Court File and Parties
Oshawa Court File No.: FC-13-00000921 Date: 2017-02-01 Ontario Superior Court of Justice
Between: Alana Corinne Scott, Applicant And: Derek John Scott, Respondent
Counsel: Alana Corinne Scott, Self-Represented Anne B. Gregory, for the Respondent
Heard: May 26, 27, 30, 31, 2016; June 1, 2, 3, 2016
Reasons for Judgment
Introduction
1These proceedings were initiated by an application signed May 23, 2013 and issued on August 24, 2013. The applicant seeks an equalization award, periodic and compensatory spousal support, a continuation of a restraining order and costs. Although there is a claim for an unequal division of net family property by the applicant, there are no facts pleaded in support of this claim. The respondent seeks costs. Each of the parties has abandoned claims for damages arising from the other’s allegedly tortious conduct. Both parties claimed for a divorce in the pleadings, and this was granted on April 8, 2015.
2For the reasons that follow, I find the respondent’s absolute discharge in bankruptcy releases him from the applicant’s claim for equalization of net family property. I am awarding the applicant $25,000 in spousal support arrears but decline to order the respondent continue to be restrained from the applicant.
The Background Facts
3The applicant was born on May 21, 1975; the respondent was born on March, 30, 1964.
4They met in Brussels, Belgium in 1997 or 1998 where the respondent was then posted. He was a non-commissioned member of the Armed Forces, occupied in the administration trade. The respondent testified that he customarily received exemplary performance reviews, such that he had advanced quickly in the ranks from Private to Warrant Officer and received plumb assignments.
5The applicant was studying music when the parties first met. Like the respondent, she had completed a high school education. She had been enrolled in a music program at Wilfrid Laurier University but did not complete it. Her academic results were poor in some aspects. She travelled to Europe to continue studying singing. After she and the respondent returned to Canada and married, she continued to take singing lessons from time to time in her home town of Whitby, when proximity and funds permitted. She travelled to Portugal to perform in an opera in 2006. There was little other evidence given as to what prospects she may have had for remunerative employment as a performing artist.
6The respondent had been married twice before. By the time the parties met in Brussels, he had two daughters, born in 1987 and 1988 respectively from his first marriage and a toddler from his second marriage. He paid child support for his son in the amount of $410 per month from November of 2010 through May of 2015.
7The respondent recalls that he separated from his second wife in the late summer of 1998. The applicant contends that she and the respondent began living together in 1998. The respondent says it was in 1999.
8Until the parties began living together, the applicant was supported financially by her family. The respondent's financial circumstances when the parties began living together in Brussels were precarious. He had been court-martialed for having falsely claimed for education allowances. He had misused funds intended for his children’s education to pay debts and support the family. He was sentenced to serve a period of incarceration and reduced in rank and pay to that of a Private. He acknowledged that as of July 22, 1999, he had an obligation to repay the Crown $92,000 in restitution. He was also entangled in legal disputes with his second wife relating to his support obligations for their son and remained so for several years.
9Though he did not realize it at this time, the sum misappropriated by the respondent came to be considered by the Canada Revenue Agency (CRA) as a taxable benefit for taxation years 2008 and 2009, such that he was assessed substantial penalties and interest. These continued to accrue over the parties’ cohabitation and marriage. By the time of his bankruptcy in 2012, he owed the CRA $174,240.72.
10The applicant remained in Brussels and cared for the respondent’s two daughters during his period of incarceration, which was about two months. She sold her car to help make ends meet at that time.
11The respondent was posted home to Canada in 1999. The parties married on October 21, 2000. At that time, she was 25, and he was 36.
12He, the applicant and his two daughters settled in a home he owned near Montréal. The Respondent was posted from Montréal to Ottawa in the spring of 2003.
13The parties bought a home in Prescott, Ontario in 2005. From October of 2006 through July 1, 2009, the respondent was posted to Saint-Jean, Quebec and thence to Kingston, Ontario. The parties sold their matrimonial home in Prescott in 2010 and divided the net proceeds of about $21,000 equally between them.
14Throughout their marriage the parties continued to avail themselves, in some measure, of financial assistance from the applicant’s family. They were dependent upon her aunt to qualify for the mortgage of the home they purchased in Prescott and to clear municipal tax arrears of more than $16,000 when it was sold five years later.
The Issues
15The issues raised by the pleadings and the parties at trial include the following:
- What is the date of separation?
- Does the applicant’s claim for equalization survive the respondent’s assignment and discharge in bankruptcy, given that his pension from employment is an asset that did not form part of his estate in bankruptcy? If an equalization payment was to be made to the applicant based on the respondent having retained an exempt asset in the form of his pension from employment, of what consequence is it that the respondent’s pension has been in pay since his retirement in 2013?
- Should the applicant be awarded spousal support, either by way of a lump sum or a periodic award? If so, is the respondent’s entire income to be considered for support purposes including any increases following retirement due to a new occupation?
- Should the restraining order continue to operate?
1. Date of Separation
16In her application, the applicant alleged that the parties’ date of separation was June 30, 2012. She was permitted to amend this allegation by an order Scott J. made at a case conference. By way of reply, the applicant alleged that the date of separation was August 1, 2012. The respondent pleads that the date of separation was September 30, 2007.
Facts
17The parties briefly separated in September of 2007. She thought he was having an affair. They parted company on hostile terms, with the respondent suddenly departing their home in Prescott for Saint-Jean, where he worked through the week and threatened to burn the house down with her in it. Each retained counsel. Letters were exchanged during the fall of 2007 between their lawyers. No demand for spousal support was made by the applicant, but reference was made to joint financial obligations and the need to ensure they would continue to be met. Communications between the lawyers tailed off in early 2008.
18From the time of the respondent’s posting to Saint-Jean in 2006, the applicant says she and the respondent would spend weekends with one another. The applicant says the parties reconciled in late 2007, following the temporary separation. She says they continued this arrangement after their reconciliation, through the sale of their home in 2010 and during his posting to Kingston, notwithstanding her employment in Toronto from 2009 onward, until their final separation in 2012. She testified the parties spent the July 1, 2012 weekend together.
19By contrast, the respondent characterizes the circumstances under which the parties encountered one another after September of 2007 as dates. He denies there was anything between them beyond sex and a hope of reconciliation.
20A neighbour and work colleague of the applicant offered evidence that the respondent was present at the parties’ matrimonial home in Prescott on weekends in 2008 and 2009. She recalled a specific occasion in March of 2009 of spending time with the respondent and applicant. She socialized with the parties throughout 2008 to 2010. She was unaware of them having separated in 2007. Another neighbour testified about his meeting the parties in 2010 when they were neighbours in Kingston. He too recalled seeing the parties together on weekends. He was aware of the applicant working in Toronto and for a time in Kingston. He and his wife celebrated the Scotts’ 11th wedding anniversary together. He identified a photograph of the parties as having been taken by him at a party on New Year’s Eve of 2011. He testified it became apparent to him in late July or August of 2012 that the applicant had moved things out of the house.
21The respondent’s family members testified. Their evidence corroborates that of the applicant that she travelled to be with the respondent on weekends.
22There was little in the evidence given by the respondent’s daughters. Their evidence was at best incomplete and in some aspects, inconsistent as to how long the children lived with the parties after returning from Brussels. At the least, the applicant formed a loving bond with and cared for the respondent’s two daughters for a couple of years before the daughters departed. I find the daughters had infrequent visits with their father, but I accept their evidence that there was little sign of the applicant’s personal items in their father’s residences after the sale of the home in Prescott. However, their evidence confirmed there was some continued contact between the parties after 2007.
23In his sister’s view, they had separated many times. She introduced him to a potential romantic partner at one point.
24Documents demonstrate that in April 2008, the respondent was promoting the idea that his wife sing at an event at his workplace. He identified his marital status as married on his income tax returns for each year between 2007 and 2011. Her income tax returns over the same period reported her status as separated, until she had the records retroactively amended after this litigation began. The returns indicate her address to be her parental home in Whitby. Insurance records for the years 2008 through 2012 reflect both parties’ names, but different regions of car usage. The applicant’s MTO records indicate her address as being in Whitby. Credit card records of the applicant show expenditures being made in Prescott, as well as Toronto and Whitby. There are records for prescriptions and veterinarian services that reflect her residence as being in various places.
25The parties attended a fertility clinic as late as April of 2011 with the shared hope of conceiving a child. The respondent underwent repeated surgical procedures to reverse a vasectomy. There are bank records in their joint names and a cable account in her name for the home in Kingston. These accounts were opened after the parties’ ostensible separation in 2007. However the evidence falls short, I find, that the applicant deposited any sums to the joint bank accounts.
26The parties exchanged congratulatory cards in relation to their 11th wedding anniversary. The applicant was present during the respondent’s mother’s dying hours and her funeral in 2011.
27Curiously, the respondent made a Statutory Declaration on July 24, 2012 that he had been separated as of January 26, 2012. As late as September 26, 2012, he sent an email to the applicant, wherein he confirmed her decision that they formally separate as of September 28 of that year, and pleads that they continue their relationship of 14 years.
28In an affidavit sworn August 15, 2013 and filed with the court in support of her application, the applicant deposed that she left the respondent once and for all in June 2012. She said he had choked her on June 30, 2012, and it was after this incident she separated from him. In her testimony at this trial, she proffered that they separated on or after the long weekend in August 2012, after she learned that he had used drugs with his daughters.
The Law
29The court was invited by the respondent’s counsel to consider cases that address the determination of when parties are to be considered to have separated without prospect of reconciliation. The factors considered by the courts have included: physical separation of the parties, whether there has been withdrawal by one or both parties with the intention of destroying the matrimonial consortium, the presence or absence of sexual relations, whether there is communication between the parties, shared social activities, meals and household tasks, their method of filing income tax returns, whether they make separate plans for assets, consulted with a lawyer or taken legal steps.
30The jurisprudence suggests no list of factors can be considered to be exhaustive or determinative. A reasonable prospect of reconciliation must be more than wishful thinking on the part of either party. It does not exist if there is a complete absence of intent on the part of at least one of the parties to reconcile: see Oswell v. Oswell (H.C.J.); Mossett v. Mossett, 2002 MBQB 278, 169 Man. R. (2d) 85; Kramer v. Kramer, 2014 ONSC 5952, 2014 CarswellOnt 14209; Gulewicz v. Gulewicz, 2005 ABQB 166, 2005 CarswellAlta 748.
Analysis
31Having considered all of the evidence, some of which I have summarized above, and having regard to the factors outlined in the jurisprudence, I am satisfied that at no time did the respondent consider that he and the applicant had separated with no prospect of reconciliation before September of 2012. While I find the applicant instigated a separation in 2007 after an angry encounter between the parties, the separation lasted no more than a few months before the parties reconciled. It was the applicant, by her words and conduct, who primarily determined the continuity of the parties contact. Due to the respondent’s work requirements, the parties spent considerable time apart. The applicant worked in Toronto from 2009 onwards, with the exception of several weeks in 2011 when she was in Kingston. She pursued and achieved full time permanent employment with the CRA, following in her mother’s footsteps. She spent her weekdays at her mother’s home in Whitby, where she continues to live, yet continued to maintain an intimate and social relationship with the respondent, even to the extent of planning to have a child with him and overlooking his infidelities.
32I do not accept the applicant’s evidence as given at trial regarding the date of separation in 2012. The applicant demonstrated that she is not above manipulation when she altered her income tax records to report her marital status as married rather than separated after this litigation began. Her evidence as to the date of separation being in August was vague and lacking in detail when compared to the contents of her sworn affidavit. I find that she was being untruthful when contradicting her sworn affidavit and the contents of her application. I prefer and accept the evidence given by the applicant in the affidavit. Based on that evidence together with all of the other evidence, I find that the parties separated with no prospect of reconciliation on June 30, 2012.
2. Net Equalization of Family Property
Facts
33The respondent filed for bankruptcy on July 26, 2012, meaning his bankruptcy post-dates the date of separation. The documents generated in the bankruptcy establish that as of July 26, 2012, the respondent’s debts totalled $256,146.49. Of this, $174,240.72 was owed to CRA and $65,000 to DND. The reported assets had a value of $453. The respondent’s pension was exempt from the bankruptcy proceedings. (Kershman J. found that the respondent had failed to include a boat he had gifted to his daughters within a year of the bankruptcy, but the applicant did not effectively challenge the validity of the “gift” in these proceedings.) On the face of it, there were insufficient assets in the respondent’s estate in bankruptcy to allow for any dividend to claimants.
34By order of Kershman J., the stay of proceedings mandated by section 69.3 of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 [BIA] was lifted to permit the applicant to pursue this litigation. He ordered the estate in bankruptcy remain open for 18 months, after which the trustee would be permitted to close it.
35Kershman J. observed in his further ruling of September 19, 2014 that the trustee had disallowed the applicant's claim in the bankruptcy and reportedly, there was a consent order allowing an appeal. There was no evidence as to the outcome of the appeal referred to by Kershman J. of the disallowance of her claim. He declined to delay the respondent's discharge from bankruptcy pending a determination as to whether the applicant had a provable claim. On January 18, 2015, he made an absolute order of discharge in the respondent’s bankruptcy. There is no evidence that any application was made to review, rescind or vary that order.
36It may be worth noting that the respondent’s debt to the Crown survived the bankruptcy, due, it may be presumed, to its origin in the respondent’s fraudulent conduct. He has since paid it.
The Law
37Section 178(2) of the BIA states that “[s]ubject to subsection (1), an order of discharge releases the bankrupt from all claims provable in bankruptcy.”
38Section 121 of the BIA defines claims provable in bankruptcy to include “[a]ll debts and liabilities, present or future, to which the bankrupt is subject on the day on which the bankrupt becomes bankrupt or to which the bankrupt may become subject before the bankrupt’s discharge by reason of any obligation incurred before the day on which the bankrupt becomes bankrupt.”
39A claim for equalization of net family property does not fall within the exceptions listed in s. 178(1) of the BIA; rather, it is a claim provable in bankruptcy: Schreyer v. Schreyer, 2011 SCC 35, [2011] 2 S.C.R. 605, at paras. 20, 29.
Analysis
40The circumstances of this this case may be compared to those in Schreyer, a case in which the Supreme Court of Canada considered the interplay between bankruptcy law and family law. Like Ontario, the regime in issue was one of equalization, such that each spouse retains ownership of his or her own property, not a division of assets. Mr. and Mrs. Schreyer filed for divorce in 2000. Before a master conducted an accounting and valuation of their assets, the husband made an assignment in bankruptcy. The wife was not listed as a creditor and received no notice of the assignment. The husband was discharged in bankruptcy in November 2002. The issue was whether the application of the BIA released the respondent from the applicant's equalization claim. It was observed that assets are only transferable at the remedial stage, as a form of payment or execution of judgment. A claim for equalization creates a debt. The court ruled that this is important for the purpose of determining whether the appellant’s claim survives her husband’s discharge from bankruptcy. The BIA sweeps equalization claims into the bankruptcy, and a bankrupt is released from all claims upon discharge unless there is a clear exclusion or exemption. As a result, Mrs. Schreyer was denied recovery of an equalization payment, whereas the respondent retained ownership of the family farm, because the farm was exempt from seizure. Schreyer allows for the possibility of mitigation of the inequities arising from a bankruptcy, such as the release of the debtor spouse from equalization claim or the retention by that spouse of an exempt asset, via an award of spousal support.
41In Schreyer, the Supreme Court of Canada refers to the reasoning of the Ontario Court of Appeal in the decision of Thibodeau v. Thibodeau, 2011 ONCA 110, 104 O.R. (3d) 161. At para. 21 of Thibodeau, Blair J.A. notes that the BIA does not purport to extinguish claims that are provable in bankruptcy; it only releases the debtor from such claims. For creditors, the discharge means that they cease to be able to enforce claims against the bankrupt that are provable in bankruptcy. The court concluded that the appellant's claim was provable in bankruptcy and was not exempt from the effect of the discharge. The court observed that the appellant, as a spouse, would have been entitled to pursue the enforcement of an equalization entitlement against exempt property since the respondent failed to list the appellant as a creditor in the bankruptcy. In those circumstances, the court said the appropriate remedy for a creditor like the appellant would have been to seek leave to pursue a claim against exempt property. Since such exempt property is beyond the reach of the ordinary creditor, lifting the stay of proceedings does not prejudice the assets available for distribution to all creditors in the bankruptcy.
42On the facts here, the applicant made a claim in the respondent’s bankruptcy. She did obtain leave to continue her litigation. The respondent was discharged in bankruptcy. The facts are indistinguishable from those in Schreyer and distinguishable from those in Thibodeau. I conclude that she is not entitled to an equalization payment. As in Schreyer, this outcome looks unfair given that the only asset the respondent truly had was his pension, which is exempt from bankruptcy and not accessible to any creditor. Given that his pension is now in pay, it will be considered for the purposes of the support analysis, in any event.
3. Spousal Support
Facts regarding the applicant’s entitlement to spousal support
43Though the applicant claims that she and the respondent had a traditional relationship and she was a full time home maker for some period of time after their return to Canada from Europe, the evidence was insufficient to establish over what period of time this may have been or what, if any, effect this may have on the applicant’s economic empowerment.
44The evidence also establishes that the respondent maintained significant responsibility for the day to day care of his children.
45After the sale of their jointly owned home in 2010 and the equal division of the proceeds between them, the parties did not much enjoin their financial resources. There is some evidence that they had some joint accounts, but there is no satisfactory evidence that the applicant made contributions to these nor that there were many joint expenditures. In this regard, I prefer and accept the respondent’s evidence that, for economy, the parties maintained a joint car insurance policy, and they arranged their affairs so that each effectively paid their own costs after 2010. He paid the rent on the PMQ in Kingston. Even though I have found that the parties did not separate until June of 2012, I find that financially, they have lived without interdependence since the sale of their home in 2010.
Facts regarding the quantum of a spousal support
46The applicant’s reported income from employment is as follows:
| Year | Income |
|---|---|
| 2000 | $340 |
| 2001 | $1 |
| 2002 | $547 |
| 2003 | $0 |
| 2004 | $23,858 |
| 2005 | $24,005 |
| 2007 | $20,499 |
| 2008 | $24,753 |
| 2009 | $22,137 |
| 2010 | $36,501 |
| 2011 | $41,780 |
| 2012 | $51,126 |
| 2013 | $49,938 |
| 2014 | $57,203 |
| 2015 | $55,175 |
47The applicant earned income in the entertainment industry for a couple of years after the parties returned from Europe, though not as a singer. She did not report her income to the CRA, so there is no documentary evidence of it. She testified she earned something between $500 and $1,500 per week. I accept her evidence that she was influenced by the respondent to engage in the particular line of work and felt ill-suited to it. It is notable that her family, with whom she had always maintained a close relationship, was unaware of the nature of her work over this time.
48The applicant next gained employment as a coordinator of recreational activity in Ottawa after the respondent was posted there in 2003. She advanced to the position of manager. She continued at this work for a time after the parties bought their home in Prescott. After leaving the job in Ottawa, she began working in Prescott at a fitness establishment. She managed the facility for a time. She maintained her employment there from February 2007 until some point in 2008. She then began working in Toronto. She was laid off in September of 2008.
49In October 2009, the applicant secured employment with the CRA. She took a leave of absence in early January 2011 to work for Statistics Canada in Kingston. Although the opportunity was for a six month term, she returned to her position at the CRA after several weeks when she realized there was no opportunity for a permanent job in Kingston. She did not wish to jeopardize the better opportunity she had at the CRA in Toronto. She has maintained employment with the CRA consistently since 2009 and is now a permanent, full time employee. She will earn more than $57,000.00 in 2016.
50As of the valuation date, the applicant’s credit card debt was $7,100. There is no evidence that these were joint debts with the respondent. As of the date of the Financial Statement she swore on May 1, 2016, her debts have spiralled to $60,958.00. These debts include loans from her mother and grandmother totaling $31,500, with the balance owing to arms’ length creditors. There was no explanation as to why the applicant’s debts have increased as they have.
51The respondent’s reported income is as follows:
| Year | Income |
|---|---|
| 2002 | $55,705 |
| 2003 | $63,482 |
| 2004 | $55,444 |
| 2005 | $63,099 |
| 2006 | $62,579 |
| 2007 | $66,580 |
| 2008 | $69,892 |
| 2009 | $70,385 |
| 2010 | $74,611 |
| 2011 | $69,820 |
| 2012 | $30,700 |
| 2013 | $115,588 |
| 2014 | $58,174 |
| 2015 | $68,395 |
| 2016 | $199,323 |
52The respondent was released from the armed forces in 2013. That year he received salary of $86,466, a severance payment of $22,826, pension income and a transitional benefit from Manulife. He was discharged from service due to having tinnitus, post-traumatic stress disorder and problems with his knees. He began working with RMP Construction during a transitional period, under the auspices of the Canadian Forces, as he approached release. He established a business called Derek Scott Global Market Consulting. He became occupied in promoting and selling condominiums constructed by RMP. RMP’s principal is the respondent’s friend, Robert Pelda. For his consulting services, the respondent says he was entitled to invoice $32,000 per annum and to earn a commission of 2% on the sale of condominium units constructed by RMP. His fixed entitlement was reduced as of April 1, 2016 to $24,000 per annum. His income for 2016 was $199,323. He does not anticipate earning as much in the immediate future, because the commissions he earns are cyclical in accordance with when sales close and the construction begins anew.
53The respondent’s income from his service in the Canadian Forces has been fairly consistent. His increases in earned income post-separation are attributable to a new career in real estate promotion and sales. The parties socialized with Mr. Pelda before their separation but other than that, there is no evidence that his increase in earnings after 2012 had its genesis during the parties’ relationship.
54The evidence as to the lifestyle enjoyed by the parties while together or apart was not rich in detail. Each seemed to always have had a motor vehicle and lived in modest accommodation. For a short time, they had a leisure boat. The last home they spent time in together was the respondent’s rental accommodation on the military base in Kingston. The parties seemed to have socialized close to home and do not appear to have travelled often or far with one another, other than one weekend trip to New York City.
55According to the respondent’s Financial Statement sworn May 1, 2016, he has acquired vehicles valuing $54,500 since his separation and bankruptcy. He has just short of $10,000 on deposit in the bank. He has purchased a condominium in Cornwall, Ontario that is valued at $234,000. He has a mortgage of $174,000 but no other debts.
56Since 2009, the applicant has maintained a home with her family in Whitby and worked in Toronto, whilst the respondent maintained his residence in Prescott and Saint-Jean then, Kingston. Her shelter costs are $750.00 per month and groceries $350.00. Her car costs run at $950.79 per month.
57The applicant’s present expenses exceed her income by a substantial margin, but there is no evidence that this is attributable to any circumstance arising from the parties’ marriage or separation.
The Law
58An order of discharge does not release the bankrupt from any debt or liability for alimony: BIA, s. 178(1)(b).
59A court may, on application by either or both spouses, make an order requiring a spouse to secure and/or pay such lump sum and/or periodic sums as the court thinks reasonable for the support of the other spouse under s. 15.2(1) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.).
60In making a spousal support order, the court shall consider the condition, means, needs and other circumstances of each spouse, including the length of time the spouses cohabited and the functions performed by each spouse during cohabitation.
61An award of spousal support should recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; apportion 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; relieve any economic hardship of the spouses arising from the breakdown of the marriage; and in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time: Divorce Act, s. 15.2(6).
62Redistributing assets is not one of the purposes or objectives of spousal support. As such, a lump sum award should not be made or pursued in the guise of support for the purpose of redistributing assets: see Davis v. Crawford, 2011 ONCA 294, 106 O.R. (3d) 221, at para. 60; Ross v. Ross, 2014 ONSC 1828, 11 C.C.P.B. (2nd) 170, at para. 48. Though the effect of a lump sum award is typically to transfer one spouse’s asset(s) to another, the effect of such an award must be distinguished from its purposes: Davis, at para. 62. A court considering an award of lump sum spousal support is to weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.
63The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons. For example: short-term marriage; domestic violence; second marriage with no children, providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.
64Similarly, the disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support: Davis, at paras. 66-68.
65Other important considerations are whether the payor has the ability to make a lump sum payment without undermining the payor’s future self-sufficiency, the beneficial tax treatment afforded only to periodic arrears but not lump sums and the inequities arising from the bankruptcy, such as the release of the debtor spouse from an equalization claim or the retention by the debtor spouse of an exempt asset as stated in Schreyer, at para. 37.
Analogous Cases that Awarded Lump Sum Spousal Support
66In Sim v. Sim, Marshman J. converted Campbell J.’s award of periodic spousal support (dated October 28, 2004) into a $60,000 lump sum spousal support award, because the ex-husband’s discharge in bankruptcy on October 16, 2006 constituted a material change in circumstances. The ex-wife counted on an equalization payment to assist her in funding her retirement. As such, the amount was to be secured against the ex-husband’s pension.
Analogous Cases that Awarded Periodic Sum Spousal Support
67In Decaen v. Decaen, 2013 ONCA 218, 303 O.A.C. 261, the parties were separated in 2007, and the father declared bankruptcy in 2008. “The trial judge ordered the father to pay the mother an amount equal to one-half the value by which his pension increased between the date of marriage and the date of separation by means of periodic spousal support commencing on the first day of the month following the earlier of the date upon which he retires or the date upon which he is first eligible to retire.” Though the Court of Appeal found the trial judge might have conflated the principles relevant to equalization and spousal support, the Court of Appeal ultimately upheld the award, because otherwise, it was reasonable.
68In Ross, the parties were separated in 2009. The ex-husband declared bankruptcy on November 8, 2010 and was discharged from bankruptcy on August 9, 2012. Though the ex-wife was not entitled to compensatory spousal support, Cornell J. awarded the ex-wife periodic spousal support, because she was responsible for the parties’ joint debts when the husband made an assignment in bankruptcy. As such, the breakdown of the marriage resulted in economic hardship to her.
69In O’Halloran v. O’Halloran, 2013 ONSC 6282, 7 C.B.R. (6th) 101, the parties separated in 2010 after 22 years of marriage. The ex-husband declared bankruptcy on February 3, 2012 and expected to be discharged in November 2013. Though Varpio J. thought that Schreyer permitted His Honour to use the fact that the ex-husband retained his pension as a basis for elevating support, Varpio J. declined to do so: at para. 32. The ex-wife was, however, awarded periodic spousal support in line with the Spousal Support Advisory Guidelines.
Analysis
70The application of the Spousal Support Advisory Guidelines to the circumstances of the parties yields the following:
| Year | Low | Mid | High |
|---|---|---|---|
| 2012 | ($4,797) | ($5,596) | ($6,396) |
| 2013 | $10,207 | $11,908 | $13,609 |
| 2014 | $0 | $0 | $0 |
| 2015 | $1,799 | $2,099 | $2,398 |
| Total | $7,209 | $8,411 | $9,611 |
71While the Spousal Support Advisory Guidelines suggest a duration of 6-12 years, I am awarding the applicant a lump sum award of spousal support, having regard to the ages of the parties as of their date of marriage and separation, the limited period of time over which child care duties were assumed, their respective education and employment while married and their uniquely independent living and economic circumstances since 2010. As well, I have weighed the circumstances that Mr. Scott, though he has the benefit of a pension which was exempted from equalization due to his assignment in bankruptcy, was released from service due to disabilities and Mrs. Scott has secure employment and is contributing to a pension. I am awarding a lump sum having regard to the arrears of spousal support that might have been awarded having regard to the SSAG calculations for the years from 2013 to 2016, in service of a final, clean break between these parties. The respondent shall pay the applicant the sum of $25,000.
4. Restraining Order
72The applicant described multiple incidents of the respondent assaulting or threatening her, as late as June 30, 2012. The respondent denies having been violent towards the applicant, save for a threat to burn down the house in 2007. He explained that he entered into a peace bond to avoid the cost and conflict of a trial when he was charged with assault. There is no evidence that the respondent has by word or deed posed any threat to the applicant over the last four years or breached the terms of any restraining order, except for the applicant’s allegation he mouthed words during this trial. The applicant was composed and extraordinarily empathetic towards his daughters notwithstanding their obvious hostility to her and lack of control over their own behavior at this trial. The respondent now lives in Cornwall. I consider there is no need for there to be an order restraining him from the applicant.
Costs
73The respondent may make submissions for costs in writing within 30 days. The applicant may do so within 45 days.
Madam Justice A.M. Mullins Released: February 1, 2017