SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
NANCY LOU MOUSSEAU Applicant
- and -
RAYMOND MARCEL MOUSSEAU Respondent
COUNSEL: S. Filipovic, for the Applicant W. Shanks, for the Respondent
HEARD: October 26, 2017, at Thunder Bay, Ontario
BEFORE: Mr. Justice T.A. Platana
Decision On Motion
1The Respondent, Raymond Mousseau, brings this motion seeking:
- An Order determining the temporary spousal support to be paid by the spouses to each other having regard to their income, expenses and other factors.
- A declaration that the Husband is not required to pay any further support under an alleged Separation Agreement and that the Order of this Court supersedes any obligation, if any, under the said alleged Agreement.
- A declaration that the Wife be required to preserve the payment received from the Fort William First Nation (the “Band”) on account of the monies paid by the Federal Government pending further Order of this Court.
- An Order that the Wife provide a Financial Statement and all other financial disclosure required under Family Law Rule 13.
- Pre-judgment and post-judgment interest.
- Costs on a full recovery basis.
2Mr. Mousseau is 52 years of age. Mrs. Mousseau is 53 at the date of the application. They were married on July 20, 1985, and were in a relationship for 30 years.
3This application was initiated by the Applicant, Mrs. Mousseau, originally seeking enforcement of the terms of a Separation Agreement (the “Agreement”) dated September 23, 2015 as it related to provisions for life insurance and a land claim settlement. Both parties were represented by counsel in the preparation of the agreement.
4The paragraphs of the Agreement at issue in the Application are paragraph 8 and paragraph 15. Paragraph 8 sets out:
- LIFE INSURANCE
8.1 The Husband presently owns or has an interest in a policy or policies of life insurance described as follows:
Insurance Co. Face Amount
Through employer (Manulife): Life $150,000.00 Accidental death and dismemberment $325,000.00
Cooperators $ 30,000.00
8.2 The Husband will irrevocably designate the Wife as the sole beneficiary under the said policies, and file the designations with the insurers as provided by the Insurance Act. The Husband will give the Wife a true copy of this designation within 30 days from the date of the execution of the Agreement. The Husband will forthwith write to his insurers (with a copy to the Wife) to direct irrevocably that the insurers notify the Wife of any changes in or lapse (actual or potential) in the policy coverages and not to grant a policy loan without the Wife’s prior written consent.
8.4 The Husband will maintain the aforesaid policy and designation as long as he is required to make payments pursuant to paragraph 6 herein and the Husband may then deal with the policies as he wishes and the Wife will then sign any document necessary to change or revoke the designation.
8.5 If the above-noted policy of insurance is no longer available to the Husband through his employment, he will immediately obtain replacement insurance, ensuring that there is no gap in coverage beyond his control, for no less coverage than the policy it is replacing and will maintain the replacement policy in accordance with the terms of the Agreement. The Husband will give the Wife full particulars of the replacement policy.
and Paragraph 15 sets out:
- LAND CLAIM SETTLEMENTS
15.1 The parties acknowledge that the Husband is a member of the Fort William First Nations Band. The parties further acknowledge that the Fort William First Nations Ban commenced a Land Claim, being the Grand Trunk Railway Claim, prior to the parties’ date of separation.
15.2 The Husband acknowledges and agrees that in the event that such claim results in the payment of monies to him, such settlement monies will be divided equally between the parties and the Husband shall execute an irrevocable Authorization and Direction to the Fort William First Nations Band to make one-half of any such payments payable to the Wife with respect to settlement payments referable to Grand Trunk Railway Claim.
15.3 The Husband acknowledges that he has received a Land Claim settlement payment of $2,900.00 and that he shall pay the Wife $1,450.00 upon execution of this Agreement.
5The Respondent filed an Answer and Claim in which he disputed the claims and in which he seeks to set aside certain terms of the Agreement relating to spousal support, the equalization payment and life insurance coming from the Band. The terms in the Agreement relating to spousal support set out:
- SPOUSAL SUPPORT
6.1 The Husband shall pay the Wife for her support the sum of $2,733.00 per month commencing the 1st day of July, 2015 and continuing on the 1st day of each and every month thereafter until the earlier of the following:
(a) The Husband’s retirement;
(b) The Wife dies;
(c) The Husband dies.
6.2 The support payable pursuant to subparagraph 6.1 shall be paid by way of direct deposit into the Wifes bank account.
6.3 The quantum of spousal support payable by the Husband to the Wife has been based upon the parties’ disclosed income of $83,883.00 for the Husband and $18,940.00 for the Wife. The parties further acknowledge that the husband’s income is non taxable and has therefore been grossed up for the purposes of calculating support. The parties have considered the fact that the Husband will not receive a tax deduction benefit for the payment of support and accordingly, the parties have agreed upon a quantum of spousal support which is lower than the suggested range of spousal support payable pursuant to the Spousal Support Advisory Guidelines.
6.4 Notwithstanding the above, the parties acknowledge and agree that in the event that the Husband becomes disabled from employment or loses his employment through no fault of his own, his obligation to pay support as set out in subparagraph 6.1 above shall cease and be at an end, without prejudice to the Wife, at that time, to proceed with a claim for spousal support based on the parties’ financial circumstances at the time.
6.5 Subject to the provisions set out herein, the quantum and entitlement to spousal support may only be reviewable or varied by the parties in the event of a meterial change in circumstance. Additionally, the parties acknowledge and agree that in the event that the Wife remarries or enters into a common-law relationship, the entitlement to and quantum of spousal support payable pursuant to paragraph 6.1, shall be reviewable and/or variable by the Husband.
6The Applicant filed a Reply to the Answer disputing the Respondent’s claims, and asking that they be dismissed.
7The Respondent filed an Amended Answer asking that the Applicant’s claims be dismissed, claiming a divorce, and requesting for support for himself, a setting aside of the terms of the Agreement, a setting aside of an order made in respect of payment of a land claim settlement, and a reduction in the amount of support as set out in the agreement.
8An Amended Reply by the Applicant sought a divorce and that all other relief claimed by the Respondent be dismissed.
9On March 23, 2017, the Applicant brought a motion in the Application seeking, among other relief, an ex-parte order with respect to the Land Claims Settlement relief claimed in the Application. Justice Warkentin ordered that:
Land Claim Settlement- A temporary and final order for the following:
(i) In accordance with paragraph 15.2 of the Separation Agreement dated September 23, 2015 (herein after referred to as the “Agreement”) the Court direct the Fort William First Nation Band that any Land Claim settlement money resulting from the Grand Trunk Railway claim payable to the Respondent, Raymond Marcel Mousseau shall be divided equally between the Respondent, Raymond Marcel Mousseau and the Applicant, Nancy Lou Mousseau.
(ii) Alternatively, if the Respondent disputes the terms of payment of these funds, in accordance with paragraph 15.2 of the Agreement that any monies received in reference to paragraph 15.2 of the Agreement be held by the Fort William First Nation Band until a decision has been made pertaining to this matter, or alternatively, paid into court on such terms as this honourable court deems just.
This Motion
10The Respondent now brings this motion under ss. 33(4) and 56(4) of the Family Law Act seeking a preservation order until the court has heard the Application and the Counter-Application. Mr. Shanks argues that the order of March 23 is a Temporary Order within the application dealing with payment of the monies, and not a final order. The Order requested in the Ex-parte Motion brought by the Wife determined that the Court would order that the Band pay one half of the money otherwise payable to the Husband, to the Wife. Mr. Shanks’ position is that there is nothing in the Order of Warkentin R.S.J. that determines the validity of that payment on a final basis. The monies have now been paid to each party. He argues that both parties have limited funds, and that until the Application is dealt with and until his argument on the improper categorization of the land claims is dealt with, the monies paid to the wife are at risk of not being recovered by the husband if his position as to the payment is upheld. He argues that the Wife’s Financial Statement filed in the Application shows that she has $14,076.49 in the bank and an RRSP account in the amount of $7,689.42 which are sufficient to cover the amount of $15,000.00 which was paid to her pursuant to Warkentin R.S.J.’s order.
11Mr. Shanks submits that the land claim payment was improperly characterized and should have been excluded from the Respondent’s net family property as a gift from a third party. Alternatively, he argues that the monies were improperly characterized as having no value at the date of marriage and therefore no credit was given from the net family property. He submits there was no value to the land claim at the date of marriage.
12He further argues that the provisions of s. 89 of the Indian Act were not considered when the Agreement was entered into. Section 89(1) reads:
Restriction on mortgage, seizure, etc., of property on reserve
89(1) Subject to this Act, the real and personal property of an Indian or a band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or band.
Considering that section, he submits that para. 15 of the Agreement is illegal as it takes away the protection of the Indian Act.
Respondent’s Position
13Mr. Shanks relies on the Amended Answer which seeks a divorce. He cites the factors set out in s. 15(2) of the Divorce Act to argue that the terms of a separation agreement are but one factor in determining support under that Act. Counsel argues that temporary support should now be determined on the basis of the parties’ respective income, expenses and other factors. He submits that I must consider the current conditions, means, needs and circumstances of both parties including the fact that this is a relationship exceeding 30 years.
14The Respondent is a status Indian pursuant to the Indian Act. The Applicant is not. Both counsel have presented differing scenarios with respect to the parties’ current incomes reflecting the fact that the Respondent’s status must be reflected in his actual income determination.
15The Agreement requires the husband to pay $1,261.39 per month. The Respondent takes the position that the Agreement entered into between the parties was not fair, that it was entered into under duress, that he had inadequate legal advice, and that there were material misstatements of the facts by the Applicant with respect to her ability to work and earn income. He argues that his income at the time of the Agreement was subject to a gross-up based on an unreasonable amount of overtime, and that he would be required to continue to work overtime.
16Mr. Shanks notes that at the time of the Agreement, the Husband was earning substantial income and working a considerable amount of overtime. The Husband deposes that there have been layoffs at the mill where he works and that his income even before becoming disabled has been substantially reduced.
17Mr. Shanks submits that the evidence in the materials filed by the Husband with respect to the means and needs of the parties demonstrates that his income has substantially changed by reason of a disabling back injury and disability with respect to carpal tunnel syndrome on his hands. Prior to June 6 of this year he had been able to continue his work at the Fort William First Nation Reserve. His 2016 income as shown on his 2016 T4, filed as an Exhibit, was $50,800.00. The year-to-date 2017 employment income (as of September 8) is shown on the paystubs attached to the Supplemental Affidavit of Raymond Marcel Mousseau dated October 23, 2017 in the amount of $27,814.00, prior to commencement of disability income.
18Mr. Shanks argues that a careful reading of both the T4 for 2015 and the year to date paystub for July 14, 2017 of the Husband indicates a substantial reduction of income. Exhibit “C”, setting out the September 8 paystub, indicates that between July 14 and September 8 there were no additional earnings from employment. The Affidavit material produces paystubs from the disability insurer which indicate a current weekly income of $600.00.
19Mr. Shanks contrasts that with the Wife’s taxable income shown on her fresh Financial Statement that she receives the monthly sum of $1,155.07 for an annual income of approximately $14,000.00, exclusive of the monies that she receives from her Husband by way of spousal support. That money is taxable however, it is the submission of the Husband that the tax on that amount would be minimal.
20Mr. Shanks argues that the material filed shows that the Respondent’s current income is $600 per week which he receives as a result of a short-term disability payment. He is required to pay to his Wife under the provisions of the alleged Agreement the sum of $1,261.39. The net result is that he has nothing to support himself. He submits that that is unreasonable.
21Counsel argues that imputing income to the Husband is clearly inappropriate where the Husband has already paid more than one half of the income that he earned in 2016 and 2017 to the Wife and now has only his disability income from which to pay ongoing support. It is submitted that his actual income should be utilized on a temporary basis.
Applicant’s Position
22With regards to the land claim monies, Ms. Filipovic submits that the issue of the land claims payment has already been adjudicated upon and the Respondent is attempting to circumvent this decision. She notes that at no time did the Respondent bring a motion for leave to appeal this decision. Further, the relief that the Respondent is seeking in his motion is that only the Applicant’s portion of the monies she received under the order be held and not all of the monies. She submits that the appropriate forum to raise these issues would have been in a motion for leave to appeal the March 23, 2017 order.
23She submits that the Agreement which is found at Schedule “I” of the Applicant’s Application should remain in full force and the onus lies with the Respondent to prove otherwise at trial, not on a motion. In the alternative, if the Respondent is seeking to vary the terms of the Agreement, Ms. Filipovic then submits that the Respondent needs to demonstrate that there has been a material change in circumstances which merit a variation. She argues that a trial should be expedited to address these two distinct threshold issues.
24The position of the Applicant is that the Agreement should not be varied on a temporary basis and that if the court is going to vary the spousal support payable, then such order should be on a temporary basis. Counsel argues that, if Mr. Mousseau’s circumstances change again, which is contemplated by the evidence he has provided to the court, then the issue can forthwith return to court for adjudication. In particular, the issue of whether Mr. Mousseau applies and qualifies for long term disability or whether he is compelled to return to employment in the same or alternate position may return to court for adjudication.
25As it relates to the Respondent, Ms. Filipovic notes that Mr. Mousseau’s actual income is non-taxable and with that he has additional benefits that are not available to the Applicant. She references Mr. Mousseau’s T4 for 2016, which confirms that his net income was $65,488.59.
26Ms. Filipovic submits that the parties were in the same situation in 2015 (when they entered in to the Agreement) as they were in, in 2016 and as they are in now. The health issues that the Respondent and the Applicant are dealing with now are the same as those they were dealing with when they entered into the Agreement. The Respondent was diagnosed with his condition in 2010 which was prior to entering in to the Agreement.
27Further, she argues that contrary to Mr. Mousseau’s submissions, the non-taxable nature of his income was taken into consideration when the spousal support payable was determined in first instance, as shown in the Agreement filed in the Continuing Record.
28The Applicant relies upon her financial statement sworn October 16, 2017: her income from employment for 2017 would be $13,860.84; based on her income tax return for 2016 which is attached to her financial statement, her employment income for 2016 was $14,681.79. On the premise that the interim spousal support should be based on the Respondent’s gross income for 2016, the only information for the court about his income for 2016 was $65,488.59. Ms. Filipovic submits that any variation in spousal support contemplated by the court should be based on the Respondent’s known annual income for 2016 or 2017.
29Further, she argues that Mr. Mousseau’s income triggers a need under the “Non-taxable Payor Income Exemption” to balance the interests of the payor spouse and the support recipient Ms. Mousseau who must pay income tax on any monies that she receives. She references the unreported decision of Ray v. Ray where Wright J., found that a person paying income tax on the same amount of income as the Respondent receives, which is non-taxable, would have to pay approximately 20% tax on his income. She submits that the Respondent, Mr. Mousseau should make a support payment based on the SSAG of $1148 as well as pay 20% of the value of his tax exemption (20% of $9736 or $162.30 per month) for a total of $1310 per month as spousal support to Mrs. Mousseau.
Analysis/Disposition
The Land Claim Settlement Preservation
30The basis upon which Mr. Shanks asks for a finding that the monies received by Mrs. Mousseau should be ordered to be preserved is that the monies should not have been paid out to her initially, and now that the monies have been paid, the monies should be maintained until a final determination is made with respect to the application. He argues that the monies are at risk of not being recovered if the Husband’s position is found to be correct. There is no evidence beyond that position which supports that contention. The evidence is that she has $14,076.49 in the bank and an RRSP account of $7,689.42. There is nothing to indicate any intention on her part to deplete that account in order to prevent recovery of any amount which may be found owing to the Husband if he is ultimately successful.
31Further, I accept the argument of Ms. Filipovic that this claim is, in essence, a collateral attack on the order directing equal distribution to the parties of money received from the Fort William First Nation land claim settlement. That order was not appealed. The order provided for payment of the monies into court “if the Respondent disputes the payment of these funds.” No dispute was made prior to the funds having been paid to the parties, and the Respondent cannot now claim an entitlement to have the funds preserved pending final resolution.
The Support Issue
32At the time the Agreement was entered into, the Husband’s income $83,883.00 as noted in the Agreement, and Mrs. Mousseau’s income was stated to be $18,940.00.
33On the basis of the evidence, I find that the Respondent’s 2016 income was $65,488.59 as shown in his Financial Statement. His 2017 income is comprised of year-to-date employment as of September 8 of $27,814.00 and $600.00 per week as short-term disability payments thereafter, for a projected 2017 income of $46,162.90.
34His current income is $600.00 per week, to be replaced by long-term disability payments in an amount to be determined.
35Her current income as shown on her Financial Statement is $2,454.07, and she shows expenses of $3,514.97. Mr. Shanks argues that she is underemployed. I note that in 2016, she had income of $47,551.98, which included $32,796.00, as support payments. She has a variety of health issues which existed at the time the Separation Agreement was entered into. She is currently able to work three days per week. Based on her current Financial Statement, her income from employment in 2017 is $13,860.84. I do not find that she is underemployed.
36Based on the above findings, I have calculated his 2017 projected income as $46,162.90 (non-taxable), and Mrs. Mousseau’s as $14,662.00.
37Counsel have provided me with DivorceMate calculations with a gross-up for non-taxable income, and the range of spousal support for a marriage of approximately 30 years. The low is $1,329.00, the mid-range is $1,532.00, and the high is $1,532.00.
38The Agreement requires a payment of $1,261.39. Mr. Shanks argues that, as the Respondent’s current income is $600.00 per week, with a payment of $1,261.39 he is left with approximately half of his income after paying support. In addition to the support, Mrs. Mousseau has employment income, which gives her approximately $3,800.00 per month to live on, while he is left with approximately $2,500.00.
39In the divorce action, the support in the Agreement is one factor to be considered. The amount is approximately $68.00 less than the suggested low end in the range of the Spousal Support Guideline amount. Her Financial Statement shows a monthly deficit for expenses of approximately $1,000.00.
40Based on the current financial situation, I do not find a reason to change the amount of support on a temporary basis pending the hearing of the divorce. This matter can proceed for a divorce hearing when more current information as to Mr. Mousseau’s entitlement to long-term disability can be determined.
41The motion is dismissed.
Costs
42There is a presumption with respect to costs in family matters, in favour of a successful party. No costs outline was presented at the time the motion was argued.
43Mrs. Mousseau should be awarded her costs. Counsel may make submissions on costs, not to exceed five pages, to be filed and served within 15 days. Mr. Mousseau may make a response, not to exceed 5 pages, within 15 days. If Mrs. Mousseau does not submit her costs within 15 days, any claim to costs shall be deemed to be abandoned.
______”original signed by”
The Hon. Mr. Justice T. A. Platana
Released: December 4, 2017
