COURT FILE NO.: FD 969/14 DATE: 2017/06/27
ONTARIO SUPERIOR COURT OF JUSTICE
FAMILY COURT
BETWEEN:
Diana Mary Leone Pennington Sharon Hassan, for the Applicant Applicant
- and -
Marc Joseph Charette Kate Bennett, for the Respondent Respondent
HEARD: March 29, 2017
REASONS FOR DECISION
GEORGE J.
Introduction
[1] This matter involves claims for a divorce, equalization, and spousal support. The parties have resolved the equalization issue, and agree to a divorce. A consent has been filed outlining the agreed upon terms, and an order will issue as asked.
[2] Respecting spousal support, the respondent acknowledges he has an obligation to support the applicant. Both parties prefer I order a lump sum, and not impose an ongoing monthly payment.
[3] Respecting equalization, the parties have organized their settlement as follows. First, the applicant has the greater net family property, and must pay to the respondent $80,000.00. Second, the matrimonial home has been sold, with the funds held in trust pending this hearing’s outcome. Third, the equalization payment, along with some post separation adjustments, has been deducted from what each is entitled to receive from the proceeds. This currently has the applicant receiving $44,002.38, and the respondent $198,055.51.
[4] The remaining question, that will further impact the amount each is entitled to, is what the lump sum spousal support payment should be.
Background
[5] The applicant is 55 years old; the respondent 60. Their relationship commenced in 2004. They began cohabiting in 2005, married in 2008, and separated in 2013. There are no children of the marriage.
[6] At the time the relationship began, the applicant was disabled and unable to work. She was previously an Educational Assistant with a local school board. She suffers from various ailments, and will never again be able to work. She initially received long-term disability, but has now been approved for and is receiving CPP disability benefits.
[7] The respondent was a long-term employee of Rogers Communications. He was let go in 2009, but received a salary continuance until 2012, when he retired.
[8] The parties characterize their relationship, and its breakdown, differently. This is irrelevant to my task. The respondent agrees he must pay spousal support; an obligation that arises from the almost nine-year period of cohabitation, the applicant’s dependency on him, and disparity in their respective incomes since separation.
[9] The parties’ materials were presented in a way that acknowledged the court might see fit to reject a lump sum, and impose an ongoing monthly payment. I have concluded a lump sum payment is appropriate, for these reasons:
- It creates a clean break that will allow them to put this part of their lives behind them and move forward.
- There are no children of the marriage, and therefore no risk the money will be frittered away quickly, at the expense of a larger family unit.
- It does not appear either party’s circumstances will change in any meaningful way. The respondent is retired with limited prospects, and the applicant is permanently disabled.
Parties Positions
[10] The applicant seeks a $198,000.00 lump sum payment, which would require I impute income to the respondent, and go beyond the Spousal Support Advisory Guidelines (SSAG). In her view, on these facts, the legislative factors outweigh SSAG’s assumptions.
[11] Her counsel focused on the following. First, the parties entered into this relationship with an implied agreement. Each understood what their respective roles would be. The applicant was disabled; this created certain obligations and expectations; and the parties ordered their lives around this. In that sense, this case is unique. She was dependent from day one. Second, given the circumstances and nature of their relationship, I should be more concerned with ensuring the applicant is able to maintain a lifestyle close to what she enjoyed before the marital breakdown, as opposed to slavishly adhering to the SSAG generated figure.
[12] The Respondent’s primary position is he should pay the applicant a lump sum of $32,000.00. This is based on no imputed income, and at the high end of the SSAG guidelines, were I to accept his gross monthly income is $4,611.00 and the applicant’s is $1,668.00. This represents a support obligation lasting 8 years.
[13] His alternate position is I should impute no more than $15,000.00. To impute that amount, again for an 8-year period, at the high end, would have him pay to the applicant a lump sum of $46,000.00.
[14] He has a tertiary position. He suggests that, in addition to a $15,000.00 imputation, I could accept the applicant’s 2017 income which, for the same duration, and again at SSAG’s high end, would have him pay to the applicant a lump sum of approximately $58,000.00.
[15] The respondent provided other SSAG calculations. I will revisit these, as they represent a further, rather compelling, position that would have me, instead of imputing income, increase the duration of the support obligation.
Entitlement
[16] The respondent concedes he is obliged to pay support. They lived together for almost nine years; there was and is significant disparity in their respective incomes; and the applicant is disabled and was dependent on him throughout the relationship.
[17] Furthermore, the applicant’s disability is permanent. She is never going back to work. At the time of separation, she had no income. She has since been approved for CPP disability benefits, which is paid to her in the amount of $10,317.72 per annum. She is in need.
[18] From 1981 until 2009 the respondent was employed by Rogers Communications, first as a cable technician and ultimately as its Regional Director of Technical Operations. In 2009, at the age of 52, he was downsized. He received a two-year severance package, and in 2012 formally retired then beginning to draw on his pension. He receives $51,921.00 annually, and will for his lifetime. He has the ability to pay support.
Issues
[19] I must first determine whether to impute income to the respondent. Only then can the total obligation be calculated.
[20] The second issue is the impact, if any, the applicant’s disability has on the applicability of SSAG. The respondent says it should be followed; the applicant says it means, in these circumstances, it should be exceeded.
Imputation of Income
[21] Section 19(1)(a) of the Federal Child Support Guidelines provides that:
19(1). The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (a) The spouse is intentionally under-employed or unemployed….
[22] This section is to ensure all the income reasonably available to a spouse is considered in determining a support obligation. It is based on the notion that one has an obligation to maximize their earning capacity. It need not flow from a finding of bad faith. Intentionality is the test.
[23] Applicant counsel puts it this way; that while the respondent has earned the ability to receive his pension, this doesn’t mean he no longer has the obligation to maximize his earnings. She argues it is irrelevant the parties agreed, during the relationship, that he retire. His obligation to maximize arose when the marriage broke down.
[24] She highlights the following. First, for the last two years the respondent has made no attempt to find work. Second, while he did obtain employment after retirement, it was short-lived. It was only part-time, with extremely low pay. She contends that, while there may be an argument as to how much to impute, we know he is able to earn something beyond his current income, and he shouldn’t be able to forego all opportunities simply because he can’t find a job to his liking. Lastly, he was only 56 at the time of separation, with no child care or support obligations. That is, as a single man, with considerable work experience, and no new dependents, he is simply choosing not to work, with no acceptable explanation for his decision.
[25] The next question is, should I decide to impute income, how much? In this respect, the applicant points to these facts. First, the applicant worked in the communications field for over 25 years, earning an income at or exceeding $100,000.00. Second, his income at termination was $150,000.00. This, she argues, is the best indication of his earning capacity. She wants me to impute $50,000.00 to the respondent’s annual income.
[26] The respondent’s primary position is no income should be imputed, mainly because his retirement was involuntary. He had no choice in the matter.
[27] His alternative position is, if I impute income, I should not do it to the level the applicant suggests. Any imputation should be limited to what he earned during his short-lived part time employment, which was very modest. He argues that, while he has significant work experience, it is in one field where there is no available comparable employment. He is not highly educated; he possesses only a secondary school diploma.
[28] He suggests another approach, that he says might address the concerns arising from the evidence. That is to structure the spousal support amount by placing true inputs into the SSAG calculation (i.e. income levels, length of cohabitation, no children), use the usual assumptions, but to then extend the duration, in this case to 16 years.
[29] After considering counsel’s submissions, and upon my review of the evidence, I have decided not to impute income to the respondent. I arrive at this conclusion for these reasons. First, there is no evidence to suggest he retired in order to frustrate potential support payments. In fact, the opposite is true; it was involuntary. Second, the evidence reveals what his current earning capacity truly is. In 2013, he earned $4,621.26; in 2014 $14,299.72; and in 2015 $8,127.24. I find the respondent is essentially unemployable and that his skillset is not transferrable.
Quantum (Including Whether to Exceed SSAG)?
[30] I am governed by s. 15.2 of the Divorce Act, which sets out the guiding principles in determining spousal support. It provides that:
15.2(1) 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 sum and periodic sums, as the court thinks reasonable for the support of the other spouse….
(3) The court may make an order subsection (1) ……for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.
(4) In making an order under (1) …. the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(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 the support of either spouse…
(6) An order made under (1) …that provides for the support of a spouse should
(a) recognize any economic advantage or disadvantage to the spouses arising from the marriage or its breakdown; (b) 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; (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.
[31] In addition, I am to look to SSAG, which is neither binding or legislated, but a valuable tool nonetheless. It operates prospectively, is reliable, and should generally be followed.
[32] The applicant argues I should go outside the guidelines, as the assumptions contained within the formula are not present in this case. For example, the guidelines assume the longer the marriage the greater the dependency. This is clearly not the case here as there was a dependency from the relationship’s outset. Moreover, there is no basis for a compensatory award of spousal support, as the applicant did not forego any employment opportunities to further the respondent’s career. Nor is self-sufficiency a realistic goal, as the evidence establishes the applicant will never become so.
[33] The goal, she argues, should be to ensure a lifestyle commensurate with what she enjoyed during the marriage, taking into account her disability and special needs, which will continue indefinitely.
[34] One sticking point relates to the applicant’s proposed budget. It contains elevated cost items largely to fund her special diet that, she argues, is essential given her health issues. She defends the budget suggesting that, given her needs, it is reasonable, and in fact a reduction to what she had become accustomed to during the marriage.
[35] I am also told the equalization payment should impact support quantum. That is, while the property division exercise can in some cases reduce one’s need for support, this is not such a case. The applicant submits it has largely worked to her detriment, as she had to include an asset in her net family property that she cannot now (and may never be able to) access, while the respondent had to include only a portion of his pension.
[36] There are some frailties in the applicant’s argument. First, having concluded the respondent is not intentionally under or unemployed, and that his job prospects are limited at best, the hard truth here is both parties have been and will continue to experience a lower standard of living. It would simply be impossible to maintain the applicant’s pre-separation lifestyle. It’s not sustainable. Most post-separation households have to adjust to a new reality, and this case is no different.
[37] Upon a complete review of the record, it is my clear impression that the respondent has only modest assets, with debts that have been increasing substantially since separation. In fact, much of this is due to the respondent having covered the applicant’s expenses until the matrimonial home sold. He must, at some point, be able to retire this debt, and to order support at the level the applicant suggests, would ensure it never happens.
[38] I note also that the respondent has been paying monthly spousal support pending this hearing; for over three and a half years now. Having determined a lump sum is appropriate, as opposed to indefinite ongoing payments, means the fact he has already paid a considerable amount should impact quantum.
[39] I find Leitch J.’s decision in Pindur v. Pindur [2015] O.J. No. 1598 instructive. That case involved an initial application for spousal support. It was a seven-year marriage, with a permanently disabled and unemployable wife. The husband paid spousal support pending the final outcome. The claim was for non-compensatory support, as is the case here, and the wife sought an indefinite order because of her disability.
[40] In the result, Leitch J. ordered time limited support (eight years), concluding the wife’s argument that in ordering spousal support the court should ignore SSAG and increase the husband’s obligation beyond the guideline range, was wrong. The final order had the husband pay $622/month for eight years, amounting to approximately $60,000.00.
[41] In our case, the applicant’s disability, and her need to be accommodated, requires that I at least turn my mind to deviating from SSAG. However, the proper way to address the concerns in this case is to, as the respondent suggests, extend the duration. Therefore, the amount should be calculated after doubling the length (from 8 to 16 years), and to reflect the applicant’s income as its set out in her 2017 financial statement (CPP/disability $10,318.00 & rental income $3,536.00).
[42] Using this information, the ‘without child support’ formula yields a range for a lump sum spousal support payment from $65,768.00 at the low-end, to $76,100.00 at the mid-range, and $85,324.00 at the high-end.
Order
[43] After balancing all relevant factors and interests, I order the respondent to pay the applicant a lump sum spousal support payment of $76,100.00.
[44] I am well aware of the Family Law Rules and its provision respecting costs. In the normal course a successful party is entitled to reimbursement for at least a portion of their litigation expenses. This case, however, is unique, and while the result is closer to the respondent’s position, the applicant arguably achieved a measure of success. That, when considered with the parties’ current circumstances, renders a costs award inappropriate and counterproductive to what they were attempting to achieve in jointly proposing a lump sum payment. No order as to costs.
“Justice J. C. George” Justice J. C. George