ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 284/08 DATE: 2018/05/23

B E T W E E N:

Ivan Edward Elliott

Applicant

• and -

Dawn Elizabeth Elliott

Respondent

COUNSEL: K. Hutchinson for the applicant Self-represented for the respondent

HEARD: May 22, 2018 (in Woodstock)

BEFORE: Mitchell J.

REASONS FOR JUDGMENT

Overview

[1] This is a motion to change the terms of the final order of Heeney J. made November 12, 2010 (the “Final Order”). Specifically, the applicant husband seeks to terminate his spousal support obligations effective January 1, 2016.

[2] In response, the respondent wife seeks to increase spousal support from the net amount currently being paid under the Final Order of $395 per month to $1000 per month.

Background

[3] The Husband is 65 years of age. The Wife is 59 years age and will turn 60 on June 17, 2018. The parties were married on July 10, 1976 and separated on November 10, 2008. A divorce order issued in October 2010. Their union produced 13[^1] children with 4 children remaining dependent at the time of the Final Order – Shelley Enna Elliott born February 17, 1992, Jonathan Everett Elliott born January 26, 1994, Lindsay Elis Elliott born September 9, 1996 and Dustin Eli Elliott born September 12, 2000.

[4] Only Dustin remains a dependent for purposes of payment of child support. He is expected to graduate from high school and begin a paid apprenticeship on a full time basis at the end of June 2018. At that time, he will become financially independent.

The Final Order

[5] Pursuant to the terms of the Final Order:

(a) The Husband was granted sole custody of the 4 dependent children, Shelley, Jonathan, Lindsay and Dustin, with access to the Wife with respect to Shelley and Jonathan in accordance with their wishes and with respect to Lindsay and Dustin as arranged by the parties.

(b) The Husband was ordered to pay spousal support in the amount of $425 per month and to pay spousal support arrears fixed in the amount of $4000 from his share of the net proceeds from the sale of the matrimonial home.

(c) The Wife was ordered to pay child support for the 4 children in the amount of $30 per month which was offset against the monthly spousal support payment to which she was entitled.

(d) Net family property was equalized with the Husband receiving $23,244.60 of the proceeds from the sale of the matrimonial home inclusive of the equalization payment in the amount of $2,427 payable to the Husband, and the Wife receiving $18,390.59 of the net proceeds.

(e) For so long as child support was payable, the Wife was to provide up-to-date annual income disclosure to the Husband within 30 days of the anniversary date of the order.

[6] In support of the Final Order, the trial judge made, among others, the following findings:

(a) The Husband’s 2010 income was assessed at $30,000 for support purposes[^2] recognizing that in 2009 when his total income was $23,438 was earned in the depths of the recession. The trial judge anticipated his income level to improve;

(b) The Wife was a stay-at-home mother for most of the marriage, raising and home-schooling the parties’12 children and was, without question, entitled to spousal support;

(c) The Wife has marketable skills;

(d) The Wife’s 2010 income was assessed at $9,200 for support purposes;

(e) The Wife needs all the spousal support she can get, but the Husband’s ability to pay is limited.

(f) The needs of the children take priority.

(g) As the children cease to become dependent, the order may be varied to increase spousal support, if such an increase is warranted based on the financial circumstances of the parties at the time.

(h) In the meantime, [the Wife] is going to have to find a better job or cheaper accommodation or both.[^3]

[7] Curiously, paragraph 46 of the Endorsement of Heeney J. dated November 12, 2010 did not find its way into the Final Order. Paragraph 46 reads:

An order will also go that the parties shall exchange copies of their income tax returns together with all schedules and attachments by May 15 in each year, to be followed by copies of the notices of assessment or reassessment, within seven days of receipt.

[8] It was not clear from the evidence at trial, whether the parties complied with paragraph 46. I note that the Motion to Change seeks disclosure but in respect only of certain items of financial disclosure not specific to the Wife’s income.

Positions of the Parties

[9] The Husband submits there have been material changes with respect to the Wife’s income and her overall financial position which support the relief requested. The Husband further submits that although the evidence supports a finding that he has overpaid spousal support and been underpaid child support over the past 7 years, he is prepared forgo any claims for adjustment and payment of arrears and any contribution to past s. 7 expenses in exchange for termination of his spousal support obligations.

[10] The Wife submits that the Husband’s financial position has similarly materially changed thereby justifying a substantial increase in spousal support. She further submits that she too has paid and contributed towards the children’s various expenses over the years.

Analysis

[11] It is evident from a review of the trial judge’s reasons in support of the Final Order, that he anticipated the parties’ respective financial positions would evolve – indeed they have.

[12] Based on the evidence of the Husband and the Wife, I make the following findings:

(a) The Wife’s income has steadily increased since the date of the Final Order. In a mortgage application dated February 7, 2014[^4] she reported her anticipated income to be $41,800. In the comments section of the Mortgage Application it reads:

Client has recently went self-employed. CMHC program please. Same job field and bought out her employer who was retiring. Bought the trailer all the wedding décor and supplies, contracts and lists. Already has weddings and catering jobs booked for this year. Did two of her children’s weddings last year in 2013. Prior to her divorce she was self-employed with her husband with Elliott Promotions. Receives Alimony for life. Own saved resources…

The Wife denied knowledge of her stated income amount in the Mortgage Application. I do not accept this evidence. The information contained in the comments section was clearly provided by the wife to the mortgage broker. I find her estimated income amount to similarly have been provided by the wife to the mortgage broker in support of her mortgage application.

(b) The Wife has made no contribution towards the children’s various s. 7 expenses, including eyeglasses, dental work, camp and rugby equipment for Dustin and various other s. 7 expenses for Lindsay, Shelley and Jonathan over the years since the Final Order issued. Her payment of approximately $30 per month for Dustin’s cell phone was in exchange for him cutting the lawn and shoveling snow at her home. When asked by the Husband to contribute to the cost of Dustin’s eyeglasses, the Wife refused saying: “he wanted the kids and got them, so he could pay for them.”

(c) The Wife’s need for ongoing spousal support is self-inflicted. Assuming her stated income in her updated financial statement is accurate, the Wife is living well beyond her means. The Wife inherited in late 2013 approximately $45,000 USD which enabled her to purchase a home. The purchase price of the home was $175,000. She paid $17,500 as a down payment. Based on her updated Financial Statement dated May 17, 2018[^5], her current monthly mortgage payments are $985.21. The deficiency between the amount of her estimated annual income and expenses is $5,460. To cover the deficiency in income, she resorted to using the balance of her inheritance monies. Once the inheritance monies were exhausted in late 2015, the Wife resorted to borrowing on lines of credit to cover the deficiency.

(d) I find that the income information contained in the updated financial statement is not accurate. It is apparent from a comparison of her bank statements and accounting for deposits >$500 and the reported income schedules[^6] that she reports less than she earns. For example, in the December 2016 TD bank statement[^7] a deposit in the amount of $1,585 was made on December 12th. The Wife accounted for this deposit as representing earnings from cleaning and catering[^8] yet for purposes of reporting to CRA she recorded only $695.00 for cleaning and catering income in December 2016. This same pattern of reporting less than what she actually earned from services provided is reflected in numerous other entries in her reporting schedules.

(e) She also made charitable contributions in the amounts of $1,095 and $623.25 in 2015 and 2016, respectively. In those same years she reported employment income of $20,645 and $17,397, respectively. This level of giving defies credibility when viewed in the context of her nominal reported income in those same years and further supports the finding that she reports far less than she earns.

(f) The Wife has the ability to work full time. Since the Final Order and in recent years, the Wife has worked on a full time basis – on a contract basis for BDO as an administrative assistant in 2016[^9] and for 3 months as a general manager at a thrift store[^10]. She testified that she has not looked for fulltime work or applied for any jobs whether as a general manager or administrative assistant or otherwise.

(g) The Wife works part time at best based on her reported income. The Wife says she earns approximately $25 per hour performing cleaning, catering, decorating, sewing and miscellaneous services for friends, family and her church. She does not advertise and is retained based on word of mouth.

(h) When she turns 60 next month she is able to collect one-half of the Husband’s CPP payment in the amount of $355 monthly.

(i) The Husband sold his home and has cashed in RRSP’s to pay off accumulated debt of the marriage estimated to be approximately $70,000 at the date of the Final Order. This debt has a present balance of approximately $30,000.

(j) The Husband works fulltime in his son’s business and earns employment income of $46,701.36 per annum. He also receives CPP benefits of $5,737.44 annually. His total income is, therefore, $52,438.80.

(k) The Husband lives in rented premises with his partner.

[13] Based on these findings made on this evidentiary record, I find the Wife is intentionally underemployed. Therefore income of $31,200 per annum shall be imputed to her based on full time employment of 40 hours per week earning $15 per hour. In addition to her imputed income must be added rental income of $500 per month and CPP payments of $355 per month starting June 2018. Her total imputed income is $41,460. Her annualized expenses as reflected in her most recent financial statement are $31,141.08 leaving her an anticipated surplus of approximately $10,000 per annum.

[14] I am mindful that the Husband’s income has increased significantly since 2010 to its current level. However, the Husband has been solely responsible for the support of the 4 children and payment for their respective s. 7 expenses. In addition he has been burdened with repayment of substantial pre-separation debt which drained his monthly cash flow and required him to sell his house and cash in RRSP’s.

[15] The trial judge found that the children were to be made a priority by the parties. By her conduct, the Wife did not make the children a priority. Since 2010, the Wife has increased her asset base and despite inheriting approximately $50,000 in late 2013 she did not voluntarily increase her child support obligations or contribute to the children’s extraordinary expenses using these funds. Her children resided in rented premises with their father while she enjoyed living in her own home.

[16] The Husband does not seek relief prior to January 1, 2016 and I presume, therefore, that he was content to pay spousal support to the Wife in accordance with the terms of the Final Order until January 1, 2016. Calculating the appropriate amounts for spousal and child support and contribution towards s. 7 expenses for the period January 1, 2016 through June 2018 (a period of 30 months) using the Husband’s income and the Wife’s imputed income, results in a significant overpayment by the Husband having regard to the Wife’s substantially increased child support obligation.

[17] In support of his request that his spousal support obligation be terminated effective January 1, 2016, the Husband does not seek repayment of this overpayment and does not seek contribution towards the children’s various s. 7 expenses since 2010.[^11]

[18] Having regard to the Husband’s substantial monetary and non-monetary contributions to the support of his children since November 2010, his debt repayment efforts and his depletion of assets to meet his financial obligations on the one hand, and having regard to the Wife’s materially improved financial position both in terms of income (and income earning potential) and assets during that same period on the other hand, I find that it is fair and just that spousal support be terminated effective January 1, 2016. Similarly, I find that child support be terminated effective January 1, 2016. The playing fields are now equal. The Husband has compensated the Wife for her contributions to the family during the period of their marriage. She is now fully rehabilitated.

Disposition

[19] The Final Order is hereby varied and a final order shall issue on the following terms:

(a) The Applicant’s obligation to pay spousal support pursuant to paragraph 4 of the Final Order is hereby terminated effective January 1, 2016;

(b) The Respondent’s obligation to pay child support pursuant to paragraph 6 of the Final Order is hereby terminated effective January 1, 2016; and

(c) Neither party is entitled to arrears of spousal support or child support, as the case may be.

Costs

[20] This does not strike me as a case where an order for costs is appropriate. However, if the parties are unable to agree on the issue of costs, they may serve and file costs submissions not exceeding 5 pages in length (exclusive of any case law, bill of costs and time dockets). In the event of no agreement, if costs submissions are not received within 30 days, there will be no order as to costs.

"Justice A.K. Mitchell"

Justice A. K. Mitchell

Released: May 23, 2018

[^1]: 12 remain living. [^2]: 2007 income - $52,375; 2008 income – $49,674; 2009 income – $23,438. [^3]: Elliott v. Elliott, 2010 ONSC 5562 at para. 40. [^4]: Exhibit #1, Tab 15, page 87. [^5]: Exhibit #2. [^6]: Exhibit #3. [^7]: Exhibit #1, Tab 16, Pages 120. [^8]: Exhibit #1, Tab 17, Pages 126. [^9]: Earning $30,305 on an annualized basis. [^10]: Earning $40,000 on an annualized basis. [^11]: Section 7 expenses were not addressed in the Final Order. If this claim had been advanced by the Husband, it would have been a fresh claim with no material change required.