Holmes v. Holmes, 2017 ONSC 6425

CITATION: Holmes v. Holmes, 2017 ONSC 6425

COURT FILE NO.: FS-36736/14

DATE: 20171101

CORRECTED: 20171201

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Leanne Holmes

Applicant

– and –

Gerard Holmes

Respondent

P. Callahan, for the Applicant

Self-Represented Respondent

HEARD: February 22, 23, 24, 2017 and March 20, 24, 2017

CORRECTED REASONS FOR JUDGMENT

MCSWEENEY, j.

Overview

[1] This was a family law trial to determine issues of income, spousal support, and section 7 expenses between the husband and wife following their 20-year relationship. The Applicant, Leanne Holmes (“Leanne”), claims spousal support. The Respondent, Gerard Holmes (“Gerard”), has custody of all three children. He denies Leanne’s entitlement to any spousal support. He asks the court to order that Leanne pay to him spousal support, s. 7 contributions toward sports and post-secondary expenditures for the children, and reimbursement for rent and storage costs incurred at time of separation.

Procedural History

[2] Four previous orders are relevant to this decision:

a) On May 26, 2016, Gibson J. made a temporary order including the following:

• Gerard pay spousal support to Leanne in the amount of $2,012.00 per month;

• Leanne pay child support to Gerard for the three children in the amount of $887.00 per month;

• Gerard to maintain a life insurance policy or policies in the amount of $578,000, and to designate Leanne as an irrevocable beneficiary;

b) On September 15, 2016, on a temporary basis, Trimble J. suspended enforcement of spousal support by the Family Responsibility Office because Gerard was unemployed;

c) On October 26, 2016, following the Trial Management Conference, Coats J. made a final order, on consent, for custody, access and ongoing child support. The final order included the following:

• No order as to custody; primary residence of the parties’ three children with Gerard, secondary residence with Leanne;

• Leanne to have “generous and liberal access” with the children, in accordance with their wishes;

• Gerard not to interfere with Leanne’s access with the children, and vice versa;

• Leanne to pay to Gerard table child support per the Federal Child Support Guidelines (“FCSG”), as long as each remains a child of the marriage/dependant pursuant to the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.);

• Child support for two children, plus one child (summer only), fixed at $887 per month;

• Annual adjustment of child support payable by Leanne on June 1st of each year, following exchange of financial documentation;

• Leanne to submit to her group benefit plan proof of any covered expenditures which she receives from Gerard, and to pay to Gerard within 10 days the amount of any reimbursement received.

d) On December 23, 2016, Gibson J. granted Gerard leave to amend his pleadings.

[3] The following issues are not in dispute:

a) Custody, access and table child support (going forward): All have been resolved on a final basis per the Coats J. Order of October 26, 2016;

b) Gerard’s claim for retroactive child support: Leanne testified, with supporting documentation, that she had paid table child support to Gerard, with the exception of certain periods early in the parties’ separation. On cross-examination, Gerard conceded that Leanne had made these payments. Leanne also provided evidence that she has since made arrangements with FRO to pay all outstanding arrears. I conclude on the basis of this evidence that the issue of retroactive table child support was resolved by the time of trial.

c) Equalization: Neither party seeks relief relating to division or equalization of property in view of their modest current circumstances.

Issues for Trial

[4] The issues for trial are:

1. Income determination: What is each party’s income for support purposes?

2. Section 7 expenses: What expenditures should be considered under s. 7 of the FCSG retroactively and going forward?

3. Entitlement to spousal support: Is either party entitled to spousal support?

4. Quantum of spousal support: If either party is entitled to spousal support, what is the appropriate quantum?

5. Gerard’s debts: Are Gerard’s debts to All Rite Moving and to George Kloet part of his claim, and should Leanne pay part of those debts?

Summary of evidence relating to the parties’ relationship

[5] Leanne and Gerard Holmes were the only witnesses at trial. The parties’ descriptions of the relevant parts of their shared life and events were substantially consistent. Where they disagreed as to dates or details, however, I prefer the evidence of Leanne. By Gerard’s own admission, Leanne has a better memory for dates and details than he does. This was evident during his testimony, when on several occasions he agreed to be corrected as to a specific date or detail when Leanne’s testimony was put to him.

Prior to Separation:

[6] Leanne and Gerard met at work in 1991 when she was in her late 20’s and he in his late 30’s. Gerard was separated from his first wife at the time. Leanne and Gerard began living together. Leanne assisted Gerard in taking the necessary steps to have his first marriage annulled so that they could marry. Gerard proposed to Leanne in New York City in 1995, and they married on November 28, 1996.

[7] They had three children together. To respect the children’s privacy, I will refer to the child born in 1997 as “the older daughter”, the boy born in 1999 as “the son”, and the child born in 2001 as “the younger daughter”.

[8] Over the years, the family’s standard of living improved with Gerard’s increasing professional success. Leanne worked in the beauty industry, and continue to work outside the home following the births of the parties’ first two children. After their third child was born in late 2001, Gerard and Leanne decided that it made sense for Leanne to stay home full time with the children beyond the end of her maternity leave.

[9] In 2002, Gerard and Leanne bought a beautiful home in east Oakville. Gerard had started his own consulting business in 2000, which enabled him to work more flexible hours and spend more time at home with the family. Both parties described the years in the east Oakville house as a positive time for the family. As the children grew, each of them exhibited interest and ability in athletics. They were all enrolled in sports including soccer, ultimately progressing to the elite “rep” level.

[10] Gerard’s consulting business was very successful for several years. Starting around 2007, however, the market downturn led to loss of work from some of his biggest clients. By his own admission, Gerard was “not paying income tax properly” by this time. As a result, he fell several hundreds of thousands of dollars in debt to Canada Revenue Agency (“CRA”).

[11] The debt to CRA forced Gerard and Leanne to sell their east Oakville home in 2010. Gerard then found an executive position in the investment industry which lasted until 2012. Before his severance pay ran out in August of that year, Gerard testified that “we needed every penny we could get”. Leanne returned to work in the beauty industry to help make ends meet.

Separation:

[12] Conflict between the parties escalated during the time Gerard was unemployed and Leanne was working outside the home. Each party testified to negative behaviours by the other during this time.

[13] By May 2013, the parties were no longer sharing a bedroom and Leanne often stayed away overnight at her brother’s home in Burlington. During this difficult time, Leanne was served with a collection notice from the CRA seeking over $210,000 from her to pay Gerard’s income tax arrears. Leanne had spent her RRSP retirement savings already. She declared personal bankruptcy in August 2013.

[14] By October 2013, the family was not able to afford to pay the rent for their home.

[15] On November 3, 2013, there was an incident between the parties. Leanne and Gerard had words when she dropped the older daughter off home. Leanne testified that she pushed Gerard. Gerard alleged that Leanne assaulted him in front of the children. Gerard called the police. The older daughter, 15 at the time, corroborated this allegation to the police. Leanne was taken into custody and was charged with assaulting Gerard. She entered into a peace bond and agreed to stay away from Gerard. Charges against her were ultimately withdrawn.

[16] The landlord required the family to move out in December 2013. At trial, the parties each blamed each other for the factors leading to the eviction. Leanne testified that Gerard had to borrow the last month’s rent, and that she had admitted to the landlord that the family could no longer afford to rent the house. Gerard testified that he believed they could have made the rent payments, and that Leanne deliberately orchestrated the eviction. It is not necessary for me to determine this issue. I find on the evidence of both parties that by December 2013, any further cohabitation was untenable, and something had to change, given their level of conflict.

Post Separation

[17] In December 2013, Gerard and the three children moved into the Monte Carlo Inn in Oakville. Leanne went to live with her brother in Burlington.

[18] Leanne stayed at her brother’s until she could afford an apartment in Oakville, near the children’s high school.

[19] At the time the parties moved out of their rental house, Gerard held a $30,000 per year marketing job. He left this job two months later to assume a Director of Marketing job at Aequitas Canada, at a salary of $130,000 plus benefits. He remained in the Monte Carlo Inn with the children for a further 8 months, then moved with them into a rental house in Oakville.

[20] In July 2016, Gerard’s employment at Aequitas ended and he received severance. In October 2016, he moved with the children to live with his sister in her two bedroom apartment in downtown Toronto. By this time, the older daughter was in university. The two younger children continued to attend their high school in Oakville and participate in elite level sports training and competitions. Gerard testified that he drove them to Oakville and back to Toronto each day, and twice a day when they had evening sport commitments.

[21] Although the children did not stay with Leanne after separation, she was initially asked by Gerard to assist with driving them to sporting events and did occasional shopping with them.

[22] As time went on, however, the relationship between the parties, and consequently, between Leanne and the children, deteriorated significantly. Although Leanne still lived in Oakville near their school and wanted to see the children, they did not visit or ever stay overnight with their mother. At trial, Leanne testified that she no longer heard from any of the children, and that they did not respond to her messages.

[23] Gerard testified that their older daughter left home for university in September 2015, and was attending his alma mater (“Gerard’s Alma Mater”). Leanne testified that she did not know her older daughter’s address at university or how she was doing in her studies. By the time of trial, the son was finishing his Grade 12 year, and had just accepted an offer to study at Gerard’s Alma Mater to start September 2017. Leanne testified that she heard this news for the first time during Gerard’s testimony.

[24] The estrangement between Leanne and her children, despite her desire for contact, was evident throughout trial. Gerard did not dispute her testimony that Leanne had a close and loving relationship with each of the children prior to the parties’ conflict and separation. By the time of the trial, however, she had no contact with any of the children. It was also apparent to the court that Gerard made little effort to keep Leanne informed on an ongoing basis about the children’s lives.

[25] The trial evidence was that in September 2017, the older daughter, 19, is in her third year of university, the son, 18, is in his first year of university, and the younger daughter, 16, is in Grade 11.

Issue No. 1 – Income of the Parties

a) What is Leanne’s income for support purposes?

[26] Leanne testified that she has worked at Venus Beauty Supply since 2012. That employment is her only source of income. The documentary evidence confirmed her testimony, and was not disputed by Gerard. Leanne’s Line 150 income is as follows:

2013: $47,114

2014: $50,807

2015: $54,223

2016: $53,396

b) What is Gerard’s income for support purposes?

[27] The evidence at trial established that Gerard’s line 150 income since 2011 is as follows:

a) 2011: $164,099

b) 2012: $100,182

c) 2013: $ 8,740

d) 2014: $117,552

e) 2015: $162,411

[28] For 2016, Gerard did not provide a T4 and had not yet filed his taxes. The court is therefore left to calculate his 2016 income on other evidence, specifically:

a) Record of Employment issued to Gerard by Aequitas on July 27, 2016, recording 2016 income of $113,871.21; and

b) Gerard’s Employment Insurance statement showing payments of 2016 of $6,542.00.

[29] Adding the two figures above, I find that Gerard’s income for 2016 was $120,413.21.

c) Should income be imputed to Gerard for 2017?

[30] I find on the basis of the evidence at trial that Gerard’s employment was terminated by Aequitas in July 2016. He did not “quit”. At trial, Gerard testified that he was still unemployed as of March 2017 despite active efforts to search for work.

[31] Leanne argued that the evidence shows that Gerard was not making reasonable efforts to find work and asked me to impute income to him.

[32] Section 19 of the FCSG provides that the court may impute such income as it considers appropriate in the circumstances. Those circumstance include where a parent “is intentionally under-employed or unemployed”. The Ontario Court of Appeal decision in Drygala v. Pauli, 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711 has established the analytical framework for intentional unemployment.

[33] The test for imputation based on under-employment or unemployment for child support purposes also applies in the spousal support context: Rilli v. Rilli, [2006] O.J. No. 2142 (S.C.) at para. 14; Perino v. Perino, 2007 CanLII 46919 (ON SC), [2007] O.J. No. 4298 (S.C.) at para. 28.

[34] The relevant considerations from Drygala are as follows:

• Intentional unemployment is found where a party “chooses not to work when capable of earning an income” [para 28];

• A party “must earn what he or she is capable of earning” [para 32] and;

• Imputation of income does not require a finding that a party has deliberately avoided his or her support obligation [para 25].

i) What is Gerard capable of earning?

[35] To determine whether Gerard’s job search has been reasonable in order to determine that he is earning what he is capable of earning, his education and previous professional achievements are relevant.

[36] Gerard’s evidence regarding his abilities and achievements was not disputed. His impressive curriculum vitae was made an exhibit at trial.

[37] The evidence establishes that Gerard is a very intelligent, high achieving individual, and a hard worker. He has had a varied and successful career at the executive level since the 1980’s. His innovative mind and business acumen have helped him find a range of challenging, remunerative positions, and in doing so successfully, he has developed highly transferable skills. Support for this conclusion is found in Gerard’s testimony and also in the following career highlights:

a) American Express Canada: Early in his career, Gerard was selected as one of only 12 Canadians to participate in its Graduate Management Program, which recognized the “best and brightest” employees;

b) Groupmark: Gerard’s strategic leadership as Director of Marketing at Groupmark Canada Limited led quickly to significant increases in business and reduction in costs, as well as the landing of a contract with a major retailer worth over $5 million for the company over a 3 year period;

c) Dairy Queen Canada Inc.: As Director of National Marketing for Dairy Queen Canada Inc., Gerard’s fresh and innovative approach fuelled a 19% increase in sales where previous growth had been negative;

d) Manulife Financial: Gerard was invited by the CEO of Manulife to write his own job description at the Vice President level. In this role of “Chief Visioneer”, he provided Strategic Marketing and Communications advice directly to the CEO. His demonstrated success in this role led to a transformative new vision and business strategy for Manulife, which saw its profits in “reinsurance” triple;

e) His own consulting business: In January 2000, Gerard started his own niche consulting business, Genesis Strategicreative. His company’s clients included at least one bank and several major media and telecommunications corporations. He testified that he earned $25,000 a month from one client alone for some years. I infer from his testimony that the gross business income of Genesis Strategicreative during its peak years was several hundred thousand dollars annually.

f) Investment Industry Association of Canada: As Director of Marketing and Member Relations for this “national voice” of the investment industry, Gerard was hired to increase revenues in its Marketing Department. He did this successfully, as well as developing and implementing a new approach to member relations.

g) Aequitas Innovations Inc.: In the last position he held prior to trial, Gerard was Head of Marketing and Communications at Aequitas, and successfully led its positioning and launch as the first senior listings exchange in Canada since the TSX. His marketing ingenuity enabled him to leverage a modest budget for maximum success and impact.

ii) Has Gerard made reasonable efforts to search for work since his position with Aequitas ended?

[38] Gerard filed documentation at trial to show he has submitted applications for many positions since Aequitas. His testimony confirmed that most of his job applications are made online, through “LinkedIn” or other sites, sometimes by direct upload of his C.V. to an organization posting a position. Much of this work was done in a public library near the children’s high school.

[39] The trial took place in February and March 2017. Gerard provided no documentation to support any job search efforts in January, February, or March 2017.

[40] In cross examination, Gerard admitted that in the six months since he lost his job, he had not signed up with an executive “head hunter” or recruiter to help him find re-employment. He had not activated his network of contacts from previous executive positions, nor had he reached out to previous employers. He offered the explanation that many of those contacts were dated and he was not sure they would be of assistance.

[41] In his testimony, Gerard emphasized the time consuming nature of his support and care for the children, particularly that he drives them to Oakville daily during the school year and home to Toronto at night, as well as to all sports practices. In the time available to him, he testified that he is actively looking for work.

[42] The evidence supports a finding that Gerard’s job search has not been reasonable. I agree with Leanne’s counsel that in Gerard’s specialty area of executive leadership, reasonable mitigation of loss of employment requires a strategic, assisted search and extensive networking, meetings, social contacts, and follow up. Gerard’s activities of dropping the children at high school in Oakville and then spending the day at the library making online applications is not sufficient.

[43] I further find that Gerard has been unreasonable in continuing to personally drive the children to Oakville and back each day, when their mother lives right in Oakville and is available to assist with getting them to school, lessons or practices, and has a bedroom for them. Such assistance from Leanne would allow Gerard to put the necessary effort into looking for work.

[44] Gerard testified that the children do not want contact with their mother. Put plainly, he cannot afford for her not to help with their care. He is the parent with primary custody, and it is his responsibility to act in the best interests of the children. Economic stability, with two working parents, is in the children’s best interests.

[45] In all the circumstances, I am not satisfied that Gerard’s job search is reasonable. In the absence of a reasonable job search, I conclude that Gerard is intentionally unemployed: see Filippetto v. Timpano, 2008 CanLII 3962 (ON SC), [2008] O.J. No. 417, (Ont. S.C.) at para. 12. It is therefore appropriate to impute an income to him for support purposes.

d) What income should be imputed to Gerard?

[46] In summary, regarding Gerard’s work history, I find that he has a sought-after skill set that helps companies at times of change and challenge. His executive level positions have lasted an average of two years each since 2010. Sometimes, he is able to go right to the next job before severance pay runs out, whereas sometimes it takes him longer.

[47] I impute to Gerard an annual income of $115,000. In arriving at this figure, I have considered Gerard’s income history, skills, age, education, and employment history, including both past and anticipated intervals of unemployment between positions. Gerard’s imputed income for the taxation years of 2017, 2018, and 2019 is $115,000. It is only subject to review in the year 2020, three years from the date of this decision, as I will discuss later.

Issue No. 2: Section 7 Expenses

a) What expenses are properly considered s. 7 expenses for this family?

[48] Leanne started her claim on May 7, 2014. Gerard’s Answer was not filed until February 26, 2016, and did not ask for s. 7 contributions from Leanne. On October 26, 2016, Coats J. directed that the issue of s. 7 expenses was to proceed to trial.

[49] On December 23, 2016, Gibson J. permitted Gerard to amend his Answer to seek spousal support and s. 7 expenses. His amended answer seeks retroactive contribution from Leanne, asking for “her proportionate share of the children’s section 7 expenses, inclusive of the cost of rep soccer for the three children retroactive to November 2013.”

[50] Particulars of the amounts claimed were not provided to Leanne until shortly before, or in the case of some documents, until the trial had started. Gerard’s testified that he had spent more than $107,000, comprised mostly of “rep” level sports costs, from 2013 to 2017. He claimed a total of $26,210.69 from Leanne for sports expenses for the two younger children for that period. He also sought over $6,000 for the 2015/2016 post-secondary costs of the older daughter, who started university in September 2015.

b) The legal framework for determination of s. 7 expenses:

[51] In awarding s. 7 special and extraordinary expenses, the trial judge first determines each party’s income for child support purposes and determines whether the claimed expenses fall within one of the enumerated categories of section 7 of the FCSG. In awarding s. 7 expenses, the Court must consider whether the expense is:

1. Necessary “in relation to the child’s best interests”; and

2. Reasonable in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation.

[52] The onus is on the parent seeking the special or extraordinary expenses to prove that the claimed expenses fall within one of the categories under s. 7, and that the expenses are necessary and reasonable, having regard to the parents’ financial circumstances: see Park v. Thompson, 2005 CanLII 14132 (ON CA), 77 O.R. (3d) 601 (C.A.).

[53] Section 7 of the FCSG requires that the expense be reasonable in relation to the means of the parents and those of the child and to the family's spending pattern prior to the separation. In Correia v. Correia, 2002 MBQB 172, 165 Man. R. (2d) 134 at para. 19, Allen J. summarized a number of factors to be taken into account in determining the reasonableness of a s. 7 expense, namely:

• The combined income of the parties;

• The fact that two households must be maintained;

• The extent of the expense in relation to the parties' combined level of income;

• The debt position of the parties;

• Any prospects for a decline or increase in the parties' means in the near future; and

• Whether the non-custodial parent was consulted regarding the expenditure prior to the expense being incurred.

[54] Where the expense is not within the means of the parties, the court may limit or deny recovery of that amount: L.H.M.K. v. B.P.K. 2012 BCSC 435, [2012] B.C.J. 593 (S.C.); Ludmer v. Ludmer, 2013 ONSC 794 at para. 195, aff’d 2014 ONCA 827 at para. 40.

[55] There is a significant difference between table child support, which is presumptively payable pursuant to the Guidelines, and s. 7 expenditures. In this case, Leanne is already required by a final court order to pay table support for all three children as long as they remain children of the marriage, and to maintain them on her employment benefit plans. It is agreed that she is doing so.

[56] By contrast, an award of s. 7 child support is not automatic. An order for such payments involves the exercise of judicial discretion as to both entitlement and amount: Julien Payne and Marilyn Payne, Child Support Guidelines in Canada, 2009 (Toronto: Irwin Law, 2009) at 227, 231.

c) Claim for retroactive s. 7 contribution

[57] Gerard seeks retroactive contribution from Leanne for her proportionate share of the children’s s. 7 expenses.

[58] I have the following concerns with Gerard’s claim for retroactive contribution from Leanne:

a) During the period for which Gerard claims s. 7 contribution, he was not paying spousal support. He therefore had available to him those amounts otherwise owing to Leanne to pay for these expenditures;

b) I am not satisfied that, based on the reduced means of the parents, that it was reasonable for Gerard to continue the enrolment of all the children in “rep” level athletics after separation. For example, Gerard testified to spending over $23,000 in 2014, the same year in which he and the three teenage children lived in a single hotel room for almost 10 months. In the reduced economic circumstances of the family, it would have been reasonable to consider lower-cost sports for the children;

c) Gerard’s evidence is insufficient to establish that he himself made the payments claimed, nor that he was charged the full cost of the programs referenced in the emails and other materials he submitted into evidence. On this point, Gerard stated only, “I paid it, not on credit, so somehow I afforded it, you make it work, you give up other things”;

d) Gerard admits he did not consult Leanne about the post-separation expenditures or ask her whether she could afford to contribute to them. Leanne was certainly aware they were enrolled in sports, but as she testified, “I was never asked. He [Gerard] just went ahead and did what he did and registered the kids”;

e) Gerard did not seek contribution to s. 7 expenses in a timely way. A full accounting of all amounts sought was not made until shortly before trial, a full three years after many of the expenses claimed.

[59] I also consider the evidence that although Leanne did not agree to the post-separation sports and was not consulted with respect to the children’s university programs, she agreed at trial that these activities and academic goals were important to both her and Gerard for the children before separation, and continued to be a priority for them after separation. She is very proud of the children’s abilities, and wants each of them to have opportunities that allow them to achieve their full potential. I find on the evidence that she would have contributed to these expenses if she could have afforded to do so after separation.

[60] The value of continuing the intensive sport involvement for the children after the parties’ separation is particularly evident in the case of the parties’ son, who was recruited to a position on a major varsity team at Gerard’s Alma Mater, commencing the 2017/2018 year. This level of achievement is to the credit of their son, of course, but is also a result of the encouragement and support of both his parents from when he was a young child, long before their separation.

[61] In these circumstances, it is appropriate that Leanne make some contribution to the children’s sports and post-secondary costs. Considering all the factors above, it is appropriate that Leanne contribute $200.00 per month toward the s. 7 expenses of the children from the date of her application to January 1, 2017.

[62] This contribution by Leanne is in addition to any amount which has been paid by her for s. 7 expenses on an interim basis. It is also appropriate that this retroactive contribution, which would have been made at the time if she had been receiving spousal support, be paid as a deduction from spousal support owing by Gerard, both on a retroactive and prospective basis, as I will discuss later.

[63] As a result of this decision, Leanne may be rightly viewed as having made a significant contribution to the sports and post-secondary costs of the children. Leanne testified that her children blamed her for “not paying for [rep] soccer” post separation. I encourage the parties to convey to the children the fact that their mother has, as result of this order, contributed to their “rep” soccer and university.

d) What should Leanne contribute to s. 7 expenses on a go-forward basis?

[64] Now that the two older children are in university and the younger daughter is in Grade 11, the main expenditure for the parties’ children is post-secondary costs. As observed by Chappel J. in Aubert v. Cipriani, 2015 ONSC 6103 at para. 41(g), a factor considered by courts in determining whether to direct a parent to contribute to post-secondary costs of an adult child includes “the willingness of the child to remain reasonably accountable to the payor parent with respect to their post-secondary education plans and progress. Where a child has unilaterally and without justification terminated their relationship with a parent, the court may take this into consideration in determining what that parent is required to contribute”.

[65] On the facts of this case, the older child has cut off communication completely with her mother, including not permitting her to see her transcript of marks or to know her address at university. I find on the facts that the older daughter has given her mother no incentive to contribute to her post-secondary education beyond applicable table support. Similarly, the parties’ son, who is now 18, was not responding to communication from his mother at the time of trial.

[66] Although it is open to me, in these circumstances, to determine that their mother need not contribute anything to these children’s post-secondary costs, that would not be in the children’s best interests. It is also not what Leanne wants. She was clear in her evidence that she wants to be a part of their life, and would contribute more to their support if she had more funds with which to do so. Gerard’s failure to pay any spousal support since separation has meant that she had to support herself and pay child support exclusively out of her employment wages. This has not been easy. Her testimony at trial was supported by her financial statement, which showed loans from family members, and other frugalities employed to ensure she continues to make timely table child support payments.

[67] In the economic circumstances of these parties and the fact that Leanne cannot afford the s.7 contribution unless she receives spousal support, I am directing that Leanne will make a meaningful contribution to the older children’s post-secondary costs and to the younger daughter’s soccer program, and that she will do so by way of a reduction in the spousal support which I would otherwise order Gerard to pay to her on a going-forward basis.

[68] In these circumstances, in which Leanne has no communication with the children and no input into the s. 7 expenditure decisions, it is not appropriate to order her to make a proportionate-to-income payment. Without input into the expenditures and regular contact from Gerard, Leanne will have no way to forecast or budget her s. 7 contribution.

[69] In considering what Leanne’s contribution to s. 7 expenses should be, I have also taken into consideration the fact that she has no input or say whatsoever in the choices leading to the expenditures. If she did, the parents might manage the expenditures differently, for example, by encouraging one of the children to live with Gerard or Leanne or extended family while attending university.

[70] In ordering Leanne’s s. 7 contribution to be paid as a reduction to the spousal support otherwise owing to her by Gerard, I am mindful that child support is to be considered in priority to spousal support. I emphasize that only discretionary s. 7 expenses, not table support, has been considered in this manner. I do so in the circumstances of this family where the evidence, as stated, has established that Leanne cannot afford to contribute to s. 7’s unless the Gerard pays spousal support. The “twinning” of these issues is within my discretion as both spousal and s. 7 expenditures are discretionary. Further, I have considered the best interests of the children in this approach as referenced later herein.

[71] This approach is preferable to the court making two orders, one directing a higher amount of spousal support to be paid by Gerard, and a second, separate order, that Leanne pay back to him a portion of that support as a contribution to s. 7 expenses. The history between the parties post-separation shows that even when he was working and obligated to do so, Gerard did not pay spousal support, whereas Leanne did pay child support. A single order for payment from Gerard, enforceable by the Family Responsibility Office, will prevent a situation where Leanne cannot comply with a court order to pay s. 7 contributions because Gerard may not have complied with the spousal support order. It will also meet the best interests of the children to the extent that it may limit litigation and expenditure of parental time, energy and money on enforcement-related court proceedings.

Issue No. 3: Entitlement to Spousal Support

a) Is Leanne entitled to spousal support?

[72] Leanne claims spousal support form Gerard on the basis that she had been economically disadvantaged as a result of the marriage.

[73] Relevant purposes of an award of spousal support include recognition of a spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse.

[74] In Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813 at para. 33, the Supreme Court of Canada confirmed that for married spouses, consideration must be given to all the purposes of a support order set out in s.15.2(6) of the Divorce Act, clarifying that an order providing 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) 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) insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[75] In Moge and Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420, the Supreme Court of Canada held that a compensatory order for spousal support may be awarded where a spouse's education, career development, or earning potential have been impeded as a result of the marriage.

[76] Compensatory support is premised on a marriage being a joint endeavour, and seeks to alleviate economic disadvantage by taking into account all the circumstances of the parties, including the advantages conferred on either spouse during the marriage. It is concerned with an equitable sharing of the benefits of the marriage: Poirier v. Poirier, 2010 ONSC 920 at para. 47.

[77] Leanne also seeks non-compensatory support. Entitlement on this basis is found where the evidence establishes a significant decline in standard of living from the marital standard. Non-compensatory support reflects the economic interdependency that develops as a result of a shared life: Department of Justice Canada, Spousal Support Advisory Guidelines: The Revised User’s Guide (April 2016) at pg. 6.

[78] The evidence of Leanne’s work history was as follows. Leanne took a two year esthetics diploma at community college after high school. While working in a salon after graduation, she began to develop an interest in the marketing side of the business. She took online courses on her own time through the Canadian Marketing Association. She then found work outside of the aesthetics area at Go Vacations. After that, she obtained a position at Groupmark, a leading Canadian marketer, where she met Gerard in 1991.

[79] Gerard was 33 and Leanne was 24 when they met. She held an entry level marketing position, and Gerard was Marketing Director in another department. They eventually started a relationship. I accept Leanne’s testimony with respect to the year of commencement of the parties’ cohabitation, which I find to be 1993.

[80] When Gerard decided to leave Groupmark in 1994, Leanne did too. She found a position in the beauty industry at Nu Skin in 1994, where she worked until 2001. During that time, her only breaks in employment were an 8 months’ leave after the birth of their first daughter, and 6 months after the birth of their son. As referenced earlier, Leanne left Nu Skin in 2001 after their third child was born, and did not return to paid employment until March 2012.

[81] During the 11 years she was out of the workforce, Leanne looked after the house and children. She was responsible for packing and moving houses, with three young children, on six different occasions during that period. Initially, the moves were to bigger homes; ultimately, the moves were toward more modest surroundings as they were forced to sell their home and downsize.

[82] While Gerard claimed in his evidence to have “no idea” what Leanne did during the day when he was working, he conceded that she was the more social of the two of them. The evidence supports a finding that while Gerard worked hard on his business, Leanne was the one who developed and maintained the parties’ social and neighbourhood relationships in the Oakville community. She also participated actively as a volunteer in the children’s elementary school.

[83] I find on the evidence that Leanne put her career on hold for 11 years, from age 34 to 45, in order to prioritize care for the children and the home. Per the SSAG’s Revised User Guidelines, I must consider where Leanne would have been, in terms of income and self-sufficiency, if she had continued in the labour market through her 30’s and 40’s.

[84] Given Leanne’s interest in marketing, and the initiative she took to improve her skills to move into that area prior to 2001, it is reasonable to predict she would have continued along this path, seeking promotional opportunities as she gained skills and experience, if she had not left the workforce when she did. To Leanne’s credit, she returned to work in 2012 and continues to work in a position for which her training and education equip her, but her income has not increased in the last four years. The evidence supports a finding that she is not as well placed to move up in her employment and earning capacity as she would have been if she had stayed in the workforce.

[85] I further find that by putting her own career on hold, Leanne contributed to Gerard’s career development and to the economic and social success of the family. The parties’ decision to have Leanne remain home full time when the children were young enabled Gerard to enjoy an uninterrupted career and devote considerable time and energy to his business.

[86] As the secondary earner, Leanne made her decisions to stop and to re-start waged employment when the family needed her to, not when it was optimal for her own career trajectory to do so. As a result, she was out of the paid workforce during her 30’s and early 40’s, years during which she otherwise would have been able to work in order to position herself for higher income opportunities for the remainder of her working life.

[87] The evidence at trial disclosed an additional disadvantage to Leanne at the time of separation: as referenced earlier, Gerard’s difficulties with the CRA led to Leanne declaring bankruptcy at the time the family separated. Gerard did not explain the disproportionate impact on Leanne of his indebtedness, nor why he did not declare bankruptcy himself.

[88] Leanne testified that she spent all her RRSP retirement savings to help the family during the marriage, and had no savings when she sought to re-establish herself after separation. At trial, she testified that after paying her rent and table child support, she has $400 left each month for all her food, clothing, transportation and other expenses.

[89] The evidence supports her counsel’s description of the end of the relationship as being “economically devastating” to Leanne.

[90] My findings and conclusions above establish an entitlement for Leanne to spousal support on both a compensatory and non-compensatory basis. She is entitled to spousal support from Gerard as of the date of that application.

[91] The factors relevant to the duration and amount of support are: a) the length of parties’ relationship, which I find on the evidence to be 20 years; b) the parties’ age at separation; c) the fact of the children’s primary residence with Gerard with two children summer only at this time, and; d) the parties’ incomes.

[92] Applying the Spousal Support Advisory Guidelines formula using Leanne’s current income and Gerard’s imputed income results in a support obligation of indefinite duration, subject to such review as may be ordered.

[93] The factors identified above support an order at the middle to high end of the “custodial payor” formula. Quantum will be discussed later in these reasons. An order for periodic support is appropriate in the circumstances of this family.

[94] It is important that Gerard secure his spousal support obligation on a prospective basis by obtaining life insurance and designating Leanne as irrevocable beneficiary: see Divorce Act, s. 15.2(1). In accordance with the Spousal Support Advisory Guidelines, the life insurance obligation to secure spousal support going forward is $346,400.

b) Is Gerard entitled to spousal support?

[95] Gerard amended his claim prior to trial to seek spousal support from Leanne. He claims entitlement on both compensatory and non-compensatory bases.

[96] The factors discussed earlier, both those grounding Leanne’s entitlement to spousal support and the imputation of income to Gerard, are relevant to my conclusion that Gerard is not entitled to either compensatory or non-compensatory support from Leanne. Not only has Gerard historically been the family’s breadwinner, but he, not she, derived the greater economic benefit from the marriage. Although Gerard is now unemployed, I have found that his job search has not been reasonable and have imputed income to him.

[97] I further note that to the extent that Gerard considers he was “worse off” than Leanne after separation, his income for the years 2014 – 2016 exceeded that of Leanne, and he was also receiving child support from Leanne. Gerard was earning at an executive employment level, and any inadequacy in his standard of living arose from choices within his control.

[98] In conclusion on this point, the evidence establishes that the family had been living beyond their means for some time prior to 2013. Certainly, both Gerard and Leanne experienced a significant decline in their standard of living in late 2013 and 2014. I find that this was an inevitable consequence of the downturn in the family’s fortunes resulting from Gerard’s financial decisions over time, which led to CRA indebtedness.

[99] For the foregoing reasons, Gerard’s claim for spousal support is dismissed.

Issue No. 4: Spousal Support Quantum

a) What is the amount of retroactive spousal support owing from Gerard to Leanne?

[100] I have found that Leanne was entitled to spousal support from the date of her application (May 7, 2014). The retroactive spousal support is calculated based on each of the parties’ respective incomes in the year of 2014, 2015, and 2016, considering the parties’ ages in those years, the respective taxation rates, and the primary residence of the children being with Gerard. For the year of 2014, 7 full months, starting June 2014, were calculated. For the year 2016, I have accounted for the fact that the older daughter was a “summer” only child for support purposes.

[101] In determining the lump sum retroactive spousal support payable from Gerard to Leanne, I have considered Leanne’s retroactive s. 7 expense obligation during those years of $200.00 per month. Based on these factors, I have calculated the net present value of Gerard’s spousal support obligation to be $ 21,214.00.

[102] In considering what amount of spousal support Gerard should pay retroactively, I have considered the adverse tax implications for Gerard of not being able to deduct as much spousal support from his income as he would have been able to do had Leanne’s s. 7 contribution been paid to him separately. The net present value of the retroactive spousal support obligation accounts for these tax implications.

b) What amount of spousal support is appropriate on a go-forward basis?

[103] The custodial payor formula referenced earlier in these reasons suggests a range of spousal support for the year 2017 and going forward of $1,102 at the low end of the range, to $1,469 at the higher end of the range. These amounts are based on Gerard’s imputed income of $115,000 for 2017, Leanne’s income of $53,396 (assumed to be the same as 2016), and 2 “summer only” children and 1 full-time child.

[104] If there were no s. 7 expenditures to consider, I would order a payment of $1,350 per month from Gerard to Leanne, representing an award at the mid to upper end of the range. However, in the circumstances of the children’s sports and post-secondary needs, that amount is reduced to $1,150 payable by Gerard to Leanne. This adjustment is effective January 1, 2017. The $200.00 difference between these amounts shall constitute Leanne’s contribution to the children’s s. 7 expenses.

[105] For the reasons referenced earlier at paras. 68-71, I decline to order two separate monthly payments (spousal support from Gerard to Leanne and section 7 contribution from Leanne to Gerard) due to the conflict between the parties. I note that these parties were in court more than a dozen times in 2016 alone. It is therefore important that the order I make clearly sets out the compliance required by the parties. This is especially important where, as in this case, a party is self-represented.

[106] In ordering a “global” monthly amount, which encompasses spousal support with a reduction to reflect Leanne’s contribution to s. 7 expenses, I have considered the best interests of the children. They will benefit from the support of both their parents. Further, the single monthly payment, collected by FRO, will minimize the type of contact that has historically led to contempt allegations, repeated court attendances, and parental money and time allocated to legal wrangling.

[107] In making this decision, I seek to minimize the communication that the parties are required to have with each other in order to comply with the court’s order. I further wish to clarify that on the evidence of this case in which the children are completely cut off from their mother, despite her efforts to repair the relationship, it was open to me to order that she not be required to contribute to s. 7 expenses at all. The reduction in spousal support which I have ordered amounts to her indirect contribution to those expenditures, but not at the same level I would have ordered in circumstances where she had input into the decisions and an opportunity to experience the benefit of these expenditures by observing the children’s development into young adults.

Issue No. 5: Gerard’s Debts

a) Is Leanne required to contribute to Gerard’s debts to All Rite Moving and to George Kloet?

[108] Gerard seeks contribution from Leanne for monies he spent to move and store the contents of the matrimonial home post separation, and for money he borrowed from an acquaintance to pay the last month’s rent on the home that the parties were renting at the time of separation. These items were first raised in Gerard’s amended Answer filed just months before trial.

[109] As a result of the Coats J. and Gibson J. orders of October 26, 2016 and December 23, 2016, respectively, the issues for trial were identified. These issues did not include reimbursement of storage costs nor the contribution/repayment of a loan incurred by Gerard to pay the last month’s mortgage on the rented house. These are issues therefore not properly before me as an issue for trial.

[110] Accordingly, the claims by Gerard for “monies relating to “All Rite Moving” and “monies owing to relating George Kloet” are dismissed.

Concluding Observations of the Court

[111] Although custody and access were resolved before trial, both parties’ concern for their three children was evident throughout their testimony and presentation of their case.

[112] I am concerned that the resolution of the issues sent to trial may not in fact improve the “status quo” presented in the evidence at trial. Specifically, the court was concerned about Gerard’s contention, emphasized in his testimony and submissions, that he is the only parent who cares about the children and is willing to provide for them.

[113] I am concerned because this contention is contradicted by the evidence, including Leanne’s trial testimony. She described her efforts to stay involved in the children’s lives by watching their sports games, attending their graduations, writing and calling them, sending them extra money directly when she could, trying to see them at holiday time, and more. I find that these are the actions of a parent who is open to doing what she can to repair damaged parent-child relationships.

[114] Gerard did not dispute that Leanne makes efforts to keep connected with the children, though he repeatedly stated that it is the children’s decision, not his, that they have no contact with her. I consider this posture of Gerard’s, of having no accountability for influence over the children’s feelings for and behaviour toward Leanne, to be disingenuous based on all the evidence.

[115] I have referenced earlier Gerard’s actions of driving the children back and forth from Oakville to Toronto, round trip, twice on sports nights. Leanne lives close to the school. The fact that Gerard had not used Leanne’s availability and willingness to help out as an opportunity to encourage the younger daughter, who is still at home, to reconnect with her mother, was illustrative of the continuing rigidity in his attitude toward Leanne.

[116] Gerard and Leanne are now divorced. It is time, in the court’s view, that their co-parenting enter a new, less positional phase. It is my hope for this family that the children will find a path forward that enables them to make independent choices and have a healthy relationship with both their parents. It is the role of both parents to support such outcomes for all their children.

[117] This is a final order. It shall not be reviewed until three (3) years from the date of this decision, absent any material changes in the parties’ circumstances. The parties are to be discouraged from bringing their issues to court prior to the end of the review period, save and except to enforce terms of this order, subject to the discretion of any subsequent motions judge.

ORDERS:

[118] The following is therefore ordered:

1. Gerard Holmes is to pay retroactive spousal support to Leanne Holmes in the amount of $21,214.00 for the period of June 1, 2014 to December 31, 2016.

2. As of January 1, 2017, Gerard is to pay spousal support to Leanne in the amount $1,150.00 per month, payable on the first day of each month thereafter.

3. Gerard Holmes shall maintain a life insurance policy in the face amount of $346,400, and designate Leanne Holmes as irrevocable beneficiary of this life insurance policy for the period that he is required to pay spousal support.

4. Leanne Holmes’ contribution to s. 7 expenses of the children has been considered in setting the amount of spousal support, both retroactively and going-forward. No separate payment by Leanne Holmes is owed.

5. Nothing in this order affects the final order of Coats J. of October 26, 2016 in regard to table child support payable by Leanne Holmes to Gerard Holmes.

Review:

6. This spousal support order will be subject to review at the request of either party after three years from this date. Loss or reduction in employment by Gerard Holmes will not constitute a material change within the review period.

7. Leanne Holmes’ contribution to s. 7 expenditures may likewise be subject to review at the request of either party after three years from this date.

8. Commencing June 1st, 2017, and by May 15th of each following year, Gerard Holmes and Leanne Holmes shall make disclosure to each other of their income from the previous year. Such disclosure shall include a full copy of their annual tax return and all schedules, and the Notice of Assessment received from the Canada Revenue Agency.

9. A Support Deduction Order is to issue.

10. Approval as to the form and content of draft orders by Gerard Holmes is hereby dispensed with.

Costs:

11. If the parties are unable to agree on costs, they may make submissions in writing sent to the attention of the Milton Trial Office by November 22, 2017. Submissions shall include a bill of costs, copies of any relevant offers to settle, and not more than 3 (three) pages, double-spaced, of cost submissions. Cost submissions received after November 22, 2017 may not be considered.

McSweeney, J

DATE: November 1, 2017

CORRECTED: December 1, 2017

CITATION: Holmes v. Holmes, 2017 ONSC 6425

COURT FILE NO.: FS-36736/14

DATE: 20171101

CORRECTED: 20171201

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: LEANNE HOLMES, Applicant

v.

GERARD HOLMES, Respondent

BEFORE: McSweeney, J.

COUNSEL: P. Callahan, for the Applicant

Self-represented Respondent

CORRECTED

REASONS FOR JUDGMENT

McSweeney, J.

DATE: November 1, 2017

Corrected: December 1, 2017