COURT FILE NO.: FS-19-00042547-0000

DATE: 2022-04-04

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Janet Elizabeth McConkey, Applicant

AND:

Sean Gordon McConkey, Respondent

BEFORE: Kurz J.

COUNSEL: Belinda Rossi, Hannah Rich, for the Applicant

Sean Gordon McConkey, Self Represented

HEARD: March 28, 2022

ENDORSEMENT

Introduction

[1] The Applicant wife (the “wife”) moved in January 2022 for child and spousal support, both prospectively and dating back to February 2019, when the parties separated. In total, she seeks $609,743 in retrospective support, the majority of which she describes as arrears. She asks me to impute income to the Respondent husband (the “husband”) at the rate of $385,000 per year, on the basis of intentional underemployment. She does so even though the husband never earned that amount from employment and the fact that he will be earning over $200,000 this year in any event.

[2] The wife had also moved for an advance on equalization, but the parties advise that they have fully settled the equalization issue.

[3] The parties separated on Feb. 9, 2019, after an almost 25-year traditional marriage. During their relationship. the wife worked outside the home on only part time basis because of her responsibility to the parties’ three children. One of those children is now independent, while two are finishing their schooling.

[4] The wife fails to offer compelling reasons for the delay in bringing this motion. Her counsel cites a number of factors, but offers no evidence that would justify or even fully explain a three-year delay in bringing this motion. Further, she has filed 136 documents on Caselines, including numerous charts and spreadsheets, in support of her motion. Yet she originally brought it (including claims for the equalization advance and disclosure) as a “regular” motion; i.e. that would take less than an hour to argue. When it became clear that the issues raised could not be argued in less than an hour, this motion was converted to a 90-minute-long motion, which was argued over about two hours.

[5] Interim support motions are not meant to take the place of a trial. Instead, they are meant to allow the parties to maintain a reasonable lifestyle until the full merits of a case can be determined at trial: Charbonneau v. Charbonneau 2004 47773 (ON SC), [2004] O.J. No. 5059 (SCJ). Even when, as here, there is no issue of entitlement, courts generally do not engage in a detailed examination of the merits of a case at the interim motion stage: ibid. While a court is not precluded from making temporary retroactive support orders where merited, particularly in the face of blameworthy conduct, it should be cautious in making such an order since there has been no questioning. The trial judge is in the best position to conduct the necessary holistic analysis of the D.B.S. factors: Palaganas v. Marshall, 2016 ONCJ 445, at para. 57- 60 (see below for citation of the D.B.S. case).

[6] That being said, it is open to a motions court to make an interim retrospective or even a retroactive support order when there is clear entitlement and blameworthy conduct that benefits the payor to the disadvantage of the recipient: Palaganas v. Marshall, at para 60-61, citing Samis (Guardian of) v. Samis, 2011 ONCJ 273, [2011] O.J. No. 2381 (OCJ), at para. 91.

[7] Here, there is no question of entitlement following a long-term marriage, the roles played during the marriage and the disparities in the parties’ incomes. But that does not mean that a motions court, working only with affidavits and no oral evidence, can take the place of a trial court. That is particularly true in this case, where there are complex issues of imputation of income to the husband and perhaps to the wife as well.

[8] For reasons that follow, I will order child and spousal support on a without prejudice basis, commencing April 1, 2021. I will do so, based on the husband’s actual line 15000 income for 2021 and anticipated income for 2022. I leave issues of imputation of income, the non-recurring nature of some income, double recovery, the date in which each element of support arises, and any credits that should be available to the husband for direct payments to the children, to trial. That is where those issues can be better explored.

[9] Any amounts that I order are without prejudice to the claims and arguments that are best explored at trial. Any findings that I make are not intended to be binding on the trial judge. I conclude by setting out the parameters of support and call for the parties to file updated submissions and Divorcemate calculations to allow me to set the exact amounts owing to date and ongoing obligations until trial.

Background

[10] The parties had a long-term traditional marriage of almost 25 years that ended on February 9, 2019. The husband was the main breadwinner throughout their relationship. He is a human resources professional who has led human resource departments at two “top five” Canadian accounting firms. The wife was primarily a stay-at-home parent, who worked part time, at best, after the parties’ children were born more than two decades ago.

[11] The parties have three children of their marriage: 23-year-old Carolyn McConkey, born April 13, 1998 (“Carolyn”), and twenty-one-year-old twins, Charlotte McConkey, born March 6, 2000 (“Charlotte”), and Hollis McConkey, born March 6, 2000 (“Hollis”).

[12] Carolyn completed her schooling in 2021, which included an undergraduate degree at University of Windsor in 2020 and a certificate in Human Resource at George Brown College in 2021. She is currently independent.

[13] Charlotte is a successful fourth year student at Dalhousie University. While she primarily resides in Halifax, Charlotte has some part time work. Charlotte returns to Toronto to stay with her mother on holidays and for about two months each summer. The father complains that the mother pays for her airfare on her return flights to Toronto. Since June 2021, he has unilaterally decided to give Charlotte $500 per month, without having negotiated this amount with the wife. He paid Charlotte $400 per month in April and May 2021. He claims to have provided her with a total of $9,514, including contributions to some expenses.

[14] Hollis resides with the wife. She is a fourth-year student at the Ontario College of Art and Design University (“OCADU”). Like her sister, Hollis works part time and summers, in part because of a paucity of support payments from the husband. He claims to have made $15,164.00 in direct payments to Hollis, for various expenses.

[15] A few months before the parties separated, the husband was fired without cause, from his job as the National Head of Talent Management at BDO Canada (“BDO”). He previously held a similar position at Deloitte Canada, where he had worked for 18 years. He was fired from his job there, again without cause. His income in the years leading up to and including the year of separation was:

2015: $273,130 in employment income

2016: $291,831 in employment income

2017: 384,532 total, consisting of: $266,032 in employment income and

$118,500 as a portion of his Deloitte severance

2018: $285,391 total, consisting of: $255,757 employment and $29,633 as a portion of severance from Deloitte

2019: $130,151 total, consisting of: $36,209 employment income from his BDO severance, $18,114 RRSP rollover and $77,778 other income, including vacation pay.

[16] The husband moved to Winnipeg about two months after the parties separated. He returned, back and forth over the two following months, primarily to deal with the sale of the matrimonial home. While the father says that he sought employment in Toronto, the evidence of that job search is scarce. He admits that he moved to Winnipeg, a far smaller job market, to live with his current partner. However, he claims that his move to Winnipeg “was made in the best interests of my children”. He supports that claim by asserting that living with his partner, he “was able to minimize my expenses and also leverage her network to find new employment”. His partner is also in the HR field.

[17] If there were any financial advantages to the husband’s move to Winnipeg, they were certainly not shared with his wife of almost 25 years or his children. The wife produced an email that the husband sent to a potential employer in the month prior to separation, in which he stated that he would be wiling to accept a lower salary for work-life balance reasons. His move had nothing to do with the interests of his dependants.

[18] The husband’s partner earns about $160,000 per year. She demands few financial contributions from him regarding home expenses. His financial statement refers to a $500 per month payment towards “maintenance” and no other housing expenses. Her willingness to forbear on any equal contributions to home expenses essentially subsidizes him.

[19] In 2020, the husband earned $317,479 including $39,471 in net business income from a consultancy firm he created, a $277,504.59 withdrawal from his Deloitte pension plan, and $521.32 in interest/investment income. He paid no support at all that year. The husband says that it would be unfair to include his pension income in his total income for support purposes because it has already been equalized. In saying this, he cites, without naming, the principle regarding double recovery set out in Boston v. Boston, 2001 SCC 43. But of course, that principle does not apply to child support. When looking to spousal support, the principle is subject to exceptions related to hardship and need: Boston, at para. 65, Rogerson and Thompson, Revised User’s Guide to the Spousal Support Guidelines at para. 19(c), p. 103.

[20] In 2021, the husband earned a total of $211,718, consisting of $190,203 employment income and $41,904 net business income. He obtained a job at Tangent Animation in April 2021, but the firm closed a few months later, paying him both a salary and severance. He later found employment with Arnold Bros. Transport.

[21] The husband continues to work for Arnold Bros. Transport. He is earning a base annual salary of $150,000 plus a guaranteed bonus of 20% or $30,000, plus a RRSP top-off of 5% or $7,500, for a total of $187,500. He also received a delayed bonus from his previous employment at Tangent Animation, which shuttered just a few months after he joined the company. He received $53,900. That means that he will earn $241,400 this year.

[22] The wife’s income from 2015 onward is as follows:

2015 $ 8,782

2016 $12,364

2017 $12,691

2018 $15,770

2019 $20,463

2020 $26,808

2021 $20,389 (of which $16,606 is Employment Insurance)

2022 $25,259 (wife’s estimate, based on expected part-time earnings)

[23] In April, 2021, when the husband obtained his job at Tangent Animation, he began to pay the wife $2,000 per month in uncharacterized support payments, which increased to $2,550 per month in June 2021. Those payments have thus far totalled $29,500. Because there is no formal characterization of any of those payments, they have attracted no tax attention.

Analysis

[24] As stated above, it is not the role of this motions court to perform the level of analysis of the support issues that should be reserved to trial. Nor does this court wish to penalize the wife for any delay in bringing this motion. Any delay arguments can be raised at trial; knowing that in both Michel v Graydon, 2020 SCC 24, and Colucci v Colucci, 2021 SCC 24, the Supreme Court of Canada has warned against taking too rigid a stance again delay by the recipient, particularly in the face of blameworthy conduct by the payor.

Blameworthy Conduct

[25] Here, based on the limited evidence before me (absent oral evidence, including cross-examination), I can find, for the purpose of this motion, that the husband has engaged in blameworthy conduct. He refused to pay any child or spousal support at all to the wife for over two years after the parties separated. Thereafter, he appears to have underpaid support.

[26] Although a very secondary income earner during the parties’ long-term marriage, the wife was required to assume the mantle of the primary financial support for herself and the parties’ three children after separation. She was left in dire circumstances, living predominantly off of her savings. The wife states that her net equity has declined by about $350,000 since separation. At the same time, the father had access to substantial taxable income while residing, virtually expense free, with his current partner in Winnipeg.

[27] In the two years following the parties’ separation (i.e. 2019 – 20), the husband’s line 15000 income totalled $447,648, while the wife’s income was just over 10% of that amount, or $47,271. Yet he paid her no support for herself or the parties’ four children, all of whom were in university.

[28] For the three years between 2019-2021, the husband earned $659,366. The wife’s income was $67,660. Yet he only paid her $21,850 in total support. That was the amount that he paid from April – December 2021. Even that amount represented an underpayment for 2021.

[29] I wish to make clear that my findings, particularly regarding blameworthy conduct and intentional underemployment are not intended to be binding upon the trial judge in this matter. She or he will have a more robust record than I have available to me.

Arguments of Intentional Underemployment

[30] I have some sympathy for the wife’s arguments that the husband was intentionally underemployed, particularly in the period immediately following their separation. At that time, the husband chose to move to Winnipeg following a highly successful career at two major financial institution in Toronto, this country’s financial capital. The husband’s claims that his move to Winnipeg benefited the wife and children ring most hollow. But the wife’s claims of intentional underemployment require a full hearing. Her claim that income should be imputed to the husband at a rate that simultaneously includes both employment income and severance pay, appear overstated. Based on the materials before me, he never made more employment income than the $291,831 he earned in 2016.

[31] Similarly, the husband‘s claims that the wife is underemployed in the face of her role during the marriage and present health issues require a full hearing. However, I note that she is presently earning an amount that is not far under the minimum wage, calculated annually. It is hard to imagine that a great deal more will be imputed to her.

[32] In light of the husband’s present lifestyle and the paucity of his payments towards support, his arguments regarding her alleged overspending appear thin and unpersuasive.

My Decision to Commence Support on January 1, 2021

[33] Ordinarily I would make any support order in an interim motion payable from the month that the motion was brought, onward. Here, the motion was brought in January 2022. But in light of the husband’s conduct set out above, I cannot, in all fairness simply follow that practice. Instead, I adopt the reasoning of Sherr J. in Palaganas v. Marshall, above.

[34] In Palaganas, Sherr J. wrote at para. 60 that the fact that a trial judge is best situated to determine retroactive support did not end his consideration, It “does not preclude the court from making any retroactive support order when merited. Here, the court cannot ignore the egregiously blameworthy conduct of the father in failing to pay any child support to the mother.” Finding that “it appears almost certain that the father will be required to pay the mother retroactive support” with the issue being quantum, Sherr J. ordered that support commence a year earlier.

[35] Here, I will require that both child and spousal support commence the year before this motion was first brought, January 2021.

[36] In the year, 2021, the husband earned $211,718, while the wife earned just $20,389. For 2022, he is expected to earn $241,400, while the wife will earn $25,259. Those are appropriate figures for which to calculate his child and spousal support obligations on an interim basis. I recognize that there are arguments both in favour of and against taking those figures at face value, but they can be considered at trial and any adjustments can be made. In light of the delay in commencing support, there will be wide room for adjustment at trial.

Further Submissions

[37] In order to assist me in calculating the proper quantum of interim support from January 2021 onwards, I ask the parties to provide me with both their written submissions (of no more than five pages) and their Divorcemate calculations. The parties’ submissions will be based on the following factors:

a. The incomes of the parties will be as set out above;

b. I wish to give the husband credit for the payments that he has made to the wife from April 2021 onward. In doing so, I will refer to the following two factors. First, priority is to be given to child support: Divorce Act s. 15.3. Second, the husband has obtained no tax relief for his spousal support payments. The consideration of the tax consequences could lead to more money in the wife’s hands and less taxes in the husband’s hands, potentially making the exercise a win-win one. I also recognize that the husband can obtain a tax deduction for spousal support payments made the year before the order.

c. In regard to the husband’s claims of direct payments to the parties’ children, he should have made the arrangements to pay the amounts to the mother, who was their primary caregiver after the separation. I am not willing to give him credit at this stage for such payments, which are contentious and need further proof. He can raise those issues at trial.

d. If the children have made any direct contribution to their s. 7 expenses, those payments should be excluded from the calculation of s. 7 expenses.

[38] The wife will provide her calculations and written submissions within seven days and the husband within a further seven days. There will be no reply unless I request it. If I feel that it is necessary, I reserve the right to call the parties back to make further oral submissions.

[39] Costs are reserved to the conclusion of this motion.

“Marvin Kurz J.”

Electronic signature of Justice Marvin Kurz,

Original will be placed in court file

Date: April 4, 2022