NEWMARKET COURT FILE NO.: FC-16-52412-00
DATE: 20211124
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Janina Jarzabek-Odwazny
Applicant
– AND –
Boqdan Zbigniew Odwazny
Respondent
Self-represented
Self-represented
HEARD: November 15 – 18, 2021
REASONS FOR DECISION
A. Himel J.
I. INTRODUCTION
[1] The applicant (the “wife”) and the respondent (the “husband”) married on August 26, 1989 and separated on July 21, 2016. There is one adult child of the marriage, Eric (age 30).
[2] The issues before the Court are as follows: (1) property claims (equalization of net family property and the husband’s pension); and, (2) spousal support.
II. BACKGROUND FACTS AND LITIGATION HISTORY
[3] The facts as I find them are set out below and will provide context for the analysis. Further facts will be referred to in the analysis as required. Where evidence of significance differs, it will be identified and considered.
Family History
[4] The parties are both immigrants from Poland. The wife was 62 years of age on the date of separation and is 67 years of age today. The husband was 59 years of age on the date of separation and is 64 years of age today.
[5] The wife, the husband and the child reside in separate bedrooms on the second floor of the matrimonial home.
[6] At the time of the marriage the husband was employed at Crown and Seal, an American manufacturing company. The company closed in 2009, due to the impact of a high Canadian dollar and a deficit of profits. The husband has been in receipt of pension payments (and supplemental/bridge payments) from the CROWN Metal Canada LP Pension Plan for Calgary Hourly Employees (the “pension”) since the company closed.
[7] The husband worked various full-time employment positions from 2009 onwards. He was recently laid off of his position with Pinnacle Tools Inc. (“Pinnacle”), an automobile parts manufacturer, due to a work shortage/supply chain issues. Since 2009, he has also worked part-time on Friday and Saturday evenings and Sundays delivering pizza on a cash basis.
[8] The wife completed college and was employed as a dental assistant at the time of the marriage. The wife’s employer recommended that she study to become a dental hygienist. However, shortly after that recommendation the wife became pregnant. The child was born in 1991.
[9] The wife was a full-time homemaker and was solely responsible for running the household. She cared for the child, including an extended period of time when he was unwell and unable to walk (at approximately 3 years of age). She homeschooled the child from ages 9 to 11, after he complained that he was bored at school.
[10] The child graduated from high school and college. During high school he drank alcohol and drove a car provided by the husband. The child’s driver’s licence has been restricted/suspended twice. The child was employed most recently at Bell Canada, although he is now in receipt of E.I. having been laid off or terminated from that position.
[11] Following the marriage, the wife never worked outside of the home although the husband told her that she should work.
[12] The wife took steps to improve the family’s finances by arranging for them to move five times, always to more expensive homes that increased in value.
[13] In July 2019, the wife began to collect Old Age Security (“OAS”), social assistance and payments from the Canada Pension Plan.
[14] In October 2022, the husband will turn 65 years of age.
Litigation History
[15] The wife commenced the Application on November 30, 2016. She has had legal representation from five different lawyers (some through Legal Aid Ontario) and has been self-represented since January 2019.
[16] The husband served his Answer on January 24, 2017. He was previously represented by one lawyer and has been self-represented since January 17, 2019.
[17] The litigation has been outstanding for five years. The delay was caused, in part, by the husband’s disclosure issues. It is unclear to what extent the changes in representation by the wife contributed to the delay, or whether counsel were actively working on this file between court attendances. There were two consent adjournments and four Settlement Conferences, (and notations that the matter is not ready to proceed to trial,) that contributed to the delay.
[18] Various interim orders were made during the seven court attendances. The relevant attendances are set out below.
[19] On October 20, 2017, the parties attended a Case Conference and entered into interim Minutes of Settlement. The parties agreed that the house will be listed for sale after certain repairs are completed. The Jarvis J. order requires the husband to continue to pay household expenses (including but not limited to the mortgage, taxes, utilities, heat and hydro) until the sale of the matrimonial home closes. The agreement requires the wife to provide any medical evidence that she intends to rely upon to suggest that she is unfit to work. She is also obliged to provide copies of any applications she delivers for employment and to keep the husband advised (through counsel) of her efforts to secure employment.
[20] On October 29, 2018, the parties consented to a further order that the home be listed for sale, this time within 14 days.
[21] On July 2, 2019, the parties attended a second Settlement Conference and the husband’s disclosure continued to be outstanding. MacPherson J. endorsed the record stating that the pension has been divided at source. The endorsement also states that the husband will need to pay support on his manufacturing income, and income imputation to be determined regarding the wife.
[22] On September 30, 2019, a further Settlement Conference was held. The endorsement states that the pension was divided at source, the spousal support issue remains outstanding and the matrimonial home is listed for sale.
[23] On January 7, 2020, the parties attended before MacPherson J. for a Trial Scheduling Conference. MacPherson J. notes that the parties plan to sell the home and divide the proceeds, and notes that the husband’s pension is divisible at source. He scheduled the matter for trial in May 2020, which did not proceed due to the Covid-19 pandemic.
[24] The house never sold and was taken off the market.
[25] A further Trial Scheduling Conference was held on October 25, 2021 with Stevenson J. She endorses that the matter should proceed to trial in November 2021, as the parties need closure and are continuing to reside in the matrimonial home together. Stevenson J. provided directions in respect of disclosure, the provision of a trial record and timelines. Neither party complied with her order. However, by the first date of the trial the disclosure was complete, and the parties’ materials were sufficient enough to proceed.
[26] On the first day of the trial I directed the parties to meet that afternoon to speak to one another in an attempt to resolve some of the issues. To their credit, the parties successfully resolved the value of most items contained in the NFP Statement. The husband agreed that the wife took loans from friends (in the amount of $33,000). With the Court’s assistance the parties arrived at a detailed plan to proceed with the sale of the matrimonial home.
[27] On the second day of the trial the wife withdrew her claim for a restraining order after learning about the consequences of breaching such an order.
[28] At the end of the trial the parties advised the Court that they were thankful for the opportunity to be heard.
III. PRELIMINARY CONCLUSIONS
[29] The marriage and the years following the separation have been difficult for the family. The child had health issues when he was 3 years of age, and later he reported being bored at school (leading to the decision that the wife provide home-schooling).
[30] As set out in greater detail below, the family is of modest means. The husband has always been the sole financial provider for the family. Financial issues have been a source of conflict for the family.
[31] While the parties have agreed to a separation date of July 21, 2016, they have led fundamentally separate lives since approximately 2011.
[32] The husband presented at trial as quiet and, as stated by the wife, he does not speak to her. The wife was expressive, with much to say about her unhappiness, disappointment, blame and regret.
[33] The trial provided the wife with a much-needed opportunity to share the challenges that she has faced during the marriage and to express the anger and frustration that she feels towards the husband. The wife acknowledged that much of the testimony she provided is not relevant to the issues that are before the Court. However, I recognize the wife’s need to be heard by a neutral third party and the importance of providing her with the opportunity to do so.
Credibility
[34] This case has various credibility issues. Jarvis J. summarizes the relevant considerations when assessing credibility and reliability as follows:[^1]
[28] As has been frequently observed, the assessment of witness credibility is an inexact science, impossible to articulate with precision. For example, a witness may impress the court with the coherence and logic, or common sense, of their narrative but be unreliable due to their interest in the outcome of the case or the lack of probative information. Or a witness may be so interested in a case that they are incapable of making an admission or facilitating the disclosure of information that they perceive as helpful to the other party and harmful to their case. These affect the weight to be given to that evidence. There is, quite simply, no one-size-fits-all template. Several of the many considerations relevant to the weighing and assessment of witness credibility and reliability, and relevant to his case, were comprehensively reviewed in Al-Sajee by Chappel J. who aptly observed that,
…the judge is not required by law to believe or disbelieve a witness’s testimony in its entirety. On the contrary, they may accept none, part or all of a witness’s evidence, and may also attach different weight to different parts of a witness’s evidence (see R. v. D.R., 1996 CanLII 207 (SCC), [1996] 2 S.C.R. 291 (S.C.C.), at paragraph 93; R. v. J.H., 2005 CanLII 253 (ON CA), [2005] O.J. No. 39 (Ont. C.A.) at paragraphs 51-56; McIntyre v. Veinot, 2016 NSSC 8 (S.C.), at para. 22).
[35] The quality of the oral evidence was poor, and the documentary evidence was lacking. For example, the husband submitted no pay statements or receipts from the pizza parlour, the wife has no evidence of the husband’s hidden bank accounts or hidden savings (aside from her own calculations and explanations) and the wife did not provide her Income Tax Returns.
[36] The parties agree to the basic facts of this case, which define their roles in the marriage. They have contradictory perspectives on various events within their marital history, and each had difficulty recalling dates, times or details. I accept that each version has “truth” from each party’s perspectives (although to some extent one or both versions may not be factually accurate).
[37] Where the parties engage in a “he said/she said” dispute, and where the issue is relevant to the matters that I must decide, I have considered the parties’ oral evidence and the documentary evidence provided (including the tax returns, pension documentation, and pay stubs). I have filled in the gaps and made factual findings based on the available evidence.
Family Violence
[38] During the trial the wife provided evidence about physical, financial and emotional abuse. She also exhibited considerable anger towards the husband and engaged in name-calling.
[39] What constitutes “family violence” is defined in s. 2(1) of the Divorce Act:[^2]
family violence means any conduct, whether or not the conduct constitutes a criminal offence, by a family member towards another family member, that is violent or threatening or that constitutes a pattern of coercive and controlling behaviour or that causes that other family member to fear for their own safety or for that of another person — and in the case of a child, the direct or indirect exposure to such conduct — and includes
(a) physical abuse, including forced confinement but excluding the use of reasonable force to protect themselves or another person;
(b) sexual abuse;
(c) threats to kill or cause bodily harm to any person;
(d) harassment, including stalking;
(e) the failure to provide the necessaries of life;
(f) psychological abuse;
(g) financial abuse;
(h) threats to kill or harm an animal or damage property; and
(i) the killing or harming of an animal or the damaging of property.
[40] The wife referred to incidents of family violence. She provided only one specific example, which was acknowledged by the husband as set out below.
[41] The parties agree that one evening, when the child was approximately 15 or 16 years of age (2014 or 2015), the wife was upset that the child wanted to go out (to drink alcohol), and an argument ensued. The parties became physical in the child’s room, and they describe scratching, pushing and choking. The child was present but did not intervene. Each party alleges that the other was the aggressor. The wife reported the incident to the police, but she did not want the husband to be charged criminally. Neither party was charged with any criminal offence. Over the next several years the wife received assistance from a community organization that supports victims of domestic violence.
[42] The husband states that he was afraid of the wife and slept with the door to his bedroom closed. He testified that the wife slept with the door to her bedroom open even though she expresses being afraid of the husband. As stated above, the parties continue to cohabit in separate bedrooms on the second floor of the matrimonial home.
[43] The wife testified that she was the victim of emotional abuse, including the recipient of abusive emails from the husband and “his lover” (in or around 2013). I have reviewed emails translated by the wife from Polish to English. There is name calling and insulting statements in the emails. Some of the emails were purportedly sent by the husband and others by his “lover”. I recognize that the emails are hearsay, they are not “official” translations, and the husband did not acknowledge or deny writing same. The emails were sent during a time that the marriage was breaking down, the child was struggling, and the parties were very unhappy.
[44] The parties agree that the husband unilaterally closed the parties’ joint bank account, Visa credit card and line of credit in October 2014, without notice to the wife. The husband admitted that he took these steps after learning that the wife used funds from the Visa/line of credit to pay for one of several trips to Cuba that they could not afford. The husband testified (and the wife admitted) that he advised her to get a paid job.
[45] The husband immediately opened a sole account and continued to be solely liable for all of the household expenses (mortgage, taxes, insurance, food staples, utilities, interest on the line of credit and car licences and insurance (except when the wife had no car for some period)). He did not cover the wife’s personal expenses and she had no regular access to funds. The lack of funds was very difficult for the wife notwithstanding that she is partially responsible for her financial situation.
[46] I recognize that the family’s financial circumstances prevented the wife (and the husband) from enjoying luxuries that others enjoy (for example, vacations, meals in restaurants and new cars). I also find that the wife’s financial circumstances would have improved if she had obtained even a part-time minimum wage job during the marriage or after separation (earning perhaps $15,000 per year). As she declined to secure employment the wife had no option but to rely on loans provided by three friends (with a total amount of $33,000) to cover her expenses from 2014 to 2019. The bulk of the loans ($29,500) were obtained after separation. The loans continue to be outstanding.
[47] During the course of the trial the wife, who was upset by the husband’s testimony, repeatedly accused him of being a liar and a criminal. She also made other derogatory statements. The husband did not respond to these allegations, nor did he make any corresponding accusations.
[48] I find that there was family violence in the parties’ relationship. However, I am not prepared to attribute blame to just one party or the other. They have continued to reside in a difficult situation living fundamentally separate lives for 20 years, and living “separate and apart” together for over five years. I accept that there were angry interactions between them, followed by years of non-communication.
[49] When the house is sold and the parties find their own accommodations (which should have taken place in 2018 but for their inability to find a suitable buyer), I am hopeful that they will each feel a sense of freedom and peace that they cannot not enjoy while continuing to cohabit.
IV. THE DIVORCE
[50] The wife and the husband both seek a divorce. Section 8(1) of the Divorce Act provides that the court may grant a spouse or both spouses a divorce on the grounds that there has been a “breakdown of their marriage.”
[51] Section 8(2) of the Divorce Act outlines the circumstances which establish a breakdown of a marriage, as follows:
Breakdown of marriage
8(2) Breakdown of a marriage is established only if
(a) the spouses have lived separate and apart for at least one year immediately preceding the determination of the divorce proceeding and were living separate and apart at the commencement of the proceeding; or
(b) the spouse against whom the divorce proceeding is brought has, since celebration of the marriage,
(i) committed adultery, or
(ii) treated the other spouse with physical or mental cruelty of such a kind as to render intolerable the continued cohabitation of the spouses.
[52] The husband and the wife rely on section 8(2)(a) in support of their entitlement to a divorce. While they have continued to reside in the matrimonial home, I accept their evidence of living separate and apart since July 21, 2016. I have reviewed the Marriage Certificate and clearance certificate. I am granting the divorce.
V. THE PROPERTY ISSUES
Law and Analysis
[53] The Preamble of the Family Law Act,[^3] (the “Act”) describes the legislative purpose as follows:
Whereas it is desirable to encourage and strengthen the role of the family; and whereas for that purpose it is necessary to recognize the equal position of spouses as individuals within marriage and to recognize marriage as a form of partnership; and whereas in support of such recognition it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the breakdown of the partnership, and to provide for other mutual obligations in family relationships, including the equitable sharing by parents of responsibility for their children[.]
[54] Sections 4(1) and 5(1) of the Act define and address the equalization of net family property, as follows:
4(1) “net family property” means the value of all the property, except property described in subsection (2), that a spouse owns on the valuation date, after deducting,
(a) the spouse’s debts and other liabilities, and
(b) the value of property, other than a matrimonial home, that the spouse owned on the date of the marriage, after deducting the spouse’s debts and other liabilities, other than debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of the marriage;
4(1.1) The liabilities referred to in clauses (a) and (b) of the definition of “net family property” in subsection (1) include any applicable contingent tax liabilities in respect of the property. 2009, c. 33, Sched. 2, s. 34 (2).
5(1) When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family property is entitled to one-half the difference between them. R.S.O. 1990, c. F.3, s. 5 (1).
[55] On the second day of the trial the parties provided the Court with an agreed upon Net Family Property Statement (“NFP”).
[56] I advised the parties that there are three problems with the NFP that need to be corrected.
[57] First, the wife omits to include any amount for the survivor’s pension that is listed in the FSCO Form 4E pension valuation. The Family Law Value of the spousal benefit as of the family law valuation date is $20,067.30. A survivor’s benefit must be included in the spouse’s NFP calculations (McMullen v. McMullen, 2021 ONSC 1570 at para. 28 and 29). I am amending the NFP Statement to include that amount, and I am adding a corresponding debt for notional disposition costs (“NDC”) at 15% (given the wife’s low tax rate).
[58] Second, the NFP includes a valuation date debt of $33,000 to account for the wife’s loans. However, in accordance with the wife’s sworn Financial Statement dated November 30, 2016, the debt at separation was $3,500. The balance was incurred after separation (and will be addressed in the analysis of spousal support below). Therefore, I am replacing the value of $33,000 with $3,500 in the NFP.
[59] Lastly, the parties mistakenly attributed the amount of $15,854.09 for the line of credit to each of them. The each owe 50% in the amount of $7,927.50. I have made that change.
[60] The main differences between the equalization payment set out in the parties’ NFP and the corrected version relate to: (a) the added survivor’s benefit as an asset to the wife (minus the NDC); and, (b) the removal of the post-separation date loans from friends (which are dealt with in the spousal support analysis).
[61] The wife owes the husband an equalization payment of $2,731.08. A copy of the amended NFP will be provided with these reasons.
[62] As per the parties’ NFP Statement the wife has agreed to pay the husband the sum of $5,000 on account of the car.
Pension Issues
[63] Henderson J. recently reviewed the law on the equalization of pensions in McMullen v. McMullen, 2021 ONSC 1570.
[64] The employee’s interest in a pension plan constitutes “property” as defined in the FLA, and therefore, prima facie, it must be included in that spouse’s NFP calculation. See the decisions in Jackson v. Mayerle, 2016 ONSC 72, and Martin v. Martin, 2018 ONSC 6804.
[65] However, an employee’s interest in a pension plan may be removed from his or her NFP calculation and dealt with separately in certain circumstances that are set out in s. 10.1(3), (4), and (5) of the FLA. Those sections of the FLA give the court some options for dealing with pension divisions outside of the NFP calculations. The options include the transfer of a lump sum out of the pension plan, or the division of periodic pension payments if the pension is in pay. See Fawcett v. Fawcett, 2018 ONCA 150 at paras. 31-32, Grassie v. Grassie, [2013] O.J. No. 1030 at paras. 60-66, L.M. v. D.B.M., 2017 ONSC 5197 at para. 73, Jackson at para. 597, and Martin at paras. 160-170.
[66] On January 7, 2020, MacPherson J. notes on the Trial Scheduling Endorsement Form that the pension is divisible at source. Earlier endorsements mistakenly note that the pension was already divided at source. However, the pension has yet to be divided at source, which the husband attributes to the lack of resolution in this case.
[67] The wife takes the position that some amount is owed to her on a retroactive basis as the pension has yet to be divided at source. The Family Law Value states that the wife may receive up to the amount of $505.59 per month. She may also receive up to the amount of $145.22 as her share of the supplemental benefit until the husband attains the age of 65. The wife estimates that the amount owed to her from 2014 to present is $56,000 (although this figure does not account for any tax liability).
[68] The husband does not know what amount, if any, is owed to the wife. However, he states that he has been solely liable for the household expenses (as per the Jarvis J. order dated October 20, 2017).
[69] A review the husband’s sworn Financial Statement dated November 2, 2021, reveals that he currently pays housing expenses of $1,886 per month for the mortgage, property taxes, property insurance and repairs. At times he has paid as much as $2,000 per month on account of these expenses. He pays these amounts in after-tax dollars.
[70] On a monthly basis, the husband receives the sum of $1,344.46 in before-tax dollars from his pension including the bridge payment.
[71] In other words, the husband’s share and the wife’s share of the pension goes towards the mortgage and property taxes (with the husband paying the balance of the housing expenses from his employment income). Since separation the mortgage has reduced from $176,290 to $106,886. Each party’s share of the mortgage has reduced by $34,702. The wife has benefited from the reduced mortgage and from the husband’s payments towards her share of the property taxes, insurance and repairs.
[72] For that reason I am not ordering any amount of retroactive payments on account of the amounts received by the husband to date. Instead, I am ordering that the husband continue to be liable for the expenses listed above until April 30, 2022. It is anticipated that the house will be sold by that date.
[73] Commencing May 1, 2022, the pension and bridging/supplemental benefits are to be divided at source so that the wife will receive the maximum permitted by the pension administrator pursuant to section 10.1(5) of the FLA.
[74] The husband shall complete whatever steps are required to effect this order. The wife shall cooperate with same. Information as to the forms that need to be completed may be found on the following website: Superintendent of Financial Services Approved Family Law Forms (gov.on.ca).
[75] On an aside, if the wife has yet to apply to divide the Canada Pension Plan (CPP) credits she may wish to do so. Information may be found on the following website: Divorced or separated: Splitting Canada Pension Plan credits - Canada.ca. This step is separate from the trial proceeding.
VI. SPOUSAL SUPPORT
The Parties’ Positions
[76] The wife (age 67) seeks an order for spousal support on a needs-based and compensatory basis. The wife has not been employed outside of the home since the child’s birth 30 years ago. Her current income is limited to CPP, OAS and social assistance. Aside from her interest in the matrimonial home and her share of the husband’s pension, she has no assets of value. The wife owes three friends the sum of $33,000.
[77] The wife requests that the support be paid by way of a lump sum as the wife believes that it is the husband’s intention to move to Poland. She has concerns about the enforceability of any periodic support order.
[78] The husband (age 64), acknowledges that the wife is entitled to spousal support. He is close to retirement and works two jobs to support the family. As stated above, his pension has been used to pay down the jointly held mortgage. He has been the sole income earner in the home throughout the marriage. Aside from his interest in the matrimonial home and his share of the pension, he has no assets of value.
[79] The husband has fully complied with the consent order of Jarvis J. dated October 20, 2017, which requires that he continue to be solely liable for all of the household expenses. The order contemplated that the matrimonial home would be sold at that time, however, the home has yet to be sold. The husband makes these payments in after-tax dollars, with no tax relief.
[80] Since the parties continue to reside together in the matrimonial home and the financial status quo that preceded the separation continues (being that the husband pays the household expenses), I would normally be disinclined to order spousal support until the house is sold and the parties no longer cohabit. The wife has had the indirect benefit of having her household expenses paid by the husband.
[81] However, the husband acknowledges that the wife incurred loans of $29,500 since separation to pay for personal expenses (food, clothing, shoes and other personal expenses). The wife had unmet financial needs from July 2016 (separation date) to July 2019 (when she began to receive CPP, OAS and social assistance). Moreover, by May 1, 2022, the parties anticipate having separate residences. Therefore, an amount of lump sum spousal support may be appropriate.
[82] I consider all of the above in my assessment of the wife’s claim for spousal support. In my analysis below I account for the value of the financial support received, each party’s income (including imputed income), an amount of retroactive support that would be appropriate if the husband had not paid the household expenses, and the wife’s loans.
[83] On the afternoon before the parties’ closing oral submissions I provided each party with the summary at paragraphs 84-86 below (from Dunleavy v. Comeau, 2021 ONSC 7210 at paragraphs 65 – 69) to assist in the development of their closing arguments in respect of the wife’s claim for lump sum spousal support. I have considered the evidence, their arguments and the relevant law.
[84] The Divorce Act provides that in making an order for spousal support, the court shall consider the following:
15.2 Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited.
(b) the functions performed by each spouse during cohabitation.
(c) any order, agreement or arrangement relating to support of either spouse.
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should:
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown.
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage.
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage.
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[85] There are three bases for the entitlement to spousal support: compensatory support, non-compensatory support and contractual support (Bracklow v. Bracklow 1999 CanLII 715 (SCC), [1999] 1 SCR 420).
[86] Compensatory support is meant to acknowledge the contributions of a spouse to the relationship and any financial opportunities which the spouse has forgone for the sake of the family or other spouse. Generally, compensatory awards are seen where one spouse has sacrificed career opportunities, has made significant contributions to the household, and where one spouse has made significant contributions to the other spouse’s career. It may also apply where one spouse has received the benefit as a result of roles assumed by the other spouse (Moge v. Moge 1992 CanLII 25 (SCC), [1992] 3 SCR 813).
[87] The starting point for this analysis on imputing income is section 19 and Schedule III of the federal Child Support Guidelines (the “Guidelines”). The relevant subsections are as follows:
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:
(a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse;
(e) the spouse’s property is not reasonably utilized to generate income;
(g) the spouse unreasonably deducts expenses from income;
(h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax
Reasonableness of expenses
(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.
Analysis
Payment of Household Expenses
[88] Since separation the husband has been solely liable for various expenses. The current amounts listed in the husband’s sworn Financial Statement dated November 2, 2021 are as follows: the parties’ car insurance and licences ($280), the housing expenses not covered by the pension amounts (approximately $542), utilities, household supplies, the home phone, cable and internet ($664) and line of credit interest ($87). These expenses amount to approximately $1,573 per month in after-tax dollars. The wife has benefited in the approximate amount of $787 per month. The parties have been separated for 65 months. Therefore, the wife has received the equivalent of $51,155 in lump sum support. As I am ordering the husband to continue to pay the household expenses through April 30, 2022 (when it is anticipated that the house will be sold), the wife will receive an added benefit of $787 x 5 = $3,935. The total benefit is $55,090.
The Wife’s Income and Entitlement to Spousal Support
[89] It is not disputed that the wife was a homemaker for the duration of the parties’ marriage. She was solely responsible for preparing meals and taking care of the home. The parties lived a modest lifestyle and did not eat in restaurants or have assistance in the home. The wife was the child’s primary caregiver including during various evenings when the husband was delivering pizzas and when he opted to go out in the community (to various stores) as he did not want to be at home. The wife homeschooled the child for two years. The wife’s housing initiatives enabled them to build equity in a series of five homes. It is anticipated that the matrimonial home will sell for at least $800,000 to $900,000, which is considerably more than its purchase price years ago.
[90] The wife is entitled to non-compensatory and compensatory support, given her roles in the family and the duration of the marriage. However, her compensatory claim is weakened by the following facts: (a) the wife never returned to the workforce or to school to further her education and improve her employment prospects. She could have taken either of these steps once the child was enrolled in school full-time (age 6); (b) the wife acknowledges that the husband told her to work; (c) the husband had to work a full-time job and a part-time job (Friday and Saturday evenings and Sundays) to cover the family’s expenses; (d) there were insufficient funds for the parties to enjoy a more comfortable lifestyle including restaurants, travel (aside from local trips when the child was young). A better lifestyle could have been achieved if the wife had worked outside of the home; and, (e) the wife’s affidavit sworn July 18, 2018 (in response to the Jarvis J. order dated October 20, 2017) confirms that there are no doctor’s letters or medical reports to verify that she is unable to work. She admits to not looking for work.
[91] In the circumstances of this case (long marriage, traditional roles, refusal to return to work) it is appropriate to use the mid-range of the Spousal Support Advisory Guidelines (SSAG) calculations until 2020 when the wife’s retirement income yields a higher annual income than the imputed income of $15,000. At that time it is appropriate to calculate spousal support based on each party having the same after-tax income (referred to as a 50/50 sharing of Net Disposable Income (NDI).
[92] The husband seeks to impute an income of $25,000 to the wife, on account of intentional under-employment. He states that she could have earned that amount even though she was 62 years of age at the date of separation and had been out of the workforce for approximately 25 years. I disagree that she should be imputed a close to full-time minimum wage income.
[93] I find that the wife could have earned a part-time annual income of $15,000 if she had taken steps to secure employment at separation. That is equal to a part-time minimum wage position. The wife was employed prior to the marriage, she describes herself as a problem-solver and she presents well. There is no medical evidence that she was unable to work on a part-time basis.
[94] For the purposes of my assessment of the wife’s income for spousal support I have imputed an income to her from 2016 (prorated for six months) to 2019 in the amount of $15,000 per year. I find that the wife could have earned that amount from a part-time job paying minimum wage (or higher). For 2020, I have considered the wife’s sworn Financial Statement dated November 17, 2021, which discloses an income of $24,412, from CPP, OAS and social assistance. For 2021 to 2022, I have decreased her income to approximately $22,000 as she testified that it would be lower this year due to an error in 2020. She may no longer receive the Guaranteed Income Supplement.
The Husband’s Income and Ability to Pay
[95] The husband has been employed full-time with Pinnacle Tool Works (“Pinnacle”) for several years earning approximately $38,000 per year (except for 2020 due to a four-month shut-down). However, shortly after November 4, 2021, the husband was laid off due to a shortage of work/end of contract or season. His expected date of recall is unknown (as per the Record of Employment). The husband testified that a shortage of microchips in the automotive manufacturing industry led to a decrease in need for other car parts. His employer manufactures seatbelt clips.
[96] The husband testified that he earns a cash income while working at a local pizzeria delivering pizzas. He is scheduled to work on Friday and Saturday evenings and Sundays. However, his paid employment commences when he is advised to deliver his first pizza and not when the store opens. He waits close to the store for that communication even though he does not get paid to do so.
[97] The husband is paid cash by the pizzeria and its customers (although tips are low due to service charges and customer discretion). He acknowledges that the amounts included in his Income Tax Returns for his pizza delivery services are not accurate as they reflect his estimated earnings and he keeps no records. The husband writes off almost the entirety of his stated earnings as self-employed business expenses. Therefore, I cannot rely on the business income amounts included in the Income Tax Returns.
[98] The wife seeks to impute an income of $10,000 to 12,000 per year (as per some written statements that she entered into the trial as exhibits), on account of the husband’s cash income from his pizza delivery services. She states that he works approximately 28 hours per week at the pizza store. Her estimate is based on the time that he is not home.
[99] I am imputing the husband with an annual income of $10,000. That is approximately 18 hours of work per week, 50 weeks a year, at a rate of $12 per hour. That accounts for the cash funds paid by the pizzeria ($10) and tips ($2). My calculations gross-up the income to account for the non-taxable nature of cash income.
[100] For the purposes of my assessment of the husband’s income for spousal support I have added the husband’s Pinnacle income and his gross-up imputed cash income for 2016 to 2020. In 2021, I have used his employment income through November 4, 2021 and added a small amount $2,156 of imputed E.I. for six weeks (on the assumption that he will apply and receive that benefit). For 2022, I have imputed Pinnacle employment and pizza income from January through October when he attains the age of 65, which is the normal retirement age. The husband made reference to working 10 months in 2022. He also testified as to being unsure of his plans, and he neither confirmed nor denied the wife’s allegation that he may move to Poland.
| Husband’s Income | Wife’s Income | After-tax benefit SSAG (annual amount) Mid-range except as indicated | |
|---|---|---|---|
| 2016 | $50,145 | $15,000 | $5,892 (for 6 months) |
| 2017 | $52,990 | $15,000 | $12,786 |
| 2018 | $52,104 | $15,000 | $12,485 |
| 2019 | $51,961 | $15,000 (CPP, OAS and impute) | $13,724 |
| 2020 | $38,077 | $24,404 | $11,212 |
| 2021 | $47,035 | $21,861 | $9,527 (50/50 NDI) |
| 2022 | $45,225 | $21,861 | $7,610 (10 months 50/50 NDI) |
| Total | $73,236 |
[101] For a variety of reasons (imputed income for both parties, lack of the wife’s Income Tax Returns (Notice of Assessments only), the wife’s stated evidence of decreased 2021 and 2021 retirement income, the husband’s recent lay off, the husband’s upcoming retirement and otherwise) the chart above includes some estimated amounts. The calculations were created using DivorceMate and reflect the wife’s reasonable entitlement to lump sum spousal support in lieu of the payment of her 50% share of the household expenses.
The Wife’s Loans
[102] The husband acknowledges that the wife is indebted to three friends in the amount of $29,500. These are post-separation date debts that she incurred to pay her personal expenses.
[103] If the wife had been employed part-time (earning $15,000 per year) and/or received some spousal support, she could have afforded these expenses without the loans.
Conclusion Regarding Spousal Support
[104] The husband is deemed to retire as of October 23, 2022. No support is payable after that date.
[105] As part of his support obligation, the husband is obliged to continue to pay the entirety of the household expenses until the closing of the sale of the matrimonial home.
[106] Based on my DivorceMate calculations a reasonable amount of lump sum spousal support from July 2016 to October 2022 is $67,091.
[107] The actual benefits received from the payment of household expenses (not including the housing expenses which are dealt with in the pension section) through April 30, 2022 is $55,090.
[108] The difference between the two amounts is: $12,001 and may be a reasonable amount of lump sum support owing.
[109] However, since the wife incurred loans of $29,500 to pay her personal expenses, which the husband acknowledges, I am ordering that he pay the sum of $29,500 as lump sum retroactive and ongoing spousal support. This amount shall be paid from the net proceeds of sale of the matrimonial home. The amount payable does not depend on whether the wife re-pays the loans as that is an issue for her to resolve with the three friends.
[110] My support award is higher than the difference between the two amounts (lump sum – benefits received) as per paragraphs 107 - 109 above. However, lump sum support in the amount of $29,500 is appropriate for the following reasons: (a) I have terminated any support obligation as of October 2022, and the husband may choose to continue working. Therefore, he may continue to earn an income with no spousal support obligation; (b) if the house closes before April 30, 2022, the husband will have the benefit of no longer paying the household expenses at a date earlier than anticipated; (c) my calculation includes an imputed income to the wife, yet I recognize that she did not have access to these funds as she opted never to work outside of the home; (d) the wife incurred loans of $29,500 to cover her personal expenses; and, (e) my calculation is based on a 50/50 sharing of NDI Income for 2020, 2021 and 2022 (when the wife’s annual retirement income is above the imputed income of $15,000). That yields an amount of spousal support that is less than the mid-range SSAG amount for those years.
[111] I am ordering a lump sum payment from the net proceeds of sale as this was requested by the wife. Lump sum support is reasonable given that the support obligation ends as of October 2022, and the husband does not deny the allegation that he may move to Poland.
Costs
[112] Neither party has been wholly successful, and this case has been ongoing for five years. I am disinclined to order costs on that basis and given the parties’ financial circumstances. However, if either party has an Offer to Settle and believes that he/she has met or beat that offer in accordance with this decision, then he/she may provide costs submissions as follows:
(a) the party who believes that they have met or beat their offer shall file a Bill of Costs, the Offer to Settle and no more than three pages (double space, 12 font) of argument about the amount of costs sought and the basis for the claim. This shall be served on the other party, filed on the online submissions portal and emailed to the judicial assistant (Nurit.suzana@ontario.ca) within seven days; and
(b) the responding party shall file a Bill of Costs, the Offer(S) to Settle and no more than three pages (double space, 12 font) of argument, within seven days of receiving costs submissions from the moving party (as per above).
[113] If no costs submissions are received within seven days, there shall be no costs.
VII. DISPOSITION
[114] As set out below, some of the orders were arrived at on consent during the trial, and others are not on consent. Either way they are court orders. The parties (and the real estate solicitor shall be directed) to comply with all of the orders below.
[115] Court admin is requested to prepare the draft order to go, for my review and execution, as follows. The parties need not approve the order as to form and content:
On consent, the divorce is granted.
On consent, the property municipally known as 51 Seaton Drive, Aurora shall be listed for sale by no later than January 15, 2022, on the following terms:
(a) the parties shall jointly retain a real estate agent (“agent”) to list the home for sale;
(b) the parties shall follow the agent’s advice about a reasonable listing price, listing terms and closing date;
(c) the parties shall be jointly liable for up to $2,500 each (which shall come from his/her $10,000 referred to in paragraph 3 below) to make any improvements or repairs recommended by the agent to prepare the house for sale;
(d) the parties shall co-operate with one another and with the agent to assist with the preparations and the sale;
(e) the first reasonable offer shall be accepted, preferably with a closing date by April 30, 2022;
(f) the parties shall ensure vacant possession on the closing date;
(g) the parties shall jointly retain a real estate solicitor who shall be directed to pay the usual closing expenses (including: mortgage, joint debts, closing expenses, real estate commission, utilities, taxes, legal fees) before distributing the net proceeds of sale as per below; and
(h) any significant issue respecting the sale of the home that cannot be resolved by the parties shall be addressed by the court (Nurit.suzana@ontario.ca).
On consent, and as soon as possible, the parties will arrange a joint line of credit against the matrimonial home that will provide each of them with the sum of $10,000, which shall be repaid on closing. Each party shall pay ½ of the interest pending the sale.
The net proceeds of sale of the matrimonial home shall be distributed equally except as adjusted below:
(a) from the wife’s ½ share to the husband:
(i) the sum of $5,000 for the Honda 2012 Civic (and both parties shall co-operate to transfer the car to his name); and
(ii) the sum of $2,731.08 on account of the equalization of net family property.
(b) from the husband’s ½ share to the wife:
(i) the sum of $29,500 as non-taxable lump sum retroactive and ongoing spousal support payable to the wife.
The husband’s pension with CROWN Metal Canada LP Pension Plan for Calgary Hourly Employees shall have its pension payments and bridging/supplemental payments divided equally at source commencing May 1, 2022. The husband shall complete the required paperwork and take the necessary steps within 14 days.
All other claims made by the wife in her Application dated November 30, 2016 and made by the husband in his Answer dated January 24, 2017 are hereby dismissed.
If no costs submissions are received within seven days, there shall be no costs.
Justice A. Himel
Date: November 24, 2021
[^1]: Jayawickrema v. Jayawickrema, 2020 ONSC 2492, at para. 28. [^2]: R.S.C., 1985, c. 3 (2nd Supp.) [^3]: R.S.O. 1990, c.F.3, s. 5(1).