A. Introduction

[1] When Cheryl and Barry Burchill separated on November 30, 2010, they ended a more than thirty-year relationship that had started in their mid-teens.

[2] Their two daughters were living independently when matrimonial litigation started on August 8, 2013. Property and spousal support issues remained. The former were resolved by partial minutes of settlement executed in early 2017. The equalization calculation included the value of Mr. Burchill’s pension entitlement on the date of separation.

[3] That left spousal support. The parties had entered into an interim separation agreement in October, 2014. The quantum of monthly spousal support payable by Mr. Burchill was set at $2,500 “until further written Agreement of the parties, a court Order, or termination of this Agreement by either party.”

[4] In February, 2018, the parties executed minutes of settlement resolving that aspect of the matter on a final basis (the “Minutes”).[^1] At the time, Mr. Burchill worked for Kromet International (“Kromet”). That employment was relatively new. Mr. Burchill had been employed by Wescast Industries for many years before being terminated on March 7, 2017. Ms. Burchill was working too. Her employment at Listowel Technology Inc. (“LTI”) was also recent and not as remunerative.

[5] The terms of the Minutes were incorporated into a final order of the Honourable Justice Aston dated March 21, 2018 (the “spousal support order”). Subject to an indexing provision, Mr. Burchill is required to make ongoing spousal support payments of $2,100 per month indefinitely.

[6] Unfortunately, Mr. Burchill was terminated by Kromet on June 14, 2018. Notice of the loss of employment and expected reduction in income was provided to Ms. Burchill’s counsel the following day. Payments in lieu of notice from that employer ended July 6, 2018.

[7] The parties’ lawyers exchanged several pieces of correspondence concerning the payment of spousal support going forward. No agreement was reached. When voluntary payments stopped, Ms. Burchill commenced garnishment proceedings. This motion to change was filed on January 24, 2019. Mr. Burchill seeks an order terminating his spousal support obligation effective August 15, 2018. He also asks for an order requiring Ms. Burchill to repay all spousal support payments received after that date.[^2] Ms. Burchill opposes.

B. The Procedural Path

[8] Some commentary concerning the procedural history of this motion to change is necessary.

[9] Subject to an inapplicable exception, rule 17(1) of the Family Law Rules mandates that “in each case in which an answer is filed, a judge shall conduct at least one conference.” According to rule 17(3):

Subrule (1) applies, with necessary changes, to a motion to change a final order…unless the motion is proceeding on the consent of the parties…or is unopposed.

[10] The motion to change was first returnable before the Honourable Justice Templeton on February 13, 2019.[^3] No case conference had been scheduled, let alone held. The motion confirmation filed on behalf of Ms. Burchill acknowledged that fact. Mr. Burchill’s counsel did not complete that portion of the form.

[11] I do not know what material was before the presiding judge. Foul weather made it impossible for the circuiting judge to reach Goderich that day. Consequently, the attendance was conducted by teleconference. The motion to change and garnishment issues were adjourned for argument on April 25, 2019 on terms that included leave to conduct questioning. A case conference was not scheduled.

[12] The timetable proved to be overly optimistic. Consequently, Ms. Burchill’s lawyer brought the matter forward by motion. He sought an adjournment of the scheduled date. The notice of motion offered this summary of the procedural history:

The date for this Variation Motion [sic] brought on by Mr. Burchill…was directed by Justice Templeton on February 13, 2019, at a time when she was unable to attend in Goderich because of weather. That attendance was for argument on the Garnishee [sic] that had been put in place by Mrs. Burchill, and which Mr. Burchill was moving against. As Justice Templeton was unable to attend, she set the date for the entire Variation [sic] proceeding, to April 25, 2019.

There has been no Case Conference conducted at any time on the variation proceeding… [Emphasis added]

[13] An agent attended on behalf of both counsel on April 10, 2019 and made a joint request for an adjournment.[^4] The scheduled date was vacated and a new date of June 5, 2019 was set. Given the way matters unfolded, it is unsurprising that the presiding justice’s endorsement did not address the fact that a case conference had never been scheduled in relation to the motion to change.

[14] The matter next appeared on my June 5, 2019 docket as a long motion: a special appointment in the Southwest Region. No case conference of any kind was ever scheduled in relation to the motion to change. Given rules 17(1) and (3), a case conference was mandatory.

[15] Non-compliance with a mandatory procedural requirement was well known in this case. As mentioned, the fact a case conference had not been held was specifically mentioned in the motion filed in support of the adjournment request. That fact was also disclosed in the confirmations of motion filed by Ms. Burchill in relation to the February 13 and April 10, 2019 attendances. However, the failing was not made known in anything filed in relation to the June 5, 2019 appearance.

[16] In fact, the final set of confirmations of motion completed by the parties’ counsel represented that a case conference had been conducted by the Honourable Justice Garson. Those statements were inaccurate.

[17] Garson J. was the justice presiding at a November 28, 2013 case conference. That conference related to the application Ms. Burchill had commenced. Garson J. has had no other involvement with this matter. To be clear, the only case conference ever held (i) related to the application that was commenced on August 8, 2013; (ii) was conducted almost fifty-two months before the spousal support order was granted and more than five years before the motion to change was even filed.

[18] The issue was raised with counsel at the outset of their attendance before me. Mr. Burchill’s lawyer initially argued that a conference is not required in relation to a motion to change. That argument falls flat. It is fully answered by rule 17(3) of the Family Law Rules to which I have already referred.

[19] His second argument, that the subrule does not apply if the parties agree to proceed straight to a hearing, misses the mark too. As mentioned earlier, rule 17(3) requires that a case conference be held “unless the motion is proceeding on the consent of the parties…or is unopposed”. Clearly those words refer to the final disposition of the matter, not to a procedural path more to the participants’ liking. The exception set forth in the subrule has no application. Mr. Burchill’s request for a change to the spousal support order is resisted with vigour.

[20] Finally, the moving party argued that the court should waive the requirement that a motion to change involve at least one conference. His counsel relied on rule 2(2) of the Family Law Rules which provides, simply, that the “primary objective of these rules is to enable the court to deal with cases justly.” I make two observations in response. First, neither party sought leave to proceed in the manner proposed until confronted with the failure to comply with rule 17(3). Second, the approach advocated by the moving party is inconsistent with the language of the applicable subrules and the entire scheme established to deal with matters of this kind. Even a motion for a temporary order cannot “be heard before a conference dealing with substantive issues…has been completed” unless “the court is of the opinion that there is a situation of urgency or hardship or that a case conference is not required for some other reason in the interest of justice.”[^5] The suggestion that an opposed motion to change can completely bypass the entire system based on a subrule more akin to a mission statement seems, with respect, whimsical at best.

[21] After the initial exchange with counsel and taking an opportunity to reflect, I nonetheless agreed to hear the matter. As is the case in many centres, Goderich is underserviced. Judges make only occasional visits. The matter had been scheduled for argument. It had been outstanding for more than six months. Material had been exchanged. Questioning was complete. The parties were present and expectant. They are enduring economic uncertainty. Substantial time had been expended by all in preparing for the attendance. If necessary, I treated the opening minutes as a conference. The depth of the parties’ disagreement was already apparent from the correspondence their counsel exchanged before the motion to change was filed. Positions had not softened. If anything, they had hardened. Insofar as the conference issue is concerned, better is expected from counsel going forward. They are officers of the court. That matters. Their tenure at the bar and extensive experience in the family law system do too. Conceding but moving past disappointment, I turn to the merits.

C. The Terms of the Spousal Support Order

[22] The terms of the spousal support order mirror the Minutes. Mr. Burchill’s obligation to pay spousal support is expressed in these terms:

Commencing at January 15, 2018 and on the 15th monthly thereafter, [Mr. Burchill] shall pay to [Ms. Burchill] the sum of $2,100.00/month on account of spousal support. Same is based on anticipated income for [Mr. Burchill] in 2018 of approximately $80,000.00 (from Wescast severance remnant and earnings from Kromet International); and anticipated income for [Ms. Burchill] of approximately $33,500.00 ($29,300.00 from employment with LTI and investment income of approximately $4,200.00); and the SSAG, using the “high end” of the SSAG range, representing a 50/50 split of Net Disposable Incomes for the parties in this relationship of 31 years until separation.[^6]

[23] Both documents also addressed the possibility of a material change in circumstances. What did and did not fit within that category was addressed to some extent in paras. 6(1) and (2):

6(1) The spousal support payments…shall be subject to material changes in circumstances affecting either of the parties or their respective incomes, means and circumstances…

6(2) The taking of voluntary retirement from employment by [Mr. Burchill] upon reaching age 65 or after, shall be deemed to be a material change in circumstances for purposes of paragraph 6(1) above. However, same shall not necessarily entitle [Mr. Burchill] to any variation of the spousal support, and the rights of the parties in that respect are specifically hereby preserved. However, the taking of voluntary retirement from employment…at any time prior to his reaching age 65, shall be deemed not to constitute a material change in circumstances for the purposes of paragraph 6(1) above.

[24] If a variation is sought as a result of a material change, para. 6(3) of the spousal support order is triggered. It reads:

6(3) In the event of a claimed variation relating to spousal support, the following shall apply:

(a) The availability to [Mr. Burchill] of his “supplemental retirement plan” from Wescast employment ($62,736.00) received May 5, 2017 and deposited into his LIRA fund…shall form part of his assets, property, means and financial circumstances to be considered on any claimed spousal support variations; and

(b) The availability to [Mr. Burchill] of his “defined contribution retirement pension” (now a LIRA fund) from his prior Wescast employment…having a value of approximately $490,000), shall from [sic] part of his assets, property, means and financial circumstances to be considered on any claimed spousal support variation; provided that nothing herein contained shall preclude [Mr. Burchill] from arguing that income based on that portion of his retirement pension and retirement gratuity that was equalized, should not be included in his income, nor shall it preclude [Ms. Burchill] from arguing that it should be included in his income…

D. The History and Present Circumstances

[25] The parties were very young when they married in 1980. One daughter was born in that year and the other in 1984.

[26] From an employment perspective, Mr. Burchill’s career took precedence. Ms. Burchill was employed from time to time. There were years when she was out of the work force including several years following a relocation to Hungary to accommodate the needs of Mr. Burchill’s employer. For years, the payee spouse worked seasonally. Her annual earnings from employment have always been relatively modest.

[27] Cheryl Burchill is currently 56 years old. Barry Burchill is now 61. As noted, separation occurred on November 30, 2010.

[28] The parties’ daughters were living independently at the time the application was filed on August 8, 2013. Ms. Burchill was then seasonally employed in the kitchen at the Wingham Golf & Country Club. Including employment insurance benefits, she reported annual earnings of approximately $31,000. Mr. Burchill was employed by Wescast at the time. He was earning about $94,000 per year. He conceded an obligation to pay spousal support in the Answer he filed. Quantum and duration were the issues that remained.

[29] Property issues were also in play. As mentioned, they were resolved by partial minutes of settlement executed on February 3 and March 6, 2017 (the “2017 property Minutes”). In addition to some monies previously paid, Ms. Burchill received $74,781 from the proceeds of sale of a jointly owned property[^7] and her estranged spouse’s interest in the former matrimonial home.[^8]

[30] The parties agree that the underlying calculations included the value of Mr. Burchill’s interest in a defined contribution retirement pension and a retirement gratuity provided by Wescast as at the date of separation. A document entitled “Equalization Schedule” included the heading “Wescast Retirement Pension (net of income tax)”. $185,746 appeared alongside the words “Defined Contribution” and “$24,595” was handwritten alongside “Retirement Gratuity – Age 60”.[^9] An RRSP obtained through Bank of Montreal was also mentioned. The amount of $16,593 was included in the parties’ equalization computations on account of that item.[^10]

[31] Mr. Burchill was terminated from his employment with Wescast the day after he signed the 2017 property Minutes.

[32] Mr. Burchill had secured alternative employment with Kromet by the time the parties resolved the issue of spousal support. His new employer was the source of most of his annual income. The final instalments of the termination pay provided by Wescast represented the balance. Ms. Burchill had also changed employment. She was then working for LTI. The Minutes and spousal support order recorded the fact that she earned approximately $29,300 annually from her new employer and about $4,200 per year from her investments.

[33] I have already mentioned the provisions of the Minutes and spousal support order dealing with a material change in circumstances. Those documents addressed the issue in non-exhaustive terms. Retirement was the specific event they contemplated. Pursuant to para. 6(2), voluntary retirement constituted a material change provided it occurred after and not before Mr. Burchill’s 65th birthday.[^11]

[34] Loss of employment is the event that occurred, not retirement. The Minutes and spousal support order addressed occurrences other than retirement in more general terms. Paragraph 6(1) contemplated a “material change in circumstances affecting either of the parties or their respective incomes, means and circumstances.” Mr. Burchill relies on that provision.

[35] Payments by Kromet in lieu of notice lasted less than a month. They ended on July 6, 2018. According to his March 15, 2019 financial statement, Mr. Burchill’s only sources of income were employment insurance ($579 per week) and Canada child benefits ($551 per month). Employment insurance benefits were scheduled to terminate in late June, 2019.[^12]

[36] Mr. Burchill has a new spouse. They have two biological children: a son born July 21, 2013 and a daughter born May 5, 2018. Mr. Burchill’s partner has bee employed since mid-February, 2019 and earns approximately $36,000 per year. Canada child benefit payments to Mr. Burchill were suspended in 2019 pending receipt and review of financial information required from his current spouse.

[37] Mr. Burchill had been unable to secure alternative employment when this matter was heard. He was in the process of retraining to be a home inspector while continuing his job search.

[38] Monthly expenses of $3,149 were itemized in Mr. Burchill’s March 15, 2019 financial statement. That sum does not include any amount on account of spousal support.

[39] Mr. Burchill declared assets having a value of $909,002[^13] in his most recent financial statement. That amount included RRSP’s totaling $533,047.23.[^14] After deducting liabilities of $232,976.26[^15], Mr. Burchill’s net worth totaled $676,025.86.[^16]

[40] It is common ground that approximately $227,000 of Mr. Burchill’s RRSP’s were included in the calculations that were used when the property issues were resolved.[^17]

[41] I turn to Ms. Burchill. Her employment situation also changed after the spousal support order was made. A cyst formed on her an ankle. While Ms. Burchill continued to be employed by LTI, she stopped performing her duties in late July, 2018.

[42] Surgery was performed on April 1, 2019. The procedure allowed Ms. Burchill to return to modified duties the following month. She earned no employment income during the intervening period and did not qualify for employment insurance benefits. Ms. Burchill applied unsuccessfully for short-term disability payments. No decision on her appeal had been made by the time the motion was argued. The court was told that Ms. Burchill’s position at LTI is uncertain. Enduring ankle pain has accompanied her return to work.

[43] Consequently, the financial statement Ms. Burchill filed in relation to the motion to change disclosed no employment income. Spousal support represented the majority of her monthly receipts. Monthly interest and investment income of $351.50 was also declared. Her monthly expenses were said to total $4,094. Assets having a value of $712,101.40 were itemized. Non-RRSP investments of $445,994.66 represented the largest component. An RRSP in the amount of $95,902.97 was also disclosed. There were no reported liabilities. Instead, the applicant says that she drew capital from her investments in the aggregate amount of $50,000 during 2018 and 2019.

E. The Parties’ Positions

[44] Mr. Burchill’s argument follows this path. The terms of the spousal support order were based on $80,000 of yearly income he no longer has. The end of the income stream from Wescast was expected. The loss of employment with Kromet and the annual salary of about $68,000 was not. This, he submits, is a change in his condition, means, needs or other circumstances necessitating a variation of the spousal support order pursuant to ss. 17(4.1) and 17(7) of the Divorce Act because the terms negotiated by the parties and ordered by the court would have been different had the imminent loss and continuing lack of employment been known. Another job has not been found despite diligent efforts. Post-termination income was simply insufficient to fund any spousal support payment. Employment insurance is no longer available. Canada child benefits have been suspended. Future employment prospects are, at best, uncertain.

[45] The moving party also submits that he should not be required to access any portion of his capital. He advances four reasons.

[46] First, Mr. Burchill’s counsel argued that as a matter of law, resort is limited to the income that is or could reasonably be generated by capital, not the underlying asset. Relying on Laurain v. Clarke, 2011 ONSC 7195 (S.C.J.) at paras. 55, 63, 64 and 83 the argument is stated in these terms in the moving party’s factum:

[Mr. Burchill’s] capital should be considered part of his means and income may be imputed to that capital on a reasonable rate of return but [Mr. Burchill] should not be required to liquidate his capital as if it were income to meet his support obligations.[^18]

[47] Second, Ms. Burchill has already been compensated to the extent her former spouse’s pension entitlement was included in the equalization calculation. It is inappropriate to allow Ms. Burchill to benefit from that portion of Mr. Burchill’s capital as an asset and then again as a source of income. While further recovery, or “double dipping” is, on occasion, allowed, the circumstances of this case do not trigger that exceptional treatment: Boston v. Boston, 2001 SCC 43, [2001] 2 S.C.R. 413 at para. 65; Mercer v. Mercer, [2017] O.J. No. 461 (Div. Ct.) at paras. 24-26.

[48] Third, counsel for Mr. Burchill argues that continuation of the current spousal support obligation will result in hardship for the members of his new family. This, he maintains, is an important factor: Fisher v. Fisher (2008), 2008 ONCA 11, 88 O.R. (3d) 241 (C.A.) at paras. 38 and 39; Cotton v. Cotton, 2015 ONSC 2703 (S.C.J.) at para. 120. On behalf of a unanimous court in Fisher v. Fisher (2008), 88 O.R. (3d) 241 (C.A.), Lang J.A. wrote at para. 39:

While courts generally recognize a “first-family first” principle (which provides that a payor’s obligations to the first family take priority over any subsequent obligations), inevitably new obligations to a second family may decrease a payor’s ability to pay support for a first family. [Citations omitted]

[49] Finally, Mr. Burchill contends that continuation of the existing spousal support obligation may well result in him running out of capital within a few years while Ms. Burchill retains hundreds of thousands of dollars that now stand in her name. Termination of the spousal support order would, the moving party submits, most fairly distribute the economic circumstances in which the parties now find themselves.

[50] Not surprisingly, Ms. Burchill takes the opposite view. She argues that an essential precondition to a variation order has not been met. The loss of employment does not, of itself, constitute a material change. She argues that the triggering event is merely a temporary set of circumstances that lacks the required longevity: L.M.P. v. L.S., 2011 SCC 64 at para. 35.

[51] Even if there has been a material change in circumstances, Ms. Burchill submits that the court’s analysis should not be limited to Mr. Burchill’s loss of employment. The Minutes and spousal support order evidence the parties’ intention that other factors receive consideration including their “means”. The parties contractually agreed that Mr. Burchill’s means would include funds that now comprise the Manulife RRSP. The only potential exception is “income based on that portion of his retirement pension and retirement gratuity that was equalized”: spousal support order, para. 6(3). Furthermore, as a matter of principle “means” is to be broadly construed. The word captures many things including all capital assets: Leskun v. Leskun, 2006 SCC 25 at para. 29.

[52] The recipient spouse questions the assertion that Mr. Burchill would have to deplete capital in order to continue to pay spousal support. She relies on a statement issued by Manulife to Mr. Burchill that suggested the plan could generate $34,100 annually.[^19]

[53] In any event, she submits that where necessary, courts can and will make a spousal support order even if the payor must access capital to make the required payments: Gainer v. Gainer, 2006 CanLII 12969 (ON SC), [2006] O.J. No. 1631 (S.C.J.) at para. 45. Further, Ms. Burchill notes that her former spouse has admitted transferring funds drawn from his capital to his current partner several times even after losing his jobs at Wescast ($33,000) and Kromet ($7,000).

[54] She argues that the enquiry leads to the inescapable conclusion that it is fair and appropriate for the court to require that Mr. Burchill continue making the payments set forth in the spousal support order.

F. Analysis and Decision

i. Has there been a material change in circumstances?

[55] A motion to vary spousal support involves two stages. First, the moving party must satisfy the court that there has been “a change in the condition, means, needs or other circumstances of either spouse” since the making of the order under consideration: Divorce Act, s. 17(4.1). Only if that hurdle is cleared does the court proceed to the second step. The final phase involves the determination of whether and to what extent the spousal support order should be changed: Dean v. Dean, [2016] O.J. No. 3521 (Div. Ct.) at para. 109. I start with the first question.

[56] While phrased slightly differently than s. 17(4.1) of the Divorce Act, the parties contemplated the possibility of a variation of spousal support. The first sentence of para. 6(1) of the Minutes and spousal support order reads:

The spousal support payments as above shall be subject to material changes in circumstances affecting either of the parties or their respective incomes, means and circumstances. [Emphasis added]

[57] “Or” rather than “and” is the word that appears in the statute.

[58] In either case, the first issue is the magnitude of the intervening event. Same must be significant: Hickey v. Hickey, 1999 CanLII 691 (SCC), [1999] 2 S.C.R. 518 at para. 20. The request for a variation must be based on “a change, such that, if known at the time, would likely have resulted in different terms”: Willick v. Willick, 1994 CanLII 28 (SCC), [1994] 3 S.C.R. 670 at p. 688; L.M.P. v. L.S., supra at para. 66.

[59] A temporal condition must also be satisfied. The change must “have some degree of continuity, and not merely be a temporary set of circumstances”: L.M.P. v. L.S., supra at para. 35.

[60] In my view, the contractual and statutory tests are met. It is clear from the evidence that Mr. Burchill’s income fell significantly following the loss of his job at Kromet. That source was specifically mentioned in the Minutes and spousal support order. Earnings from Kromet constituted the bulk of the $80,000 annual income figure specified in those documents. The importance of income to the settlement the parties achieved is clear on the face of the Minutes. A “50/50 split of Net Disposable Incomes” was expressly stated to be the objective.

[61] Indefinite employment income from Kromet was lost and only partially and on a time limited basis, replaced by employment insurance benefits. The difference in earnings was substantial. The fact Mr. Burchill may have been able to fully mitigate the effect by dipping into the capital he had accumulated does not, in my view, alter that fact.

[62] Counsel for Ms. Burchill argued that this motion founders because the change, even if significant, is nothing more than temporary. I disagree. Mr. Burchill had been unemployed for six months when the motion to change was filed. By the time it was argued, Mr. Burchill had been unemployed for almost a year. No prospective employment had been identified. Employment insurance benefits had nearly run out. Mr. Burchill has been accessing capital. The loss of employment continues to adversely affect the moving party’s overall financial circumstances. It has seriously weakened, if not destroyed, the foundation for the negotiated resolution of the spousal support issue.

ii. The Scope of the Review

[63] Once the precondition for potential variation has been met, the court must consider the impact of the material change in circumstances: s. 17(4.1).

[64] In L.M.P. v. L.S., supra the Supreme Court of Canada cautioned that the court “should limit itself to making only the variation justified by that change” because the variation process is neither an appeal of the existing order nor a hearing de novo.[^20]

[65] The principle is difficult to apply to this fact situation. The parties’ sources of income were used to determine the level of spousal support. However, a reduction in income did not necessarily constitute a material change of circumstances. As mentioned, the parties agreed that voluntary retirement by Mr. Burchill before age 65 would not fit within that category. However, voluntary retirement by him upon or after reaching that age would have constituted such a change: para. 6(2) of the Minutes and spousal support order. Termination of employment was not specifically addressed and consequently had to be considered in the context of the more general contractual and statutory language.

[66] Once a variation is sought, the Minutes and spousal support order direct the court to consider something more than income. Paragraph 6(3) of the Minutes and spousal support order refers to “assets, property, means and financial circumstances”. Those are “to be considered on any claimed spousal support variations”. Mr. Burchill’s “supplemental retirement plan” and “defined contribution retirement pension” are expressly stated to constitute part of his assets, property, means and financial circumstances. The parties reserved the right to argue whether income derived from the equalized portion of those funds is to form part of the analysis.

[67] The pensions described in the Minutes now take the form of the Manulife RRSP that had a value of $524,380.14 as of March 25, 2019. Of that amount, $210,341 was included in the pre-equalization calculation.

[68] The resolution achieved by the parties is not to be ignored. As Cromwell J. said in L.M.P. v. L.S., supra at para. 92:

If a material change is identified, the agreement is…to be considered in determining what variation is justified. Change is not a threshold that permits the court “to jettison the agreement entirely” ... Rather, judges making variation orders under s. 17 should limit themselves to making the appropriate variation, but should not make a fresh order unrelated to the existing one ... [Citations omitted]

[69] Despite the fact the Minutes fail to mention other assets including, by way of example, the BMO RRSP Mr. Burchill still maintains,[^21] the parties’ intention appears clear from the wording they chose. If a motion to change is triggered by a significant and sufficiently long-standing change in income, the reviewing judge is to consider each party’s overall financial circumstances, including assets of a capital nature: Leskun v. Leskun, supra at para. 29. However, the right to argue in favour of or against the principle of double recovery is expressly reserved: Boston v. Boston, supra at para. 64.

iii. Should the Spousal Support Order be Varied?[^22]

[70] The objectives of a variation order are set forth in s.17(7) of the Divorce Act. It reads:

A variation order varying a spousal support order should

(a) recognize any economic advantages or disadvantages to the former spouse 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 is practicable, promote the economic self-sufficiency of the former spouse within a reasonable period of time.

[71] In Hickey v. Hickey, supra at para. 24, L’Heureux-Dubé J. addressed the implications of the subsection. She wrote:

The objectives that guide the exercise of judicial discretion set out in s. 17(7) … recognize the varying ends that an order for spousal support should serve, taking into account the nature of the marriage, its economic consequences, the consequences of its breakdown, and the situations of the parties before the court. In making an order that reflects them, a…judge must consider all relevant facts and applicable factors.

[72] Recently the Court of Appeal succinctly summarized the appropriate approach when it said:

Ultimately the Supreme Court has emphasized the need for flexibility and a holistic view of each matter on the basis of its particular factual matrix… [Citations omitted][^23]

[73] Until mid-2018 the parties were, on balance, fortunate. They continued to hold the assets that had been divided equitably by agreement the previous year.

[74] Spousal support issues were resolved in early 2018 during periods of employment. There was net disposable income that could be and was equally divided.

[75] Unfortunately, they now face financial adversity. Each party’s employment has been negatively and unexpectedly affected: Mr. Burchill’s by another termination without cause and that of Ms. Burchill for medical reasons.

[76] Nonetheless, counsel for Ms. Burchill submitted that Mr. Burchill’s 2019 household income was virtually identical to what he was receiving when the Minutes were signed. The calculation he prepared included drawings Mr. Burchill has made from his RRSP’s. I do not agree that those pre-retirement withdrawals are to be regarded as “income” despite the fact they are treated in that manner under the Income Tax Act.

[77] The calculation also included the income of Mr. Burchill’s current spouse as if it was his own. In my view, that is not appropriate although the fact she contributes to joint household expenses is a consideration.[^24] Furthermore, Ms. Burchill’s suggestion that her former spouse could receive $34,100 annually from his Manulife RRSP without depleting capital is misplaced. The statement relied upon contains a prospective estimate of what might be attainable at the age of retirement based on market assumptions that may or may not prove to be accurate. Mr. Burchill’s reality is much different than the picture Ms. Burchill’s counsel tried to paint. Currently, Mr. Burchill has very limited – if any - income and few liquid assets aside from his RRSP’s.

[78] Ms. Burchill’s income position is troublesome too. The cyst on her ankle prevented her from working for about ten months. She received nothing from her employer during that period. If her short-term disability benefit appeal is successful, she may recoup some of the employment income she has had to forego to date. However, the court has no sense of the likely outcome of that process. Further, if her physical issues do not improve, it is unclear whether employment with LTI will continue.

[79] Ms. Burchill’s income, then, has been limited to a very modest return (less than one percent per year) on her non-RRSP portfolio[^25] and the spousal support payments she has able been able to extract.

[80] From an income perspective, the parties are in uncharted waters. While not to blame for their present predicament, the parties’ expenses exceed their incomes.

[81] If the current situation does not improve, I do not see any alternative but the continued use and likely depletion of capital. Adoption of Ms. Burchill’s solution would require Mr. Burchill to access his capital, to the exclusion of her own.

[82] As noted, Mr. Burchill argued that the court cannot impose such a requirement. I disagree. Even the authority relied upon, Laurain v. Clarke, supra does not go that far. At para. 55 Price J. said:

Having regard to the Family Law Act, the Divorce Act, the Guidelines, and the case law that has interpreted them, capital amounts themselves should not generally be regarded as income for the purpose of calculating child or spousal support. [Underlining added][^26]

[83] Furthermore, there is higher authority on the point. In Boston v. Boston, supra at para. 64, Major J. noted that where, as here, the equalization process included capital:

…the court should, where practicable, focus on that portion of the payor’s income and assets that have not been part of the equalization or division of matrimonial assets when the payee spouse’s continuing need for support is shown… [Emphasis added]

[84] It seems clear that capital assets are to be considered as part of the analysis when one party seeks a variation of a spousal support order: Leskun v. Leskun, supra at paras. 29 and 31. Therefore, the court has jurisdiction to refuse to vary the spousal support order even if Mr. Burchill would have to deplete capital to satisfy his continuing obligation. However, that does not end the analysis. The question is whether the court should require that he do so: Gainer v. Gainer, supra at paras. 41, 42 and 45.

[85] After lengthy and anxious consideration of the condition, means, needs and other circumstances of the parties, including the material change, I have concluded that the payment of spousal support should be suspended effective September 15, 2019.

[86] The foundation for the spousal support order does not currently exist. Mr. Burchill simply does not have the income to continue making payments to Ms. Burchill.

[87] Requiring Mr. Burchill to access capital to fund spousal support does not seem to me to be fair or appropriate. The parties have already divided the assets they accumulated in an equitable manner. While their asset mix differs, to my eye their financial positions are comparable. Continuing the payments will, to my eye, tilt the balance unfairly in Ms. Burchill’s direction. Appropriately she shared in the higher level of income he was able to earn. The burden of misfortune should be equally shared too.

[88] Fortunately, each party currently has hundreds of thousands of dollars as a back stop even after the withdrawals they have had to make to date. I recognize their capital will not last forever if the status quo remains unchanged. Consequently, it is imperative that they continue their efforts to reverse, or at least mitigate, the effect of their plight.

G. Conclusion and Costs

[89] For the reasons given, the payment of spousal support is suspended effective September 15, 2019.

[90] I decline to order the return of any portion of the spousal support payments made to date. Mr. Burchill was receiving employment insurance. His current spouse’s post-February 14, 2019 earnings have helped the situation. Mr. Burchill stopped making spousal support payments without judicial approval. The resourcefulness of Ms. Burchill and her counsel resulted in the recovery of monies she badly needed. The parties should move forward as best they can.

[91] The court is hopeful and cautiously optimistic, that the financial fortunes of Mr. Burchill will improve and that spousal support payments can resume in the previously agreed upon or some modified amount. Consequently, each party shall advise the other forthwith and with particularity about any change in employment and/or any material increase in monthly income (meaning $500 or more). In addition, the parties shall exchange complete copies of their income tax returns as filed annually by no later than June 1 of each calendar year and copies of notices of assessment/reassessment forthwith upon receipt.

[92] The result is, in my view, mixed. I will not repeat other comments made earlier in these reasons. Suffice to say that I am hopeful the parties can resolve the issue of costs. If they cannot do so, short written submissions not exceeding five pages each may be provided to me through the trial coordinator in Goderich, Ontario within thirty days.

Grace J.

Released: August 30, 2019

COURT FILE NO.: 115-2013

DATE: 20190830

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Cheryl Elizabeth Burchill

Applicant

– and –

Barry Robert Burchill

Respondent

REASONS FOR JUDGMENT

Grace J.

Released: August 30, 2019

[^1]: The typed minutes were identical to ones completed in hand and executed by the parties on October 30, 2017. [^2]: All instalments up to and including May 15, 2019 had been paid at the time the motion was argued although a number of the payments were late. [^3]: The confirmation of motion filed by the respondent’s counsel for that attendance did not indicate whether a case conference had been held or not. The one filed by the applicant’s counsel indicated that a case conference had not been held because the respondent had not requested one. [^4]: The applicant’s counsel filed a confirmation of motion prior to that attendance. It indicated that a case conference had not been held on the substantive issues. [^5]: Those excerpts are drawn from rules 14(4) and (4.2) respectively. [^6]: The language in para. 2 of the Minutes and para. 2 of the spousal support order is identical. Mr. Burchill had been terminated by Wescast on March 7, 2017. In addition to various other amounts, Wescast agreed to pay him fifty-two weeks’ salary ($84,354.02 less statutory deductions) in lieu of notice of termination in accordance with Mr. Burchill’s employment contract. [^7]: Part Lot 41, Concession 14, Wawanosh. [^8]: 20 Jane Street, Belgrave, Ontario. [^9]: $30,705.00 had been typed in and deleted. [^10]: Neither party raised para. 4 of the 2017 property Minutes. It provides: [Ms. Burchill] releases and waives any and all claim she has or may have to a division of or sharing in the pension entitlement, pension benefit and retirement gratuity of [Mr. Burchill] including but not limited to the division, sharing or distribution in any manner of the Respondent’s Wescast Industries Inc. Registered Retirement Savings Plan…administered by Manulife Financial, his retirement gratuity and entitlement with Wescast… [^11]: See para. 6(2) of the spousal support order. [^12]: That statement is based on a document appearing as appendix “A” to the factum filed on behalf of Mr. Burchill. For the period starting in March, 2019, the weekly benefit was $562 less federal tax of $70. [^13]: $882,627 was the value of the assets disclosed in his earlier January 23, 2019 financial statement. [^14]: $516,857.57 was the value of the RRSP’s in the January 23, 2019 financial statement. According to the March 15, 2019 statement $494,000 was attributable to the Manulife RRSP (unchanged from January 23, 2019), $9,437.93 to the BMO RRSP (it had been $22,857.57) and $29,609.30 to a Credential Asset Management “investment” offered “through Libro”. The latter item did not appear in the earlier financial statement. Apparently, Mr. Burchill withdrew $12,500 from that account on May 2, 2019. Nonetheless, a Credential Asset Management statement showed a balance of $25,149.70 as at May 6, 2019. A March 25, 2019 Manulife statement was produced by Mr. Burchill during the course of this proceeding which showed an account balance of $524,388.14, significantly more than the $494,000 shown in the March 15, 2019 financial statement. [^15]: $229,758.98 had been the number shown in the earlier financial statement. [^16]: $652,868.13 had been the number shown in the earlier financial statement. [^17]: That is the amount set forth in para. 32 of Mr. Burchill’s factum. That figure is comprised of $185,746 from the defined contribution plan, $24,595 from the retirement gratuity and $16,593 from the BMO RRSP. [^18]: See para. 64 of Mr. Burchill’s factum. [^19]: The text on the statement for the period ending June 30, 2017 reads “The current value of your account is $491,695.86. If you continue making your average monthly contributions until you retire at age 65, your estimated income during your retirement will be $34,100 each year.” Qualifying language appears that emphasizes the fact actual retirement income may vary depending on, among other things, the performance of the investments held within the RRSP. [^20]: The principle was expressed by Abella and Rothstein JJ. at paras. 47 and 50 and adopted by the majority at para. 92, point 6. [^21]: $16,593 from the BMO RRSP was equalized too. [^22]: While not mentioned by the parties’ counsel, I have reviewed portions of the Spousal Support Advisory Guidelines with emphasis on Chapter 14, Variation, Review, Remarriage, Second Families. [^23]: Makwana v. Bishnu, 2019 ONCA 543 at para. 17 [^24]: Bell v. Bell, 2013 BCSC 271 at para. 19; Flieger v. Adams, 2012 NBCA 39 at para. 12. [^25]: Ms. Burchill continues to have an obligation to make reasonable efforts to generate income from her investments: Boston v. Boston, 2001 SCC 43 at para. 56. The current rate of return seems too low: Halliwell v. Halliwell, 2017 ONCA 349 at para. 139. However, even an annual rate of return of three percent will not solve the problem. [^26]: See, too, paras. 101 and 102.

Burchill v. Burchill, 2019 ONSC 5081

Case Summary

A. Introduction

B. The Procedural Path

C. The Terms of the Spousal Support Order

D. The History and Present Circumstances

E. The Parties’ Positions

F. Analysis and Decision

i. Has there been a material change in circumstances?

ii. The Scope of the Review

iii. Should the Spousal Support Order be Varied?[^22]

G. Conclusion and Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 3

Legal Tests 1

Legislation 1