COURT FILE NO.: FS-17-89413-00
DATE: 2020 09 28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ELIZETE DA LUZ RAPOSO BAPTISTA
E. Pacheco, for the Applicant
Applicant
- and -
MICKEY HARJIT SACHDEVA
Respondent
R. Sleightholm, for the Respondent
HEARD: September 11, 2020 (via videoconference)
REASONS FOR JUDGMENT
Fowler Byrne J.
[1] In or around August 24, 2020, the Applicant Wife sought leave to bring an urgent motion, wherein she sought interim spousal support. Its urgency was recognized, and the matter was scheduled to proceed on August 27, 2020 by videoconference. The matter had been further adjourned to that day in order to allow the Respondent Husband an opportunity to serve and file responding materials and he was ordered to make a without prejudice payment to the Wife of $3,400 to enable her to pay her first and last month’s rent.
[2] Following the argument of the motion on September 11, 2020, but before my decision was released, the Husband sought leave to file an up-to-date pay stub for the court’s consideration. After hearing from the Wife, this court ordered that the Husband file his most recent, up-to-date income information and provided the Wife with an opportunity to respond. I also gave the Wife an opportunity to provide a supplemental cost outline as a result of having to respond to the Husband twice. Having reviewed the original motion materials and the supplemental materials filed after September 11, 2020, I am now prepared to make my decision.
Relief Sought by Wife
[3] The Wife seeks the following:
a) Spousal support in the amount of $4,655 per month, retroactive to January 1, 2020, or in the amount the court deems appropriate;
b) That the Husband name the Wife as the irrevocable beneficiary of his life insurance, presumably as security for this obligation;
c) That the Husband maintain the Wife as a beneficiary of his extended health, medical and dental benefits through is place of employment; and
d) Her costs of this motion on a full recovery basis.
[4] The Husband opposes this motion indicating that the Wife has not established her entitlement to support. If entitlement is found, then the Husband asks that the court find his most recent income in 2019 to be an exception and that he anticipates earning only $150,000 this year. Finally he asks that any order made will only be “without prejudice” until he receives more disclosure regarding the Wife’s disability. He also asks that support only start as of August 2020, and not January 2020 as requested by the Wife.
[5] Accordingly, I have been asked to determine the following questions:
a) Is the Wife entitled to interim spousal support?
b) If entitlement is found,
should this Order be “without prejudice”?
when should spousal support commence?
what is the income of the Wife and Husband for the purposes of calculating support; and
where along the SSAG range should the support fall?
Background
[6] The parties married on June 24, 1995 and separated on September 9, 2016. At the time of this motion, there were no longer any children of the marriage.
[7] During the marriage, both parties were employed full time.
[8] The Husband was first an officer with the R.C.M.P., and subsequently joined Peel Region Police Services. At the time of the separation, he had risen to the position of a staff sergeant. In 2019, his line 150 income was $179,408.84; in 2018 it was $150,734; in 2017 it was $141,132; in 2016 it was $129,252.23. The Husband claims that he currently earns a base salary of $124,000 and the rest of the income is from extra pay duty. He states that 2019 was an exceptional year and he predicts he will only earn $150,000 in 2020. He stated in his affidavit that he earned much more income than usual in 2019 by taking extra duties and to help pay his legal fees. The most recent pay stubs produced, dated August 20, 2020 and September 3, 2020, show that his biweekly base income is $5,008.42, which equates to $130,218.92 per annum. These stubs also show that, as of September 2, 2020, he earned approximately $15,000 over and above his base pay in pay duty and overtime. He claims he will not be doing any more pay duties, but does not explain why. It appears that extra pay duty has been a historical component of his regular pay.
[9] The Husband also claims that he has not received any dividend income from Deva Property Investment Management Inc., which is a corporation in which he has a controlling interest. The Wife has produced the financial statements for the fiscal years ending in June 2016, 2017, and 2018. The Husband has not provided year-end financial statements for 2019 and 2020, although given another opportunity to do so when I allowed him to file additional evidence of his most recent income. The produced financial statements show that, in the fiscal year ending 2015, he reduced his retained earnings by approximately $5,000. In the next year, just before separation, his retained earning increased by approximately $23,000. In the fiscal year ending 2017, his retained earnings increased by approximately $26,000, and then in the fiscal year ending 2018, his retained earnings increased by approximately $46,000. As of the end of June 2018, he had approximately $125,000 retained earnings in his company. No income report has yet been proffered by the Husband. Simply stating that he will not receive any dividend payments this year is an insufficient explanation for the increase in retained earning of over $73,000 in the two years after separation.
[10] During the marriage, the Applicant worked in the insurance industry. As of the date of separation, the Wife was an auto fleet insurance underwriting for Royal Sun Alliance Insurance Company of Canada. In 2017, she earned $83,000, and in 2018, she earned $87,282.57. In February 2019, approximately 2.5 years post separation, the Wife went on short term disability leave. This became long term disability as of August 2019, and she continues to be on this leave. She earns $4,383 per month, which is the equivalent of 2/3 of her salary at the time. She has provided the LTD documentation, showing her diagnosis and medical notes from her family doctor (April 30, 2020), a psychotherapist and social worker (dated May 15, 2020), and from her psychiatrist (dated June 9, 2020). The letters indicate that she suffers from PTSD, severe depression, panic and anxiety disorder, and has been suicidal in the past. The Wife claims that her diagnoses are linked to an abusive relationship. The Husband denies that claim. The Wife maintains that her career always took a second seat to that of the Husband’s and that, as a result, she did not advance as she could have. The Husband denies this allegation as well.
[11] No spousal support has been paid since separation. The Wife states that the delay in requesting support was due to the tardy delivery of financial disclosure by the Husband. The Wife indicates that she started to take the steps to bring this motion in February 2020 and provided her supporting materials to opposing counsel at that time. Unfortunately, due to the suspension of court operations in March 2020, the motion did not proceed. The Wife attempted to negotiate the issue since that time, but to no avail. She maintains she had no option but to bring this motion on an urgent basis.
Entitlement
[12] I find that the Wife is entitled to interim spousal support. In so determining, I am mindful of the particular considerations when determining a request on an interim basis as set out in Driscoll v. Driscoll, 2009 CanLII 66373 at para. 14. In particular:
a) it is clear that the Wife has a need and the Husband has the ability to pay;
b) interim spousal support is necessary for the Wife to approach the standard of living she enjoyed while married, as she currently earns approximately half of what the Husband earns;
c) it is not necessary at this juncture to determine if she was economically disadvantaged by the marriage or separation, or whether her current disability was “caused” by the marriage or separation; and
d) a prima facie entitlement for spousal support has been shown, given the length of the marriage, the disparity of income and that the Wife’s disability that is sufficiently close to the marriage to warrant further investigation. There are sufficient uncontested facts that show this prima facie case.
Nature of the Order
[13] The Wife requests that this Order be put in place on an interim basis pending trial. Accordingly, if either party wanted to vary it again prior to trial, they would have to show a material change in circumstances. The Husband requests that it be made “without prejudice” so that it may be revisited after he receives full medical disclosure from the Wife.
[14] The purpose of an interim order is to put in place an arrangement that can be sustained until which time all facts can be gathered and tested at trial. It is not anticipated that interim orders will change regularly as each piece of evidence is disclosed leading up to trial. Sometimes a “without prejudice” order, or what was previously referred to as an “interim interim” order is made when there is some urgency, but insufficient information is available to make an order on the merits. This is not the situation in the case before me. We have the parties’ income information for the last several years, the husband’s most recent pay stub, both parties’ current employment status, the length of their marriage, and basic information regarding Wife’s inability to work. While the Husband is entitled to argue that the Wife is not really disabled, that the disability is not connected to the marriage or separation, or that he earns less than the Wife has alleged due to the varied method in which he earns income, these are questions that will require a trial to resolve.
[15] Accordingly, I see no reason for this Order to be made “without prejudice”. The parties should focus their efforts on obtaining the additional disclosure they require, conduct questioning if necessary, and then proceed to trial. Another interim motion on the issue of spousal support will only delay this process. When the parties proceed to trial, interim orders may be varied back to the commencement of the interim order if the evidentiary record at trial justifies such an order: Ponkin v. Werden, 2015 ONSC 791, at para. 18, citing Fisher v. Fisher, 2008 ONCA 11, at para. 76.
Start Date
[16] The Wife maintains that she started addressing the commencement of spousal support in February 2020, which is acknowledged by the Husband. The affidavit evidence of both parties supports the finding that the parties continued to communicate from that time, through the suspension of court operations, hoping to resolve the issue in some manner. Accordingly, the Husband was well aware from at least February 2020 that the Wife sought support. Accordingly, it is reasonable that support start as of that month.
The Wife’s Income
[17] The current monthly income of the Wife is not contested. It is also agreed that her disability benefits are non-taxable and that her income for support purposes should be grossed up. The parties disagree on the “grossed up” amount that the Wife earns. The Wife relies on the grossed up income calculated by the DivorceMate software that is readily available to counsel. The Husband provided his own calculation of the Wife’s grossed up income, without any supporting evidentiary basis for it.
[18] If imputed correctly, the DivorceMate software will calculate how much gross employment income the party would have to earn at his/her current marginal income tax rate, in order to earn this non-taxable disability benefits income. Sufficient information was received on this motion to accurately impute this amount. Absent an expert opinion on another grossed up figure, the grossed up income on the DivorceMate calculation will be used.
The Husband’s Income
[19] The parties agree that the Husband has more than one income source. He is employed with the Peel Police Services, and his earnings include his regular salary and any extra pay duty or overtime he earns from year to year. The evidence also supports a finding that he has the ability to earn extra income through the Company by virtue of the consistent increase in his retained earnings over the years leading up to 2018.
[20] The Federal Child Support Guidelines (the “Guidelines”) provide direction to the court in determining income for the purposes of support. These Guidelines are also to be utilized to determine income for spousal support purposes: Spousal Support Advisory Guidelines, Section 6.1.
[21] The relevant sections of the Guidelines are as follows:
2(3) Where, for the purposes of these Guidelines, any amount is determined on the basis of specified information, the most current information must be used.
16 Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.
17(1) If the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
19 (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following:
(d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;
(e) the spouse’s property is not reasonably utilized to generate income;
(f) the spouse has failed to provide income information when under a legal obligation to do so;
[22] The imputation of income for support purposes is a discretionary and fact-specific exercise: Levin v Levin, 2020 ONCA 604 at para. 12.
[23] The Husband’s past and current employment income is clear. Based on the uncontested facts before me though, I also find that the Husband is able to earn additional income from his Company, over and above his employment income. In doing so, I have made an adverse inference against the Husband for failing to provide his most recent financial statements for the Company, an entity in which he appears to be accumulating his wealth since separation.
[24] In determining the Husband’s income for the purposes of support, I have also noted that over the last three years, his employment income has steadily increased. Between 2016 and 2017, his income increased by $11,880; between 2017 and 2018, his income increased by $9,602; and between 2018 and 2019, his income increased by $28,679. The Husband can earn pay duty and statutory holiday pay over and above his base salary. While the Husband stated he would not earn any more extra pay duty, he did not indicate whether any further statutory holiday pay will be available. There are further statutory holidays this year. The one specific anomaly pointed out by the Husband was that in 2019, he was paid out his vacation pay. He did not indicate who much that was, or whether he would be paid out again this year. At a minimum, the Husband will be able to earn $150,000 this year in employment income.
[25] Also, based on the financial statements of the Company from 2015 to 2018, and in the absence of any evidence to the contrary by the Husband, I am satisfied that the Husband’s dividend income has been unnecessarily retained in the Company and that this property is not properly being utilized for support purposes. Although the exact amount cannot be ascertained without a trial, at this juncture, the court notes the continual increase of anywhere between $10,000 and $28,000 each year following separation.
[26] Accordingly, based on the principles set out in the Guidelines, and the uncontested evidence before me, I will impute the Husband’s current income to be $170,000 per annum, being $150,000 from his employment and an additional income of $20,000 from the Company.
Range in SSAG’s
[27] Interim support orders should be set within the SSAG range. In this case, I have determined that support should be payable at the high range. In so determining, I have taken into consideration the following:
a) the Wife currently has a need for support and has limited earning capacity due to her ongoing disability; she has received no support since going on disability leave in February 2019, approximately 1.5 years ago;
b) the Wife is only earning approximately half of what the Husband is earning;
c) the marriage was a long one – 21 years;
d) due to the Wife’s disability (whatever the cause), there is not a need to incentivize the Wife to seek employment or to achieve self-sufficiency at this stage; and
e) the Husband’s up-to-date corporate income has not yet been disclosed.
[28] I have attached the DivorceMate Calculation for the parties’ information.
Security for Support
[29] The court has the power, on an interim motion for support, to order that a spouse designate the other spouse as an irrevocable beneficiary of their life insurance policy. Given the order for support that will be made, it is appropriate that this obligation be secured and the appropriate order will be made. It is also appropriate that, given the Wife’s entitlement to spousal support, that she should remain a beneficiary of the Husband’s extended health benefits. Both these orders are made on an interim basis, to be addressed again at trial.
Costs
[30] The parties have provided to me their Costs Outline. No offers to settle were exchanged with respect to this motion. I have also reviewed the Applicant’s supplementary costs outline, associated with the requirement that she respond a second time to the Husband’s income evidence.
[31] The Wife seeks the sum of $11,887.60, inclusive of disbursements, taxes, and fees on a full indemnity basis. The Respondent’s full indemnity costs, by contrast, are only $6,045.50.
[32] The Wife is entitled to her costs on this motion, but on a partial indemnity only. The Family Law Rules do not provide for a general approach of “close to full recovery” of costs. Instead, r. 24(12) sets out the appropriate considerations in fixing a quantum of costs. As the wording of the rule makes clear, proportionality and reasonableness are the touchstone considerations to be applied in fixing the amount of costs: Beaver v. Hill, 2018 ONCA 840, at paras. 11-12, 19.
[33] The Family Law Rules expressly contemplate full recovery costs in specific circumstances, such as: when a party has behaved unreasonably under r. 24(4), acted in bad faith under r. 24(8), or beat an offer to settle under r. 18(14). I see nothing that amounts to bad faith or unreasonable conduct in this matter except for the Husband’s failure to provide up-to-date financial information for the argument of the motion.
[34] In setting the costs of this motion, I have considered the following:
a) The costs associated with the “pre-Motion stage” are not properly awarded at this juncture. The Wife is free to seek these costs at the trial of this matter;
b) The Wife should have her costs of the adjourned hearing on August 27, 2020;
c) The hourly rate of both parties is reasonable given their experience;
d) Costs should only be payable on a partial indemnity basis, except for the costs incurred by the Wife for having to respond twice to the motion. While the Wife would no doubt have had to include this extra work in her first affidavit if she had the Husband’s up-to-date income information prior to the motion being heard, the additional time required to have the client in again, and swear another affidavit, should be compensated on a full indemnity basis. I have estimated this to be approximately 1 hour.
Conclusion
[35] For the above reasons, I make the following order:
a) The Respondent Mickey Harjit Sachdeva shall pay interim spousal support to the Applicant Elizete Da Luz Raposo in the amount of $3,500 per month commencing February 1, 2020, and continuing on the 1^st^ day of each month that follows until a court orders otherwise;
b) The Respondent Mickey Harjit Sachdeva shall irrevocably designate and maintain the Applicant Elizete Da Luz Raposo as the beneficiary of his life insurance policy through his place of employment as security for his spousal support obligations, pending trial;
c) The Respondent Mickey Harjit Sachdeva will maintain his medical, extended health and dental coverage through his employment for the benefit of the Applicant Elizete Da Luz Raposo, pending trial; and
d) The Respondent Mickey Harjit Sachdeva shall pay to the Applicant Elizete Da Luz Raposo her costs of this motion fixed in the sum of $6,800, inclusive of fees, disbursements and taxes, payable in thirty (30) days; and
e) The sum of $3,400 previously paid by the Respondent Mickey Harjit Sachdeva to the Applicant Elizete Da Luz Raposo on a without prejudice basis, shall be credited against any spousal support arrears that are owing due to this order.
_______________________
Fowler Byrne J.
Released: September 28, 2020
COURT FILE NO.: FS-17-89413-00
DATE: 2020 09 28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ELIZETE DA LUZ RAPOSO BAPTISTA
Applicant
- and -
MICKEY HARJIT SACHDEVA
Respondent
REASONS FOR JUDGMENT
Fowler Byrne J.
Released: September 28, 2020