COURT FILE NO.: FS-20-016732
DATE: 20210625
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DONNA ANNE GORDON
Applicant
– and –
CHARLES DREW ZUCKERMAN
Respondent
Bryan R.G. Smith and Emilie-Anne Puckering, for the Applicant
W. Douglas R. Beamish, for the Respondent
HEARD: June 17, 2021
ENDORSEMENT
P.J. Monahan J.
[1] The Applicant seeks a temporary without prejudice order for child support of $6,092 per month, spousal support of $32,345 per month, and that the Respondent pay 100% of their children’s post-secondary school fees and certain other s. 7 expenses. The Respondent argues that the Applicant’s motion should be dismissed on a variety of grounds, as described more fully below.
I. Background
[2] The parties married on August 20, 1998 and separated on August 23, 2019. They have two children, JZ, born February 21, 2000 (currently 21 years old) and SZ, born June 21, 2003 (currently 18 years old.)
[3] At the time of their marriage the Applicant was 40 years old and the Respondent was 39. The parties entered into two marriage contracts, one in Ontario and one in Quebec, both dated March 6, 1998. Shortly after their marriage, the Applicant moved to Montreal to be with the Respondent. However, in 2012 the parties moved to Toronto, where they resided at the time of their separation. According, it is agreed that the applicable marriage contract is the Ontario marriage contract (the “Marriage Contract”).
[4] The Marriage Contract provided (amongst other thing) that upon marriage breakdown the Applicant would receive as spousal support a lump sum payment equal to $50,000 for each complete year of marriage, up to a maximum of $1.5 million. As the validity and/or enforceability of the support provisions in the Marriage Contract are in dispute, the relevant provisions in the Contract are discussed in further detail below.
[5] The Respondent was the family’s principal income-earner during the marriage. He was employed initially with a family business in Montreal and subsequently in various corporate roles in Montreal and Toronto.
[6] Although the Applicant had an MBA from the University of Toronto and prior to their marriage had worked at a product design firm in Toronto, at the time of their marriage she had a limited capacity to speak French, which significantly limited her employment prospects in Montréal. The Applicant endeavoured to overcome that language barrier by enrolling in French courses and working at a retail store. In addition, at very young ages both of their children were diagnosed with Autism Spectrum Disorder. The Applicant states that this changed her life materially as she was required to prioritize the needs of the children before developing her career. The Applicant also states that she limited her employment outside the home so that she would be available to be highly involved with the children’s diverse therapies and activities.
[7] In 2009 the Applicant was diagnosed with Chronic Lymphocytic Leukemia, a blood and bone marrow cancer. Its primary symptoms include overwhelming exhaustion and chronic fatigue. The Applicant was initially treated with a regimen of holistic and naturopathic treatments and, for a time, kept working despite her symptoms. However, in November 2010 the Applicant left her position as a teller at a Montreal bank and has not worked outside the home since then. In 2019 she began chemotherapy treatments for her cancer, which she indicates has compromised her immune system.
[8] The Applicant says that during their marriage the parties lived a lavish lifestyle. Upon their move to Toronto in 2012, they purchased a matrimonial home in the Hoggs Hollow area of the city which has a current value of at least $4.8 million. Their children attended private schools, they owned luxury automobiles and had memberships at three private golf clubs. In addition, in October 2017 the Respondent purchased a property in the Dominican Republic (the “Dominican Republic Property”) for $2.3 million USD, which was then renovated at a cost of $1.4 million USD and furnished at a cost of $520,000 USD. The Dominican Republic Property is serviced by four full-time employees and managed by a property manager.
[9] The Respondent does not dispute the Applicant’s description of their lifestyle, except to say that their current lifestyle only existed for seven years following their move to Toronto in 2012.
[10] Since the parties’ separation, the Applicant has continued to reside in the matrimonial home in Toronto while the Respondent has become a resident of the Dominican Republic, residing at the Dominican Republic Property. Both parties have filed financial statements and affidavits setting out their current financial circumstances.
[11] The Respondent’s financial statement, sworn June 10, 2021, discloses that at the time of the parties’ separation in 2019, he owned property with a value of at least $15.764 million. In early 2020, he decided to become a non-resident of Canada for tax purposes, effective July 1, 2020. Individuals who give up their Canadian tax residence are deemed to have disposed of most of their assets at fair market value, creating what is commonly referred to as a “departure tax”. In order to minimize the amount of his departure tax as well as any ongoing Canadian tax liability, the Respondent engaged in a complicated series of trust and corporate transactions. This included a transfer of his personal and corporate investment portfolios to a Cayman Islands company he had incorporated, CZEE Holdings, for which he received a promissory note for $4.940 million. The Respondent also sold his shares in Zugeorge Holdings Limited, an Alberta corporation with substantial real estate holdings in Winnipeg, Toronto and Montréal, back to the corporation, in return for a promissory note for $4.387 million.[^1]
[12] Although these transactions reduced the Respondent’s tax payable as a result of his becoming a nonresident of Canada, they nevertheless substantially increased his 2020 line 150 income to $5.853 million, resulting in a one-time tax liability of $1.959 million.
[13] The Respondent’s current monthly expenses are $80,455, including a monthly operational cost of $17,641 to maintain the Dominican Republic Property and $8600 per month to rent a condominium in Toronto. Following the parties’ separation, the Respondent began making a monthly payment of $15,000 to the Applicant to cover her living expenses. In November 2020, the Respondent reduced the Applicant’s monthly payment to $9000. The Respondent has also been covering the educational and other expenses for the parties’ two children. This includes tuition and living costs for JZ, who is going into his second year of a law program in the U.K., and various special expenses for SZ, who has just completed high school and will be attending the University of Guelph in the fall of 2021.
[14] The Applicant’s financial statement, sworn April 12, 2021, discloses that her principal asset is her 50% interest in the parties’ jointly-owned matrimonial home, an interest which she values at $2.4 million. She also has private investments with a date-of-separation value of approximately $1.71 million.
[15] The Applicant estimates her current monthly expenses to be $25,800. Her largest ongoing monthly expense is approximately $9000 to maintain the matrimonial home in Toronto. The Applicant argues that this is a reduced “Covid” budget reflecting the fact that many of her normal expenses have been reduced or eliminated due to the restrictions imposed as a result of Covid 19. Nevertheless, as I will discuss in more detail below, the Applicant’s budget does include certain expenses which could be reduced somewhat in arriving at a determination of her reasonable needs for purposes of calculating temporary spousal support.
[16] I note that the Respondent has brought a motion for sale of the matrimonial home and division of its contents. The Applicant cross-motioned to dismiss the Respondent’s motion and sought exclusive possession of the home. Those motions were heard by Justice Hood on May 20, 2021, who has reserved his decision.
[17] I also note that the Marriage Contract expressly provides that it does not deal with the issue of child support. Neither party disputes their legal obligation to support JZ and SZ, who remain children of the marriage for purposes of the Federal Child Support Guidelines (the “CSG”).
II. Issues
[18] The following issues arise on these motions:
i. Is the Applicant’s motion for temporary spousal support barred by the Marriage Contract?;
ii. If the motion for temporary spousal support is not barred by the Marriage Contract, has the Applicant established a prima facie entitlement to temporary spousal support?;
iii. Even if the Applicant has a prima facie entitlement to temporary spousal support, and there is no dispute that the Respondent has a legal obligation to pay child support, should the court nevertheless decline to make a support order on the basis that the Respondent is providing financial support to both the Applicant and the children on a voluntary basis?
iv. If a temporary order for child and spousal support should issue, what quantum of child and spousal support is appropriate on a temporary without prejudice basis?
III. Is the Applicant’s Motion for Spousal Support Barred by the Marriage Contract?
A. General Principles
[19] Interim support pursuant to the Divorce Act is not necessarily barred by the waiver of spousal support in an agreement if, on the evidence filed on the motion for temporary support, there is a triable issue as to the enforceability of the waiver. This is particularly the case in circumstances where, if the enforceability of the contract were to be upheld at trial, there are assets in the recipient’s name that can be used to compensate the payor for any overpayment of support.[^2]
[20] The enforceability of a contractual limitation on spousal support may be called into question in two different ways.
[21] The first possible way is through the two-stage analysis set out in Miglin v. Miglin.[^3] “Stage One” of Miglin requires a consideration of the circumstances in which the agreement was negotiated and executed, in order to determine whether there is any reason to discount it on that basis. This first stage of the analysis also considers the substance of the agreement to determine whether its terms are in substantial compliance with the objectives of the Divorce Act. These objectives include not only the spousal support objectives in s. 15.2 (6), but also the general legislative objectives of finality, certainty and the invitation in the Act for the parties to determine their own affairs. Assuming the contract satisfies the analysis at Stage One, “Stage Two” of Miglin considers the current circumstances of the parties to determine whether the agreement still reflects their original intentions, as well as the extent to which the agreement is still in substantial compliance with the objectives of the Divorce Act.
[22] The second possible avenue for challenging the validity or enforceability of a contractual limitation on spousal support is on the basis of s. 33 (4) (a) of the Family Law Act. This provision permits the court may set aside a provision for support or a waiver of the right to support in a domestic contract if enforcement of the relevant contractual term would result in “unconscionable circumstances”. In determining whether unconscionable circumstances have resulted, the test is whether the circumstances are “shocking to the conscience”. This requires a consideration of the circumstances surrounding the execution of the agreement; the results of the support provisions of the agreement, including any hardship visited upon a party; and the parties’ circumstances at the time of the hearing, including their health, employability and ability to maintain their lifestyle.[^4]
B. The Marriage Contract
[23] In this case, Paragraph 8.1 of the Marriage Contract provided that upon marriage breakdown, the Respondent would pay, in full satisfaction of any and all claims for equalization of property or for spousal support, a lump-sum amount equal to $50,000 for each complete year of marriage prior to breakdown of the marriage, to a maximum amount of $1,500,000. However, Paragraph 8.2 provided that the Applicant’s lump sum payment for spousal support would be reduced by any amount she received on account of her interest in the parties’ matrimonial home.
[24] The parties separated after 21 years of marriage. Thus, pursuant to Paragraph 8.1 of the Marriage Contract the Applicant is presumptively entitled to a lump-sum payment of $1,050,000 in satisfaction of any claim for equalization of property and spousal support. However, since it is agreed that the matrimonial home is worth at least $4.8 million, the value of the Applicant’s half interest in the matrimonial home is at least $2.4 million. Thus, after deducting the value of the Applicant’s share of the matrimonial home from the lump-sum amount that is presumptively payable for equalization/spousal support, the lump sum for spousal support is effectively reduced to zero.
C. Positions of the Parties
[25] The Applicant argues that there is a triable issue as to the enforceability of the provisions of the Marriage Contract dealing with spousal support, either on the basis of a Miglin analysis or because the provisions produce an unconscionable result. Therefore, the Applicant takes the position that the Marriage Contract is not a bar to an order for temporary spousal support, particularly in light of the fact that the Applicant has sufficient assets that would enable her to repay any overpayment.
[26] In particular, the Applicant takes the position that the Marriage Contract no longer reflects the joint intentions and expectations of the parties at the time they were married, nor does it reflect the objectives of the Divorce Act. She argues that their joint expectation was that she would continue working and would have progressed through a career such that she would have an income that would allow her to be independent in the event of marriage breakdown. However this did not happen because of circumstances beyond her control. The Applicant made every effort to work at the beginning of the marriage but her efforts were thwarted by her inability to speak French, the need to care for the children with special needs and then, eventually, her diagnosis of cancer. She also takes the position that there was a joint expectation that the Respondent would participate in a meaningful way in the care for and raising of their children. In her submission, none of these joint expectations was realized. The result is that, at 62 years of age and through no fault of her own, she finds herself unable to support herself, a result that she maintains is inconsistent with the objectives of the Divorce Act.
[27] The Applicant also takes the position that the result produced by the Marriage Contract is unconscionable and should be set aside on the basis of s. 33 (4) of the Family Law Act. Although the Applicant acknowledges that she had a net worth of approximately $4.4 million of the date of separation, approximately half of that amount is comprised of her share of the matrimonial home. Other than the matrimonial home, the Applicant has approximately $1.4 million in a margin investment account and $430,000 in RRSPs. Given the fact that she has been out of the paid workforce for a decade and has cancer, she is not in a position to seek paid employment. Even assuming that she depletes her capital in order to support herself, she maintains that she will not have the ability to maintain a lifestyle approximating that she had during the marriage. In contrast, the Respondent has assets worth over $15 million and lives in a luxurious villa in the Dominican Republic serviced by full-time staff. The Respondent has no need to work to support himself and, instead, spends his time golfing year-round in Toronto and the Dominican Republic. In the Applicant’s view, the vast disparity in the parties’ assets, combined with her uncertain ability to support herself in the years ahead, have produced an unconscionable result within the meaning of s. 33 (4).
[28] The Respondent argues that the Applicant, who was 39 years old and well-educated with an MBA at the time of marriage, entered into the Marriage Contract fully and voluntarily, with full knowledge of its contents and after receiving independent advice from experienced legal counsel. During the marriage, the Applicant had every opportunity to work but chose not to do so. She also had full-time paid help in the home. Because the Respondent paid all of the family expenses, the Applicant was able to accumulate significant wealth in her own name, which now exceeds $4 million. Although the Applicant alleges that she is unable to work and is overwhelmingly fatigued by her medical condition, the Respondent notes that a great deal of the Applicant’s current budget involves travel, skiing, golf and exercise. Thus, in the Respondent’s view, there is no triable issue as to the enforceability of the support waiver in the Marriage Contract and the motion for interim spousal support should accordingly be dismissed.
D. Analysis
[29] The parties each present quite different accounts of what occurred during their marriage, and none of the affidavit material presented has been subject to cross-examination. Nevertheless, I have little difficulty in concluding that there is a triable issue as to the enforceability of the limitation of spousal support in the Marriage Contract.
[30] In particular, I find that there is a serious issue as to whether the limitation on spousal support should be set aside on the basis of Stage Two of the Miglin analysis. The Respondent does not appear to question the Applicant’s assertion that at the time of their marriage their joint expectation was that, in the event of marriage breakdown, the Applicant would have the capacity to support herself. The Respondent’s argument appears to be that to the extent that this expectation was not realized over the course of the marriage, it was due to the conscious choice of the Applicant not to work or to develop her career.
[31] Yet there is no dispute that both of the parties’ children were diagnosed with Autism Spectrum Disorder at young ages, which required the Applicant to devote a good deal of her time and attention to their special needs. Nor is there any dispute that the Applicant was diagnosed with cancer in 2009 and that this has significantly affected her health and ability to work over the last decade. Neither does the Respondent appear to contest the Applicant’s assertion that she is not in a position to financially support herself at this time given her age, current health challenges, and the fact that she has not been in the paid workforce for over a decade. Indeed, the fact that the Respondent has been making voluntary support payments to the Applicant since their separation appears to be at least an implicit acknowledgement that the Applicant cannot financially support herself at this time.
[32] On this basis, I find that there is a triable issue under Stage Two of Miglin as to whether the parties’ present circumstances continue to reflect their joint expectations at the time of entering into the Marriage Contract, and whether these circumstances are in substantial compliance with the objectives of the Divorce Act.
[33] The Applicant’s argument that the support provisions in the Marriage Contract should be set aside on the basis of s. 33 (4) of the Family Law Act faces more of an uphill battle. Although there is a significant disparity in the relative financial positions of the parties, the Applicant still has a net worth in excess of $4.4 million. Nevertheless, it seems evident that the Applicant does not have the capacity to earn employment income and the net proceeds that she will receive from the sale the matrimonial home will presumably be required to fund alternative accommodation. She will therefore need to support herself, perhaps for a number of decades, by drawing down on her financial assets. In these circumstances it would appear that, absent some sort of ongoing support from the Respondent, the Applicant will not be able a maintain a lifestyle that even remotely resembles that enjoyed during the marriage. In contrast, the Respondent will be able to maintain his current standard of living without the necessity of seeking employment. It is at least arguable that these circumstances rise to the level of unconscionability within the meaning of s. 33 (4).
[34] I therefore find that because there is a triable issue as to the enforceability of the limitation on spousal support in the Marriage Contract, particularly under Stage Two of Miglin, the Contract does not constitute a bar to an order for temporary spousal support pending trial. This conclusion is supported by the fact that, should the Contract be upheld at trial, the Applicant will have sufficient resources to repay any spousal support that ought not to have been paid.
IV. Does the Applicant have a Prima Facie Entitlement to Spousal Support?
[35] An order for temporary spousal support is only appropriate where the Applicant has established a prima facie entitlement to spousal support.[^5]
[36] The Applicant argues that she has an entitlement to support on both compensatory and non-compensatory grounds.
[37] The Applicant’s compensatory claim to support is based on her assertion that she has catered to the family’s needs at the expense of her own career and her ability to earn income that would assist with the promotion of her self-sufficiency. At the time of their marriage, the Applicant gave up a promising career in Toronto to move to Montréal to support the Respondent’s employment at his family’s business. She then took different entry-level jobs to be able to care for the children. The Applicant also argues that in November 2010, she left her job as a bank teller in part because it interfered with the family’s ability to travel during the holidays and her ability to attend to the children’s needs. The Applicant maintains that her role in the marriage was that of the household manager and primary caregiver for the children. In contrast, the Respondent was not burdened by family responsibilities and was free to pursue his business activities.
[38] The Applicant also asserts that she has a claim for support on non-compensatory grounds since she has a clear need for support. She is 62 years old and has not worked in the field for which she was educated and experienced in almost 23 years. Her position is that it is unreasonable to expect that she could improve her work skills or develop industry contacts at this time, especially given her current health and the risk of contracting Covid 19. Chronic fatigue from her cancer coupled with her role as household manager has kept her out of the workforce meaningfully for the past decade. The Applicant maintains that it is unreasonable to believe that she could be self-sufficient, much less maintain the lifestyle to which she was accustomed during the marriage, without support from the Respondent.
[39] It is unclear whether the Respondent disputes the Applicant’s prima facie entitlement to support, apart from the argument that the Applicant has waived her entitlement pursuant to the Marriage Contract. In any event, while the Applicant’s underlying entitlement to spousal support may well be disputed at trial by the Respondent, in my view the Applicant has a strong prima facie claim for spousal support on both compensatory and non-compensatory grounds, sufficient to ground an order for temporary support on a without prejudice basis.
V. Should the Court Decline to make an Order for Spousal or Child Support Because the Respondent is currently making Voluntary Payments?
[40] The Respondent argues that any support order is unnecessary because he is already paying the Applicant $9000 a month on a voluntary basis to fund her living expenses. He is also voluntarily paying all of the post-secondary and other s. 7 expenses for the children. He argues that the only effect of a spousal support order would be to increase his monthly payments to take account of the fact that court-ordered spousal support would be taxable in the hands of the Applicant, even though, as a nonresident, he would not be entitled to deduct such support payments from his taxes.
[41] The difficulty with the Respondent’s position in this regard is that he currently has no legally binding obligation to pay support either to the Applicant or their children. Thus, it is within his absolute discretion to reduce or terminate his support payments at any time. The Respondent has in fact exercised this discretion by unilaterally reducing or ceasing certain payments to both the Applicant as well as the children. For example, in November 2020 the Respondent reduced the monthly payment to the Applicant from $15,000 per month to $9000 per month, because he was no longer living in the matrimonial home himself and the parties’ son JZ was going to school in the United Kingdom. The Respondent also decided that he would no longer fund therapy for SZ since he saw little to no progress being made in the therapy (although he states that he would gladly pay for any other “responsible therapist” for SZ.) The Respondent also refused to pay for a surgical procedure for SZ because the surgery was scheduled on a date when SZ was supposed to be with the Respondent in the Dominican Republic.
[42] The point is not whether the Respondent’s decisions were reasonable or appropriate in the circumstances. What gives rise to concern is the fact that these decisions were made unilaterally by the Respondent over the objections of the Applicant and without any possibility of independent review. Given the Respondent’s acknowledged legal obligation to support his children, as well as the Applicant’s prima facie entitlement to spousal support, in my view it is inappropriate for the Respondent to have absolute discretion to determine the extent to which, and on what terms and conditions, he will provide support.
[43] I also do not accept the Respondent’s argument that I should decline to make an order for spousal support because he would not be able to deduct any such court-ordered payments from his Canadian income taxes. It is true that the Spousal Support Advisory Guidelines (the “SSAGs”) assume that the payor will be entitled to a tax deduction for his spousal support payments. But the SSAGs also assume that the payor is a Canadian resident paying Canadian income tax on his world income, and calculate the appropriate level of spousal support on that latter assumption.
[44] The Respondent is now a non-resident for Canadian tax purposes and his assets appear to have been moved outside of Canada. There is nothing in the record before me to suggest that the Respondent will have any income tax liability to the Canadian government going forward. I therefore see no basis upon which it can be suggested that he would be prejudiced by the non-deductibility of the Respondent’s spousal support payments under Canadian tax law, to such an extent that would justify a refusal to order spousal support to which the Applicant would otherwise be entitled.
VI. Assuming an Order for Temporary Child and Spousal Support Should Issue, What Quantum of Support is Appropriate in the Circumstances?
[45] The relevant legal principles applicable to motions for interim child and spousal support are not in dispute. In addition to the factors and objectives set out in s. 15.2 of the Divorce Act, it is well established that on applications for interim support the Court does not engage in a comprehensive review and analysis of the parties’ circumstances, which is better left for trial. The court achieves “rough justice” at best.[^6]
[46] On applications for interim support, the applicant’s needs and the respondent’s ability to pay assume greater significance. The purpose of interim relief is to provide the parties with reasonable arrangements to meet the needs and means of the parties until trial. This includes providing support sufficient to permit the applicant to continue living at the same standard of living enjoyed prior to separation if the payor’s ability to pay warrants it.[^7]
[47] With these guiding principles in mind, I note that a particular challenge in determining the appropriate quantum of support in this case is the limited evidence as to the Respondent’s Guidelines income. The Respondent is not employed and presumably is funding his living expenses from investment income or from his assets. Moreover, his line 150 income for the past four years has fluctuated quite dramatically, as set out below:
TABLE ONE RESPONDENT’S LINE 150 INCOME 2017-2020
| YEAR | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|
| Line 150 income | $5,353,499.74 | $657,608.46 | $64,925.10 | $5,853,187.53 |
[48] In his most recent financial statement sworn June 10, 2021, the Respondent submits that his current annual income is $254,000, consisting largely of capital gains and interest income. However, the Respondent has not filed an expert report calculating his income for purposes of the CSG. Any such calculation will need to take account of the fact that the Respondent is now a nonresident of Canada for tax purposes who presumably will have limited ongoing tax liability in Canada. In any event, given the significant fluctuations in the Respondent’s Line 150 income over the past four years, I find that his line 150 income does not provide a sound or reliable basis for calculating the Respondent’s Guidelines income.
[49] That being said, the Respondent’s most recent financial statement does provide relevant information as to his means and ability to pay support. In addition to the fact that he has assets worth at least $15 million, he also shows expenses in excess of $80,000 per month or $965,000 per year. His budget anticipates that he will make payments of close to $25,000 per month to support the Applicant as well as the parties’ two children. Thus, he clearly has the financial capacity to make monthly support payments of at least this amount.
[50] The Respondent’s financial statement does not indicate whether, or to what extent, he expects to pay income tax to either the Canadian or the Dominican Republic governments. The Applicant argues that, on the assumption that the Respondent will not be paying any Canadian income tax, any nominal income attributed or imputed to him should be grossed up for purposes of calculating his Guidelines income.
[51] Where a support payor receives income on a tax-free basis, that income is normally grossed up for purposes of calculating the payor’s Guidelines income. Nevertheless, because I do not have any evidence as to the extent to which (if at all) the Respondent will be paying income tax in the future, and because this is a temporary motion for support on a without prejudice basis, I would decline the Applicant’s invitation to gross up the Respondent’s income at this time. This is an issue more properly left to the trial judge, who will likely have a more accurate and complete understanding of the nature and extent of the Respondent’s income.
[52] I find that the best evidence of the Respondent’s Guidelines income available on this motion is his own expected annual budget of $965,000. This is the amount that the Respondent expects to spend annually to fund his standard of living on an ongoing basis. The Respondent argues that he should not be required to deplete his capital in order to fund support.[^8] There is no invariable rule to that effect.[^9] In any event, I have no evidence as to whether he anticipates being required to deplete his capital to fund his expected standard of living. Therefore, on a temporary without prejudice basis, I would impute income of $965,000 per year to the Respondent.
[53] Turning to a consideration of the Applicant’s means and needs, there is no dispute that her current line 150 income is $48,299. According to her most recent financial statement, she currently requires $25,800 per month net disposal income to pay her living expenses.
[54] The Applicant argues that her income is clearly insufficient to support her needs. She also argues that her current budget has been reduced to reflect the fact that many of her normal expenses are no longer being incurred as a result of the restrictions associated with the ongoing Covid 19 pandemic. At the same time, her monthly ‘Covid budget’ includes approximately $4500 to fund SZ’s educational and other special expenses, costs which she argues should be solely funded by the Respondent as a s. 7 expense. In addition, the Applicant has budgeted approximately $4000 per month for a housekeeper. Given that the parties’ two children will be attending university out of town for eight months of the year, it is not clear that this is an expense which should be funded by the Respondent.
[55] If the educational and other s. 7 expenses for SZ are backed out of the Applicant’s budget, and the housekeeper costs are reduced 50% to $2000 per month, this results in a monthly requirement of approximately $19,000 in net disposable income. I accept the Applicant’s position that this is a reduced budget, as compared to the standard of living she would have enjoyed during the marriage. I nevertheless find that this will provide her with a sufficient level of support to reasonably meet her needs on a temporary basis pending trial.
[56] The starting point for the determination of the quantum of spousal support is the formula in the SSAGs.[^10] A Divorcemate calculation showing the Respondent’s income as $965,000 and the Applicant’s income as $48,299 is attached as Schedule 1. Schedule 1 assumes that the Respondent is obliged to pay table child support only during the summer months, given that the two children will be away at university for eight months of the year.
[57] I note that there is some uncertainty as to whether their son JZ will actually be living with the Applicant in the summer months, or whether he will live in an apartment in Toronto funded by the Respondent. That matter can be addressed at trial when there will be better evidence as to where JZ has resided/plans to reside during the summer months. For now, I assume that both children will reside with the Applicant during the summer, and therefore that table child support should be paid by the Respondent for four months of the year.
[58] On these assumptions, Schedule 1 indicates that the monthly table child support payable by the Respondent is $3952,[^11] while the support formula in the SSAGs results in a range for monthly spousal support of $25,035 at the low range, $27,695 at the midrange and $30,355 at the high range. These calculations also assume (i) that the Respondent will be able to deduct the spousal support payments in determining his taxable income; and (ii) that after such deduction, he will pay income tax ranging between $23,857 and $26,705 per month. For reasons explained earlier, neither of these assumptions is likely to be correct. Nevertheless, Schedule 1 provides a reasonable starting point for determining the appropriate level of child and spousal support that should be paid by the Respondent on a temporary without prejudice basis.
[59] I have found that the Applicant’s monthly needs can be met by a monthly net disposable income of $19,000. As Scenario E in Schedule 1 indicates, this would require a monthly spousal support payment from the Respondent of $21,423, which is somewhat below the low range suggested by the SSAGs. At the same time, Schedule 1 assumes that the Respondent will continue to fund the s. 7 expenses for the two children, and the postsecondary educational costs for JZ in particular are substantial. I also recognize that the enforceability of the Applicant’s waiver of support in the Marriage Contract, and thus her entitlement to receive spousal support at all, will be an issue at trial. On this basis, I find that a spousal support payment below the low range of the SSAGs is appropriate.
[60] The Respondent has funded the children’s s. 7 expenses since separation and indicated a willingness to continue to do so on a voluntary basis. For reasons explained earlier, I do not believe that it is appropriate to leave the funding of the children’s s. 7 expenses to the discretion of the Respondent. I therefore order, on a temporary without prejudice basis, that the Respondent continue to fund the post-secondary costs for JZ and SZ, as well as the following monthly expenses for SZ: tutoring of $312.50; counselling (with Dr. Cummings or other therapist of SZ’s choice) of up to $1250 per month; and treatment for SZ’s Persistent Motor Tic Disorder of $216.67 per month. The costs for SZ’s karate shall be funded by the Applicant.
[61] The Respondent has also indicated a willingness to continue to pay all premiums and to maintain the Great West Life extended health, dental and medical coverage for the Applicant and their two children, as well as to irrevocably designate the Applicant as the beneficiary of his Manulife life insurance.
Disposition
[62] On a temporary without prejudice basis, order to go as follows:
a. I find the Applicant’s income to be $48,299, and I impute income to the Respondent of $965,000 per year;
b. Commencing July 1, 2021, the Respondent shall pay table child support to the Applicant of $3952 per month;
c. Commencing July 1, 2021, the Respondent shall pay $21,423 per month in spousal support;
d. the Respondent shall continue to pay all premiums and maintain the Great West Life extended health, dental and medical coverage for the Applicant and the children;
e. the Respondent shall irrevocably designate the Applicant as the beneficiary of his life insurance, being Manulife Financial Life Insurance Policy number 3031522;
f. the Respondent shall continue to pay for all of JZ’s post-secondary school fees and expenses, including all travel-related expenses, tuition, fees and school expenses, residency costs, books, tutoring, and all computer and sundry expenses. If there are any remaining funds in JZ’s RESP/CST fund, they will be used to reimburse the Respondent for the payment of such expenses;
g. the Applicant shall be entitled to withdraw funds from SZ’s RESP/CST fund to the extent permitted by the plan/fund and to apply such funds to the payment of SZ’s post-secondary fees and expenses, including all travel-related expenses, tuition, fees and school expenses, residency costs, books, and all computer and sundry expenses. To the extent that the funds withdrawn from SZ’s RESP/CST fund are not sufficient to pay SZ’s post-secondary school fees and expenses, such additional amounts shall be paid by the Respondent;
h. the Respondent shall pay to the Applicant the following s. 7 expenses for SZ: tutoring of up to $312.50 per month; counselling (with Dr. Cummings or other therapist of SZ’s choice) of up to $1250 per month; and treatment for SZ’s Persistent Motor Tic Disorder of $216.67 per month.
[63] I urge the parties to attempt to settle amongst themselves the issue of costs. In the event that they are unable to do so, the Applicant shall file written costs submissions of up to five double-spaced typed pages (not including Offers to Settle and Bills of Costs) by July 11, 2021 and the Respondent shall file written costs submissions on a similar basis by July 25, 2021. No further cost submissions will be permitted.
P. J. Monahan J.
Released: June 25, 2021
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DONNA ANNE GORDON
Applicant
– and –
CHARLES DREW ZUCKERMAN
Respondent
ENDORSEMENT
P.J. Monahan J.
Released: June 25, 2021
[^1]: The Respondent had received his shares in Zugeorge through a family trust set up in 1999 by his father, George Zuckerman. [^2]: See Salzmann v. Salzmann, 2004 CanLII 5009 (ON SC), 50 RFL (5th) 181, at para 19; Chaitas v. Christopoulos, 2004 CanLII 66352 (ON SC), 12 RFL (6th) 43, at para 20. [^3]: Miglin v. Miglin, 2003 SCC 24 ("Miglin"). [^4]: Scheel v. Henkelman, 2001 CanLII 24133 (ON CA), [2001] O. J. No 55 (Ont. C. A.) [^5]: Cartwright v Cartwright, 2020 ONSC 7653 at para. 21 [^6]: Samis (Litigation Guardian of) v. Samis, 2011 ONCJ 273 at para. 43. [^7]: Driscoll v. Driscoll, 2009 CanLII 66373 (ON SC) at para. 14. [^8]: See Plaxton v. Plaxton, 2002 CarswellOnt 49545. [^9]: See Jackson v. Jackson, 1997 CanLII 12392 (ON SC), 35 RFL (4th) 194. [^10]: Fisher v Fisher, 2008 ONCA 11. [^11]: Although the Table amount is payable only during the four summer months, the Divorcemate software automatically spreads those payments equally over a 12 month period, resulting in the monthly payment of $3952.