Salewski v. Culetta, 2011 ONCJ 524

Cambridge Registry No. 103247 DATE: 2011·III·07 CITATION: Salewski v. Culetta , 2011 ONCJ 524 ONTARIO COURT OF JUSTICE BETWEEN: DARLENE SALEWSKI, Applicant, — AND — PAUL CULETTA, Respondent. Before Justice Paddy A.

Hardman Heard on 17 December 2010 and 18 January 2011 Reasons for Judgment released on 7 March 2011 SUPPORT ORDERS — Entitlement — Spouse — Objective of spousal support — Mix of compensatory and non-compensatory support — Parties had 30-year common-law relationship during which “wife” was not only primary but often only caregiver for child (now effectively independent), while “husband” worked away from home for large stretches of time, leaving her responsible for upkeep of child and home — “Wife” worked and contributed to household expenses but always made substantially less than “husband” — When parties separated 11 months ago, “husband” had, without warning, terminated “wife’s” access to health and life insurance benefits from his employer, stopped paying her car insurance and paid no spousal support until 4½ months ago when court ordered him to make interim payments of $3,205 per month — Court found that, by having looked after family and household, “wife” had contributed to “husband’s” ability to further his employment by accepting work far from home — Parties had been family unit for over 30 years and it was therefore appropriate to consider equalizing their standard of living — In light of “wife’s” age (50 years), education and unsuccessful efforts to date, court found it unlikely that she would ever have income that she earned before separation, whereas “husband” was foreman with utility contractor that had employed him for over 30 years and had been in position to earn more than “wife” and showed every prospect of doing so in future — “Husband” had new girlfriend whose expenses he started to pay and had fraudulently added her to his benefits at work, but he owed no legal obligation to support her — In course of this case, “husband’s” financial disclosure was delayed, incomplete and sometimes inaccurate; he avoided producing simple but key information without explanation for his failure to do so — In addition, his evidence changed as the case progressed — For example, he had suddenly announced that he shared his rental business with “silent partner” whose existence could not be confirmed but, on his tax returns, he claimed entire profit of this business — Court concluded that he was sole owner of business all of whose profits belonged to him — Immediately after separation, “husband” started to make major purchases of items that were previously unneeded that could only be explained as deliberate attempt show large debts on his financial statement and thus to minimize his disposable income at trial — On basis of information before it, court set “husband’s” annual earnings at $117,550 and made final order for “wife’s” support of $3,400 per month — Court also directed “husband” to restore “wife” to his extended health benefits through his employer or, in alternative, pay to her $148.90 per month to purchase equivalent health coverage — He was also ordered to restore “wife” as sole beneficiary of any life insurance policy available through employer.

STATUTES AND REGULATIONS CITED Family Law Act , R.S.O. 1990, c. F-3, as amended],

section 21 ,

section 30 , subsection 33(8) and subsection 33(9) . Catherine A. Haber ................................................................................... counsel for the applicant Tara A. Lattanzio ................................................................................... counsel for the respondent [ 1 ] JUSTICE P.A. HARDMAN:— The matter was heard on 17 December 2010 and 18 January 2011. The applicant

sought spousal support and coverage under the respondent’s existing health and life insurance. 1: BACKGROUND [ 2 ] The parties had a thirty-year common-law relationship from May 1980 to April 2010. Together they have a child who is in her last year of university and is expected to be independent. The applicant is fifty years of age and the respondent is almost fifty- five years of age. Both the parties are currently working. They separated on 1 April 2010. [ 3 ] During their relationship, the parties had moved from Sudbury to Cambridge for the respondent’s employment.

The applicant stated that, while she had worked and contributed to the household expenses, she had always made substantially less than the respondent. [ 4 ] The applicant testified that, although she had grade XII, she had not attended any post-secondary education. She told the court that, during the marriage, she was not only the primary caregiver for the child, she was often the only caregiver.

She noted that the respondent was sometimes away working for two thirds of the month or six months at a time and so she had to do everything: take care of the child and all her activities, shovel the driveway and take care of home maintenance. The applicant also told the court that she had refinished the floors as well as other jobs around the home. [ 5 ] The applicant testified that she had worked during the relationship in the position of clerk, secretary or receptionist although she took time off to have a child. She had worked for one company that was purchased by Sutherland-Schultz.

At the time of the sale, the selling owner gave a number of employees including the applicant a gift of $100,000 each. The applicant said that, after the taxes of $52,000 were paid, the balance was spent over the years on various household items. She testified that she had worked in total for Sutherland-Schultz a period of ten years. [ 6 ] After her employment at Sutherland-Schultz, the applicant worked at Siemens for eight years and by 2009, had reached the annual wage of $51,718.

In March 2010, days before the separation, the applicant was laid off due to downsizing at the company but was given a severance package of about $27,000, which after taxes was $18,500. [ 7 ] Although there was no division of property, the home was jointly owned with the mortgage being paid off in 2007 and, in July 2010, it was sold and the proceeds divided equally after the payment of the joint line of credit. Each party received about $81,000. The respondent closed the joint account. [ 8 ] The applicant used the $81,000 as a down payment to purchase a small semi-detached home.

She has a mortgage of $130,000 and lives alone. [ 9 ] At the time of trial, the applicant indicated that, other than the $6,925 left of the severance, she had no savings and no pension plan. [ 10 ] The applicant testified that, once she knew about the layoff, she had been searching for employment at job banks, on line and by distributing resumes. Eventually, she was able to find employment in mid-April through a friend making $10.25 per hour as a subcontractor being about $21,320 -$23,000 annually. She remains at that employment. Although she enjoys the work, she still is looking for other employment.

She is not hopeful given the economic times. [ 11 ] Although the parties separated on 1 April 2010, the applicant testified that they both remained in the home until June. The applicant told the court that the respondent took over the payment of the utilities because of her layoff. She also noted that the respondent came and went from the home during this time period. In June, when the applicant took her daughter and her daughter’s boyfriend to Cuba using some bingo winnings and savings, the respondent entered the home with his girlfriend and removed furniture, leaving a list of what else he wanted.

This note from the respondent but written by his girlfriend also told the applicant to call his lawyer if she wanted spousal support. The applicant testified that, when she asked why they could not arrange it without lawyers, he said that she would then get nothing. He did not agree to pay anything in the interim. [ 12 ] The respondent told the court that he continued to pay all utilities in the home until he left the home at the end of July when it was sold, although acknowledged cancelling the T.V and cable mid-June, the time that the applicant said the respondent moved out.

Later in his evidence, the respondent said that he had moved out in May but had attended the house while the applicant was away to pick up a few things as he still had the key to the house. [ 13 ] The applicant told the court that income tax is not deducted directly at her place of employment and that she also pays tax on the spousal support received. [ 14 ] Despite the separation in April, there was no spousal support paid by the respondent to the applicant until an interim order of 22 October 2010 at which time the respondent was ordered to pay $3,205/month commencing on 1 October 2010.

Given the severance package that she received, the applicant is not seeking retroactive support for the months between April and October of 2010. [ 15 ] The respondent testified that, although he had only completed grade VIII at school, he was a unionized heavy-equipment operator by trade. He said that he had worked with Aecon Utilities for over thirty years and was currently a foreman. He explained to the court that his work in the past had been made up of both mainline work, involving work on the bigger pipes, and distribution work, being work on the smaller pipes into people’s homes.

He said that, although he had worked about half and half over the last three years, there was no mainline work available now and that was the higher paying work. He also testified that most of the mainline work was outside of Cambridge. [ 16 ] The respondent also acknowledged that he was provided by his employer with a truck to drive. Although he said that it was not intended for personal use, it appears that it was considered to be a taxable benefit as he had it to drive back and forth to work.

The respondent also acknowledged that he had contributed $342,405.94 to his pension as of October 2010. He did not know or provide any documentation to the court about his pension’s full value. He did tell the court that he had contributed $13,809.46 to the pension in 2010 as of October 2010. [ 17 ] The respondent acknowledged to the court that he had a business known as Jessie Rentals, which was started on 5 November 2009. In his direct evidence, he told the court that he had a silent partner, Jeff Raspberry, with whom he shared the profits equally.

He said that the first piece of equipment was purchased for $5,000 from a friend and that he has to pay $175/month toward that debt, although he normally doubled that amount. The second Gator he bought new for $13,060 (plus taxes) and pays the dealer $350/month. As of 25 October 2010, the balance owing was $2,975.49. [ 18 ] The respondent told the court that the equipment was rented to his employer Aecon for $400/week generating $11,800 gross between November 2009 and December 2009. He said that, despite the only expense being the payments and the capital cost allowance, the business had yet to turn a profit.

However, later in his evidence he acknowledged that he had declared a profit of $9,497.91 on his income tax return for the 2009 tax year. The only costs claimed were $63.71 in interest and $1,948 in capital cost allowance. [ 19 ] He acknowledged that the applicant had requested confirmation of rental paid to Jessie Rentals but that he had not yet received that from Aecon.

By the resumption of trial a full month later, the respondent still did not produce confirmation from Aecon about the money paid to Jessie Rentals despite the request by correspondence on 14 December 2010. [ 20 ] In his cross-examination, the respondent admitted that he had always taken the position that he was the 100% owner of the rental company and had never mentioned any partner and that, despite filing financial statements and being examined prior to trial, the first time a partner was mentioned was in his direct evidence at trial.

He then acknowledged that he claimed the full amount of income on his income tax return but said that the partner paid him his half of the taxes directly. Despite all of this, he then said that he was in fact the owner of the business! [ 21 ] The respondent produced no independent confirmation of the arrangement from the so-called silent partner and no documents to confirm any partnership. [ 22 ] It appears from the evidence of the respondent and the documents filed that, on 22 April 2010, he purchased a Toyota Tundra truck for $50,032.40 and declared at the time that his annual earnings were $100,000.

Of the purchase price, $48,032.40 was financed at 2.9% requiring monthly payments of $860.95. He testified that, before purchasing this vehicle, he used the truck that work provided. [ 23 ] Although it did not appear on his 8 September 2010 financial statement, the respondent declared a new debt on his 6 December 2010 statement of $8,100 owing on a Ford Focus with payments of $273/month.

He acknowledged that this was his girlfriend’s car and that he was making the payments because she could not. [ 24 ] The respondent made another large purchase on 10 June 2010 by purchasing a trailer for $28,265.56 and declared at that time that his income was $10,000/month, being $120,000/year. Of that purchase price, $20,265.56 was financed at 7.5% with monthly payments of $406.08. [ 25 ] The respondent told the court that he had intended to represent that he had an annual income of $100,000 and that he had purchased the trailer to stay in when he worked out of town despite the fact that it was not winterized.

The respondent said that the trailer was currently in storage. [ 26 ] When challenged, the respondent denied that the borrowing against these large purchases was intended to “rack up” his debts despite the fact that he acknowledged that he had over $81,000 in savings. He said he acquired the truck for a purchase price of $50,000 because the applicant took the car, a 2004 “Mazda 6” worth $2,000 according to the applicant. [ 27 ] The respondent testified that he is currently renting an apartment in Breslau and has two storage units to keep the remainder of his household items.

He said that he now lives with girlfriend SB. He told the court that they had had a three year relationship despite the fact that he continued living with his common-law spouse at that time. He told the court that he was supporting SB as she did not work. On cross-examination, he said that he had started residing with her two weeks before the trial. [ 28 ] The respondent also acknowledged that, despite requests in July from the applicant’s counsel, financial disclosure was not provided until September 2010.

Further, his financial disclosure was incomplete in many ways: he did not show either his RRSP, pension savings or his taxable benefits. [ 29 ] It was the evidence of both parties before the court that the respondent had paid the daughter’s tuition at university this year. Further, it was acknowledged that he continued to pay her car insurance and together with his insurance the cost was $355/month. The respondent acknowledged that, although he had paid the applicant’s car insurance throughout the relationship, he stopped on 5 August 2010. [ 30 ] The respondent acknowledged that he had benefits through work.

He testified that, in July or August 2010, he took the applicant off his benefits without speaking to her about this despite knowing that she had been laid off from her original employment and without confirmation that she had any independent coverage. The respondent told the court that he had also changed the beneficiary of his life insurance through work from the applicant to his daughter at the same time. [ 31 ] The respondent admitted that he took the applicant off his benefits so that he could add his girlfriend as he was only allowed to cover one spouse at a time.

However, the respondent told the court under oath that he and the applicant separated April 2010 and that he and his girlfriend had just moved in together two weeks before the trial and therefore the girlfriend did not qualify as a spouse under the plan which requires “living common law with (him) in a conjugal relationship, continuously for at least a year”! When challenged in cross-examination, the respondent admitted that his girlfriend was not entitled to be on his benefits plan.

[ 32 ] At the court’s direction, the respondent produced a quote for the costs of supplementary health benefits during the adjournment. The enhanced plan which the respondent acknowledged was like the one he had through work cost $148.90/month. [ 33 ] The respondent acknowledged that he had worked out of town for four months in 2010 for four months. As of 1 November 2010, he had received $12,561 in room and board. He did not provide the court with his final paystub despite the importance of the information including the full amount paid for room and board in 2010.

Further, he acknowledged that he had only needed to use half of the amount paid for expenses. [ 34 ] Since the temporary court order for spousal support was made, the respondent has not routinely paid on time. 2: CONCLUSION 2.1: The Law [ 35 ] Under

section 30 of the Family Law Act , R.S.O. 1990, c. F-3, as amended, every spouse has an obligation to support him or herself, and, where appropriate, each other. 30. Obligation of spouses for support.— Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so. [ 36 ] The applicant clearly qualifies as a spouse for the purpose of support given the definition in

section 21. [ 37 ] Subsection 33(8) sets out the purposes of spousal support. In this matter, it appears from the evidence that the applicant took on the bulk of the responsibility for the family and the household during the relationship. The family moved as a consequence of the respondent’s employment and the respondent was often away for months at a time. Throughout the relationship, the respondent has been in the position to earn more than the applicant. [ 38 ] Subsection 33(9) identifies some circumstances that the court should review in determining the amount and duration of spousal support.

In this matter, the following considerations are of note: • The respondent is making and is likely to make in the future considerably more than the applicant. • The respondent has significantly more assets than the applicant and no doubt that disparity will continue in the future. • Given her age, education and unsuccessful efforts to date, it is unlikely that the applicant will be able to attain even her pre- separation high of approximately $50,000/year. • Given the respondent’s experience and his earnings over the last decade, it seems clear that he will be in a position to continue working for the same or a greater amount in the future. • As the parties were together as a family for over thirty years, it is appropriate that the court consider equalizing their standard of living. • Neither the applicant nor the respondent have any legal obligation to support any other person. • By looking after the family and household, the applicant contributed to the respondent’s ability to further his employment by accepting work distant from the home. 2.2: Application of the Law [ 39 ] There are a number of troubling aspects to this case.

First, from the beginning there has been delayed, incomplete and sometimes inaccurate disclosure by the respondent. Despite the opportunity to straighten out some of the issues as a result of examinations being held, the problem of a lack of disclosure persisted. Even during the trial, the respondent did not produce evidence that would have assisted the court, such as his last 2010 paystub, the total value of his pension including the employer’s contribution, and independent confirmation from his employer of the money paid to Jessie Rentals.

Given the month-long adjournment, there was no real explanation for the failure to provide information key to establishing the respondent’s income for 2010. [ 40 ] Also of concern is the changing nature of the respondent’s evidence. His sworn financial statements have been clearly shown to be incomplete or inaccurate. He declared on one loan application that he earned $100,000/year and on another $10,000/month or $120,000/year.

The respondent testified that the latter was a mistake but did not call any evidence to support that claim. [ 41 ] Regarding Jessie Rentals, the respondent suddenly raised the issue of a silent partner’s splitting both the obligations and profits of the business, despite declaring the entire profit on his income tax in 2009 and despite a complete lack of supporting evidence. The respondent could have filed documents supporting the partnership or called the partner to testify but he did neither.

The court must conclude that he is the sole owner and that all profits belong to him. [ 42 ] In his evidence, the respondent was evasive about the whole issue of the interim support payments. His evidence was not consistent about even minor matters such as the date he left the house. Some of the problems with the evidence of the respondent may have been because he was easily confused on the stand as it was certainly clear that he was not a sophisticated witness.

However, his lack of follow-through regarding matters raised with him is concerning. [ 43 ] Particularly perplexing is the respondent’s decision completely to abandon his responsibilities toward his spouse of thirty years. Without warning, he terminated her access to his benefits both health and life insurance. He stopped paying her car insurance. He paid no support whatsoever until a court order was made. [ 44 ] Instead he prioritized the expenses of his girlfriend to whom he had no legal obligation. He started to pay her expenses

and fraudulently added her to his benefits at work. He had his girlfriend write the caustic separation note telling applicant what the respondent had decided he wanted from the property accumulated over their thirty-year relationship. [ 45 ] Further, the respondent’s decision immediately after separation to incur substantial debt to acquire major purchases previously unneeded is inexplicable. Prior to separation, the respondent appeared focussed on not having debt. For Jamie Rentals, for example, the respondent told the court that he tried to double some of the payments on the equipment.

Further, the mortgage was paid off on their family home. The family previously were content to have the company truck and a small used vehicle at their disposal. There is no real explanation for the respondent’s decision to borrow to acquire an expensive truck and the trailer now in storage, neither of which he appears to need especially given the substantial amount of money in the bank.

The only explanation is that he was deliberately attempting to limit his disposable income, a foolish decision given all the circumstances. [ 46 ] It appears to the court that the respondent has been making decisions without regard to the needs or welfare of his common-law spouse.

Further, unfortunately his irresponsible attitude has been reflected in his offhand approach to necessary disclosure. [ 47 ] Counsel for the respondent has asked the court to consider the lump sums received by the applicant historically as well as her previous earnings in order to impute income to the applicant to be used in any calculation. [ 48 ] Clearly, too much time has passed to consider the $100,000 received a number of years ago. There is no suggestion that that money was hidden or used for some extraordinary purpose. No doubt, it was absorbed into the expenses of the family as stated by the applicant.

Given the historic nature of that one-time gift and the use of that money, that gift has no role to play in the consideration of this court. [ 49 ] The applicant’s recent severance was used by the applicant to supplement her new lower income during the period of April to September 2010, a period of time for which no spousal support is being sought. Any further consideration would not be appropriate. [ 50 ] Also there is no evidence before the court to suggest that the applicant can once again attain the employment level of $50,000.

The only evidence is that she looked for employment and was only able to find this through a friend. Counsel for the respondent submitted that the applicant did not look for very long and was only out of work for a couple of weeks before taking this full- time position earning only half as much. However, it should be noted that the separation created a true sense of urgency in the securing of employment as soon as possible.

Given how the respondent completely abandoned the applicant economically as soon as the house sold, it indeed turned out to be important to find a job as soon as possible, something that the applicant managed with the help of a friend. [ 51 ] Hopefully, the applicant will be able to find better full-time employment that will provide her with more financial remuneration and benefits of her own in order to make her less dependent on the respondent. However, there is no evidence that such employment is available to her now or in the foreseeable future.

Therefore in any calculation, it is appropriate to consider the applicant’s income as $23,000. [ 52 ] The important issue for the court is to determine the income level for the respondent. As has been noted, the respondent has failed to provide the 2010 information that could have established his employment income, his room-and-board benefit and the income received from Jessie Rentals.

Therefore the court must estimate and extrapolate to produce the figure that ought to be used in the calculation of spousal support. [ 53 ] A number of factors should be noted: • The respondent earned an average of over $124,000/year in T4 income and over $126,000/year “line 150” income for the period of 2005-2009 inclusive. • The respondent earned an average of over $134,000/year in T4 income and over $138,000/year “line 150” income for the period of 2007-2009 inclusive. • The respondent claimed a $9,497 profit from Jessie Rentals in 2009 from only two to three months of rental.

That income is included as part of the “line 150” income of $157,545 in 2009. In 2009, the respondent also received $31,323.11 as non-taxable room-and-board allowance. • The respondent received an average of over $30,800/year as a non-taxable room-and-board allowance for 2007- 2009 inclusive, some of which he acknowledged not using for out-of-town work living expenses. • By 1 November 2010, the respondent had received gross taxable income from the company of $70,463.57. Further, there was a “Payroll Hours/Dollars History from 01/01/2010 to 11/21/2010” filed with the court that confirmed a gross pay of $98,786.27.

According to the same document filed for 2009, the gross amount included the room-and-board payments. The only information for 2010 regarding room-and-board payment provided to the court confirms the respondent’s receipt of $12,561 by 1 November 2010. • The respondent’s employer confirmed that they have not done any mainline work in 2010 but noted that each construction season is different. [ 54 ] It is obvious that some information is missing. First, despite having ample opportunity to do so, the respondent failed to provide independent confirmation of earnings from Jessie Rentals in 2010.

Given the weekly rental rate of $400, it is possible that the revenues could be significant. Further, the final information regarding pay and non-taxable benefits for 2010 was not provided to the court. [ 55 ] The other issue is the respondent’s position that he has dropped from 2009 T4 earnings of $128,550 and a room-and- board allowance of $31,323.11 to 2010 earnings of $85,000-$90,000 and an allowance of approximately $13,000-15,000.

The only explanation before the court is that he was paid a lower hourly rate due to the work not being half mainline work as it had in the past. [ 56 ] An examination of the document, “payroll hours/dollar history from 01/01/2010 to 11/21/2010”, shows that the respondent worked 1,539 hours up to 21 November 2010. If one adds the number of hours he worked in 2009 for the end of November and all of December, a figure of 198 hours, to the year to date 21 November 2010, the total number of hours worked in the year is very

close to 2009: 1,871 hours in 2009 and 1,737 for 2010. This represents a decrease of about three weeks of work that was not addressed. However, it seems clear that a reduction in the number of hours worked is clearly not the primary reason for the respondent’s reduced income. [ 57 ] Although counsel for the respondent seeks to calculate the respondent’s income on $95,000, given the information regarding the non-taxable benefit traditionally received by the respondent and the expected revenue from Jessie Rentals, that figure is too low.

Even if only half of the allowance is included, the earnings should be seen as well over $100,000. [ 58 ] Further, given the length of the marriage, the income sharing should come close to equal. [ 59 ] Counsel have submitted various spousal guidelines calculations. Given all the information, it would appear appropriate to set the respondent’s earnings at $117,550 as submitted by the applicant.

I am therefore prepared to order that the final support order should be $3,400/month. [ 60 ] Also, the respondent should be maintaining the applicant on his benefits until she obtains her own or pay to the applicant the sum of $148.90/month to cover an enhanced health benefit package for as long as he himself has access to benefits through his place of employment. [ 61 ] And last, given the fact that the respondent’s only legal obligation is the support of the applicant, it only makes sense that his life insurance should remain completely payable to her.

Certainly his obligation to support the applicant should not terminate with his death where there is the possibility of continued support through his life insurance or his estate or both. 3: FINAL ORDER [ 62 ] There shall be a final order as follows: 1. The respondent shall pay to the applicant as spousal support the sum of $3,400/month commencing on 1 October 2010. Any payments made under the interim order of 22 October 2010 should be credited against this order. 2.

The respondent shall maintain the applicant on his extended health benefits through his place of employment or, in the alternative, pay to the applicant the sum of $148.90/month to purchase the equivalent health coverage. This obligation shall expire should the applicant be eligible for similar benefits through her own place of employment or should the respondent no longer have benefits available to him through his place of employment. 3. The respondent shall notify the applicant in writing forthwith regarding which coverage will be available to the applicant. 4.

The respondent shall maintain the applicant as the sole beneficiary of any life insurance policy available through his place of employment and shall produce written proof confirming such designation upon the reasonable request in writing of the applicant. 5. Any party seeking their costs of the motion or this matter in general shall serve and file submissions in writing within 30 days of this decision. Any response to such submissions shall be served and filed within 30 days of receipt of the original submissions. Reply may be served and filed with 7 days. Written submissions are limited to ten pages maximum.