Court File and Parties

Court File No.: FC-11-48-1 Date: 2018-09-17 Ontario Superior Court of Justice

Between: Edouard Vlasblom, Applicant – and – Helene Monderie, Respondent

Counsel: Erin Lepine, for the Applicant Yusuf Dandashe, for the Respondent

Heard: September 13, 2018

Reasons for Decision

Audet J.

[1] This is a motion brought by the Applicant, Mr. Vlasblom, to change the final order of Justice McKinnon dated November 16, 2012 with respect to spousal support. Mr. Vlasblom seeks to terminate his spousal support obligation.

[2] For the reasons that follow, Mr. Vlasblom’s spousal support is reduced to 1$ per month, effective November 26, 2017.

Facts

[3] The parties were married on August 11, 1979, and they separated on December 4, 2006, after 27 years of marriage and two children. A divorce order was issued on May 19, 2011, at which time both children were already adults. Pursuant to a final order dated November 16, 2012, Mr. Vlasblom was required to pay spousal support to Ms. Monderie in the amount of $1875 per month commencing on December 1, 2012. At the time, Mr. Vlasblom was 56 years old and employed by the Federal Department of Justice in Ottawa as the Director Accounting Operations and Client Services, where he earned approximately $126,000 per year. Ms. Monderie was 54 years old and was employed as a Family and Children’s Counsellor with Military Family Resources at the Vanier Community Center, earning approximately $40,000 annually.

[4] In 2015, Mr. Vlasblom experienced workplace issues that resulted in a brief suspension from his employment, followed by a period of stress leave. In October 2015, Mr. Vlasblom resigned from his employment at the Department of Justice and accepted a position with the Government of the Northwest Territories, where he earned $155,000 per annum. In July 2017, Mr. Vlasblom was notified that his position with the Government of the Northwest Territories had been identified as “surplus” and that he would be laid off as of October 2017. He received four weeks of severance pay and has been unemployed since November 26, 2017.

Mr. Vlasblom’s Position

[5] Mr. Vlasblom states that he has made significant efforts to find alternative employment since finding out that his position was identified as surplus in July 2017. In fact, he had started looking for alternate employment as early as January 2017. However, his age (he is currently 62 years old) and poor health have proven to make this a difficult task, and he has been unable to find alternate employment despite his best efforts. As his health continued to deteriorate, his doctor recommended that he retire. Following his termination in November 2017, Mr. Vlasblom retired from the Public Service and started to draw on his pension income, earning approximately $41,187 per year (including his CPP benefits).

[6] Mr. Vlasblom seeks to have his spousal support obligations terminated to reflect this change in income resulting from his retirement effective November 26, 2017.

Ms. Monderie’s Position

[7] While Ms. Monderie does not disagree that a variation of spousal support may be justified in the circumstances, she takes the position that Mr. Vlasblom has voluntarily retired although fully capable of working, and that he should continue to work, or become self-employed, in order to continue to pay spousal support. She takes the position that the loss of his employment with the Federal Government in October 2015 resulted from his own misconduct, and that this Court such not condone his behavior by allowing him to terminate his spousal support obligations. Had he not misbehaved, he would still have his employment with the Federal Government and would be earning the same level of income he earned back in 2012.

Applicable Legal Principles

[8] The legal principles applicable to a variation of spousal support are set out in s. 17 of the Divorce Act, 1985, c. 3 (2nd Supp):

Order for variation, rescission or suspension

17 (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,

(a) a support order or any provision thereof on application by either or both former spouses; or

(b) a custody order or any provision thereof on application by either or both former spouses or by any other person.

Terms and conditions

(3) The court may include in a variation order any provision that under this Act could have been included in the order in respect of which the variation order is sought.

Factors for spousal support order

(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration.

Objectives of variation order varying spousal support order

(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;

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

[9] The test for a “material change”, as confirmed by the Supreme Court of Canada in L.M.P. v. L.S., 2011 SCC 64, 3 S.C.R. 775, is a change that is substantial, continuing, and that “if known at the time, would likely have resulted in a different order.” This test was further explained in Dedes v. Dedes, 2015 BCCA 194, 58 R.F.L. (7th) 261, where the British Columbia Court of Appeal stated:

25 As articulated in L.M.P., the test for material change is based not on what one party knew or reasonably foresaw, but rather on what the parties actually contemplated at the time the order was entered by agreement. A function of the material change threshold is to prevent parties from re-litigating issues that were already considered and rejected; in such cases an application to vary would amount to an appeal of the original order.

[10] The list of factors relevant to the determination of whether a support payor may seek a reduction or termination of spousal support upon retirement have been outlined in detail by Justice Trousedale in St-Jean v. Fridgen, 2017 ONSC 7680, 3 R.F.L. (8th) 92, as follows:

37 Whether a support payor spouse may seek a reduction or termination of spousal support upon retirement depends on an examination of the individual facts and circumstances of each case which may include:

(a) The age of each party at the date of separation and at the current date;

(b) The length of the marriage;

(d) The role which each party played in the marriage;

(e) The financial circumstances of each party at the date of separation and at the current date including income, expenses, assets and debts;

(f) Whether either party has re-partnered;

(g) The medical situation of each party if relevant, supported by medical evidence;

(h) Whether there has been a material change in circumstances of either party;

(i) Whether the spousal support was needs-based support or compensatory support or contractual support or some combination thereof;

(j) The period of time subsequent to separation and/or the order that the support payor spouse has paid spousal support;

(k) What the intention of the parties was at the date of the order and/or the date of the separation agreement, if ascertainable from the order and/or separation agreement;

(l) Whether the order and/or separation agreement dealt with the issue of retirement or with the issue of age of retirement;

(m) The reasons for retirement including whether the retirement was voluntary or was beyond the control of the support payor spouse;

(n) Whether either party has any economic advantages or disadvantages arising from the marriage or its breakdown;

(o) Whether there are 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;

(p) Whether there is any economic hardship of the former spouses arising from the breakdown of the marriage;

(q) Whether each spouse is or may become economically self-sufficient within a reasonable period of time;

(r) What, if any, is the range of spousal support provided for pursuant to the Spousal Support Advisory Guidelines (“SSAG”) on the parties’ incomes at the current time; and

(s) Any other relevant circumstance.

38 In my view, there is no hard and fast rule to be applied in every case about when or at what particular age a support payor is entitled to retire and seek a reduction or termination of spousal support. An examination of the facts of each particular case is required and this examination may result in a different conclusion in different cases depending on the specific facts of each case.

I will discuss below those factors which I find most relevant in the context of this particular case.

Analysis

[11] I find that Ms. Monderie’s entitlement to spousal support was both compensatory and non-compensatory. In her affidavit of March 14, 2018, she states that she supported Mr. Vlasblom’s career as a professional chartered accountant and was the primary caregiver of the two children, to the detriment of her career and earning capacity. Mr. Vlasblom’s various employments required that he travel/move to different places including in Europe and in various Canadian provinces. She states that the parties had agreed that she would only work part-time to be available at home and for the children. This evidence was not disputed by Mr. Vlasblom and I accept Ms. Monderie’s submissions that her entitlement to spousal support was both compensatory and non-compensatory.

[12] During the marriage, Ms. Monderie also earned two degrees; one in Early Childhood Education and a three year degree in Horticulture. Since December 2006, Ms. Monderie has been working at Military Family Resources (Vanier Community Center) as a Family and Children’s Counsellor, earning approximately $40,000 annually. In 2017, she earned $48,720.

[13] Mr. Vlasblom’s formal obligation to pay spousal support to Ms. Monderie was crystalized in the final order of November 2012 and became effective retroactively to January 1, 2011. However, prior to that date, Mr. Vlasblom was paying Ms. Monderie’s expenses as nontaxable voluntary spousal support from the date of separation (December 2006). This is supported by the fact that the final order does not contain any provisions with regards to retroactive spousal support beyond 2011 and, given the large disparity between the parties’ income at the date of separation, spousal support was undoubtedly payable during those years. If spousal support is to terminate in November 2017 as requested by Mr. Vlasblom, he will have paid spousal support for 11 years, for a 27 year marriage. This is significantly lower in duration than what would be suggested by the SSAG, but it can be explained by the fact that Mr. Vlasblom was already in his fifties at the time of the parties’ separation.

[14] I do not find, as alleged by Ms. Monderie, that Mr. Vlasblom’s workplace misconduct which ultimately led him to seek employment elsewhere was such that it should preclude him from seeking relief from his spousal support obligation at this time. In July 2015, Mr. Vlasblom was suspended from work without pay for four weeks as a result of his misusing a corporate travel credit card. In an email dated July 18, 2015, he wrote to Ms. Monderie and explained that due to his dire financial circumstances, he had gone deeper and deeper into debt and that the year prior, he had used the corporate credit card given to him to see him through month ends. While he eventually always paid it off, he had gotten caught and on June 1, 2015, had been called to a meeting and been explained that he was suspended for four weeks without pay.

[15] Mr. Vlasblom initially filed a grievance but ultimately, he felt so embarrassed and humiliated by the situation that he was unable to return to work and face his former colleagues. In addition to this, Mr. Vlasblom explains that during the year before he was suspended, he had shared with the Office of the Comptroller General, contrary to the Department’s Chief Financial Officer’s wishes, that the Department had made serious accounting errors. He states that as a result, he faced significant backlash at work. This, coupled with his misuse of a corporate credit card and subsequent suspension, made it extremely hard for him to return in that workplace. He was put on stress leave the day he was set to return to work, and started to look for alternate employment. When he found a new job in the Northwest Territories, he quit his employment with the Federal Department of Justice, and moved to Yellowknife.

[16] While I might have been prepared to look at his misconduct more closely had Mr. Vlasblom attempted to vary his spousal support obligations after quitting his job with the Federal Department of Justice, the fact is that Mr. Vlasblom did not quit his employment until he secured alternate employment with the Government of Northwest Territories. I find that he cannot be faulted for having changed jobs in those circumstances, and I find that he cannot be blamed for the fact that his position with the Government of the Northwest Territories was subsequently declared surplus, resulting in his becoming unemployed again.

[17] Further, I disagree with Ms. Monderie’s submissions that Mr. Vlasblom’s employment with the Federal Department of Justice offered him stable, permanent and long-term employment. Mr. Vlasblom’s employment history throughout the marriage confirms that he has always struggled to maintain steady employment, even within the Federal Government. His employment history from 1992 through 2017 can be summarized as follows:

from September 1990 to May 1997, he worked as a Senior Staff Audit Officer for the Department of National Defence;
from May 1997 to May 1998, he was unemployed (one year);
from May 1998 to August 1998, he worked as a Controller for Sanpalo Investments Corporation;
from August 1998 to September 1998, he was unemployed (one month);
from September 1998 to September 2000, he worked as the Vice President of Finance for NetPCS Networks Inc.;
from September 2000 to April 2001, he was unemployed (seven months);
from April 2001 to April 2002, he worked as the Chief Financial Officer for 0Eone Corporation;
from April 2002 to October 2002, he was unemployed (six months);
from October 2002 to July 2004, he worked as the Chief Operating Officer for the Sam Chowieri Family Trust;
from July 2004 to November 2006, he was unemployed (two years and four months);
from November 2006 to July 2008, he worked as a Director of Audit for Health Canada and was posted on various assignments;
from July 2008 to November 2012, he worked as a Senior Director for the Federal Office of the Comptroller General;
from November 2012 to July 2015, he worked as a Director of Accounting Operations and Client Services for the Federal Department of Justice;
from July 2015 to October 2015, he was on stress leave (three months);
from October 2015 to October 2017, he worked as a Director of Finance and Administration for the Northwest Territories Health Social Service Authority.

[18] As a result of Mr. Vlasblom’s inconsistent employment, the parties experienced financial difficulties throughout their marriage, and particularly during Mr. Vlasblom’s two-year period of unemployment between July 2004 and November 2006. Mr. Vlasblom was forced to declare bankruptcy in 2004 due to his lack of employment and unsuccessful legal action against NetPCS Networks Inc. for unpaid commission income. Ultimately, in September 2005 (one year before their separation), the parties had to sell their home because the capital on which they were living had run out. Mr. Vlasblom only began working with the Federal Government again a few weeks before the parties formally separated. Mr. Vlasblom’s income before 2006 had always been in the range of $70,000 to $90,000 per annum. It is only weeks before the parties’ separation that his income increased to $126,000 per annum. While working in the Northwest Territories, he earned $155,000 per annum.

[19] Mr. Vlasblom acknowledges that he has accumulated significant arrears in his spousal support obligations since July 2015. Up to that point, he was meeting his support obligations. He explains that he stopped paying spousal support in July 2015 because he was on unpaid leave and looking for alternative employment. He was already having financial difficulties by that time, due to various reasons. He had started to draw on his RRSPs long before he lost his employment with the Federal Department of Justice, and was carrying an important debt load. While the evidence before me suggests that Mr. Vlasblom does not manage his money very well, and while this does not justify failing to pay spousal support, it explains why he fell into arrears as soon as he stopped receiving employment income in July 2015.

[20] Also, while Ms. Monderie argues that there was no explanation for Mr. Vlasblom to fall behind in his support obligations while earning $155,000 in the Northwest Territories, the evidence provided by Mr. Vlasblom provides a reasonable and satisfactory explanation as to why he did. Mr. Vlasblom incurred significant moving costs to relocate in the Northwest Territories and back to Ottawa less than two years after (over $40,000). In addition, he had to carry the costs of both his Ottawa home and his rented residence in Yellowknife for an entire year, as he was unable to sell his Ottawa home until November 2016. The carrying costs of both homes during that year exceeded $6,000 per month. Given the delays and his inability to continue to maintain both homes, he was forced to sell for approximately $70,000 less than what he had paid for it five years before. The vast majority of the net proceeds realized on the sale was used to pay the huge debt load he had accumulated the previous year, while forced to maintain both homes. Spousal support arrears continued to accrue during that time, although Mr. Vlasblom was forced to resume payments when the Family Responsibility Office began enforcing, but continued to accumulate after October 2017 when he became unemployed again.

[21] I find, based on the evidence before me, and including various emails sent by Mr. Vlasblom to Ms. Monderie since 2015, that he was very open and honest with her about his situation as it changed. He immediately advised her when he learned that he was being suspended without pay, he kept her appraised of his move to the Northwest Territories to work, he explained his financial difficulties openly with her, and notified her when he was unable to pay spousal support as ordered. I do not accept, as alleged by Ms. Monderie, that Mr. Vlasblom moved away to the Northwest Territories to hide and avoid his support obligations. This is simply not supported by the evidence.

[22] I accept Mr. Vlasblom’s evidence with regards to the significant efforts he has made to find new employment since January 2017. For reasons unknown to me, Mr. Vlasblom started looking for other employment within and outside of the Government as early as January 2017. He worked with several talent management agencies to get the coaching and help necessary to find alternate employment, and he applied for several high ranking management positions as a chartered accountant, Chief Operating Officer and Executive Director of various corporations and government departments in various provinces and territories. He reached out to many of his contacts within the government with whom he had once worked, to try and find alternate employment. I am satisfied based on the evidence before me that Mr. Vlasblom made genuine and extensive efforts to find employment from January 2017 until he decided to retire effective November 26, 2017. Other than one application made in February 2018, there is no evidence that Mr. Vlasblom has made any effort to find employment after he retired in November 2017.

[23] In support of his decision to fully retire as of November 2016, Mr. Vlasblom states that he has various medical conditions which limit his ability to work. Such medical conditions include osteoarthritis in his hands, knees, ankles, back, and left shoulder as well as sleep apnea. He required a lumbar fusion for spinal stenosis last year (his third). He also suffers from atrial fibrillation which means that he has an irregular and often rapid heart rate that can increase the risk of strokes, heart failure and other heart related complications. His treating physician, Dr. Staples, who has provided letters confirming the above, has recommended that he retire. Mr. Vlasblom did not suffer from these medical conditions at the time of the 2012 support order.

[24] While I appreciate that Dr. Staples has advised Mr. Vlasblom to retire, the very brief opinion letter provided to support that advice leaves me with more questions than answers as to Mr. Vlasblom’s ability to work, even on a part-time basis, despite his medical ailments. The burden is on Mr. Vlasblom to establish that his retirement was justified by his medical condition, and I find that he did not meet that burden, although I accept, based on the evidence before me, that he has several medical conditions which he did not have at the time of the 2012 order and which likely results in a much reduced ability to work. Coupled with his age (almost 63) and the aftermath of his workplace misconduct, I accept that it has been and will continue to be very difficult for him to secure alternate employment, whether on a full-time or part-time basis.

[25] Based on all of the above, I find that there are material changes in circumstances which allow this Court to review spousal support. The material change in circumstances is not Mr. Vlasblom’s retirement per se. It is the loss of his employment with the Government of the Northwest Territories on November 26, 2017, his inability to secure alternate employment despite his reasonable efforts thereafter, his advanced age, and his growing health challenges which, coupled together, resulted in his having to rely on retirement income in order to support himself.

Variation vs. Termination

[26] This said, I am not prepared to terminate Mr. Vlasblom’s spousal support obligations at this time.

[27] The parties’ marriage was a lengthy and traditional one during which Mr. Vlasblom was the main breadwinner and Ms. Monderie was mainly responsible for the children and the home, although she did work outside of the home from time to time until she secured full-time employment with the Vanier Community Center. There is a significant compensatory element to Ms. Monderie’s entitlement to spousal support and I am not prepared to conclude, based on the evidence before me, that Ms. Monderie has been fully compensated for the disadvantages resulting from the role she played in the marriage.

[28] In particular, it is important to note that there was no equalization of the parties’ net family property at the time of the parties’ separation. While this is explained by the fact that the parties’ net family property value (excluding Mr. Vlasblom’s pension plan with the Federal Government) was nil at the date of their separation, the family law value of Mr. Vlasblom’s pension plan as a Public Servant was never divided between the parties. There may very well be legitimate reasons for this, although I was not made aware of them. In any event, when the parties finally resolved the issues arising from their marriage and separation in 2012, it was clear that neither party had any significant valuation date assets; Mr. Vlasblom retained his pension plan with the Federal Government and Ms. Monderie secured a spousal support order. Therefore, when Ms. Monderie also retires, or should she loose her employment, there may still be an entitlement to spousal support as she has very little retirement assets (accumulated post-separation) and Mr. Vlasblom’s pension has never been equalized.

[29] Although I am not prepared to terminate spousal support, it is clear that Mr. Vlasblom does not currently have the ability to continue to pay spousal support. In assessing the amount, if any, of any prospective spousal support order, I have reviewed the parties’ present financial circumstances, which are the following.

[30] Mr. Vlasblom remarried after he separated from Ms. Monderie. His wife, Ms. Wilson, is a photographer. Before Mr. Vlasblom and Ms. Wilson’s move to Yellowknife, Ms. Wilson was earning approximately $12,000 from her photography business. When she followed her husband to Yellowknife, she lost her portfolio and had to start fresh in the Northwest Territories. She has not earned any meaningful income while there, nor has she been able to return to the level of income she was earning before the move since they returned to Ottawa in January 2017. Mr. Vlasblom and his wife are currently renting their residence on a month-to-month basis.

[31] To be clear, I am not reviewing Ms. Wilson’s earning history for the purpose of justifying a reduced ability to pay on Mr. Vlasblom’s part, on the basis that she is financially dependent on him. Rather, I am reviewing her past and ongoing contributions to Mr. Vlasblom’s expenses in order to assess whether he has an increased capacity to pay as a result of such contributions. I find that Mr. Vlasblom’s remarriage to Ms. Wilson does not increase his ability to pay support to Ms. Monderie.

[32] When comparing the financial statement that Mr. Vlasblom filed in the context of the original application in 2012, and his current financial statement, it is clear that his financial situation has deteriorated significantly since 2012. He has over $60,000 of consumer debts, in addition to significant spousal support arrears, and he has depleted all of the savings he had managed to accumulate between the parties’ separation and the date of the 2012 settlement. He currently earns $41,187 which includes CPP income.

[33] Ms. Monderie continues to be employed with the Vanier Community Center, a position she has held for the past 12 years. Her annual employment income in 2017 was $48,720. On March 2, 2018, Ms. Monderie received notice from her employer that her position would be terminated as of December 31, 2018. This is because the province of Ontario which provides the funding for the Military Family Services’ program in which she works has confirmed that it would no longer provide the funding. However, Ms. Monderie was also informed that the centre pursued its efforts to obtain new financing beginning January 2019 and that, should the funding be obtained, Ms. Monderie’s position will be renewed at the same salary and with the same benefits.

[34] Mr. Vlasblom states that this is nothing new. Ms. Monderie’s employment has always been dependent on yearly funding renewals as a community service. In fact, such funding has been renewed or secured for at least the past 12 years. Ms. Monderie has not produced any evidence that she is currently searching for alternative employment, which leads me to conclude that she is confident that her employment will be renewed come January 2019, as it usually is. In any event, at this time, she continues to be employed in that capacity and should this change, it will constitute a material change in circumstances allowing her to ask for a variation of support.

[35] When I compare her 2012 financial statement with the financial statement that she recently filed in the continuing record, it appears that her financial position has somewhat improved, as she has been able to save approximately $60,000 during the past four years. She continues to rent the same apartment that the parties resided in before their separation, and she has no debt. While she has not re-partnered, she is able to meet her monthly expenses with her employment income. She is in good health.

[36] It is important to note that the parties have never lived a luxurious life. Throughout the parties’ marriage, the most Mr. Vlasblom has ever earned is approximately $90,000, and this was the year before the parties’ separation. Prior to that, his income had been in the range of $80,000. He was the main breadwinner for a family of four with two growing children, and went through many periods of unemployment which eventually led to his bankruptcy and the loss of the parties’ matrimonial home. Both parties have always lived a frugal lifestyle.

[37] Mr. Vlasblom is not seeking to reduce the arrears of spousal support that he has accumulated up to November 2017. According to the statement of arrears filed, he has accrued $39,164.87 in support arrears between July 2015 and November 26, 2017. He will have to repay those arrears over time and this will result in a significant lower standard of living for Mr. Vlasblom than that of Ms. Monderie, given their current incomes.

[38] While I find that Ms. Monderie may continue to be entitled to spousal support, I conclude, based on the above, that Mr. Vlasblom has no ability to pay support.

Order

[39] I therefore make the following order:

Mr. Vlasblom’s spousal support obligation to Ms. Monderie is reduced to 1$ per month retroactive to November 26, 2017. Any support payment received by the Family Responsibility Office after that date shall be applied towards arrears owing up to that date.
Mr. Vlasblom shall continue to pay arrears owing by monthly payments in the amount of $400, until fully paid. In addition to these monthly payments, any and all tax returns payable to Mr. Vlasblom shall be paid to Ms. Monderie, either directly by Mr. Vlasblom or through at source garnishments by the Family Responsibility Office. These payments are periodic support payments which are taxable in the hands of Ms. Monderie and tax-deductible in the hands of Mr. Vlasblom.
There shall be a first charge on Mr. Vlasblom’s estate to guarantee the payment of all arrears owing to Ms. Monderie at the time of Mr. Vlasblom’s death.
The parties shall continue to exchange on a yearly basis their income tax returns and notices of assessment, by May 30th of each year.

[40] Mr. Vlasblom is undoubtedly the successful party in this motion. I will accept his written cost submissions should he choose to seek costs and should the parties be unable to settle the issue within the next 15 days. Ms. Monderie will then have 15 days to file her responding submissions. The parties’ written submissions shall not exceed two pages (not including Bill of Costs and Offers to Settle).

[41] Mr. Vlasblom will then have 7 days to file a brief reply, not exceeding one page, if necessary.

Madam Justice Julie Audet Released: September 17, 2018

Vlasblom v. Monderie, 2018 ONSC 5417

Case Summary