Veres v. Veres, 2018 ONSC 3497

BROCKVILLE COURT FILE NO.: 12-0199

DATE: 20180605

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Darrell Franklin Veres (husband), Applicant

AND

Margaret Ann Veres (wife), Respondent

BEFORE: Mr. Justice Timothy Minnema

COUNSEL: James N. Eastwood, for the Applicant

Michael Swindley, for the Respondent

HEARD: March 21, 22, and 23, 2018

REASONS FOR JUDGMENT ON MOTION TO CHANGE

MINNEMA, J.

1This is a Motion to Change (“MTC”) by the applicant/husband Darrell Franklin Veres heard by way of a trial. He is seeking to end or reduce his spousal support obligation as a result of loss of employment and subsequent retirement, and to terminate the life insurance securing that support. The respondent/wife Margaret Ann Veres is asking the court to only make a modest reduction in the monthly spousal support she receives.

Background Facts and Procedural History

2After living together for six months the parties married on July 20, 1996. They separated on May 1, 2011, after over 15 years together. At the time of separation the husband was 58 years of age and the wife was 52. They have no children between them.

Events Following Separation

3About 6 months after the separation the wife was involved in a motor vehicle accident. There is no dispute that as a result she has required the regular use of pain medication to manage day to day and to continue with her employment.

4At the time of both the separation and the accident the wife had been working part-time (40 hours bi-weekly) as a nurse at Sherwood Park Manor (“SPM”) earning approximately $45 per hour. She continued to work there until May 30, 2013 when her employer made allegations related to alleged workplace failings and misconduct, and placed her on sick leave. It also reported her to the College of Nurses of Ontario (“College”) which is the governing body for registered nurses in the Province.

5Notwithstanding that the wife was still at the early stages of dealing with these difficulties, the parties settled all their matrimonial issues except for the divorce on September 24, 2013 by way of Minutes of Settlement. The terms were incorporated into the Final Order of Justice Pedlar of the same date.

Final Order of September 24, 2013

6The Final Order is detailed and includes two Schedules, namely a Net Family Property Statement and a Spousal Support Advisory Guidelines (“SSAG”) calculation. As a general overview I note the following.

7Spousal support was set at $2,411 per month being a slightly higher than mid-point SSAG value using the 2012 base salaries of the husband at $157,658 and the wife at $51,121. The husband was a Plant Manager of a local company Greenfield Specialty Alcohols Inc. (“Greenfield”). As already noted, the wife was not working when the agreement was signed. The Final Order included a yearly support adjustment clause related to the husband’s income and required him to pay the wife a share of his annual bonus by way of a formula. The gross bonus in 2013 was over $35,000.

8There is no dispute, indeed the parties agreed, that support entitlement was established on a non-compensatory or needs only basis. The duration of support was not specified possibly as a result of the ‘rule of 65’. The Final Order indicated with respect to the wife’s income that she “must use reasonable efforts to increase her financial self-sufficiency.”

9The husband was required to maintain $250,000 in life insurance to secure the spousal support obligation, with a provision that if the policy could not be maintained for any reason he was to immediately obtain replacement coverage.

10The Final Order also included variation provisions covering both spousal support and life insurance. Unintentional loss of employment of either party or the husband retiring voluntarily after March 1, 2016 were both specifically identified as situations that may constitute a material change in circumstances.

Events up to Early 2016

11There was no provision in the Final Order that the husband maintain the wife on his work health and dental benefits plan but he did so. Interestingly, he managed to keep her on even after the parties were divorced on March 25, 2014.

12The husband made all the payments under the Final Order. Rather than adjusting the ongoing support, he calculated the value of the adjustment each year and paid it as a lump sum. The base amount of $2,411 per month therefore remained the same. He also made payments of his bonus each year as required based on the formula. No disputes were noted at the relevant times or at trial, and it appears that the wife was satisfied with his calculations.

13The wife was of course still dealing with some very marked stressors related to the car accident and her work place issues, and those were likely related. At some point (the date was not clear) the report by her employer to the College was dismissed following a nine day hearing. No limitations were placed on her working as a registered nurse in Ontario.

14As the wife was no longer in active employment with SPM and had no short-term disability benefits, she qualified for Unemployment Insurance (“EI”). For 2013 she had $24,418 in employment income, $7,515 in EI benefits, and a few other nominal sources of income. Those amounts coupled with $28,932 in spousal support provided a Line 150 total income of $61,665. The wife made a $15,000 RRSP contribution in that year. Much later she received some minor retroactive disability insurance benefits for 2013 of $750.

15There is no dispute that the wife was disabled from employment from June 1, 2013 to December 3, 2014 in part as a result of the noted stressors. The EI ran out before the beginning of 2014. She therefore had no employment related income for that year, and lived off spousal support of $31,343 and about $20,000 withdrawn from her RRSP. She also began renting a room or rooms in her home earning a gross income of $2,200 but showing a loss of $292.47 on her Income Tax Return. Her Line 150 total income for 2014 was therefore $52,100. Much later she received some minor retroactive disability insurance benefits for that year of $3,000.

16When the wife was medically cleared to return to work by her family physician in December of 2014, her employer SPM refused to take her back. In May of 2015 she grieved that decision through her union as a violation of their collective agreement. This process is still ongoing with a continuation of the hearing scheduled for seven days this spring. The wife’s official status with the employer is still unpaid sick leave, but she is seeking to be reinstated with back pay subject to mitigation.

17On that point, the wife said that she has tried to mitigate her losses. She found part-time employment at Ottawa Home Care on June 8, 2015. Per her 2015 Income Tax Return she earned $13,563 from that position for the year. Still looking at her Income Tax Return, she also had increased income from her rentals namely $4,950 gross and $1,267 net. With the $29,339.54 received in spousal support the Line 150 total income was $44,235. She made a $20,000 contribution to her RRSP in 2015, about the same amount as she withdrew the year before, which she indicated came from her line of credit. Much later she received some minor retroactive disability insurance benefits for 2015 of $1,250.

18In early 2016 the wife tried to further mitigate her job loss by attempting additional nursing positions while still working part-time at Ottawa Home Care. She worked at Argyle OMFS Services Inc. for about three and a half weeks starting on March 7, 2016. Her Record of Employment shows she was terminated. She explained she could not do the work because of the physical demands which were different than her SPM job. She then worked at Bayfield Manor for two and a half weeks starting on May 5, 2016 until she was terminated. She explained it was for the same reasons, namely she could not keep up with the job. Overlapping that work she started on May 9, 2016 at Dundas Manor, and this time she quit herself after two and a half weeks again for similar reasons – the job was such that she could not do it – with an added complicating factor of some individual bullying.

19While the wife’s employment struggles continued, the husband’s situation remained relatively stable. His income was $214,039 in 2013, $230,679 in 2014, and $246,156 in 2015. These amounts included large bonuses which were split with the wife per the previously agreed to formula in the Final Order (the bonuses for those years were $35,335, $41,750, and $41,657 respectively). At some point that income began including his full pension from Washington Mills (a previous employer) of just under $11,000 per year, about half of which had been equalized in the settlement. He paid his support as ordered and, although not required to, kept the wife on his benefits plan.

The Husband’s Termination and Retirement

20The critical event that brings this matter before the court was that on May 10, 2016 the husband was terminated from his employment as Plant Manager at Greenfield. He explained that profits had dropped off, and this was an upper management decision. He negotiated a severance package that for the most part had his salary, pension (RRSP), and benefits plans continue until November 30, 2016. He advised the wife in real time about these developments including explaining to her that as his health and dental benefits were coming to end, so would hers.

21Following this event the husband decided to retire. He was 64 years old and the wife was 57. When his salary stopped he was nine months past the voluntary retirement date (March 1, 2016) specified in the Final Order. He is now 65 and the wife is 59 (she had a birthday between the end of trial and the release of this decision).

Subsequent Events and Litigation

22The husband brought this motion to change in June 2016 immediately after he was terminated. He said he was hoping to come to a resolution before his salary ran out. The wife’s situation regarding her arbitration and the issues with her employer were not disclosed to him in a timely way. She initially alluded to having a physical disability and inability to work which was not borne out by the evidence. The disclosure issues required two court orders to address. In fairness to the wife, her explanation for the reluctance was that she was under direction from the arbitrator not to discuss evidence that had been given, or that may be given, under the SPM grievance process until she had completed her testimony. This was corroborated by a letter from her union. However, that does not excuse ignoring disclosure obligations in this process, particularly direct court orders.

23Continuing with the wife’s work and living situation in 2016 and picking up around the time of the husband’s employment difficulties, as noted she remained on unpaid sick leave from SPM but had been working part-time with Ottawa Home Care since June 8, 2015. In October of 2016, she took a new position with At-Home Hospice (“AHH”). It paid $26 dollars an hour and her expectation was that she would do one shift per week and earn a little less than $1,000 per month. At the same time she quit her position with Ottawa Home Care. She explained that she did not want to be on call for two different employers at the same time, and that she made that decision on her own without asking the employers if they would accommodate. She added that she chose AHH because she found Ottawa Home Care challenging in that an established team had to take directions from her (although she had already been there for well over a year) and there were French language issues.

24Per her Canada Revenue Agency (“CRA”) Assessment, the wife earned $15,618 in employment income mostly from Ottawa Home Care in 2016. Her income from her rentals increased to $7,200 gross and $4,429 net. With the $26,515 received in spousal support that year and $2,434 in ‘other income’, her Line 150 total income was $48,996.

25As noted the husband issued his Motion to Change in June of 2016 and he continued to pay regular spousal support pursuant to the Final Order until November 30, 2016 when his work payments ended. Per his 2016 Notice of Assessment, his income for that year was $218,764 including a bonus of $11,630 (shared with the wife) and his Washington Mills pension.

26Although the husband made some support payments voluntarily in 2017, the Family Responsibility Office (“FRO”), as it is mandated to do, started enforcement efforts on the full support obligation reflected in the Final Order and began garnishing the husband’s EI benefits. The husband brought a motion that was heard by Justice Swartz on May 16, 2017, and his support payments were reduced to $500 per month commencing June 1, 2017. The wife was ordered to pay costs fixed at $4,500. Justice Swartz also made disclosure orders.

27FRO continued to enforce the support arrears owing from December 1, 2016 to the date of Justice Swartz’s order. On October 3, 2017 a motion brought by the husband in the enforcement file was before Justice Gomery at which time the parties consented to the husband paying all arrears in full without prejudice to seeking a retroactive variation at trial. I am satisfied looking at the FRO ledger that he did so. His arrears were $30.21 as of the end of 2017. However, he only made the $500 per month payments up until the end of that year. He indicated that he was under the impression that he had overpaid, and that when he learned otherwise he found himself close to this trial date.

2017 Incomes

28At the interim motion before Justice Swartz on May 16, 2017, the parties confirmed the following. The husband’s annual income was $33,447 “without … any arguable asset related income”. The wife estimated her annual income from AHH to be $11,648, again based on her working part-time earning about $1,000 per month. Justice Swartz noted that there was insufficient evidence to assess the wife’s net rental income for 2016 (we now know from the above that it was $4,429 in her Income Tax Return).

29The parties have come to an agreement to address any double dipping regarding the husband’s Washington Mills pension per Boston v. Boston, 2001 SCC 43. As noted, this is not a huge amount. The total annual pension is $10,609.80, and the amount excluded by agreement (subject to the below) is $5,071.49 (47.8 percent).

30The up-to-date evidence from the husband in his affidavit filed for trial (all his T-4 slips were in evidence) was that for 2017 his income was comprised of $23,521 in EI benefits, $5,538 being the unequalized portion of his pension, $3,530.71 being the actual amount of eligible dividends received (see Schedule III paragraph 5 of the Federal Child Support Guidelines), $1,756.47 of Old Age Security (“OAS”), $20,000 of RRSP withdrawals, and $4,868 being Greenfield’s last contribution to his RRSP (negotiated as part of his severance). I therefore find that his total income was $59,214, subject to the further analysis below in the subheading ‘Summary – Incomes’.

31The wife’s income for 2017 was not clear. The up-to-date evidence from her affidavit filed for trial (sworn February 26, 2018) was that it was $40,091.75 being $36,091.15 in employment income and approximately $4,000 in net rental income. Her Financial Statement filed for trial (sworn February 21, 2018) indicated that her previous year’s income from all sources was $48,996. The difference of almost $9,000 was not explained. It is less than the spousal support she received that year. At some point she began making withdrawals from her RRSP, although there were no T4RSPs from her in evidence. I consider further below her rental income and whether I should also impute investment income to her for 2017.

Current Incomes

32The husband’s evidence on his current income is as follows. The two pensions noted in the interim Order were from Washington Mills totalling $5,538.31 per year (the unequalized portion) and his Old Age Security (“OAS”) at $585 per month. Those continue, however he indicates that the EI has ended and will be replaced by his Canada Pension Plan benefits although, as the credits were shared by the wife, he is not yet sure of the exact amount. He was expecting about $1,000 per month. The total is $24,558.31. His Financial Statement dated January 25, 2018, indicated that he was withdrawing $1,667 per month or $20,000 per year from his RRSP, which would bring his total income to $44,558.31.

33The wife confirmed that her estimate about her employment income given to Justice Swartz was accurate at the time at about $1,000 per month. However, as noted her last pay stub for 2017 showed year-to-date earnings from AHH at December 24, 2017 of $36,091.15. She confirmed that the increased earnings were in the last 7.5 months of 2017 in which she averaged about $4,133 per month. When it was put to her if that continued into 2018 her annual income would be more than $48,000, she indicated that there are variable factors such as the number of patients on her schedule, so it was not a given. However, she conceded that she had the capacity to earn that amount. Her doctor’s evidence was that she has the capacity to work two to three 12 hour shifts per week provided that she has a break between shifts. At $26 per hour, that works out to between $32,448 and $48,672 per year. Her Financial Statement sworn February 21, 2018 indicates a RRSP withdrawal of $18,000 under “income you are currently receiving” which she averaged as $1,498.35 per month. Lastly, although the wife’s net rental income on her 2016 income tax return was $4,429 and she indicated in her affidavit that it was $4,000 for 2017, her Financial Statement shows it as $280 per month or $3,360 in 2018.

34I defer my final findings on current incomes to the subheading ‘Summary – Incomes’ below following the analysis relating to imputation.

Assets

35As to the parties’ assets globally, their net worths on the date of separation were roughly equal although the wife had larger date of marriage deductions (house and RRSPs) in her Net Family Property which resulted in the husband paying her an equalization payment. He also paid off her share of a joint debt. The net worths at the date of separation in 2011 adjusted for the subsequent equalization payment and other obligations was about $272,000 for the husband and $537,000 for the wife. As of today, based on their most recent Financial Statements, the husband’s net worth is about $612,000 and the wife’s is about $573,000 not including the value of her HOOPP (Healthcare of Ontario Pension Plan). There was no protest to the husband’s assertion that if she had valued that pension as required their assets would be roughly equal.

36The husband has clearly grown various assets since separation. However, at trial the wife’s focus was on the growth in the husband’s RRSPs. Indeed, both parties gave evidence about RRSP growth since separation. The husband acknowledged sizeable growth from his employer’s contributions, living frugally, and making savvy investment decisions. The wife’s growth was not as marked, although she had access to an investment professional. On the date of separation their RRSPs were roughly $287,000/$204,000 respectively wife/husband. Currently, avoiding double accounting for transfers, they are roughly $448,000/$432,000 respectively, making the husband’s growth about $228,000 compared to the wife’s of $160,000.

Issues and Positions

Husband’s Position

37The husband’s basic position was that as the parties’ assets are roughly equal and the wife has more income than him, the ongoing spousal support and the associated life insurance obligation should simply end. He was also seeking to have income imputed to her, and an order that she pay back the support received since December 1, 2016. In closing submissions he was open to her keeping some of the alleged overpayment, namely $411 per month up until the interim order, as it made for an easy round number of $2,000 per month owing from her to him.

Wife’s Position

38The wife concedes the material change in circumstances. Other than that her position was more difficult to follow.

Lack of a Proper Pleading

39The wife chose incorrectly to respond to the Motion to Change by filing an affidavit and not a Form 15B ‘Response to Motion to Change’ as required in section 15 of the Family Law Rules (“Rules”). This is not a criticism of her counsel -- I have seen this practice before and the husband’s counsel did not object -- but in my view it is not supported by the Rules and leads to confusion. It is confusing in this case. The affidavit that stands in place of the pleading starts off “I swear this Affidavit in response to the Motion to Change” but then ends “I am advised by my counsel and I verily believe that I may swear an updated affidavit once the information [from the husband] is received. I hereby reserve my right to do so.” This seems to assert an open-ended pleading.

Affidavit of August 16, 2016

40In her original affidavit of August 16, 2016 the wife did not take a clear position. She set out facts that are clearly wrong or at least overstated. For example, she said that her physical pain and dependence on pain medication had left her unable to maintain remunerative employment since May of 2013 and that she did not expect her situation would improve for ten years. That was not supported by evidence. But as for a position, all she said was “[t]hough I concede that with Darrell’s retirement his ongoing spousal support obligations should be reduced, I require some quantum of support for the necessities of life.” She made no claim of her own.

Trial Affidavit of February 26, 2018

41The wife’s trial affidavit dated February 26, 2018 (only four weeks before the hearing) had a number of new aspects, which I list below:

1. She referred at paragraph 57 to “my material change in income since 2012”. If this vague reference was meant to assert a retroactive claim, she did not articulate it or address it in either her Opening Statement or Opening Factum.

2. She indicated at paragraph 110 “it remains my position that the non-equalized, post-separation accumulated value of Darrell’s assets (most notably, the RRSP) may be encroached upon to continue to pay me ongoing spousal support.” This remains her core position.

3. In paragraph 117 she indicated “until an Arbitral Decision is rendered arising out of Sherwood Park Manor’s refusal to return me to work, it is my position that Darrell should continue to pay spousal support to me.”

4. And lastly, at paragraph 120 she said “[b]ased on my 2017 income of $37,091.15 and Darrell’s alleged 2017 income of $58,908.00, the Spousal Support Advisory Guidelines range is $456.00-$532.00-$608.00 per month in spousal support.” I would note that her stated income is not as found above nor as referred to in her Opening Factum below.

Wife’s Opening Factum

42The wife’s factum submitted for the start of trial identifies the issue as “What is the appropriate quantum of spousal support payable by the Applicant to the Respondent?” Under ‘Part V: Order Sought’ she alleged arrears to be owing of $1,530.21. She gave three alternative positions regarding the spousal support: (1) dismissal of the Motion to Change; (2) support calculated per the SSAGs using the husband’s 2016 income and her 2017 income at $40,091; and (3) support per the SSAGs using current incomes. What is odd about these positions, given the facts above, is that the first is incongruent with her admission that there has been a material change in circumstances relating to the husband’s income, the second compares different years’ incomes, and the third position mirrors the husband’s position.

Wife’s Opening Statement

43The wife’s Introductory Statement identifies the issue as “What is the appropriate quantum of spousal support payable by the Applicant to the Respondent on a retroactive and ongoing basis?” I note that the addition of “on a retroactive … basis” is different from the issue as identified in her Factum. However, the husband was claiming adjustments back to December of 2016 and she was claiming arrears since that date, and there is nothing to suggest otherwise than that this vague reference was with respect to those positions.

44The wife repeated the assertion that the husband has unequalized assets “available for spousal support” and mentioned changes in net worth/family property since the Final Order. She also referenced how much income both parties earned “since 2015”. She asked the court in determining the appropriate quantum of spousal support to consider the Applicant’s income “since the date of the order.”

Wife’s Closing Statement

45The wife indicated correctly in her closing submissions that the two questions for the court are (1) does the husband have the means to pay spousal support, and (2) does the wife still have the need for spousal support. Her main argument again was that spousal support should be ordered paid out of the husband’s assets. But her argument also veered into a difficult to follow direction.

46While acknowledging that the court was only dealing with the MTC by the husband and there was no claim by her, the wife asserted that there were other changes in circumstances that could have supported a previous MTC by her had she brought it. She argued that the husband has the ability to pay ongoing spousal support because he has had a break from paying higher amounts since the order. She asked the court to compare the total income earned by him since the Final Order with the total she earned. Ignoring the potential award from her arbitration, she urged the court to consider that difference looking at the percentages of the Net Disposable Income (“NDI”) in the SSAG attached to the Final Order. Based on that she was seeking $1,800 per month spousal support going forward.

47This seemed to blind side the husband’s counsel who asserted that not only had retroactive support not been pled, but it was the first time he had heard that argument. He characterized it as a back door retroactive claim that the court cannot consider. The wife’s counsel confirmed that she had not made a formal retroactive claim.

Conclusion – Issues and Positions

48In looking at the law below, it is clear that I am to consider the changes in the means and needs of the parties since the making of the last order. I view the wife’s argument relating to past incomes in that context. I accept both parties’ submissions that no retroactive claim dealing with the time frame before the Motion to Change was brought has been made or pled. Even if it had been raised, I would not consider it given the lack of notice. The issues in this case are therefore whether, in assessing their available incomes and the objectives of the Divorce Act, (1) the husband has the means to pay spousal support, and (2) the wife still has need for spousal support. As seen below, entitlement does not appear to be an issue.

Law and Analysis – Incomes and Imputation

49The SSAGs specifically apply to variation and review. The SSAGs are income based. The starting point for the determination of income under the SSAGs is the definition of income under the Federal Child Support Guidelines (“CSGs”). Section 19 of the CSGs allows the court to impute such an amount of income as it considers appropriate in the circumstances.

50There are two preliminary questions in determining incomes given the way the issues were framed: (1) should the husband’s income from his RRSP be included for spousal support purposes and nothing included or imputed for the wife; and (2) should more than what the husband is withdrawing from his RRSP be imputed as income and considered within the SSAG formulas.

RRSP Income/Imputation

51It was conceded that the husband should be able to earn 4 to 5 percent growth or approximately $20,000 a year on his RRSP investments. This appears to be the amount he has been withdrawing per his most recent Financial Statement. He indicated that his plan was not to encroach on the capital. Per the CSGs, that amount is to be included in income for spousal support purposes.

52The husband acknowledges he needs this income to live on. However, he indicates that as his RRSP and the wife’s RRSP (along with their respective overall net worths) are more or less equal, a similar income should be imputed to her. Indeed, she has withdrawn or is currently withdrawing about $18,000 from her RRSP per her Financial Statement. That is also income per the CSGs. The wife takes the position that she should not have to withdraw on her RRSPs but the husband should pay her support on what he withdraws.

53As noted in Boston v. Boston at paragraphs 54 and 56, the wife must use her equalization assets to generate income once the husband retires: see also Slongo v. Slongo, 2017 ONCA 272 at paragraph 109. It would be a different situation if this was an early retirement case and/or there was no material change in circumstances: see Walts v. Walts, 2016 ONSC 4777 at paragraph 18, and Slongo still at paragraph 109.

54I agree with the husband that including RRSP withdrawals for him but not for the wife or not imputing some amount to her pursuant to CSG section 19(1)(e) would be unfair. The wife is 7 years younger with income earning years ahead. The husband needs his investment income now to live on. If he withdraws all the income from his RRSP it stops growing but the wife’s does not. Hers will continue to grow. If she retires at 65 using the same assumptions without compound interest and without further contributions even though she continues to work, her RRSP can be expected to grow by about $120,000 until she retires. Whether it is more or less, in any event the result would be that she would retire with more investments and assets than the husband on their respective retirement dates.

Encroachment (by way of Imputation) on the Husband’s RRSP

55As the husband points out, with the fresh evidence on the wife’s employment income, the above issue of RRSP income and imputation is somewhat moot. Even if he included his actual or imputed RRSP income or growth at $20,000 and wife did not, with her current income at $52,429 and his at $24,000 there would still be no spousal support payable.

56As a result the wife does not arrive at a position where the husband has an ability to pay continuing spousal support unless she can convince the court, per her main argument, that it is appropriate to impute an amount that would in effect liquidate his RRSP, much like drawing on a pension. Her desired outcome would force him to take out more from his RRSP than he plans to. Her view is that this would be fair because he has accumulated more assets since the date of the Final Order in part by paying less support than he should have. She argues that these “unequalized assets” should therefore be available for spousal support. I note a few of the difficulties with her position.

57The SSAGs are generally based on current income not on what a payor could or should have paid in previous years. Further, the wife’s position that the husband paid less support than he should have is an assumption, which is untested by way of a formal claim that the husband has had an opportunity to defend. I cannot make that finding. Indeed, it is not an obvious conclusion. The husband paid support per the order, and his income growth has been addressed in part with cost of living increases and the bonuses being equitably shared. The motor vehicle accident and the wife’s employment difficulties both post-dated the separation, the latter by two years, making the connection to the marriage a possible issue. Lastly, depending on the outcome of the arbitration, her income position may not have actually changed.

58It is clear that capital assets can be taken into account in assessing a payor’s means related to his or her ability to pay spousal support: see Leskun v. Leskun, 2006 SCC 25 at paragraph 32. The SSAG: Revised Users Guide at Chapter 19(e) suggests that reasonable withdrawals from capital can in some situations be imputed as income to be considered within the formulas. Imputing capital as income is absent from the usual go-to subparagraphs in section 19(1) of the CSGs, however that is not a closed list. As noted, the test is that the court can impute such an amount “as it considers appropriate in the circumstances”. Still, as to what is appropriate, there is a general aversion in the case law to depleting capital to either pay support or fund a support obligation: T.W. Hainsworth, Divorce Act Manual, 2017 Thomson Reuters Canada Limited (Looseleaf), at paragraph 17:6.06; Wagstaff v. Wagstaff, 2002 NSSC 256 at paragraph 49; Shepley v. Shepley (2006), 2006 CanLII 1924 (ON SC), 24 R.F.L. (6th) 422 (Ont, S.C.) at paragraph 69; Van Horne v. Van Horne, 2007 CanLII 16457 (ON SC) at paragraph 31; and Laurain v. Clarke, 2011 ONSC 7195 at paragraph 83. That is often considered to be a redistribution of property under the guise of spousal support.

59The facts in this case do not support the relief the wife is seeking. The cases cited and relied on by her where draws on capital (mostly the equalized portion of a pension) were included or imputed for spousal support purposes are distinguishable. For the most part they involved long-term traditional marriages with strong compensatory claims. In most the payee spouse was not working, had relatively limited assets, and had a dire subsistence type need. None of those factors are present in this case. To the contrary, granting her request would result in a situation where “the payee spouse would accumulate an estate while the payor spouse’s estate is liquidating” (Boston v. Boston at paragraph 56) which would be inequitable given their similar resources.

Summary - Incomes

60Clearly this analysis has similarities to and shares aspects with the analysis below under section 17(7) of the Divorce Act.

61In my view, this is a case for imputing income to the wife from her RRSP in a similar amount to what the husband is expected to withdraw from his, namely $20,000 per year. In the circumstances it would not be just or appropriate for the wife to maintain and grow her retirement savings while requiring the husband to share the income generated from his. While I treat this as imputation to arrive at equal numbers which I find to be fair, I note that the wife is currently withdrawing only a little less than the husband in any event. For the same reason I would not impute as income larger withdrawals from the husband’s RRSPs which would encroach on his capital. The parties have equal assets, and that would put the wife in a better position than him at the date of their respective retirements.

62Although this was not raised, I do note that including the incomes of both parties on investments results in a double counting against the wife if the equalized portion of the husband’s pension is excluded as a result of ‘double dipping’ per Boston v. Boston. Her investments include her share of that equalized pension, and if both are drawing on their RRSPs it would be unfair for him to get an exclusion for equalized property and her not. The income related to the divided Washington Mills pension or its equivalent should be taken out of both sides or out of neither (see the SSAG: Revised Users Guide at Chapter 19(c)), and I find the latter is appropriate in this case.

63In view of the above, I find that the husband’s current income not including from his RRSP is $24,558 per year being his pensions and expected C.P.P. I have included his RRSP income of $20,000, and the same amount imputed to the wife for both ongoing and 2017, noting that her current actuals are only $2,000 less. I add to the husband’s current and 2017 income the portion from his equalized pension presently excluded by the parties. I have not included in current income the husband’s dividend that he received in 2017 per the T5 filed, noting there was no evidence as to its source or its regularity for inclusion into ongoing. Given the wife’s stated capacity by her doctor and her actual earnings in the latter half of 2017, I find that her current employment income is $48,000 per year. The wife suggested that her rental income could vary as noted above. The husband argued that her deductions from gross rental income were not established by evidence and likely to be of the kind routinely imputed back for support purposes. I have included the $4,429 per year in net rental income from the wife’s 2016 Income Tax Return. There is insufficient evidence to stray up or down from that. I have incorporated all these findings in SSAG calculations that will be addressed further below.

The Law – Variation of Spousal Support

64As the parties were married, variation of spousal support is governed by the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.) as amended, and in particular section 17. Per subsection 17(4.1), before the court can make a variation order it must be satisfied that there has been a change in the condition, means, needs or other circumstances of either former spouse since making the last spousal support order. Once that has been met, the objectives of a variation order are set out in subsection 17(7) which reads as follows:

17(7) A variation order varying a spousal support order should

(a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;

(b) apportion between the former 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 former spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.

65As an overview, the approach to be taken was set out by the Supreme Court of Canada in L.M.P. v. L.S., 2011 SCC 64, at paragraph 50 (citing its decision in Hickey v. Hickey, 1999 CanLII 691 (SCC), [1999] 2 S.C.R. 518) as follows:

50. In short, once a material change in circumstances has been established, the variation order should “properly reflec[t] the objectives set out in s. 17(7), . . . [take] account of the material changes in circumstances, [and] conside[r] the existence of the separation agreement and its terms as a relevant factor” (Hickey, at para. 27). A court should limit itself to making the variation which is appropriate in light of the change. The task should not be approached as if it were an initial application for support under s. 15.2 of the Divorce Act.

Change in Circumstances

66As noted, the wife concedes that there has been a material change in circumstances since the last order based on the husband’s termination from employment and subsequent retirement.

Analysis of the Section 17(7) Objectives

67The four section 17(7) objectives can be viewed as an attempt to achieve an equitable sharing of the economic consequences of marriage or marriage breakdown: see Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813 at paragraph 78, and Hickey v. Hickey at paragraph 21. Family law can only play a limited role in alleviating those economic consequences (Moge v. Moge at paragraph 76). No one objective has greater weight or importance than another (L.M.P. v. L.S. at paragraph 49).

Economic Advantages or Disadvantages Arising from the Marriage or its Breakdown

68As noted in Fisher v. Fisher (2008), 2008 ONCA 11, 88 O.R. (3d) 241 at paragraph 43, “[t]he concept of economic advantage or disadvantage arising from the marriage is the foundation for the principles of compensatory support familiar from their detailed discussion in Moge” (see also Hickey v. Hickey at paragraph 22). As noted in Moge v. Moge itself, the most significant consequence of marriage or marriage breakdown usually arises from the birth of children (paragraph 81). However, that decision goes on to clarify (at paragraph 83) that families need not fall strictly within a particular marriage model in order for one spouse to suffer disadvantages, and they could arise in childless marriages. Indeed, Fisher v. Fisher is one such example, and under this objective it held that the parties had formed a relationship of financial interdependence (paragraph 44). However, with little information about the pre-separation decisions and roles of the parties here, and to get a sense of how to weigh the material change, I specifically asked counsel about the basis for entitlement relied on in the Final Order. The parties agreed that this is not and was not a compensatory support case.

Financial Consequences arising from the Care of any Child over and above any Support Obligation

69With no children of the marriage this consideration, generally related to compensatory support, does not apply.

Economic Hardship Arising from the Breakdown of the Marriage

70I appreciate that the Divorce Act section 17 variation proceeding is not to be approached as if it were an initial application for support with a full means and needs analysis (see the quote from L.M.P. at paragraph 67 above and Aspe v. Aspe, 2010 BCCA 508 at paragraph 33). However, those factors come into play in assessing and taking into account the material changes and in assessing what if any hardship would be occasioned should the support continue, be reduced, or terminate.

71I have looked at the parties’ expenses in their most recent Financial Statements. The wife claims yearly expenses of about $71,000. I note that her travel expenses are somewhat high given the nature of her work, as are her medicine costs still as a result of the motor vehicle accident. She claims a $200 per month debt payment on her Line of Credit. She improperly includes as an expense the amount she has been withdrawing from her RRSP. When adjusting only for that last item, her expenses are about $53,000. I note that this is almost the same as her current income ($52,429) before any RRSP inclusion or imputation. The husband shows yearly expenses of about $60,000. However he includes $1,500 per month for “Alimony” that was not explained. When adjusted only for that his expenses are about $42,000. The parties therefore do have different but not have markedly different needs, and the husband mentioned that he lives a somewhat frugal lifestyle.

72Even in a non-compensatory claim the consideration is generally not one of only basic need, but also of the economic hardship related to the marital standard of living (SSAGs at Chapter 7.2, 8th paragraph). However, it must be kept in mind that subsection 17(7)(c) addresses the economic hardship of both former spouses. As noted in Moge v. Moge the economic consequences of the marriage or its breakdown have to be “shared” in an equitable manner by “both” partners (paragraph 77).

73The hardship here is a result of the ending a very significant income stream to the husband, such that neither party can be sustained at the marital standard of living. The court cannot fix that. The quantum of the support cannot always equal the amount of the need: Bracklow v. Bracklow at paragraph 54. As noted, the wife has proposed two ways around that to her benefit: including RRSP income to the husband only but not her; and requiring him to draw on his unequalized RRSP capital. I have already dealt with and rejected those arguments above.

74Given the ages of the parties at the date of separation and at the date of the Final Order, the reality was that there were going to be significant changes in the amount of support ordered upon the husband’s retirement. I have created the following SSAG scenarios using the ‘without child support’ formula:

(a) Schedule 1 - 2017. I use the amounts found above for 2017. For the husband this is all his 2017 income including his RRSP withdrawals ($59,214), and I add to that the equalized portion of his Washington Mills pension ($5,071), for a total of $64,284. For the wife I use her actual employment income ($36,091), her rental income as found ($4,429), plus imputed RRSP income equal to the husband’s, for a total of $60,520. The result is a monthly support payment range of $71-$82-$94.

(b) Schedule 2 – Current Incomes. I use the amounts as found above for current incomes. For the husband this is $44,558 which includes RRSP withdrawals of $20,000, and I add in the equalized portion of his Washington Mills pension at $5,071, for a total of $49,629. For the wife, I use her income as found at $48,000, her rental income as found at $4,429, plus imputed RRSP income equal to the husband’s for a total of $72,429. As her income is greater than his, no support is payable.

(c) Schedule 3 – Illustration. As a variation of Schedule 2, this example shows that there would still be no current spousal support payable by the husband if the RRSP income were included for him only but not the wife. I have properly excluded the husband’s equalized pension income in that calculation, but note that even if it were included ($5,071) the result (no support payable) would still be the same.

75Again, the court has a limited role in alleviating the economic consequences of marriage breakdown. With the husband’s loss of employment and subsequent retirement there is a need here for both parties to transition to a lower standard of living. As observed by Justice Ducharme in Shepley v. Shepley at paragraph 62, cases such as this require a careful balancing of the payee spouse’s need and the payor spouse’s ability to pay. To create an ongoing support obligation from the husband to the wife would require an imputation order that has the husband drawing on both his RRSP income and capital and the wife neither. I cannot see how that would be a fair apportionment of the economic hardship.

So Far as Practicable, Promote the Economic Self-sufficiency of Each Former Spouse within a Reasonable Period of Time

76The husband has been paying spousal support (including the interim period) for roughly half the length of their cohabitation. However, he did not argue a lack of entitlement.

77Self-sufficiency must be seen in the context of the standard of living previously enjoyed by the parties (Allaire v. Allaire, 2003 CanLII 26263 (ON CA) at paragraph 21). The wife was working part-time at the date of separation. Except for the period of disability she has always worked. Per paragraph 23 above, in the past when she had an opportunity to work more she chose to continue to work part-time. If her grievance is successful, I understood that she would return to her old job which again was only part-time. The husband initially wanted to impute income to the wife on the basis that she continued to work part-time contrary to the positive obligation in the Final Order to “increase” her self-sufficiency. However, in view of the evidence at trial, he did not push that position in his closing submissions.

78In my view, despite or perhaps in light of her employment and health struggles since the Final Order, the wife’s efforts to maintain and increase her economic self-sufficiency have been reasonable. Including her rental income she is currently back to earning similar to what she earned on the date of separation, and she is working close to what her doctor says is her present capacity. This appears to be longer hours, and approaching full-time. In this case the factor influencing self-sufficiency is the husband’s retirement. The wife appears to have already recognized this, as evidenced by the increased work hours since the date of the interim order.

Summary/Conclusions

79The law referenced above directs me in making a variation order to take into account the material changes in circumstances, limiting myself to a result that is appropriate in light of those changes. The change is that the husband retired at age 64 with clean hands, having made all his support payments up until he lost his regular income. He gave the wife all the notice he could about his situation and intentions. His retirement was contemplated when they entered into their Minutes of Settlement that were turned into the Final Order. Looking at the four legislated objectives, the wife’s income without the spousal support can meet her needs, at least as well as the husband’s will be able to meet his, and they have a relatively equal asset base. This was not a long-term marriage or a compensatory support claim. The wife has in some respects been thwarted by circumstances in becoming fully self-sufficient, but has made reasonable efforts. Each former spouse is in a fairly similar situation taking into account that the husband has retired and the wife is still employed. The aggregate retirement savings can be expected to keep both spouses at reasonable, or at least similar, standards of living. Any economic hardship is equitably shared. In my view the Divorce Act section 17(7) objectives have been met as best they can in the current circumstances with the husband being permitted to end the spousal support payments.

80In light of all the above, I make the following orders. Looking first at the arrears or claims for retroactive adjustments, the husband earned $218,764 in 2016. I therefore would not vary or terminate support until after the end of that year. For 2017, I use the SSAG calculation Schedule 1. It has the husband paying a modest level of support which, sharing his and his counsel’s affinity for broad round numbers, I set at $100 per month. Moving to the ongoing obligation, I use the SSAG calculation in Schedule 2, and cannot see a basis for continuing the support after January 1, 2018. To be clear, this is not to suggest a finding that there is a lack of non-compensatory entitlement. The zero range and ending of support simply reflects a current inability to pay: see SSAG: Revised Users Guide at Chapter 3(c).

81I understood that the husband has paid the $2,411 per month from January 1, 2017 up until May 31, 2017 (5 months), and $500 per month commencing June 1, 2017 until the end of last year (7 months). By my calculations he has therefore overpaid $14,355 ($12,055 plus $3,500 minus $1,200). It has always been his clear intention to seek retroactive adjustments.

Decision

82The Final Order of Justice Pedlar dated September 24, 2013, shall be changed as follows:

1. Paragraph 6 is deleted effective December 31, 2016 and replaced with:

(a) The Applicant shall pay to the Respondent spousal support of $100 per month commencing January 1, 2017 until December 31, 2017.

(b) The spousal payments are terminated effective December 31, 2017.

2. Paragraph 10 is deleted effective December 31, 2017 with the life insurance obligation ending as of that date.

3. The wife shall pay the husband $14,355 as an overpayment of spousal support. The parties may by agreement include a different number in the issued order if my calculation does not align with FRO’s accounting.

83If the parties wish to address me on costs I will accept brief written submissions as follows: from the husband served and filed within fifteen days from the release date of this judgment; from the wife served and filed within 10 days after she is served with the husband’s submissions; and, if required, a reply from the husband of no more than two pages served and filed within five days after he is served with the wife’s submissions.