COURT FILE NO.: FS-19-42057
DATE: 20201210
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Irene Cartwright
Frances Wood, Wood Gold, for the Applicant
Applicant
- and -
Charles Cartwright
Self-represented
Respondent
HEARD: November 26th, 2020
REASONS FOR DECISION
LEMAY J
[1] This is a motion brought by the Applicant for interim spousal support and a non-depletion order. The Respondent is opposed to both orders. For the reasons that follow, I have ordered a limited amount of spousal support commencing on January 1st, 2021. No retroactive support should be ordered in this case. The Applicant’s request for a non-depletion order is dismissed.
Background
a) The Parties and the Relationship
[2] The parties began to live together in November of 2000, were married on June 21st, 2003 and separated July 5th, 2016. This was a second relationship for both parties. The Applicant brought her then eight year old son to live with the parties when they began to live together. The Respondent had two children from his first relationship that lived primarily with their mother and visited the Respondent on a regular access schedule. The children are now adults.
[3] The Applicant was, and continues to be, employed as a flight attendant with Air Canada. Historically, she has been earning approximately $60,000.00 per year. The Applicant has a high school education and is currently 55 years old.
[4] The Respondent has held a number of positions in retail and in sales. His most recent employment was with Acutant Corporation in a director level job. In that position he earned between $127,000.00 and $136,000.00. He started this job in 2013 and held it until 2016 when the Acutant Corporation phased out its Canadian operations. The Respondent has not worked since that time.
[5] The Respondent has a university degree and has worked at a senior level in the area of sales. He has also held positions in retail management. The Respondent is currently 51 years old.
[6] During the course of the relationship, the Applicant alleges that she cared for the Respondent’s children, and that she was their primary caregiver when they were with the Respondent. The Respondent alleges that, if there were any caregiving responsibilities, it was the Respondent who assisted the Applicant with the day-to-day care for her son, who lived with them on more or less a full-time basis.
b) The Parties' Current Circumstances
[7] In her materials, the Applicant raises issues about underlying medical conditions. These medical conditions required the Applicant to take time off of work in 2018, and she was paid disability benefits. The Applicant returned to work in January of 2019 resuming full time work in May of 2019. There was a reduction in her income as a result of her disability leave, but that reduction stopped when she returned to work.
[8] The Applicant had been working for Air Canada up until the beginning of the pandemic. At that point, she was laid off and has either been receiving Canada Employment Replacement Benefits (“CERB”) or the Canadian Employment Wage Subsidy (“CEWS”) program. These provided the Applicant with either $2000.00 per month in income or $2,500.00 per month in income.
[9] The Respondent is not currently working and has not been working since the end of 2017. The Applicant alleges that he has been golfing and has described himself as “semi-retired” to others. The Respondent alleges that he is continuing to look for work.
[10] On the motion before me, the Respondent filed a few job-search documents. The ones that have been filed before me are all for applications in October and November of 2019. They are all for jobs that seem to fit the Respondent’s skill set as it has been described in the materials. The Respondent states that he has provided 150 job applications to the Applicant and her counsel through the course of this litigation. I do not have any more information about those job applications. I have no idea when they were sent, to what companies they were sent, or what the response to them was.
[11] The records filed on this motion also show that the Respondent has been spending a considerable amount of time and resources golfing since the separation. The records also show that the Applicant has had cosmetic surgery since the separation, but the Applicant deposes that this surgery was necessitated as a result of scarring that she suffered.
[12] In addition, there are the financial statements filed by each party. The Applicant’s financial statements demonstrate that the Applicant has been able to save money and, if only slowly, improve her financial position since the parties separated.
[13] The Respondent’s financial statement shows a decrease in his net worth of several hundred thousand dollars from the date of separation to the beginning of November 2020. This is unsurprising, as the Respondent has been living off of his RRSPs since he lost his employment and his severance package was depleted.
c) The Course of This Litigation
[14] This litigation was commenced in 2019. A case conference was held before Fowler Byrne J. in October of 2019, and disclosure was ordered on consent.
[15] When this motion was originally scheduled in November of 2019, disclosure issues were still outstanding. At this point, however, the disclosure issues have been resolved and the only outstanding issues are the interim support and the non-depletion order.
[16] This motion was supposed to proceed as a short motion on March 19th, 2020 but was adjourned as a result of the COVID-19 shutdown. Similarly, the settlement conference scheduled in April of 2020 was adjourned. As of the hearing before me on November 26th, 2020, the parties had not charted a path forward for this litigation.
[17] There is also a dispute about the equalization payment in this case. The Applicant asserts that she is entitled to an equalization payment. The Respondent asserts that the parties already agreed to an unequal division of the proceeds from the matrimonial home in satisfaction of the issues in this case.
Issues
[18] The Applicant has raised the following two issues:
a) Whether she should be entitled to interim spousal support?
b) Whether she should be entitled to a preservation and a non-depletion order?
[19] I will deal with each issue in turn.
Issue #1 – Interim Spousal Support
[20] The law on interim spousal support is not controversial and has been set out in a number of decisions. In this case, the parties referred me to Driscoll v. Driscoll 2009 66373 (ON SC), [2009] O.J. NO. 5056.
[21] In Driscoll, supra Lemon J. quoted Robles v. Kuhn 2009 BCSC 1163 and set out the following list of factors that the Court should rely upon in assessing the claim for interim spousal support:
a) On applications for interim support, the applicant's needs and the respondent's ability to pay assume greater significance;
b) An interim support order should be sufficient to allow the applicant to continue living at the same standard of living enjoyed prior to separation if the payor's ability to pay warrants it;
c) On interim support applications, the court does not embark on an in-depth analysis of the parties’ circumstances which is better left to trial. The court achieves rough justice at best;
d) The courts should not unduly emphasize any one of the statutory considerations above others;
e) On interim applications, the need to achieve economic self-sufficiency is often of less significance;
f) Interim support should be ordered within the range suggested by the Spousal Support Advisory Guidelines unless exceptional circumstances indicate otherwise;
g) Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out;
h) Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support.
[22] In addition, on an interim motion for spousal support, the Court should attempt to have the parties maintain a reasonable lifestyle until the trial. Dependents are not expected to live modestly until trial, and the Court does not expect one spouse to live better than the other spouse. Newcombe v. Newcombe 2014 ONSC 1094 at para 16.
[23] The Applicant is seeking support based on an imputed income of $140,000.00 to the Respondent. As a result, she is seeking significant support. In addition, the Applicant is alleging that her income has been significantly reduced as a result of the pandemic. The Respondent argues that the Applicant received more of the proceeds from the sale of the matrimonial home on separation, and that the Applicant has been able to improve her financial circumstances since separation. The Respondent argues that he has been conducting a diligent job search and should not have support deemed.
[24] In the main action, the Applicant is seeking spousal support on both a compensatory basis and on a needs basis. It is not my role in a motion of this nature to provide findings on these issues, especially since there is a considerable dispute between the parties over a number of issues.
[25] In addition, both parties point to allegedly unexplained items on the other party’s financial statements. Each party has subsequently provided an explanation for those items. While it is possible that one (or both) of the parties are hiding income, I am not in a position to make that determination on this motion. There is certainly not enough evidence on the facts before me to make any conclusions in this regard.
a) The Applicant’s Income and Means
[26] The Applicant argues that I should assess her income and means based on the fact that she is currently only receiving CERB payments. I disagree for three reasons.
[27] First, the Applicant still has her underlying job. Indeed, she has deposed that she is returning to Air Canada on December 7th, 2020. Although this date may end up being adjusted, it is quite likely that the Applicant will return to work before the trial takes place in this matter. In addition, it is clear that the Applicant was working up until March of this year. Even on an interim motion, the Court must be mindful of the underlying pattern of employment. I am not persuaded that I should deviate from the underlying pattern of employment in this case.
[28] Second, the Applicant is arguing that I should impute income to the Respondent based on his past history of employment. However, in making that argument, the Applicant ignores any effect that the pandemic might have had on the Respondent’s employment. It is difficult to see how the Applicant can argue that she should be entitled to enhanced support for the duration of the pandemic, while the Respondent is not entitled to a reduction in the income imputed during the same time. The better analytical approach in a case such as this is to assume that nothing has changed in the pandemic time period. That approach has the advantage of being a balanced approach.
[29] Finally, the Applicant has not provided any explanation as to why she has not searched for other work since she has been laid off by Air Canada. The Applicant has, instead, stated that she is simply waiting to be called back to work. If one were to accept the Applicant’s arguments in this respect, then the Applicant would not have any responsibility to address her self-sufficiency. While I acknowledge that this factor should attract less weight on an interim motion, it is still a factor to consider.
[30] As a result, for the purposes of this motion, I will consider the Applicant’s income as if it remains at her wage at Air Canada throughout the pre-trial time period.
b) The Respondent’s Income and Means
[31] I start by noting that I am concerned that the Respondent has not been conducting a job search in this matter. His Affidavit evidence that he has filed 150 applications must be counterbalanced with the fact that he filed less than fifteen of them with the Court, and that the ones that were filed were for a two-month period after the Respondent knew that spousal support would be an issue.
[32] I am of the view that, on the records I have before me, the Respondent is underemployed. However, I am not prepared to deem his income at $140,000.00 for the purposes of this motion for three reasons:
a) $140,000.00 is at the very top end of the income that the Respondent has earned over time.
b) The Respondent’s skills will have diminished over the time that he has been out of the workforce. Indeed, it is possible that part of the reason that the Respondent has not been able to find a job could be because his skills are not a complete fit for the marketplace.
c) The Respondent may have to accept a position that is a “level down” from the position he last occupied. This will result in a reduction in his income.
[33] On my view of the case, it is appropriate to impute income to the Respondent in the sum of $90,000.00 per annum. In accordance with Driscoll, this is an amount that best represents what the Respondent would likely be able to earn if he had conducted a comprehensive job search.
c) Conclusions
[34] Based on the foregoing analysis, there may very well be an entitlement to spousal support in this case after trial. However, there is a significant dispute over entitlement on both the needs and compensatory basis for spousal support in this case. The needs basis is a problem for the Applicant because of the fact that her net worth has gone up since separation and that she still has significant income earning potential because of her employment with Air Canada.
[35] The compensatory basis is simply a dispute between the parties that will require evidence to be led at trial. I can make no final decisions on that issue on the materials before me. However, that is not the test that I have to apply. I must consider whether the Applicant has demonstrated a prima facie case of entitlement. In my view, she has.
[36] There is clearly a dispute between the Applicant and the Respondent about whether the Applicant provided significant care to the Respondent’s children. However, this is a matter that is in dispute. The Applicant has, therefore, raised a prima facie case.
[37] The parties were married for fifteen and a half years. Assuming a marriage of fifteen years, this produces a spousal support range between $562.00 per month and $750.00 per month. The SSAG calculations are attached as Appendix “A” to these reasons.
[38] I acknowledge that, in this case, there is also a live issue raised by the Respondent that the parties had resolved the issues in this case by payment of more than half of the proceeds of the matrimonial home to the Applicant. I am also cognizant of the Applicant’s financial circumstances. When I consider those two factors, I am of the view that the monthly support amount should be set at the low end of the range.
[39] As a result, commencing January 1, 2021, the Respondent will pay the Applicant the sum of $562.00 per month as spousal support. This is an interim amount, pending trial.
Issue #2 – Preservation Order
[40] The Applicant seeks a preservation Order that would limit the Respondent to withdrawing a fixed amount of $5,000.00 per month from his RRSPs and otherwise not depleting his assets. In support of this position, the Applicant points to the following:
a) The Respondent has withdrawn nearly $300,000.00 from his investments since the parties separated.
b) The Respondent is spending significant sums on his golf membership.
[41] In other words, the Applicant argues that the Respondent is in the process of dissipating his assets. However, the Applicant’s position acknowledges that the Respondent will need to draw on his RRSP’s as he is not employed. As a result, the Applicant suggests that the Respondent should not be permitted to draw on his RRSPs at a rate any higher than he is currently doing, which is $5000.00 per month.
[42] The purposes of section 12 and section 40 of the Family Law Act must be remembered. Section 12 has been used in two ways. First, to place an onus on a spouse who has been required to preserve assets to account for the assets at trial. Second, to restrain a person’s conduct with respect to his or her property. In deciding whether to apply this section, the Court will consider how likely it is that the Applicant will obtain an equalization payment as well as the effect of the order on each party.
[43] I am not persuaded that the Respondent is intentionally depleting his assets. Instead, the Respondent is living off of his assets. He has deposed that he is not intending to deplete them, and that he would prefer (to the extent possible) to keep his assets. The Respondent argues that, in the event of unforeseen circumstances (such as a car repair) he might need to encroach further onto his RRSPs. For the purposes of this motion, I accept both halves of this submission.
[44] In addition, I am mindful of the fact that there is a dispute over the equalization payment. In particular, the Respondent points out that the Applicant received more than half of the proceeds from the matrimonial home, that these funds have already been distributed, and that the Applicant has purchased a new home with these funds. As a result, the concerns about the dissipation of assets in this case are much less significant than they might be in a case where the Respondent still had control of all (or even most) of the assets from the marriage.
[45] In the circumstances, I am not prepared to order the Respondent to either cease withdrawing monies from his RRSP or limit the amount that he is entitled to withdraw.
Conclusion and Next Steps
[46] For the foregoing reasons, I am ordering as follows:
a) Commencing January 1, 2021, on an interim basis, the Respondent is to pay the sum of $562.00 per month in spousal support to the Applicant.
b) The motion for a non-depletion order is dismissed.
[47] In addition to the relief on the motion, there was also the question of what should be done with this action. As I noted above, this action has been stalled for a year or more. As a result, I provided the following directions to the parties:
a) The parties are to exchange any originating expert reports by January 15th, 2021.
b) Any reply expert reports are to be exchanged by March 15th, 2021.
c) A settlement conference was scheduled in-Court for 10:00 a.m. on April 14th, 2020.
d) The parties are to file the Trial Scheduling Endorsement Form for the Settlement Conference. The Applicant’s counsel has undertaken to complete her TSEF and provide it to the Respondent two weeks in advance of the Settlement Conference. This will ensure that there is one TSEF completed for the Settlement Conference judge.
e) The parties are expected to be able to schedule a trial date at the Settlement Conference, and are to be prepared for trial at that time.
f) I also believe that I provided the Respondent with the guide for self-represented litigants during the course of our appearance. Out of an abundance of caution, I am also including it as a separate attachment with the e-mail releasing these reasons.
[48] This brings me to the subject of the costs of this motion. I have concluded that the costs of this motion should be fixed by the trial judge. At this point, there may be arguments about whether entitlement to spousal support is justified on these facts. It is only after the merits of this issue are determined that the reasonableness of each party’s position can be fully assessed.
[49] I am not seized of this matter.
LEMAY J
Released: December 10, 2020
COURT FILE NO.: FS-19-42057
DATE: 20201210
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Irene Cartwright
Applicant
- and -
Charles Cartwright
Respondent
REASONS FOR DECISION
LEMAY J
Released: December 10, 2020