Salazar v. Salazar, 2011 ONCJ 523

Cambridge Registry No. 060440-02 DATE: 2011·VI·01 CITATION: Salazar v. Salazar , 2011 ONCJ 523 ONTARIO COURT OF JUSTICE BETWEEN: PATRICIA SALAZAR, Applicant, — AND — ROBERTO SALAZAR, Respondent. Before Justice Paddy A.

Hardman Heard on 13 May 2011 Reasons for Judgment released on 1 June 2011 DOMESTIC CONTRACTS — Variation of support provisions — Respecting parties’ original intentions — Expectation to become self- supporting — Although Family Law Act Imposed duty on spouses to become self-supporting, separation agreement that parties made 6½ years ago recognized that wife needed help and that husband was to provide it, but there was expectation that wife would work to contribute to her own support at least to level of minimum wage — Agreement did not set out formal expectation that wife should work toward being self-sufficient, but she was aware that change in husband’s economic circumstances could very well have impact on her finances — Wife applied to vary support provisions of agreement but, from her financial information, court was unable to conclude that she was likely to earn less than minimum wage this year, but neither could court conclude that she was likely to earn significantly more than minimum wage — She claimed that health issues had impaired her ability to earn what she had earned at time of separation but presented no independent evidence of her condition — Court looked instead at any increase in husband’s ability to pay more spousal support in light of his increased earnings and original ratio of parties’ respective earnings and concluded that 10% increase in spousal support payments to wife would be appropriate — Husband filed counter-application to insert requirement into agreement that wife become self-supporting by particular date, but court refused because this had not been intent of original agreement and because of duration of marriage (28 years before separation).

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

section 30 . David W. Grant .................................................................................. counsel for the applicant wife Edward J. Kiernan .................................................................... counsel for the respondent husband [ 1 ] JUSTICE P.A. HARDMAN:— The applicant brought a motion to increase the spousal support contained in a separation agreement dated 14 January 2005. The respondent cross-claimed, seeking disclosure by the applicant of her efforts to become self-supporting and a termination date of the support.

While there were additional claims in the motion to change, they have been abandoned. 1: BACKGROUND [ 2 ] The parties were married on 12 September 1974 and separated on 29 May 2002. The separation agreement as noted was dated 14 January 2005. At the time of that agreement, there were no dependent children of the relationship. Spousal support was set out in paragraph 4.01:

4.01(

a) Roberto agrees to pay to Patricia spousal support in the monthly amount of $750.00, commencing on the last day of February 2005 and continuing on the last day of each and every month thereafter until there is a material change of circumstance which would include, among other things: (

a) a change in the income of either party (

b) if Patricia should cohabit with a partner (

c) the death of either party. (

b) The parties acknowledge that in agreeing to spousal support as provided above, Roberto has a current income of approximately $60,000 per annum and Patricia a current income of approximately $21,000 per annum. [ 3 ] The agreement clearly contemplates that a change in the income of one of the parties may be considered as a material change and support the review of the spousal support. [ 4 ] The following earnings are agreed by the parties: YEAR APPLICANT RESPONDENT 2007 $4,266* $57,799 2008 $19,398* $63,275 2009 $16,435* $68,148 2010 $15,230* $68,148 * Does not include spousal support received [ 5 ] It appears from the evidence that the respondent’s earnings in 2009 were inflated as a result of a one-time opportunity for extra work. [ 6 ] The applicant, now 55 years of age, works as a machine operator through a temporary employment agency.

She takes the position that she has health problems that are affecting her ability to work. Further, although she did retraining at one time, she was unable to get work in that field. The applicant is not on the respondent’s benefits nor was that an expectation of the separation agreement. [ 7 ] The respondent is 58 years of age. He continues to work full-time but is looking ahead to retiring, perhaps even at 60. 2: THE APPLICANT’S POSITION [ 8 ] The applicant originally brought the motion to change to double the spousal support to $1,500/month.

However, by the time that the motion was heard, the applicant had reduced the amount being sought. The applicant argued that, although the increase of the respondent’s income by 10% might not have been sufficient to warrant the variation, when combined with the 15% decrease in the applicant’s income, the change does become significant.

She therefore is seeking a 25% increase in spousal support varying the current $750/month to $937.50. [ 9 ] The applicant’s position is that she is no longer able to make what she was at separation because of some health issues. 3: THE RESPONDENT’S POSITION [ 10 ] The respondent has resisted the claim for an increase in support requested by the applicant.

Further, the respondent is seeking either a termination of spousal support or, as a minimum, an order that the applicant report on her efforts to become self- sufficient and set a time for termination of spousal support. [ 11 ] The respondent has noted that, in 2010, he worked for a second employer and earned $1,700 but that it was a one-time opportunity. [ 12 ] It is also argued that there has been no independent confirmation of how the applicant’s health has interfered with her ability to be fully employed.

He notes the following: • despite an alleged drop on income in 2007 from $21,000 to less than $5,000, the applicant did not seek an increase; • for some years, the applicant did not disclose her receipt of spousal support in her income tax returns; • a review of her financial statement of June 2010 shows that she had included significant expenditures on gifts and life insurance premiums, perhaps more than one would expect if one’s income had been reduced and one was desperate; • the applicant’s income in 2011 extrapolates to at least $21,000 based on the six month contract and if employment insurance benefits (E.I.) are added, the amount would be $29,800; • if the six-month contract was renewed, then the applicant could earn $42,000; • the applicant only provided a January 2001 paystub in the disclosure provided in April 2011 without explanation; • although the applicant has stated that she makes minimum wage, the disclosure received noted three different rates of pay, all above minimum wage without explanation. [ 13 ] Therefore, the respondent argues that the applicant’s accounting is suspect and that she has not satisfied her onus to establish that she is earning less than she was at the time of the agreement, as the extrapolated earnings lie in the range of $29,800 to $42,000. [ 14 ] He also submits that he is getting closer to retirement and may retire early at 60.

He has taken the position that, as a result of obtaining this employment later in life, his contribution to his retirement plan has not been significant and therefore his pension

will not be great. [ 15 ] Although it is acknowledged that the separation agreement identifies that changes to income can constitute a material change of circumstances, the respondent argues that it intended that such changes should only happen when the variations were significant. [ 16 ] Further, although admitting that the agreement did not set out the obligation for the applicant to become self-sufficient, nevertheless the agreement did expect that the applicant would continue to work.

Also, the respondent argued that the fact that the agreement was silent regarding a termination date did not automatically mean that the spousal support was intended to be forever. 4: APPLICANT’S REPLY [ 17 ] The applicant took the position in addressing the submissions of the respondent that to order termination at age 60, 63 or 65 would be to create a new term of the agreement, as there was no termination date identified in the agreement. In his submissions, counsel for the applicant reminded the court that the applicant worked as much work as she could get and routinely supplemented her earnings with E.I.

He was unable to explain the different hourly rates. 5: DECISION 5.1: The Applicant’s Claim [ 18 ]

Section 30 of the Family Law Act , R.S.O. 1990, c. F-3, as amended states: 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. [ 19 ] Therefore, as a starting principle, spouses are expected to be independent. However, in this case, there was agreement between the parties that one spouse needed help and the other spouse was to provide it.

It appears that the agreement expected that the applicant would work to contribute to her own support to at least the level of approximately minimum wage. [ 20 ] The separation agreement clearly contemplated, however, that there might be changes in the incomes of one or both of the parties and set out that such variations would constitute a material change of circumstance for the party affected. [ 21 ] Although the agreement did not provide a formal expectation that the applicant should work toward being self-sufficient, it appears that the applicant was aware that a change in the respondent’s economic circumstances could very well have an impact on hers. [ 22 ] It is unfortunate that the year-to-date earnings of the applicant and her income prospects for the balance of 2011 are not clearer.

On the basis of the information, it is not possible for the court to conclude that the applicant is likely to make less than minimum wage this year. However, the court cannot conclude that she is likely to make a significant amount more than minimum wage either.

Also, there is no independent evidence that the applicant is no longer able to work. [ 23 ] Therefore, any variation of support must be based on any increase in the ability of the respondent to pay more spousal support given the increase in his earnings and the original ratio of their respective earnings. [ 24 ] Given all the information, it would seem appropriate that the respondent’s monthly spousal support payments be increased by 10% from $750 to $825 monthly. [ 25 ] The application was started in June 2010, almost a year ago.

In reviewing the endorsements, it does not appear that the matter was particularly delayed by either party. Further, the respondent was enjoying the increase in earnings both in 2009 and 2010. [ 26 ] Therefore the increase should start on 1 July 2010. 5.2: The Respondent’s Claim [ 27 ] The agreement does not set out a termination date. However, the amount of support can be varied depending on the circumstances of the applicant and the respondent.

Although the respondent’s future decision to retire will presumably have an impact on his earnings and therefore potentially on the spousal support that he is paying, it is premature for the court to be examining those changes. The court does not know how much he will be earning in retirement or what amount of pension he will have. The court does not know the applicant’s future situation either.

There is Canada Pension splitting yet to be resolved. [ 28 ] Given the silence in the agreement and the length of the relationship, the court does not consider it appropriate to add the requirement in the agreement that the applicant must become self-supporting by a particular date. Having said that, it is clear that the applicant should recognize that the amount of support that she is currently receiving could very well be adversely affected by the respondent’s decision to retire. [ 29 ] However, I do think that both parties need to keep each other routinely informed of his or her respective annual income.

6: ORDER [ 30 ] The court orders is as follows: 1. Commencing on 1 July 2010, the respondent shall pay the applicant spousal support of $825 per month. 2. The applicant and the respondent shall provide to each other a copy of their income tax return with attachments and notice of assessment by 1 June each year for the previous year. 3. Should either party seek their costs for these proceedings, that party shall serve his or her submissions with particulars of the bill of costs attached on the other party and file with proof of service with the court within 30 days of the release of this decision.

The responding party shall serve and file any response within 20 days of receiving the original cost submissions. The original party may file any reply with proof of service within 10 days of receiving the response.