Corriveau v Justin-Corriveau, 2020 ABQB 788

Court of Queen’s Bench of Alberta Citation: Corriveau v Justin-Corriveau, 2020 ABQB 788 Date: 20201215 Docket: 4801-147716 Registry: Calgary Between: David Francis Alan Corriveau Applicant - and - Jessica Rosalin Justin-Corriveau Respondent _______________________________________________________ Reasons for Decision of the Honourable Madam Justice M.H. Hollins _______________________________________________________ [ 1 ] The Applicant, Mr. Corriveau, applies to vary the spousal support payable by him to his former spouse, Ms.

Justin- Corriveau, the Respondent. [ 2 ] The parties were married for approximately 19 years and separated in 2012. Minutes of Settlement (the “Settlement Agreement”), which included the parties’ agreement regarding spousal support, were reflected in the Divorce Judgment and Corollary Relief Order dated January 21, 2014 (the “Order”). The Order obligated the Applicant to pay a lump sum payment of $75,000 and then $10,000 per month to the Respondent from July, 2013 to and including June, 2015. Thereafter he was to pay her $9,000 per month to June, 2026, when she will be 60 years old.

[ 3 ] The Applicant has paid this spousal support more or less faithfully. Following their separation, the Applicant took a job overseas with Royal Dutch Shell. In May of 2018, he lost that job and returned to Canada, finding employment in July, 2018 with an oil sands company in Alberta. His new employment with Cosia paid less than he had earned at Shell, although he received a significant severance payment from Shell in 2019. [ 4 ] In 2018, he applied to reduce his spousal support, but that application was dismissed as premature.

In June of 2020, he reached a deal with Maintenance Enforcement to reduce his spousal support to $4,000 per month pending this application. Arrears continue to accumulate on the original Order, subject to this decision. The Parties’ Positions [ 5 ] The Applicant comes to this Court seeking a reduction in spousal support to $3,000 per month retroactive to June, 2020 on the following grounds: (

a) His income has decreased significantly; (

b) His income is not forecast to return to previous levels; (

c) His monthly budget well exceeds his income. He has been borrowing from investments and savings to keep up with his spousal support payments, as he says he simply cannot afford to pay $9,000 per month or even the $4,000 per month he has been paying since June; (

d) He has remarried and his new wife has adult children and a grandchild; (

e) He believes that the Respondent could be earning more income for herself. [ 6 ] The Respondent objects to any reduction in spousal support. She argues that he has not established what his income was at the time of the Order and therefore cannot establish the requisite change in circumstances; LPM v LS , 2011 SCC 64 at para.31. Even if this Court does find a material change in circumstances, she urges this Court to dismiss the application. In her opinion, he is still living extravagantly and still has investments and property that result in a high net worth.

She argues that his future income is uncertain. [ 7 ] If any reduction is granted, she wants it to account for the lump sum severance payment he received in 2019 and also to be tied to his gross, not net, income. She also wants annual disclosure of his income going forward. Material Change in Circumstances [ 8 ] Variation of the existing Order is governed by

Section 17 of the Divorce Act (Canada) . The Applicant must first establish that a “change in the condition, means, needs or other circumstances of either spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order”; s.17(4.1) Divorce Act . [ 9 ] This change must be of a permanent nature, not temporary; T(CJ) v T(GA) , 2012 ABQB 193 at para.55.

It must also be significant enough that, had the current circumstances existed at the time the order was made, the existing order would have been made differently; LMP , supra at para.32. [ 10 ] I am also to consider whether the Order or underlying Settlement Agreement sets out criteria for applying to vary; LMP, supra at para.38. In this case, the Order referenced the Settlement Agreement in the

preamble but did not speak to conditions precedent to variation. The Settlement Agreement itself contained various waivers of future claims but only by the Respondent, who was disproportionately if not unilaterally restricted in when she could apply to increase spousal support. In other words, there is no contractual prohibition on the Applicant’s ability to apply to vary, but that does not change or obviate the “material change” threshold. [ 11 ] This does not mean that the Settlement Agreement, and its intended finality, are of no consequence.

Both parties agreed on the amount of spousal support that would be paid to 2026. Not only did Mr. Corriveau want to prevent his former spouse from increasing her claim for spousal support later, the amount is also reflective of what she agreed to accept, not temporarily, but until 2026. She also has a right to expect that the Settlement Agreement will not be easily set aside to her detriment. [ 12 ] Notwithstanding this, I am satisfied that the Applicant has established the requisite material change in his circumstances in order to bring this application. [ 13 ] In 2014, when the Order was granted, Mr.

Corriveau was working overseas for Dutch Shell. He has sworn an Affidavit saying that the $10,000 monthly spousal support payment was approximately 50% of his net income at that time. Working backwards, that would mean he was netting $240,000 per annum. Assuming a marginal tax rate of 39%, his gross income would have been approximately $334,000 [1] . [ 14 ] The Applicant’s employer has provided a letter stating that the Applicant’s maximum income for 2020 and going forward will be no higher than $187,505. Based on his most recent paystubs, he is on track to earn $93,000 in 2020.

He advised that he has been told by his employer that there will be no bonuses paid for this year. While not unimaginable, given the current economic climate particularly in the oil and gas industry, this is not in evidence. I am going to proceed on the basis that his income is now $187,505 (gross). This represents a decrease of approximately 44% from his estimated income at the time of the Order [2] . [ 15 ] Even if we were reluctant to engage in an empirical analysis that requires hypothesizing about applicable tax rates, it is uncontroverted that he no longer has the job he had at the time the Order was made.

While I am sympathetic to the Respondent’s

argument that he has failed to provide his 2014 income and is responsible for that evidentiary gap; RP v RC, 2011 SCC 65 ,[2011] 3 SCR 819 at para.33, practically speaking, if I were to find that his application fails for having to put in his Affidavit his exact2014 income, he could simply file a new application with that information and at least attempt to begin again. [16] I also realize that we have not yet accounted for the Applicant’s significant severance payment. While terminated in 2018, hewas able to defer payment of his retiring allowance to 2019.

The result is that his employment income earned in 2019 was $469,518 andhis severance payment was an additional $349,882, giving him a total gross income of $835,709 for last year. Obviously, we cannotignore that influx of cash in determining proper spousal support, but because it is a one-time payment, I will deal with it in terms ofcalculating spousal support rather than consider it to impact the threshold material change issue.

What is the Proper Amount of Spousal Support? [17] Although a variation application is expressly not an application de novo and I am to make only the variation necessitated bythe change in circumstances; LMP, supra at para.47, I must also be guided by the objectives in s.17(7) of the Divorce Act, namely: (

a) To recognize any economic advantages or disadvantages to the parties arising from the marriage or its breakdown; (b) [not applicable] (

c) to relieve any economic hardship of the parties arising from the breakdown of the marriage; (

d) promote reasonable self-sufficiency as far as practicable. Imputation of Income [18] The Applicant asked this Court to impute income to the Respondent of $35,000, based on minimum wage for a full-time job.The Respondent works part-time in retail, earning about $8,000-$9,000 per year.

She resists any imputation of income, based both on hervery limited work history and her current mental and physical issues, which she says arise largely from the breakdown of the marriage. [19] Even though self-sufficiency is a statutory objective of this variation order, the fact is that the Respondent’s circumstanceshave not changed at all since the Order. She has acquired some minimal retail employment earning about $8,000-$9,000 per year.

WhileI would not have necessarily accepted her doctor’s letter as sufficient evidence of any inability to work if that were an issue, here itsimply is not an issue. [20] At the time of the Order, the Respondent had been a homemaker, not employed outside the home for many years. I mustassume that the Minutes of Settlement and the Order envisioned a payment of $108,000-$120,000 in annual spousal support because itwas not anticipated that she would enter the work force. [21] Therefore, I decline to impute any income to the Respondent.

Applicant’s Net Worth [22] I will also address the fact that the Applicant does have investments and real estate at his disposal.

It is always difficult todecide exactly how to account for these capital assets in the calculation of spousal support, particularly on a variation application.Presumably, part of the benefit to both parties of having signed a Settlement Agreement at the time of separation was to have certainty inthe division of existing matrimonial property and to have the freedom acquire and dispose of future property without it being subject tothe claims of a former spouse. [23] However, when a spouse comes to Court saying he or she can no longer honour the obligations agreed to at that time, but hassignificant holdings which, if liquidated, could generate funds to pay the promised support, it becomes a balancing exercise betweenthese interests. [24] And of course, the Applicant received a severance package in 2019 of $349,882.

The Applicant has argued that this paymentwas for his retirement and was deposited directly into his RRSP’s. While that is a common and permitted way of avoiding income tax ona severance payment, the fact is that legally, a severance payment is a form of income replacement or continuation. The preferred way ofdealing with it, where possible, is to treat it as income for the months or years it was intended to cover.

Equally true, as a one-timepayment, it can no more be treated as though it were annual income than it can be ignored. [25] I am also mindful of the fact that the Respondent sought no relief related to that severance payment and that she has arguedagainst any retroactive adjustments to spousal support. [26] To the extent the Applicant wishes spousal support to be tied to his fluctuating income, he should be prepared to paysomething in respect of his income in 2019 and 2020 when he was benefiting (or able to benefit) from the severance payment thatformed part of his income.

The reality is that the Applicant made far more money in 2019 than the Order envisioned and far lessthereafter. [27] Based only on the reduction to his current income, I would have ordered spousal support reduced to $5,000 per month untiland including June of 2026. However, in view of the Applicant’s recent income, including his severance payment, I will order thatreduction in a stepped-down arrangement as follows:

2021: $9,000 per month 2022: $7,500 per month 2023: $7,500 per month 2024: $5,000 per month 2025: $5,000 per month 2026: $5,000 per month [ 28 ] This results in an additional $108,000 paid to the Respondent over the next three years over the $5,000 base spousal support. This will recognize the Applicant’s income over the last two years, which should be treated as income even though it was largely converted to capital assets and thereby increased the Applicant’s net worth.

It will also give the Respondent additional time to increase her employment earnings, should that be necessary to meet her budgetary needs. [ 29 ] The Applicant advised the court that he has access to further credit and of course, he could liquidate some of his RRSP’s or other investments if he chose.

Accordingly, I will give him the option of paying that $108,000 in a lump sum and reducing his spousal support payments to $5,000 beginning in January, 2021. [ 30 ] If he wishes to do this, he must notify the Respondent no later than December 31, 2020 and the payment of $108,000 will be due no later than March 31, 2021. If he so elects, he may begin paying $5,000 each month beginning in January 2021 but if he fails to pay the lump sum after promising to do so, it will be treated as arrears as of March 31, 2021.

Arrears [ 31 ] As for Maintenance Enforcement, the penalties and interest levied since June of 2020 will remain to be paid, along with the arrears to be recalculated. In view of the amount of money received by the Applicant in 2019, none of which was apparently socked away for future spousal support obligations and also in view of several capital assets that could or will likely be liquidated, those arrears (June, 2020 to December, 2020 payments plus penalties and interest) must also be paid in a lump sum no later than March 31, 2021.

Costs [ 32 ] Although the Applicant was technically successful in reducing the spousal support obligation, it was not unreasonable on the basis of this material for the Respondent to have opposed this application. I am directing that no costs be payable to either party. Heard on the 08 th day of December, 2020. Dated at the City of Calgary, Alberta this 15 th day of December, 2020. M.H. Hollins J.C.Q.B.A. Appearances: David Francis Alan Corriveau for himself Ms. Jessica MacDonald for the Respondent, Jessica Rosalin Justin Corriveau