Smith v Smith, 2015 ABQB 817

Court of Queen ’ s Bench of Alberta Citation: Smith v Smith, 2015 ABQB 817 Date: 20151218 Docket: 4803 147613 Registry: Edmonton Between: Kim Elaine Smith Applicant - and - Howard Thomas Smith Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice R.A. Neufeld _______________________________________________________ I. Introduction [ 1 ] This case represents the end of a marriage entered into on December 5, 1981 between Mr. Howard Smith and Ms. Kim Sherk (now Smith). At the time the couple lived in North Vancouver. Both were employed – Ms.

Smith as a legal secretary and Mr. Smith as an unskilled labourer at a refinery then operated by Imperial Oil Limited (“IOL”). [ 2 ] They were determined to succeed financially, and had a head start of sorts in that Ms. Smith and other members of her family

had interests in residential realty. She also had at least $20,000 in Canada Savings Plan Bonds, with a variety of maturity dates during the 1980’s and early 1990’s that could be cashed in. [ 3 ] For his part, Mr. Smith had an excellent employer. Among other things, IOL provided its employees with opportunities to build personal wealth through company-assisted savings plans, and to enjoy a substantial pension upon retirement. Having joined IOL at a young age, Mr. and Ms. Smith could look forward to being in a position to retire when Mr. Smith turned 55 years old, with a full pension.

Today, that pension entitlement is based on a retiree’s top 3 years of earnings. It consists of a monthly pension, plus a lump sum supplement. It provides survivor benefits to the named spouse in the event of death of the retiree amounting to ½ of the monthly payments. [ 4 ] As of the date of the trial, Mr. Smith had exercised his right to retire from IOL. The monthly pension to be paid is approximately $98,400 per year or $8,200 per month. The supplemental lump sum to be paid is $234,000. [ 5 ] Ms.

Smith set aside her career as a legal assistant when the couple had their first of four children; Calvin on February 1, 1987, followed closely by their second child, Jacqueline, on February 28, 1987. From that point forward, she was very busy raising the children and managing a very busy household. Both Mr. and Ms. Smith worked very hard over the years, and each have enjoyed excellent relationships with their children – all of whom are now in the adult workforce. [ 6 ] In January 2007, the marriage fell on hard times. Ms. Smith asked Mr. Smith to move out. He refused.

She had his furniture and some of his clothing moved into the basement of the family home, where he lived until the home was sold in the summer of 2012. During that period of time the management of the family finances changed. Mr. Smith continued to pay household bills, but rather than having his pay cheque deposited to the couple’s joint account, he opened another account in his own name. Over time, the joint account came to be used primarily by Ms. Smith. Mr.

Smith would deposit an allowance of sorts for her use in the amount of $1,000 per month, and periodically top that up to pay for unusual expenses that she might incur for the family, such as veterinary bills. Ms. Smith used the joint account for day-to-day expenditures, including occasional food purchases. Food was also purchased by Mr. Smith. [ 7 ] During this period of time, and subsequently, Ms. Smith looked to make extra money and did so by finding work at a garden center and in assisting on the renovation of a restaurant.

Her annual income was in the range of $10,000 to $20,000. [ 8 ] At the end of June 2012, the couple went their own ways. Ms. Smith moved out and rented a home. She found full time employment in a law office. Ms. Smith expected the couple’s youngest child to live with her and she did for a short period of time before deciding to live with her father on a full time basis in November 2012. [ 9 ] In June 2012 Mr. Smith agreed to pay $4,000 per month in spousal support. No child support was paid by either party following separation. [ 10 ] The family home in Sherwood Park was sold in the fall of 2012.

Net proceeds after the retirement of a mortgage then on title was $392,136. It took another year before agreement was reached on distribution, due to a dispute on whether the proceeds should be used to pay back certain obligations to the children of the marriage, and to Mr. Smith’s mother. In the end, the parties divided equally a net amount of $342,486.00. Both used the proceeds to purchase replacement homes, among other things. [ 11 ] At the time of distribution of the house proceeds in the fall of 2013, Mr. Smith was continuing to work at IOL.

His evidence was that he was continuing to work, despite having qualified for full retirement benefits, in order to obtain extra income that would increase his pension earnings, to help pay for ongoing costs for the youngest child, Michelle’s education and to meet his spousal support obligation. That obligation was $4,000 per month at the time of Ms. Smith moving to a new home, but was later increased to $8,000 per month by Order of this Court in December 2014, retroactive by 6 months. [ 12 ] Mr.

Smith made more money during this latter time period by accepting a supervisory positon at the Edmonton IOL refinery, and continuing to work overtime as he had done during his career, especially when finances were tight. He detested the new position and the stress it engendered. At one point, he was forced to take a month of stress leave, and he remains on medication. [ 13 ] Ms. Smith used the home sale proceeds to purchase a replacement vehicle and as a down payment on a home in Vernon, B.C., where she now lives. Shortly before making that move, she quit her job as a receptionist in an Edmonton law firm.

She had suffered eye discomfort for a number of years and found artificial lighting and other aspects of an indoor office environment to be unbearable. She has not taken work since, either indoor or outdoor. [ 14 ] In July of this year, Mr. Smith gave notice to IOL of his intention to retire. His last day of work was October 31, 2015, his 58 th birthday. He did not advise Ms. Smith of his retirement until October 28, 2015. Although during the marriage, Mr. and Ms.

Smith had discussed the possibility of him taking on contract work to supplement his pension following retirement, his evidence at trial was that he does not plan to do so and he is uncertain as to whether IOL would bring him back for occasional contract work in any event. [ 15 ] While it appears to me that Mr. Smith is genuine in respect of his current plans for retirement, I am not persuaded that contract work is unlikely – particularly if the energy industry returns to a healthier state. I am not prepared, for the purpose of this proceeding, to impute substantial contract income to Mr.

Smith until age 65, as requested. He worked very hard over the course of his career and has reached the point of diminishing financial returns and job satisfaction. He is entitled to retire. [ 16 ] I will return to this later, in dealing with the issue of spousal support. II. Matrimonial Property Act Division [ 17 ] The division of matrimonial property is governed by Sections 7 and 8 of the Matrimonial Property Act . Fundamentally, it involves three steps:

1) identification of the assets and liabilities of each party; 2) determining whether there is property held by either party that is exempt from division, or that can be traced back to exempt property; and 3) determining how the property is to be split, having regard to the factors enumerated in s.8 and in the case of accretion in value of exempt assets, the general principle of ensuring a just and equitable allocation. [ 18 ] It is settled law in Alberta that the relevant time for valuation of assets is the time of the trial ( Mazurenko v Mazurenko , 1981 ABCA 104 ).

That is not to say that other valuation dates are never important, however. For example, if a claim is advanced that property was brought into the marriage, and should be exempted from division, it is important to establish the value of that property at the time of the marriage if the exemption is to be carried through to the final division of matrimonial property.

Similarly, if a case is made that the accreted value of assets from the date of separation to the date of trial should be disproportionately distributed, it is incumbent on the person advancing that claim to prove that the asset has in fact increased in value. A. The Assets a nd Liabilities [ 19 ] I will turn first to my findings in respect of the matrimonial property held by Howard and Kim Smith at the time of trial.

Before doing so, a brief comment on the quality of the evidence before me is required. [ 20 ] First, I am satisfied that there is sufficient evidence now on the record to allow me to identify, and place a value on, the primary assets involved. There is no doubt that during the course of the litigation Mr. Smith was not as diligent as he could or should have been in providing financial disclosure up to and including the trial. This is an issue that can be dealt with in the context of costs, however.

As I consider that the evidence before me is now sufficient, there is no need to make adverse inferences against either party arising from the non-disclosure of financial (or medical) information. [ 21 ] Second, it would have been of assistance had counsel been able to agree on asset values before the trial, so that the Court did not have to sift through the financial information provided.

In my view, there is no reason why a common matrimonial property statement could not have been produced, even if one or two items of disagreement had been left for determination by the Court. [ 22 ] With that preface, I will describe my findings as to matrimonial property assets. I will then deal with the exemption issue, as well as the claim advanced by Ms. Smith for an unequal division of the increased value of the exempt assets that she brought into the marriage in the form of the ultimate sales value of the 923 Plymouth Street and Sherwood Park homes respectively.

I will then turn to the question of whether the remaining non-exempt property should be unevenly allocated, having regard for the factors enumerated in S.8 of the Act . B. Matrimonial Property Description [ 23 ] The assets held by the couple at trial (including proceeds of the matrimonial home that were divided in the Fall of 2013) are as follows (and rounded to the nearest $100): 1) B.C.

Cabin $333,000. 2) IOL Savings Plan $142,500. 3) IOL Supplemental Pension $234,000. 4) Matrimonial Home Proceeds $342,300 5) Surmont Energy Shares $40,000. 6) Tax Free Savings Account $8,000. 7) TD RRSP $50,200. 8) Cash (Midpoint Estimate based on matrimonial $22,900. property statements provided by each party) 9) Household Contents $11,500. 10) Leon’s Furniture Credit $2,500. 11) Vehicles $4,200. 12) Credit Card Debt ($12,700.) [ 24 ] The parties agreed that the B.C.

Cabin should not be part of this distribution, as it cannot be liquidated due to legal problems between its co-owners. [ 25 ] It should be noted here that each party advanced claims that there had been dissipation of certain assets before trial. Ms. Smith asserted that Mr. Smith had dissipated approximately $40,000 by withdrawing over-contributions to his IOL Savings Plan. Mr. Smith asserted that Ms. Smith had dissipated a $90,000 Spousal RRSP after the couple separated in 2007/2008. I do not accept either of these

claims. The monies withdrawn were used predominately for living expenses and primarily during the time period that the couple continued to live under one roof and were functioning as a single economic unit. This was not a case where one spouse was removing and squirrelling away, for his or her own future use, money that should properly be divided. Further, in the case of Ms. Smith’s RRSP, a substantial portion was used to purchase Surmont Energy Shares, which remain available for distribution. C. Exemptions [ 26 ] The Plaintiff asserts a claim to two exemptions.

First, she says that she brought an interest in real estate into the marriage in 1981, as well as Canada Savings Bonds that had been gifted to her by her grandparents prior to marriage. [ 27 ] At trial, she testified that at the time of the marriage in 1981, she held an interest in three residential properties in Vancouver, along with some of her siblings. In October, 1984, the value of those properties and associated mortgage obligations were calculated and equalized as amongst the siblings and their father, who apparently was responsible for mortgage payments on at least one of the homes – 923 Plymouth Drive.

In a document entitled “Sherk Family October 31, 1984 Property Transfers”, both Howard and Kim Smith were listed as owners of each of the three properties involved, although no documentation or viva voce evidence explained how and when Howard acquired an interest in those properties. In any event, as a result of that equalization and property transfer process, Howard and Kim Smith ended up owning 923 Plymouth Drive as joint tenants. The mortgage on that property amounted to approximately $68,000.

Howard and Kim were to pay it off, but responsibility for default seems to have remained with Kim’s father, according to a letter from the lender which was introduced into evidence. [ 28 ] Following the equalization and property transfer, another document was signed. This was a Declaration of Trust dated December 1, 1984. It was prepared by Ms. Smith’s brother, a lawyer practicing in Vancouver, and signed by Mr. Smith without benefit of independent legal advice. It purported to create a trust, whereby Mr.

Smith would hold 923 Plymouth Drive in trust, with beneficial ownership of 75% (Kim) and 25% (Howard). [ 29 ] The trust document appears to have never been discussed again until well after the parties separated for good in 2012. It was not disclosed to third party lenders. It did not affect the behaviour of the parties in allocating the benefits and burdens of property maintenance, rental revenue or mortgage retirement. It was not mentioned or acted upon when the 923 Plymouth Drive property was sold in 1988, and used to fund a replacement home in Sherwood Park.

It was also not mentioned or acted upon when the parties sold the Sherwood Park home, and agreed to divide the proceeds of sale equally, in the Fall of 2013. [ 30 ] In the circumstances, it would be neither fair nor reasonable to enforce the Declaration of Trust as one that is binding in its own right, and in accordance with its terms. [ 31 ] The Plaintiff concedes that the Declaration of Trust is not enforceable in its own right. She argues, however, that it can and should be taken into account, in two other ways.

First, it operates so as to rebut the presumption of advancement which would support the conclusion that she intended to gift a portion of her interest in the B.C. residential properties to Howard Smith when the property equalization and transfer arrangements were made.

Second, it can be used as a basis for dividing, on a 75/25 split, matrimonial property held at the time of dissolution of the marriage which can be traced back to the property described in the trust, being 923 Plymouth Drive, so that she would be entitled to 75% of the sale proceeds of the Sherwood Park home. [ 32 ] I reject both of these arguments. [ 33 ] Under the Matrimonial Property Act , the Court is called upon to distribute matrimonial property in accordance with a prescribed statutory scheme, founded on the principle that non-exempt property is to be divided in a just and equitable manner, having regard to specified factors.

Where property is brought outside of the operation of the statute by virtue of an agreement, it is necessary to show that the agreement was fairly entered into, including that each spouse was aware of the consequences of entering into the agreement, as acknowledged before independent legal counsel. [ 34 ] Although the Declaration of Trust here may not be a matrimonial property agreement, per se, it would have that effect if utilized in the manner advocated by the Plaintiff. [ 35 ] As for rebuttal of the presumption of advancement, that is somewhat of a red herring.

Section 37 of the Matrimonial Property Act effectively abolishes the presumption of advancement in respect of matrimonial property in any event, in favor of distribution in accordance with the overall Matrimonial Property Act regime. [ 36 ] The argument that the Declaration of Trust mandates a 75/25 incremental allocation of matrimonial property traceable to 923 Plymouth Drive is in my view, somewhat circular in nature. It only does so if, having regard to all the factors at play under the Act , it would be just and equitable for such an allocation to be made.

That is not the case here. [ 37 ] I do accept the proposition that Ms. Smith brought interests in residential property, and $20,000 of Canada Savings Bonds into the marriage and that these are roughly traceable to the matrimonial property at the time of separation. As alluded to earlier, the value of the 923 Plymouth Road property at the time of the Sherk Family equalization and property transfer in October 1984 was given as $133,000, with a mortgage of $68,000, for net equity of $65,000. I will credit Ms. Smith with one half of that, or $32,500 in the final matrimonial property division. I will also credit Ms.

Smith with a further $5,000, being the difference between the $20,000 in Canada Savings Bonds that she was given by her grandparents and the $15,000 in inheritance that Mr. Smith received from his grandfather during the marriage and which was also contributed to the acquisition of matrimonial property (the B.C. Cabin). [ 38 ] The result will be an exemption in favour of Ms. Smith in the amount of $37,500. [ 39 ] In

summary, I am prepared to find that Ms. Smith brought exempt real estate into the marriage and will assign to it a value of $32,500, or one half of the equity owned by the couple when 923 Plymouth Drive was transferred into their joint names. To the extent that both 923 Plymouth Drive and the Sherwood Park residences increased in value after that point in time, I find that it is just and

equitable for such accretion in value to be distributed equally. Both contributed equally to the household during the marriage, and it would be inequitable and unjust to superimpose a 75/25 division based on an apparently long-forgotten Declaration of Trust dating back to 1984, drafted by one spouse’s brother and executed by the other spouse without the benefit of independent legal advice. [ 40 ] I will also exempt $20,000 in Canada Savings Bonds to the credit of Ms. Smith and a $15,000 inheritance to the credit of Mr. Smith. D.

Section 8 Adjustments 1. General Principles [ 41 ]

Section 7 of the Matrimonial Property Act provides that for non-exempt property, the presumptive distribution of property is equal shares, unless it appears to the Court that it would not be just and equitable to do so, having regard for matters set out in s.8. That section, in turn, lists a dozen factors that may be considered, as well as a catch-all provision – “any factor or circumstance that is relevant”. [ 42 ] I do not propose to discuss each and every matter listed in s.8.

It is unnecessary to do so, although I have considered each matter in arriving at my decision. [ 43 ] There is generally little reason to depart from the principle of an equal distribution of property in this case. This was a very long marriage. Each of the spouses came into the marriage having a good job. Both were determined to see the marriage succeed, including on the financial level. They worked hard and contributed in their own way to building a good financial future. Neither were particularly good money managers or investors, but both appeared to be fundamentally honest and good people.

They have agreed that the homes they acquired after separation are not part of this process, and they also agreed to divide the proceeds of the sale of the matrimonial home equally. [ 44 ] I have already discussed the issue of whether there should be an adjustment under

Section 7 or

Section 8 in favour of Ms. Smith, based on the 1984 Declaration of Trust. Mr. Smith argues that he should receive a higher proportion of the IOL monthly and supplemental pension to reflect its increase in value between the date of separation and the date of the trial, and I will turn to that argument now. [ 45 ] The notion that pension entitlements accumulating after separation should be retained by the spouse who earns that additional pension is not new.

In Rands v Rands , 2011 ABQB 605 , Justice Hall of this Court stated the proposition as follows: “Pensions differ considerably from other matrimonial property assets, particularly where the parties have been separated for a lengthy period of time. During that period of time, the pensioner has continued to be employed and to make contributions to the pension while the former spouse is making no such contributions. It is because of the pensioner’s efforts alone that the pension increases in value. Accordingly, except in some unusual circumstances, which do not exist here, the factors set out in

section 8(a), (b), (

c) and (

f) are important considerations for the Court, and lead to the conclusion that neither party should share in the appreciation of the other party’s pension for the period of time for which the parties were separated.” [ 46 ] A similar approach was taken in Mew v Mew, 2011 ABQB 531 and Shopik v Shopik, 2014 ABQB 41 . [ 47 ] A somewhat different approach was used in McCulloch v. McCulloch, 2003 ABQB 432 , but it is unnecessary for me to reconcile the two approaches, given my conclusion on this issue. [ 48 ] Applied to the facts in this case, and using the Rands framework as a starting point, 2 questions arise.

First, what is the date of separation for the purpose of identifying the time period during which additional pension entitlement was earned? Second, on the evidence presented in this case, is there a material difference in the monthly and supplemental pensions as of the date of separation and the date of trial? 2. Date of Separation [ 49 ] For the purpose of considering the distribution of pension entitlement, the Plaintiff argues that the date of separation should be the date on which the couple ceased to be economically interdependent.

She says that this occurred in July 2012 when she moved out of the matrimonial home, started a new job and commenced receipt of spousal support payments. [ 50 ] Before that she was totally reliant on the pre-existing familial infrastructure for her basic necessities, including receiving an allowance of sorts from her husband. [ 51 ] During the trial, considerable time was spent establishing that the couple had been living separate and apart since 2007 or 2008. In argument, it was not entirely clear what date the Defendant was urging upon the Court.

His written submissions stated that the parties “have been separated since 2011” and that the date of economic independence is at the latest October 2012. [ 52 ] In any event, I agree with the Plaintiff that for the purpose of s.8, the date of separation of the parties was July, 2012. 3. Incremental Pension Value – 2012 – 2015 [ 53 ] The evidence presented in respect of pension entitlement consisted of annual statements from IOL (produced on disclosure by Mr. Smith); a final IOL statement of entitlement as of October, 2015 (produced during trial on direction of the Court); and viva voce evidence from Mr.

Smith providing his understanding of the plan. No witness was produced from IOL, nor was there any expert evidence to assist the Court in understanding how the plan operates.

[ 54 ] The annual statements for 2012 showed a supplemental pension plan value of $331,000. With an average annual income for the preceding 3 years of approximately $201,000, the annual pension entitlement at that date would have been approximately $91,000 or $7,580 per month. [ 55 ] For 2014, the preceding 3 years income averaged out to approximately $205,000, resulting in a yearly income entitlement on retirement of $99,000 or $8,250 per month.

This coincides with the actual monthly pension entitlement value provided during trial. [ 56 ] Based on these values, and using the approach suggested in Rands , the Court could direct that the parties each receive 50% of the monthly income entitlement as of 2012 of $7,580 (or $3,790) and Mr. Smith receive an additional $667, representing the increase monthly entitlement for a total of approximately $4,457. [ 57 ] As pointed out by the Plaintiff, however, there is a fundamental problem with taking that approach on the facts of this case.

Specifically, it appears, based on the same annual statements, that between 2012 and the date of trial, the lump sum supplemental pension entitlement value dropped from $331,000 to $234,000. This seems counter-intuitive, but the fact of the matter is that as of today, the supplemental pension value is considerably less than it was stated to be at the time of separation. [ 58 ] In the circumstances, I find that Mr. Smith has failed to prove that his pension entitlement, when taken as a whole, materially appreciated in value between July 2012 and the date of trial.

Both the supplemental lump sum pension and the monthly income entitlement will be divided equally between the parties. 4. Remaining Assets [ 59 ] The IOL savings plan program allows employees to redirect up to 6% of their earnings into a company savings plan, administered by SunLife. This is used to purchase IOL shares, and is matched by IOL. [ 60 ] At an average annual income of approximately $200,000 from 2012 – 2015, Mr. Smith was entitled to contribute approximately $12,000 per year and to have that matched by IOL. His pay stubs showed that he had done so. [ 61 ] At trial, Mr.

Smith sought to be credited for his contribution, leaving IOL’s matching contribution to be divided between the parties. [ 62 ] Mr. Smith also testified that the current value of the IOL savings account is approximately $142,000. This is $45,000 less than it was valued at in 2014, with the difference being attributable to the reduction in IOL share value over the past year. [ 63 ] In my view, it is fair for Mr. Smith to receive at least some credit for building and maintaining the value of the IOL savings plan since separation, even though IOL share values have decreased on a per unit basis.

I will, therefore, allocate this asset on a 60/40 basis ($85,500 / $57,000) in the matrimonial property distribution. [ 64 ] The balance of the remaining assets and liabilities will be divided equally. 5. Method of Payment [ 65 ] The matrimonial home proceeds have already been distributed. Thus, the amount remaining for distribution is $845,400 less $342,487, or $502,913. In addition, withholding tax on the IOL supplemental pension and Mr. Smith’s RRSP will be payable.

At a 20% rate, this amounts to $46,800 and $10,400 respectively, leaving $445,173 for distribution. [ 66 ] Each party would therefore be entitled to receive $222,856 before adjusting for exempted property ($37,500 in favour of Ms. Smith) and the 2012-2015 contributions to the IOL share plan ($28,500 in favour of Mr. Smith) or a net credit to Ms. Smith of $9,000. [ 67 ] In result, Ms. Smith is entitled to $227,356 and Mr. Smith is entitled to $218,356 of the remaining matrimonial property value. It should also be noted that the Surmont Energy shares will be kept by Ms. Smith.

She was the proponent of this purchase (which I value at $40,000), and she will bear the risk and benefit associated with it. [ 68 ] As most of the assets are held by Mr. Smith, the division of assets will be effected in the case of Ms. Smith as follows: 1. Ms. Smith will receive ½ of IOL`s supplemental pension, net of withholding tax ($93,600); 2. Ms. Smith will retain all Surmont Energy shares; 3. Ms. Smith will receive 40% of the value of the SunLife IOL Savings Plan, in the amount of $57,000; 4. Ms. Smith will receive 50% of the remaining assets and liabilities, comprised of:

a) Cash $22,900.

b) TFSA (remaining after interim distribution) $8,000.

c) Household Effects $11,500.

d) Vehicles $4.200.

e) Credit Card Debt ($12,700)

f) RRSP $40,200

g) Leon’s Furniture Credit $2,500. [ 69 ] These remaining assets and liabilities amount to approximately $76,600. Ms. Smith`s share is $38,300. [ 70 ] In total, Mr. Smith will therefore pay to Ms. Smith the amount of $70,790. This is over and above Ms. Smith`s entitlement to receive from IOL 50% of the supplemental pension and future monthly pension payments. In that regard, Mr. Smith will irrevocably direct IOL that Ms. Smith is his sole beneficiary for the purpose of future entitlement to surviving spouse benefit. III. Spousal Support A.

Entitlement [ 71 ] As in all spousal support cases, the threshold issue for determination is entitlement. If that is established, the court can then proceed to assess the issues of quantum and duration. [ 72 ] There is no question in this case that Ms. Smith was entitled to receive spousal support upon separation. Her entitlement was grounded on both compensatory and non-compensatory factors. [ 73 ] Hers is a classic case of spouse setting aside her own career opportunities to take on the role of caregiver and household manager while her spouse pursued his career and assumed the role of financial provider.

At the conclusion of the relationship, she was left with a limited income-earning skillset, at a time when most people (including her husband) would be actively planning for retirement. [ 74 ] This disparity in income-earning ability and work experience generally also manifested itself in the need for non- compensatory spousal support.

Without it, there would be no way for the parties to maintain a comparable standard of living. [ 75 ] Fortunately, the IOL pension program, when combined with the distribution of the remaining matrimonial property, will serve to ameliorate the disparity in income between the parties. It will also return to Ms.

Smith income in retirement that will compensate her for the sacrifices she made during the marriage. [ 76 ] Assuming the parties will, on a going-forward basis, have roughly the same assets and the same monthly income, the starting point in an analysis of future spousal support would be simple – none would be required. [ 77 ] The Plaintiff argues, however, that spousal support should continue. She says that the financial consequences of Howard`s decision to retire early – at age 58 – should be borne by him alone.

She also says that Howard`s own budget information shows that he will have no choice but to work in the future. In the circumstances, she suggests that the Court should impute an income of $100,000 per year to Howard for the purpose of setting spousal support and based on that, he should be required to pay $3,500 per month to Ms. Smith until age 65, when a review can occur.

He should also be required to provide financial disclosure in advance of that review. [ 78 ] The Defendant argues that there should be no further spousal support required, and the interim award of $8,000 per month was excessive. [ 79 ] In my view, “early retirement” is somewhat of a misnomer when applied to employment conditions such as that of Mr. Smith. Long-term employees in his situation reach a point where their monthly pension entitlement will be roughly the same as their base salary. Absent overtime, they will be working for nothing.

It is not at all unreasonable or premature to retire in such circumstances. [ 80 ] This same dynamic encourages employees to return to the workforce following retirement. At that point, they are still young enough to work, and highly skilled. Economics permitting, they are a ready resource for the old employer, or a new one. [ 81 ] In argument, Ms. Smith submitted that Mr. Smith could readily return to work for IOL during the busy refinery shutdowns that occur twice per year, and earn $100,000. There was little evidence submitted in support of that, and Mr.

Smith contended that in today’s economy, such contract work may not be available. [ 82 ] I am not prepared to impute an annual income of $100,000 to Mr. Smith as requested by Ms. Smith. I do, however, find that he is capable of finding some contract work if necessary, and is likely to do so and can afford to pay reasonable spousal support. I also find that Ms.

Smith is capable of finding work, although at a much lower hourly rate, which can provide additional income if needed. [ 83 ] Having regard to the economic circumstances of the parties, and the need to provide a transition to self-sufficiency as they enter retirement years, I will therefore order that Mr. Smith pay $1,750 per month in spousal support, commencing on January 1, 2016 and concluding on January 1, 2019. B. Retroactive Support [ 84 ] Ms. Smith argues that she is entitled to retroactive support. In her Statement of Claim, she sought $4,000 per month.

This amount was apparently acceptable to both parties following their separation in July, 2012. In July, 2014 she amended her statement of claim to delete reference to the $4,000 per month figure. She then sought and obtained increased support in the amount of $8,000 per month from July, 2014 to December, 2014. The Court determined that it would not make an award going back to the time period before amendment of the pleadings.

[ 85 ] Ms. Smith argues that I should do so, and award her $8,000 per month for the period of June, 2013 to June, 2014. She says that this is within the range suggested by application of the Spousal Support Advisory Guidelines, based on the parties’ actual incomes for the time period in question. [ 86 ] Mr. Smith argues that $4,000 per month was appropriate both before and after the pleadings were amended.

He says that the $8,000 awarded in December, 2014 was far too high given that it was close to his entire base take home pay, and it was only through working overtime, and switching to a job that he detested, that Mr. Smith was able to make those ongoing payments and retire the retroactive component of the award. He argued that $4,000 was the amount actually agreed upon by the parties, and was conceded by Ms. Smith to be reasonable when questioned.

He referred the Court to a variety of cases in which payors with similar income paid much less than $8,000 and in fact, less than $4,000. [ 87 ] With the greatest of respect and with the benefit of the evidence given at trial, I do not consider it appropriate to award retroactive spousal support based on the $8,000 per month awarded by Madam Justice Shelley in December, 2014. In my view, and having regard to the factors and objectives articulated in s. 15.2 of the Divorce Act , $8,000 per month was too high, just as $4,000 per month may well have been too low.

Absent agreement to the contrary between the parties, an award in the range of $6,000 would have been more appropriate. In the circumstances, I will leave matters as they are, and make no retroactive adjustments – either upward or downward – in the spousal support paid to date. C. Duration [ 88 ] In the context of a couple who are facing retirement, the spousal support objective of encouraging economic re-tooling and self-sufficiency takes on a different dimension. For most Canadians, retirement necessitates a degree of belt-tightening, and revised lifestyle expectations. [ 89 ] This couple is no different.

Clearly, on an aggregate basis, they have and continue to spend beyond their means. Both will need to adjust to retirement. [ 90 ] I agree with the Plaintiff that Mr. Smith’s decision to retire when he did was his decision alone, and one for which he must take responsibility. At the same time, it cannot have come as much of a surprise, given the way that the IOL pension plan is structured. [ 91 ] I find that the duration of spousal support should equate to the time needed for both parties to transition to full retirement.

As indicated above, an additional three years should be sufficient to allow that to take place. If it does not, Ms. Smith will be entitled to seek review of spousal support at that time. [ 92 ] I will also direct the parties to provide annual financial disclosure to each other in the form of income tax returns, pay stubs, and financial statements (if any) in respect of any new business venture established, such as a consulting or services company. These are to be provided on or before July 1 every year. IV Costs [ 93 ] During the litigation process, Mr.

Smith failed to pay court costs associated with interlocutory proceedings. He failed to respond in a timely manner to requests for additional information regarding pension matters that were at the heart of this litigation, necessitating an adjournment during the trial, and unnecessary confusion. Whether this course of conduct was deliberate or merely careless, the result was the expenditure of unnecessary resources for everyone involved. Therefore, although the results of this trial are mixed, Ms. Smith will be awarded costs of this trial, in addition to the $3,250.00 in costs that remain outstanding.

Those will all be paid as part of matrimonial property distribution. VI Conclusion [ 94 ] The divorce is granted and the matrimonial property of Howard and Kim Smith will be divided in accordance with this judgment. Should it be necessary for the Court to order specific action by the administrator of the IOL Pension, counsel will be entitled to return before me to speak to that issue. Heard on the 17 th day of December, 2015 . Dated at Calgary, Alberta this 18th day of December, 2015 .

R.A. Neufeld J.C.Q.B.A. Appearances: T. Huizinga for the Applicant N. Virk for the Respondent