Court File and Parties
NEWMARKET COURT FILE NO.: FC-20-654-00 DATE: 20210217 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: David Cranfield Schieder Applicant – AND – Diane Mary Gajewczyk Respondent
Counsel: Adela Crossley, Counsel for the Applicant Diana Isaac, Counsel for the Respondent
HEARD: February 10, 2021
Ruling on Motion
JARVIS J.
[1] The applicant has brought a motion for spousal support. He seeks an Order that the respondent pay him $9,000 a month starting January 1, 2020 with credit for anything paid since then. The respondent does not dispute the applicant’s support entitlement but contends that the appropriate monthly amount is $4,370 starting November 1, 2020.
[2] A second motion involving disclosure will proceed on February 24, 2021.
[3] Initially, the parties’ motion materials grossly exceeded what is permitted pursuant to the Notice to the Profession and Family Law Litigants effective January 4, 2021 (“the Notice”) and were the subject of the court’s disapproval and direction, resulting in the two motions being scheduled for separate hearing dates and compliance with the Notice required. [1] The parties’ have since brought themselves into substantial compliance: their disregard of the court’s practice will be addressed when dealing with costs.
[4] The parties filed the following evidence, pleadings and material, not all of which they needed to rely upon for this motion but which are listed below because, on occasion, reference to them by the court became necessary:
(a) The applicant’s affidavits sworn October 27, 2020; November 2, 2020; January 19, 2021; and, February 5, 2021 together with their exhibits; [2] (b) The applicant’s financial statements sworn June 17, 2020 and October 27, 2020; (c) The respondent’s affidavits sworn October 28, 2020; November 2, 2020; January 12, 2021; January 15, 2021 (from a clerk in the offices of her counsel); and, February 4, 2021 together with their exhibits; (d) The respondent’s financial statements sworn November 10, 2020 and January 12, 2021; (e) The parties’ pleadings, comprising the Application and the respondent’s Answer and Claim; (f) A factum from the applicant and a factum and supplementary factum from the respondent.
[5] Although the materials filed dealt with both issues of support and disclosure, most of the evidence dealt with support. Surprisingly, in light of the fact that he is the party seeking support, the applicant (unlike the respondent) did not comply with Family Law Rule 13(12),
UPDATING FINANCIAL STATEMENT
(12) Before any case conference, motion, settlement conference or trial, each party shall update the information in any financial statement that is more than 30 days old by serving and filing,
(a) a new financial statement; or (b) an affidavit saying that the information in the last statement has not changed and is still true. O. Reg. 202/01, s. 3 (2).
[6] No acceptable explanation was given for the applicant’s non-compliance with this Rule. [3] But as a result of the lack of current income information from him, and the respondent’s failure to provide the court with accurate 2020 year-end income information, the parties were contacted by the court before the hearing and requested to provide 2020 year-end income statements. Both filed supplementary affidavits sworn February 9, 2021. The applicant disclosed total 2020 income of $26,417.82 comprising CPP benefits ($8,485.32), CERB [4] ($12,000) and video home inspection self-employment earnings ($5,932.50). [5] The respondent filed a 2020 year-end Statement of Earnings: it disclosed a gross pay of $377,122.08. She explained that this figure included base pay of $263,938.08, a car allowance of $14,000 and a 2019 bonus (paid in 2020) of $98,784. Her evidence is that her employer has not declared, and will not be declaring, a bonus for 2020 payable in 2021.
Background
[7] The following background is relevant:
(a) The parties are unmarried. They began cohabiting in 1996. There are no children of the relationship; (b) The applicant is 62 years old: the respondent is 55 years old; (c) The parties dispute when they separated. The applicant says that they separated in December 2019 whereas the respondent contends that they separated in 2012 even though the parties continued to cohabit afterwards, bought at least one cottage property that is registered in their names jointly (where the applicant is currently residing: the respondent resides in another jointly-owned home in Aurora), a timeshare in Mexico (also reflected as owned by the parties in their financial statements) and the respondent filed the parties’ income tax returns representing that they were residing together on a common law basis. The applicant continues to be insured as an eligible dependant under the respondent’s employment health benefits package; (d) During their cohabitation the parties acquired four properties. In addition to the cottage and Aurora properties, they also purchased a property in Wasaga Beach (vacant land) and a residence in Toronto that had been formerly owned by the respondent’s mother, title to each of which was registered in the parties’ names as joint owners. The Toronto property is an investment property with tenants whose lease expires on February 29, 2021. The respondent is trying to secure new tenants. The cottage property was tenanted until the applicant began living there in mid-2020; (e) The respondent has claimed that the applicant holds his interest in all four properties in trust for her. Consistent with the parties’ practice in earlier years, the respondent has declared net rental losses on the parties’ investment properties. For 2020, the respondent indicates that there will be (at least) a $18,069 loss; (f) Both parties worked during their cohabitation, although by the time that the applicant says that they separated in 2019 the respondent had been the much higher income earner for many years; (g) The applicant had been employed in the computer industry. After a cancer diagnosis in 2012 and a deterioration in his physical and mental health the applicant was packaged-out by his former employer in 2014. He undertook training in the home inspection field but, as a result of the current pandemic and changes in the residential realty market, he earned little, if any income in 2020; (h) In 2017 the applicant was diagnosed with bipolar disorder. According to an August 9, 2020 letter from a CAMH psychiatrist who has been treating the applicant since April 2018, the applicant achieved a total remission of his symptoms after medication and a period of annual therapy. The decompensating stress of the parties’ separation was stabilized with medication after May 2020; (i) According to his last sworn financial statement, the applicant’s only source of income is CPP and OAS in the amount of $636.40 monthly. That statement did not include the $12,000 CERB payments received or his home inspection income; (j) The vocational trajectory of the respondent is less clear, but it is a reasonable inference that for much of the parties’ time together (regardless whose separation date is preferred) she earned more than the applicant. She established a career in the pharmaceutical industry before cohabitation, earning a PhD in 1995 and she later completed the Ivey Executive MBA program in 2011; (k) Since 2018 the respondent has been employed in a senior executive capacity with a specialty pharmaceutical company located in the Greater Toronto Area whose stock is listed on the Toronto Stock Exchange. In addition to her employment income, she declares the net income (loss) from the parties’ two investment properties. [6] The respondent’s January 12, 2021 financial statement disclosed a 2019 income of $344,083 (of which the respondent claims that $110,535 was a one-time RRSP withdrawal to fund renovations to the Toronto investment property). As noted, her gross 2020 employment income appears to be $377,122.08. The respondent’s financial statement claims a net monthly investment property loss of $5,190.42 for 2020 but her February 9, 2021 financial statement corrects that to $18,069 for the year; (l) For 2021, the respondent claims that her income, inclusive of car allowance, net of benefits, will be $167,687. However, this figure is also net of a voluntary bi-weekly RRSP deduction at source ranging between $304.54 to $355.30 every two-week pay period (there are only 24 pay periods through her employment in the year) averaging $329.92 or an estimated $7,918.08 a year; [7] (m) Both parties’ financial statements disclose significant debt. The applicant’s October 2020 statement shows total debt exceeding $700,000. This includes an increase in personal debt owed to a friend and to family members incurred after December 2019 and a mortgage and lines of credit exceeding $448,900 dealing with the Toronto investment property, which he is clearly not paying. The respondent’s January 2021 financial statement shows a total indebtedness of at least $1,353,419. Most of this debt relates to the realty owned and financed by the parties. It is clear that the parties’ acquisition of their properties was facilitated by debt primarily funded by the respondent. She claims that at least $500 of the monthly housing costs for the cottage property relate to a line of credit relating to that property; [8] (n) Unchallenged by the applicant was the respondent’s claim that since January 1, 2020 she provided him with $50,725.76. These comprised $4,500 (three payments of $1,500 between July to September 2020 arbitrarily grossed up by her to $6,000); unidentified, allegedly joint debts of the parties paid by the respondent since December 2019 when the applicant left the Aurora property ($9,685); his automobile insurance ($983.25); his Home Depot credit card ($3,429.83); miscellaneous expenses ($3,792); carrying costs for the parties’ four properties ($18,225.68); and, an uncharacterized advance in December 2020 from the parties’ joint line of credit ($10,000). She also maintained health coverage for the applicant through her employer (no figure given).
[8] Each party has alleged that the other should have income imputed to the other. For example, the respondent provided an April 9, 2020 letter from the Chief Executive Officer of her employer to the company’s employees notifying them that as a result of the pandemic significant operational changes were needed to deal with the crisis which involved, among other things, remote working and a 40% reduction in work and compensation. The applicant contends that, as a member of senior management, the respondent conspired with her employer to manufacture, possibly misrepresent, an involuntary reduction in her income to decrease her spousal support exposure. He may have a point. According to the respondent’s most recent financial statement, her non-RRSP income in 2019 was $232,542 (see 7 above): backing out her 2019 bonus of $98,784 received in 2020, the respondent’s 2020 income appears to be $278,833.08, almost a 20% increase, not 40% decrease, in compensation. The court can only speculate why this information wasn’t forthcoming from the respondent until the court directed its disclosure.
[9] The respondent alleged that the applicant is nowhere as ill and unable to contribute to his own support as portrayed and that an income of $32,000, not significantly greater than the annual minimum wage, should be attributed to him. She advised that she would be seeking a vocational assessment of the applicant. The evidence indicates that for several years before December 2019 the applicant earned a marginal income from self-employment not significantly greater than what he disclosed for 2020. This was implicitly acknowledged by the respondent. [9]
[10] No income other than as already disclosed will be imputed to either party for this motion.
The Law
[11] Part III of the Family Law Act [10] (“the Act”) deals with support obligations. It is not necessary to replicate here the provisions of sections 30, 33(8) and 33(9) dealing, respectively, with spousal support obligations, the purposes of an Order for spousal support or the non-exhaustive list of mandatory statutory considerations relevant to determining the amount and duration of a support Order. In this case, neither entitlement nor duration, only the interim support amount, requires determination, the overarching framework (or approach) for which was well expressed by Penny J. in Knowles v. Lindstrom, 2015 ONSC 1408,
[8] It is well-established that interim support motions are not intended to involve a detailed examination of the merits of the case. Nor is the court required to determine the extent to which either party suffered economic advantage or disadvantage as a result of the relationship or its breakdown. These tasks are for the trial judge. Orders for interim support are based on a triable or prima facie case. An order for interim support is in the nature of a “holding order” for the purpose of maintaining the accustomed lifestyle pending trial, Jarzebinski v. Jarzebinski, 2004 CarswellOnt 4600 (ONSC) at para. 36; Damaschin-Zamfirescu v. Damaschin-Zamfirescu, 2012 ONSC 6689, 2012 CarswellOnt 14841 (ONSC) at para. 24.
[12] The range of considerations (often also described as principles) is broad as is the highly discretionary nature of a spousal support decision, all framed by the individual circumstances of each case. Counsel relied on several cases, some more comprehensive than others in listing those considerations most relevant to a temporary Order where entitlement was not disputed (as here). [12] Contrasted with a final hearing, the primary, interim support considerations in this matter include:
(a) The parties’ presenting means and needs, particularly the applicant's needs and the respondent’s ability to pay; (b) Assessment of the applicant’s capacity to contribute to his own support, a consideration often less significant than the respondent’s ability to pay; (c) Maintaining the same standard of living or accustomed lifestyle enjoyed before separation, if reasonably affordable; (d) The understandably inexact nature of the amount awarded, a more in-depth analysis of the parties' circumstances being best left to a trial. Some authorities have described this as “rough justice”; [13] (e) Testing the evidence for an award mindful of the SSAG.
[13] None of these, or the statutory, considerations should be emphasized in preference to the others at the interim stage. As observed by Penny J. and often repeated in the case law, an interim spousal support order is a “holding Order”. [14] The merits of the case, the proof of the parties’ allegations, must await trial.
Discussion
[14] Where entitlement to temporary support is not disputed, the court should be mindful of, but not presume, a SSAG-range order. Ideally, the guidelines should form the backdrop against which the evidence for a particular support amount, however raw and untested, must first be considered. But, untethered to evidence, reliance on the SSAG is problematic and, in this case, calculating a holding order, even when dispensing “rough justice”, is complicated for the following reasons:
(a) The applicant claimed interim spousal support “in the low range of the SSAG and in an amount of at least $9,000 monthly”. This calculation was based on the respondent’s 2019 $343,083 income and his income of $10,000 which suggested a low ($9,784) to high ($13,046) SSAG range. Why, apart from the fact that the SSAG suggested such a range, or how the evidence supported an amount even remotely near the range’s low end, was never made clear to the court. Invoking the SSAG on separation is not the same as claiming a winning lottery ticket; (b) There was no evidence from the applicant dealing with the parties’ standard of living or accustomed lifestyle before they separated. None. While cottage ownership and owning a Mexican timeshare may imply a certain lifestyle, the evidence is that the cottage was rented (possibly seasonally) before the applicant began to live there in mid-June 2020. There was no evidence about how often the parties may have enjoyed the timeshare, otherwise spent their vacation time, their activities or, for example, dined out. The applicant did allege that the respondent spent a lot of money “pampering” herself; (c) Neither party was entirely candid or reasonable with the court about their or the other party’s incomes, the respondent less so than the applicant. In his quest to secure as high an award as possible, the applicant blithely chose to ignore (he certainly never challenged) the respondent’s evidence that she redeemed over $110,000 in RRSP income to renovate the parties’ jointly owned Toronto property. Yet he still sought to attribute to her an income that included that amount! As for the respondent, nowhere in her January 12, 2021 financial statement, the January 15, 2021 affidavit from a clerk employed by her counsel or her affidavit sworn February 4, 2021 can any information about how much she actually earned from her employment in 2020 be found. In light of the applicant’s claim for support effective January 1, 2020, the respondent’s total 2020 income was clearly relevant. Instead, the respondent produced the April 2020 notice from her employer about a 40% work and income reduction for the foreseeable balance of that year and representative remuneration statements for early 2021 showing a much-reduced employment income. So where was the evidence of what she did, in fact, earn from employment in 2020? That was not forthcoming until the court directed its disclosure. And that disclosed an income appreciably different, and higher, than what the respondent was prepared to disclose to the court. No explanation was given why 2021 earnings statements could be provided while an earlier year-end statement for 2020 was not. In my view, this was a deliberate omission; (d) The respondent’s claim that the parties really separated in 2012 is inconsistent with her actions, and those of the parties, afterwards in their continuing to cohabit, their purchase of the cottage and Mexican timeshare in their joint names (the funding for which, according to the respondent, she provided and continues to finance) and her filing of the parties’ tax returns identifying the parties as common law spouses. Without determining this issue, the respondent’s position is prima facie without merit; (e) In resisting the support amount claimed, the respondent has sought credit from the applicant for the expenses of the four properties owned by the parties which she has pleaded are really owned by her: according to her Answer and Claim, the applicant holds his interest in all their properties for her on a resulting trust basis.
[15] Given the foregoing how then to craft a holding Order? Neither party’s evidence is particularly helpful and, as should now be obvious, neither has acted reasonably nor been entirely candid with the court. What, for example, are the applicant’s needs? In his October 27, 2020 financial statement, he disclosed expenses of $1,651.17. Nothing was recorded for Housing, Personal or Health expenses. Two categories (Alcohol and tobacco and Debt payments) were simply, and unhelpfully, marked as “TBD”. In her January 12, 2021 financial statement, the respondent disclosed that the expenses for the cottage property paid by her were $2,448.34 monthly. Of this amount $208.33 was for legal, accounting and management fees for the cottage, too high in my view for a property that appears to have been seasonally used and managed by the parties so $100 for that expense will be allowed, thereby reducing the monthly expense to $2,340. In her financial statement the respondent stated that $500 of the monthly cottage expenses related to a line of credit. The applicant also acknowledged the existence of this line of credit, although not its monthly carrying cost, but attributed that to the Toronto investment property. Given the fact that two other encumbrances were noted as secured against, or related to, title to the Toronto property and that the respondent was paying the various encumbrances, I will accept her evidence on this point at this time. At the very least then the applicant’s net monthly needs appear to be $3,991.
[16] Further information relevant to the applicant’s support needs may be inferentially found in the respondent’s evidence. As noted above in paragraph 7, the respondent claims that she either advanced, or paid, to the applicant or for his benefit the sum of $50,725.76 of which $3,792 was for miscellaneous expenses and $3,429.83 for credit card debt. In her February 5, 2021 affidavit the respondent castigated the applicant for his alcohol consumption, pointing to three months between November 2019 and July 2020 in which his monthly expenditure averaged $680, an amount that is presumptively excessive. [15] Attributing an admittedly arbitrary figure of $100 monthly for this expense and, equally as arbitrary but inferentially not unreasonable, an average monthly expenditure for miscellaneous and credit card expenses of $600, results in the applicant having a net monthly expense need of $4,691.
[17] Based on the evidence before the court, I accept that the applicant’s current income now and for the foreseeable future is $636.40 monthly or $7,637 for the year. As for the respondent, there shall be attributed to her an income of $175,605 comprising her acknowledged, anticipated income of $167,687 and her voluntary RRSP contributions made at source of $7,918.08 for 2021.
[18] Attached as Schedule “A” to this Ruling is a Divorcemate calculation based on the forgoing figures and resulting in a monthly net disposable income to the applicant of $4,700 after payment of $5,256, say $5,260. The respondent shall pay to the applicant for temporary spousal support the sum of $5,260 a month starting January 1, 2021. He shall be responsible for the cottage housing expenses and shall contribute $500 monthly for the support received.
Disposition
[19] The following is Ordered;
(a) The respondent shall pay to the applicant for temporary spousal support $5,260 a month starting January 1, 2021; (b) The applicant shall be responsible for all costs associated with the cottage effective January 1, 2021. This shall include paying $500 monthly to the cottage line of credit from the support paid. Credit shall be given to the respondent for any verified cottage expenses paid by her and as itemized in her financial statement sworn January 12, 2021 and which accrued after January 1, 2021; (c) The amount payable is ordered without prejudice to either party’s claim about the effective start date for payment of support or their entitlement to support credits for payments in the nature of support made to, or on behalf of, the other party after December 24, 2019; (d) The respondent shall maintain the applicant as an eligible dependant of her health benefits through her employment and shall provide to his counsel by February 26, 2021 (if not already done) full details of those benefits as made available to her by her employer.
[20] A Support Deduction Order shall issue.
Final Observations
[21] A number of final observations:
(a) The amount for spousal support could conceivably have been higher but for the reasons given had there been a better evidentiary basis; (b) While the respondent vigorously argued that the applicant’s support claim was needs-based only and non-compensatory, this Ruling should not be interpreted as endorsing the conceptual basis for either party’s spousal support position, or any position in that regard; (c) The applicant’s position that the respondent should have imputed to her a higher 2021 income because she could seek out alternative employment paying more was unsupported by any evidence and thoroughly devoid of merit. The respondent’s claim to impute an income to the applicant slightly higher than the Ontario minimum wage at this interim stage of the proceedings was similarly gratuitous and ill-conceived; (d) What support should have been paid in 2020 and the amount of the credits to which the respondent may be entitled are best left to trial where there will be a better evidentiary record than before this court as to what was paid, by whom and whether adjustments should be made in favour of either party; (e) Neither party distinguished themselves by failing to adopt reasonable positions about their or the other’s income or being entirely candid with the court; (f) The applicant reported an incident that occurred in late January 2021 when the respondent attended at the cottage, unannounced. While there is no motion before this court dealing with possession, nor as the parties are unmarried, does Part II of the Act apply, the parties should respect the other’s sole occupancy of the properties in which they are currently residing; (g) An issue arose, unnecessary in my view, with respect to renewal of insurance coverage for the cottage. As the applicant will be occupying the property until further notice, he should be responsible for its cost and all other cottage housing expenses effective January 1, 2021; (h) Despite the respondent’s trust claim involving all four of the parties’ properties, the parties should seriously consider the sale of the Toronto and Wasaga Beach properties given the outstanding debt being funded by the respondent. During argument the respondent seemed to imply, erroneously in my view, that any sale could be tacitly viewed as an admission against, or waiver of, her claims. Ms. Isaac acknowledged that the funds from any sale could be held in trust on a without prejudice basis pending final determination of the merits of the parties’ claims.
[22] Costs of this motion are reserved to be addressed after the court rules on the parties’ disclosure issues to be heard on February 24, 2021.
Justice David A. Jarvis Date: February 17, 2021
Footnotes
[1] See my endorsement made January 19, 2021 and Schieder v. Gajewczyk, 2021 ONSC 635 (Himel J.).
[2] The parties were required to bring themselves into compliance with Order of Himel J. dated October 5, 2020 and later, as already noted, the Notice to the Profession and Family Law Litigants effective January 4, 2021 (See #1 above). The applicant’s affidavits sworn January 19, 2021 and February 5, 2021 and the respondent’s affidavit sworn February 4, 2021 were filed in compliance with the Order and Notice, but reference was also made to the parties’ earlier filed material as needed. The parties’ February 9, 2021 affidavits were filed pursuant to the court’s direction (see para. [6]).
[3] This was brought to Ms. Crossley’s attention during argument but the affidavits to which she referred the court, particularly the applicant’s February 5, 2021 affidavit, do not address his compliance with the Rule in this regard.
[4] Canada Emergency Response Benefit.
[5] This is a gross figure inclusive of HST.
[6] Until the applicant began living in the cottage property in 2020, it was tenanted.
[7] Exhibits “B” and “C” to the respondent’s February 4, 2021 affidavit being, respectively, representative Statements of Earnings for the periods ending January 15, 2021 and January 29, 2021. According to the respondent the statements vary over the course of the year to reflect statutory holidays. The RRSP contribution will vary accordingly and is noted as voluntary. The $7,918.08 figure is estimated.
[8] This appears to be the $150,267.08 Line of Credit described as “Scotiabank Lake Kash Line of Credit Account ending in #6234” in the respondent’s January 12, 2021 financial statement.
[9] See paragraphs 2, 5, 9 (d) and 17 of the respondent’s February 4, 2021 affidavit.
[10] R.S.O. 1990, c. F.3 as am.
[11] 2015 ONSC 1408.
[12] Driscoll v. Driscoll, 2009 ONSC 66373; Pothier v. Taillefer, 2014 ONSC 812; Racco v. Racco, 2014 ONCA 330. See also Hamdy v. Hamdy, 2015 ONSC 5605, at paras 16-18; Huo v. Wang, 2015 ONSC 6989, at para. 117; and, Bridge v. Laurence, 2016 ONSC 5075, at paras 16, 17 and 19.
[13] Ibid, Driscoll, at para. 14.
[14] See, for example, Kowalski v. Grant (2007), 2007 MBQB 235, 43 R.F.L. (6th) 344, 2007 CarswellMan 422 (Man Q.B.).
[15] In Pothier, supra # 11 at para. 50, Gauthier J. was disinclined to include a claimant’s alcohol and tobacco use as a component of an interim award. Much like this case, “[o]ther than reliance on the Spousal Support Advisory Guidelines, there was no evidence tendered to establish that the Applicant has a need which would justify spousal support in the amount” claimed.