ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Philip Thomas Salari
Applicant
– and –
Michele Lynn Salari
Respondent
Philip Thomas Salari, Acting in Person
Michelle Lynn Salari, Acting in Person
HEARD: October 2 and 3, 2017
reasons for judgment
hebner j.
1The applicant, Philip Thomas Salari (Philip), and the respondent, Michele Lynn Salari (Michele), were married on April 23, 1988. They separated on February 1, 2011. They had three children: Christine, born March 5, 1990; Caley, born January 5, 1992; and Tyler, born May 29, 1994. The parties are divorced by a Divorce Order dated January 8, 2013.
2On December 18, 2012, Bryant J. made a final order based on Minutes of Settlement of the parties that provided that Philip pay spousal support to Michele in the sum of $3,200 per month. This motion to change was brought by Philip seeking an order terminating or reducing spousal support payable to Michele.
The Bryant J. Order
3The relevant paragraph in the order reads as follows:
- Spousal Support
a) Philip Thomas Salari shall pay to Michele Lynn Salari spousal support in the sum of $3,200 per month commencing October 1, 2012 and on the 1st day of each month thereafter.
b) The amount of spousal support is reviewable at the request of either party annually commencing October 1, 2013 and on the 1st day of October of each year thereafter.
c) The parties acknowledge that the spousal support is based upon Michele Lynn Salari not being in a common-law relationship nor is she cohabiting in a relationship resembling marriage as of the date of this agreement.
d) Prior to June 1 of each year commencing in 2013, each party shall provide to the other party a copy of his or her notice of assessment as issued by the Canada Revenue Agency and a copy of his or her annual income tax return.
e) The parties agree that the spousal support provided for in this agreement is consistent with the spousal support advisory guidelines, a copy of which is attached as Schedule “C”.
4Schedule “C” attached to the order was a DivorceMate calculation, the contents of which are summarized as follows:
The applicant’s employment income is stated as $139,000.
The respondent’s employment income is stated as $24,000.
Caley and Tyler are identified as children of the marriage residing with the respondent during the summer months only. Based on the incomes and summer residence schedule, the child support payable by the applicant to the respondent was identified as $628 per month.
The length of the marriage is identified as 22 years and the respondent’s age at separation is identified as 44 years.
The federal Spousal Support Advisory Guidelines using the “with child-support” formula identifies the range as between $2,832 per month and $3,694 per month, with the midpoint being $3,261 per month.
5On November 28, 2016, the spousal support payable was reduced to $2,000 per month by way of a temporary consent order.
Background Facts
6The moving party, Philip, has a Bachelor of Science in Chemistry from Queen’s University. At the time of the parties’ marriage, he accepted a position at a company in Sarnia, Ontario. The parties lived in Sarnia until 1994 and all three of their children were born in Sarnia. Michele does not have a post-secondary education. She did not finish high school. In Sarnia, in order to supplement the parties’ household income, Michele babysat children in her home.
7In 1994, Philip took a position with Shur-Gain in or near St. Marys, Ontario, as a lab supervisor. The parties moved to St. Marys. Philip worked at Shur-Gain until 1999, then at Labatt Brewery until 2000. In 2000, Philip obtained employment at St. Marys Cement as an assistant plant chemist. His starting annual salary was approximately $50,000. In 2003, he was promoted to quality manager with an increase in salary to approximately $62,500. In 2010, he was promoted to production manager with an increase in salary to approximately $92,000.
8During the years 1994 to 2011, Michele initially continued to babysit children in her home. She then obtained employment as a receptionist with Urbshott-Galloway Insurance.
9The parties separated in February 2011. Philip had commenced a relationship with a co-worker at St. Marys Cement. As a result of that relationship, Philip was transferred to a sister company in the aggregates division (CBM Aggregates) in Aberfoyle, Ontario as the quality manager. It was a lateral transfer with no difference in his remuneration package. At the time the parties separated, Philip’s income was approximately $94,000 as an annual base pay, plus bonuses. In 2012, Philip’s income of $139,000 included bonuses and use of a company car.
10At the time of the separation, Michele was working for Urbshott-Galloway Insurance at an annual income of approximately $24,000.
11The parties’ net family property was equalized such that Philip retained his pension and Michele retained the matrimonial home. A payment of $31,000 from Michele to Philip was required to equalize the parties’ net family property. The order of Bryant J. was based on the Minutes of Settlement signed and filed by the parties.
12At the time the parties separated, Caley and Tyler continued to reside with Michele in the matrimonial home and attend post-secondary school. In the order of Bryant J., child support was set at $628 per month for the summer months. By August 2013, both of the children had left the matrimonial home and child support was terminated.
Philip’s Circumstances Following Separation
13Philip began to reside with his then fiancée, Natasha Lago, in May 2012. They married in March 2013. At the time, Ms. Lago continued to be employed at St. Marys Cement and Philip continued to be employed at CBM Aggregates. In May 2013, Ms. Lago obtained employment at Essroc Cement Company (“Essroc”) in Puerto Rico. Both Philip and Ms. Lago left their respective employment and moved to Puerto Rico. They had a child born November 11, 2013. Philip cared for the child until March 2014, when he obtained his work visa and began to work as a consultant at Essroc. In June 2014, Essroc offered both Philip and Ms. Lago employment at their company in Pennsylvania. They accepted those jobs and moved to Pennsylvania. Philip was the corporate quality manager and Ms. Lago was the plant director.
14According to his income tax returns, in 2012, Philip earned $147,220 CAN. In 2013, during a year when Philip was employed for only a part of the year, he earned $87,918 CAN. In 2014, he earned $82,991.11 USD. In 2015, Philip and Ms. Lago filed a joint United States tax return and claimed total income of $279,996 USD. Philip’s evidence was that his share of that income was $107,000 USD.
15In January 2016, Ms. Lago lost her employment at Essroc due to a corporate takeover. Both parties began to look for other employment. Ms. Lago was given a one-year severance package from Essroc plus accumulated vacation. Philip did not receive a similar package. In January 2016, Philip found employment with a cement company, GCC, in Pueblo, Colorado and was hired at a salary of $115,000 USD, plus the possibility of a bonus and use of a company truck. Ms. Lago was unemployed until June 2016 when she found employment in Florida. Philip remained employed at GCC until November 2016 when he left his employment and moved to Florida to be with his family. He obtained employment at American Cement Company commencing December 1, 2016. His starting salary was $92,500 USD, with the possibility of a bonus of up to 20 per cent of his salary. He remains employed at American Cement Company to date.
16In 2016, Philip and Ms. Lago filed a joint income tax return disclosing a total income of $423,639 USD. This figure includes the severance that Ms. Lago received from Essroc and a $25,000 moving expense paid to Philip when he took employment at GCC. He is required to pay the sum of $12,000 back to GCC. Philip’s evidence is that, of the $423,639, his income was $113,200 USD.
17Philip continues to maintain employment at American Cement Company as the district manager. Ms. Lago is the plant manager. Philip’s current salary is $92,500 USD per annum. At a conversion rate of 1.25:1, this equates to $115,625 CAN. Philip has not yet received a bonus. His first opportunity for a bonus is in February 2018. His financial statement discloses that Ms. Lago earns $214,200 CAN per annum.
18According to his financial statements, Philip and Ms. Lago own their home in Winter Garden, Florida. They estimated the value at $450,000 USD. Philip has received inheritances since the parties separated, in the amount of $50,000 – $70,000 CAN. Along with savings and his one-half ownership of his home, Philip has total assets over $400,000. His only debt is the requirement that he repay some of his moving relocation benefit in the amount of $12,000 USD to GCC. His expenses include church donations to Life Bridge Church of $1,500 per month.
Michele’s Circumstances Following Separation
19At the time of the separation, Michele was employed at an insurance brokerage earning approximately $24,000 CAN per year. She left that job to take care of her mother who eventually died of cancer in April 2013. In May 2013, when her youngest child had finished high school, Michele moved in with her new partner, Mr. Van Dronigan, in Waterford, Ontario. She had previously reconnected with Mr. Van Dronigan at a reunion. She obtained employment at a restaurant as a waitress and then left that employment in November 2014 when her father was diagnosed with cancer. Her father died in December 2014.
20As a result of the loss of her parents, Michele received some inheritance funds. So far, she has received approximately $300,000. She expects to receive another $100,000 when the estate is completely distributed.
21After Michele moved out of the St. Marys home, her daughter and son-in-law moved into the home. Michele sold the St. Marys home in August 2014 for approximately $179,000. The proceeds of sale were used in the purchase of her current residence in Waterford with Mr. Van Dronigan.
22Mr. Van Dronigan is a US Steel retiree. His source of income is pension income which, in 2016, totaled $33,710 CAN per year.
23Michele is currently unemployed. She did not return to the workforce following the death of her father due to her health issues. Specifically, in December 1989, Michele was in a motor vehicle accident. She was pregnant with her daughter at the time. She was sent home from the hospital and was told she had whiplash. Five years later, she had difficulty with numbness in her hands and x-rays of her neck were taken. It had been fractured in the accident. In February 2017, the numbness became worse. Medical investigation revealed a spinal cord compression. According to medical records filed “[t]he spinal cord itself is amazingly compressed down to just a 2 mm diameter with a generous established myelomalacia change within it. The baseline diameter distally is almost 6 mm.”
24Michele had surgery in Hamilton on August 17, 2016 to address the spinal cord compression. She suffered complications identified as “excessive and marginally controlled venous surgical bleeding requiring packing that will necessitate a secondary return to the operating room.” The serious nature of the complications is illustrated in the following excerpt from the report of her surgeon, Dr. Bednar:
“Her operation was complicated by a virtually exsanguinating haemorrhage from the very delicate engorged veins that parallel the vertebral artery, I actually had to pack her wound closed and bring her back to the operating room on a delayed basis to control it. I have never had to do that before in my 28 years of active practice.”
25Michele is scheduled for further surgery, a hysterectomy, on November 3, 2017. She is eligible for the disability tax credit as a result of her back injury. She has applied for CPP credit sharing and CPP disability.
26In 2012, Michele had employment income of $13,590 plus spousal support payments of $23,500 for a total income of $37,090. In 2013, Michele had employment income of $7,893, interest income of $350 and spousal support payments of $38,400 for a total income of $46,643. In 2014, Michele had employment income of $15,774 and spousal support of $38,400 for a total income of $54,175. In 2015 and 2016, Michele’s only source of income was spousal support. Currently, Michele’s only source of income continues to be the spousal support she receives from Philip, now totaling $24,000 per year.
27According to her updated financial statement, Michele owns one-half of her current residence, which she estimates is worth a total of $179,000. There is a mortgage against the property totaling approximately $138,000. Michele invested some of her inheritance into savings and an RRSP such that her current savings total approximately $190,000. Michele’s evidence was that she has no pension or any other savings for her retirement.
Position of the Parties
28Philip’s position is that the spousal support payment ought to be reduced as a result of Michele’s changes in circumstances. He put forth three reasons for his requested reduction in spousal support:
Michele is now living with and is married to Ron Van Dronigan;
Michele has received a substantial inheritance from her parents, some of which she has already spent; and
Although Michele claims the spousal support payments as income on her Canadian income tax return, Philip has not been successful in claiming a corresponding deduction on his United States income tax return.
29Insofar as the taxation issue is concerned, Philip’s evidence is that the Internal Revenue Service does not provide a clear reason for the refusal to allow a deduction. Apparently, Michele needs to apply for an individual tax identification number as a non-resident. Michele has applied for the number, but the number has been refused. Neither party understands the reasoning. The result is that Michele is required to include the spousal support payments in her income for tax purposes but Philip does not receive a corresponding deduction. It should be noted that Philip’s evidence is that his average tax rate between he and Ms. Lago is 23 per cent.
30Philip suggests an appropriate spousal support payment would be $1,300 CAN per month. He suggests that the spousal support payment be reduced by $750 to account for the lack of income tax relief, an additional $750 to account for contribution of Michele’s new husband to her household expenses and the balance of the reduction ($400) being monies that Michele could earn from her inheritance.
31Michele points out that she and Philip had a long-term traditional marriage. Michele tried to cooperate by applying for her individual tax identification number with the Internal Revenue Service. She suggests that Philip failed to research the tax consequences prior to his move to the United States and seeks to put the resulting loss onto her shoulders. Michele acknowledges that she has had significant changes in her life since the parties’ separation, namely her re-marriage and inheritance, and suggests that a reduction of $700 per month would be fair. Michele, therefore, suggests that spousal support payable be set at $2,500 CAN per month.
Analysis
32The order of Bryant J., dated December 18, 2012, provides for an annual review of the spousal support at the behest of either party. Given that, in my view, this proceeding is properly characterized as a review of that order as opposed to a variation application.
33Section 15.2 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), deals with spousal support orders of the first instance. Subsection (3) provides:
The court may make an order under subsection (1) or an interim order under subsection (2) 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.
34The common law has extended this provision to provide a court with jurisdiction to make “review” orders. A review order, in contrast to a variation order, does not require a material change in circumstances. In Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at paras. 39-40, the Supreme Court of Canada has directed that courts should, where possible, decide cases based on the evidence before them on a final basis. Review orders should only be granted if there is uncertainty on a material issue at the time of trial. If that issue is to be decided on a future review hearing, the issue should be delineated in the order. An example would be if the recipient spouse intended to upgrade his/her education requiring a review of the support to take into account that spouse’s expected increased earnings potential. In Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, at para. 70, the Court of Appeal directed that review orders should only be made if it is truly warranted. Review orders are to be the exception rather than the norm.
35In this case, the support order was based on Minutes of Settlement. The parties agreed to an annual review of the spousal support order. There was no issue delineated in the support order that was to be the subject of review, such as Michele’s remarriage or receipt of inheritance. The question then becomes what form of a review is appropriate.
36I agree with Graham J., in Arnaud v. Chiddenton, 2004 ONSC 5615, when he said at para. 161:
A review of spousal support differs from a motion to vary. Whereas a motion to vary requires the moving party to establish that there has been a material change in circumstances since the spousal support order was made, a review has no such requirement. Rather, a review requires the court to take a fresh look at the parties’ circumstances to determine whether spousal support should be paid, and if so, how much and for how long.
37In Fisher, the Court of Appeal provided the following guidance, at para. 63:
A review allows an application for support without the need to prove the material change in circumstances required in a s. 17 variation application. Unless the review is restricted to a specific issue, it is generally equivalent to an initial application for support and necessitates a complete rehearing of every issue from entitlement to quantum.
38In this case, the spousal support order of Bryant J., dated December 18, 2012, did not direct the reviewing court or the parties to any specific issue or issues on review. Accordingly, given the direction of the Court of Appeal, this court is directed to consider all of the parties’ circumstances in determining the appropriate order as it would in the event of an initial application. It therefore becomes necessary to consider the factors and objectives of a spousal support order under s. 15.2 of the Divorce Act.
39Section 15.2(4) of the Divorce Act sets out the factors a court must consider in making a spousal support order. It reads as follows:
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabitated;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
40Section 15.2(6) of the Divorce Act sets out the objectives of a spousal support order. It reads as follows:
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) 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.
41In Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, the Supreme Court provided some direction in considering the objectives at p. 852:
All four of the objectives defined in the Act must be taken into account when spousal support is claimed or an order for spousal support is sought to be varied. No single objective is paramount. The fact that one of the objectives, such as economic self-sufficiency, has been attained does not necessarily dispose of the matter. Carruthers C.J.P.E.I observed in Mullin v. Mullin (1991), supra, at p. 148:
All of these objectives must be considered. There is nothing in the legislation to suggest that any one or two of these objectives should be given greater weight or importance than any other objective. Section 17(7) of the Act recognizes that each former spouse shall attain economic self-sufficiency, insofar as practicable, within a reasonable period of time, but it does not say that such economic self-sufficiency is the dominant consideration.
42I find the Fisher case particularly instructive when considering the difference in the parties’ standards of living. The Court of Appeal said, at para. 56:
The relevance of standard of living as a measure of dependency in long-term marriages is best encapsulated by L’Heureux-Dubé J. in the following passage from [Moge, at p. 870] [citations omitted]:
Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement. Furthermore, great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.
43Philip and Michele had a long-term traditional marriage. They were married for 25 years. They raised three children. Their marriage was traditional in the true sense of the word. Philip was the spouse who earned the income to financially support the family and Michele was the spouse who cared for the household and the children. At the time the parties separated, Michele was 47 years of age. Her work during the marriage consisted of babysitting and, in the latter part of the marriage, as a receptionist. Post-separation, she was able to find work as a waitress.
44Although the order of Bryant J. did not specify whether the support was compensatory or non-compensatory in nature, it seems to me that, on a consideration of the objectives of spousal support set out in s. 15.2(6) of the Divorce Act, Michele would have been entitled to compensatory support. Certainly she is at least entitled to long-term needs-based support.
45I must consider the effect of Michele’s re-partnering on her support. In that respect, the decision in Colley v. Colley, 2013 ONSC 5666, 40 R.F.L. (7th) 209, is helpful. At paras. 69 – 70, Quinn J. provided the following framework:
69When considering the implications upon a need-based spousal-support order of the re-partnering of a recipient spouse, there are two important questions to ask:
(a) Does the recipient spouse have a present need for support?
(b) Does her new partner have a legal obligation to contribute to her expenses?
70Where the prior spousal-support order contains a compensatory component, the following questions are appropriate;
(a) Has the recipient spouse overcome the economic disadvantages arising from her role in the marriage so that there is no basis for continuing compensatory support?
(b) Have compensatory concerns been fully addressed as of the date of the variation?
(c) Should the court reduce or eliminate the need-based portion of the prior order, while maintaining the compensatory portion?
46In Colley, the issue was a variation application. This is different from the present case, which is a review application. In any event, I find the framework helpful. In Colley, there was no indication in the current order as to whether the support was compensatory or needs-based in nature. This is similar to the case here. However, I have significant evidence from the parties as to the roles adopted during the marriage. It seems clear to me that the family moved to accommodate Philip’s career choices. It seems clear to me that Michele took a backseat in her income earning potential in order to care for the household and the family so that Philip could pursue his career choices. Under those circumstances, Michele would be entitled to compensatory support. Using the framework above, I find that Michele has not overcome the economic disadvantages that arose from the marriage. In my view, compensatory concerns have not been fully addressed.
47Regardless of whether the spousal support was compensatory in nature, it is my view that Michele is entitled to continued support at a reasonable level. She has a present need for support. Although her current spouse has a legal obligation to support her, his means are limited. I also take into account the current standards of living of the parties as directed in Fisher. Philip has a significantly higher standard of living than does Michele as a result of his significantly higher income.
48The Spousal Support Advisory Guidelines calculation is attached. I find the appropriate figure for Philip’s income to be $92,500 USD, converted to Canadian dollars at the current rate of 1.25:1. Accordingly, I attribute an income of $115,625 CAN to Philip. For Michele, I continue to use the figure of $24,000 CAN. I am satisfied that Michele is unable to work. However, she has received some inheritance monies and will receive some additional inheritance monies, totalling approximately $400,000. It appears as though she will have about $300,000 to invest. If I use the figure of 4 per cent for imputed income on her inheritance monies, I reach a figure of $12,000. In addition, she may receive some CPP disability income. That figure is unknown. The previous support order used the income figure of $24,000 CAN for Michele, and I continue to use that figure for convenience. However, with imputed interest income of $12,000 and CPP disability income, if anything, the $24,000 figure is generous to Philip.
49At those income levels, the Spousal Support Advisory Guidelines provide a range of between $2,634 and $3,512 CAN per month. Michele is suggesting a figure of $2,500 CAN per month. That figure is eminently reasonable in all of the circumstances and given the Spousal Support Advisory Guidelines. Accordingly, I accept Michele’s figure.
50Given the direction of the Supreme Court of Canada in Leskun, in my view a continued annual review provision is inappropriate. There is no evidence of any anticipated changes in circumstances. There is no evidence of any employment on the part of Michele that would result in her self-sufficiency. There is no evidence of any anticipated decline in Philip’s financial circumstances. Accordingly, this spousal support order will not contain a review cause. Of course, in the event of a material change in circumstances either party may apply for a variation under the applicable statutory provisions.
51These parties ought not to be required to continue to come to court annually or, indeed, again unless there is a material change in circumstances. Accordingly, in my view, the support order ought to provide for an annual cost of living adjustment, which is normally sufficient to deal with inflation and annual wage increases.
Disposition
52For the foregoing reasons, I order as follows:
The applicant, Philip Salari, shall pay to the respondent, Michele Salari, spousal support in the sum of $2,500 CAN per month commencing October 1, 2017.
This order is not subject to an annual review, but may be varied in the event of a material change in circumstances.
The spousal support payable shall be increased annually on October 1 by the percentage change in the Consumer Price Index for Canada for prices of all items since the same month of the previous year, as published by Statistics Canada, with the first such increase to take place on October 1, 2018.
In the event either party wishes to claim costs, that party may provide written submissions, to include a bill of costs or costs outline and any relevant offers to settle, within 20 days. The other party may provide responding written submissions within 20 days thereafter.
“original signed and released by Hebner J.”
Pamela L. Hebner
Released: October 30, 2017
CITATION: Salari v. Salari, 2017 ONSC 6493
COURT FILE NO.: 12-6163 (Stratford)
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Philip Thomas Salari
Applicant
– and –
Michele Lynn Salari
Respondent
REASONS FOR JUDGMENT
Pamela L. Hebner
Justice
Released: October 30, 2017