Price v. McCulloch, 2011 NSSC 357

SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Price v. McCulloch, 2011 NSSC 357 Date: 20110928 Docket: 1210-000656, SATD-020385 Registry: Halifax Between: Paul Arthur Price Applicant v. Gillian Elizabeth McCulloch Respondent LIBRARY HEADING Judge: The Honourable Justice Beryl MacDonald Heard: September 21 and 22, 2011, in Halifax, Nova Scotia Written Decision: September 28, 2011 Keywords: Family, application to vary corollary relief judgment, dependent child, adult child support, application to terminate child support, application to terminate spousal support. Legislation: The Divorce Act , R.S. 1985, c.3, sections 2 (1) b, 17

(7) Summary: Father applied to terminate child support for a child who was 20 years of age and had access to substantial monies invested on her behalf. This child had not resided with her mother since 2007 and the majority of her financial needs had been provided by her father. Child support was terminated. Father applied to terminate spousal support paid for 10 years after a 10 year marriage. The mother no longer had a compensatory entitlement to spousal support. Notwithstanding her financial need, the disparity in income, and the father’s ability to pay, the wife no longer had a non-compensable entitlement to spousal support. Spousal support was terminated.

THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Price v. McCulloch, 2011 NSSC 357 Date: 20110928 Docket: 1210-000656, SATD-020385 Registry: Halifax Between: Paul Arthur Price Applicant v. Gillian Elizabeth McCulloch Respondent Judge: The Honourable Justice Beryl A. MacDonald Heard: September 21 and 22, 2011, in Halifax, Nova Scotia Counsel: Elliot Robyn , counsel for the Applicant Kay Rhodenizer, counsel for the Respondent By the Court: [ 1 ] On July 24, 2009 Dr.

Paul Price filed an Application to terminate the child and spousal support set out in a Corollary Relief Judgment dated April 21, 2005.

His application was filed in Antigonish, Nova Scotia but the proceeding was eventually moved to the Supreme Court (Family Division) sitting in the Halifax Regional Municipality. [ 2 ] I do not have before me the date the application was served upon Gillian McCulloch but the material in the file does indicate she began participating in respect to this proceeding by consenting to its transfer on or about October 2009. [ 3 ] By the time this proceeding came before me, at a conference held in December 2010, it was apparent Ms.

McCulloch had issues she wished to place before the court although she had not filed a formal response to the variation application and some of the relief

requested would ordinarily have required her to file a separate application. [4] At the beginning of this hearing on September 21, 2011 it became abundantly clear that counsel for Dr. Price was not clearabout the issues upon which Ms. McCulloch sought a ruling from this court. Having reviewed many, but not all, of the documents filed Ialso was unclear about what Ms. McCulloch was asking this court to do other than continue her spousal support. In conversation withcounsel those issues were identified but, for some issues, I questioned whether I had jurisdiction to order what was requested by Ms.McCulloch.

I decided to divide the proceedings into two separate hearings. In the first hearing I would consider the evidence andsubmissions relevant to termination of the child support and spousal support either at the date of Dr. Price’s application or at some otherdate. In the second hearing I would deal with issues flowing from my decision about termination and the remaining issues identifiedpreviously by counsel at the beginning of this hearing. This decision relates only to the question of termination. [5] Both parties have acknowledged there are changed circumstances that justify consideration of Dr.

Price’s application. [6] The Corollary Relief Judgment required Dr. Price to pay table guideline and

section 7 child support to Ms. McCulloch. [7] A parent is entitled to receive child support for a child who is a “child of the marriage”. The Divorce Act, R.S. , 1985, c.3, s.2(1) (

b) defines a “child of the marriage” as a child who: is the age of majority or over and under their (the parents) charge but unable, by reason of illness, disability or other cause, to withdrawfrom their charge or to obtain the necessaries of life. [8] Usually a child is considered to have withdrawn from a parent’s charge when he or she leaves home, obtains his or her ownresidence and has sufficient income to financially meet his or her basic needs. A child who is pursuing post secondary education ortraining can be a “child of the marriage”.

Whether a child is a “child of the marriage” is to be decided on a case-by-case basis. There isno arbitrary cutoff point based on age or scholastic attainment, (Martell v. Height (1994), 1994 NSCA 65 , 130 N.S.R. (2d) 318(N.S. C.A.)) [9] In reaching my decision I have considered, Rebenchuk v. Rebenchuk , 2007 MBCA 22 (Man. C.A.). It provides acomprehensive review of the principles that have been and should be applied when considering whether a child is a “a child of themarriage”. [10] On the date of Dr. Price’s application the parties’ daughter was 20 years of age.

She had been residing in British Columbia forapproximately 2 years and rarely returned to Nova Scotia. She had moved to British Columbia to pursue training and a career in ballet.She studied with the Goh Ballet Academy and this continued until approximately the summer or fall of 2009 when she moved toMontréal to continue her studies and career in that city. She was the beneficiary of a trust fund set up in her name and of investments heldon her behalf. Both were being administered by Dr. Price. It was at this time that Dr.

Price determined, because of the financial resourcesavailable to his daughter, he should be relieved from the obligation to pay Ms. McCulloch table guideline and

section 7 child support. [11] As a result of this proceeding it is now known that the parties daughter worked part-time in a coffee shop in 2010 and possiblyin 2011. In 2010 she completed an income tax return declaring an income of $5,900.00. Ms. McCulloch testified in her affidavit that theirdaughter also received tips but her information does not allow for an accurate calculation of their impact upon their daughter’s overall income.

Also missing is any detailed 2009, 2010 and 2011 to August 31st analysis of their daughter’s expenses for easy comparison tothe monies available to her to establish whether she had a deficit that required her father to continue to pay child support. This wasinformation that should have been provided by Ms. McCulloch because she has the burden of proving their daughter remained adependent child until the date of this hearing. (MacLennan v. MacLennan , 2003 NSCA 9 (N.S. N.A.)). Although Ms.

McCullochprovided some information about her daughter’s circumstances and some information about money she provided to her daughter, therequisite analysis required to prove that her daughter remained dependent child is absent. She has not proven that the child support shereceived and allegedly sent to her daughter was in fact needed by her daughter. [12] Since July 24, 2009 the parties daughter has had sufficient financial means to pay for all of her educational costs and herpersonal living costs. She had this means even if she did not receive the child support paid to her mother.

The reason why I say she hadsufficient financial means to meet all of her financial needs is because she was the sole beneficiary of funds invested on her behalf that

could have been totally under her control had she requested. She chose to leave these funds under her father’s management. These fundswere in fact used to pay for her education and other expenses since July 2009. Additional money could have been advanced if required.This young woman now has funds invested on her behalf of an approximate value of $100,000.00. She has no debt. [13] Under these circumstances, I have decided the parties’ daughter was not, on July 24, 2009, a “child of the marriage” and therequirement that Dr.

Price pay child support terminated on that date. [14] The next issue I must decide is whether to terminate spousal support. [15] Entitlement to spousal support and the factors and objectives to consider in making an award is governed by

section 15.2 of theDivorce Act R.S. , 1985, c.3.

Section 15.2(6) creates four statutory support objectives. The Supreme Court of Canada in Moge v. Moge (SCC), [1992] 3 SCR 813. and Bracklow v. Bracklow (SCC), [1999] 1 SCR 420 confirmed that allfour objectives are to be considered in every case but no one objective has paramountcy. If any one objective is relevant upon the facts, aspouse is entitled to receive support. These same objectives are to be considered when the court is requested to vary a spousal supportorder. (Divorce Act R.S. , 1985, c.3., s.17(7)) In Bracklow v.

Bracklow, supra, the Supreme Court analysed the statutory objectives and held that they create three rationales forspousal support: 1. Compensatory support to address the economic advantages and disadvantages to the spouses flowing from the marriage or from theroles adopted in marriage. 2. Non-compensatory dependency based support, to address the disparity between the parties, needs and means upon marriagebreakdown. 3. Contractual support, to reflect an express or implied agreement between the parties concerning the parties’ financial obligations toeach other.

These rationales take into account both the factors set out in s. 15.2 (4) and the objectives set out in s. 15.2 (6) and those same objectivesfound in s. 17 (7). [16] The Supreme Court did recognize that many claims have elements of two or more of the stated rationales. It confirmed thatanalysis of all of the objectives and factors is required. Pigeonholing was to be avoided. [17] In this decision I will not comment on the contractual objective. It is not a factor in the case before me.

McLachlan, J. inBracklow, supra, indicated that the basis for a spouse’s support entitlement also affects the form, duration, and amount of any supportawarded. [18] Examples of circumstances that may lead to a decision that a spouse is entitled to compensatory support are:

a) a spouse’s education, career development or earning potential have been impeded as a result of the marriage because, for example: - a spouse has withdrawn from the workforce, delays entry into the workforce, or otherwise defers pursuing a career or economicindependence to provide care for children and/or a spouse; - a spouse’s education or career development has been negatively affected by frequent moves to permit the other spouse to pursuethese opportunities; - a spouse has an actual loss of seniority, promotion, training, or pension benefits resulting from an absence from the workforce forfamily reasons.

b) a spouse has contributed financially either directly or indirectly to assist the other spouse in his or her education or careerdevelopment. [19] Ms. McCulloch argues that she still has a compensatory entitlement to spousal support because: - She has not yet received sufficient spousal support to permit her any savings for future financial security and thus her economic disadvantage flowing from the marriage continues. - The value of her spousal support has been diminished because: - Mr. Price failed to pay an amount of $8, 233.00 owed to her pursuant to the terms of the Corollary Relief Judgment; - Mr.

Price failed to pay the proper amount of child support; - Mr. Price delayed in completing the rollover of R.R.S.P. funds and he, not she, became the beneficiary of the interest earned onthose funds in the meantime; - There was no cost award after the hearing held in 2004 and she therefore had no contribution toward her significant legal expense. - The Spousal Support Guidelines would have provided her a much greater spousal support award than she received. [20] In order to evaluate Ms.

McCulloch’s claim I must be guided by the decision of Justice MacLellan in respect to his findingsabout these claims at the hearing that resulted in the Corollary Relief Judgment dated April 21, 2005. I am not an appeal court. I cannotbase a compensatory claim upon evidence and submissions rejected by Justice MacLellan when they were brought before him. I musttake his findings into consideration when I decide whether there is a continuing entitlement to receive spousal support. [21] Justice MacLellan’s decision was reported as McCulloch v Price (2004) 2004 NSSC 138 , 224 N.S.R. (2d) 180. Hedid consider how Ms.

McCulloch’s request to receive sufficient support to provide savings for future financial security should beaddressed. He said: 55 The petitioner submits that I should factor in a monthly amount for her future security. She offers the case of Mosher v. Mosher,[1999] N.S.J. No. 202, where Goodfellow, J. of this Court commented that he felt that “security is a component of spousal support”.

Iconcluded that there may be cases where a spouse can advance an argument that he or she should be given support that is beyondobvious needs in order to build up security in the future after the support stops. 56 While I am prepared to accept that argument to some extent I believe it should only be factored in where a payor has clear ability topay additional support and the property settlement between the parties does not provide adequately for the payee’s future need.

I alsorecognize that Meaghan lives with her mother in a home which has total income of about $36,000.00 while the respondent’s householdincome is over $200,000.00 even after the payment of significant child support. 57 Considering all of the circumstances here, I conclude that the petitioner here has some need and that the respondent has an abilityto pay. I would order spousal support in the amount of $1,500.00 per month...

[22] I conclude that Justice MacLellan did consider the issue of Ms. McCulloch’s future security in determining her entitlementand the quantum of spousal support. The implications of Justice MacLellan’s decision are that the assets received by Ms. McCulloch as aresult of the property division satisfied the request for financial security.

I say this because he bases his decision on her “need” and didnot give her financial support “that is beyond obvious needs in order to build up security in the future after the support stops” although herecognized that was an option he could have chosen in assessing compensatory entitlement and the quantum of spousal support requiredto eventually compensate the spouse. [23] The compensatory entitlement finding made by Justice MacLellan was related to the disadvantage suffered by Ms. McCullocharising from her parenting responsibilities.

He said: 41 the respondent suggests that the petitioner is not entitled to spousal support because she’s not suffered an economic disadvantageas a result of the marriage and also that she simply does not have a need for support based on her budget. He also suggests that she couldearn more income if she wishes to do so and therefore could become self-sufficient.

He suggests that her lifestyle where she works part-time and paints could generate more income if she wished to do so. 42 the petitioner submits that she is entitled to support based on all the models as set out in the Supreme Court of Canada in Moge v.Moge (SCC), [1992] 3 SCR 813.

She suggests the parties agreed that she would continue being an artist despite the factthat it didn’t really generate significant income during the marriage and therefore it is not fair for the respondent to now suggest that sheshould give up that occupation and do things that are more financially rewarding.... 44 the petitioner is presently 46 years old.

She has been married to the respondent for 10 years the evidence is that after the birth oftheir daughter in 1989, the petitioner continued to basically do what she had done previously, that is, work as an artist for which shegenerated a small amount of money... after the separation she started teaching a course at St. F. X.

University and presently does that ona part-time basis... 45 I am not satisfied that the petitioner has suffered any serious economic disadvantages as a result of her marriage to the respondent.However, I conclude that as a result of the separation from the respondent she has assumed more childcare responsibilities for theirdaughter... 46 I interpret subsection (b) ( of

section 15.2(6) of the Divorce Act ) to recognize that if one spouse is limited in her ability tobecome self-sufficient because of childcare responsibilities that could entitle her to spousal support... 50 I conclude that the petitioner should not be forced to work full-time at a better paying job as suggested by the respondent insteadof part-time and as an artist which is the present arrangement. I believe it provides her with the flexibility to ensure that she can care forMeaghan’s needs.

That was basically the arrangement the parties had during the marriage. [24] After determining the amount of spousal support he thought appropriate justice MacLellan concluded as follows: 59 I am not prepared to put a termination date on this award spousal support, however, I would anticipate that once Meaghan is nolonger dependent the respondent would be entitled to request termination considering the fact that I’ve made the award mainly becauseof the petitioner’s parental obligation to Meaghan. [25] I am satisfied that Justice MacLellan considered the particulars of Ms.

McCulloch’s compensatory entitlement to receivespousal support. The disadvantages for which she was to receive compensation were those that flowed from her childcareresponsibilities. Those responsibilities did and would, for a further period of time, prevent her from entering the workforce on a full-timebasis. However, her compensatory entitlement may end when Meaghan was no longer dependent. It is not my role in this application tonow find additional reasons that may have supported a different ruling on compensatory entitlement. Those arguments should have beenmade at the original hearing.

[ 26 ] Whether a compensatory claim has been satisfied by a previous order is a proper subject in the hearing before me. However, Justice MacLellan’s decision also appears to have resolved that issue. If her compensatory entitlement existed because of her child rearing responsibilities, when those ceased, so should her compensatory claim. Diminishment of the value of her spousal support award and the fact that Ms. McCulloch may have been paid more spousal support under the Spousal Support Advisory Guidelines are not indications that the compensatory claim remains unsatisfied.

The entitlement issue is not a dollar issue. No particular amount of money is attached to a determination whether compensatory entitlement remains. In addition it must be remembered that the Spousal Support Advisory Guidelines are not intended to, and do not, establish entitlement. They address the issue of quantum. [ 27 ] In 2007 the parties daughter moved to British Columbia and was no longer under her mother’s direct care. When that happened Ms. McCulloch was free to pursue full time employment. I have decided that on July 24, 2009 Meaghan was no longer a dependent child .

By July 24, 2009 I am satisfied that Ms. McCulloch’s compensatory entitlement to spousal support was satisfied and at an end. [ 28 ] Ms. McCulloch argues that she continues to have a non-compensatory entitlement to spousal support because she has insufficient income to provide for her financial needs. [ 29 ] Although Dr. Price is requesting a termination of spousal support from the date of his application, assessing Ms. McCulloch’s non-compensatory entitlement to spousal support will require an analysis of her efforts to achieve self-sufficiency.

Clearly by 2007 her parenting responsibilities would no longer prevent her from engaging more actively in the workplace. Therefore I’ve determined that an analysis of her income situation since then is important. [ 30 ] In 2007 Ms. McCulloch’s employment income was $10,033.00. She had a gross income received from her painting of $523.00, but her net was negative ($6121.00). In 2008 her employment income was $16,558.00; her gross income from her painting career was $7,607.00, her net was $4,191.00.

In 2009 her employment income was $10,337.00; her gross income from painting was $7,000.00, her net was $5,117.00; in 2010 her employment income was $164.00; her gross income from painting was $5,376.00, her net $2.321.00. In 2010 she also had rental income of $12,000.00 with an expected net income of $8,495.00.

In 2011 she will continue to receive the rental income, she will receive approximately $5,000.00 from a painting she has been commissioned to complete and she has potential income from students taking painting classes and from a short term teaching contract she has accepted although exact income amounts are not presently known because these are new initiatives on her part. [ 31 ] Ms. McCulloch Statement of Expenses filed December 29, 2010 shows a relatively modest budget. She requires approximately $32,000.00 per year to meet that budget.

This budget includes expenses relating to the rental property. [ 32 ] Since 2007 Ms. McCulloch has never earned $32,000.00. She reduced her capacity to earn income from teaching at St. F.X. University when she moved to Halifax in 2010. She testified the move was necessary to care for her ailing mother. She does not explain why her mother could not have moved to Antigonish to live with her there.

The evidence about her mother’s health does not satisfy me that it required her to move to Halifax. [ 33 ] If the mere fact that a former spouse continued to have a deficit in his or her financial budget justified the continuation of non- compensatory entitlement for spousal support many spousal support awards would continue for the lifetime of the recipient. The same can be said in respect to disparity of income between former spouses.

These factors must be analyzed in the context of the length of the parties marriage, the period of time over which spousal support has been paid, and the efforts made by the recipient toward self- sufficiency. [ 34 ] In this situation Dr. Price has been paying spousal support to Ms. McCulloch for 10 years. He has shouldered the responsibility of providing the majority of the income from which their daughter has been supported and educated. Ms. McCulloch has never had significant income to contribute. [ 35 ] Justice MacLellan determined that the parties relationship lasted 10 years.

I do not accept the proposition that a 10 year relationship is a lengthy relationship that may justify, in an of itself, the continuation of spousal support beyond the number of years of the existence of the relationship. I consider this marriage to be a mid length marriage. Generally a non-compensatory claim in a short to mid length marriage is satisfied when a spouse becomes self-supporting or when support has been paid for a period equal to the number of years the parties were married or were in the relationship.

In such cases, neither the payor spouse’s greater income nor the inability of a recipient spouse to replicate a previous lifestyle, is a factor entitling a spouse to continuing support .

[ 36 ] Non-compensatory support, in a mid length marriage, generally anticipates that, at some point, the payee will be on his or her own, even if unable to maintain himself or herself. The support is not to compensate for career losses but to ease the adjustment to financial separation . When there are clear indications that a spouse is making meaningful efforts to become self-sufficient, but has not quite made it, a court may continue spousal support to allow that transition to occur. [ 37 ] If Ms.

McCulloch had been making efforts to become self-supporting since 2007 and if spousal support for a further period of time was required to assist her transition either to more remunerative employment or a reduced lifestyle, a continuation of her entitlement to spousal support might be justified. Here however it appears nothing has changed in her attitude about her own self support since the hearing held before Justice MacLellan. Ms.

McCulloch’s testimony clearly indicated that she believes she is entitled to continue her artistic career even though it does not provide her with sufficient income to meet all of her financial needs. She believes this was the arrangement under which she married Dr. Price and she believes he should be held to that arrangement and continue to provide her with financial support. [ 38 ] Ms. McCulloch has had ample time to reeducate herself so that she might find more remunerative employment.

She has had ample time to find a way to use her present education and skills to provide her with sufficient income to meet her financial need. Only now has she begun to pursue additional income earning opportunities even though it should have been readily apparent to her, when she was served with Dr. Price’s application, that her spousal support might be terminated. If Ms. McCulloch continues on her present path she may never be fully self-supporting. I am not prepared to terminate Ms. McCulloch’s spousal support at the date of Dr. Price’s application. However, Ms.

McCulloch has had two years since that time to pursue self-sufficiency and she has only recently started that process. The initiatives she has undertaken are still based upon her intention to pursue her painting career and there is no indication that those initiatives will likely ever provide her with sufficient income to meet her financial need. She will need to find a way to reduce her financial need if her income remains insufficient.

I am not satisfied that another year or more of spousal support is required to permit her to pursue self-sufficiency or to adjust to the ultimate termination of spousal support. [ 39 ] I am satisfied that Dr. Price has paid spousal support to Ms. McCulloch for a long enough period time to have permitted her to become self-sufficient or to readjust to the new economic circumstances arising out of the breakdown of their relationship. On October 1, 2011 Dr. Price’s responsibility to pay spousal support will terminate because Ms. McCulloch is no longer entitled to non-compensatory spousal support. J.