COURT FILE NO.: FC-19-1098-1
DATE: 2020/01/24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kim Letkeman, Applicant
AND
Nancy Bainbridge, Respondent
BEFORE: Justice Engelking
COUNSEL: Loreen Irvine, Counsel for the Applicant
Gonen Snir, Counsel for the Respondent
HEARD: January 14, 2020
ENDORSEMENT
[1] This is a Motion to Change brought by the Applicant, Mr. Letkeman, seeking to reduce the spousal support payable by him to the Respondent, Ms. Bainbridge, based on a material change of circumstances relating to his income since the execution by the parties of their Separation Agreement dated May 2, 2011.
[2] In her submissions, Ms. Bainbridge conceded that there has been a material change in circumstances, so the only issue before the court is that of what the appropriate quantum of support should be and for how long.
[3] For the reasons that follow, I find that commencing January 1, 2019 Mr. Letkeman shall pay to Ms. Bainbridge $3,000 per month in spousal support for an indefinite period.
Background Facts
[4] The parties were married on December 31, 1985 and separated on January 21, 2009. Two children, both now independent adults, were born of the relationship.
[5] Mr. Letkeman and Ms. Bainbridge entered into final Minutes of Settlement on May 2, 2011. At the time the Minutes were executed, Mr. Letkeman was working for IBM and was earning approximately $180,000 per year. Ms. Bainbridge was retired from her employment with the department of Foreign Affairs and was in receipt of a pension income of approximately $24,000 per year.
[6] The parties agreed that Ms. Bainbridge’s pension income was going to be split at source, and that until such time as that occurred, Mr. Letkeman would pay her $4,610 per month in spousal support based on him having an annual income of $180,000 and her having an annual income of $24,000. After the pension division occurred, the support payable by Mr. Letkeman would increase to $5,100 per month.
[7] According to Ms. Bainbridge’s evidence, the amount chosen was reduced somewhat to account for the fact that the children’s primary residence was with Mr. Letkeman and they were attending university at the time. It was, however, nevertheless at the high end of the SSAG range to take into account Ms. Bainbridge’s health issues[^1] and need. For the same reason, the parties agreed to stay married so that Ms. Bainbridge would have the benefit of continued medical coverage under Mr. Letkeman’s insurance with his employer.
[8] Ms. Bainbridge’s pension was never, in fact, divided at source, and Mr. Letkeman continued to pay $4,610 per month in spousal support. At some point post the Agreement, Ms. Bainbridge took a supplemental payment from her pension, knowing that the result would be that her payment at age 65 (which she turned in October of 2019) would be lower. She also elected to take her CPP at age 60 rather than 65. Her income is now $1,841 in pension, $633 in CPP and $454 in OAS for a total of $2,928 per month or $35,136 annually, though Mr. Letkeman argued that the latter amount (OAS) was after-tax, and her actual annual income was closer to $37,000.
[9] In 2018, IBM changed its structure such that the department for which Mr. Letkeman worked was moved to Markham, Ontario. Mr. Letkeman attempted to negotiate remaining in Ottawa, but ultimately, because he wanted to remain in Ottawa, he was required to retire from IBM effective July 2018. He received a severance payment in 2018, which, combined with his employment income, resulted in his income being $234,000 for that year. Mr. Letkeman was able to find new employment with a company called ThinkRF commencing in October of 2018. His annual salary at his new employment is $120,000.[^2]
[10] Early in 2018, Mr. Letkeman communicated the impending change to Ms. Bainbridge in hopes of negotiating a reduction in his support payments with her, but as they could not reach an agreement, he filed his Motion to Change. Given that she has now conceded that there has been a material change, it is not necessary for me to examine the pertinent paragraphs of their 2011 Separation Agreement.
Position of the Parties
[11] Mr. Letkeman’s submits that the Separation Agreement resulted in Ms. Bainbridge having 41.2% of the Net Disposable Income (“NDI”) of the parties. The contemplated adjustment of his support payment to $5,100 after the division of her pension income, had it happened, would have resulted in Ms. Bainbridge having 40.5% of the NDI. It is his position that any adjustment in the support payable should, therefore, result in Ms. Bainbridge ending up with approximately 40% of the NDI. His calculation of support at 40% of the parties NDI on incomes of $120,000 for Mr. Letkeman and $37,000 for Ms. Bainbridge results in a monthly support payment by him of $1,596, which is well below the low range of the SSAG’s of $2,385.
[12] Ms. Bainbridge’s position is that the parties agreed in the Separation Agreement that support would be payable near the high range of the SSAG’s. Her calculation of support on incomes for Mr. Letkeman at $120,000 and her at $35,136 results in a payment in the high range of $3,253. To attend to the issue of the amount being historically slightly lower than the high range, Ms. Bainbridge submits that Mr. Letkeman should pay her spousal support of $3,000 per month.
Analysis
[13] There is no doubt that Mr. Letkeman communicated to Ms. Bainbridge about the impending change in his employment situation well in advance of it occurring in July of 2018. In his Motion to Change, Mr. Letkeman seeks a reduction in spousal support commencing September 1, 2018, the date at which he commenced his new employment. Although I am able to find that there was effective notice to Ms. Bainbridge prior to the filing of his Motion to Change, Mr. Letkeman’s income in 2018 was, in fact, $234,000 as a result of his employment with IBM, his severance pay from IBM and his employment with ThinkRF. I can find no material change such that support should be reduced in 2018. However, Mr. Letkeman’s income changed to $120,000 in 2019. Any change in his spousal support payable should, therefore, commence effective January 1, 2019.
[14] This is a case involving a variation under the Family Law Act (the parties never having divorced). As Justice MacLeod found in Charleton vs. Coburn, 2016 ONSC 5415 at paragraph 32:
[32] While L.M.P. v. L.S. dealt with variation under the Divorce Act, the principles are similar under the Family Law Act. The Supreme Court has said that on a variation of a spousal support order, the objective is to determine the appropriate change required as a result of the material change. It is not a review of support de novo. The Court adopted the analysis in Miglin that judges making variation orders limit themselves to making the appropriate variation but do not weigh all of the factors required by s. 15. Moreover, the analysis is the same whether the original order was the result of adjudication or of a settlement. In either case, unless a party is seeking rescission, there is a presumption that the original order was correct and in accordance with the objective of the Act. There is no reason not to apply the same analysis to an order under the Family Law Act.
[15] The parties in this case did not set out in the Separation Agreement whether the basis for entitlement to support was compensatory or non-compensatory. Mr. Letkeman argues, and I accept, that it was largely non-compensatory, based both on the fact that Ms. Bainbridge worked as a public servant throughout the marriage and on her post-retirement need, some of which is based on her current medical situation. Mr. Letkeman’s DivorceMate calculation of spousal support for 2019 has produced a range of $2,415 at the low end, $2,818 at the mid-point and $3,220 at the high end. Notwithstanding his arguments with respect to the respective percentages of NDI their Agreement resulted in, I can not see the basis for diverting from the range they agreed to as being appropriate to meet Ms. Bainbridge’s needs, or slightly below the high end of the range. Like in Charleton, this permits Ms. Banbridge to share in Mr. Letkeman’s post-separation reduction in income[^3] without doing so dollar for dollar, it accounts for the change in her income as well, it addresses her continuing needs and, finally, it is in keeping with the point of the range the parties agreed to in their Separation Agreement.
[16] The Separation Agreement dated May 2, 2011 provided that spousal support would be payable until the death of either party, with Mr. Letkeman maintaining insurance to secure his support obligation. Variation of support is contemplated with a material change of circumstances, “foreseeable or unforeseeable”, including the possible retirement of Mr. Letkeman. He, therefore, may seek a further change at that time.
Order
[17] My order is as follows:
Commencing January 1, 2019, spousal support payable by the Applicant to the Respondent shall be varied to $3,000 per month;
The Applicant shall be credited for any overpayment made from January 1, 2019 to the present; and,
The remainder of the Separation Agreement of the parties dated May 2, 2011 shall remain in full force and effect.
Costs
[18] If the parties are unable to agree on liability for costs of the Motion to Change by February 7, 2020, counsel may make written submissions of no more than three pages, along with copies of their bills of costs and offers to settle, to me at intervals of 10 days from that date and I will make an order.
Justice Engelking
Date: January 24, 2020
COURT FILE NO.: FC-19-1098-1
DATE: 2020/01/24
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Kim Letkeman, Applicant
AND
Nancy Bainbridge, Respondent
BEFORE: Justice Engelking
COUNSEL: Loreen Irvine, Counsel for the Applicant
Gonen Snir, Counsel for the Respondent
ENDORSEMENT
Engelking J.
Released: January 24, 2020
[^1]: Ms. Bainbridge suffers from “short bowel syndrome”, due to surgeries she underwent well before the marriage of the parties.
[^2]: His last pay statement for 2019 showed a year-end total of $119,999.88
[^3]: Though in Charleton it was a post-agreement/order increase in income