COURT FILE NO.: 16-460
DATE: 2018/03/02
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Pamela Anne MacIntyre-McAlear
– and –
Paul Andrew McAlear
Ronald G. McClelland, counsel for the Applicant
Edward C. Castle, counsel for the Respondent
HEARD: Cornwall, February 16, 2018
rULING ON INTERIM MOTION
Desormeau, j.
INTRODUCTION
[1] The Respondent, Mr. Paul McAlear, is the moving party for this interim motion. While he advances additional relief, the central issues are spousal and child support.
[2] The Applicant, Ms. Pamela MacIntyre-McAlear responds to this motion, and seeks a dismissal of the Mr. McAlear’s motion, and that income be imputed to him for purposes of support.
OVERVIEW
[3] The parties were married on August 10, 1996. Together, they have three children: Sadie McAlear, born January 1, 2000, Benjamin McAlear, born May 3, 2003, and Padraig McAlear, born September 18, 2007.
[4] The parties separated on August 17, 2016. At that time, there was a verbal agreement that the children would be with their parents on a shared, week about regime. However, from approximately December, 2016 until June, 2017, Sadie lived primarily with the father, and since approximately September, 2017 to present, Benjamin resides only with the mother.
[5] Following separation, Mr. McAlear continued to reside in the matrimonial home until its sale on June 16, 2017, for $385,000.00. After paying off the first and second mortgage, there was $19,917.50 remaining from the proceeds. Mr. McAlear used his share of the equity ($9,985.75) to pay off personal his Canada Revenue Agency (“CRA”) liens for both unpaid income taxes and unpaid H.S.T. The remainder ($9,985.75) was paid to Ms. MacIntyre-McAlear’s real estate lawyer. Mr. McAlear still owes approximately $65,084.75 to CRA, minus approximately $27,964.42 garnished directly by CRA, reflecting 50% of Mr. McAlear’s commissions since January 2017, and minus the $9,985.75 payment.
[6] Initially, upon separation, there was a verbal agreement that payment for joint bills would be through the parties’ joint account. This occurred until approximately January, 2017, when Ms. MacIntyre-McAlear stopped contributing toward the joint account. As a result of non-payment of joint bills, Mr. McAlear argues there has been financial hardship to him. In October, 2017, he filed for a consumer proposal, and for the following 60 months, he must pay $600.00 per month toward same.
[7] Mr. McAlear is employed as a real estate agent with Royal Lepage, and volunteer fire chief. He indicates that he has suffered from depression and emotional stress in the past few years. As a result of same, he has been unable to devote his full time and attention to his real estate business. This, along with what he contends is a decline in the Cornwall real estate market, has caused a significant drop in his income. During the final years of marriage, and since separation, he has had to withdraw funds from his RRSPs and LIRA to make ends meet. His 2013 to 2016 income was, and 2017 is estimated to be, as follows:
| Year | Line 150 income | Assessed income | Re-assessed income | RRSP amount (or LIRA) | Income without RRSP |
|---|---|---|---|---|---|
| 2013 | $52,008 | $52,008 | None | 0 | $52,008 |
| 2014 | $41,662 | $53,642 | $74,688 | $17,835 | $56,853 |
| 2015 | $70,004 | $81,325 | $92,337 | $57,413 | $34,924 |
| 2016 | $63,614 | $63,614 | $63,614 | $23,672 | $39,942 |
| 2017 (est.) | $48,920.77 | Tbc | Tbc | $12,803 | $36,117.77 |
| Total | Average for 2014 to 2016: $76,880.00 per year | Average for 2014 to 2016: $32,973.33 per year | Average for 2014 to 2016: $43,906 per year |
[8] Mr. McAlear bases his estimate for 2017 income on the following: real estate commissions, part time work for the South Stormont Township as deputy fire chief, a few odd jobs, as well as liquidating his SunLife RRSP and cashing out $12,000.00 from his LIRA.
[9] Ms. MacIntyre-McAlear is employed as a teacher with the Upper Canada District School Board and in 2016 earned $101,509.00. In 2015 she earned $95,127.29, and in 2014 she earned $94,732.13.
[10] Ms. MacIntyre-McAlear takes the position that Mr. McAlear has not worked to his full potential since 2014, and argues that he relies on the groundless excuse of being depressed to avoid work. She disputes any depression or anxiety affecting Mr. McAlear’s ability to earn an income as a real estate agent. She challenges the assertion that there has been a decline in the real estate market. Mr. McAlear’s reduction in income is not reasonable, and she seeks income be imputed to him for the purposes of child and spousal support.
[11] The children are involved in fairly costly extra-curricular activities. Sadie is with the Cornwall Sea Lions, which costs approximately $1,000.00 per year. Both Benjamin and Padraig play competitive hockey, which costs approximately $4,945.35 for Benjamin’s Eastern Ontario Wild hockey, and $635.00 to SSMHA for Padraig’s hockey registration.
[12] At the outset of the motion, both parties agreed that the issues of custody and access need not be determined by me at this time.
[13] At this motion, Mr. McAlear is seeking the following relief:
a. Ms. MacIntyre-McAlear shall pay ongoing child support to Mr. McAlear, pursuant to section 9 of the Child Support Guidelines, including support for June, July and August, 2017;
b. Ms. MacIntyre-McAlear shall pay ongoing, mid-point, spousal support to Mr. McAlear, pursuant to the Spousal Support Advisory Guidelines, including support for June, July and August, 2017;
c. An Order requiring each party to contribute to the children’s extraordinary expenses in proportion to their respective incomes;
d. Ms. MacIntyre-McAlear shall reinstate Mr. McAlear, and maintain him and the children under her group drug, dental and health benefit plan through her employment;
e. Ms. MacIntyre-McAlear shall designate Mr. McAlear as irrevocable beneficiary of her life insurance policies; and
f. Costs.
[14] Ms. MacIntyre-McAlear is seeking that Mr. McAlear’s motion be dismissed with costs, on a full indemnity basis. As alternate relief, Ms. MacIntyre-McAlear requests the following:
a. For the purpose of support, Mr. McAlear’s income shall be imputed to $76,880.00;
b. No child support is payable by Ms. MacIntyre-McAlear;
c. No spousal support is payable by Ms. MacIntyre-McAlear;
d. Mr. McAlear shall refund Ms. MacIntyre-McAlear the full amount of support payments she has paid to him since date of separation; and
e. Costs.
[15] On April 5, 2017, Justice Laliberté signed a Temporary Order, reviewable in June, 2017, which provides for a joint custodial arrangement of the children, with equal parenting time, and alternating weeks. Further, the parties agreed, on a without prejudice basis, that Ms. MacIntyre-McAlear would pay child support to Mr. McAlear in the amount of $869.00 per month, and $314.00 per month for spousal support, based on the father’s annual income of $50,000.00, and the mother’s income of $98,987.00, for April, May and June 2017. This Order was to address the period of uncertainty consequent on the sale of the matrimonial home and the parties each obtaining a new residence. It was also subject to the parties review and credit any overpayment of the amounts depending on determination of the parties’ actual incomes for that specific time period.
[16] On October 31, 2017, Justice Lafrance Cardinal made a further Temporary Order, maintaining the joint shared custodial arrangement, and on a without prejudice basis, directing child support based on the same income figures set out above be payable by Ms. MacIntyre-McAlear in the amount of $869.00 per month, and spousal support of $214.00 per month, for the months of October, November and December 2017. These amounts are again subject to the parties review and credit for any overpayment or underpayment once the income is determined for both parties for that specified time period. Additionally, Ms. MacIntyre-McAlear agreed to maintain benefit coverage for Mr. McAlear under her group benefit plan through her employment until further Order of this Court.
[17] Ms. MacIntyre-McAlear paid the above amounts for support for January, 2018.
[18] However, she removed Mr. McAlear from her employer group benefit plan in early January, 2018, which resulted in Mr. McAlear having to pay out of pocket for his prescription refills.
THE LAW
[19] The crux of the issues argued at the motion revolved around Mr. McAlear’s income. Therefore, I will first determine income, then analyze the spousal support issue, and conclude by looking at the medical benefits and life insurance policy requests.
ISSUE 1: DETERMINATION OF INCOME
[20] Section 15.1 of the Divorce Act (“DA”) permits a spouse to apply for child support. The court is required to have regard to the Child Support Guidelines (“Guidelines”) in making interim or final orders. Section 15.3 DA gives priority to child support over a spousal support order.
[21] Section 31 of the Family Law Act provides that every parent has an obligation to provide support for their unmarried child who is a minor or is enrolled in a full-time program of education, to the extent that the parent is capable of doing so.
[22] The purpose of the Guidelines is to establish a fair standard of support that ensures that children continue to benefit from the financial means of both spouses after separation, using a methodology that strives to achieve objectivity, efficiency and consistency: Obodoechina v. Ayetor, 2013 ONCJ 738 (Ont. C.J.): Charron v. Carrière, 2016 ONSC 4719 (Ont. S.C.J.) at para. 52.
[23] Section 3 of the Guidelines sets out the presumptive rule:
- (1) Unless otherwise provided under these guidelines, the amount of an order for the support of a child for children under the age of majority is,
(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the parent or spouse against whom the order is sought; and
(b) the amount, if any, determined under section 7.
[24] Section 2 of the Guidelines defines income as the annual income determined under sections 15 to 20.
[25] Section 7 of the Guidelines addresses Special and Extraordinary expenses, and sets out a closed list of what constitutes such expenses. The Guidelines state that the expense is to be shared by the parents in proportion to their respective incomes.
[26] Section 9 is applicable in shared custody situations as follows:
Shared custody
Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account
(a) the amounts set out in the applicable tables for each of the spouses;
(b) the increased costs of shared custody arrangements; and
(c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.
[27] The starting point for how one is to calculate income is set out section 16 of the Guidelines, which states:
Subject to sections 17 to 20, a parent’s or spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.
[28] Section 17 of the Guidelines sets out:
Pattern of income
- (1) If the court is of the opinion that the determination of a parent’s or spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the parent’s or spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
[29] The court’s discretion for imputation of income arises from section 19 of the Guidelines, where a non-exhaustive list of circumstances is provided. Section 19 reads as follows:
- (1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,
(a) the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;
(b) the parent or spouse is exempt from paying federal or provincial income tax;
(c) the parent or spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;
(d) it appears that income has been diverted which would affect the level of child support to be determined under these guidelines;
(e) the parent’s or spouse’s property is not reasonably utilized to generate income;
(f) the parent or spouse has failed to provide income information when under a legal obligation to do so;
(g) the parent or spouse unreasonably deducts expenses from income;
(h) the parent or spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and
(i) the parent or spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. O. Reg. 391/97, s. 19 (1); O. Reg. 446/01, s. 6.
Reasonableness of expenses
(2) For the purpose of clause (1) (g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act (Canada). O. Reg. 391/97, s. 19 (2).
[30] The leading case on imputation of income is Drygala v. Pauli, (2002), 2002 41868 (ON CA), 61 O.R. (3d) 711 (Ont. C.A.). At paragraph 23 of Drygala, the Court of Appeal set out a three-part test to determine whether income should be imputed:
Is the spouse intentionally under-employed or unemployed?
If so, is the intentional under-employment or unemployment required by virtue of his reasonable educational needs?
If the answer to question #2 is negative, what income is appropriately imputed in the circumstances?
[31] The Ontario Court of Appeal set out the following principles in Drygala:
a. There is no need to find a specific intent to evade child support obligations before income can be imputed (at para. 25);
b. "Intentionally" means a voluntary act. The parent required to pay is intentionally underemployed if that parent chooses to earn less than he or she is capable of earning. That parent is intentionally unemployed when he or she chooses not to work when capable of earning an income (at para. 28);
c. There is no requirement of bad faith for income to be imputed (at para. 29);
d. A court cannot arbitrarily impute an amount of income. There must be some factual basis in the evidence for the amount imputed. If the parent does not provide evidence on types of jobs available, hourly rates, and available hours of employment, a court may impute a percentage of what the person had been earning (at paras. 44 and 46);
e. A parent who changed jobs to increase career satisfaction is not intentionally underemployed;
f. The Guidelines depend on full disclosure to determine support. A payor who fails to make full disclosure cannot complain if a court draws an adverse inference against him or her on the basis of the available facts;
g. Section 1 of the Guidelines stipulates that one of its objectives is to establish a fair standard of support for children to ensure that they benefit from the financial means of both parents after separation. Imputing income is one method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning (at paras. 31 and 32);
h. There is a duty to seek employment in a case where a parent is healthy. As a general rule, a parent cannot avoid child support obligations by a self-induced reduction of income. Thus, once it has been established that a spouse is intentionally unemployed or under-employed, the burden shifts to that spouse to establish what is required by virtue of his or her reasonable educational needs. A spouse is not to be excused from his or her child support obligations in furtherance of unrealistic or unproductive career aspirations (at paras. 38 and 39);
i. When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered are: age, education, experience, skills, health, availability of job opportunities, the number of hours that could be worked in light of the parent’s overall obligations, and the hourly rate one could reasonably be expected to obtain (at para. 45);
j. The purpose of child support is to assist the custodial parent in meeting the day-to-day expenses of raising children. A party seeking retroactive child support must provide evidence that the child suffered from a lack of financial support during the period in question. Ability to pay, as well as need, must be considered by the trial judge in the exercise of his or her discretion (at para. 53); and
k. The court has the discretion to award retroactive child support that is fit and just in the circumstances (at para. 54).
[32] The second step of the Drygala test is generally treated as an overall test of reasonableness: Pey v. Pey, 2016 ONSC 1909, at para. 88. Once a party seeking the imputation of income presents the evidentiary basis suggesting a prima facie case, the onus shifts to the individual seeking to defend the income position he is taking: Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344 (Ont. S.C.J.); Charron v. Carrière, supra, at para. 66.
[33] The Court must have a rational and solid evidentiary basis to justify an imputation. The onus is on the person requesting an imputation of income to establish this evidentiary basis: Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17 (Ont. C.A.); Charron v. Carrière, supra, at para 64; Sullivan v. Sullivan, 2014 ONSC 390, at para. 21.
[34] There is a duty on the part of the payor to actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their children. L.(N.) v. P.(B), 2000 22516 (ON SC), [2000] O.J. No. 2574, 2000 CarswellOnt 2487 (Ont. C.J.); Corcios v. Burgos, supra, at para. 40.
[35] The determination to impute income is discretionary, as the court considers appropriate in the circumstances. Therefore, the court may decide not to impute income where the payor establishes the reasonableness of his or her decision or his or her situation. Cole v. Freiwald, 2011 ONCJ 395, at para. 122.
[36] Suspicions of bad faith are easy to have, but this is not enough. Such things as reductions in income that arise from market forces, or legitimate health issues will not quality as voluntary reductions in income. Cole v. Freiwald, supra, at para. 124.
[37] Regardless of the basis upon which income is imputed, the amount of income that the court imputes to a party is a matter of discretion. The only limitation on the discretion of the court in this regard is that there must be some basis in the evidence for the amount that the court has chosen to impute: Thompson v. Thompson, supra, at para 96; Korwin v. Potworowski, 2007 CarswellOnt 6852 (Ont. C.A.), Corcios v. Burgos, supra, at para. 40. The court may decide not to impute income where the payor establishes the reasonableness of his or her decision or his or her situation: Cole v. Freiwald, supra, at para. 122.
[38] Though the Court in Drygala dealt with imputing income for the purposes of child support, this test is equally applicable to claims for spousal support as determined in Crowe v. McIntyre, 2014 ONSC 7106 (Ont. S.C.J.): Pey v. Pey, 2016 ONSC 1909, at para. 84.
[39] I am alert to the line of cases which indicate it is more appropriate to leave the issue of imputing income to the trial judge, rather than consider same at an interim motion, i.e.: Lamb v. Watt, 2017 ONSC 5838, at para 34. I will briefly touch on this issue in my analysis.
[40] A spouse’s annual income for child support purposes is based on “Total Income” on the T1 Income Tax Return. RRSP income is part of total income on the T1 General. As such, RRSP income received in a particular year is presumptively part of a spouse’s income for child support purposes: Fraser v. Fraser, 2013 ONCA 715, [2013] O.J. No. 5347 (Ont. C.A.) at para. 97.
ISSUE 1: ANALYSIS OF DETERMINATION OF INCOME
[41] The parties both concede that they have joint shared custody of three children. They also concede that at this time, Benjamin resides primarily with Ms. MacIntyre-McAlear, but Sadie and Padraig spend 50/50 (week about) time with each parent. As such, section 9 of the Guidelines is applicable.
[42] Ms. MacIntyre-McAlear has the onus to establish that Mr. McAlear is intentionally under-employed in order for me to impute income to him, or has chosen to earn less that he is capable of earning.
[43] Ms. MacIntyre-McAlear does not believe Mr. McAlear is working to his full potential. She does not accept that Mr. McAlear suffers from depression, or that it has affected his work.
[44] In support of her request to impute income, Ms. MacIntyre-McAlear relies on the affidavit of John A. Cameron, a Broker of Record for the company M. Jean Cameron Real Estate Limited. Mr. Cameron is a licenced real estate broker, who knows the Respondent, Mr. McAlear. Mr. Cameron, who has signed an Acknowledgement of Expert’s Duty, indicates that the real estate market for the past four to five years has remained approximately the same, but the market values of such transactions have increased. He also states that there has been no significant increase in competition for sales or purchases of real estate. In Mr. Cameron’s letter to Mr. McClelland, dated January 22, 2018, attached as Exhibit A to his affidavit, he opines that “if a typical licensed real estate person in no matter what type of brokerage model he/she works for, puts in the time, with the proper effort, and who constantly prospects for new business and servicing their existing referral business leads, their business income should remain at minimum, constant over the last 4-5 years or so.” [emphasis omitted] He goes on to state, “This opinion is predicated on the assumption that a respective real estate sales representative is putting in the effort, working on a consistent basis and most importantly employing the basics as described above.”
[45] I am alert to Mr. McAlear’s text messages to Ms. MacIntyre-McAlear, where he states “I’m confident I will be earning income like I used now that I’m rid of you. You caused a lot of damage”, and “… it’s going to cost you”. However, in this interim stage, without cross examination on these text messages, I am not prepared to give them any more significance than Mr. McAlear’s confidence to earn a greater income in the future. However, based on the evidence, this has not yet come to fruition.
[46] While Mr. McAlear’s primary employment is as a real estate agent, he has also been employed as a volunteer in the fire service for approximately 21 years. As set out in questioning, he has been a volunteer deputy fire chief for approximately 3 years. He recently added a second station to his responsibilities. This will increase his hours for the Township to approximately 15 to 20 hours per week, at a rate of $20.66 per hour, effective January 1, 2018. If averaged at 17.5 hours per week, this will have the effect of $19,000.00 additional income to supplement his real estate commission income. In 2017, his Township income was $8,453.27. In addition to his commission income from real estate, he estimates his income will be $48,920.00.
[47] Mr. McAlear’s evidence at questioning was that he takes care of the administrative duties with the fire department when he has time, as it is secondary to his primary role as a realtor. As a fire chief, he has no set hours.
[48] The parties presently have joint shared custody of the children. While I am cognizant that Benjamin does not presently spend any time with Mr. McAlear, I also recognize that Sadie initially spent most of her time with him. In questioning (question 198), Mr. McAlear’s position was that family time can take precedence over work time, especially as he is now a single parent to three children. His evidence was also that more successful realtors work between 60-80 hours per week at the business, and they do very well. However, as a generalization, he suggests that the amount of time they spend with family would be significantly less than what he does. He suggests that from 2013 to 2016, he worked approximately 30 to 40 hours per week as a real estate agent.
[49] Mr. McAlear’s physician, Dr. Ducas, sent a letter dated January 15, 2018, to Mr. Castle, which is found at Tab 21. Dr. Ducas confirms that Mr. McAlear attended the hospital in December, 2010, with chest pains, which was felt to be non-cardiac. Mr. McAlear did not follow up with further appointments until December 16, 2016, when he presented with concerns about chest pains. In 2011, Mr. McAlear reported symptoms in relation to stress or anxiety, but no formal diagnosis was made. Mr. McAlear attended the emergency room on December 9, 2016, and was seen by another doctor on December 15, 2016. At that that time, Mr. McAlear reported being under a tremendous amount of stress. Dr. Ducas recorded that Mr. McAlear was experiencing a lot of stress due to a number of issues including his failed marriage, loss of income, problems with Revenue Canada, etc. Mr. McAlear reported to Dr. Ducas that he has had symptoms of anxiety for several years, with a turning point in 2014 when he lost a fair amount of work due to lack of motivation, leading to an income drop. During standardized psychological testing, Mr. McAlear scored in the moderate to severe range for anxiety, and moderate depression range. Dr. Ducas concluded that Mr. McAlear’s atypical chest pain was due to anxiety and situational crisis with anxious mood. In December, 2016, Mr. McAlear was formally diagnosed with an anxiety disorder. Thereafter, Mr. McAlear reported attending counselling.
[50] I accept Mr. McAlear’s medical diagnosis of an anxiety disorder.
[51] I have taken into account Mr. McAlear’s age, education, skills, health, availability of job opportunities, as well as his earning history.
[52] I recognize that I have discretion when determining whether or not to impute income. However, I must have a rational and solid evidentiary basis to justify any imputation.
[53] Contrary to what is asserted by Ms. MacIntyre-McAlear, I am not prepared to find that Mr. McAlear is deliberately accepting more work at a lower paying wage to maintain a lower income during these proceedings.
[54] Though he has been a licenced realtor since 1996, he has nonetheless sought out additional sources of revenue, taking on a second fire station as deputy fire chief, and even waxing floors to generate a greater income. I find his decision to augment his primary source of income is reasonable in these circumstances.
[55] While Ms. MacIntyre-McAlear suggests I ought to impute income to Mr. McAlear, Lamb v. Watt, supra, suggests that at this interim stage, the issue should be left to the trial judge. Even if this were not the case, I would be unable at this stage to impute income to Mr. McAlear for a number of reasons, including credibility issues raised which I cannot reconcile based on affidavit evidence.
[56] Ultimately, I am not prepared to impute income to Mr. McAlear.
[57] It is also advanced by Ms. MacIntyre-McAlear that the fairest determination of Mr. McAlear’s income would be pursuant to section 17 of the Guidelines. Mr. McAlear’s investment income for the past three years should be included as income when determining same.
[58] Mr. McAlear’s position is that the court can decline to take into account the RRSP withdrawals as the RRSPs will be equalized with Ms. MacIntyre-McAlear when that issue is determined.
[59] Mr. McAlear advances that his estimated 2017 income was $48,920.77. It would be closer to $36,117.77 if one were to remove his RRSP and LIRA income. His position is that the RRSP and LIRA income should not be averaged over the past three years. However, he suggests that if the court is going to include the withdrawals to his income, the fairest determination would be to base 2017 income on actuality, and not on averaging.
[60] It is clear that pursuant to Fraser v. Fraser, supra, RRSP income should be included as income in determining support. And while I appreciate Mr. McAlear’s argument about the RRSPs eventually being equalized, the matter before me is of support, not equalization.
[61] There is no dispute advanced that Mr. McAlear withdrew from his RRSPs in 2014, 2015 and 2016. This demonstrates a clear pattern of supplementing his income.
[62] I accept that RRSP income in this situation is a recurring source of income, and is considered income for child support purposes pursuant to section 17 of the Guidelines. I also accept that Mr. McAlear’s average income from 2014 to 2016, inclusive of RRSP income is $76,880.00, and there has been an average of $32,973.33 withdrawn by him from his RRSP’s and / or LIRA for that same time frame.
[63] However, I note that the RRSP withdrawals fluctuated in quantum throughout the years, and from 2014 until August, 2016, the withdrawals benefited the entire family as the parties were still a couple.
[64] The evidence supports that in 2017, Mr. McAlear’s RRSPs have been completely liquidated. In February, 2017, he withdrew $12,000.00 from his LIRA. His uncontroverted evidence is that he is no longer permitted to withdraw funds from his LIRA as he has maximized the amount he can withdraw prior to retirement.
[65] I am unable to find a consistent trend of quantum of monies withdrawn to supplement Mr. McAlear’s income as it has ranged from $57,413.00 in 2015, to $12,803.00 in 2017.
[66] Further, based on the evidence, there are no further monies available for Mr. McAlear to liquidate until his retirement.
[67] As such, I do not find it fair or reasonable to include $32,973.33 to Mr. McAlear’s income.
[68] Sub-section 2(3) of the Guidelines states that the most current information must be used to determine support.
[69] I find that the most current information is that Mr. McAlear earned approximately $48,920.77 in 2017. It is fair and reasonable in the circumstances to round up that figure to $50,000.00, as supported by Mr. McAlear’s counsel’s Divorcemate calculation.
[70] Therefore, pursuant to section 9 of the Guidelines, Ms. MacIntyre-McAlear’s income of $101,509.00, and Mr. McAlear’s income of $50,000.00, and considering the Benjamin resides primarily with Ms. MacIntyre-McAlear while the other two children spend equal time with each parent, set off child support shall be payable by Ms. MacIntyre-McAlear to Mr. McAlear, as detailed in the disposition section below.
[71] Pursuant to section 7 of the Guidelines, it is appropriate that both parties proportionally share the cost of the children’s special and extraordinary expenses.
ISSUE 2: SPOUSAL SUPPORT
[72] Section 15.2 of the Divorce Act applies in these circumstances. The relevant provisions are as follows:
Spousal support order
15.2
Interim order
(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).
Factors
(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 cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
…
Objectives of spousal support order
(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) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[73] Sections 30, 33 and 34 of the Family Law Act (“F.L.A.”) also apply. These sections set out the obligations of spouses to support themselves and each other, as well as the powers of the court to make a support order.
[74] Section 33 F.L.A. sets out the purposes for support and how to determine the amount:
33 (1) A court may, on application, order a person to provide support for his or her dependants and determine the amount of support.
(8) An order for the support of a spouse should,
(a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse;
(b) share the economic burden of child support equitably;
(c) make fair provision to assist the spouse to become able to contribute to his or her own support; and
(d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home).
(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all the circumstances of the parties, including,
(a) the dependant’s and respondent’s current assets and means;
(b) the assets and means that the dependant and respondent are likely to have in the future;
(c) the dependant’s capacity to contribute to his or her own support;
(d) the respondent’s capacity to provide support;
(e) the dependant’s and respondent’s age and physical and mental health;
(f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties resided together;
(g) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;
(h) any legal obligation of the respondent or dependant to provide support for another person;
(i) the desirability of the dependant or respondent remaining at home to care for a child;
(j) a contribution by the dependant to the realization of the respondent’s career potential;
(k) Repealed: 1997, c. 20, s. 3 (3).
(l) if the dependant is a spouse,
(i) the length of time the dependant and respondent cohabited,
(ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,
(iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,
(iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,
(v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting the time spent in performing that service in remunerative employment and were contributing the earnings to the family’s support,
(v.1) Repealed: 2005, c. 5, s. 27 (12).
(vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and
(m) any other legal right of the dependant to support, other than out of public money.
(10) The obligation to provide support for a spouse exists without regard to the conduct of either spouse, but the court may in determining the amount of support have regard to a course of conduct that is so unconscionable as to constitute an obvious and gross repudiation of the relationship.
[75] As set out by the Supreme Court of Canada in Bracklow v. Bracklow, 1999 715 (SCC), [1999] S.C.J. No. 14 (S.C.C.), there are three bases for entitlement to spousal support being compensatory, contractual or non-compensatory support: Lamb v. Watt, 2017 ONSC 5838, at para. 19.
[76] In Samis (Guardian of) v. Samis, 2011 ONCJ 273, [2011] O.J. No. 2381, Justice Sherr analyzed the legal principles in dealing with temporary spousal support. At paragraph 43, Justice Sherr refered to Kowalski v. Grant, 2007 MBQB 235, 219 Man. R. (2d) 260, 43 R.F.L. (6th) 344, [2007] M.J. No. 386, 2007 CarswellMan 422(Man. Q.B.), where the court set out the following principles in dealing with temporary spousal support motions:
Interim support is to provide income for dependent spouses from the time the proceedings are instituted until trial.
The court need not conduct a complete inquiry into all aspects and details to determine what extent either party suffered economic advantage or disadvantage as a result of the relationship. That is to be left to the trial judge.
Interim support is a holding order to maintain the accustomed lifestyle if possible pending final disposition as long as the claimant is able to present a triable case for economic disadvantage.
Interim support is to be based on the parties' means and needs, assuming that a triable case exists. The merits of the case in its entirety must await a final hearing.
[77] In Robles v. Kuhn, 2009 BCSC 1163, [2010] B.C.W.L.D. 1935, [2010] W.D.F.L. 1330, [2009] B.C.J. No. 1699, 2009 CarswellBC 2239 (B.C. Master), at para. 12, the court determined on interim support applications, the applications must be qualified by certain considerations:
On applications for interim support the applicant's needs and the respondent's ability to pay assume greater significance: Gibb v. Gibb (2005), [2005] B.C.J. No. 2730 (B.C. S.C. [In Chambers]);
An interim support order should be sufficient to allow the applicant to continue living at the same standard of living enjoyed prior to separation if the payor's ability to pay warrants it: Grossi v. Grossi, [1993] B.C.J. No. 878 (B.C. S.C.);
On interim support applications the court does not embark on an in-depth analysis of the parties' circumstances which is better left to trial. The court achieves rough justice at best: Randhawa v. Randhawa, [1999] B.C.J. No. 3299 (B.C. S.C.); Newson v. Newson, 1998 6440 (BC CA), [1998] B.C.J. No. 2906, 65 B.C.L.R. (3d) 22 (B.C. C.A.);
The courts should not unduly emphasise any one of the statutory considerations above others;
On interim applications the need to achieve economic self-sufficiency is often of less significance;
Interim support should be ordered within the range suggested by the Spousal Support Advisory Guidelines unless exceptional circumstances indicate otherwise: Ladd v. Ladd, [2006] B.C.J. No. 1930, 2006 BCSC 1280 (B.C. S.C.);
Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out: B. (L.G.) v. M. (M.A.C.), [2005] B.C.J. No. 2966, 2005 BCSC 1786 (B.C. S.C.);
Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support: L.G.B.
[78] On a motion for interim spousal support, entitlement does not need to be proven on a balance of probabilities like it would have to be at trial. All that need be demonstrated is a prima facie case: Samis (Guardian of) v. Samis, supra, at para. 44; Lamb v. Watt, supra, at para. 20.
[79] Prima facie is defined in Black's Law Dictionary (9th ed.) as being "at first sight; on first appearance but subject to further evidence or information" or "sufficient to establish a fact or raise a presumption unless disproved or rebutted": Lamb v. Watt, supra, at para. 22.
[80] An order for temporary spousal support is not a final decision, but a temporary order intended to address short term hardship which has arisen from the breakdown of the marriage. To suggest that the motion be dismissed by raising a triable issue results in too great a burden on the recipient, as the issue of entitlement is often disputed by the support payor and there is often conflicting evidence on the issue of entitlement: Lamb v. Watt, supra, at para. 25.
[81] It is clear that income discrepancy alone does not create a non-compensatory claim: see Fisher v. Fisher, 2009 ABQB 85 (Alta. Q.B.) and Calvert v. Stewart, 2009 CarswellOnt 671 (Ont. S.C.J.). There must be some evidence that the disadvantage to the recipient spouse must arise from the breakdown of the marriage: Lamb v. Watt, supra, at para. 27.
[82] The Supreme Court of Canada stated in Bracklow, supra, that non-compensatory support may arise from the "mere fact that a person who formally enjoyed inter-spousal entitlement to support now finds herself or himself without it." [para. 41]: Lamb v. Watt, supra, at para. 28.
ISSUE 2: ANALYSIS OF SPOUSAL SUPPORT
[83] I have considered the objectives of a support order, as set out in the D.A. and F.L.A. I have also considered the Spousal Support Advisory Guidelines, and the relevant jurisprudence.
[84] Section 15.2(4) D.A., which addresses interim orders, directs the court to consider the condition, means, needs and other circumstances of both spouses.
[85] As set out in Knowles v. Lindstrom, 2015 ONSC 1408, [2015] O.J. No. 1059, the accustomed standard of living during a relationship is an appropriate part of context upon which need should be assessed.
[86] I note that this is a 20-year marriage. Ms. MacIntyre-McAlear is 48 years old, and Mr. McAlear is 53 years old. Together, the parties enjoyed a higher standard of living. Since separation, Mr. McAlear’s standard of living has declined, to the point where he felt he had to file for consumer proposal. I accept that Mr. McAlear’s consumer proposal has the effect of merging all out his outstanding debts into one monthly payment of $600.00. I accept Ms. MacIntyre-McAlear’s assertion that she has had to take over payment of the joint credit union loan as Mr. McAlear stopped making payments towards this loan, and have considered this in my determination.
[87] The prior interim orders made on this issue were on a without prejudice basis. I have not viewed these orders as determinative of any issue.
[88] I am cognizant that at this interim stage, it is not necessary for me to determine if there is entitlement. I also need not conduct a full inquiry to determine to what extent either party suffered an economic advantage or disadvantage as a result of the relationship. The trial judge will conduct that inquiry.
[89] I note that no single objective set out in either the D.A. or the F.L.A. is paramount.
[90] I recognize that an interim order would be a holding order pending final disposition.
[91] Pursuant to the SSAG Revised User Guide: Need can mean an inability to meet basic needs, but has also generally been interpreted to cover 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 live, including significant elements of reliance and expectation, summed up in the phrase “merger over time”.
[92] Based on all of the above, and the evidence at this motion, I find that Mr. McAlear has established a prima facie case for non-compensatory, needs based entitlement to spousal support. I also find, based on all of the circumstances, including the length of the marriage, needs and means, that mid-range support is appropriate at this juncture to assist Mr. McAlear in achieving financial stability.
[93] I have considered Ms. MacIntyre-McAlear’s argument that Mr. McAlear’s income is significantly understated. However, I determined above that the proper income to be attributed to Mr. McAlear is $50,000.00. In applying the SSAGs, I have used Ms. MacIntyre-McAlear’s most current income of $101,509.00.
[94] I find that it is appropriate, on an interim basis, to award spousal support to Mr. McAlear in the amount of $733.00 per month, commencing February 1, 2018. This provides Mr. McAlear with 45.2% of the parties’ Net Disposable Income, and Ms. MacIntyre-McAlear with 54.8%.
[95] I am not prepared to address any issue of spousal support arrears, and leave that issue to the trial judge.
ISSUE 3: MEDICAL BENEFITS AND LIFE INSURANCE POLICY
[96] As set out above, on October 31, 2017, Justice Lafrance Cardinal made a Temporary Order, on consent of both parties, whereby Ms. MacIntyre-McAlear agreed to maintain benefit coverage for Mr. McAlear under her group benefit plan through her employment until further Order of this Court.
[97] In the face of that Order, in early January, 2018, she terminated those benefits to him.
[98] No viable reason has been advanced by Ms. MacIntyre-McAlear to terminate Mr. McAlear’s from benefit coverage under her group benefit plan.
[99] Ms. MacIntyre-McAlear is ordered to reinstate and maintain Mr. McAlear on her group drug, dental and health benefit plan through her employment forthwith. She is ordered to provide full particulars of benefits, and to give Mr. McAlear independency in claim submissions. Should Ms. MacIntyre-McAlear be unable to reinstate Mr. McAlear on the group benefit plan through her employment, pending further review, Ms. MacIntyre-McAlear is to indemnify Mr. McAlear for the same amount as would have been reimbursed to him through the plan.
[100] She is also ordered to reimburse Mr. McAlear $163.06 for the prescription refills he had to pay out of pocket in January, 2018, due to her breach of the court order.
[101] Ms. MacIntyre-McAlear owns life insurance policies. It is appropriate in cases where support is ordered, to make provisions to have the recipient made beneficiary to the life insurance policies.
[102] I find it is appropriate to make such provisions to secure Mr. McAlear’s interest for both child and spousal support. As such, I order that Ms. MacIntyre-McAlear shall designate Mr. McAlear as the beneficiary to her life insurance policies until further order of this court.
DISPOSITION
[103] Interim Order to issue as follows:
(1) Pursuant to section 9 of the Child Support Guidelines, Ms. MacIntyre-McAlear shall pay child support to Mr. McAlear, based on her estimated annual income of $101,509.00, in the amount of $1,490.00 per month, for the benefit of two children: Sadie McAlear, born January 1, 2000, and Padraig McAlear, born September 18, 2007, and Mr. McAlear shall pay to Ms. MacIntyre-McAlear child support based on his estimated 2017 income of $50,000.00, in the amount of $977.00 per month, for the benefit of the three children: Sadie McAlear, born January 1, 2000, Padraig McAlear, born September 18, 2007, and Benjamin McAlear, born May 3, 2003. This results in the net payment by Ms. MacIntyre-McAlear to Mr. McAlear in the amount of $513.00 per month, commencing February 1, 2018.
(2) The parties shall share the children’s special and extraordinary expenses in proportion to their respective incomes determined above, commencing February 1, 2018.
(3) Ms. MacIntyre-McAlear shall pay spousal support to Mr. McAlear in the amount of $733.00 per month, commencing February 1, 2018.
(4) Ms. MacIntyre-McAlear is ordered to reinstate and maintain Mr. McAlear on her group drug, dental and health benefit plan through her employment forthwith. She is ordered to provide full particulars of benefits, and to give Mr. McAlear independency in claim submissions. Should Ms. MacIntyre-McAlear be unable to reinstate Mr. McAlear on the group benefit plan through her employment, pending further review, Ms. MacIntyre-McAlear is to indemnify Mr. McAlear for the same amount as would have been available to him through the plan.
(5) Ms. MacIntyre-McAlear is ordered to reimburse Mr. McAlear $163.06 for the prescription refill from January, 2018.
(6) Ms. MacIntyre-McAlear shall designate Mr. McAlear as the beneficiary to her life insurance policies until further order of this court.
[104] If the parties are unable to agree on the issue of costs, the Respondent may file submissions not exceeding three pages in length, plus attachments, within 30 days of the release of these reasons. The Applicant may file submissions within a further 14 days, with a right of reply within a further five days.
Justice Hélène C. Desormeau
Released: March 2, 2018
MacIntyre-McAlear v. McAlear, 2018 ONSC 1395
COURT FILE NO.: 16-640
DATE: 2018/03/02
ONTARIO
SUPERIOR COURT OF JUSTICE
Pamela Anne MacIntyre-McAlear
– and –
Paul Andrew McAlear
Ruling on INTERIM motion
Justice Hélène C. Desormeau
Released: March 2, 2018