Court File and Parties

COURT FILE NO.: 19-36

DATE: 2019/10/29

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lori Ann McCaslin, Applicant

AND:

David McCaslin, Respondent

BEFORE: Madam Justice Laurie Lacelle

COUNSEL: Thomas Byrne, Counsel for the Applicant

Joseph Brennan, Counsel for the Respondent

HEARD: October 25, 2019

ENDORSEMENT

Introduction

[1] The Applicant brings a motion for interim spousal support. She seeks an order of $1, 700 per month, commencing October 1, 2019.

[2] The Respondent is currently paying spousal support in the amount of $400 monthly. He asks that the Applicant’s motion be dismissed and that the Court confirm that interim spousal support shall be payable at the rate of $400 per month.

[3] The issue of entitlement is conceded for the purposes of this motion, where only a prima facie case need be demonstrated. The issue I have to decide is what amount of support is appropriate having regard to the evidence adduced on the motion and the applicable legal principles.

Overview of the evidence

[4] The parties were married in 1988 and separated in 2014. The Applicant is now 52 years old, while the Respondent is 53. They were married for almost 26 years.

[5] The parties have two sons who are both adults now. The parties’ 26-year-old son resides with his mother as a result of a brain injury he sustained.

[6] During the marriage, the Applicant worked as a pharmacy assistant while the Respondent worked as a truck driver. The Respondent incorporated his own business during the marriage (in 2009) which allowed him to work independently as a truck driver. The Applicant managed the business’s finances. At the time the parties separated, this business had failed. The parties were in significant debt, owing over $150, 000.00.

[7] In September of 2015, the parties made a consumer proposal pursuant to the Bankruptcy and Insolvency Act. The proposal is for a period of five years ending in August 2020. Under the terms of the proposal, each of the parties pays $475 monthly to their trustee.

[8] Currently, the Applicant is earning about $40, 000.00 as a pharmacy assistant. She receives some funds from her son on a monthly basis and works as a server at a golf course. She says this work provides her with tips of about $300 per year. Because of this work, she does not have to pay green fees. This benefit is worth about $900 per year. The Applicant’s financial statement indicates that she has modest expenses.

[9] The Respondent is currently earning about $88, 000 per year. This is based on 60-70 hour work weeks. He says he has assumed such a heavy work load in order to clear his debts and get back his financial footing. The Respondent asserts, and the Applicant does not deny, that the Respondent worked approximately 50-hour work weeks during the course of the marriage. The Respondent says that given this work week, his salary prior to starting his business was in the area of $62, 000 per year.

[10] The parties agree that post-separation, the Respondent transferred to the Applicant $26, 000.00 in RRSP funds.

[11] The Respondent further alleges that the Applicant has fraudulently obtained $30, 000.00 from a life insurance policy owned by the Respondent and held for the benefit of one of their children. While the Applicant acknowledges that she asked her son to pose as the Respondent in a phone call with London Life officials to enable her withdrawal of money from the life insurance policy, she says she obtained only $6, 000 to $7, 000 that was used to pay off the parties’ debts during the marriage. She says she now realizes that she was stressed and overwhelmed following the injury to their youngest son in 2011 and she was not able to manage the parties’ finances.

[12] Both parties assert they are paying a disproportionate amount of the parties’ joint debts. The Applicant says she should not have agreed to share the payment for the consumer proposal equally. For his part, the Respondent says that he learned of a debt owed by his business relating to unpaid taxes. While the characterization of this debt remains an issue, the evidence is uncontradicted that the Respondent has been repaying $1350 monthly to the Canada Revenue Agency. The Respondent argues that because the Applicant was responsible for his business’s finances, she must have known about this outstanding debt obligation, and yet she did not include it in the consumer proposal agreed to by the parties after their separation.

[13] The record is silent as to why there has been a delay in the claim for spousal support, which is the only claim before the court. While the parties separated in April of 2014, the Applicant filed her Application almost five years later, on March 20, 2019.

The legal principles

[14] Section 15.2 of the Divorce Act governs consideration of the spousal support issue in this case.

[15] The wording of section 15.2(2) confirms that when making an interim order, the test is reasonableness:

Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim 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, pending the determination of the application under subsection (1). [emphasis added]

[16] The Court may make a final or interim order 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 (s. 15.2(3)).

[17] In making a spousal support order, including an interim order, section 15.2(4) directs the Court to consider the condition, means, needs and other circumstances of each spouse, including a) the length of time they cohabited; b) the function each performed during their cohabitation, and c) any order, agreement or arrangement relating to support of either spouse. Spousal misconduct shall not be considered (s. 15.2(5)).

[18] Importantly, s. 15.2(6) of the Divorce Act lists the objectives of a spousal support order. A spousal support order should:

a. Recognize any economic advantage 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.

[19] These objectives must all be considered by a Court and no single objective is paramount. However, the weight that should be placed on each must be based on the particular circumstances of the parties and is discretionary. Against the background of these objectives, the Court must consider the factors set out in s. 15.2(4) of the Divorce Act: Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420 at paras. 35-36.

[20] A threshold issue in considering a claim for spousal support is whether the claimant is entitled to such support: Halliwell v. Halliwell, 2017 ONCA 349.

[21] The compensatory basis for spousal support was recognized by the Supreme Court of Canada in Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813. The conceptual basis for this type of support was succinctly explained in this way in Ludmer v. Ludmer, 2013 ONSC 784 at para. 215:

This is in recognition that upon marriage breakdown, there should be an equitable distribution between the parties of the economic consequences of the marriage. Specifically, compensatory support is intended to compensate a spouse upon relationship breakdown for contributions made to the relationship and to recognize sacrifices made and the advantages to one spouse and disadvantages to the other, both during and after breakdown of that relationship. It is to compensate for foregone careers and missed opportunities during the marriage, and to serve as reimbursement for hardships accrued as a result of the marriage breakdown.

[22] The law also provides for spousal support to be made on a non-compensatory or needs- based basis: Bracklow v. Bracklow at para. 49. As explained in Gray v. Gray, 2014 ONCA 659 at para. 27, “[o]ne of the objectives of the Divorce Act is to relieve economic hardship. Need is not measured solely to ensure a subsistence existence, but rather should be assessed through the lens of viewing marriage as an economic partnership”. As reviewed by MacKinnon J. in N.H. v. J.H., 2017 ONSC 6607 at para. 87, and as stated in the Spousal support Advisory Guidelines: The Revised Users Guide, Rogerson and Thomspon, 2016 at p. 10:

Non-compensatory claims involve claims based on need. “Need” can mean an inability to meet basic needs, but it has also generally been interpreted to cover a significant decline in standard of living from the marital standard. Non-compensatory support reflects the economic interdependency that develops as a result of a shared life, including significant elements of reliance and expectation, summed up in the phase “merger over time”.

Common Markers of non-compensatory claims include: the length of the relationship, the drop-in standard of living for the claimant after separation, and economic hardship experienced by the claimant.

[23] The Spousal Support Advisory Guidelines are a useful tool for setting the amount and duration of a spousal support award, but they are not binding on the Court. They suggest a range of both amount and duration of support that reflects the current law. In all cases, the reasonableness of an award produced by the Guidelines must be balanced in light of the circumstances of the individual case, including the particular financial history of the parties during the marriage and their likely future circumstances. Nevertheless, when counsel fully address the Guidelines in argument, and a trial judge decides to award a quantum of support outside the suggested range, appellate review will be assisted by the inclusion of reasons explaining why the Guidelines do not provide an appropriate result: Fisher v. Fisher, 2008 ONCA 11, [2008] O.J. No. 38 (C.A.).

[24] Insofar as assessing a payor’s income is concerned, the starting point for determining income under the SSAGs is the definition of income under the Federal Child Support Guidelines (SSAGs, s. 3.3.2), which are identical to the provincial Child Support Guidelines: Halliwell v. Halliwell, 2017 ONCA 349.

[25] Support recipients who proceed reasonably to a disposition of the claim are presumptively entitled to prospective support from the time they have given notice of their intention to seek support: MacKinnon v. MacKinnon, 2005 CanLII 13191 (ON CA), [2005] O.J. no. 1552 (C.A.) at para. 22.

[26] Insofar as interim orders are concerned, various Courts have provided direction as to the Court’s approach. I consider the summary of the relevant principles set out at para. 24 of Damaschin-Zamfirescu v. Damaschin-Zamfirescu, 2012 ONSC 6689, [2012] O.J. No. 5586 (S.C.J.). They include the following:

(1) The party claiming temporary spousal support has the onus of establishing that there is a triable (prima facie) case, both with respect to entitlement and quantum. The merits of the case in its entirety are to be dealt with at trial.

(2) In the event that a spousal support claimant cannot establish an arguable case for entitlement to spousal support, the motion for temporary relief should be dismissed, even if the claimant has need and the other party has the ability to pay.

(3) The court is not required to carry out a complete and detailed inquiry into all aspects and details of the case, or to determine the extent to which either party suffered economic advantage or disadvantage as a result of the relationship or its breakdown. That task is for the trial judge.

(4) The primary goal of an interim spousal support is to provide income for dependent spouses from the time the proceedings are commenced until the trial. Interim support is meant to be in the nature of a “holding order” to, insomuch as possible, maintain the accustomed lifestyle pending trial.

(5) Assuming that a triable case exists, interim support is to be based primarily on the motion judge’s assessment of the parties’ means and needs. The objective of encouraging self-sufficiency is of less importance.

[27] Some cases have linked the test for interim spousal support to the likelihood of success at trial, particularly where there is a delay in making the claim: see Belcourt v. Chartrand, 2006 CanLII 11925 (ON SC), [2006] O.J. No. 1500 per MacKinnon J. at para. 11, Lamb v. Watt, 2017 ONSC 5838 at para. 23.

[28] With respect to the quantum of any support order made on an interim basis, various Courts have held that interim support should be ordered within the range of the SSAG, unless exceptional circumstances dictate otherwise: see Samis (Guardian of) v. Samis, 2011 ONCJ 273, [2011] O.J. No. 2381 (Ont. C.J.); Veneris v. Veneris, 2015 ONCJ 49.

The positions of the parties

[29] The Applicant emphasizes the long duration of the marriage and the difference in the parties’ current incomes. She argues she is entitled to spousal support on both a compensatory and needs-based basis. She argues that even if she received the full $30, 000 the Respondent says she obtained from London Life in addition to the $26, 000 in funds she received from the Applicant’s RRSPs, this does not come close to satisfying the full spousal support award to which she is entitled. She seeks an interim order in the mid-range of the SSAG calculations she has provided. Those calculations were made using the current incomes for the parties.

[30] The Respondent does not dispute entitlement for the purposes of this motion, though he argues that neither basis is particularly compelling. In his evidence, the Respondent asserts that income ought to be imputed to the Applicant given her clear ability to work extra hours at the golf course. He argues his income for the purposes of determining spousal support should be based on his income when he was not self-employed. He submits that this figure better reflects the income he can expect to earn going forward when he stops working 60-70 hours per week. Regardless, he argues that the current payment of $400 monthly meets the objectives of spousal support in this case at this time, particularly since in the absence of an equalization claim, any overpayment in spousal support will not be easily recouped by him. In support of this position, he emphasizes the funds already received by the Applicant from his RRSP and the additional funds obtained from London Life.

Analysis

[31] As indicated above, the issue of entitlement to spousal support is conceded for the purposes of this motion. Accordingly, I address the issue of what amount of monthly support is appropriate having regard to the evidence, the principles of law I have outlined above, and the SSAGs.

[32] This is a motion for interim support, and it is not my function to make the ultimate findings of fact that will be required to determine the issue. However, I consider that some important facts are agreed to by the parties. I consider, for instance, that at the time of separation, the parties were significantly in debt. In the circumstances, neither has made a claim for equalization of their net family property.

[33] I am also satisfied that since separation, the Applicant has received $26, 000 in RRSP funds from the Respondent and that the Respondent has been re-paying a significant debt to the CRA that was not captured in the consumer proposal.

[34] Finally, I am satisfied that the Respondent has been paying $400 in monthly spousal support since July of 2019.

[35] A number of other issues, however, do not permit findings at this stage.

[36] On the record before me, it is safe to conclude that the determination of credibility issues will be significant in this case. While I do not make any findings at this time, I note the following issues which may lead to adverse findings about the Applicant’s credibility:

a. Her failure to initially disclose additional earnings from tips working at golf course and other benefits received from that work in her first financial statement;

b. Her failure to disclose the full amount received from the son who lives with her in her first financial statement;

c. Her admission that she asked her son to pose as the Respondent for the purpose of obtaining funds from a life insurance policy owned by the Respondent without the Respondent’s knowledge.

[37] I also consider that there are a number of significant triable issues in relation to the Applicant’s claim for spousal support. At a minimum, they include:

a. the income that should be attributed to each of the Applicant and the Respondent for the purposes of this calculation:

i. As regards the Respondent’s income, the Applicant says it should reflect the Respondent’s current line 150 income, which is consistent with his income at the time of separation. In reply, the Respondent argues that his income should reflect his earnings historically, which were closer to $62, 000 per year. This is because his income at separation was effectively set by the Applicant, who the Respondent says mismanaged his company’s books. Given that the company folded, and the couple were in significant debt at separation, this assessment of his income (and the lifestyle associated with it) is not fair. The Respondent argues the determination of this issue will be informed by assessments of the Applicant’s credibility. The Applicant also argues that his income since separation has been consistently in the $80, 000 range because he is working 60-70 hours per week to discharge his disproportionate share of the debt. He argues that this is not sustainable going forward.

ii. As regards the Applicant’s income, while it was not argued in oral submissions, the materials before me indicate that the Respondent may seek to have income imputed to the Applicant. Since it appears that the Applicant is working at a golf course in addition to her job as a pharmacy assistant, there is at least a prima facie case to be made on that issue.

b. the strength and basis of the Applicant’s entitlement to spousal support – for instance, there is conflicting evidence on this motion about whether the Applicant took on a disproportionate share of the child care or other household responsibilities, and what economic benefits and disadvantages have accrued because of the marriage;

c. the extent to which the parties’ division of property and debts upon separation should be considered in determining the amount of spousal support ordered – this includes consideration of the amount of the funds received from London Life by the Applicant, and whether the Applicant’s assumption of the same level of debt in the consumer proposal unduly benefitted the Respondent;

d. the extent to which the parties’ respective lifestyles are different from that during the marriage, and how the Court should assess the lifestyle during the marriage since it may have been, as the Respondent argues, a fabrication supported by an “immense amount of debt”;

e. whether any of the above circumstances alone or in combination place this case within the “exceptional circumstances” that would justify a spousal support order outside the range suggested by the SSAGs.

[38] At trial, the Court will likely have further documentary evidence as well as viva voce evidence to assist in resolving the triable issues.

[39] While the evidence is limited, I consider the information available on this record as regards the needs and means of the parties. I am alive to the Applicant’s argument that the assessment of her needs must be broader than permitting her only a subsistence existence and must be based within the context of her standard of living during the marriage. However, there is merit to the Respondent’s argument that the Applicant’s financial disclosure does not support the claims of “barely making ends meet”. While there are bald assertions, there is little evidence on this record about the lifestyle enjoyed by the parties during the marriage (let alone what was fiscally sustainable), as compared to what each enjoys now.

[40] The Respondent argues that he is working 60-70 hours per week and his lifestyle has not improved. However, a review of the financial statements for each of the parties indicates that he is in a position to afford higher expenses for basic needs such as transportation, housing and utilities. While the Respondent’s expenses are not lavish, on their face they appear to permit a lifestyle that exceeds the Applicant’s. I arrive at this conclusion having regard to the expenses aside from the $1350 debt repayment to the CRA. In other words, even while making that payment, the Applicant has the means to support a lifestyle that is more comfortable than the Applicant’s.

[41] The Respondent attaches to his factum calculations of spousal support that are based on an annual income for him of $66, 000 and for the Applicant at $40, 000. Given the duration of the marriage, this yields an award for support at the low end of $812 monthly and $1, 031 at the high end. This is in contrast to the Applicant’s calculations using current incomes, which show a range of $1,484 to $1,926 between the low and high ends.

Conclusion

[42] This case involves a marriage of long duration where there is a prima face basis for claims of spousal support on both a compensatory and needs-based basis. The ultimate finding as to the bases of entitlement and the strength of that entitlement will have an impact on any amount of spousal support that is ultimately awarded. The extent to which the property issues that were resolved post-separation by the parties may be considered as credits towards spousal support will also affect the determination as to what amount of spousal support is appropriate.

[43] At this juncture, after considering the evidence, the law, the SSAGs, and the submissions of the parties, I am persuaded that the negotiated spousal support payment of $400 per month should be increased to reflect the objectives of the Divorce Act. I am not persuaded by the Applicant that an increase to the degree she seeks is required to meet those objectives, however. I find that a monthly spousal support award of $950, commencing on October 1, 2019, is reasonable and just on an interim basis. This amount reflects the mid-range of the spousal support calculations provided by the Respondent.

[44] As far as costs are concerned, I encourage the parties to attempt to resolve that issue. If they are unable to do so, submissions of no longer than two pages (in addition to the Bill of Costs) may be directed to my attention. The Applicant shall have 14 days from the date of the release of this endorsement to file her submissions. The Respondent shall have a further 7 days to reply.

The Honourable Madam Justice Laurie Lacelle

Date: October 29, 2019