Each week, Wise Law Blog reviews recent decisions from the Ontario Court of Appeal. Commencing this week, Alim Ramji, a student-at-law with Wise Law Office, takes over the Court of Appeal beat.
Beck v Beckett
The appellant, Brenda Beck appealed the judgment of Magda J. concerning child and spousal support under the Family Law Act, R.S.O. 1990.
Issues raised by the appellant:
- The amount of income imputed to the respondent, Daniel Beckett
- Entitlement to Child Support and Spousal Support
- The trial judge's decision to refuse to make an order for lump sum spousal support
- Leave to appeal the costs order made by the trial judge
Background
The appellant and respondent commenced living together in 1984. The parties were never married, but this was a traditional relationship. They had two children together ages 21, and 19. When their children were born, the appellant left her job at Woolco look after them. The family's primary source of income was the respondent's full-time employment at General Motors (GM). The parties separated in September 2006.
The respondent's annual income from General Motor's was approximately $73,000.00 and he had accrued a substantial pension of approximately $400,000.00 during the period of the parties' relationship.
A significant point of contention in this appeal was the respondent's decision to take voluntary retirement from GM in April 2007 at the age of 49. The respondent received a severance package in the sum of $70,000.00. He chose not to pursue further employment opportunities and instead decided to live off his pension benefits.
In October 2008, the parties sold their house for $480,000.00 and the appellant received $125,000.00 from that amount. After the parties' sold their house, the respondent continued to not pay child or spousal support and discontinued paying the home expenses. The respondent's share from the house remained in trust pending the outcome of this proceeding.
The trial was scheduled to commence in May 2009 but was adjourned at the request of the respondent. Roswell J. ordered that the respondent pay child support in the amount of $666.00 per month based on an imputed income of $73,000.00.
In 2010, the appellant's income was $48,118.00 and the respondent was earning $41,768.00 from his pension.
Law & Analysis of Key Issues:
Imputed Income
If the respondent were laid off, his income would drop below what he would be entitled to receive from his pension if he decided to take the retirement package that was offered by GM. The trial judge accepted the respondent's evidence concerning these risks. He held that some income must be imputed to the respondent since he made no attempt to find any employment to supplement his pension income. Some factors that were considered was that he was 53 years old with a Grade 10 education. Thus, the trial judge imputed an income of $19,760.00 per year for minimum wage work. Coupled with the respondent's pension income, this brought his total income to $61,528.00.
The appellant submitted that the trial judge erred in only imputing income to the respondent on the basis of minimum wage skilled employment. During trial, the parties failed to adduce evidence about employment prospects in the Oshawa area.
The Court of Appeal found that the appellant's own evidence tended to support the trial judge's conclusion. The only employment opportunities that the she was aware that might suit the respondent were mainly minimum wage positions. Therefore, the Court decided not to vary the order of the trial judge.
Child and Spousal Support
The trial judge found that the respondent was entitled to child support in the amount of $570.00 per month, but no spousal support was awarded because the appellant had 54.7% of the parties' net disposable income at that time.
In regard to the parties' youngest child, the trial judge found that he lived with the respondent for 21 months from May 2007 to March 18, 2009. Therefore, the respondent was entitled to be credited for child support he should have received from the appellant in the amount of $7,438.00. Taking into account the amount of child support that the respondent failed to pay for the months of April and May 2009, the respondent was to be credited with a net amount of $6,208.00. In its review of the trial judge's decision, the Court found that the trial judge failed to take into account that the older son was living with the appellant for the entire time post-separation and that both children lived with the appellant for some periods of time.
The Court of Appeal noted that the respondent failed to make any child support payments ($666.00 per month) in accordance with the the trial judge's order. The Court ordered that the respondent pay these child support payments out of the funds currently held in trust before the funds were to released to the respondent.
The trial judge declared that the appellant could apply for spousal support once the respondent was no longer obligated to pay child support for the youngest child. The youngest child no longer was a dependent as of November 2010. Thus, the Appeal Court varied the judgment to eliminate the order for child support and replaced it with an order for spousal support at the rate of $433.00 per month (mid range of the Spousal Support Advisory Guidelines). The spousal support award, retroactive to November 2010, was also to be paid from the trust funds.
Lump Sum Support Award
The appellant argued that there was a real risk that the respondent would not comply with an award of periodic support payment. One reason for this belief was that the respondent did not pay a costs order made by Roswell J. Secondly, he did not make any child support payments ordered by the trial judge. The trial judge refused to make a lump sum payment. Reference was made to Davis v. Crawford, where in discussing the suitability of a lump sum payment, the Court noted that,
One
important consideration is whether the payor has the ability to make a
lump sum payment without undermining the payor's future self-sufficiency.
The Court in Davis also stated that most spousal support orders will be in the form of periodic payments but a lump sum award can supplement an award of periodic support.
The Court of Appeal held that the unpaid costs order was relatively small and the respondent had otherwise complied with previous court orders. The Court also found that once the respondent was permitted to gain access to the funds in trust, it is reasonable to believe that enforcing a periodic support order would not be an issue.
Costs
The trial judge found the respondent was successful on the appellant's claim for lump sum spousal support and his claim for retroactive child support for their youngest child. Moreover, the trial judge felt the appellant's position on imputing income in the amount of $73,000.00 per year was "patently unrealistic" and "inappropriate". The respondent was awarded costs in the amount of $15,000.00.
The Court of Appeal found the trial judge's characterization of the appellant's position to be an error in principle and stated that it should not have been a factor in fixing costs of the trial. Therefore, the Court granted leave to appeal the costs award and reversed the costs Order, holding that the parties were to bear their own costs of the trial.
Disposition
Rosenberg J.A. allowed the appeal in part as follows:
- The order of child support was to be terminated as of November 30, 2010;
- The respondent was to pay to the appellant spousal support as of December 1, 2010 in the amount of $433 per month;
- Term 4 of the Order requiring the appellant to pay child support arrears was deleted;
- Term 9 of the Order was varied to require that arrears of child support and spousal support payable by the respondent was to be paid out of monies held in trust before the funds were released to the respondent
