McKeen v. McKeen, 2011 ONCJ 602

Milton Registry No. 228/11 DATE: 2011·XI·25 Citation: McKeen v. McKeen, 2011 ONCJ 602 ONTARIO COURT OF JUSTICE BETWEEN: AUDREY LORRAINE McKEENApplicant — AND — JOHN PATRICK McKEENRespondent Before Justice Sheilagh M. O’Connell Heard on 9 November 2011 Reasons for decision released on 25 November 2011 STATUTES AND REGULATIONS CITED Family Law Rules, O. Reg. 114/99 [as amended], subrule 15(28). CASES CITED Clark v. Vanderhoeven, 2011 ONSC 2286, [2011] O.J. No. 1759, 2011 Cars​well​Ont 2577 (Ont. Fam. Ct.). Connell v. Connell, 2006 PESCTD 14, 257 Nfld. & P.E.I.R. 217, 776 A.P.R. 217, [2006] P.E.I.J.

No. 12, 2006 Cars​well​PEI 87 (P.E.I.Tr. Div.). Crawford v. Dixon, , 14 R.F.L. (5th) 267, [2001] O.T.C. 86, [2001] O.J. No. 466, 2001 Cars​well​Ont 364 (Ont. Fam.Ct.). Ferguson v. Ferguson, , 50 R.F.L. (6th) 363, [2008] O.J. No. 1140, 2008 Cars​well​Ont 1676 (Ont. S.C.). French v. Woods, (1992), (ON SC), 42 R.F.L. (3d) 345, [1992] O.J. No. 2017, 1992 Cars​well​Ont 294 (Ont. Gen.Div.). Macy v. Macy and Johnston (1984), (ON CA), 3 O.A.C. 369, 40 R.F.L. (2d) 11, [1984] O.J. No. 95, 1984 Cars​well​-Ont 238 (Ont. C.A.). AUTHORS AND WORKS CITED Rogerson, Carol J. and D.A.

Rollie Thompson: Spousal Support Advisory Guidelines, (Ottawa: Minister of Justice and Attorney Generalof Canada, July 2008). Jeffrey S. Hart ....................................................................................................... for the applicant David Goodman .................................................................................................. for the respondent JUSTICE S.M. O’CONNELL:— 1: INTRODUCTION [1] The applicant, Audrey McKeen, has brought an urgent motion for spousal support within her motion to changeproceedings. Ms.

McKeen is seeking a temporary order increasing the spousal support that she receives from $2,500.00 per month to$7,000.00 per month, effective immediately, pending the final determination of her motion to change. The relief that Ms. McKeen isseeking in her urgent motion is essentially the same relief that she is seeking on a final basis in these proceedings.

2: ISSUES [ 2 ] The issues before the court are: 1. Does this court have jurisdiction to make a temporary variation of spousal support in a motion to change spousal support pursuant to a separation agreement between the parties? 2. If the court does have jurisdiction, what is the legal test to be applied, and do the facts of this case warrant the making of a temporary spousal support order varying the original amount for support in the agreement pending the final hearing of the motion to change? 3: APPLICANT’S POSITION [ 3 ] Ms.

McKeen submits that her motion for temporary spousal support is urgent because, at the time that her motion was brought, she had not received any spousal support from the respondent, for the month of October 2011, she is currently running a deficit of approximately $4,000.00 monthly and she has very limited funds. [ 4 ] She further submits that there has been the following changes in circumstances since the parties signed their separation agreement: (

i) She is no longer receiving child support from Mr. McKeen, or alternatively, it has been reduced substantially; (ii) Mr. McKeen’s income for 2011 has increased to well beyond $200,00.00; (iii) Ms. McKeen has multiple sclerosis (MS) and her health has deteriorated significantly since the spousal support was agreed to between the parties. 4: RESPONDENT’S POSITION [ 5 ] The respondent, Mr. McKeen, opposes the motion and submits that an interim motion within a motion to change proceedings can only be brought in clear cases of urgency and hardship, which he submits is not the case here. Mr.

McKeen submits that this interim motion is improper and that Ms. McKeen is attempting to circumvent the process of the court since it is the same relief that she is seeking in the final hearing. Mr. McKeen further submits that, in any event, Ms. McKeen has not established a material change in circumstances that warrants an increase in spousal support payable to her. 5: BACKGROUND [ 6 ] Ms. McKeen is 50 years old and Mr. McKeen is 49 years old. The parties were married on 27 December 1986 and separated on 24 March 2004, after 18 years of marriage. They have two children, Meagan, age 20 and Alexandra, age 17.

Both children currently reside with the father, although Meagan is now a full-time student at the University of British Columbia and resides with the father during the summer and holidays. [ 7 ] Ms. McKeen suffers from the debilitating disease of multiple sclerosis (MS) and is unable to work. Her only source of income is the support that she receives from Mr. McKeen and CPP disability benefits. Mr .McKeen was employed until recently with Phillips Electronic Ltd. in Markham, Ontario.

In 2010, it is not disputed that his gross annual income was $175,615.30. [ 8 ] On 27 August 2007, the parties entered into a separation agreement. At the time of the execution of the original agreement, both parties were represented by counsel. It is not disputed that, at the time the parties entered into the agreement, Ms. McKeen had already been diagnosed with MS and was receiving disability benefits. She was unable to work. Both children were also primarily residing with Ms. McKeen at that time. [ 9 ] The separation agreement provides that Mr. McKeen shall pay $2,073.00 per month in child support to Ms.

McKeen for both children, based on his 2005 income of $157,094.76, so long as both children continue to have a permanent residence with her. The parties also agreed that Mr. McKeen would pay spousal support to Ms. McKeen in the amount of $2,500.00 per month on an indefinite basis, until Ms. McKeen remarried, or cohabited continuously in a spousal relationship of two years. Ms.

McKeen continues to live in the former matrimonial home, which was transferred to her upon the execution of the separation agreement. [ 10 ] The agreement also provides the following regarding any change to the spousal support provisions: 5.3 The wife agrees that the amount of spousal support will not be adjusted until the husband’s income exceeds $200,000.00 per annum. 5.4 The quantum of spousal support may be adjusted in the event of a material change in circumstances. [ 11 ] By 2009, both children were living with their father. It is not disputed that, despite the change in the children’s residence, Mr.

McKeen continued to make monthly child support payments to Ms. McKeen, in the amount of $1,537.00, although Ms. McKeen characterizes these payments as “ ex gratia .” Currently, Ms. McKeen’s total month income is as follows: $2,500.00 in spousal support (taxable) $1,537.00 in child support or ex gratia (non-taxable) $1,096.00 in CPP disability benefits [1]

$5,133.00 gross monthly or $61,596.00 gross income annually [12] As indicated, in 2010, Mr. McKeen’s gross annual income from Phillips Electronic was $175,613.30. In 2011, up untilOctober 2011, Mr. McKeen’s gross income was $154,880.35. However, on 9 August 2011, effective on 3 October 2011, Mr. McKeenwas laid off by his employer and received a severance package of $113,600.00. This severance payment represents a settlement withPhillips whereby it agreed to pay a lump sum to Mr. McKeen that represents his base salary with no bonuses for 10.5 months from 9August 2011 to the end of May 2012. [13] Ms.

McKeen takes the position that Mr. McKeen’s total income for 2011 is $268,480.00 ($154,880.00 base plus theseverance of $113,600.00). Mr. McKeen takes the position that his income for 2011 should be calculated as $197,688.00 because atleast 5.96 months of the severance package should be attributed to 2012.

At this time, he projects his 2012 income to be $71,345.00based on the severance he received, unless he finds alternate employment. 6: THE LAW AND ANALYSIS [14] The threshold issue that I must determine is whether this court has jurisdiction to make a temporary order varying thespousal support pending a final determination of Ms. McKeen’s motion to change. Subrule 15(28) of the Family Law Rules, O.

Reg.114/99, as amended, makes it clear that the court does have jurisdiction to hear an interim motion in a motion to change a final order oragreement. [15] The case law supports the principle that a court can make a temporary variation of a final spousal support provision in amotion to change when the moving party makes out a clear case for relief and demonstrates hardship and urgency. In Crawford v.Dixon, , 14 R.F.L. (5th) 267, [2001] O.T.C. 86, [2001] O.J. No. 466, 2001 Cars​well​Ont 364 (Ont. Fam. Ct.), the courtstated as follows at paragraph [14], after a careful review of the case law: . . .

On balance, although the court should not make it a practice to vary final orders on an interim basis,if the moving party makes out a clear case for relief and proves that the need for the variation is urgent,there seems to be little reason to deny the power to vary. Such a denial might encourage the other sideto delay. [16] In French v. Woods, (1992), (ON SC), 42 R.F.L. (3d) 345, [1992] O.J. No. 2017, 1992 Cars​well​Ont294 (Ont. Gen.

Div.), the court held that in clear cases of hardship or where it would be incongruous or absurd to do otherwise, the courtcan intervene to vary a final order, pending a final hearing. However, in the case of spousal support, a prima facie material change incircumstances must also first be demonstrated. The court should proceed cautiously with a temporary change when there are materialissues in dispute that require a trial. See Connell v. Connell, 2006 PESCTD 14, 257 Nfld. & P.E.I.R. 217, 776 A.P.R. 217, [2006]P.E.I.J. No. 12, 2006 Cars​well​PEI 87 (P.E.I. Tr. Div.). [17] In Macy v.

Macy and Johnston (1984), (ON CA), 3 O.A.C. 369, 40 R.F.L. (2d) 11, [1984] O.J. No. 95,1984 Cars​well​Ont 238 (Ont. C.A.), the Ontario Court of Appeal stated the following regarding the interim variation of support in aseparation agreement at paragraph [13]: Interim applications should be discouraged where a spouse is faithfully fulfilling obligations incurred bythe terms of a separation agreement which provide a reasonable standard of living for dependantshaving regard to all the circumstances.

Such applications should not be used to “fine tune” the rightsand obligations of the parties to an agreement in order to take into account changes in circumstancessince the execution of the agreement. Such applications should not be made unless it is clear that thefailure to make an interim order which has the effect of varying the terms of a separation agreementwould work a hardship or injustice on one of the parties having regard to their means and needs. . . .

Itmay very well be that the wife in the present case will be entitled to relief on grounds which she mayprove at trial but, in my view, the evidence available to the Master on this application did not justify theexercise of his discretion in making an order to vary the terms of a separation agreement which appearsto provide a reasonable standard of living for his dependants, even acknowledging that they are entitledto a high standard of living.

The trial will be a more appropriate occasion to determine whether itprovides a style of living to which they were formerly accustomed and now claim to be entitled. [18] In

summary, after a careful review of the case law, it appears that the weight of authority supports the principle that thecourt does have jurisdiction to make an interim variation of a final spousal support order or agreement. In considering whether thereshould be an interim variation of a final spousal support order, the moving party has to demonstrate a prima facie case, there must be aclear case of hardship or urgency and the moving party must come to the court with clean hands.

The court looks to the means of eachparty and whether the continuation of the final order or agreement until trial would be incongruous or absurd. See also Clark v.Vanderhoeven, 2011 ONSC 2286, [2011] O.J. No. 1759, 2011 Cars​well​Ont 2577 (Ont. Fam. Ct.). [19] In my view, for the following reasons, Ms. McKeen has not established a clear case of the hardship or urgency necessaryto warrant a temporary variation of the spousal support pending a trial of the issues: (

a) Despite her claim that she received no spousal support from Mr. McKeen for the month of October, hence requiring theurgent motion, Ms. McKeen did receive the full amount of spousal support ($2,500.00) in the month of October from Mr.McKeen, albeit in two instalments, which has been the practice that the parties had adopted for several years in accordancewith Mr. McKeen’s bi-monthly pay periods at work. It is my understanding that Mr. McKeen has now agreed to pay thesupport upon the first of each month as he is no longer working and has received a lump-sum severance.

(

b) Although both children are no longer residing with Ms. McKeen, Mr. McKeen continues to pay child support or an “exgratia” payment in the amount of $1, 537.00 to Ms. McKeen, given the impact of the loss of the child support income toMs. McKeen. This is tax-free income, unlike the spousal support received by Ms. McKeen. (

c) The total amount of support that Mr. McKeen pays to Ms. McKeen is therefore $4,037.00 each month. Further, Ms.McKeen is not paying any child support to Mr. McKeen, who continues to support both children, although Meagan didreceive a full scholarship to the University of British Columbia. (

d) In addition to the income received from Mr. McKeen, Ms. McKeen receives disability income of either $1,096.00 monthly(or $1,855.00 monthly according to her sworn financial statement and the SSAG calculations prepared by her counsel), soher total monthly income from all sources currently is at a minimum $5,133.00 monthly or $5,892.00 monthly. (

e) Ms. McKeen states that she is operating at a monthly deficit of $4,000.00, which causes her hardship and that her homerequires costly repairs and maintenance that she simply cannot afford. I have carefully reviewed Ms. McKeen’s swornfinancial statement and the most recent expenses that she has attached as an exhibit to her sworn affidavit in support of hermotion. It is clear that the majority of the monthly operating deficit claimed by Ms. McKeen is regarding her home, (theformer matrimonial home), which she values at $540,000.00 in her financial statement. According to the evidence filed byMs.

McKeen, she is incurring approximately $1,500.00 monthly in ongoing maintenance costs (for snow removal, poolcare, tree pruning, spring clean up, gardening, appliance and bathroom fixtures, etc.), and $670.00 monthly for houserepairs. She is also paying $2,441.00 in fixed monthly expenses for mortgage, property taxes and utilities. This isapproximately $4,611.00 in total housing monthly expenses for a spacious, five-bedroom home on a very large lot that Ms.McKeen lives in alone.

According to her evidence, the home is in a state of disrepair that she cannot afford to fix, nor canshe physically do herself, given her disability. She does not have tenants to generate income because this may pose a threatto her health. Ms. McKeen has stated emphatically that she “has no intention of ever selling the home.” (

f) Although the court sympathizes with Ms. McKeen, given her understandably strong emotional connection to her home, it isno longer a realistic or affordable option for Ms. McKeen to continue living in a five-bedroom home that costs almost$5,000.00 per month in housing expenses, particularly given that both children have left the former family home quitesome time ago. Ms. McKeen can find affordable options within her same community that will accommodate her specialneeds and allow her to maintain a comfortable standard of living. [20] In accordance with the legal principles established by the case law, Ms.

McKeen must also demonstrate a prima faciecase for a material change in circumstances. There is no question that a termination of child support can create a material change incircumstances warranting an increase in spousal support. See Ferguson v. Ferguson, , 50 R.F.L. (6th) 363, [2008]O.J. No. 1140, 2008 Cars​well​Ont 1676 (Ont. S.C.). This is particularly true in Ms. McKeen’s tragic circumstances as it is clear that sheis incapable of working as a result of her MS. Mr. McKeen seems to tacitly acknowledge this, given that he continues to make voluntarypayments of child support or ex gratia payments to Ms.

McKeen, in addition to his spousal support payments, even though both childrenare now primarily residing with him. [21] However, in her motion to change, Ms. McKeen is seeking to increase her spousal support from $2,500.00 per month to$7,000.00 per month, as she takes the position that Mr. McKeen’s income for 2011 is $268,000.00. In my view, this is a triable issueand Ms. McKeen has not established a prima facie case that Mr. McKeen’s entire severance payment should be included in his 2011income for support purposes.

Although I agree that severance payments are considered income for support purposes, the severancepayment that Mr. McKeen received represents a lump-sum payment of his base salary with no bonuses for a 10.5 month period from 9August 2011 to 31 May 2012. Mr. McKeen takes the position that his income for 2011 should be calculated as $197,688.00 because atleast 5.96 months of the severance package should be attributed to 2012. At this time, Mr. McKeen projects his 2012 income to be$71,345.00 based on the severance he received, unless he finds alternate employment. [22] This is an equally fair analysis of Mr.

McKeen’s 2011 income and a triable issue. If Mr. McKeen’s income for 2011 isdeemed to be $197,688.00, then according to the Spousal Support Advisory Guidelines, (Ottawa, July 2008) (SSAG) calculationsprovided, Ms. McKeen should be receiving spousal support in a range of $3,009.00 to $4,011.00 per month, which is the range ofsupport that she is currently receiving from Mr. McKeen, albeit in a combination of spousal support and child support or ex gratiapayments.[2] As well, even if we accepted that Mr. McKeen’s income for 2011 was $268,000.00, then the SSAG calculations[3]prepared by Ms.

McKeen in aid of her urgent motion are not even $7,000.00 per month at the high range, and are $5,200.00 per month atthe mid-range. [23] The other triable issue in this matter arises from the provisions in the separation agreement that address when a materialchange in circumstances is triggered to warrant an increase in spousal support.

As previously set out, the provisions provide as follows: 5.3 The wife agrees that the amount of spousal support will not be adjusted until the husband’sincome exceeds $200,000.00 per annum. 5.4 The quantum of spousal support may be adjusted in the event of a material change incircumstances. [24] These two provisions appear to be contradictory and it is very unclear what the parties intended in agreeing to includeboth of these provisions in their separation agreement. Counsel for Ms.

McKeen submits that these two provisions should be readtogether and that the parties would clearly have negotiated a different amount of spousal support if child support was not payable to Ms.McKeen. In my view, common sense dictates that this is probably the correct analysis of these two provisions, and consistent with legalprinciples. However, this does not change the fact that the clear contradiction between these two provisions is a triable legal issuerequiring a trial of the issues that cannot be determined on this urgent motion. 7; CONCLUSION [25] For the above reasons, Ms.

McKeen’s urgent motion for an interim variation of the spousal support agreement isdismissed. Mr. McKeen is currently paying global support to Ms. McKee in the amount of $4,037.00 per month, which in my view, isreasonable in the current circumstances pending trial and does not trigger a hardship claim. However, should Mr. McKeen terminate the

voluntary child support or ex gratia payments that he is also making in addition to the spousal support payments before trial, then Ms. McKeen’s motion can be renewed pending a trial. [ 26 ] Further, I order that there should be an immediate and expedited trial of the issues raised in Ms. McKeen’s motion for change. Trial dates can be arranged at the next appearance in this matter scheduled for 23 January 2012 at 10:00 a.m., unless the parties have resolved the outstanding issues in the interim.

If the parties would like an earlier trial management conference date, then counsel should request this by way of a Form 14B motion, which can be faxed to the court. [ 27 ] If the either party seeks costs, then they shall serve and file costs submissions, with a bill of costs and offers to settle attached, within 14 days. Any written response to costs submissions shall be served and filed within 10 days.