 lump-sum amount $15,299
High-range $1,922 lump-sum amount $16,713
(b) The NDI of the parties, as follows:
(i) Low-range applicant, 46%; and respondent, 54%
(ii) Mid-range applicant, 48%; and respondent, 52%
(iii) High-range applicant, 50%; and respondent, 50%
(c) The applicant’s compensatory and non-compensatory entitlement to spousal support.
(d) The prospective cost of the respondent’s life insurance premiums. Since the date of separation, the applicant has not been the designated beneficiary of the life insurance policies.
(e) The applicant’s financial statement shows a need and the respondent’s financial statement shows an ability to pay.
[228] Taking all the factors into consideration, I order the respondent to pay to the applicant the low end of spousal support, in the amount of $1,504 per month, commencing January 1, 2016.
LUMP-SUM SPOUSAL SUPPORT
[229] The applicant seeks a lump-sum payment of $133,523, for the period January 1, 2010 to December 31, 2015, and periodic support as of January 1, 2016, in the amount of $1504 per month.
[230] For reasons set out herein, I have found that spousal support should have started on January 1, 2011. I have found that spousal support should have been paid for the years 2011, 2012, and 2015, in the total amount of $86,976.
LIFE INSURANCE
[231] The applicant seeks an order that the respondent designate the applicant as the irrevocable beneficiary of a life insurance policy. During submissions, counsel for the applicant indicated that that she was seeking $325,000 of life insurance. The amount of the life insurance sought is related to the amount of the spousal support ordered based on the expected life expectancy of the applicant.
[232] The respondent submits that life insurance is not warranted as the respondent’s pension will end upon his death and any obligation to support should end at that time. The respondent denies that there will not be any liability for spousal support at the death of the respondent. In the alternative, if life insurance is to be ordered, the amount would be $83,740-$97,651 or $111,562. Further, the amount of life insurance should decrease with the applicant’s age.
[233] The respondent’s children are the beneficiaries under the Great-West Life and Industrial Alliance life insurance policies, while his son Ryan is the beneficiary in trust of the respondent’s death benefit.
[234] The applicant has submitted a DivorceMate life insurance estimate that, based on the mid-range of support, the sum of $365,290 of life insurance would be required to secure the support.
Legal framework
[235] In Katz v. Katz, 2014 ONCA 606, 377 D.L.R. (4th) 264, the Court of Appeal canvassed the issue of life insurance securing support obligations and provided the following principles:
(a) The Divorce Act does not have a provision like s. 34(1)(k) of the Family Law Act, which permits a court to order a spouse to obtain insurance to secure payment of support following the payor’s death;
(b) Despite not having the specific provisions, the Court is given broad discretion to impose terms, conditions, and restrictions in connection with an order for child or spousal support, including the power to order a spouse to obtain insurance to secure the payment, to be binding on the payor’s estate; and
(c) The factors to be considered in determining the quantum of the life insurance, once the issue of insurability and cost of the insurance is resolved, are as follows: the amount of life insurance cannot exceed the amount of support payable over the duration of the support order; the amount of insurance to be maintained should decline over time as the amount of spousal support payable will diminish over the duration of the award; the obligation to maintain insurance should end when the support obligation ends; and the court should first order that the support obligation is binding on the payor’s estate.
Analysis
[236] I have considered the following factors in arriving at my decision regarding life insurance:
(a) Under the Divorce Act, I have jurisdiction to order the respondent to obtain and maintain life insurance to secure his payment of a support obligation;
(b) Under the Divorce Act, I have jurisdiction to order the support obligation to be binding on the respondent’s estate;
(c) I have ordered the respondent to pay to the applicant spousal support in the amount of $1,504 per month;
(d) The respondent’s Great-West Life policy of $200,000 costs him $430.62 per month and has no term;
(e) The respondent has a death benefit of two times his salary through his employment, which principal amount is reduced by 10% each year starting in 2013.
[237] Taking all the factors into consideration, I order the respondent to designate the applicant as the irrevocable beneficiary of his death benefit through his employment and the Great-West Life policy and to provide proof of said designation by December 23, 2016.
DISPOSITION
[238] I order the following:
(a) Commencing on January 1, 2016 and, on the first day of each month thereafter, the respondent shall pay to the applicant spousal support in the amount of $1,504 per month;
(b) The respondent shall pay to the applicant the sum of $29,187.94, being the lump-sum spousal support owed by the respondent of $86,976, less the sum of $57,788.06 owed by the applicant, representing the equalization and post separation credits. This sum shall be payable to the applicant within 180 days of the date of the order, with interest pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43;
(c) The respondent shall execute a discharge of his mortgage registered on the applicant’s residence at 422 Hamilton Street Ottawa Ontario within 30 days of this order. The cost of the preparation and registration of this discharge to be paid by the applicant;
(d) The respondent shall designate the applicant as the irrevocable beneficiary of his death benefit through his employment and the Great-West Life policy and to provide proof of said designation by December 23, 2016; and
(e) The respondent’s support obligation to the applicant to be the first charge on his estate.
COSTS
[239] If the parties are unable to resolve the issue of costs, the applicant shall submit her cost submissions, not to exceed four pages, plus any offers to settle, and a detailed bill of costs by January 13, 2017. The respondent shall submit his cost submissions, not to exceed four pages, plus any offers to settle, and a detailed bill of costs by January 27, 2017. The applicant may file a reply of no more than two pages by February 6, 2017.
Released: December 9, 2016
Shelston J.