IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
A.K. v. N.K. , |
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2018 BCSC 55 |
Date: 20180116
Docket: E110412
Registry: Vancouver
Between:
A.K.
Claimant
And
N.K.
Respondent
Before: The Honourable Mr. Justice Crossin
Reasons for Judgment
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Counsel for Claimant: |
T.R. Bell |
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Counsel for the Respondent: |
S.G. Label |
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Place and Date of Hearing: |
Vancouver, B.C. December 8, 2017 |
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Place and Date of Judgment: |
Vancouver, B.C. January 16, 2018 |
[1] The issues arising from the breakdown of this marriage were litigated and resolved some years ago in a trial before Ballance J. (indexed at: A.K. v. N.K., 2012 BCSC 1499).
[2] The claimant seeks a review of the order for spousal support arising from the order of the trial judge as follows:
Review of support
[134] I am mindful of the observations made by the Court in Leskun concerning the limited usefulness of reviewable spousal support orders. In my view, the changing circumstances of N.K.’s health, principally her evolving psychological well-being, and its consequent effect on her earning, is a genuine and material future uncertainty, and supports the making of a reviewable order. I order a review of the quantum and duration of spousal support on either party’s motion after November, 2014. I am seized of that review.
[3] The matters in issue upon the review are framed by the order; and those issues are heard de novo upon the application: Morck v. Morck, 2013 BCCA 186, at para. 23.
[4] The parties had apparently agreed the application would proceed with the benefit of an exchange of documents and examinations for discovery. Some of the documents are before me in evidence, as are the transcripts of the examinations for discovery.
[5] The reasons for judgment of Ballance J. provide the background of the relationship leading up to the trial of the marital issues.
[6] Briefly, the parties were born in the Ukraine, ultimately married, and moved to Canada in 1993.
[7] The claimant is educated and employed as a mechanical engineer.
[8] The respondent worked in various capacities throughout the marriage. She is a qualified piano teacher and accompanist, and upon arriving in Canada, quickly secured a position as such with the Richmond Academy of Dance, where she worked until 2006, when tendonitis forced her to stop. At the time of trial, the respondent had not returned to this vocation.
[9] In or around 2008, the claimant announced he had fallen in love with a younger woman, Ms. B., and would be leaving the marriage. This event had a profound impact on the respondent and mired her in an emotional collapse that she experienced up to and during the timeframe of the trial. In any event, the claimant’s declaration in this regard ended the marriage of over 32 years.
[10] The trial judge apportioned the major asset of the marriage (the family residence) awarding approximately two-thirds to the respondent. The court ordered spousal support.
[11] The trial judge made the follow findings:
[131] I do not accept N.K.’s assertion that she has no realistic prospect of obtaining any form of gainful employment for the rest of her life. The stubborn fact is that she has not taken reasonable steps to actively look for appropriate employment or to pursue further vocational training. N.K. must concentrate more wholeheartedly and with genuine effort on securing remunerative employment commensurate with her skills, experience and education, and with the overall objective of becoming more economically self-sufficient to the extent practicable in her overall circumstances.
[132] In my view, N.K.’s less than diligent and less than reasonable efforts in the months leading up to trial justify the Court imputing an annual income to her starting in 2012 in the amount of $8,000. I attribute to her an employment income of $10,000 for 2013 and $12,000 for 2014.
Quantum of support
[133] As N.K. has established entitlement to spousal support, reference to the Spousal Support Advisory Guidelines is appropriate. Both counsel have provided a number of DivorceMate calculations, each using assumptions that favour their respective clients. I have performed a calculation using the “without child support” formula for a payor earning $82,391 and a recipient with the employment income that I have imputed to N.K. Based on those calculations, N.K. would be entitled to indefinite support ranging between $2,325 and $2,968 for 2012; $2,262 and $2,891 for 2013; and $2,200 and $2,814 for 2014. I conclude that she is entitled to the mid-point of the range in each of those years. Accordingly, I order that, commencing January 1, 2012, N.K. is awarded monthly support of $2,712. She is to receive spousal support in the amount of $2,639 per month for 2013 and the sum of $2,566 per month in 2014.
[12] The claimant continues to pay spousal support in the amount of $2,566 per month.
[13] I am told the parties are now both 61 years of age.
[14] The claimant is employed as a mechanical engineer with Accurpress America Inc. (“Accurpress”), as he has been since 2009. The claimant earns a salary of $60,000 US per year. There is some controversy in relation to the salary of the claimant that I will address later in these reasons.
[15] The claimant and Ms. B. are married and live in a home in Rapid City, South Dakota. The home is solely owned by Ms. B. The claimant has co-signed for Ms. B.’s mortgage on the property. He lists and itemizes his annual expenses in the amount of approximately $75,000. He has expended the capital payment consequent upon reapportionment and incurs debt on an annual basis. The claimant pays rent to Ms. B. and contributes to other expenses relating to the household. Consequently he swears in his affidavit that he assumes, but does not know, that he would have some claim to a proprietary interest in the home under South Dakota matrimonial law.
[16] There is certain information contained in the record of this matter that relates to the financial circumstances of Ms. B., however Ms. B. did not give evidence in this application.
[17] Ms. B. worked as a waitress and esthetician for many years and as at the time of trial her annual salary was approximately $24,000 US per annum.
[18] The claimant, in this application, has produced payroll deposits in the name of Ms. B. that disclose she is now also an employee of Accurpress earning approximately $36,000 US per annum. It appears from other documents that she began this employment in the fall of 2012, when she was hired by Accurpress as a bookkeeper/safety coordinator. The claimant could shed little light on any other details in relation to this. He stated he did not know, or at least could not remember, how Ms. B.’s employment came about with Accurpress.
[19] Ms. B. also operates a salon business called Oh La La.
[20] In 2014 the claimant and Ms. B. filed a joint tax return. I was not taken through the document but it appears to disclose income to the salon. Beginning in 2015 Ms. B. filed her own income tax returns and they are not before the court. It is unknown what income is generated from her business presently.
[21] The respondent has not worked since the trial in this matter. Her annual income continues to consist of spousal support and some modest interest income from the investment of her capital distribution from the sale of the matrimonial home. The respondent travels from time to time with her boyfriend. Her expenses do not generally appear extravagant; although they include an expense of $600 per month for alcohol and cigarettes. This seems somewhat indulgent.
[22] The only evidence before me concerning her current health issues is the information provided by the respondent on her examination for discovery and in her affidavit. A medical opinion was not provided for the purpose of this application. The evidence concerning the health of the respondent is vague and consequently not entirely satisfactory, however, it is the only evidence and it stands uncontradicted.
[23] The respondent continues to have headaches and experience vertigo. In her words, “sometimes it is better, sometimes it is worse”. The respondent says she still has problems with the function in her right arm, and, in addition, now has similar problems with her left arm. The respondent has testified that while she still holds out hope to some day resume her piano teaching, she has been unable to do so to date due to her physical and emotional issues that remain extant. Similarly, the respondent says these issues prevent her from pursuing other forms of employment.
[24] The trial judge expressed her views concerning the respondent’s approach to future employment:
[129] Since separation, N.K. has earned extremely low wages from teaching piano. Despite the paltry income that it generates, N.K. does not see herself working in any job other than teaching piano, asking: “Why should I do any job, if I have my profession and I love it?” She is plainly not receptive to the idea of pursuing any other employment options and has no willingness to turn her mind to retraining prospects or vocational counselling.
[25] The evidence before me clearly indicates the respondent remains entrenched in that mindset.
[26] More or less echoing her position at trial, the respondent maintains that due to her physical and emotional state, she has no realistic prospect of working. She reiterates that she has not sought any other kind of employment because she cannot conceive of anything she can do; or wants to do. She has made virtually no effort to explore counseling or retraining prospects; and she currently has no intention of doing so in the future.
[27] Before leaving this area I will address the submission of the respondent as it relates to the financial position of the claimant.
[28] As I understand the submission, the position of the respondent essentially amounts to an allegation of fraud in generally two areas.
[29] The respondent submits that the claimant is not being truthful concerning his assets. In particular, the respondent says he has not fully disclosed his interest in the assets of Ms. B.
[30] In addition, the respondent submits that there has been collusion between the claimant, Ms. B., and Accurpress, resulting in the employment income of the claimant being reduced artificially, such that the claimant is receiving the direct benefit of more employment income than appears from the various records placed before me.
[31] First, dealing with the accusation concerning the assets of Ms. B., it is my view that the submission of the respondent that the claimant has undisclosed interests in the assets of Ms. B. rests on speculation. There is not a sufficient evidentiary basis to support the position of the respondent in this regard. I am simply not able to give any weight to the submission.
[32] Second, the theory in relation to the issue of income manipulation appears to be that the employer, along with the claimant and Ms. B., have schemed to reduce the claimant’s salary to $60,000 US per annum and funnel the amount of the reduction back to the direct benefit of the claimant, through the vehicle of Ms. B.’s purported employment with Accurpress.
[33] The claimant has given evidence that in 2015, due to the economic circumstances of the employer, his salary was reduced by his employer from $80,000 US per annum to $60,000 US per annum.
[34] One of the documents that has been produced tending to support the current salary of the claimant is a letter dated May 15, 2015. It is purportedly authored by the president of Accurpress, and sent to the claimant, confirming that the claimant’s salary will be reduced to $60,000 US per annum effective May 27, 2015.
[35] The respondent pointed to that letter as supporting the collusion theory and mounted a vigorous attack in argument concerning the authenticity of the letter.
[36] In essence, the respondent submits, the court should have grave doubts the letter was authored and signed by the employer. The respondent offered no expert evidence on this issue. While I agree with the respondent that the letter does reflect some curious features, those features do not translate to a finding of forgery, or other deceitful conduct. The evidence is too uncertain to make such a leap.
[37] In any event, the letter does not impact the evidence that the claimant is in fact receiving $60,000 US per annum in salary. The claimant’s W-2 statement for 2016 (the equivalent of our T4 statements), his 2017 paystubs, and his tax return transcripts for the period ending December 31, 2016, are all before me and confirm an annual salary of $60,000 US per annum.
[38] In addition, as I understand it, the respondent submits that a related feature to the collusion theory concerning salary is the proposition that Ms. B. is not actually employed by Accurpress or, if employed, does not perform her purported duties, and in either case, her receipt of a salary from Accurpress is a ruse.
[39] The claimant produced Wells Fargo bank statements for the years 2014 and 2015 on this point. The statements are in the name of Ms. B., with her account number, reflecting regular deposits described as “Accurpress payroll 002 Ms. B.”. The statements are consistent with the declared annual salary of Ms. B.
[40] While I agree with the respondent that the evidence in relation to the employment situation of Ms. B. is sparse and somewhat confusing, the weight of the documentary evidence is clear that Ms. B. is in fact employed by Accurpress and receiving a salary. The evidence does not support the submission of the respondent on this issue.
[41] The relevant sections of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), for the purpose of this application are 15.2(1), (3), (4), and (6):
Spousal support order
15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.
…
Terms and conditions
(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.
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; and
(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; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[42] The basis for spousal support in this case is non-compensatory.
[43] The framework in relation to non-compensatory spousal support is set out in one of the leading decisions in this area, Chutter v. Chutter, 2008 BCCA 507, at paras. 54 and 55:
[54] Where compensatory principles do not apply, need alone may be sufficient to ground a claim for spousal support (Bracklow, at para. 43). Non-compensatory support is grounded in the “social obligation model” of marriage, in which marriage is seen as an interdependent union. It embraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantaged spouse falls on his or her former partner, rather than the state (Bracklow, at para. 23). Non-compensatory support aims to narrow the gap between the needs and means of the spouses upon marital breakdown, and as such, it is often referred to as the “means and needs” approach to spousal support.
[55] The concept of “needs” in the context of non-compensatory spousal support goes beyond basic necessities of life and varies according to the circumstances of the parties. As stated by Finch J.A. (as he then was) in Myers v. Myers (1995), 17 R.F.L. (4th) 298, 65 B.C.A.C. 226, at para. 10:
“Need” or “needs” are not absolute quantities. They may vary according to the circumstances of the parties and the family unit as a whole. “Need” does not end when the spouse seeking support achieves a subsistence level of income or any level of income above subsistence. “Needs” is a flexible concept and is one of several considerations which a trial judge must take into account in deciding whether any order for spousal support is warranted.
[44] The objective set out in s. 15.2(6) requires the court to assess all of the evidence in relation to all of the enumerated objectives in order to try and achieve an equitable state of affairs that alleviates the adverse consequences of a marriage breakdown.
[45] Given the comments and direction of the learned trial judge, the claimant has placed a good deal of focus on the evidence relating to the respondent’s lethargy in seeking employment, and the objective set out in s. 15.2(6)(d).
[46] The concept of “practicality” that informs the notion of self-sufficiency has been neatly summed up by Prowse J.A. in Tedham v. Tedham, 2005 BCCA 502, at para. 33:
[33] As already stated, however, s. 15.2(6)(d) of the Act does not require self-sufficiency, but simply seeks to promote self-sufficiency "in so far as practicable". In determining what is practicable, regard must be had to all of the circumstances, including the age and gender of the spouse, her/his skills and education, or lack thereof, the opportunities for retraining, and the realistic prospect of the spouse being able to find not just a job, but one which enables her/him to become self-sufficient, which may be quite a different matter.
[47] This was a lengthy marriage of over 32 years.
[48] The claimant submits that he took significantly less assets from the marriage. He has dutifully paid support to the respondent. The salary he now earns is significantly less than the salary he earned at the time of trial, and the support payments continue to strain his finances. He says the respondent remains stoutly resistant to the goal of self-sufficiency and, the claimant urges, he cannot be expected to subsidize the respondent’s lack of effort in this regard.
[49] The claimant initially submitted that entitlement should end absolutely as at June 2018. This position was not pressed in argument. The claimant fundamentally relies on his alternative position, namely, that spousal support ought to be on the basis of an imputed income to the respondent of $25,000 per annum; set at the low range of the Spousal Support Advisory Guidelines [Guidelines]; and then end after two years.
[50] The respondent submits, given the fact of the 32 year marriage, there is no basis in fact or law to adhere to the claimant’s application. The respondent resides alone in a rented one bedroom apartment and is unemployed. The respondent maintains in her evidence she is unable to resume her career, and submits that at 61 years of age, with some health issues, and unskilled in any other area, it is unrealistic to conclude there is any reasonable prospect of securing other employment. In addition, or perhaps as a consequence, the respondent remains unwilling to explore employment counselling or retraining.
[51] In my view, the evidence before me is such that it appears highly unlikely the respondent will be able to return to her vocational training at the piano, or any significant variation of that vocation.
[52] I find however, that there remains a practical ability in the respondent to earn income from employment. Put another way, the evidence falls short of persuading me that she cannot still constructively pursue some path to self-sufficiency. I am very much alive to the fact the respondent is a woman of 61 years of age having to compete with much younger people, in pursuit of unskilled, low paying job opportunities. It may be at some point, based on the evidence, it will be apparent employment and self-sufficiency are not realistic; but the evidence does not now demonstrate it is impractical for the respondent to pursue the goal of self-sufficiency. In these circumstances, income should be imputed.
[53] The evidence discloses that the respondent’s best year from an income perspective was in 2006, when she earned approximately $25,000. As referenced, the claimant submits that in all of the circumstances there should be an imputed income of $25,000 per annum over the course of the next two years and then the obligation of spousal support would end.
[54] In my respectful view, this position is unrealistic and not in accordance with the principles that must be brought to bear in these matters. It is my opinion the respondent could not, in the future, secure any employment other than employment at minimum wage or perhaps slightly higher. I also conclude on the evidence that the prospect of her being able to work a consistent 40-hour work week is equally unrealistic. Part time employment is her realistic future.
[55] There is no formula for imputing income. It appears to be an exercise of assessing the probabilities arising from the evidence, tempered with common sense. The learned trial judge ordered income in the amount of $12,000 per annum be imputed to the respondent beginning in 2014. The fact is, based on the evidence and circumstances before me, income of $12,000 per annum is the figure I now find is appropriate and consequently I attribute employment income going forward in the amount of $12,000 per annum.
[56] I have found the claimant’s salary to be $60,000 US per annum. This converts to a salary of approximately $77,000 Canadian per annum. The claimant is of the view some of his expenses continue to earn him an interest in the residency shared with his wife. There is no suggestion his employment is in jeopardy.
[57] The objectives of spousal support, as set out above, include that the order should “in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.” While it is unlikely the respondent will achieve full self-sufficiency, she surely has an obligation to demonstrate reasonable efforts in this regard.
[58] The quantum of support requires reference to the Guidelines. I have performed a calculation using the “without child support formula” for a payor earning approximately $77,000 per annum and a recipient with the employment income I have imputed to the respondent in the amount of $12,000 per annum.
[59] I find the Guidelines helpful in determining the amount of support. The question becomes where within the range most appropriately reflects these particular circumstances. While I recognize that the respondent is faced with obvious realities in pursuing self-sufficiency; it is clear she continues to immutably resign herself to a certain self-imposed fate. It is my conclusion it is the low-end of the subject range that reflects the circumstances at bar. Accordingly, I order that commencing February 1, 2018, the respondent is entitled to monthly spousal support in the amount of $2,032 per month; payable the first of every month.
[60] The learned trial judge determined it was appropriate to order a review of the quantum and duration of spousal support after November 2014 due to the uncertainties related to the future prospects of the respondent. I see no point in making this current award a time limited order nor do I find any basis in the evidence that would justify an order for a further review.
[61] In any event, it is always open to the parties to seek a variation of this order in appropriate circumstances.
[62] Finally, given the results of this application, I conclude that this is an appropriate case for each party to bear their own costs.
“The Honourable Mr. Justice Crossin”