Nevile-Smith v. Nevile-Smith, 2020 ONCJ 614

ONTARIO COURT OF JUSTICE CITATION: Nevile-Smith v. Nevile-Smith , 2020 ONCJ 614 DATE: 2020 12 23 COURT FILE No.: Toronto D40565/20 BETWEEN: Sara Nevile-Smith Applicant — AND — Kevin Nevile-Smith Respondent Before Justice Robert J. Spence Motion heard December 16, 2020 Reasons released December 23, 2020 Ms. Poroshad Mahdi..................................................................... counsel for the applicant Ms. Theresa Maclean............................................................... counsel for the respondent R. J.

SPENCE J.: 1: INTRODUCTION [ 1 ] The applicant, Sara Nevile-Smith (Sara) has brought a motion for temporary spousal support. She seeks support from the respondent, Kevin Nevile-Smith (Kevin). [ 2 ] Sara asks the court to order Kevin to pay her $4,564 per month as temporary support, pending a trial of this matter. [ 3 ] In his responding affidavit to Sara’s motion, Kevin states that this amount is excessive. He does not dispute Sara’s legal entitlement to support.

However, he argues that her motion is unnecessary because he is making voluntary payments to her. [ 4 ] As the argument unfolded, Kevin’s counsel advised the court that Kevin would be prepared to consent to a temporary order in the amount of $2,500 per month. 2: BRIEF FACTUAL BACKGROUND [ 5 ] The parties were married on May 8, 1999. They separated on December 3, 2018. [ 6 ] There is one child of the marriage, a daughter, B., who is now 21 years old. [ 7 ] B. currently attends Dalhousie University where she is in her fourth year of her Business Management Programme. She is expected to graduate in May 2021.

[ 8 ] In June 1989, about 10 years prior to the parties’ marriage, Kevin was in a serious automobile accident. He suffered devastating injuries. [ 9 ] As a result of that accident, Kevin received a structured settlement. That settlement consists of two components, namely, a monthly payment which is tax-free – currently $6,850, and a lump sum payment to him in the amount of $1,000,000 payable on January 1, 2023. [1] [ 10 ] Sara has not been employed since 2018.

According to her financial statement sworn August 24, 2020, her sole source of income is the Canada Emergency Response Benefit (CERB) in the amount of $2,000 per month. 3: EVENTS LEADING TO THIS MOTION [ 11 ] When the parties separated, Kevin left the home in which they had lived for many years, a rental unit on which the current rent is $2,496 per month (the home). [ 12 ] Until August 2020, Kevin had been paying the full amount of the rent on the home. [ 13 ] He had also been paying B.’s university tuition, her rent ($696 per month), her living expenses and her allowance.

Sara had been paying one-half the cost of B.’s flights, her medication and her clothing and miscellaneous expenses. B’s total university-related expenses were about $20,000 per year. [ 14 ] However, on July 31, 2020, Kevin sent written notice to Sara stating: • This is just a reminder that this August 2020 rent is the last month I am paying full rent at the home.

As of September, I will be paying half. • Also please note that I will be paying half of B.’s rent in Halifax as of September 2020. [2] [ 15 ] In September 2020 Kevin paid Sara one-half of the rent for the home, namely, $1,225. [ 16 ] In October 2020 he again paid one-half the rent, namely, $1,225. [ 17 ] On August 24, 2020, Sara brought a 14B motion in which she sought leave of the court to issue an application, an order waiving the need for First Appearance court and a request for an urgent case conference. [ 18 ] On August 31, 2020, I granted leave to issue the application, waived the requirement for the parties to attend First Appearance court and set October 13, 2020 as the date for a case conference. [ 19 ] The parties attended the case conference on October 13, 2020.

On that date I set December 16, 2020 as the date for this motion, and I ordered timelines for the filing of motion material by both parties, including mutual disclosure. [ 20 ] In November 2020, Kevin paid $2,000 to Sara towards the cost of rent. [ 21 ] After the October 13 th court appearance, Sara decided not to include a claim for child support in her motion, as Kevin had agreed to pay all of B.’s university-related expenses. [3] 4: ANALYSIS 4.1: General principles [ 22 ]

Section 30 of the Family Law Act (Act) states: Obligation of spouses for support 30 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. R.S.O. 1990, c. F.3, s. 30 ; 1999, c. 6, s. 25 (3); 2005, c. 5, s. 27 (7) . [ 23 ] Subsection 33(8) of the Act states [my emphasis]: Purposes of order for support of spouse

(8) An order for the support of a spouse should, (

a) recognize the spouse’s contribution to the relationship and the economic consequences of the relationship for the spouse; (

b) share the economic burden of child support equitably;

(

c) make fair provision to assist the spouse to become able to contribute to his or her own support; and (

d) relieve financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home). R.S.O.1990, c. F.3, s. 33 (8); 1999, c. 6, s. 25 (5); 2005, c. 5, s. 27 (9). [24] Subsection 33(9) of the Act states: Determination of amount for support of spouses, parents

(9) In determining the amount and duration, if any, of support for a spouse or parent in relation to need, the court shall consider all thecircumstances of the parties, including, (

a) the dependant’s and respondent’s current assets and means; (

b) the assets and means that the dependant and respondent are likely to have in the future; (

c) the dependant’s capacity to contribute to his or her own support; (

d) the respondent’s capacity to provide support; (

e) the dependant’s and respondent’s age and physical and mental health; (

f) the dependant’s needs, in determining which the court shall have regard to the accustomed standard of living while the parties residedtogether; (

g) the measures available for the dependant to become able to provide for his or her own support and the length of time and costinvolved to enable the dependant to take those measures; (

h) any legal obligation of the respondent or dependant to provide support for another person; (

i) the desirability of the dependant or respondent remaining at home to care for a child; (

j) a contribution by the dependant to the realization of the respondent’s career potential; (

k) Repealed: 1997, c. 20, s. 3 (3). (

l) if the dependant is a spouse, (

i) the length of time the dependant and respondent cohabited, (ii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation, (iii) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness,disability or other cause to withdraw from the charge of his or her parents, (iv) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or overwho is unable for that reason to withdraw from the charge of his or her parents, (

v) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse were devoting thetime spent in performing that service in remunerative employment and were contributing the earnings to the family’s support, (v.1) Repealed: 2005, c. 5, s. 27 (12). (vi) the effect on the spouse’s earnings and career development of the responsibility of caring for a child; and (

m) any other legal right of the dependant to support, other than out of public money. R.S.O. 1990, c. F.3, s. 33 (9); 1997, c. 20,s. 3 (2, 3); 1999, c. 6, s. 25 (6-9); 2005, c. 5, s. 27 (10-13). [25] Spousal support is not merely a consideration of a spouse’s needs and means. In determining the appropriate amount of spousalsupport, compensatory and non-compensatory considerations should be considered to equitably alleviate the economic consequences ofthe breakdown of the relationship. See: Rioux v. Rioux, 2009 ONCA 569 , [2009] 97 O.R. (3d) 102 (OCA).

Entitlement can bebased on compensatory, non-compensatory or contractual grounds. See: Bracklow v. Bracklow, (S.C.C.). [26] However, for the purposes of the within motion, the court does not need to consider the issue of whether Sara is entitled tosupport on a compensatory basis. It is sufficient for the purposes of a temporary support order in this case to consider Sara’s needs andKevin’s ability to pay. See: Politis v. Politis, [2015] O.J.

No. 5473 (ONSC), at paragraph 14 [27] In determining need, courts ought to be guided in part by the principle that the spouse receiving support is entitled to maintain thestandard of living to which she was accustomed at the time cohabitation ceased. The analysis must consider the recipient’s ability tosupport herself, having regard to her income and reasonable expenses. See: Gray v. Gray, 2014 ONCA 659. 4.2: Sara’s need [28] I start with the recognition that the court’s findings about Sara’s need and Kevin’s ability to pay are based on evidence which has

not been tested by cross-examination. That is most often what the courts must do on motions for temporary support where the evidenceis by affidavits alone. Interim awards are temporary only and inevitably imperfect. See: Chaitas v. Christopoulos, (ON SC), [2004] O.J. No. 907 [29] I make certain findings of fact with those limitations in mind. [30] Sara’s sworn financial statement dated August 24, 2020 reveals that her sole source of income is from CERB, in the amount of$2,000 per month. [31] Sara has not been employed since August 2018 when she worked part-time as a seasonal contractor.

Over the past four years herincome has been as follows: • 2020 – $2,000 monthly solely from CERB; • 2019 – no employment income. Her Notice of Assessment reveals total income of $37,774 which she says come fromwithdrawals from her Registered Retirement Savings Plan (RRSP); • 2018 – $32,096 in employment earnings from a government agency. Her contract was not renewed; and • 2017 – $60,032 from employment working in the Legislative Assembly of Ontario.

This was a contract job from which she wasdismissed due to frequent time off resulting from her diagnosed depression. [32] Sara’s assets consist primarily of her RRSP which she values at $95,335.[4] [33] Her debts total approximately $59,000, primarily made up of a personal loan from her mother in the amount of $50,000. [34] Kevin disputes that Sara suffers from mental health challenges which impair her ability to work.

He states that Sara has simplychosen to remain unemployed so that she can enjoy herself, including playing tennis. [35] Sara has filed a one-page report dated November 20, 2020, from the psychiatrist who has been treating her since 2004.

In thisbrief report he expresses the view that she is suffering from an “Adjustment Disorder with anxious and depressive features.” He notesthat she is continuing to take Lorazepam for anxiety on a regular basis. [36] Whether Sara can establish at trial that she is unable to work, either because of lack of employment opportunities, or because ofher diagnosed psychiatric illness, or a combination of the two, is something that must be left for trial when all relevant evidence can beadduced and thoroughly tested by cross-examination. [37] For purposes of this motion, the court concludes that Sara has not worked for about 2-1/2 years, and her income is minimal. [38] Sara’s financial statement discloses monthly expenses of $7,009.

Several noteworthy monthly expenses are: • Rent in the amount of $2,496[5] • Various items for B., including vacations, school supplies, clothing, driving lessons and monthly allowance - $857 • Travel to Mexico, twice yearly, to visit Sara’s mother - $250 [39] The total of these expenses is $3,603. I eliminate all of these on a temporary basis, thereby reducing Sara’s expenses to $3,406. Her shortfall would then amount to $1,406.[6] [40] The court concludes that the first half of the needs and ability to pay equation is met.

Sara needs support. 4.3: Kevin’s ability to pay [41] The determination of Kevin’s ability to pay is somewhat more complex. [42] Kevin’s financial statement sworn December 7, 2020 reveals two sources of monthly income: CERB in the amount of $2,000 andhis structured settlement annuity payment in the amount of $6,850. His total monthly income is $8,850. [43] Sara submits that Kevin has additional income from other sources. She asks that the court impute an extra yearly income of$10,000 to Kevin.

Kevin acknowledges that in the past he did receive some income from his late father’s insurance business but that isno longer the case. At trial, Sara may be able to establish the basis for an imputation of income. However, at this early stage of theproceedings, with untested evidence, the court is not prepared to impute additional income to Kevin. [44] Apart from two nominal bank account balances, Kevin’s only asset is his structured settlement.

On his financial statement, thevalue of that is shown as “TBD”. [45] He has produced a letter dated November 25, 2020 from BDO Canada stating that he filed a consumer proposal with BDO onSeptember 2, 2020. [46] The consumer proposal lists nominal assets and debts which total $42,865. He is proposing to pay those debts at the rate of $230per month for 60 months, for a total debt repayment of $13,800.

[47] As against that proposal, he is guaranteed to receive $1,000,000 tax-free as part of his structured settlement on January 1, 2023,which is 24 months from now. [48] A review of Kevin’s sworn financial statement discloses monthly expenses of about $8,748 per month. There are a number ofitems in the expense portion of that statement which stand out, including: • $900 for groceries • $300 for meals outside the home • $2,000 for “spousal” support[7] • $1,500 for accounting and legal fees[8] [49] I note that the total of Kevin’s monthly groceries and meals is approximately double Sara’s.

There is no evidence that Kevinlives with another partner and is responsible for buying groceries and meals for another person. [50] On a temporary basis, I conclude that it is reasonable to discount $4,000 of those foregoing expenses in calculating Kevin’sability to pay. [51] Taking all of this into account, the court concludes that Kevin has the ability to contribute to Sara’s support. 4.4 Assessing the amount of temporary support [52] The court in Politis, supra, set out several principles for courts to consider in motions for temporary spousal support.

Atparagraph 14 of her decision, Justice Harvison Young states [my emphasis]: 14 At the outset, it is important to underline the principles applicable to an interim motion for support. As the respondent submitted,these principles are set out clearly in the case of Driscoll v. Driscoll, , at para. 14, and are not in dispute. That casecites an earlier decision, Robles v. Kuhn, 2009 BCSC 1163, which set out the principles in useful

summary form as follows: 1. On applications for interim support the applicant’s needs and the respondent’s ability to pay assume greater significance; 2. An interim support order should be sufficient to allow the applicant to continue living at the same standard of living enjoyed prior toseparation if the payor's ability to pay warrants it; 3. On interim support applications the court does not embark on an in-depth analysis of the parties' circumstances which is better left totrial. The court achieves rough justice at best; 4.

The courts should not unduly emphasize any one of the statutory considerations above others; 5. On interim applications the need to achieve economic self-sufficiency is often of less significance; 6. Interim support should be ordered within the range suggested by the Spousal Support Advisory Guidelines unless exceptionalcircumstances indicate otherwise; 7. Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out; 8.

Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, itbecomes less advisable to order interim support. [53] Before I turn to the Spousal Support Advisory Guidelines (SSAG), I will address the nature of Kevin’s structured settlementincome. [54] Sara argues that all that income should be included in the SSAG calculations. [55] Kevin argues that only a portion of it should be included in the SSAG calculations. [56] Kevin produced a “Report on the Structured Settlement” authored by Jack Carr, dated May 13, 2019 (Carr report). Mr.

Carr wasasked to estimate the income loss component of the structured settlement which is paid to Kevin. [57] The Carr report concluded that the portion of the structured settlement which represents loss of income is $33,602 a year. [58] Kevin did not produce the documents from his lawyer who represented him on the personal injury proceeding and which mayhave set out the basis for the structured settlement, specifically, the portion attributable to pain and suffering and the portion attributableto loss of income.

Kevin said his lawyer who represented him on the settlement no longer has his file. [59] Kevin submits that only that portion of the settlement which pertains to loss of income should be taken into account in thecalculation of his spousal support obligation. [60] On the other hand, Sara produced a critique of the Carr report dated September 5, 2019 by David Downs. Without getting intothe details of that critique, Mr.

Downs set out his reasons for disagreeing with the conclusions in the Carr report. [61] There is conflicting case law on whether all the income from a structured settlement ought to be considered for purposes ofdetermining support obligations.

[62] In Rivard v. Hankiewicz, 2007 ONCJ 180 , Justice Ellen Murray reviewed the case law concerning the treatment ofstructured settlements.[9] At paragraphs 32 and 33 of her decision, Justice Murray stated [my emphasis]: [32] In cases where the evidence establishes that a portion of settlement funds was paid on account of lost wages and a portion waspaid for the costs of future care, courts have determined that only that portion of the settlement funds paid for lost wages will be treatedas guidelines income. For example, in M.K. v. R.A.S.,[10] Justice Catherine A.

Wedge dealt with a payor who was permanently andtotally disabled and who had received the bulk of his settlement funds by way of a monthly structured settlement that was non-taxable.

The evidence established that a specific portion of this settlement was calculated in reference to loss of earning capacity and anotherportion was calculated to reflect compensation for the expenses for future care, which were significant. [33] Justice Wedge observed that any payments for cost of future care were personal to the plaintiff and related to his or her needsresulting from the accident and should not be imputed as income to him pursuant to the guidelines.

Her order included in the payor’sincome only the $30,000 that he received annually for loss of earning capacity. [63] The court in M.K., supra, referenced a number of other authorities which held that the portion of a structured settlement receivedon account of pain and suffering are personal in nature and are not to be included as a family asset.[11] [64] More recently, the Ontario Court of Appeal in Hunks v.

Hunks, 2017 ONCA 247 , was faced with the issue whether astructured settlement annuity was property, for the purpose of equalization of net family property under the Family Law Act, or income. [65] In Hunks, the applicant wife had been injured in an accident. She received a settlement which was attributable to several heads,including pain and suffering as well as loss of future income. She used her lump sum payment to purchase a structured settlementannuity.

The trial judge found that the structured settlement was property, and not excluded for purposes of equalization, and thereforeto be included in the equalization of net family property. [66] The Court of Appeal disagreed with the trial judge. At paragraph 49, the Court of Appeal stated [my emphasis]: I agree with the appellant that the SS Annuity payments should be considered as income for the purposes of spousal support, and notproperty under

Part 1 of the Act. I reach this conclusion for two reasons: (1) the SS Annuity arises from a structured settlement; and (2)the SS Annuity is analogous to disability benefits and not to a pension. [67] The Court of Appeal in Hunks relied on an earlier decision in Lowe v. Lowe (2006), (ON CA), 78 O.R. (3d) 760(C.A.), and at paragraph 59, continued [my emphasis]: Like the disability benefits in Lowe, the SS Annuity payments replace, in whole or in part, the employment income that Ms. Hunkswould have earned had she been able to work. The SS Annuity payments give her financial support because she cannot work.

They are,therefore, of the same nature as the income that she would have earned had she not been injured. Just as disability benefits are morecomparable to a future income stream based on personal service than a retirement pension, so too are the SS Annuity payments. Annuities are usually purchased with savings. Not so the structured settlement annuity. As we have seen, an individual cannot purchasea structured settlement annuity. Furthermore, structured settlements can only arise from a settlement for a damages claim based onpersonal injury or death.

Clearly, the SS Annuity was not purchased from personal savings nor is it a form of savings. The SS Annuity,as a structured settlement, is designed to provide income to Ms.

Hunks that she would have been able to earn, had she not been injured. [68] The decision in Hunks would appear to be dispositive of the issue on this motion. [69] That said, the trial court and the Court of Appeal in Hunks had the breakdown of the heads of damages which the led to thestructured settlement, something which is not currently available in this motion. [70] However, based on the court’s analysis in Hunk, it is not apparent to this court that such a breakdown would make any differenceto the principled analysis which the Court of Appeal conducted. [71] For the purposes of this motion, I intend to treat the totality of Kevin’s income as income for support purposes.

I do so for tworeasons. [72] First, I consider that the reasoning in Hunks is such that I am bound by the decision of the Court of Appeal. [73] Second, a review of Kevin’s financial statement does not reveal any unusual medical expenses required for his ongoing or futurecare resulting from his automobile accident. Under the heading “health”, Kevin lists expenditures for: health insurance premiums, dentalexpenses, medicine and drugs and eye care, all totalling $686 per month. These all appear to be the usual and ordinary expenditures foran individual.

Kevin’s affidavit evidence does not refer to any of these expenses as specifically necessary for his care arising from theautomobile accident. [74] In this regard, Justice Murray’s comments at paragraph 42 of her decision in Rivard, supra, are relevant to the facts on thismotion [my emphasis]: How should the respondent’s annuity payments be assessed in light of these factors?

The respondent presented no evidence, in April 2003 or in the hearing before me, as to the allocation of his settlementfunds among heads of damage, or as to the evidence of loss of income or cost of future care utilized in the negotiations forthe settlement. . . .If he did not provide evidence that would be helpful to him (such as, for example, evidence thatsignificant costs for future care and treatment were a basis for his settlement negotiations with the insurer), an adverseinference may be drawn. . . .A review of the respondent’s financial statements from 2003 to date indicates that he isspending no substantial amounts for expenses that might be related to treatment or care required because of his injuries.

The statements do not indicate expenditures related to the purchase of any special equipment required because of hisinjuries. [75] I turn next to the SSAG calculations. [76] Sara’s counsel has produced two different SSAG calculations. In each, Sara is imputed with $24,000, which is consistent withher reported CERB income. [77] Both SSAG calculations include non-taxable income for Kevin in the amount of $82,000,[12] as well as $24,000 in CERBincome. One of the calculations includes $10,000 of employment income for Kevin.

However, as discussed earlier, I am not prepared toimpute any employment income to Kevin on the motion for temporary support.

Accordingly, I ignore that SSAG calculation. [78] The other SSAG calculation, which excludes imputed employment income for Kevin, results in spousal support payments asfollows: $3,241 (Low); $3,781 (Mid); and $4,126 (High). [79] As I noted earlier in looking at Sara’s income and expenses, her monthly shortfall, excluding certain items, including her rentalcost, is $1,406. [80] Sara’s need is therefore the cost of rent ($2,496) plus the shortfall of $1,406, or $3,902 per month. [81] Before I conclude this

section of my reasons I will briefly comment on Kevin’s assertion (implied if not explicitly stated) thatbecause Sara has her RRSP asset of about $95,000, and he has no assets at all, she is able to draw down on that asset to assist her inmeeting her needs. [82] Sara drew out more than $37,000 from her RRSP in 2019 as her sole source of income that year. However, I am not inclined ona motion for temporary support to require Sara to continue to deplete the only asset which she has. See: Berger v.

Berger, 2016 ONCA884 [83] I am reinforced in the fairness of this approach by the evidence that in 24 months, Kevin will obtain a lump sum payment fromhis structured settlement in the amount of $1,000,000. [84] Whether Sara should ever be imputed with income by virtue of her RRSP is a matter for the trial judge to determine. [85] Returning to the SSAG calculation, I note the similarity between what I would characterize as the “upper-mid” spousal supportrange and what I have approximated as Sara’s need in these reasons. [86] A comparison of these amounts leads to the conclusion that $3,902 (rounded to $3,900) a fair award to order in the circumstancesof this case. [87] In my view, this amount will not only meet Sara’s needs, but it will not be overly burdensome for Kevin, bearing in mind that injust a few days’ time his non-taxable income will increase by more than $200 per month.[13] 5: CONCLUSION [88] Sara issued her application claiming spousal support on August 24, 2020.

August was the last month that Kevin paid the full renton the home. My order for temporary spousal support will commence on September 1, 2020. [89] The court orders:

(1) Commencing September 1, 2020, Kevin will pay Sara the sum of $3,900 per month as temporary spousal support.

(2) Kevin shall be credited with the amounts paid by him to Sara on account of Sara’s rent on the home since September 1, 2020,namely, $6,450.[14] [90] Given Kevin’s undertaking expressed by his counsel on the motion that he will continue to voluntarily pay all of B.’s expensesuntil the end of the current school year, I do not find it necessary to make an order to that effect. [91] In the event Sara seeks her costs of this motion, she shall file her written submissions with the trial coordinator, by email, no laterthan 21 days following the date of this judgment.

Kevin shall have 14 days thereafter to similarly file his responding submissions. Noreply submissions will be permitted. Submissions by both parties shall not exceed three pages, exclusive of attachments, which shall belimited to a Bill of Costs and any Offers to Settle. Any case law upon which the parties rely shall be in the body of their three-pagesubmissions and shall be hyperlinked. Submissions shall be double-spaced and in 12-point font. [92] I thank both counsel for their well-organized document briefs and their helpful submissions.

Released: December 23, 2020 Justice Robert J. Spence (Signed electronically)