Court File and Parties

KINGSTON COURT FILE NO.: 678/14 DATE: 20180625

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Lora Dawn Sprigings (Wiederick), Applicant Jacqueline Mills, for the Applicant

- and -

Christopher Charles Fletcher Wiederick, Respondent Michael D. Swindley, for the Respondent

HEARD: May 7, 2018

TROUSDALE, J.

REASONS FOR JUDGMENT

[1] The parties resolved most of the issues arising from the breakdown of their marriage by Partial Minutes of Settlement entered into on April 27, 2017, which have been incorporated into a final order.

[2] On the remaining outstanding issues, the parties were able to agree on and file an Agreed Statement of Facts prior to the hearing. The parties agreed that the Agreed Statement of Facts be filed as an Exhibit at the hearing as evidence. The only other evidence filed at the hearing on consent of both parties was a Brief of the various Financial Statements of each party filed since the Application was commenced. The matter was then argued on the basis of those two documents. Each party also filed a Factum including case law. To the credit of the parties and their counsel, this avoided a trial set for five days.

Background

[3] Both the Applicant and the Respondent are now 51 years old.

[4] The parties met while at Queen’s University where they each obtained a Bachelor of Engineering Physics. After graduating, both parties moved to Toronto and started working.

[5] They married on August 28, 1993 when they were each 26 years old.

[6] The parties have 3 children born of their marriage, with the births being in 1997, 1999, and 2002.

[7] The Applicant stopped working shortly before the eldest child of the marriage was born in 1997. The Applicant became a stay-at-home mother and did not return to work until approximately 2015 except for doing some modest fitness training during the marriage.

[8] The parties moved to Kingston in or about 2000 as the Respondent became employed at a company where the manufacturing facility was in Kingston. He subsequently became a shareholder in that company. He received the shares as part of his compensation.

[9] The parties separated on September 10, 2010 after 17 years of marriage. The parties were each 43 years old at the date of separation.

[10] The eldest child of the marriage is 21 years old and is entering 4th year at Queen’s University. The eldest child resides in a student house in Kingston during the school year and resides in Toronto during the summer when working. The eldest child expects to graduate in June, 2019.

[11] The second child of the marriage will be 19 years old shortly and is entering 2nd year at Queen’s University. The second child will be residing in a student house as of May 1, 2018, but will be residing primarily with the Applicant this summer. This child expects to graduate in June, 2021.

[12] The youngest child of the marriage is 16 years old and is finishing Grade 10. This child expects to graduate from high school and commence university in 2020. If this child takes a 4 year course, this child will likely graduate in June, 2024.

[13] The youngest child of the marriage resides primarily with the Applicant and the Respondent pays child support to the Applicant in an agreed upon amount for that child.

[14] After the parties separated, the Applicant obtained a Bachelor of Education degree. She became an Ontario Certified Teacher in 2014 and worked part-time in that field for just over a year.

[15] In March 2015, the Applicant obtained a contract position as a career coach at a Faculty at Queen’s University. In 2017 she became a certified coach for a specific program in the Faculty. Although the Applicant’s contract has expired, she continues to be employed at that Faculty as a certified coach.

[16] The Respondent continues to be employed at the manufacturing company in Kingston and he continues to be a shareholder in that manufacturing company.

Agreements between the parties

[17] The parties have settled the equalization of net family property. In general terms, the Applicant retained the matrimonial home, the Respondent retained his shares in the manufacturing company, the Respondent assumed responsibility for the joint debt (which was taken into account in the calculation of the equalization payment), and the Applicant paid an equalization payment to the Respondent.

[18] The Respondent has paid child and spousal support since the separation. The parties have agreed on the issues of ongoing and retroactive child and spousal support.

[19] The parties have agreed on their incomes and have agreed that there shall be a final order commencing May 1, 2018, that the Respondent shall pay to the Applicant periodic spousal support in the amount of $6,893.00 per month. This is based on the Respondent’s income in 2017 of $381,692.00 and the Applicant’s income in 2017 of $77,815.00.

[20] Both parties agree that upon a material change in circumstances of either of the parties, the spousal support payable by the Respondent to the Applicant, be that concerning either the issue of entitlement and/or the issue of quantum, may be reviewed at the instance of either party, upon written notice to the other. The party seeking to review either the issue of entitlement and/or the issue of quantum must provide the other party with evidence of a material change in circumstances.

[21] The parties have not agreed on whether there should be a set non-variable date at which spousal support would terminate forever, or whether the spousal support should be for an indefinite period subject to variation in the event of a material change in circumstances, or whether the spousal support should be subject to a review after a specified date.

[22] The Respondent’s base salary is $240,000.00 plus bonus income payable on a non-discretionary basis once per year on or before December 1 in each year based on the annual financial management report of the company over the previous 12 months.

[23] The parties have also provided me with the following agreed-upon wording to be incorporated on consent into the Final Order:

“Any review of spousal support shall take into account the following considerations:

a. The length of time the parties cohabited; b. The parties’ ages at the date of separation and at the date of the review; c. The functions performed by each of the parties during cohabitation; d. Any economic advantages or disadvantages to the respective parties arising from the marriage or its breakdown; e. The apportionment between the parties of any financial consequences arising from the care of the children of the marriage over and above any obligation for the support of the children of the marriage; f. Any economic hardship arising from the breakdown of the marriage, and the relief of the same; g. In so far as practicable the reasonableness of the Applicant’s efforts to promote her own economic self-sufficiency; h. The recognition of spousal support received by the Applicant from the Respondent since September 10, 2010; i. The recognition of ongoing spousal support receivable by the Applicant from the Respondent including but not limited to periodic and lump sum spousal support payments; and j. The Applicant’s claim to support on a compensatory basis.”

[24] The parties have also agreed that the Final Order shall contain the following provision:

“So as to secure his child and spousal support obligations, the Respondent shall maintain in force a policy of insurance, with a face amount of at least $500,000.00, and irrevocably designate the Applicant as the sole beneficiary thereof. The Respondent’s obligation to carry life insurance for the benefit of the Applicant shall terminate upon termination of his spousal support obligation.”

Issues

[25] The remaining issues are:

1. Whether the spousal support to be paid by the Respondent to the Applicant should: (a) have a set termination date, or (b) be indefinite in duration, subject to variation in the event of a material change in circumstances of either party, or (c) have a specified review date.
2. Costs.

Positions of the Parties

[26] Both parties have exchanged DivorceMate SSAG calculations prepared under the with child support formula, all of which state, “The formula results in a range for spousal support in a range of $5,559 to $7,812 per month for an indefinite (unspecified) duration, subject to variation and possibly review, with a minimum of duration of 8.5 years and a maximum duration of 17 years from the date of separation.”

[27] The Applicant’s position is that the spousal support order should be indefinite subject to variation in the event of a material change in circumstances of either party. The Applicant submits that she has a very strong claim for compensatory support as well as a claim for spousal support based on need. The Applicant is not seeking that there be a specified date for a review of spousal support, but submits that if the court determines that a review is to take place, it should not take place until the youngest child has completed her post-secondary education.

[28] The Respondent’s position is that the spousal support should terminate with a last payment on June 1, 2024, which would be almost 14 years from the date of separation, and would be when the youngest child would be expected to complete a four year undergraduate degree. The Respondent’s position that the spousal support should have a fixed duration of June 1, 2024 is based on taking the mid-range between the range of duration set out in the SSAG calculations which would cause spousal support to end in 2023, but extending it one further year so that spousal support would terminate in June, 2024 when the youngest child would be expected to graduate from University with a four year degree. The Respondent’s position is that the Applicant is working full-time now, that there is no uncertainty in her situation, and that by June 1, 2024, the Applicant will be self-sufficient and not in need of spousal support. The Respondent argues against a review order and submits that in Ontario jurisprudence review orders should be the exception, not the norm. (See Fisher v. Fisher, 2008 ONCA 11 at paragraph 63 to 65 and paragraph 70) The Respondent is concerned about the significant legal cost of what he believes could potentially be one or more reviews of spousal support.

The Law

[29] As this is an Application pursuant to the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), as am., the issue of spousal support is governed by Section 15.2 of that Act. Relevant portions of Section 15.2 to this case are as follows:

Spousal support order

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an 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.

Terms and conditions

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

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.

Analysis

[30] Both parties have agreed that at this time, the Applicant is entitled to spousal support. The issue is the duration of spousal support and whether it should be time-limited.

[31] This was a 17 year traditional marriage where the Applicant stayed home to provide the primary care for the children and the household, and the Respondent financially provided for the family.

[32] Both parties had the same education and both parties had the same professional designation at the start of the marriage. However, the Applicant’s career was significantly interrupted by the birth of the parties’ first child and two subsequent children. The parties agree that it was a joint decision that the Applicant would stay home to provide the primary care for the children. The children have done very well. The parties moved from Toronto to Kingston so that the Respondent could take a job at a manufacturing company in Kingston and further his career. The Respondent provided well for the family.

[33] The Respondent made a good income and the parties were able to share income for some of the years during the marriage. In spite of the Respondent’s high income, the property accumulated by the parties during the marriage was relatively modest in proportion to the Respondent’s income. The parties and their children enjoyed a very comfortable standard of living during the marriage.

[34] On the equalization of net family property completed between the parties on consent, the Applicant received the matrimonial home subject to the mortgage (equity of $245,000.00) and her savings of $85,000.00. The Respondent received his shares in the manufacturing company (agreed upon value of $275,000.00 at date of separation) and his savings of $64,000.00. The Applicant paid an equalization payment to the Respondent in the sum of $37,500.00 which was offset by the amount of $75,590.00 for retroactive child and spousal support, resulting in the Respondent paying the Applicant a net amount of $38,090.00.

[35] The Applicant’s income from employment has increased from $34,344.91 in 2014 to $77,916.62 in 2017. The Applicant has made very good efforts to do what she can to achieve economic self-sufficiency. However, she is concerned that her employment contract has recently expired and she has no guarantee as to whether her current employment will last.

[36] Although the Respondent’s income does fluctuate, the Respondent’s income has been over $300,000.00 per year for the last 4 out of 5 years. The only exception was in 2015 when the Respondent’s income was $247,692.34.

[37] The Respondent submits that the Applicant’s budget in her most recent Financial Statement is already 78% covered from her own income from employment and that her ability to contribute to her own support has increased each year since 2014, while the Respondent’s income fluctuates each year. The Applicant responds that the Respondent underpaid support during the earlier years of the separation and that her budget reflects expenses which were within the means she had available to her during those years as opposed to the much higher standard of living she was accustomed to during the marriage.

[38] At paragraph 53 of the Fisher v. Fisher case, the Ontario Court of Appeal stated the following regarding the concept of self-sufficiency:

Self-sufficiency, with its connotation of economic independence, is a relative concept. It is not achieved simply because a former spouse can meet basic expenses on a particular amount of income; rather, self-sufficiency relates to the ability to support a reasonable standard of living. It is to be assessed in relation to the economic partnership the parties enjoyed and could sustain during cohabitation, and that they can reasonably anticipate after separation. See Linton v. Linton (1990), 1 O.R. (3d) 1, [1990] O.J. No. 2267 (C.A.), at pp. 27-28 O.R. Thus, a determination of self-sufficiency requires consideration of the parties' present and potential incomes, their standard of living during marriage, the efficacy of any suggested steps to increase a party's means, the parties' likely post-separation circumstances (including the impact of equalization of their property), the duration of their cohabitation and any other relevant factors.

[39] The Respondent submits that the Applicant has been able to increase her assets by $500,000.00 since the date of separation as well as now having a pension plan at her current employment. He argues that payment of spousal support for the duration he proposes will allow the Applicant to continue to save for her retirement. The Respondent has no pension plan and he submits that his assets have not increased in value. He argues that if he pays spousal support until June 2024 as he proposes and retires at age 65, he will only have 7 more years to save for his retirement.

[40] The Applicant points out that the value of her assets are over-stated as her RRSPs are subject to tax which has not been taken into account. She submits that her pension has only a very modest value as she has only been contributing to the pension plan for 3 years and the combined amount of her own and her employer’s contributions in 2017 was a total of $6,240.00.

[41] In addition, the Applicant argues that it is not possible to compare the net assets of the Respondent and the Applicant at this time as the Respondent’s shares have not been valued since the date of separation in 2010 and they may have increased substantially in value over that period of time, just as the Respondent’s income has increased since that time. The Applicant also notes that the Respondent’s budgeted expenses are excessive and that he makes sufficient income to commence saving for his retirement now if he would cut back on some of his living expenses.

[42] In the case of Thompson v. Thompson, 2013 ONSC 5500, 2013 CarswellOnt 12392 (S.C.J.) Justice Chappel reviewed the basis and objectives of compensatory support and non-compensatory support at paragraphs 55 to 59:

ii. Compensatory Support

55 The compensatory basis for spousal support entitlement recognizes that upon marriage breakdown, there should be an equitable distribution between the parties of the economic consequences of the marriage. The objective of a compensatory award is to provide some degree of compensation for the sacrifices and contributions which a spouse made during the marriage, for economic losses which they experienced and may continue to experience as a result of the marriage, as well as the benefits which the other spouse has received as a result of these sacrifices and contributions. 33 A compensatory award recognizes that such sacrifices, contributions and benefits conferred often lead to interdependency between the spouses and merger of their economic lives. 34

56 Compensatory support claims arise most typically in situations where one spouse has suffered economic disadvantage and contributed to the other spouse's income earning potential as a result of assuming primary responsibility for child care and/or home management obligations. However, a compensatory claim can also be founded on other forms of contribution to the other party's career, such as supporting the family while the other party obtained or upgraded their education, 35 selling assets or a business for the benefit of the family unit, 36 or assisting a party in establishing and operating a business that is the source of that party's income. 37

57 In considering whether a compensatory claim exists, the court must undertake a broad and expansive analysis of advantages and disadvantages which each party experienced throughout the relationship as a result of the marital union. In some situations, a compensatory claim may be defeated or weakened by the fact that disadvantage suffered by the claimant spouse is offset by disadvantage of a different type experienced by the other spouse. 38

58 A compensatory claim for spousal support may be established even where the recipient spouse is employed and reasonably self-supporting at the time of the parties' separation. This situation can arise where, despite that spouse's ability to meet their own needs, their financial advancement has been impaired as a result of subordinating their career to that of the other spouse, or from adopting a less lucrative career path in order to accommodate the needs of the family. 39

iii. Non-Compensatory Support

59 Spousal support entitlement can also arise on a non-compensatory basis, as a result of the needs of a spouse. The Supreme Court of Canada discussed this basis of entitlement in Bracklow v. Bracklow. It emphasized in that case that a spouse may be obliged to pay support based on the other spouse's economic need alone, even if that need does not arise as a result of the roles adopted or sacrifices made during the marriage. Rowles, J.A. of the British Columbia Court of Appeal summarized the general concepts underlying this basis of entitlement in Chutter v. Chutter 40 as follows:

Non-compensatory support is grounded in the "social obligation model" of marriage, in which marriage is seen as an interdependent union. It embraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantaged spouse falls on his or her former partner, rather than the state (Bracklow, at para. 23). Non-compensatory support aims to narrow the gap between the needs and means of the spouses upon marital breakdown, and as such, it is often referred to as the "means and needs" approach to spousal support.

[43] In the Thompson case, where there was a 17 year cohabitation with two children born of the marriage, Justice Chappel found that the husband was not entitled to compensatory support, but was entitled to non-compensatory support given the length of cohabitation, and the mutual dependency as a result of a merger of the economic lives of the parties. The spousal support was ordered for an indefinite period as Justice Chappel found that it was likely that the situation of the children and the parties would change over the following few years.

[44] On the evidence before me, I find that the Applicant has a strong entitlement to compensatory spousal support as well as an entitlement to non-compensatory spousal support. Although the Applicant had the same educational qualifications as the Respondent, she interrupted her career for 18 years, as jointly agreed by the parties, so that she could be the primary caregiver of the three children and the home, while the Respondent enhanced his career. The Applicant had an economic dependency on the Respondent during the marriage. I find that the Applicant has suffered economic disadvantages as a result of the role taken on by her during the marriage, while the Respondent has enjoyed economic advantages as he had the opportunity to develop his career and greatly increase his income during the marriage. As a result, the Applicant has suffered economic hardship arising from the breakdown of the marriage because it is not likely that she will ever be able to earn the significant income now earned by the Respondent.

[45] The youngest child of the marriage resides with the Applicant and has at least a further two years of high school. There is no guarantee that this child’s academic career will necessarily unfold as predicted at this time. I find that the Applicant, who has the primary care of the youngest child, is entitled, in so far as possible, to continue to enjoy a comfortable standard of living in her home subsequent to separation, given the standard of living enjoyed by the parties during the marriage. I find that the Applicant is not self-sufficient at this time in the context of the standard of living enjoyed by the parties during the marriage.

[46] I find that there is uncertainty in the employment situation of the Applicant. The Applicant’s recent work history is not long. She has no contract and no job security. Both she and the Respondent are getting older. Either party may have health issues in the future, or suffer or enjoy other material changes in circumstances in the future which may result in variations of the quantum or duration of spousal support. It is not known whether the Applicant will have received adequate compensatory support by the June 1, 2024 termination date requested by the Respondent.

[47] I note that the final order made by Justice Swartz on April 27, 2018 on consent of the parties, which order settled most of the issues between the parties, provides that the parties are to annually exchange their income tax returns and Notices of Assessment and to annually readjust child and spousal support in accordance with an already agreed-upon formula based on their incomes and the midrange of the Spousal Support Advisory Guidelines. Accordingly, by the terms of the aforesaid consent order, the child and spousal support provisions will already be adjusted annually by the parties based on their actual incomes.

[48] The spousal support in this case is calculated on the “with child support formula” pursuant to the Spousal Support Advisory Guidelines. In considering the issue of duration of spousal support in this case, I note the Spousal Support Advisory Guidelines: The Revised User’s Guide, April 2016 states at page 11:

(e) Duration as the end of entitlement

Duration is often forgotten in the SSAG analysis. The formulas generate ranges for amount and duration. Amount cannot be considered alone. Duration is nothing more or less than the end of entitlement. When support stops, there may still be – and usually is – an income disparity between the spouses.

The SSAG formulas generate time limits which delineate the end of entitlement:

• Under the without child support formula and the custodial payor formula, which is modeled on the without child support formula, the time limits are generated for relationships of less than twenty years (or for those with an older recipient under the “rule of 65”).

• Under the with child support formula, there are also time limits, but softer and more flexible, only implemented through variation and review. Even here, it is possible, even likely, that support will end despite the presence of a continuing income disparity.

[49] The case of Fielding v. Fielding, 2014 ONSC 2272 (appeal on other grounds dismissed 2015 ONCA 901, 2015 CarswellOnt 19363 (O.C.A.)) involved a marriage of two physicians for 17 years. After the birth of their three children, the wife significantly reduced her level of practice due to her responsibilities for the children and the household. Although the wife suffered some health difficulties and it was a Rule 65 case pursuant to the Spousal Support Advisory Guidelines, the underlying facts and principles are similar to the case before me.

[50] At paragraph 212 of the Fielding case, Justice Mesbur rejected the request for an automatic termination at a specific time or an automatic review at a set date and stated:

The Divorce Act permits a spousal support order to be changed if there has been a material change in circumstances. It seems to me it is best to leave the issue of any changes to spousal support, including its termination, to a time when there has been a material change in circumstances. Given the length of this marriage, the SSAGs suggest any support order should be “indefinite”. I therefore decline to order either an automatic termination or review of spousal support, and leave any change to be dependent on a material change in circumstances occurring.

[51] Similarly, the Divorce Act will permit the spousal support order in this case to be varied or terminated in the event of a material change in circumstances. I find that an order for spousal support for an indefinite duration, subject to variation in the event of a material change in circumstances of either party is the appropriate order. Such an order takes into account the factors in Section 15.2(4) of the Divorce Act and meets the objectives of Section 15.2(6) of the Divorce Act. I decline to order an automatic termination date or a specific date for a review of spousal support in the circumstances of this case.

Order

[52] This Court orders that:

1. Commencing on the first day of May 2018 and continuing on the first day of each month thereafter, the Respondent shall pay to the Applicant periodic spousal support in the amount of $6,893.00 per month subject to variation in the event of a material change in circumstances of either party.
2. On consent, the amount of periodic spousal support payable is based on a) The Respondent’s 2017 income of $381,692.00; and b) The Applicant’s 2017 income of $77,815.00 and c) The mid-range of the DivorceMate Spousal Support Advisory Guidelines calculation prepared by the parties.
3. Upon a material change of circumstances of either of the parties, the amount of spousal support payable by the Respondent to the Applicant, be that concerning either the issue of entitlement and or the issue of quantum, may be reviewed at the instance of either party, upon written notice to the other. The party seeking to review either the issue of entitlement and/or the issue of quantum must provide the other party evidence of material change in circumstances.
4. On consent, any review of spousal support shall take into account the following considerations: a. The length of time the parties cohabited; b. The parties’ ages at the date of separation and at the date of the review; c. The functions performed by each of the parties during cohabitation; d. Any economic advantages or disadvantages to the respective parties arising from the marriage or its breakdown; e. The apportionment between the parties of any financial consequences arising from the care of the children of the marriage over and above any obligation for the support of the children of the marriage; f. Any economic hardship arising from the breakdown of the marriage, and the relief of the same; g. In so far as practicable the reasonableness of the Applicant’s efforts to promote her own economic self-sufficiency; h. The recognition of spousal support received by the Applicant from the Respondent since September 10, 2010; and i. The recognition of ongoing spousal support receivable by the Applicant from the Respondent including but not limited to periodic and lump sum spousal support payments; and j. The Applicant’s claim to support on a compensatory basis.
5. On consent, so as to secure his child and spousal support obligations, the Respondent shall maintain in force a policy of life insurance, with a face amount of at least $500,000, and irrevocably designate the Applicant as the sole beneficiary thereof. The Respondent’s obligation to carry life insurance for the benefit of the Applicant shall terminate upon termination of his spousal support obligation.

Costs

[53] If the parties are unable to settle the issue of costs between them, they may make written submissions as to costs. The Applicant shall serve and file any written submissions as to costs of not more than three typewritten pages plus a bill of costs and a copy of any offers to settle by July 11, 2018. The Respondent shall serve and file any written submissions as to costs of not more than three typewritten pages plus a bill of costs and a copy of any offers to settle by July 25, 2018. The Applicant may file any written response of no more than two typewritten pages by August 6, 2018. If neither party files any written submissions as to costs within the aforesaid timelines, there shall be no order as to costs.

Madam Justice A. C. Trousdale

Released: June 25, 2018