Lucas v. Lucas, 2019 NSSC 260

SUPREME COURT OF Nova Scotia Citation: Lucas v. Lucas , 2019 NSSC 260 Date: 20190903 Docket: TRU 1207-004154 (STD 095601) Registry: Halifax Between: Arnold Joseph Lucas Applicant v. Sherry Ann Lucas Respondent DECISION: APPLICATION TO VARY SPOUSAL SUPPORT Judge: The Honourable Justice Patrick J. Duncan Heard: March 20, 2019 Final Written Submissions: April 2, 2019 Counsel: Anastacia L.

Merrigan, for the Applicant Sherry Ann Lucas, Respondent, self-represented By the Court: Introduction [ 1 ] Arnold Joseph Lucas filed a Notice of Application on November 7, 2018, in which he requested that his court-ordered obligation to pay spousal support be terminated effective October 1, 2018. The respondent, Sherry Ann Lucas, does not agree to an order terminating spousal support, but she is prepared to consider a reduction of the amount payable. [ 2 ] At issue is whether, or in what amount, Mr.

Lucas should continue to pay spousal support now that he has retired and has a substantially lower income than that at which time the current order was made. [ 3 ] Both parties provided documentary and in person evidence in support of their positions. Background [ 4 ] The parties were married in 1980 and separated in 2014. There are no children of the marriage. A consent Corollary Relief Order (CRO) dated December 9, 2015, provided, among other things, that: 2.

Beginning on November 1, 2015 and continuing the first of each month thereafter, Arnold Joseph Lucas shall be responsible for ongoing spousal support in the amount of $1750 per month. 3. Either party shall be able to apply to a court of competent jurisdiction for a review of the issue of quantum of spousal support payable in the event of any of the following: a. Upon the retirement of Arnold Joseph Lucas from his employment with the Coast Guard, for any reason;

b. Upon Sherry Ann Lucas reaching the age of 65; c. In the event that either party’s income changes either by an increase or decrease, of greater than $5,000. [5] At the time of the Order Mr. Lucas was determined to have an annual income of $62,000 and Ms. Lucas an approximateannual income of $15,000. [6] Mr. Lucas had a lengthy career as a marine electrician in the Coast Guard. In or around July 2018, he provided notice to Ms.Lucas of his intention to retire and to terminate support payments as of October 2018. He did so, without her agreement, or an order ofthe court varying or terminating his obligation.

Arrears have accumulated as a result. The court is also asked to determine what if anyarrears must be paid. Entitlement [7] The respondent’s entitlement to spousal support has not been put in issue. However, the basis upon which it was ordered is notstated in the Corollary Relief Order. [8] In Bracklow v. Bracklow, (SCC), [1999] 1 SCR 420, the Supreme Court analyzed the statutory objectivesand held that they create three rationales for spousal support: 1. Compensatory support to address the economic advantages and disadvantages to the spouses flowing from the marriage or fromthe roles 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. [9] 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) of the DivorceAct. [10] I am satisfied that entitlement in this case is founded on a non-compensatory rationale. The parties appear to have lived fullyintegrated lives, one in which Mr.

Lucas as the higher income spouse, assumed financial responsibility for Ms. Lucas as the lowerincome spouse. In such cases a court may award support to reflect the pattern of dependence created by the marriage and to preventhardship arising from marriage breakdown. This incorporates an analysis based upon need and ability to pay. [11] After separation, and while he was employed, Mr. Lucas made support payments that enabled Ms. Lucas to have a betterstandard of living than she might otherwise have had.

However, as she testified to pointedly, she will never have the financial andmaterial benefits in retirement that she expected them to have as a couple. She continues to have financial needs and believes that Mr.Lucas has the obligation and ability to continue his support of her. Review or Material Change in Circumstances [12] The CRO provides an automatic right of review upon proof that one of the three events set out in paragraph 3 has occurred. Theevidence satisfies me that the conditions set out paragraphs 3(

a) and (

c) have been met, and so it would not be necessary to undertake a s.17 Divorce Act analysis. [13] While a review, strictly speaking, does not require proof of a change in circumstances, the applicant’s Notice of Application wasmade pursuant to s. 17 and therefore I feel it is incumbent upon me to undertake this analysis.

For the reasons set out below myconclusion would be the same based upon either analysis. [14] Before questions of duration or quantum of support can be addressed, the applicant has the burden of proving there has been amaterial change in circumstances so as to warrant a variation or termination of the spousal support currently ordered. See, s. 17(4.1) ofthe Divorce Act. [15] The applicant submits that there has been a material change in his means and circumstances which occurred since the CRO wasissued. Specifically, he relies on his retirement, which he submits was triggered by his ongoing health issues.

He submits that thoseproblems have also impacted on his ability to obtain further employment. [16] Minnema J. writing in Walts v. Walts, 2013 ONSC 6787 (Ont. S.C.J.), provided this helpful review of the applicable law: (

a) Overview of the Law 34 As the parties were married, this motion to change is governed by the Divorce Act, R.S.C. 1985, c. 3, as amended.

Section 17 dealswith variation of a support order.

The threshold requirement that puts the onus on the person seeking a variation of a spousal supportorder to establish a change in circumstances is as follows: 17(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in thecondition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or thelast variation order made in respect to that order, and, in making the variation order, the court shall take that change into consideration. 35 Not just any change will qualify.

Sopinka J. for the majority of the Supreme Court of Canada in Willick v. Willick (1994), 1994

28 (SCC), 6 R.F.L. (4th) 161 (S.C.C.) at paragraph 21 described what is essentially the sub-section 17(4.1) test as follows: In deciding whether the conditions for variation exist, it is common ground that the change must be a material change of circumstances.This means a change, such that, if known at the time, would likely have resulted in different terms. The corollary to this is that if thematter which is relied on as constituting a change was known at the relevant time it cannot be relied on as the basis for variation. 36 In this case, like many others, the parties knew that at some point Mr.

Walts was going to retire. On his own evidence he told Ms.Walts of his intention to retire at age fifty-five prior to separation. On a plain reading of the Willick analysis, as the retirement was achange that was known by the parties at the relevant time, it follows that it cannot be a material change in circumstances. A materialchange cannot be one that was reasonably foreseeable. 37 However, the material change test has evolved in the case-law such that the "matter" being considered as the change is often not the O.J. No. 735 (S.C.J.) at para. 32.

The focus is often on whether the impact of the change was reasonably foreseeable: for example, seeDonovan v. Donovan (1999), 44 R.F.L. (4th) 111 (Ont.Gen.Div.) at para. 10. 38 That the impact of the change and also the intent of the payor are relevant considerations was noted in Hooper v. Hooper (2002),(ON CA), 59 O.R. (3d) 787. There the Court of Appeal accepted that the applicant's retirement was voluntary, notcompelled.

Goudge J.A. speaking for the court went on to say at paragraph 29: The judge below clearly viewed the taking of voluntary early retirement as typical of the deliberately adverse financial treatment whichthe appellant had accorded to the respondent. Without commenting on the impact of voluntary retirement in other circumstances, I see noerror in his conclusion that the appellant's early retirement here does not constitute a material change in circumstances. (

b) Cases Referred to by the Parties … 40 Ms. Walts relied on Bullock v. Bullock, supra. That case dealt directly with the question as to whether the payor husband's withdrawalfrom the workforce at age sixty-two in the context of a twenty-three-year marriage qualified as a material change in circumstancesjustifying a variation of spousal support. The court found that the husband had retired voluntarily when he still had the capacity to earn asignificant income.

It indicated at paras. 9 and 10 that "[t]he legal question for this case ... is not whether ... [the husband] should retire atage 62, but whether this personal choice should be viewed as a "material change in circumstances" for the purposes of payment ofspousal support.

In my view it should not." The court reiterated at para. 13 that voluntary retirement at that age is not a basis for finding amaterial change in circumstances, and drew on a line of cases for the proposition that "[a] support payor cannot choose to be voluntarilyunderemployed, whether by retirement or otherwise, and thereby avoid his or her spousal support payment obligations ..." The court alsonoted at paragraph 1: While every case must be looked at on the basis of the unique circumstances of the parties, as a general proposition, a payor of spousalsupport should make his or her retirement plans on the basis that support will continue until aggregate retirement savings can beexpected to keep both former spouses at reasonable standards of living. 41 In Innes v.

Innes, supra, the husband at age sixty-two and in the context of a twenty-six year marriage brought a motion to changebased on his retirement. On the facts there, which included the voluntary nature of that retirement and that the husband had not taken intoaccount his ongoing spousal support obligation in retiring, the court was not satisfied that he had established a material change incircumstances. 42 In Boston v. Boston (2001), 2001 SCC 43 17 R.F.L. (5th) 4 (S.C.C.), the motions judge, [1999] O.J.

No. 5655, found amaterial change of circumstances based on the husband's decrease in income on his retirement and the fact that his income was derivedfrom his pension that had previously been equalized. The material change was conceded before the Court of Appeal,(ON CA), [1999] O.J. No. 4140. The Supreme Court of Canada agreed with the motions judge. I note that Ms.

Walts and the courts inBullock and Innes all distinguish Boston given that the payor spouse there did not choose to retire early; the material change incircumstances was not voluntary as alleged here. [17] Has there been a material change in the condition, means, needs or other circumstances of either former spouse since themaking of the spousal support order? [18] There are two bases upon which to conclude that there has been. [19] Firstly, the terms of the CRO, though perhaps not as explicit as one would like, can only be interpreted to mean that the partiesagreed that any of the three stated changes of circumstances in para. 3 amounted to a material change justifying judicial review of thequantum of spousal support payable.

For ease of reference those were: 3. Either party shall be able to apply to a court of competent jurisdiction for a review of the issue of quantum of spousal support payablein the event of any of the following: a. Upon the retirement of Arnold Joseph Lucas from his employment with the Coast Guard, for any reason; b. Upon Sherry Ann Lucas reaching the age of 65; c. In the event that either party’s income changes either by an increase or decrease, of greater than $5,000.

[ 20 ] Conditions (

a) and (

c) have both been met. Significantly, a review of the quantum of support payable is justified on Mr. Lucas’ retirement, irrespective of his reasons for doing so . [ 21 ] The task is to assess the impact of the event on the parties and whether it was reasonably foreseeable. As posed by Corbett J., in Bullock , supra : 11 … “Really, what is required here is an

interpretation of the parties' agreement. When did they intend [the payor] would retire? What did they intend would happen to spousal support at that time?” [ 22 ] Impending retirement, aging and a threshold change in income were all changes that were anticipated by the parties at the time of consenting to the CRO. The parties agreed to revisit the support question when any of these conditions were met. [ 23 ] The second basis upon which to conclude that there has been a material change in circumstances centres on Mr. Lucas’ reasons to retire.

The law is that w hile the payor may be free to retire whenever he chooses, he cannot voluntarily choose to be underemployed and thereby avoid his spousal support obligations. The question is whether, having regard to all the circumstances, Mr. Lucas’ decision to retire was reasonable. [ 24 ] For reasons I discuss below, I accept that Mr. Lucas’s ability to continue to work in his chosen profession was so seriously compromised by his ongoing health issues and conditions of employment that opting to retire when he did was a reasonable decision.

I also accept that his health conditions impair his ability to work as an electrician in the future. [ 25 ] I am satisfied therefore that both the terms of the order and the change in Mr. Lucas’ income constitute material changes of circumstances justifying a review of the spousal support order. Quantum/Duration of Support Circumstances of the Applicant [ 26 ] Mr. Lucas turned 60 years of age in September 2018 and retired on October 1, 2018.

He had been employed as a marine electrician with the Coast Guard since 1985, retiring after 33 years. [ 27 ] Prior to retirement his line 150 income was: 2015 $63,910 2016 $63,285 2017 $73,705* *The 2017 income included a retroactive payment of $7,430.20 plus an adjustment to pension in the amount of $3,535.93. [ 28 ] The applicant’s pension was divided after the marriage breakdown. Specifics of how this was effected are described later in this decision. [ 29 ] The applicant’s monthly pension, which began in October 2018, is $2,163.25, leaving him with an annual income of $25, 959.

At age 65 the benefit will be reduced to $1,622 per month because of integration with the Canada Pension Plan at that age. [ 30 ] It appears, based upon the information filed, that drawing down his CPP benefit prior to age 65 would not increase his monthly pension income at this time. To do so could reduce the benefit he would otherwise receive at age 65. [ 31 ] At this point, Mr. Lucas’ income is fixed subject to any future employment income. [ 32 ] The applicant provided no evidence of his expenses. [ 33 ] Mr. Lucas gave evidence that his retirement was due, among other things, to poor health.

He went off work on November 12, 2014, due to carpal tunnel syndrome in his left hand. Copies of physician reports to his employer, substantiating his ongoing inability to work, were tendered in evidence without opposition. [ 34 ] He continued to be off work when on November 16, 2016, he underwent surgery. He was able to return to work on January 3, 2017. [ 35 ] When he returned to work he was reassigned to a larger ship with a significant increase in climbing activities from what he had been used to. It required him to regularly climb nine flights of stairs.

He testified that he has three toes missing on one foot, which impacts on his balance. As he has aged this has affected his left knee. He underwent physical therapy for the condition, but it was never sufficiently corrected. He continues to have problems with it. Working on a ship at sea with balance issues was becoming a significant issue for him. [ 36 ] Over time he developed pain in his wrist and in July 2018 was referred to a physiotherapist for treatment of tendinitis. He was told that having regard to his age there were no further surgeries that would resolve his growing list of health issues. [ 37 ] Mr.

Lucas felt that his health was not improving sufficiently to return to his previous duties and elected to retire. It would be fair

to say that he was not forced by his employer to retire. He assessed his situation and felt that the combination of his health and age made it too difficult to continue trying to work. His testimony in court was consistent with the documentary medical information in evidence. [ 38 ] The applicant, when pressed, indicated that there may be jobs that he could do. The only example he offered was as a truck driver. He does not feel that he will be able to work as an electrician due to his health issues.

It is evident that he has not given any serious consideration to seeking out further employment. [ 39 ] His view is that he and the respondent are in essentially the same financial position and circumstances – both in their 60s and living on modest incomes. Virtually the entire amount of his employment pension and his Canada Pension Plan benefits have been divided with the respondent. [ 40 ] In his view, it is reasonable that Ms. Lucas should begin to access her pension funds just as he has had to do. His counsel submits that it is “unfair” to require Mr. Lucas to pay support from his already divided pensions.

It would result in a form of “double dipping” if the respondent were successful in her request for continued spousal support. Circumstances of the Respondent [ 41 ] Ms. Lucas has proposed that the applicant continue to pay support in the amount of $500 per month until September 2023, when he attains the age of 65. [ 42 ] Ms. Lucas was 63 years old when the applicant stopped paying spousal support. She turned 64 in April 2019. She has worked for the same company for the past 12 years, the last three of which has been part time at a gas station earning approximately $14,000 per year.

She testified that full-time employment is not available to her with her current employer. She testified that she too has medical issues limiting her ability to earn more income. These include clinical depression and age-related aches and pains.

There was no independent medical evidence relating to her health issues, and no evidence that she has sought full time employment. [ 43 ] The respondent receives Canada Pension Plan benefits of $536 per month, bringing her annual income to $20,432 before adding in spousal support. [ 44 ] She acknowledged that when the matrimonial home was sold in June 2015 she received $66,000 as her share of the equity. She says that she spent that money on a car and a trailer. There was nothing left to invest. She also received $25,000 as her share of the matrimonial retirement savings.

She has that amount invested. [ 45 ] The applicant’s pension was divided pursuant to the Pension Benefits Division Act. A statement provided by Public Works and Government Services Canada Pension Centre indicates that the amount of $319,512.69 was paid to the respondent on July 25, 2017, being the date of division. In cross-examination Ms. Lucas thought that she had received between $310,000-$312,000. In cross- examination she estimated the current balance of her investment of that amount to be $318,000. [ 46 ] Ms. Lucas was vague in her stated understanding of her investments.

She described the pension monies as being held in what sounded like a life income fund. She said that the maximum amount that she could deduct at this point would be $1,400 per month and that it was her understanding that there would be a reduction of capital over time. Some documentary evidence on this issue would have been very helpful, but it was not presented. [ 47 ] Ms. Lucas is concerned for her ability to support herself in her retirement years. Her expenses before deductions are $2,041.83.

She calculates her income, before taxes, and without spousal support, as $1,635.49, leaving a deficit before tax of $517.80. [ 48 ] In general, Ms. Lucas’ expenses demonstrate a modest lifestyle commensurate with her means. She does not have debts other than what I take to be a mortgage. Over half of her expenses are committed to housing. These include payment of $830 for “Rent/Mortgage”. She also pays property tax, property insurance, heat/electricity, and water which total a further $420 per month. On the face of it, the costs of housing are reasonable. [ 49 ] Ms.

Lucas did not file a Statement of Property, and no questions were asked about her claimed housing costs. I infer that the $830 is a mortgage, not rent, since the respondent is paying all of the associated costs of home ownership, and due to her evidence that she used money from the sale of the matrimonial home to purchase a trailer.

It would have been helpful in understanding her needs and means to have better particulars of her mortgage arrangements, including the equity she may hold in the property. [ 50 ] The respondent has been reluctant to draw down on her pension investment, in part because she believes that Mr. Lucas has the ability and obligation to continue paying spousal support. Her proposal, that Mr. Lucas pay $500 per month until September 2023, would cover most of her current deficit and thus delay in whole or in part her need to draw down on her pension funds until she is approximately 68.5 years old.

Her submission is that that is a reasonable outcome. [ 51 ] If Ms. Lucas draws down $1,400 per month pension, then her total income would be $37,232. If she had no employment income, and only draws down her CPP and pension then her annual income is $23,232. In this scenario, where both parties rely solely on pension income, the differential in their incomes is $2,727 per year. ($227 per month). Analysis [ 52 ] The parties were together for approximately 34 years. There were no children. Both were employed; however, at the time of the marital breakdown Mr.

Lucas’ income was substantially greater. [ 53 ] At the time of separation, the parties owned a home, had some retirement savings and each had a car. In accordance with the terms of the CRO: • Each party kept their car. Mr. Lucas assumed the debt for his vehicle.

• The home was sold, and the equity divided equally. • The RRSP savings were divided equally by way of a spousal rollover to Ms. Lucas. • Mr. Lucas’ Canada Pension Plan credits were divided equally with Ms. Lucas. • Mr. Lucas’ employment pension was divided equally as at July 2017, just over a year prior to his retirement. [ 54 ] After their separation, Ms. Lucas had funds to purchase a different car and a trailer. She continues to work, as she had during the marriage. Mr. Lucas made all payments required of him, on time and without interruption until he retired.

Both parties are self-sufficient although on very modest incomes that are approximately the same. [ 55 ] The equal division of all assets at the time of the divorce, and made just before the applicant’s retirement, could reasonably have been anticipated to generate comparable reasonable standards of living for the parties. [ 56 ] I agree that if Mr.

Lucas had no ability to earn further income at this time, then termination of the Order could be justified on the basis that there is a relatively small difference in the incomes of the parties. [ 57 ] I also agree that to require him to continue to pay spousal support from the proceeds of already fully divided pensions would be “double dipping”. Relying on the principles in Boston , I would not be prepared to make such an order. [ 58 ] The question is whether the applicant is required to go back to work to pay support that would allow Ms. Lucas to delay drawing down her pension, as he has chosen to do.

There is little evidence of what he might be capable of doing at his current age, with his health issues, and his training to supplement his income and enable him to continue to pay support. [ 59 ] However, I am satisfied that his medical situation does not sufficiently impair him from all employment. He has some ability to earn income, even if on a part-time basis at minimum wage. Conclusion [ 60 ] I do not think it is reasonable in these circumstances that the respondent should expect to delay drawing down her pension until she is almost 69 years of age, at the expense of the applicant.

Any financial hardship she might incur at this point results from her own decision to delay taking a pension that is available to her. [ 61 ] The respondent’s evidence does not satisfy me that her ability to support herself in the long term will be negatively affected by drawing on her pension fund at this time. Given her current health and opportunity to continue working, she may choose to continue to work or not. [ 62 ] There are various options open to the respondent.

For example: OPTION 1: Continues to work as at present Employment income $1,167.00 CPP 560.00 Pension Draw 500.00 Total $2,167.00 ($26,400 per annum) OPTION 2: Fully retires CPP $560.00 Pension Draw 1,400.00 Total $1,960.00 ($23,520 per annum) [ 63 ] As demonstrated, if the respondent continues to work, as she has said that she will, then she has options as to how much pension she wants to draw.

For example, by supplementing her income of $20,432 with $500 per month of pension monies (being the amount she seeks from the applicant) she will have a slightly larger income than the applicant. [ 64 ] If she discontinues work, then she will need to draw $1,400 per month (being the maximum she stated she could take) and which will result in an income that is $2,700 per annum less that of Mr. Lucas. [ 65 ] Both parties may be eligible to receive the Old Age Supplement upon attaining the age of 65. In the case of Ms.

Lucas that has the potential to further reduce her dependence upon her pension funds. [ 66 ] Having regard to all the circumstances, and in assessing the respective consequences to the parties of the marital breakdown, I conclude that the applicant’s obligation to pay spousal support should be terminated. [ 67 ] Order accordingly.

Duncan, J.