Wolters v. Wolters, 2013 ABQB 172

Court of Queen ’ s Bench of Alberta Citation: Wolters v. Wolters, 2013 ABQB 172 Date: 20130319 Docket: 4803 141363 Registry: Edmonton Between: Paul Wolters Applicant - and - Janice Wolters Respondent _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] In this special chambers application, invoking his former wife ’ s remarriage, Mr. Wolters applies to lower, and eventually terminate, his spousal support obligation. Ms. Wolters asserts that remarriage does not affect a former spouse ’ s entitlement to compensatory spousal support and claims ongoing unlimited spousal support based on compensatory, contractual and needs models. [ 2 ] Mr. Wolters ’ application is allowed, in part: although his spousal support obligation will cease on December 31, 2015, between now and then, the amount of his spousal support will remain constant. [ 3 ] Mr.

Wolters has established that his former wife did not suffer an employment consequence as a result of the marriage. The

[3] Mr. Wolters has established that his former wife did not suffer an employment consequence as a result of the marriage. Themarriage breakdown resulted in some economic hardship which was partly alleviated by the property settlement. To the extent that Ms.Wolters’ current situation is caused by her previous marriage, her ongoing ability to achieve economic self-sufficiency subsequent to themarriage has been facilitated by Mr. Wolters’ spousal support. By December 31, 2015, Mr. Wolters will have been paying spousalsupport for nine years. Given Ms.

Wolters’ employment history during the marriage, including her training and employment as a legalassistant, nine years of spousal support is a sufficiently realistic bridge towards Ms. Wolters’ economic self-sufficiency. [4] Ms. Wolters is not entitled to contractual spousal support. Nor, because of her remarriage, is she entitled to needs-basedspousal support from her previous husband. [5] Although Mr. Wolters has made a reasonable argument that the increase in Ms.

Wolters’ income from employment sincethe execution of the Minutes of Settlement justified a proportionate decrease in the amount of spousal support, the court denies Mr.Wolters’ application to scale down support until the termination of the spousal support obligation. Given Mr. Wolters’ financialcircumstances, the fairest way to treat his application is to make the termination of the spousal support obligation clear and definitiverather than to scale down the amount of that support. Cases and authority cited [6] By Mr. Wolters: Shields v Shields 2008 ABCA 213 , [2008] A.J. No. 598 (C.A.). [7] By Ms.

Wolters: Rosario v. Rosario, 1991 ABCA 318 , 120 AR 331 (Alta CA 1991); Heimbecker v.Heimbecker, 2007 ABQB 645; Peloquin v. Peloquin, 2004 MBQB 193. 1. Background [8] The parties married in 1980, separated in 2006, and divorced in 2007. They are the parents of two adult children, one ofwhom is a special needs child. The applicant is currently 53 years old and the respondent is 51 years old. [9] In 2007, the parties entered into Minutes of Settlement which included the following

section dealing with spousal support:

(5) SUPPORT FOR WIFE

(5.1) The Husband shall pay to the Wife for her maintenance and support the sum of $2,650.00 per month payable as follows:

a) commencing on the 1st day of April, 2007 and continuing on the 1st day of each and every month thereafter until further agreement or court order, the sum of $1,360.00; and

b) commencing on the 1st day of July, 2007 and continuing on the first day of every third month thereafter until further agreement or court order, the sum of $3,870.00.

(5.2) The parties acknowledge that the numbers set forth above have been based,on the Husband having annual gross income (before expenses) of $145,000.00 and the Wife having annual gross income of $15,600.00.

(5.3) The quantum of spousal support shall be reviewed upon the happening of any of the following events:

a) The Husband's annual gross income before expenses falls below $145,000.00; or

b) The Husband's annual gross income before expenses rises above $180,000; or

c) The Wife's annual earned income falls below $15,000.00; or

d) The Wife's annual earned income rises above $35,000.00.

(5.4) Should there be a material change in the condition, means, needs or circumstances of either party or MaryBeth not otherwise set forth above, the spousal support arrangements shall be reviewed by the parties. This review shall include but not be limited to the quantum, duration, liability for, or entitlement to spousal support. [ 10 ] Mr. Wolters asserts that when the parties were settling matrimonial property, he agreed to a valuation the former matrimonial home, in which Ms. Wolters continues to reside, at a much lower value than market value so that Ms.

Wolters would not have to negotiate a larger mortgage to pay him out. Ms. Wolters asserts that, since she acquired the matrimonial home, she has in fact substantially increased the size of the mortgage to make renovations to the home that were required as a result of deficient renovations undertaken during the course of the marriage. She has also spent some $30,000.00 on legal fees connected with the settlement of family law issues.

She has also purchased a new vehicle. [ 11 ] The October, 2010, consent variation order between the parties contained the following preambular term: AND UPON being advised the quantum of child support and spousal support were agreed to meet the Defendant ’ s (Ms. Wolters ’ ) budget . . . [ 12 ] Mr. Wolters ’ obligation to pay child support ceased on November 1, 2011; according to paragraph 4.2 of the Minutes of Settlement, that change in the relationship between the parties gives to the parties the opportunity to review entitlement, quantum and duration of spousal support. [ 13 ] Since 1996, Mr.

Wolters has been working at two jobs. His income since 2007 has been: 2007 $26,234.00 2008 38,376.00 2009 41,488.00 2010 54,369.00, including RRSP withdrawals

2011 40,221.00, including RRSP withdrawals [ 14 ] Ms. Wolters has been employed outside the home during the course of the marriage except for periods totalling 9 or 10 years. At one point, she took training to become a legal secretary and thereafter worked as a legal secretary. She was employed outside the home at the time of separation. Since the date of separation, she has worked as an assistant manager at a McDonald ’ s and, from January 2010 to July, 2012, as an order desk supervisor at a special events business. Since August 1, 2012, she has been unemployed. Mr.

Wolters characterizes the latter event as “ quitting work ” whereas Ms. Wolters says that she was required to stop work as a result of basilar migraines and is now on long term disability; no medical evidence was presented on this application. Ms. Wolters ’ income since 2007 has been: 2007 $167,035.00 2008 168,780.00 2009 171,315.00 2010 215,271.00 2011 188,591.00 [ 15 ] In October, 2012, Ms. Wolters remarried. Her new spouse and his son are now living with the respondent, as is the respondent ’ s mother and the parties ’ adult daughter. Ms.

Wolters has not provided any information about her new husband ’ s financial situation nor about his financial contribution to the household and affirms that she has never been asked for such information. Nor has she provided any information about her mother ’ s financial contribution to the household. She has, however, indicated that she has not requested any financial contribution from the parties ’ adult daughter who is employed because she is helping that daughter save funds with a view to establishing a separate residence. 2. Has Mr.

Wolters proved that spousal support should be lowered and eventually terminated? [ 16 ] Parliament has stated that, in assessing entitlement to spousal support, the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including the length of time the spouses cohabited, the functions performed by each spouse during cohabitation and any orders or agreements made between the spouse concerning support.

Spousal support orders should recognize any economic disadvantage to a spouse arising from the marriage or its breakdown, apportion between the spouses any financial consequences arising from the care of children of the marriage, relieve a spouse from the economic hardship arising from the breakdown of the marriage and, insofar as practicable, promote the economic self-sufficiency of each spouse. [ 17 ] The parties were in a long term marriage. However, it cannot be characterized as a “ traditional ” marriage, even if such characterization continued to be appropriate.

It was not a traditional marriage in the sense that during approximately two-thirds of the marriage, Ms. Wolters was employed outside the home. Moreover, at least at one point in her married life she trained and qualified for a career, that of legal assistant. [ 18 ] Ms. Wolters asserts that she is entitled to continued, indefinite, spousal support whether the court grounds her entitlement to such support in contract, in need, or in compensation. Each of these will be assessed.

a) Contract [ 19 ] Ms.

Wolters has no ongoing entitlement to spousal support based in contract. [ 20 ] By establishing income ranges for automatic spousal support variation applications, as well as by explicitly stating that reviews were not limited to the quantum, duration, liability for, or entitlement to, spousal support, the parties ’ Minutes of Settlement - in relation to which each spouse had the benefit of legal advice - made it clear that the spousal support terms to which they agreed should not be misinterpreted as establishing even an entitlement to spousal support, much less an entitlement to permanent spousal support.

This is different from the style of contract between spouses where there is an explicit obligation to pay a specified amount of spousal support

indefinitely. [ 21 ] It is also important to note that the Minutes of Settlement represent a global settlement of property and support issues. In other words, it is possible, even likely, that Mr. Wolters assumed the payment of matrimonial debts leaving Ms. Wolters free of that type of burden. It is in the context of a global settlement that the court must consider that the parties agreed that there would be no splitting of incomes, even when Ms. Wolters was earning what was close to, and perhaps below, the minimum wage. The parties must have concluded that such an arrangement was fair. [ 22 ] Here, the contract does not give the wife any right to ongoing spousal support.

b) Needs [ 23 ] Ms. Wolters has submitted a personal financial plan which states that she has a current net worth of approximately $285,000.00 and yearly “ lifestyle ” needs, i.e. shelter, basic personal, discretionary personal, travel & vacation and transportation needs of $48,540.00 per year. [ 24 ] When a recipient spouse remarries, that individual ’ s new spouse assumes, in the absence of any evidence to the contrary, the spousal support obligation that was formerly assumed by the first spouse.

The Spousal Support Advisory Guidelines themselves attempted to summarize the then current state of Canadian law on re-partnering in the following way: The Recipient's Remarriage or Re-Partnering The remarriage or re-partnering of the support recipient does have an effect on spousal support under the current law, but how much and when and why are less certain. There is little consensus in the decided cases. Remarriage does not mean automatic termination of spousal support, but support is often reduced or suspended or sometimes even terminated.

Compensatory support is often treated differently from non-compensatory support. Much depends upon the standard of living in the recipient's new household. The length of the first marriage seems to make a difference, consistent with concepts of merger over time. The age of the recipient spouse also influences outcomes. [ 25 ] The case law holds that remarriage or re-partnering does not generally affect compensatory support nor contractual support.

Remarriage will not usually terminate contract based spousal support because remarriage or re-partnering is foreseeable and, if it was intended by the parties that remarriage or re-partnering would terminate support, the contract would say so. Spousal support based on compensation is not usually terminated by re-partnering or remarriage because compensation is, by its very essence, payment for damage which the marriage has caused to one of the partners. It ’ s as if the marriage had been a car accident - and the court is left to determine what damage the marriage has caused the claiming partner.

That amount is due to the victim of the accident no matter what the victim ’ s current employment income might be. [ 26 ] However, when a recipient spouse remarries, the new spouse assumes the spousal support obligation imposed by the law. It is only where a recipient spouse can establish that the new partner is unable to meet the spouse ’ s current needs that needs-based spousal support may continue after remarriage or re-partnering.. In this case, Ms.

Wolters has not provided any evidence that her current partner is unable to provide for the needs that are set out in her budget and she is the only party who could provide such evidence. In the result, there is no needs-based obligation on Mr. Wolters to continue to support his former wife since she re-partnered.

c) Compensation [ 27 ] While there is no evidence that Ms. Wolters suffered disadvantage as a result of the marriage, she clearly did suffer some disadvantage as a result of the marriage breakdown which was not entirely compensated by the matrimonial property settlement. However, in the circumstances here the spousal support which Mr. Wolters will have provided for a period of 9 years is a sufficient bridge towards Ms. Wolters ’ economic self-sufficiency. Therefore, Mr. Wolters ’ spousal support payments will cease on making the payment on December 1, 2015.

[ 28 ] These parties married young. The first of their children had severe allergy problems prior to school age. The second of their children has had some problems in the past, but now, in adulthood, is considered to have good potential for future adaptive functioning; indeed, a 2009 assessment indicated that this child has experienced a radical change or improvement of learning efficiency over time.

The need to provide at least a structure for the development of these children undoubtedly fell to the mother. [ 29 ] Once the children were in school, however, the mother was able to apply herself to managing her own life. She was only out of the work force for a period of 9 to 10 years. She completed training as a legal assistant and worked for a time in that field. Legal assistants continue to be in demand, and it is entirely likely that a legal assistant would be able to earn $48,500.00 gross a year. In addition to her training as a legal assistant, Ms.

Wolters has worked in a variety of other fields, including in managerial capacities. It is not clear why Ms. Wolters has not returned to work as a legal assistant. Indeed, it is not clear why Ms. Wolters is currently unemployed; although she is on long-term disability, there is no medical evidence concerning her employability. [ 30 ] In every case it is difficult to determine if a particular individual has suffered disadvantage as a result of marriage, but it is particularly difficult to make such an assessment if the individual was young at the time of the marriage.

One way that courts could go about this tricky task is to use the same principles that are applied to making assessments of loss of capacity when young people are injured in car accidents, i.e. by looking to information such as the academic, social and financial success of siblings, academic performance as a predictor of future earning capacity, extra-curricular interests, etc. Here, no information or evidence is provided by Ms. Wolters of disadvantage, but she presumes that her economic life would have been better if she had not married Mr. Wolters.

On the other hand, there is evidence that the marriage provided her with the training for an independent career and that the marriage provided her with her fair share of the property acquired during the course of the marriage. [ 31 ] Although there is very little detail about the property settlement portion of the global settlement in the Minutes of Settlement, it is clear that Ms. Wolters had legal advice concerning her entitlement to matrimonial property. At the time of separation, she had approximately $200,000.00 in RRSPs and pension and, even now, she has a net worth of nearly $290,000.00.

It is also clear that although Ms. Wolters has incurred some $90,000.00 in additional debt since the Minutes of Settlement, there is essentially no evidence about why nearly $90,000.00 in renovations was required when renovations had been completed shortly prior to separation by bonded and licensed tradespeople. Nor is it clear why Ms. Wolters found it necessary to purchase a new vehicle. At the time of separation, Ms. Wolters was in her early 40s; while a woman of that age may not have quite as many employment options as a younger person, Ms. Wolters did have a lot of experience to offer a prospective employer.

In any event, however, while it is not clear that the Minutes of Settlement fully compensated Ms. Wolters for any disadvantage which she suffered because of this marriage, it is clear that the marriage breakdown itself would have caused Ms. Wolters some disadvantage as she had to decide if she wanted to continue to live in the matrimonial home and, if she did, she had to come up with a way of paying her husband for his share of that asset. [ 32 ] The Minutes of Settlement clearly anticipated that Ms. Wolters would be able to improve her post-marriage self-sufficiency. Indeed, it has proved to be so.

She is now earning, or capable of earning, at least 37% more than she was earning at the time of separation. Mr. Wolters would like to have only one job instead of two. In trying to fairly balance the interests of the two former partners, I have concluded that Mr. Wolters ’ proposal that his spousal support obligation should terminate at the end of 2015 is reasonable. That will provide Ms. Wolters with 9 years of spousal support; in light of her training and experience, I have concluded that the 9 years of support constitutes a sufficient bridge to economic self-sufficiency for Ms. Wolters. [ 33 ] While Mr.

Wolters ’ proposal that, between now and December 31, 2015 his spousal support should reduce in stages is reasonable, based as it appears on a lowering of support in relation to Ms. Wolters ’ proven ability to earn employment income, I have concluded that Mr. Wolters ’ real need is not, in light of his yearly income, to reduce the drain on that income, but rather it is to establish a clear limit to his spousal support obligation. Therefore, I decline to adopt Mr. Wolters ’ proposal that his spousal support should decrease to $1,200.00 per month and then to $800.00 over time until the end of 2015.

In the result, Mr. Wolters ’ current obligation to pay spousal support will continue at the current rate until his final payment on December 1, 2015. 3. Costs [ 34 ] If the parties are not agreed on costs, I may be spoken to within 30 days of the release of this decision. Heard on the 7 th day of March, 2013.

Dated at the City of Edmonton, Alberta this 18 th day of March, 2013. J.B. Veit J.C.Q.B.A. Appearances: Michelle L. Mackay, Gordon Zwaenepoel for the Applicant, Mr. Wolters Michael Kraus, Emery Jamieson LLP for the Respondent, Ms. Wolters