Court File and Parties

COURT FILE NO.: FC-17-FS006596 DATE: 2020-03-27 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: LARRY LORIMER, Applicant AND: EDNA LORIMER, Respondent

BEFORE: Justice D.A. Broad

COUNSEL: A. Justine Lyons, for the Applicant James Battin, for the Respondent

HEARD: February 10 and 11, 2020

Corrected decision: The correction was made on April 17, 2020. The reference to “… payments of child support paid …” in paragraph 87 (e) on page 19 has been corrected to read “… payments of spousal support paid …”

Reasons for Decision

Background

[1] The applicant was born on January 15, 1959 and is now 61 years of age. The respondent was born on December 17, 1959 and is now 60 years of age.

[2] The parties married on October 6, 1979 and separated on June 1, 2007. They had four children. The oldest child is 32 years of age and the youngest is 27.

[3] By Final Order dated January 21, 2011 (the “2011 Order”) Whitten, J. ordered, inter alia, that one-half of the applicant’s employment pension, which accrued during the period of co-habitation from October 6, 1979 to June 1, 2007, be transferred to the respondent and that the applicant pay to the respondent spousal support in the amount of $1,994 per month commencing January 1, 2011, based upon the applicant’s income from his employer, U.S. Steel, in the sum of $75,000 per year, and the applicant’s imputed net farming income of $40,000 per year and the respondent’s imputed income of $20,000 per year.

[4] The 2011 Order also provided that the respondent be named as irrevocable beneficiary of the applicant’s life insurance, available through his employment, and on his Manufacturer’s Life Financial life insurance policy, in the amount of $100,000, for so long as he is obliged to pay spousal or child support to the respondent.

[5] By Final Order dated July 27, 2017 (the “2017 Order”) Whitten, J., inter alia, fixed arrears of support to be paid by the applicant in the sum of $52,395 to be paid from the proceeds of sale of the applicant’s farm property then held in trust, and to pay ongoing spousal support of $2,307 per month commencing March 1, 2017, based on his 2016 income of $83,291 and the respondent’s imputed income of $20,000.

[6] The applicant retired from his employment on January 1, 2018, after almost 37 years of service.

[7] On August 25, 2017, the applicant made application for a divorce. On October 4, 2017 the respondent filed an Answer opposing the divorce sought by the applicant on the basis that she has extensive medical expenses which are currently covered by the applicant’s benefits and fears being cut off in the event of a divorce.

[8] On July 5, 2018, the applicant filed an amended application for divorce reciting that spousal support is in dispute by reason of his retirement.

[9] By Temporary Order dated August 27, 2019 (the “2019 Temporary Order”) Breithaupt-Smith, J. ordered that the enforcement of spousal support under the 2017 Order, including both ongoing support and arrears of support, be suspended until further order of the court. Justice Breithaupt-Smith made a Final Order on August 27, 2019 (the “2019 Final Order”) severing the divorce from the corollary relief and mandating the plan administrator for the applicant’s benefits plan to maintain the respondent as a beneficiary of the extended group insurance benefits available to the spouse of the applicant.

[10] Notwithstanding that a Motion to Change was not brought by the applicant, a trial management conference was held on November 5, 2019 identifying the following issues for determination at trial:

(a) spousal support termination; (b) spousal support arrears; (c) extended group insurance benefits; (d) extended dental/health benefits; and (e) the irrevocable designation of life insurance/pension plans.

[11] At the commencement of trial, counsel advised that they are agreed that the trial proceed on the basis that the applicant’s amended application for divorce be treated as a Motion to Change to terminate spousal support and to eliminate all arrears of spousal support and any continuing obligation to maintain the respondent as beneficiary of any life insurance policy.

Issues

[12] In final submissions, Mr. Battin, for the respondent, acknowledged that the applicant’s retirement constituted a material change in circumstances and that the issues for determination are as follows:

(a) Should the applicant’s employment pension be included in his income for spousal support purposes, notwithstanding that the portion of the pension entitlement that accrued to the applicant during the marriage was equalized in the 2011 Order? (b) Should income be imputed to the applicant for his Canada Pension Plan or Canada Pension Plan disability pension entitlement? (c) Should income be imputed to the respondent and if so, at what amount?

Facts

[13] The applicant worked at U.S. Steel/Stelco as a millwright throughout most of the marriage. In 1988 the parties purchased a farm property comprised of approximately 89 acres and began growing vegetables which they sold at various farmers’ markets in southern Ontario. Following separation in 2007, the applicant purchased the respondent’s interest in the farm property for $112,500 and continued to operate the farming business until July 2013. He subsequently sold the farm property and received net sale proceeds in 2017 of $315,528.45 ($32,000 paid to the applicant’s then counsel and $283,528.45 paid to the applicant), following payment to the respondent of $45,142 for arrears of support and $6,780.00 for costs pursuant to the 2017 Order. From the proceeds of sale, the applicant purchased new vehicles, placed $50,000 into a tax-free savings account and invested the balance in non-registered mutual funds.

[14] Prior to the acquisition of the farm property, the respondent worked on a part-time basis for varying periods, at tobacco farms, retail establishments and bank branches in the area. She earned minimum wage or close to minimum wage in these positions. Following separation, the respondent continued carrying on business selling produce at farmers’ markets, purchasing product from producers in the area.

[15] The matrimonial home was sold in 2015. The applicant received net proceeds of $3,842.00 and the respondent $3,981.39.

[16] In summary, the respondent received the following amounts in respect of division of property/equalization:

Proceeds of sale of matrimonial home - $ 3,981.39 Sale of interest in farm property - $112,500.00 Equalization in respect of the contents of the matrimonial home and shop - $ 17,500.00 Value of equal share of applicant’s employment pension transferred to her LIRA - $144,692.00 TOTAL - $278,673.39

[17] The applicant testified that there were a number of factors which contributed to his decision to retire. His employment was physical in nature and included having to climb tall ladders and he had begun to experience soreness in his leg, which had been injured earlier in a motorcycle accident. He was also experiencing stress, suffering from headaches and high blood pressure, as well as depression, causing him to be unable to sleep properly at night in order to be rested for work in the morning. On December 17, 2018, after his retirement, the applicant was diagnosed by a psychiatrist with depression and was prescribed antidepressant medication.

[18] In addition, the applicant’s employer was in the process of being purchased and there was general concern among the workforce that there was a risk that pension entitlements could be impacted as part of the transaction.

[19] The applicant resides in a room rented from a friend at a rent of $500 per month, inclusive of utilities.

[20] The applicant’s employment income in 2017 was $83,174.84. In that year he received investment income of $965.80. In 2018, the applicant reported employment income of $25,950.43, comprised of a payout of accrued vacation pay on his retirement, investment income of $1,026.49 and pension income of $22,462.08, comprised of base pension of $1,360.59 per month and a bridge pension until the age of 65 of $511.25 per month. In 2019, the applicant received pension income of $22,462.08 and estimated investment income of $1,000.00. The bridge pension will cease at age 65 and be replaced by the Canada Pension Plan retirement pension.

[21] The applicant qualified for a Canada Pension Plan retirement pension of $801.04 per month if he had applied in November 2019 and would qualify for $1,154.23 per month if he should apply at age 65. He testified that he has chosen to wait to age 65 to apply in order to qualify for the higher monthly pension. He acknowledged that he has not made an application to Canada Pension Plan for a disability pension which would pay $1,362.03 per month if he met the criteria.

[22] The respondent testified that, from the proceeds she received from the transfer of her interest in the farm property, she was forced to utilize more than 50% to pay off credit card debts incurred in the farm business, as result of the applicant removing his name from the credit card accounts. The respondent did not produce any documentary support for this assertion. She stated that she retained approximately $50,000 from the proceeds of sale of her interest in the farm property.

[23] The respondent also testified that all four of her children attended college or university and that the applicant did not contribute anything towards the cost of their education, paying straight child support only.

[24] The respondent confirmed that following separation she carried on with her business selling produce at farmers’ markets. She stated that initially the business was very good but in recent times the customer base has dropped, and her rent, advertising and insurance costs have increased. She has also incurred substantial expense in repairing and maintaining the truck that she uses in the business to transport produce. She sells produce on Thursdays on a year-round basis at Simcoe Ontario, at the London Western Fair on Saturdays and at a seasonal market at the Masonville Mall in London from May to the end of September or early October.

[25] According to her financial statement sworn January 29, 2020, the respondent generates monthly revenue of $1,520 from her business, with net income of $300 per month ($3,600/year). On her 2018 tax return she reported gross farming income of $18,240 and a net loss of ($174.27).

[26] In 2018, the respondent reported RRSP income, represented by withdrawal from her LIRA, in the sum of $14,988.70. In 2017, her net farming income was $281.49 for the year, and she also withdrew $14,988.70 from her LIRA.

[27] Effective in January 2020 the respondent began drawing a Canada Pension Plan retirement pension of $308.93 per month.

[28] The respondent testified that following separation she was unable to find any other employment, applying for banking and office jobs without success. She stated that she last made application for employment three or four years ago.

[29] The respondent testified that she moved to London when the parties’ two younger children began attending Fanshawe College. She rented a five-bedroom house in the vicinity of the college and for a period of time all four children resided with her. Currently her oldest daughter, Natalie, born June 25, 1987 and her youngest son, Kevin, born February 16, 1991, reside with her. Natalie works with her in the farmers’ market business but is not otherwise employed. Kevin works on a casual basis as a security guard.

[30] In her financial statement sworn January 29, 2020, the respondent reported rent expense of $1,800 per month and utilities of $515 per month. Neither Natalie nor Kevin make any contribution to these costs. She acknowledged that she has not attempted to sublet either of the vacant rooms in the home in order to offset the rental cost, notwithstanding that the home is student housing and is rented on a per-bedroom basis. The respondent explained that renting the five-bedroom house is more economical for her than renting a two-bedroom apartment, which she stated, without supporting evidence, would cost $2,000 per month.

[31] The respondent testified that she has ongoing health concerns including diabetes, asthma and environmental allergies, for which she requires medication. She relies upon the applicant’s benefit plan to pay for the cost of her medications.

Positions of the Parties

(a) Position of the Applicant

[32] The applicant seeks variation of the spousal support provision of the 2017 Order as of January 1, 2018, and to terminate ongoing spousal support based upon the significant reduction in his income upon his retirement. The applicant submits that the respondent received the benefit of one-half of his employment pension accrued during the marriage as an asset, and accordingly his pension income should not be considered in the calculation of spousal support. The applicant submits that the respondent had an obligation to use the divided assets to provide for her own pension but chose to deplete her assets in order to live beyond her means and to provide for her independent adult children. Moreover, the applicant submits that the respondent made no attempts to improve her situation in order to become self-sufficient. He says that continuing to sell at farmers’ markets at marginal income, or at a loss, while failing to seek and obtain alternate employment is unreasonable.

[33] The applicant submits that the respondent acted unreasonably in not renting out vacant rooms in her home and not requiring other adults living in the home to contribute to the household expenses.

[34] The applicant submits that, even if his income is calculated based upon the full amount of his income in 2018 and 2019, including the full amount of his pension, and income of $20,000 per year continues to be imputed to the respondent, he has overpaid spousal support by $32,360, comprised of $14,676 in 2018 and $17,684 in 2019.

[35] The applicant points out that the respondent has not provided a budget but is simply asking that spousal support continue. He submits that the court should not contemplate forcing him to liquidate his assets to artificially increase his income to accommodate the respondent’s poor decisions.

(b) Respondent’s Position

[36] As indicated above, the respondent acknowledged that the reduction in the applicant’s income upon his retirement represented a material change in circumstances. However, the respondent submits that, although she received a division of the applicant’s pension upon equalization, the applicant’s pension income should continue to be included in his post-retirement income for the purpose of spousal support as she has continued to experience economic hardship from the marriage or its breakdown.

[37] Parenthetically, it is noted that Mr. Battin acknowledged in submissions that the inclusion of the figure of $1,200 as “monthly” interest and investment income in the applicant’s Financial Statement of January 7, 2020 was a typographical error and that $1,200.00 was intended to refer to his annual investment income. There is no basis, on the evidence, to suggest that the applicant has sufficient assets to generate interest and investment income in the sum of $14,400 per year.

[38] The respondent also submits that income should be imputed to the applicant for Canada Pension Plan retirement pension entitlement or Canada Pension Plan disability pension entitlement. She says that the applicant has acted unreasonably by not applying for either of these pensions.

[39] Finally, the respondent submits that, for spousal support purposes, her actual income should be utilized ($3,426.00 in 2018, $3,426.00 in 2019 and $7,307.00 projected for 2020), rather than imputed income in the sum of $20,000 per year as provided in the 2011 and 2017 Orders.

Analysis

(a) Statutory Framework

[40] Subsection 17(1) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), as amended, provides that the court may make an order varying, rescinding or suspending, prospectively or retroactively, a support order or any provision thereof on application by either or both former spouses.

[41] Subsection 17(4.1) provides that, 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.

[42] Subsection 17(7) provides that 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; (c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and (d) insofar as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.

[43] Factors (a) to (d) of ss. 17(7) mirror the objectives of an original spousal support order as set forth in ss. 15.2(6).

(b) Effect of Applicant’s Retirement on Spousal Support Obligations

[44] A useful summary of the test for whether there has been a material change in circumstances was set forth in the case of Poulter v. Poulter, 2005 BCCA 227 (B.C.C.A.) at para. 11 as follows:

The changes must be such that they were not known to the parties or to the judge at the time when the first final support order was made. Second, they must be such that they could not reasonably have been in contemplation of the parties or the judge. The third is that if they had been known, a different order would have been made than the one that was actually made. And fourth, that the different order would have been different in respect of the weight and consequences of the change and would have taken into account the change to make an alteration in the result.

[45] In the case of Boston v. Boston, 2001 SCC 43 (S.C.C.) Major, J., writing for the majority, noted at para. 61 that on retirement, the pension-holding spouse may apply to vary a support order if his ability to pay support is compromised, and that the decision of whether to vary support depends on whether the applicant can demonstrate that there has been a material change in circumstances.

[46] A material change of circumstances will vary from one case to another, particularly in relation to foreseeability. Retirement from employment can be a change of circumstances even if it is clearly foreseeable: Stones v. Stones, 2004 BCCA 99, at para. 15. (See also Schulstad v. Schulstad, 2017 ONCA 95 (C.A.) at para. 31 and Arthur v Arthur, 2018 ONSC 6682 (S.C.J.) at para. 42)

[47] Based upon the acknowledgment by the respondent referred to above, I find that there has been a material change in circumstances, by reason of the applicant’s retirement. Even in the absence of the respondent’s acknowledgement, I find that: 1) the change represented by the applicant’s retirement was not known to the parties or to the judge at the time when the final support and the earlier variation orders were made; 2) the change is such that it could not reasonably have been in the contemplation of the parties with the judge; 3) if the change had been known, a different order would have been made than the one that was actually made; and 4) the different order would have been different in respect of the weight and consequences of the change and would have taken into account the change to make an alteration in the result.

[48] As observed at para. 62 of Boston, the payee spouse’s need and the payor spouse’s ability to pay are factors which the court considers when determining spousal support, as is the extent, if any, of “double recovery.” Double recovery is defined by the Supreme Court as the “situation where a pension, once equalized as property, is treated as income from which the pension-holding spouse must make spousal support payments”: Boston, at para. 34. At para. 63 Major, J. noted that it is generally unfair to allow the payee spouse to reap the benefit of the pension, both as an asset and then again as a source of income. At para. 64 Major, J. stated that “to avoid double recovery, 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.”

[49] In this case, the applicant’s retirement and diminished income potential is a “material change” to warrant a variation order. This is because the current circumstances would permit a double recovery that was not contemplated by Whitten J. in the initial order. I find that had Whitten J. considered the applicant’s current income from his pension would be used in calculating spousal support, the initial order would have changed in its result.

(c) Inclusion of the Applicant’s Pension Income and “Double-Dipping”

[50] At para. 65 Major, J. stated that, in certain circumstances, a pension which has previously been equalized can also be viewed as a maintenance asset in that double recovery may be permitted:

Where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and, despite this, an economic hardship from the marriage or its breakdown persists. Double recovery may also be permitted in spousal support orders/agreements based mainly on need as opposed to compensation.

[51] The two circumstances articulated by Major J., in which double recovery may be permitted, is (1) where the payor spouse has the ability to pay, or (2) where the payee has demonstrated a reasonable effort to use the equalized assets in an income-producing way.

[52] In my view, neither of the circumstances where double recovery may be permitted are engaged in the case at bar.

[53] First, it is clear from the evidence that the applicant, following his retirement, has a diminished earning capacity and does not have the ability to pay. The applicant’s income may be too low to warrant spousal support payments. In Rogerson and Thompson, “Spousal Support Advisory Guidelines: A Draft Proposal”, (Ottawa: Department of Justice, 2005), $20,000 of income per year is generally considered the floor for spousal support payments. At pg. 87, Rogerson and Thompson write:

Our initial view is that there should not be any amount of spousal support payable until the payor’s gross income exceeds $20,000 per year. A minimum wage or poverty income was considered too low, providing too little incentive for the payor to continue working, given prevailing tax rates. A review of the case law suggests that judges almost never order spousal support where payors make less than $20,000, or even slightly more.

It is noted that the Ontario minimum wage has increased since the foregoing observations were published. What may reasonably be considered a “minimum wage or poverty income” has been adjusted upwards. Thus, I find the applicant’s annual income is too low and compelling spousal support payments would represent hardship.

[54] Second, the respondent has not made a reasonable effort to use the equalized pension income in an income-producing way to provide for her own pension on retirement. The Supreme Court has stated that a payee spouse has an obligation, as far as it is reasonable, to attempt self-sufficiency by using equalization assets to produce an income: Boston, at para. 70. As indicated above, the respondent received the sum of $144,692.00 from the applicant’s pension, as part of the equalization, for transfer to her LIRA. As a result of capital withdrawals in the sum of approximately $15,000 per year over a number of years, the capital value of the respondent’s LIRA has been reduced to $30,000, according to her financial statement sworn or affirmed January 29, 2020.

[55] I find that the need for the sizable capital withdrawals from the respondent’s LIRA largely resulted from two decisions she made, namely: 1) persisting unreasonably in seeking to support herself in an unprofitable business selling produce at farmers’ markets rather than seeking and obtaining gainful employment; and 2) continuing to support her four adult children for various periods of time, including to date, without seeking any meaningful contribution from them to the expenses of daily living, including rent, food and transportation.

[56] In contrast to the respondent, the applicant has kept his living expenses to a reasonable level, such that he is largely living within his means, and he has managed his capital assets in order to provide for a basic level of income in retirement.

[57] This case is inversely analogous to Boston. In Boston, the Supreme Court allowed the appellant husband application to lower spousal support payments because it was evident the respondent wife had invested “her equalization assets wisely”: Boston, at para. 70. Further, the Court examined the parties’ assets and determined double recovery would be inequitable since the husband’s only tangible asset was a diminishing pension.

[58] I find that the circumstances are not such that double recovery by the respondent, by receiving the benefit of the applicant’s pension accrued during the marriage, and at the same time, looking to that portion of his pension income as a source of income for spousal support purposes, should be permitted. Here the respondent failed to act with prudence. She has not met her obligation to use the equalization assets towards self-sufficiency. Given the applicant’s diminished income capacity and ability to pay, it would be inequitable to allow for double recovery.

[59] In accordance with the Supreme Court’s directive in Boston, for spousal support purposes, the focus should be on that portion of the applicant’s pension income that has not been part of the equalization or division of matrimonial assets pursuant to the 2011 Order, namely that portion which accrued after the date of separation.

(d) Portion of Applicant’s Pension Income to be Included for Spousal Support

[60] No evidence was led at trial with respect to the value of that portion of the applicant’s pension which accrued after separation or the attribution of the applicant’s pension income to the periods prior to and after separation. As set forth in the 2011 Order, the portion of the pension which was subject to division accrued over the period October 6, 1979 to June 1, 2007 (approximately 28 years). The applicant’s pension entitlement for that period was reduced by virtue of the division with the respondent by 50%. The portion which accrued from June 1, 2007 to January 1, 2018 (approximately 10 ½ years) has not been subject to division.

[61] In the absence of evidence, I am left to do the best I can with the available information. I would therefore estimate the value of the applicant’s pension income which has accumulated post-separation and therefore to be included in his income for spousal support purposes, to be 50% of his total pension income or $11,231.03 per year. Combined with his estimated investment income in 2019 of $1,026.49, the applicant’s total income for spousal support purposes was therefore $12,257.52 in that year.

(e) Imputing Canada Pension Plan Income to the Applicant

[62] I would not impute an amount equivalent to Canada Pension Plan retirement or disability pension income to the applicant on the ground that he has unreasonably failed to make an early application for Canada Pension Plan retirement pension, or to apply for a Canada Pension Plan disability benefit. The applicant testified that the purpose of the bridge pension which he receives by virtue of his past employment in the sum of $511.25 per month is to “bridge” him until he begins drawing from the Canada Pension Plan at age 65. It may be inferred from this that, should he begin drawing the Canada Pension earlier than age 65, the bridge pension would be terminated.

[63] I am unable to find that the applicant’s decision to defer applying for Canada Pension Plan retirement pension until age 65 to increase the amount of his entitlement at that time, and to continue to draw the bridge pension in the meantime, is unreasonable.

[64] Moreover, there was no evidence that, should the applicant apply for Canada Pension Plan disability pension, his application would be approved. It is noted that although records of the applicant’s treating physician and psychiatrist were admitted into evidence on consent, counsel for the respondent did not seek to cross-examine either of them. The onus of showing an evidentiary basis for the imputation of income to the applicant is on the respondent. I find her suggestion that the applicant acted unreasonably in failing to apply for a disability pension to be unsupported and speculative.

(f) Imputing Income to the Respondent

[65] The Reasons for Decision of Whitten, J. for the 2011 Order were not put into evidence and they do not appear to have been reported publicly. Although the 2011 Order itself does not identify the basis for imputing income to the respondent, it appears to be common ground that Whitten, J. imputed income to the respondent in the sum of $20,000 per year as a reflection of her earning capacity from her agricultural business selling produce at farmers’ markets and not on the basis of any failure to seek alternate employment at that time.

[66] A spouse is intentionally underemployed if he or she chooses to earn less than he or she is capable of earning having regard to all the circumstances (see Drygala v. Pauli, 61 O.R. (3d) 711 (C.A.), at para. 28).

[67] The principles which the court should consider, among others, when considering a spouse’s capacity to earn income were very usefully summarized by Shelston, J. in the case of Verhey v. Verhey, 2017 ONSC 2216, at para. 35 as follows:

(a) There is a duty on the spouse to "actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their children" (Thompson v. Thompson, 2013 ONSC 5500 (Ont. S.C.J.), at para. 99); (b) A spouse's capacity to earn income can be influenced by his or her age, education, health, work history, and the availability of work that is within the scope of his or her capabilities (Marquez v. Zapiola, 2013 BCCA 433, 344 B.C.A.C. 133 (B.C. C.A.), at para. 37); (c) A spouse can be found intentionally under-employed or unemployed if he or she quits employment for selfish or bad faith reasons, or engages in reckless behaviour that results in a reduction of his or her income earning capacity (Scott v. Chenier, 2015 ONSC 7866 (Ont. S.C.J.), at para. 48); (d) A spouse cannot avoid support obligations by a self-imposed reduction in income (L. (N.) v. P. (B.), 7 R.F.L. (5th) 335 (Ont. S.C.J.), at para. 27); (e) Where a spouse experiences an involuntary loss of employment, courts will grant a "grace period" to allow the spouse to seek out replacement work. However, the absence of a reasonable job search will leave the court with no choice but to find that the spouse is intentionally under-employed or unemployed (Filippetto v. Timpano).

[68] The onus is on the party seeking to impute income to establish an evidentiary basis that the other party is intentionally under-employed or unemployed (see Homsi v. Zaya, 2009 ONCA 322, at para. 28).

[69] The respondent reported net farming income in the following amounts for the years 2016, 2017 and 2018:

Tax Year	Net Annual Farming Income/Loss
2016	$1,521.01
2017	$281.49
2018	($174.27)

[70] At the time of trial, the respondent had not filed her Income Tax Return for 2019. However, in her Financial Statement sworn January 29, 2020 she stated her self-employment income in 2019 to be $300/month ($3,600/annum). As indicated above, the respondent testified to changes which have significantly reduced or eliminated the profitability of her business.

[71] As noted above, the respondent has made no applications for alternate employment in three to four years.

[72] I find that the applicant has established an evidentiary basis that the respondent is intentionally under-employed by persisting in being engaged in unprofitable self-employment and in failing to take reasonable steps to seek alternate employment to achieve a higher degree of self-sufficiency.

[73] The respondent testified that when she did attempt to find alternate employment in the past, her efforts were hampered by employment market changes, her age, lack of training and health issues.

[74] The respondent’s evidence confirmed that she has been engaged in a business that involves a degree of strenuous work, including transporting and handling produce sold at various farmers’ markets. Although I am not satisfied that it is appropriate to impute income to the respondent on a basis equivalent to full time employment, I find that it is appropriate to impute income to her based upon half-time employment at a minimum wage level. Based upon part-time employment of 20 hours per week at minimum wage, I would impute income to the respondent in the sum of $14,560 per annum.

(g) Determination of the Parties’ Incomes for Spousal Support Purposes

[75] Based upon the foregoing, I find the parties’ respective incomes in 2018 for spousal support purposes to be as follows:

Applicant Employment $25,950.43 Pension $11,231.03 Investment $1,026.49 TOTAL $ 38,207.95

Respondent Imputed Employment $14,560

[76] I find the parties’ respective incomes in 2019 for spousal support purposes to be as follows:

Applicant Pension $11,231.03 Investment $1,026.49 TOTAL $12,257.52

Respondent Imputed Employment $14,560

(h) Applicant’s Spousal Support Obligations for 2018 and 2019 and Payments

[77] The mid-range obligation of the applicant for spousal support under the Spousal Support Advisory Guidelines (the “SSAG’s”) for 2018 is the sum of $852.00/month or $10,224 for the year.

[78] The applicant paid spousal support of $2,307/month or $27,684 in total in 2018, resulting in an overpayment of $17,460 in that year.

[79] The applicant had no spousal support obligation in 2019. The applicant paid a total of $20,763 in spousal support until September 2019. There is disagreement between the parties as to whether the applicant made payments of spousal support in October, November and December 2019, after the making of the 2019 Temporary Order suspending enforcement of spousal support. The respondent produced a Family Responsibility statement dated February 11, 2020 (Ex. 3) indicating that there were no receipts of payments by FRO for October, November and December 2019, whereas the applicant testified that the 2019 Temporary Order was not implemented by FRO until December 2019 and that payments were garnished by FRO in October, November and December 2019. The respondent denies receiving any payments for those months.

[80] In the result, the applicant overpaid spousal support for 2019 in the sum of $20,763, if payment terminated in September, or $27,684 if it did not terminate until December.

(i) Applicant’s Claim for Reimbursement of Overpayment of Spousal Support

[81] The applicant, in submissions, claimed termination of spousal support effective on the date of his retirement, January 1, 2018, the elimination of all arrears of spousal support and repayment of all overpayment of spousal support.

[82] The Supreme Court of Canada, in the case of Kerr v. Baranow, 2011 SCC 10 (S.C.C.), offered guidance on the issue of retroactive spousal support. At para. 207, Cromwell, J. stated that similar considerations to those set out in the context of child support in the case of S. (D.B.) v. G. (S.R.), 2006 SCC 37 (S.C.C.) are relevant to deciding the suitability of a "retroactive" award of spousal support. These factors are: the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support, and any hardship of the retroactive award may occasion on the payor spouse.

[83] However, Justice Cromwell, at para. 208 of Kerr, noted the different legal foundation that spousal support has from that of child support. Unlike child support, there is no presumptive entitlement to spousal support, and a spouse is in general not under any legal obligation to look out for the other separated spouse's legal interests. Accordingly, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support.

[84] In the case of a request for retroactive reduction or elimination of spousal support, the issue of hardship on the recipient spouse is also an important consideration.

[85] In my view, it would not be appropriate to make the termination of the respondent's support obligation effective at any time prior to September 1, 2019, being the first date for payment following the 2019 Temporary Order suspending enforcement of the payment of spousal support by the applicant, as it would create unacceptable hardship for the respondent.

[86] Any payment of spousal support by the applicant following the 2019 Temporary Order is to be repaid by the respondent. Given the conflicting evidence on when the 2019 Temporary Order was implemented by FRO, counsel for the parties, through their counsel, are directed to make appropriate enquiries with FRO to determine the amount to be repaid by the respondent to the applicant.

Disposition

[87] For the foregoing reasons it is ordered, on a final basis, as follows:

(a) the applicant’s obligation to pay spousal support to the respondent is terminated effective September 1, 2019; (b) arrears of spousal support shall be fixed at zero; (c) the Order of Whitten, J. dated January 21, 2011 shall be varied to remove paragraph 17 thereof; (d) the Order of Whitten, J. dated July 27, 2017 shall be varied to remove paragraph 13 thereof; and (e) the respondent shall reimburse the applicant for all payments of spousal support paid by the applicant after August 27, 2019. Counsel shall make appropriate enquiries with the Family Responsibility Office to determine the amount of the required reimbursement.

[88] I may be spoken to, by making arrangements through the Trial Coordinator at Simcoe, to resolve any issues respecting the calculation of the reimbursement of spousal support paid after August 27, 2019 to be made by the respondent.

[89] A Support Deduction Order shall issue to give effect to the foregoing.

Costs

[90] The parties are strongly urged to agree upon costs. If the parties are unable to agree, the applicant may make written submissions as to costs within 21 days of the release of these Reasons for Decision. The respondent shall have 14 days after receipt of the applicant’s submissions to respond. Each party’s written submissions shall not exceed three (3) double-spaced pages, exclusive of Offers to Settle, Bills of Costs and authorities. The submissions shall be forwarded to me at my chambers at 85 Frederick Street, 7th Floor, Kitchener, Ontario N2H 0A7. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

“D.A. Broad” D.A. Broad, J. Date: March 27, 2020