J. 2000 SKQB 75 U.F.C. A.D. 1993 No. 391 J.C.S. IN THE QUEEN’S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF SASKATOON BETWEEN: EDWIN JOHN HINZ and NANCY MARGARET HINZ RESPONDENT K. J. Ford, Q.C. for the applicant P. H. Loran for the respondent JUDGMENT BAYNTON J. February 18, 2000 THE APPLICATION [1] The applicant applies to vary a February 1, 1995 consent judgment by terminating or significantly reducing his obligation to pay further spousal support. The amount he is required to pay under the 1995 judgment is $2,500.00 per month. [2] The application before me was triggered by the applicant’s loss of employment and a debilitating leg injury. [3] The affidavit material filed by the parties indicates that they have different views as to many of the issues involved and their respective needs and means, but neither wanted trial of the issue. agreed to determine the issue on the basis of the materials filed in chambers keeping in mind the extensive inquiries mandated by Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] S.C.R. 420. POSITION OF THE PARTIES [4] The applicant raises two grounds as constituting a material change in circumstances. The first is that he is now unemployed and no longer receives the substantial salary that he previously enjoyed. The second is that the respondent is now over 65 years of age and receives Canada Pension Plan and Old Age Security Pension benefits. The applicant acknowledges that he should continue to pay some ongoing spousal support but that it should be significantly reduced. He maintains that the respondent chooses to remain by herself in the matrimonial residence which is located across from the university and could generate significant income. Alternatively the respondent could sell it and acquire more suitable accommodation with net financial benefit to herself. [5] The respondent acknowledges that there has been material change in circumstances that entitles the Court to vary the level of spousal support set out in the consent divorce judgment. She suggests that the reduction in spousal support should be limited to the amount that she now receives from her Old Age Pension and her Canada Pension. She takes the position that despite the significant reduction in the applicant’s income, he is still in financial position to continue to meet spousal support obligations. She also takes the position that despite the decreases and increases in their respective incomes, she will still have less disposable income to live on than is available to the applicant. [6] The respondent resists any reduction in excess of her pension benefits until the applicant can establish that he will not in fact have any employment income. She suggests that the applicant’s position on this variation application is based on future projections, not on established fact. She suggests that he be given leave to make further variation application in couple of years when the status of his employment income will be known. [7] Neither counsel filed any cases in support of their respective positions and confined their submissions primarily to the financial information filed. [8] The applicant and respondent were married on July 8, 1961. They had three children, all now adults living independently of their parents. The applicant and respondent lived together almost 29 years, separating in May 1990. The respondent remained in the matrimonial home and the applicant supported her from the date of separation until 1993 when the level of support was set by court order at $2,500.00 per month. In 1995 they agreed on an equal division of their matrimonial property and consented to divorce judgment that ordered ongoing spousal support of $2,500.00 per month. The support was not time limited nor was it expressed to be subject to variation by the Court should the financial position of either party change substantially in the future. [9] The applicant is now 62, the respondent 67. The respondent has not remarried and lives alone in the former matrimonial home. The applicant has remarried. [10] The applicant is current with his spousal support payments. The material filed on behalf of the applicant when the support was continued at $2,500.00 per month by the consent judgment in 1995, indicated that he was earning approximately $90,000 per year. In 1998 his gross employment income was almost $99,000.00 per year. In August of 1999 his employment was terminated in part because of his age and his injury and he was given severance package that continued his salary to and including March 31, 2000. [11] The applicant’s pension consists of Registered Retirement Savings Plans. The respondent received her proportionate share of this “pension” when the matrimonial property was divided in 1995. The applicant’s future income will be restricted to what he draws from these RRSP’s and other investment income. He has no desire or plans to seek other employment. [12] The respondent also has health problems. Some of them arose during the marriage. Although she has university education, she stayed at home during the marriage to raise their children. She has not been employed since the parties separated. Upon reaching the age of 65 years, she qualified for Old Age Pension benefits that are currently $417.00 per month. She was also entitled to receive her proportionate share of the applicant’s Canada Pension Plan benefits. The combined current amount of these benefits is just over $775.00 per month. [13] The applicant has filed comprehensive financial analysis of the joint investment income that is available to his second wife and himself, with an estimate of what portion is attributable to her. He has obtained projections from financial planner. He asserts that if he is required to maintain the current level of spousal support, his savings including those that represent his pension will be depleted by the year 2011. [14] Despite how the respective needs and means of the parties might be interpreted, it is beyond dispute that compared to the time the order was made in 1993 and continued by the divorce judgment in 1995, the applicant’s income is now less while the respondent’s income is more. It is also beyond dispute that the health of each of the parties has deteriorated since the order. It is unlikely that either is now capable of earning significant employment income. [15] It is clear from Bracklow v. Bracklow, supra, that each case involving spousal support issue must be determined on its own facts. It is also clear that the Court must give due consideration to all the factors and objectives of spousal support order set out in s. 15.2 of the Divorce Act, R.S.C. 1985, c. (2nd Supp.), rather than focussing on one factor alone, such as income levels or self-sufficiency. [16] The application of these legal principles to the facts and circumstances of the case before me do not warrant termination of the applicant’s spousal support obligations to the respondent, but they do warrant reduction of the quantum of the support payable. The parties had three children. The respondent understandably did not work during the marriage. Fortunately the matrimonial property division coupled with the spousal support, provided her with sufficient financial means so that she was not required to seek employment after the parties separated. [17] From financial perspective, considering the changes to the needs and the means of the parties since the divorce judgment, the position of the applicant is now worse while the position of the respondent is better.  The applicant has met the threshold for a variation application by demonstrating that there has been a material change in circumstances since the spousal support order was last revised. Although this entitles him to have the Court review his obligation to pay spousal support, it does not follow that his obligation should be terminated. [18] It is significant that the agreement reached by the parties in 1995 did not provide that the spousal support was either time limited or that it was to be varied if there was a substantial change in the future financial positions of the parties. Surely at the time the agreement was made, the parties had contemplated their eventual retirement and the financial consequences that it would have for each of them. Yet it is not likely that the parties intended spousal support to continue indefinitely at $2,500.00 per month even after the applicant retired. [19] In most cases each party to marriage is disadvantaged by its breakdown. In this case, being a traditional marriage, the respondent has been disadvantaged to a greater degree than has the applicant. The respondent devoted her full time to working in the home and raising the three children of the marriage during the years when she would have been the most productive financially had she pursued a job or a career outside the home. Because of her efforts the applicant was able to pursue and develop his career as an engineer and thereby acquire the capacity to earn significant level of income annually. A couple of years after the parties separated in 1993, the respondent received her full share of the joint efforts of the parties up to that point in time in the form of an equal division of matrimonial property. [20] But the parties obviously recognized, and acknowledged through the additional spousal support provision of the agreement, that the property settlement alone would not put them on an even plane financially. In 1995 the respondent had little prospect of remunerative employment while the applicant’s financial future was secure. He then had the benefit of thirty-two years of employment as an engineer with secure future financially. In the years that have followed, he has been in much better position to improve his financial position than has the respondent. One of the reasons for this is because the respondent stayed home during the most productive years of her life to raise the children which enabled the applicant to focus on and advance his career. [21] Although it is obviously not the law that appropriate spousal support levels are determined by equalizing the incomes of couples who have divorced, the economic benefits and disadvantages that flow from the marriage and its dissolution must be taken into account. Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813. The fact that the applicant will no longer have any employment income, is not the sole consideration on this variation application, nor is it determinative of whether spousal support should be terminated. [22] The applicant has quite properly gone to considerable lengths to project his retirement income. Because most of it consists of tax sheltered investments, the tax consequences to him are substantial. He estimates that he will be required to draw $7,733.00 per month from those investments in order to maintain his standard of living and continue to pay the respondent $2,500.00 per month. His amortization projections show that if he does so, his retirement income will run out by the year 2011. He has sought the advice of certified financial planner respecting the implications of converting his Registered Retirement Savings Plans (RRSP’s) into Registered Retirement Income Funds (RRIF’s), Locked-In Retirement Accounts (LIRA’s), Life Income Funds (LIF’s) and Locked-In Retirement Income Funds (LRIF’s). [23] review of the material filed indicates that the applicant and his financial planner have focused primarily on the legal limitations he faces in accessing his RRSP’s and on the fact that there is significant tax cost to him in accessing retirement funds through any of these potential vehicles. The applicant also focuses on suggestions as to how the respondent could increase her monthly income by taking in boarders or selling her home and purchasing some form of annuity. There are two flaws in these submissions. The first is that there is significant tax saving to the applicant respecting payments he makes for spousal support. It is not evident from the material that either he or his planner have adequately taken this into account. The second is that the applicant could also supplement his own income by selling his residence and purchasing some form of annuity. [24] Considering all the factors set out in Moge v. Moge, supra, and Bracklow v. Bracklow, supra, and the means and needs of the parties and the changes to their financial positions, conclude that the 1995 spousal support should be varied downwards but should not be terminated. An adjustment period is also called for in the circumstances. [25] It is ordered that commencing April 1, 2000, the ongoing spousal support payable by the applicant to the respondent shall be $1,750.00 per month up to and including March 1, 2001. From and after April 1, 2001 until further order, the amount of spousal support shall be $1,250.00. [26] There is no merit in the wait-and-see suggestion of the respondent. It is evident that the applicant has retired and has no intention to become re-employed. It is essential that he know now what his future obligations will be. [27] As each party has had some measure of success, no costs are awarded to either.
The applicant sought to vary the 1995 consent judgment by terminating or significantly reducing spousal support of $2,500 per month. The respondent suggested the reduction should be limited to the amount she now received from her old age pension and CPP. Neither wanted a trial of the issue and submissions were primarily confined to the financial information filed. HELD: On-going spousal support was reduced to $1,750 per month from April until March 1, 2001 and $1,250 thereafter.  1)It is clear from Bracklow that each case involving spousal support must be determined on its own facts. The court must give due consideration to all the factors and objectives of a spousal support order set out in s.15.2 of the Divorce Act rather than focusing on one factor alone, such as income levels or self sufficiency.  2)There had been a material change in circumstances as the applicant, now 62, had lost his employment and suffered a debilitating leg injury while the respondent, now 67, was receiving an old age pension. 3)The 1995 agreement did not provide spousal support was either time limited or that it was to be varied if there was a substantial change in their future financial positions. However, it was unlikely the parties intended spousal support to continue indefinitely at $2,500 per month even after the applicant retired. The respondent was disadvantaged by the traditional marriage to a greater degree than the applicant as she devoted her full time to working in the home. She received her full share of their joint efforts in the form of an equal division of the matrimonial property. The economic benefits and disadvantages that flow from the marriage and its dissolution must be taken into account (Moge). There was no merit in the wait-and-see suggestion of the respondent. 4)No costs.