IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Schick v. Schick, |
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2018 BCSC 1181 |
Date: 20180713
Docket: E35729
Registry: New Westminster
Between:
Margaret Susan Schick
Claimant
And
Dennis Keith Schick
Respondent
Before: The Honourable Mr. Justice Armstrong
Reasons for Judgment
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The Claimant appearing in Person: |
M.S. Schick |
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Counsel for the Respondent: |
F.A. Lepp |
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Place and Date of Trial/Hearing: |
New Westminster, B.C. June 22, 2018 |
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Place and Date of Judgment: |
New Westminster, B.C. July 13, 2018 |
Table of Contents
The Respondent’s Circumstances
Material Change in Circumstances
Retroactive Variation to August 3, 2017
Termination of Spousal Support
[1] This is the respondent’s summary trial application seeking a variation of his spousal support obligations to the claimant established by an order of Mr. Justice Grauer made June 21, 2011 (the “Order”). The Order required the respondent to pay the claimant $1400 per month commencing December 1, 2010.
[2] The respondent suffered a medical crisis August 3, 2017, that forced him to take time away from work. Although he has returned to part-time employment, he contends his illness has resulted in an ongoing loss of income due to continuing symptoms. He contends the compromise of his health and the attendant loss of income are material changes in circumstances entitling him to a variation of the Order.
[3] The parties married in 1985 and separated September 2008. They had three children, all of whom are now adults.
[4] The claimant is 55 years old and the respondent is 65.
[5] The Order was made June 21, 2011 but the parties had divided their pensions and RRSP’s at a judicial case conference in December 2010. I did not receive a comprehensive explanation on the division of family assets prior to their divorce.
[6] Beginning in 1988, the respondent worked as a steam engineer for a local food company. He remains employed with that company to the present. This application is based on a series of medical events and related ongoing symptoms that disabled him from working from August 3, 2017 to January 18, 2018. Since January 2018, His employer will not permit him to work at the same level due to his condition. He has returned to work at approximately 60% of his former capacity and contends that his current income is now reduced to $37,000 per annum.
[7] The Order did not specify the parties’ Guidelines’ incomes. Each party filed their 2010 F8 financial statements. The claimant’s 2010 Guideline income was $24,625 and the respondent’s income was $69,920.
[8] At the time of separation, the respondent’s monthly expenses were $5,957 or $71,486 per annum. The claimant’s monthly expenses were $2,697 or $32,373 per year.
[9] The respondent did not pay any spousal support until the Order was made in 2011, and stopped paying support in October 2017.
[10] After the parties separated, the claimant continued to work. She married Dean Ross in May 2014. He became disabled from working in December 2015 and died on August 13, 2017 and the claimant receives a widow’s pension of $370.48 per month.
[11] During her marriage to the respondent, the claimant worked part-time when the children were young. Later, she eventually obtained full time work but her earnings were limited because she did not finish school. She was the primary care giver to the parties’ children. She was devoted to their care during their infancy and believes she has been relegated to earning lower wages because of her limited education.
[12] Over the years, the claimant was employed in charitable work, religious pursuits and training. Until January 2017 she worked for the Union Gospel Mission as a support worker for many years earning up to $17 per hour. She earned $24,625 per year in 2010. She does not believe she can return to that work or earn that level of income. At one time she resided in Mission, BC, but found she could not afford the high cost of living in that community and chose too moved to California where she now resides and works without remuneration for a charity.
[13] She needed to return there to carry on her work with a Christian Charity known as Youth with a Mission (“YWAM”) immediately after this hearing ended. In addition to her widow’s pension she receives $70 from WYAM. She has monthly expenses of $1,070.
[14] It appears that the claimant does not have a visa to work or receive income in the United States. She said that after two years service in the United States (estimated to be October 2018), she can obtain a visa that will enable her to work and permit her to “raise support as a missionary.” I took this comment to mean she will be able to earn an income. She gave no evidence concerning her economic prospects in Canada or the United States or any other efforts she has made toward self-sufficiency.
[15] She said that since the respondent stopped paying support in August 2017, her credit card debt reached $1,000 and has been referred for collections. She also owes some money to the charity she has been assisting since moving to California.
[16] It is clear that the claimant has not made any serious efforts to become self-sufficient or economically independent since the death of her second husband. There is no evidence she is unable to earn an income in any field. It appears she has chosen to commit her efforts to charitable works that do not generate income. The current minimum wage in BC is now $12.65; at this rate the claimant could earn $26,000 pr annum.
[17] The claimant concedes that the respondent has experienced medical difficulties in the last year but believes he has not fully investigated the options available to supplement his income. She contends that, without support, she can not afford her meagre living standard.
[18] The respondent has worked as a steam engineer with Lilydale Farms (now known as Sofina Foods) since December 1998. Currently, he is employed on a part-time basis. Although he is 65 years old he continues to work and has delayed receiving an employment related pension for the present. When he retires, he will share his work related pension and his CPP pension with the claimant.
[19] The respondent attempted to tender some evidence from a doctor and some hospital records on this application; however those documents did not conform to the requirements of the Supreme Court Civil Rules, or the Evidence Act, R.S.C. 1985 c. C-5, and could not be taken into account. Nevertheless, I accept his evidence that he has suffered from a medical condition as set out in his affidavit and that his ability to function at his work is somewhat compromised.
[20] In his supporting affidavits the respondent provided tax records indicating his Line 150 incomes for 2014, 2015, and 2016 were; $97,058, $93,000 and $96,489 respectively. He has provided copies of pay records for two periods ending in May 11, 2018 but nothing else for the time between February 1, 2018, and the present. He earned approximately $87,334 per annum up to August 3, 2017 but has provided limited income tax information concerning his salary between 2011 and 2013; it is clear his income was rising steadily over that time and was close to $100,000 in 2016.
[21] He owns a house worth $461,000 and other assets valued at $23,893. Other than a $237,200 mortgage on his home he has virtually no debt.
[22] I notice that, in neither of the respondent’s affidavits, does he provide much detail concerning his current living circumstances, whether he has remarried or formed a new relationship, or what steps he has or might be able to take to improve his income.
[23] In his second affidavit he said that his son and his son’s spouse live in his residence without paying rent. His daughter-in-law is a licensed practical nurse who is able to help with some of his medical issues. There appears to be an exchange of some household chores for free rent. It is not clear whether the respondent’s son has children or what portion of the house he occupies and he declined to inform the court as to the rental value attributable to the space occupied by his son.
[24] The respondent contends he was forced to work overtime to afford the ongoing spousal support of $1,400 per month prior to his medical crisis. That is simply untrue based on his pre August 2017 income.
[25] The respondent’s income has increased dramatically since 2011 whereas his support payments remain based on his 2010 Guidelines’ income.
[26] I make these comments because this is a summary trial application and the claimant is self-represented. There have been no examinations for discovery and no cross-examination of the doctor or the respondent’s employer on points that, in my view, could be important to a proper assessment of the issues in this case.
[27] The reliance of hearsay evidence in summary trials was discussed by Adair J. in Magdalena v. Vancouver Coastal Health Authority, 2014 BCSC 2651. The Court pointed out the problem faced by the respondent on that application concerning the use of hearsay evidence regarding income loss and medical diagnosis. The Court said:
[23] Although the defendant Dr. Buczkowski is the one bringing the application for a summary trial, since a summary trial is a trial, the burden of proof remains on the plaintiff.
[24] Moreover, evidence that would not be admissible at a trial is not admissible on a summary trial. Thus, in this case, what Mr. Magdalena was told by others, if it is tendered for the truth of what he was told, is not admissible because it is hearsay. Generally speaking, and with some exceptions, opinion evidence is only admissible from someone who is properly qualified as an expert and able to give opinion evidence. So, to the extent that opinions are expressed in the affidavits from Ms. Hughes or your brother, Mr. Magdalena, or you yourself in your affidavits, those opinions are not admissible on this application because they would not be admissible at a trial.
[25] The court may grant judgment on a summary trial, either on an issue or generally, unless the court is unable, on the whole of the evidence, to find the facts necessary to decide the issues of fact or law, or the court is of the opinion that it would be unjust to decide the issues on the application. Judgment may be granted on a summary trial, even if there are conflicting affidavits or conflicting evidence where the court is able to make the necessary findings of fact.
[28] Overall, I have determined from the evidence that the Order was based on compensatory and non-compensatory criteria and did not contain a specific duration because the parties did not contemplate an end to support in the foreseeable future. The evidence was not fulsome on this point, but I am able to find that this was a 23 year marriage during which time the parties raised three children. The claimant was 23 years old when they married and she did not complete her education. She was the primary care giver to the children and was restricted from completing her education because she was engaged as principal care giver to their children. Throughout their marriage the respondent was employed with his current employer and in receipt of regular salary increases.
[29] Section 15.2 of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.) deals with questions of spousal support entitlement. Subsection 15.2(6) directs that spousal support orders should take into account a list of objectives, namely:
(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.
[30] The issues on this application are entitlement to spousal support and duration of that entitlement. In Chutter v. Chutter, 2008 BCCA 507, the Court of Appeal discussed the objectives of spousal support orders in this context. It said:
[121] The award of spousal support chosen should reflect the objectives in the Divorce Act. The Guidelines identify a number of factors for consideration in determining the appropriate amount of spousal support within the calculated range, which can be summarized as follows (see Guidelines at s. 9):
1. A strong compensatory claim may be a factor that favours a support award at the higher end of the ranges for amount and duration.
2. Where the recipient has limited income and/or earning capacity due to age or other circumstances, the recipient's need may warrant an award at the higher end of the ranges for amount and duration. An absence of need may suggest an award at the lower end.
3. An absence of property to be divided might suggest an award at the higher end; an unequal division in favour of the recipient may indicate an award at the lower end is more appropriate.
4. The need and limited ability to pay of the payor spouse may push an award to the lower ends of the ranges.
5. Self-sufficiency incentives may push in either direction.
6. Low work incentives for the payor may push an award to the lower ends of the ranges, in that the marginal gain in net income from additional income earned may be negligible.
[122] The foregoing summary is not intended to exclude consideration of other factors. In other words, it is an inclusive, not a closed, list.
[31] These principles were obviously the basis for the Order and must be revisited on this application that flows from the respondent’s changed circumstances.
[32] The conditions necessary to vary a spousal support obligation were summarized by Madam Justice Smith in Powell v. Levesque, 2014 BCCA 33, at paras. 23−27:
23 In L.M.P. v. L.S., 2011 SCC 64, [2011] 3 S.C.R. 775, a decision that was rendered after the decision under appeal, the Supreme Court of Canada reiterated the two-fold test for variation of a support order under the Divorce Act, R.S.C. 1985, c. 3 (2d Supp.) from Willick v. Willick, [1994] 3 S.C.R. 670 (for child support orders) and G.(L.) v. B.(G.), [1995] 3 S.C.R. 370, (for spousal support orders). The Court stated:
[31] Willick described the proper analysis as requiring a court to "determine first, whether the conditions for variation exist and if they do exist what variation of the existing order ought to be made in light of the change in circumstances" (p. 688). In determining whether the conditions for variation exist, the court must be satisfied that there has been a change of circumstance since the making of the prior order or variation. The onus is on the party seeking a variation to establish such a change.
[32] That "change of circumstances", the majority of the Court concluded in Willick, had to be a "material" one, meaning a change that, "if known at the time, would likely have resulted in different terms" (p. 688). G.(L.) confirmed that this threshold also applied to spousal support variations.
24 The Court added that whether a material change of circumstances has been demonstrated will depend on the actual circumstances of the parties at the time of the order (para. 34) and in general will require some degree of continuity, not merely a temporary set of circumstances (para. 35).
25 The Court further confirmed that the threshold test for variation is the same whether or not the previous support order incorporated provisions from an agreement between the parties. It reiterated (at para. 36) that the question remains: "Has a material change of circumstances occurred since the making of the order? (See Willick; G.(L.); Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920.)"
26 The circumstances in L.M.P. involved an application to vary a spousal support order pursuant to s. 17(1)(a) of the Divorce Act. The issue was whether the separation agreement executed by the parties before the divorce proceedings was a factor to be considered in determining the former husband's application to vary the initial spousal support order. The majority concluded that it was not because s. 17(4.1) did not include "agreement" in the list of factors to consider in determining if the threshold test of a material change in circumstances had been established.
27 The Court distinguished the test for variation in s. 17(4.1), which refers only to whether a "change in the condition, means, needs or other circumstances of either former spouse has occurred", from the test for an initial order in s. 15.2(4), which requires the court to consider "any order, agreement or arrangement relating to support of either spouse". If an agreement specifies or defines what type of change will or will not give rise to variation, courts should attempt to give effect to the parties' intention where those provisions are incorporated into the initial or previous order, as those provisions are presumed to have met the objectives for spousal support in s. 15.2(6) (paras. 33, 38-39). The Court further clarified:
[39] ... Even significant changes may not be material for the purposes of s. 17(4.1) if they were actually contemplated by the parties by the terms of the order at the time of the order. The degree of specificity with which the terms of the order provide for a particular change is evidence of whether the parties or court contemplated the situation raised on an application for variation, and whether the order was intended to capture the particular changed circumstances. [Emphasis added.]
[33] Retirement may constitute a material change in circumstances for the purposes of varying an order for spousal support but the courts will carefully scrutinize the details surrounding any voluntary retirement. Close attention must be paid to the individual circumstances of the parties. Recently in Kormendy v. Kormendy, 2018 BCSC 342, Jenkins J. discussed whether or not retirement will constitute a material change in circumstances. At para. 41 he stated: “[W]hen [the respondent] does retire, this issue may need to be revisited. If his retirement does not result in a marked decline in his income, it may well be the case that his support obligations continue”: see also Szczerbaniwicz v. Szczerbaniwicz, 2010 BCSC 421, at para. 21; Gajdzik v. Gajdzik, 2008 BCSC 160, at para. 35.
[34] In Boston v. Boston, 2001 SCC 43, the majority held that absent certain conditions there is no reason spousal support cannot continue after the payor spouse has retired. The payor/applicant must demonstrate that there has been a material change in the circumstances of the parties and a reduction in income following retirement to constitute a material change.
[35] The respondent has asked for an order extinguishing his spousal support obligation on his retirement. At present, he does not intend to retire and there is no evidentiary basis to consider that part of his application. Retirement may be a material change in circumstance but that question must be answered in light of all circumstances extant when he chooses to retire, in the result, I dismiss his claim for an order that deals prospectively with his pension and events that have not yet happened.
[36] However, I am satisfied that the respondent’s illness and resulting diminution in income is a material change in circumstances that was not actually contemplated by the parties or the court in June 2011: see Dedes v. Dedes, 2015 BCCA 194, at para. 25. Accordingly, I am permitted to review the questions of quantum and duration of ongoing support.
[37] I accept the respondent has suffered a medical setback that has interfered with his ability to work and earn an income and that his income has declined over the most recent 10 months However, I am not satisfied that he has fairly established or proved the level of his ongoing reduced income earning capacity or that this is a permanent state of affairs.
[38] The respondent contends that his work week has been reduced to 60% of his pre August 2017. Based on this pre-incident 2017 income, I conclude that, working 60% of his normal schedule, could produce an income more likely in the range of $57,890 per annum (60% of 2016 income of $96,489). He says he is no longer permitted to work overtime and it is unclear what portion of the respondent’s income came from overtime. In the absence of an explanation from his employer, I do not accept that his current income earning ability is only $37,000.
[39] The respondent’s ongoing monthly expenses disclosed in his most recent F8 offer some support for this inference that his income is much higher. Those expenses amount to $70,848.
[40] When the Order was made he disclosed Line 150 income of only $69,900. His circumstances improved significantly between 2011 and 2017. In any event, I am satisfied that his income in 2017, before and after his medical event, meant that his Guideline income for the entire year 2017 would more likely be in the order of $69,900.
[41] Although the respondent’s evidence on this point is not convincing, I find that he has experienced a material change in circumstances because of his medical problems. These changes have, at least temporarily, interrupted his ability to earn income. He was paid at his full rate of income until August 2017 and thereafter received disability benefits until January 2018.
[42] I have concluded from the respondent’s pay records for a two week period in April/May 2018, that he is now earning approximately $40,000 per annum. This sum is arrived at by multiplying his income for two weeks by 26 (the number of two week pay periods in each year.) Accordingly, I determine that the respondent’s Guideline income for 2018 is $40,000 per annum. It is not clear if he will be able to increase his hours of work as time passes—nothing in the evidence persuades me that his income will remain at $40,000 indefinitely.
[43] From the available evidence I have inferred that the respondent’s Guidelines’ income for 2017 should be $69,900.
[44] As indicated, the letter from his employer and his doctor are not properly admissible evidence on this application. I understood from both parties that, notwithstanding the paucity of evidence on this point, they wished to resolve this application without referring the matter to the trial list. Thus, I have imputed his income with the information available but am aware of the lack of admissibility on some points.
[45] The claimant’s explanations for choices she has made concerning her pursuit of charitable work and moving to the USA suggest she has not turned her mind to her obligation to work toward self sufficiency. I am satisfied the claimant has elected to pursue a career in charitable work that lacks the assurance or prospect of a meaningful income for her efforts. In this regard, the claimant has chosen to avoid finding remunerative employment in order to pursue her personal religious convictions and dedication to helping others.
[46] I accept that the claimant is continuing to suffer deficits in her ability to become self sufficient due to her historical role in raising the children and the consequences of the marriage breakdown. She is at an age when she is unlikely to be able to earn income at the same level she might have earned but for her role in the marriage. Nonetheless, I conclude the claimant has failed in the requirement that she attain self-sufficiency. She cannot rely on the respondent as her sole source of support.
[47] The respondent suggested that I should impute income to the claimant at $24,625 per annum being commensurate with her income for earlier employment. This is approximately the amount of money a person would earn if paid at minimum wage in BC.
[48] There was evidence the claimant worked for Union Gospel Mission and earned $17 per hour before the death of her husband. The evidence relating to the claimant’s ability to become self-sufficient is modest at best. I assume the claimant might be able to find work at the minimum BC wage notwithstanding her shortcomings. For the purposes of this application I will impute Guideline income to her $30,400 based on her widow’s pension of $370 per month ($4,440 per year) and $26,000 her earning capacity at a minimum wage position.
[49] The next issue is whether the respondent’s spousal support obligations should be varied retroactively to August 2017. Material changes in circumstances must include a permanent or long-standing changes. In this case, the respondent became entitled to disability insurance benefits after suffering his medical crisis. Those benefits became payable immediately and it appears he received $657 per week or $2,847 per month while on disability until January 31, 2018. I have indicated that the respondent’s Guideline income for 2017 for support purposes will be $69,900.
[50] Assuming the claimant’s guidelines income is $30,400 and the respondent’s income for 2017 is $69,920, the range of the respondent’s spousal support obligations is between $1,302 and $1,519 at the low and mid-range. Thus, I am satisfied that the respondent’s ongoing support obligations from August to December 2017 are fairly set at $1400 per month.
[51] On the facts of this case, including the medical crisis suffered by the respondent in August 2017 and uncertainty about the duration of his medical condition I have accepted that, for now, he will receive $40,000 for 2018.
[52] This was a long term marriage and based on the principles articulated in Chutter, spousal support should remain payable for an indefinite duration. Based on the findings concerning each parties’ Guidelines’ incomes, I will order that ongoing support order of $350 (based on a range of $276 at the low range and $368 at the high end) commencing February 1, 2018 will be paid.
[53] The respondent’s Guideline income is $40,000 as determined by the pay record provided by the respondent. This will be the amount against which the respondent’s ongoing spousal support obligation will be measured and I have ordered that he make payments of $350 per month.
[54] I am not prepared to make any order concerning the duration of this support obligation or termination of the respondent’s obligation because I am satisfied that the claimant remains entitled to support based on the non-compensatory and compensatory criteria. The Guidelines provide that the obligation will be indefinite in cases of long term marriages. Given the length of their marriage, the claimant’s parenting role, and limitations on her educational achievements, the respondent has not met the burden of proof on him to introduce a termination date.
[55] I have imputed significant income to her based on the choices she has made concerning her own career goals. Coupled with her widow’s pension and this imputation of income, the claimant remains in need of support to ensure that the objectives of the Divorce Act are met on this question of spousal support.
[56] I accept there is a possibility he may retire and be forced to live on his pension income. The respondent did not include a copy of his pension plan nor any statement of anticipated benefits. His lawyer argued that the amount could be as little as $700 per month but there is no evidence to support this assertion. The court must be careful to ensure that retirement is not a decision animated by a payor’s desire to terminate their obligation.
[57] Thus, if the respondent makes a decision to retire and seeks a further variation of his support obligation based on his retirement he must bring a further application with more fulsome evidence than has been presented on this application. Further, if the respondent returns to more fulsome hours, he must inform the claimant who will be permitted to seek an increase in support commensurate with any increases in his income. For as long as the respondent is employed, he will provide the claimant a copy of his income tax return by the 30th day of May for income earned in the prior year.
[58] I make the following orders:
a) The respondent’s application to vary the his spousal support obligations retroactive to August 3, 2017 is dismissed;
b) The respondent’s continuing spousal support obligation will be $350 commencing January 1, 2018;
c) The respondent’s application to terminate his spousal support obligations is dismissed; and
d) The respondent’s alternative application to terminate his spousal support obligations on retirement is dismissed.
[59] The parties will have liberty to apply for the consideration of costs on this application within 21 days. If no applications are made, the parties will each bear their own costs.
“Armstrong J.”