COURT FILE NO.: FC-21-2077
DATE: 2022/09/27
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Steven James Labelle, Applicant
AND
Laurie Anna MacMillan, Respondent
BEFORE: Blishen J.
COUNSEL: Jeremy Bieman, for the Applicant
Karla Policelli, for the Respondent
HEARD: June 7, 2022
ENDORSEMENT
Introduction
[1] The Applicant, Mr. Labelle’s Notice of Motion requests:
an order severing the divorce from the Respondent, Ms. MacMillan’s claims for corollary relief;
an order granting a divorce;
an order that the divorce take immediate effect;
costs; and
punitive damages.
[2] I declined to hear any argument on punitive damages, finding such a claim to be overreaching and inappropriate on this motion.
[3] Given his diagnosis of ALS in August 2021 when he was posted with the armed forces in Colorado, Mr. Labelle returned to Ottawa and received a medical release from his employment. He indicates his death is imminent and if he dies when he is still married, his children will be disadvantaged as they will receive less from the survivor benefits under his pension than if he was divorced.
[4] The Respondent, Ms. MacMillan agrees to a divorce effective immediately but requests orders that:
Mr. Labelle obtain from any common law or intended new spouse, a signed, witnessed irrevocable waiver of the right to receive any portion of the survivor benefits of Mr. Labelle’s pension on his death;
Mr. Labelle designate and maintain her as the beneficiary of the Supplemental Death Benefit under his pension as security for child support obligations outstanding at his death;
in the event either party dies, the other parent will become the sole guardian of the property of the 2 children of the marriage James, 9 and Thomas, 7 and
if Mr. Labelle dies before a divorce is granted, she shall sign before a witness an irrevocable waiver of her right to receive any survivor benefits under Mr. Labelle’s pension.
[5] On his return to Ottawa, Mr. Labelle cancelled his Group Life Insurance policy. Ms. MacMillan argues that policy was security for child support (CS). It was anticipated Mr. Labelle would share parenting on an almost equal basis on his return to Ottawa, and the parties’ incomes would be very similar. He has not been able to share parenting and has not paid CS since his return in October 2021. Therefore Ms. MacMillan argues she requires some security for CS that will be outstanding upon his death and for future s. 7 expenses.
[6] The motion was argued on June 7, 2022, and the decision was reserved.
[7] On June 28, 2022, I received an email from counsel for Mr. Labelle indicating Mr. Labelle’s “condition is declining very rapidly and there is increased urgency.”
[8] Ms. MacMillan’s counsel responded indicating her client’s agreement that Mr. Labelle’s “health is deteriorating and there is urgency” to receiving the court’s decision.
[9] Although no medical evidence was provided, there is no dispute Mr. Labelle was diagnosed with ALS in August 2021 and in June 2022 received a medical release from his employment with the military. His health was precarious and his ability to continue with his daily activities limited. Given the parties agreement that Mr. Labelle’s health was significantly deteriorating, and orders
were required on an urgent basis, on June 30, 2022, I made the following orders with reasons to follow:
Final Orders
The Divorce is severed from the Respondent’s claims for corollary relief.
The Divorce is granted to take immediate effect without the 31-day waiting period.
Temporary order
- The Applicant is to designate the Respondent as the beneficiary of the Supplementary Death Benefit under his pension. The funds from the benefit are to be held in trust by the Respondent to the credit of the action for the court to make a final determination as to any child support, including the Applicant’s contribution to s. 7 expenses, outstanding on the Applicant’s death and/or whether any additional funds are required for future s. 7 expenses after the Applicant’s death.
[10] These are my reasons.
Brief Background
[11] The parties married June 26, 2010 and separated on October 20, 2020. They have two children: James 9 and Thomas 7. Mr. Labelle was 46 years old when the motion was argued. He was an analyst with the Canadian Armed Forces. Ms. MacMillan is 41 years old and is a registered nurse.
[12] On December 6, 2020, the parties signed a comprehensive Separation Agreement (SA), negotiated through a mediator. Mr. Labelle was in the process of moving to Colorado Springs, Colorado for a three-year posting January 2021 – August 2024. It was agreed the children would remain with Ms. MacMillan.
[13] The SA provides in general terms that when the parties reside in Ottawa or the surrounding area, they will share parenting time on a flexible child focused schedule. Para. 4.3 of the agreement provides that if the Applicant lives away, which was anticipated, he will pay child support (CS) of
$1,284 per month based on his annual income at that time of $85,000. In addition, the parties were
to share agreed upon special or extraordinary expenses as per s. 7 of the Federal Child Support Guidelines, SOR/97-175, as am, in proportion to their incomes.
[14] The agreement further provided Ms. MacMillan would keep the matrimonial home and Mr. Labelle would retain his government pension with the Canadian Armed Forces.
[15] Mr. Labelle paid CS while in Colorado. Tragically, as noted above, he was diagnosed with ALS in August of 2021. The disease is terminal and although no medical evidence was provided, the parties agree the A was given approximately two years to live. His posting in Colorado was cut short. He returned to Ottawa in October 2021, found his own accommodation, began having some parenting time with the children, stopped paying CS, and cancelled the Group Life Insurance which was security for CS. He received a medical release from the military in June 2022.
[16] Based on the evidence before me on the motion, I find Mr. Labelle has not exercised the anticipated equal or 40% parenting time consistently since his return to Ottawa. In March he began parenting on a relatively equal basis but more recently his health has deteriorated, and he has been unable to do so. At the time the motion was argued, he was not paying CS.
[17] Mr. Labelle’s annual income at the time of his release was $91,392 as indicated on his May 4, 2022, sworn Financial Statement (FS). He indicates, after his release scheduled for June 20, 2022, his income will be reduced to $82,234.80, which is not disputed.
[18] Ms. MacMillan is a registered nurse. Her December 15, 2021, sworn FS indicates an annual income of $80,154.
Court Application
[19] On November 22, 2021, Mr. Labelle filed a simple Divorce Application. Ms. MacMillan filed an Answer with claims for CS and security for CS through designating her a beneficiary of his Group Life Insurance policy or otherwise and for an order designating her as irrevocable beneficiary of the Supplementary Death Benefit available under his pension with the military.
[20] On April 13, 2022, a case conference was held before Associate Justice Kaufman who ordered an expedited motion. He declined to order the disclosure requested by Ms. MacMillan,
noting Mr. Labelle will have the onus of demonstrating reasonable arrangements have been made for the support of the children on the motion to sever the divorce. He encouraged Mr. Labelle to promptly provide the information requested by Ms. MacMillan to the extent possible. The information requested was to be provided from the employer or pension administrator.
[21] Mr. Labelle did not provide any information directly from the employer or pension administrator regarding survivor benefits or supplementary death benefits, despite numerous requests from Ms. MacMillan’s counsel. Instead, printouts from the Government of Canada website were provided indicating that if parties are divorced, their children may receive 40% of the member’s pension and that supplementary death benefits may also be payable to the member’s designated beneficiary.
[22] Mr. Labelle retained actuary, Guy Martel to do a report regarding entitlement to survivor benefits and the supplementary death benefit under Mr. Labelle’s military pension.
Guy Martel’s Report
[23] Mr. Martel indicates his report was prepared in accordance with actuarial principles based on information received from the Government of Canada website.
Survivor Benefits
[24] Mr. Martel confirms if Mr. Labelle is married to Ms. MacMillan on his death, she will receive a survivor pension of 50% of his pension and the children will each receive 20% of her entitlement paid monthly until they reach the age of 18 or 25, if in full time attendance at a post- secondary educational institution.
[25] If the parties are divorced and Mr. Labelle does not have a legal spouse or common law partner at the time of his death, Ms. MacMillan will receive no survivor benefits, but the children will each receive 40% of what would have been her entitlement, paid monthly. As the children’s legal guardian Ms. MacMillan will receive the benefits until they reach the age of majority. Mr. Martel calculates the monthly benefit to be a total of $1307.
[26] After his medical release Mr. Labelle’s annual income will be reduced by 10% from
$91,372 to $82,234.80. Child support payable on that income as per the Federal Child Support Guidelines would be $1243.43 monthly. Therefore, based on Mr. Martel’s report, the survivor benefits payable to Ms. MacMillan in trust for the children are greater than the child support that would be payable.
Supplementary Death Benefit
[27] In this case, the benefit will be equal to two times Mr. Labelle’s annual pay at the time of his release, $91,372 x 2 = $182,744.
[28] Mr. Labelle may designate anyone 18 or over at the time of designation, his estate or a registered charitable, educational, or religious organization as beneficiary of the benefit. Funds paid directly to a beneficiary are not taxable. In this case, Mr. Labelle has designated the estate as beneficiary and the benefit may be taxed.
Will
[29] Mr. Labelle’s Will designates the entire residue of his estate after funeral cost, debts, and a small cash legacy, to the benefit of his two sons with his sister as trustee. The residue would include the Supplementary Death Benefit. Mr. Labelle’s sister is directed to use the funds for education, sports, and other reasonable costs as she in her absolute discretion considers appropriate from time to time with an emphasis on funding education.
[30] The Will also contains this clause:
For absolute clarity, my Trustee is to factor in any survivor benefits the children may receive from my pension plan, which are separately payable to their guardian in satisfaction of child support, when contemplating any expenditures to ensure the survivor benefits are being utilized to their fullest extent as intended for my children only, and whereby the trust will act to supplement those survivor benefits for the purposes of education and advancement and shall not act to replace the survivor benefits for the purposes of child support.
Separation Agreement
[31] Under the SA, Ms. MacMillan is to be the sole guardian of the property of the children. The agreement also indicates under Life Insurance (s. 8), Ms. MacMillan has been designated as the irrevocable beneficiary of Mr. Labelle’s Supplementary Death Benefit. Section 8.3 (c) requires Mr. Labelle to maintain Ms. MacMillan as irrevocable beneficiary of Group Life Insurance coverage available through his employment, as security for CS obligations outstanding on his death. There is no longer any such coverage, and as noted, the estate is the beneficiary of the Supplementary Death Benefit with Mr. Labelle’s sister as trustee.
Law and Analysis
[32] Mr. Labelle requests an order severing the divorce from Ms. MacMillan’s claims for corollary relief and a divorce be granted, to take immediate effect.
[33] Ms. MacMillan does not object to the relief sought but argues that in order to ensure reasonable arrangements have been made for the support of the children of the marriage, a number of orders should be made prior to the divorce, including that Mr. Labelle obtain from any common law or intended new spouse, a signed, witnessed irrevocable waiver of the right to receive any portion of the survivor benefits of Mr. Labelle’s pension on his death and an order that Mr. Labelle designate and maintain her as the beneficiary of the Supplementary Death Benefit under his pension as security for child support obligations outstanding at his death. She also requests an order that she be designated as guardian of the property of the children.
[34] Rule 12(6) of the Family Law Rules O. Reg. 114/99 as am indicates:
Splitting divorce from other issues
(6) The court may, on motion, make an order splitting a divorce from the other issues in a case if,
(a) neither spouse will be disadvantaged by the order; and
(b) reasonable arrangements have been made for the support of any children of the marriage. O. Reg. 114/99, r. 12 (6).
[35] Section 11(1)(b) of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp), as am states:
Duty of court — bars
11 (1) In a divorce proceeding, it is the duty of the court…
(b) to satisfy itself that reasonable arrangements have been made for the support of any children of the marriage, having regard to the applicable guidelines, and, if such arrangements have not been made, to stay the granting of the divorce until such arrangements are made.
[36] In this case I can find no legal disadvantage to Ms. MacMillan if the divorce is split from the corollary issues. Under the SA, she released all rights to spousal support. In addition, the agreement dealt with all property issues between the parties. On this motion, Ms. MacMillan. agreed that if Mr. Labelle dies before a divorce is granted, she shall sign before a witness an irrevocable waiver of her right to receive any of the survivor benefits under Mr. Labelle’s pension.
[37] The only question is whether reasonable arrangements have been made for the support of the children.
[38] I am satisfied on a balance of probabilities based on Mr. Martel’s report, prepared in accordance with actuarial principles, that if the parties are divorced at the time of Mr. Labelle’s death and he remains single, the survivor benefits under his pension will provide a monthly amount of child support higher than what the children would be entitled to under the Federal Child Support Guidelines.
[39] Although Ms. MacMillan requested an order that Mr. Labelle obtain a waiver from any common law or intended new spouse, the parties agree that Mr. Labelle’s health is rapidly deteriorating, death is imminent and there is no evidence of any new intended common law or spousal relationship. I also question the court’s jurisdiction to order a non-party to sign a waiver.
[40] Therefore, I find that given the children’s entitlement to the survivor benefits under Mr. Labelle’s pension, reasonable arrangements have been made for their support. In fact, they will receive more than the base amount payable under the Child Support Guidelines, O. Reg. 391/97 as am.
[41] There is evidence that although Mr. Labelle has been unable to have equal or 40% parenting time with the children contemplated in the SA, he has not been paying CS. Therefore, there may be CS, including a contribution to special or extraordinary expenses under s. 7 of the CSG, owing on Mr. Labelle’s death.
[42] Although the SA between the parties is clear Ms. MacMillan was to be the beneficiary of the Supplemental Death Benefit under Mr. Labelle’s pension and that he was to maintain Group Life Insurance with her as beneficiary as security for CS, Mr. Labelle cancelled the insurance and made his sister beneficiary of the Supplementary Death Benefit in trust for the children. The SA also provides Ms. MacMillan is to be the guardian of property for the children.
[43] Although Mr. Labelle’s Will, which could be changed at any time, provides that Mr. Labelle’s sister holds the funds in trust for the children, it gives her absolute discretion as to how to use those funds which is contrary to the SA.
[44] It is unclear at this point what, if any, CS, or contribution to the children’s s. 7 expenses will be owing on Mr. Labelle’s death nor is there evidence as to what funds might be required for future s.7 expenses. There are funds available through the Supplementary Death Benefit that could cover the possible amounts owing or needed in the future.
Orders
[45] Therefore, based on the evidence provided on this motion, I make the following orders.
Final Orders
The Divorce is severed from the Respondent’s claims for corollary relief.
The Divorce is granted to take immediate effect without the 31-day waiting period. Temporary Orders
The Applicant is to designate the Respondent as the beneficiary of the Supplementary Death Benefit under his pension. The funds from the benefit are to be held in trust by the Respondent to the credit of the action for the court to make a final determination as to any child support, including the Applicant’s contribution to s. 7 expenses, outstanding on the Applicant’s death and/or whether any additional funds are required for future s. 7 expenses after the Applicant’s death.
Costs
[46] Costs are to be heard by oral submissions for a maximum of 15 minutes each at 9:00 AM on a date to be set by trial coordination, to be heard by November 4, 2022. Any Offers to Settle and Bills of Costs are to be provided a minimum of three days before the oral submissions through the trial coordinator’s office with copies also sent to my judicial assistant, Tina Gloyn at tina.gloyn@ontario.ca.
Date: September 27, 2022
COURT FILE NO.: FC-21-2077
DATE: 2022/09/27
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Steven James Labelle, Applicant
AND
Laurie Anna MacMillan, Respondent
BEFORE: Blishen J.
COUNSEL: Jeremy Bieman, for the Applicant
Karla Policelli, for the Respondent
ENDORSEMENT
Blishen J.
Released: September 27, 2022