Court File and Parties

COURT FILE NO.: FC-11-1234-1 DATE: 2019/07/19

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jeffrey Stacey Cuffe, Applicant -and- Sylvie Louise Desjardins, Respondent

BEFORE: Justice P. MacEachern

COUNSEL: John Summers, Counsel for the Applicant Mary Jane Binks, Counsel for the Respondent

HEARD: October 15, 2018

ENDORSEMENT

[1] Mr. Cuffe seeks to terminate spousal support to Ms. Desjardins. Mr. Cuffe currently pays spousal support of $1,800/m to Ms. Desjardins, under Justice Mackinnon’s Order of the Ontario Superior Court dated June 11, 2013[^1].

[2] The parties began to cohabit in June 1991. They married on July 23, 1994. They separated on April 1, 2009, after 18 years of cohabitation. They have one child, now age 22. Mr. Cuffe pays child support for the child of $591/m, under an agreement. Mr. Cuffe sought an order terminating child support. He withdrew this request upon acknowledging that the court does not have jurisdiction to vary child support payable under an agreement.

[3] Mr. Cuffe made this Application under the Interjurisdictional Support Orders Act, S.B.C. 2002. Mr. Cuffe lives in B.C. Ms. Desjardins lives in Ottawa. At the hearing, both parties agreed this matter should proceed as a motion to change under s.17(1) of the Divorce Act.

[4] Mr. Cuffe seeks to vary spousal support because his income has decreased. He has been unemployed since January of 2018. He seeks to terminate spousal support on the basis that he has paid enough, and Ms. Desjardins’ financial circumstances have improved.

[5] Ms. Desjardins opposes the termination of spousal support. Her position is that there has not been a material change because Mr. Cuffe has a long history of intermittent employment and seeking to avoid his spousal support obligation to her.

[6] The issues to be decided are:

1. Has there been a material change in circumstances since the June 11, 2013 Order that warrants a change in spousal support?
2. If so, how should spousal support be varied? Should spousal support terminate?

Issue 1: Has there been a material change in circumstances since the June 11, 2013 Order that warrants a change in spousal support?

[7] I find that there has been a material change in circumstances that warrants a change in spousal support because of the reduction in Mr. Cuffe’s income as well as the fact that Ms. Desjardins’ financial circumstances have improved.

[8] The starting point for considering whether there has been a material change is the circumstances that gave rise to Justice Mackinnon’s June 11, 2013 decision.

[9] Section 17(1) of the Divorce Act provides that a court may make an order varying, rescinding, or suspending, prospectively or retroactively, a support order. Before the court varies a spousal support order, the court must 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[^2].

[10] The change must be a material change in circumstances. It must be a change that is substantial, continuing, and that “if known at the time, would likely have resulted in a different order[^3].”

[11] Justice Mackinnon ordered Mr. Cuffe to pay spousal support of $1,800/m for an indefinite duration subject to variation in the event of a material change in circumstances. Justice Mackinnon also ordered Mr. Cuffe to pay a lump sum spousal support payment of $60,000.

[12] Justice Mackinnon set aside the spousal support waivers of a marriage contract and separation agreement. She found that Mr. Cuffe had unduly influenced Ms. Desjardins to sign the spousal support waivers in both agreements and that the waivers were improvident given the circumstances of the marriage. In particular, Justice Mackinnon found that the spousal support waiver did not address the financial consequences of the marriage due to care for the child, the economic dependence arising from the marriage, and the discrepancy in their respective standards of livings[^4]. The comparable standards of living were of particular concern, given the child was in an equal timesharing arrangement[^5].

[13] The circumstances that existed at the time of Justice Mackinnon’s 2013 Order, and considered in determining the spousal support, included the following[^6]:

• The spousal support was based on Mr. Cuffe’s income being $130,295/yr (his 2012 income), and Ms. Desjardins’ income being $57,833/yr (2012 income), and took into account the child support payments of $591/m[^7];
• The parties had cohabitated for 18 years. This period, plus Ms. Desjardins’ age at the date of separation (47) resulted in her reaching (just) the “Rule of 65” under the SSAG’s;
• Ms. Desjardins took a five-year leave to care for the child, during which time she did not work for 2.5 years and worked part-time for three years. Ms. Desjardins obtained a bachelor's degree during this period. When she returned to the workforce, she entered as a sales merchandiser, moving into dental and medical sales and quickly restored her income to what it had been before the child's birth ($37,000). At the time of separation, her income had increased to approximately $80,000/yr[^8];
• Mr. Cuffe’s income was generally always almost twice Ms. Desjardins' income during the marriage[^9];
• Mr. Cuffe had significantly more savings than Ms. Desjardins. Mr. Cuffe’s savings totalled $869,095 at the time of separation, with no debt. Ms. Desjardins' savings totalled $215,695, and she had debts of $56,430[^10]. The difference between their net savings was $709,830.

[14] The circumstances of the 2013 Order included that Justice Mackinnon upheld the validity of the property provisions of the marriage contract and separation agreement. These provisions provided for the parties to be separate as to property except for sharing the equity in the matrimonial home that accumulated during the marriage. Ms. Desjardins received a payment of $130,000 concerning the property. It is relevant that the property provisions of these agreements did not result in the significant wealth difference between the parties. Justice Mackinnon found that if she had awarded an equalization payment, the amount would have been approximately $195,000[^11], rather than the $130,000 that Ms. Desjardins received.

[15] Justice Mackinnon awarded periodic support at the high end of the SSAG range to allow Ms. Desjardins to meet her needs, increase her savings for retirement, and provide a standard of living more commensurate with Mr. Cuffe’s standard of living.

[16] The $60,000 lump-sum spousal support award provided for retroactive support to the date of separation and an additional amount to Ms. Desjardins for savings or debt reduction[^12]. Justice Mackinnon calculated the retroactive spousal support at $33,000[^13], being the after-tax benefit to Ms. Desjardins if she had received taxable periodic spousal support during this period.

[17] I find that there has been a material change that is substantial, continuing, and, if known at the time, would likely have resulted in a different order. These material changes are as follows:

1. Mr. Cuffe has had several job lay-offs and terminations of employment that have significantly reduced his income. In 2017 his total income was $39,740. He has been unemployed since January of 2018. His income for 2018 to the date of the hearing was $11,000.
2. The difference between the parties’ respective financial circumstances has changed. In 2014, Ms. Desjardins inherited 1/6th of a large farm property valued, in December of 2017, at $1,785,000. Ms. Desjardins’ 1/6th share is worth $297,500. At the time of the hearing, Ms. Desjardins had savings totalling $656,780[^14]. Her only debt is a line of credit of $84,351 that includes repairs to her home, and a mortgage that I have not included because I have excluded the value of her home. Mr. Cuffe has total savings of $997,980 and no debt. The difference between their respective savings is now $425,551, compared to a difference of $709,830 at the time of the 2013 Order. The need to provide Ms. Desjardins with additional income to generate savings to make up for the disparity in financial circumstances has decreased. Ms. Desjardins’s financial statement also shows that she can meet her needs through her income.

[18] I do not accept Ms. Desjardins’ argument that the change in Mr. Cuffe’s income is not continuous enough to be a material change. Mr. Cuffe has had several different jobs since separation, as a result of lay-offs or terminations. Despite this, Mr. Cuffe’s income from 2013 to 2016 was higher, except for one year in which his income was slightly less[^15] than his income of $130,295 at the time of the 2013 Order. Mr. Cuffe’s income has now been significantly lower, however, for two years. I find that this change in income is substantial and continuous.

[19] I do not accept Ms. Desjardins’ argument that Mr. Cuffe has not provided compelling evidence that he is not able to earn a similar income. I accept Mr. Cuffe’s evidence that he is making reasonable efforts to find employment. This evidence includes that he has applied for over 150 jobs, and has had several interviews.

[20] I do not accept Ms. Desjardins’ argument that Mr. Cuffe should be required to provide a detailed employment skills analysis report through expert evidence in support of his position. Ms. Desjardins’ raises these concerns because Mr. Cuffe has been clear that he dislikes paying spousal support. The spousal support waivers in the marriage contract and separation agreement reflect that Mr. Cuffe did not want to pay spousal support. However, Mr. Cuffe has provided confirmations of his lay-offs and terminations and numerous job applications. Although Mr. Cuffe refers to struggling with depression and anxiety, he does not state that this is the reason why he is not working. His evidence is that he is looking for employment, and I accept that he is making reasonable efforts to do so.

Issue 2: If so, how should spousal support be varied? Should spousal support terminate?

[21] In making the variation order, the court is required to take the changes since the 2013 Order into consideration[^16] as well as the criteria under s.17(7) of the Divorce Act.

[22] Ms. Desjardins’ income was $57,833 at the time of the 2013 Order. Since that time, her income has been as follows:

2013 $56,078 2014 $58,996 2015 $56,545 2016 $76,224 2017 approximately $58,000

[23] I have excluded Ms. Desjardins’ spousal support and losses from farming income in the above numbers.

[24] Ms. Desjardins lost her job in July of 2017 but secured new employment in February of 2018 with similar income – a base salary of $55,000 plus 7% commission income.

[25] Ms. Desjardins’ September 2018 financial statement shows expenses of $56,364 per year that includes her contributing $6,000 per year to retirement savings. Ms. Desjardins’ income meets these needs.

[26] Mr. Cuffe currently does not have any employment income. His only income would be from his investments. He states these investments are not now earning income. I find that in organizing his affairs in this manner, he has not acted reasonably. Ms. Desjardins did not provide evidence of what return on capital the Court should attribute to Mr. Cuffe for investment income. In the absence of evidence to the contrary, I find that 5% is a reasonable rate of return, which would produce an income of $50,000 per year.

[27] Given the parties’ current incomes, as well as the improvement to Ms. Desjardins’ financial circumstances, I find that spousal support should reduce to $1 per year, effective January 1, 2019, variable in the event of a material change in circumstances.

[28] I am not varying spousal support before January 1, 2019, for several reasons. First, I do not find that before this date, Mr. Cuffe’s income situation was substantial and continuous enough, particularly in light of his investment assets and history of job changes, to warrant a change. Second, I have taken into consideration that during the period from 2013 to 2016, Mr. Cuffe’s income was higher than the income used to determine support in the 2013 Order for three of the four years during this period. Third, Mr. Cuffe’s support payments in 2017 and 2018 may be taken into consideration in future variations of spousal support, including ultimately the determination of whether, and when, spousal support should end.

[29] I do not find that spousal support should terminate at this time. I find that, although diminishing, there continues to be a compensatory and needs-based element to Ms. Desjardins' entitlement to spousal support that has not yet been adequately addressed by the spousal support paid since separation in 2009.

[30] Both parties shall be required to exchange annual income information until spousal support is terminated.

Disposition

[31] For the above reasons, I order that:

1. Commencing January 1, 2019, the spousal support payable by Mr. Cuffe to Ms. Desjardins under the Order of Justice Mackinnon dated June 13, 2013, shall be varied to $1 per year effective January 1, 2019, variable in the event of a material change in circumstances;
2. Each party shall provide the other with annual income information by providing copies of their complete income tax returns, with schedules and attachments, on or before July 1st in each year; along with copies of any financial statements for any partnerships in which they have an interest or corporations which they control. Also, Mr. Cuffe shall be required to notify Ms. Desjardins within 30 days of securing employment or other non-investment income and he shall provide her with supporting documentation confirming the terms of remuneration. Each party shall provide income information for 2018 within 30 days of this Order if not previously provided.

Costs

[32] If the parties are unable to agree on the costs of this motion, Mr. Cuffe may file submissions concerning costs on or before August 23, 2019. Ms. Desjardins may submit submissions relating to costs on or before September 6, 2019. Cost submissions of both parties shall be no more than three pages in length, plus any offers to settle and bills of costs and shall be spaced one point five spaces apart, with no less than 12-point font.

Justice P. MacEachern

Date: July 19, 2019

COURT FILE NO.: FC-11-1234-1 DATE: 2019/07/19

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Jeffrey Stacey Cuffe, Applicant -and- Sylvie Louise Desjardins, Respondent

BEFORE: Justice P. MacEachern

COUNSEL: John Summers, Counsel for the Applicant Mary Jane Binks, Counsel for the Respondent

ENDORSEMENT

Justice P. MacEachern

Released: July 19, 2019

[^1]: Cuffe v Desjardins 2013 ONSC 4044 [^2]: Divorce Act, R.S.C. 1985, c.3 (2nd Supp), as am., s.17(4.1) [^3]: L.M.P. v L.S. 2011 SCC 64, S.C.R. 775 [^4]: Cuffe v Desjardins 2013 ONSC 4044, para 57 [^5]: Cuffe v Desjardins 2013 ONSC 4044, para 64 [^6]: Cuffe v Desjardins 2013 ONSC 4044 [^7]: Cuffe v Desjardins 2013 ONSC 4044, para 58 and 59 [^8]: Cuffe v Desjardins 2013 ONSC 4044, para 16 and 17 [^9]: Cuffe v Desjardins 2013 ONSC 4044, para 58 [^10]: Cuffe v Desjardins 2013 ONSC 4044, para 67 [^11]: Cuffe v Desjardins 2013 ONSC 4044, para 51 [^12]: Cuffe v Desjardins 2013 ONSC 4044, para 71 [^13]: Cuffe v Desjardins 2013 ONSC 4044, para 66 [^14]: Based on the estimated value of her pension, bank savings and interest in the farm property, and not including the value of her residence. [^15]: In 2013, his income was $151,675; in 2014, his income was $150,669; in 2015, his income was $122,200; in 2016, his income was $162,000 (excluding RRSP income) [^16]: Divorce Act, s.17(4.1)