Court File and Parties

COURT FILE NO.: 174/15-01 DATE: 2017-07-04 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

WILLIAM ROBERT BRANDOW Applicant – and – BRENDA HEATHER BRANDOW Respondent

COUNSEL: J.P. Paciocco, for the Applicant M. Carter, for the Respondent

HEARD: June 22, 2017

GAREAU J.

Endorsement on Motion

[1] On April 13, 2017 the applicant brought a notice of application in which he seeks, inter alia, an interim and final order terminating his obligation to pay spousal support to the respondent, effective March 31, 2017.

[2] At Tab 3 of the continuing record is a motion dated April 5, 2017 in which the applicant seeks the following interim relief:

1. Leave to hear within interim motion prior to the conduct of a case conference on the basis of urgency and hardship;
2. An interim order suspending the applicant William Robert Brandow’s obligation to pay any further spousal support for the benefit of the respondent Brenda Heather Brandow effective March 31, 2017 pending further order of this Honourable Court;
3. In the alternative, an interim order reducing the applicant William Robert Brandow’s obligation to pay spousal support to $1 per month or as otherwise found appropriate by this Honourable Court pending trial of the matter or further order;
4. An interim order requiring the respondent Brenda Heather Brandow repay any spousal support paid by the applicant William Robert Brandow for the period after March 31, 2017.
5. Such further and other relief as may be just and appropriate; and
6. Costs.

[3] In fact a case conference was held on May 15, 2017 before Varpio J. The motion at Tab 3 of the continuing record was argued before me on June 22, 2017. At the hearing of that motion the applicant argued that spousal support for the respondent should be terminated on an interim basis as of March 31, 2017.

Background

[4] The parties had a lengthy marriage spanning 24 years. They have lived separate and apart since May 19, 2000. After separation there were orders and agreements made which governed the relationship of the parties post marriage. The property issues were resolved by minutes of settlement which were incorporated into an order granted on March 8, 2006 by Whalen J. The essence of the agreement made by the parties incorporated into the court order was that the respondent retained the matrimonial home located at 40 Cambridge Place, Sault Ste. Marie, Ontario and the applicant retained his employment pension with Algoma Steel Inc. The matrimonial home had a value of $72,500 as of the date of separation and the Algoma Steel pension had a pre-tax value of $76,214.00 and an after tax value of $59,066.00. The applicant also retained some small investments which resulted in an equal division of assets with the respondent with her retaining the matrimonial home.

[5] The provision in the order of March 8, 2006 which deals with the retention of the Algoma Steel pension by the applicant and the release of any interest in the pension by the respondent is particularized in paragraph 3 of the order which reads as follows:

The respondent husband shall retain his pension with Algoma Steel Inc. free and clear of any claims by the applicant wife as part of the equalization of net family property. Notwithstanding any designation to the contrary which may pre-date this agreement, neither the respondent husband or the applicant wife shall be entitled to share or to receive any benefits of any kind from any pension of the other, whether as property or income, including but not limited to any company pension plans, deferred profit sharing plans, registered retirement savings plans and registered home ownership plans, neither the respondent husband nor the applicant wife will make a claim to share in any pension of the other at any point or in the future.

[6] The issue of spousal support was resolved between the parties by way of a spousal support agreement dated February 21, 2008. Paragraph 1(a) of that agreement provides that the applicant pay the respondent spousal support payments in the amount of $2,340.00 per month commencing January 1, 2008. This amount is the mid-point figure as calculated under the Spousal Support Advisory Guidelines based on the applicant having a total gross income of $88,000 per year and the respondent having an imputed income of $20,000 per year.

[7] The spousal support agreement also provides in paragraph 1(b) that as an additional support payment the applicant pay 75% of the respondent’s health care plan of $296.00 per month, which equates to a $222.00 per month contribution by the applicant.

[8] Paragraph 5 of the spousal support agreement provides for a variation on an interim or permanent basis of spousal support upon a material change in circumstances which is to include but not be limited to the following factors:

(a) Changes in either party’s financial position, including changes in income; (b) Upon the applicant’s retirement; (c) Upon the respondent’s remarriage or cohabitation with another person in a relationship resembling marriage for more than 12 months; (d) Any increase in the premiums for the respondent’s health care plan.

Failing agreement by the parties the spousal support agreement contemplates an application to the Superior Court of Justice for a determination of the issue.

[9] The applicant was born on April 25, 1952. He is 65 years of age. The respondent was born on December 29, 1953. She is currently 63 years of age and will be 65 years of age in 18 months’ time.

[10] The applicant retired from Essar Steel Algoma Inc. on July 1, 2016. He was 64 years of age at the time. As indicated in Exhibit 4 to the affidavit of the applicant sworn on April 5, 2017, this retirement constituted an “early retirement” from Essar Steel Algoma Inc. The “normal” retirement date for the applicant was May 1, 2017, just following his 65th birthday.

[11] Upon his retirement from Essar Steel Algoma Inc. the applicant’s income was reduced to the following monthly amounts:

Employment Pension $2,522.00 Canada Pension $ 822.00 Old Age Security $ 570.00

These amounts total $3,914.00 monthly or $46,968.00 annually.

[12] On this amount the applicant continued to pay the spousal support of $2,340.00 monthly plus $222.00 toward the respondent’s health care benefits until May 1, 2017. The applicant submits that he cannot continue to meet this monthly financial obligation given his reduction in income.

[13] The respondent’s present income is set out in her financial statement sworn on April 26, 2017. The respondent lists CPP benefits of $306.65 per month as her only income apart from the spousal support she receives from the applicant. The applicant takes issue with the income disclosed by the respondent in her financial statement in that it does not disclose income the respondent has from students who room and board in her home periodically. The applicant estimates that this rental income totals $15,000 per year. The respondent takes the position that the rental income she receives totals no more than $7,000 yearly, giving her an income of $10,500 yearly if her Canada Pension benefits are added in.

[14] The home that the respondent resides in is listed for sale and, if sold, will eliminate the rental income which the respondent currently has while residing in that home.

Discussion/Analysis

[15] The respondent concedes that there should be a reduction in the level of spousal support paid by the applicant. She takes the position that the spousal support should be reduced to between $800.00 to $1,000.00 monthly. The applicant takes the position that the spousal support should be terminated and that this order should be made on an interim basis.

[16] I find on the evidence before me that the applicant’s decision to retire was a reasonable one given his age and the nature of the job he was performing at Essar Algoma Steel Inc. The applicant’s normal retirement date was May 1, 2017. He retired only 10 months prior to his normal retirement date. Any adjustment for support should be effective as of May 1, 2017, the applicant’s normal retirement date. Paragraph 5 of the spousal support agreement entered into by the parties clearly contemplates a variation of spousal support upon Mr. Brandow’s retirement and upon a reduction in his income. Both these preconditions have been met. A change in the present spousal support arrangements is clearly warranted.

[17] The more difficult question to be answered is what the appropriate level of spousal support, on an interim basis, given the parties present financial circumstances should be. This is made more difficult by the difficulty in ascertaining what the incomes of the parties are. The spousal support agreement provides for an imputed income for the respondent of $20,000 yearly. This may be reasonable if the respondent continues to receive rental income but this rental income will cease once the former matrimonial home is sold. The court must be cognizant of the fact that the home is listed for sale and will presumably be sold before this litigation is finalized. A sale of the former matrimonial home, even at its full value of $130,000 will not generate large funds on which the respondent can live given the fact that her debt, totalling $73,787.74 will likely be discharged from the sale proceeds of the home. Without the rental income it is difficult to impute income of $20,000 annually to the respondent given her age and her limited work experience both pre and post separation. It is more likely that the respondent’s income will be in the range of $10,000 yearly, which would include her CPP benefits of $3,679.80 annually and some reasonable amount for other limited employment income.

[18] The applicant’s income is no easier to ascertain than the respondent’s. The applicant has Canada Pension benefits and Old Age Security benefits which total $16,704.00 annually. The balance of his income, $36,264.00 annually, is from his employment pension. Paragraph 3 of the order granted on March 6, 2006 provides that Mrs. Brandow is not to receive any benefits from Mr. Brandow’s pension, whether as property or income. To include the full amount of Mr. Brandow’s pension for the purpose of calculating his income for support purposes gives rise to the notion of “double dipping” given the express wording of paragraph 3 of the order of March 8, 2006. Adopting the approach in Boston v. Boston, 2001 SCC 43, 17 R.F.L. (5th) 4 (SCC), the court should wherever possible back out from the calculation of income the part of the payor’s pension that has already been divided with the recipient spouse as an asset. The unequalized portion of the applicant’s pension should be the principal amount considered in arriving at his income.

[19] As is indicated in the statement from Essar Steel Algoma Inc. the applicant entered the pension plan on October 1, 1978. The parties separated on May 19, 2000. Mr. Brandow retired as of July 1, 2016. These dates indicate that approximately 22 years of Mr. Brandow’s pension accumulated prior to separation and 16 years of Mr. Brandow’s pension accumulated post-separation, or, in other words, was not divided with Mrs. Brandow as an asset for equalization purposes. There was no actuarial evidence before the court calculating the exact amount of the applicant’s employment pension attributable to post-separation. The court is left in a position where it must approximate that amount. After considering the evidence I conclude that a reasonable amount for the applicant’s income applying the principles set out in Boston is $30,000 yearly. This includes Canada Pension benefits of $9,864.00 annually, Old Age Security benefits of $6,840.00 annually, leaving $13,296.00 annually or $1,108.00 monthly attributable to Mr. Brandow’s employment pension income.

[20] On the basis of an annual income of $30,000 for the applicant and an income of $10,000 for the respondent broken down as indicated above, the Spousal Support Advisory Guidelines provide for a range of between $600 to $800 monthly for spousal support.

[21] Based on all of the factors to be considered in assessing spousal support, I am not prepared to terminate spousal support on an interim basis. Spousal support should be terminated at some point considering the length of time the parties have lived separate and apart and their respective financial positions but, in my view, that should not occur until the respondent attains the age of 65 years of age and is in receipt of Old Age Security benefits.

[22] The applicant can continue to pay some level of spousal support without having it affect him to any large extent whereas a termination of spousal support at this stage would have devastating financial consequences to the respondent. After the payment of debt the respondent has limited liquidity. On the other hand, the applicant has savings plans and investments totalling $87,776.86 as disclosed in his financial statement sworn on April 5, 2017 which gives him the ability to finance spousal support payments on an interim basis.

[23] In reviewing the financial statement of the respondent sworn on April 26, 2017 and the financial statement of the applicant sworn on April 5, 2017 it is clear that the respondent has a need for continued spousal support and the applicant has the ability to meet that need on an interim basis. Accordingly, I am not prepared to terminate spousal support. I am also not prepared to make the order that the respondent is seeking, between $800 to $1,000 monthly. Considering the financial statements of the parties and balancing a need and means test and in considering the Spousal Support Advisory Guidelines, I find that a fair amount for interim spousal support is $600.00 per month.

[24] Interim spousal support shall be paid by the applicant to the respondent in the amount of $600.00 per month commencing May 1, 2017, which is the month following the applicant’s 65th birthday. Interim spousal support shall be paid from May 1, 2017 to and including December 31, 2018 after which date the order for interim spousal support shall terminate. As of that date the respondent will be entitled to receive Old Age Security Benefits, which will likely be in the approximate amount of the spousal support which she will be receiving from the applicant.

[25] Given the reduction in income of the applicant there should be an adjustment in the applicant’s contribution to the respondent's health care plan, as set out in paragraph 1(b) of the spousal support agreement dated February 21, 2008. On the basis of Mr. Brandow having an annual income for support purposes of $30,000 and Mrs. Brandow having an annual income for support purposes of $10,000, Mr. Brandow should contribute the sum of $197.00 per month (or 2/3 of the monthly cost), effective May 1, 2017.

[26] That leaves the issue of costs of the motion at Tab 3 of the continuing record. I am mindful of the fact that success has been divided on the motion. Having said that, if the parties cannot settle the issue of costs, counsel can make written submissions on that issue with the submissions to be no more than five typed pages in length excluding offers to settle and bills of costs. These written submissions are to be served and filed with the court no later than July 21, 2017 at 12:00 noon.

Gareau J. Released: July 4, 2017