M. Gordon QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2016 SKQB 216 Date: 2016 06 21 Docket: DIV 757 of 2015 Judicial Centre: Saskatoon BETWEEN: ALISON STEPHANIE HERCHAK McCORRISTON and JAMES ROBERT McCORRISTON Counsel: James M. Streeton for the petitioner wife Alan W. Rankine for the respondent husband FIAT GOEBEL J. June 21, 2016 Introduction [1] The wife applies for interim spousal support and an order providing her with an interim distribution of property in the amount of $25,000. [2] The parties were involved in spousal relationship for almost 10 years. They had no children together although the husband has children from prior relationship for whom he pays support. During the relationship the wife suffered from health problems which resulted in her becoming disabled and unable to continue her employment. During this same time period the husband secured full-time employment with CN. [3] The parties separated in July 2015. The wife currently supports herself from two sources of disability benefits for total income in the range of $20,000 per year. She has lived frugally and has kept her expenses at minimum. Since separation she has resided with extended family members, most recently her mother, with the result that she has no costs for housing. Although she deposes that this is not sustainable long-term, she has not provided any evidence respecting her future plans or whether she has applied for subsidized housing. [4] The husband’s total reported income in 2015 was $74,174. He has one minor child in his care and continues to pay $1,100 in child support each month to his former spouse. He claims that he has no monies remaining after his basic expenses are paid. Interim Spousal Support [5] The wife seeks an order in the amount of $2,000 per month to equalize the gross incomes of the parties. In so doing she suggests that the Spousal Support Advisory Guidelines: Carol Rogerson Rollie Thompson, Spousal Support Advisory Guidelines ([Ottawa]: Department of Justice, 2008), should not apply in these circumstances. Further, in proposing this sum she makes no adjustment for the husband’s child support obligations nor the fact that he is supporting minor child in his care. [6] The husband does not take issue with the wife’s entitlement to interim support but states that she has failed to demonstrate need for support at this time. Specifically, he points out that her sworn financial statement shows modest surplus, which is enhanced given additional evidence that 94% of the cost of her medical expenses is covered. The husband also argues that he is not able to afford support payment at this time. It is noted that his calculations of affordability rely solely on net income figures making no allowance for the fact that spousal support is deductible payment. [7] In Hein Hein, 2004 SKQB 277 (CanLII) [Hein], Sandomirsky J. addressed the issue of interim spousal support claims by saying, at para. 32: 32 At an interim stage it is often quoted that the paramount consideration at an early stage of the breakdown is “need and ability to pay.” The statutes do not prescribe separate considerations, factors or objectives for interim spousal support as opposed to final determination of spousal support. The paramountcy of need and ability is reflection that an interim order is made before family property division is completed and also anticipates that the attainment of economic self‑sufficiency and overcoming the economic hardship of the marriage breakdown are yet to be achieved. The primary purpose of interim spousal support is to allocate family income in fair and equitable manner during this transition period. [8] In Antonishyn Boucher, 2011 SKQB 147 (CanLII), 373 Sask 154, he expanded on his comments in Hein and provided comprehensive overview of the principles to be considered on an interim application for spousal support as follows: 38 Case law has established that at an interim stage, what may be “reasonable” may differ from what may be “reasonable” at the final or variation stage. The case law emphasizes that need and means take on greater significance because: (i) the interim order usually precedes the division of family property; (ii) one of the spouses may be in control of the income generating family assets and have access thereto, whereas the other spouse may not have equivalent or any such access; (iii) section 5(1) of The Family Maintenance Act expressly emphasizes, “need and capability to pay”; (iv) section of The Family Maintenance Act expressly mandates that, “the court shall take into account the needs, means and economic circumstances of the parties”; (v) similarly, s. 15.2(4) of the Divorce Act mandates that the court shall take into account “the conditions, means, needs and other circumstances of each spouse”; (vi) spouse is not required to consume one’s capital, savings or other family property when there is ability to reallocate family income to overcome disparities in the incomes of the spouses; (vii) attainment of economic self sufficiency [sic] and overcoming economic hardship of the marriage breakdown are yet to be achieved. See: Frass v. Frass 2006 SKQB 189 (CanLII); [2006] S.J. No. 287 (QL) at para. 12 (Sask. Q.B.) Sandomirsky J. states: [12] At this interim stage, rely upon need and ability to pay, largely circumscribed by the difference in the party’s respective incomes, $73,000.00 versus $29,000.00, rounded. also rely upon the principles of spousal support enunciated so carefully in the Supreme Court of Canada’s decision of Moge v. Moge, 1992 CanLII 25 (SCC), [1992] S.C.R. 813, wherein Madam Justice L’Heureux-Dubé focussed upon the economic consequences of the marriage and marriage breakdown as they impact upon each spouse. Where there is a significant disparity in the incomes of each of the former spouses in the immediate post‑separation period, and such economic disparity defines a corresponding disparity in the affordability of lifestyles of the former spouses, spousal support is the appropriate mechanism to diminish those disparities. The amount of spousal support should provide both of the former spouses with an interim standard of living which more closely relates to that of each other and to the standard of living experienced by both before their separation. This principle does not, however, demand equal household incomes as is so often misunderstood. See: Hein v. Hein, 2004 SKQB 277 (CanLII); [2004] S.J. No. 458 (QL) (Sask. Q.B.) at para. 32; See: Marcotte v. Marcotte 2008 SKQB 223 (CanLII); (2008), 315 Sask. R. 280 (Sask. Q.B.); See: Skomorowski v. Bernier, 2009 SKQB 55 (CanLII); [2009] S.J. No. 125 (QL) (Sask. Q.B.); See: Cey v. Cey, 2004 SKQB 493 (CanLII); [2004] S.J. No. 767 (QL) (Sask. Q.B.); See: Messer v. Messer (1997), 1997 CanLII 9794 (SK CA), 33 R.F.L. (4th) 426; (1997), 163 Sask. R. 101 (Sask. C.A.); (viii) at this interim stage, spousal support application does not involve property analysis per se, but does constitute an income analysis: See: Van De Sype v. Riviere, 2009 SKQB 269 (CanLII); (2009), 336 Sask. R. 284 (Sask. Q.B.); (ix) equalization of income is not the goal, but adjusting disparity between incomes, and therefore lifestyles, is to be considered: Moge v. Moge, supra. See: Frass v. Frass, supra; (x) remember Moge v. Moge, supra, wherein L’Heureux Dubé [sic] J. states that the new Divorce Act, (1985) is move away from strict needs/means analysis to broader based analysis of factors (s. 15.2(4) and objectives (s. 15.2(6) of spousal support. Further, in Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] S.C.R. 420 McLachlin J., as she was, concedes at para. 43 that, “need alone may be enough”. 39 Only when entitlement is established does the court proceed to the second step of the analysis being quantum and duration. An interim spousal support order is normally not compensatory and addresses imminent economic hardship in the immediate post‑separation period. [Emphasis in the original] [9] In this instance, there is no dispute that the wife is entitled to interim support. In addition, there is no dispute that there is a significant disparity in incomes and lifestyles between the spouses. Interim spousal support is an appropriate mechanism to diminish those disparities. In addition, the husband can arrange for an immediate tax adjustment from his employer which will increase his net monthly income and allow him to absorb spousal support obligation into his monthly cash flow. [10] On the other hand, the analysis must reflect an adjustment for the after tax cost of his child support payment as well as his obligation to support the minor child in his care. Child support obligations take precedence over spousal support. [11] Having considered all of these matters, I direct that the husband pay to the wife the sum of $500 per month in interim spousal support commencing on June 1, 2016 and continuing on the first of each month until further agreement or court order. This amount shall be tax deductible to the husband and taxable to the wife. Interim Distribution of Property [12] The wife asks for an interim distribution in the sum of $25,000 and, recognizing that there is no liquid funds available, proposes that the husband be ordered to take out loan to facilitate the payment. The husband opposes the application and asks that it be dismissed. [13] The court has authority to order an interim distribution pursuant to s. 26(2) of The Family Property Act, SS 1997, F-6.3. [14] Conley Conley (1985), 1985 CanLII 2599 (SK QB), 44 Sask 76, (QB) [Conley], is the leading case in Saskatchewan on such an application. The Conley factors were succinctly summarized by Ryan-Froslie J. (as she was then) in Geransky Geransky, 2012 SKQB 218 (CanLII), and have been repeatedly cited and applied, as follows: (i) Were the assets for distribution acquired during the marriage? (ii) Do the net assets for distribution far exceed the amount of the interim distribution requested? (iii) Will there be some considerable period of time before the matter can be brought to trial? (iv) Who has possession and control of the assets? (v) Can funds be made available for the purpose of an interim distribution either from cash on hand or by way of loans? (vi) Can the distribution be made without prejudicial tax implications? (vii) Can the distribution be made without serious prejudicial effect to the family assets? (viii) Does the applicant need the distribution to meet capital demands? [15] These factors do not constitute an exhaustive list with the most important consideration being whether the net assets for distribution “far exceed” the amount of the interim distribution being sought: Waldherr Waldherr (1992), 1992 CanLII 8120 (SK QB), 106 Sask 140 (QB). See also: Savoy Savoy, 2014 SKQB 293 (CanLII), 456 Sask 16; Schaffel Schaffel, 2008 SKQB 91 (CanLII), 313 Sask 203; Gray Breeze, 2011 SKQB 193 (CanLII); Shurvell Shurvell, 2012 SKQB 380 (CanLII), 406 Sask 86. [16] In this instance there is some dispute between the parties as to whether they have any beneficial interest in the house they were residing in at the date of separation (which appears to be legally owned by third party). They concede that this issue cannot be resolved on an interim motion. [17] The other assets listed in their property statements are mainly household goods and locked-in retirement funds, portion of which are subject to an exemption claim. Even if they could be accessed on an interim basis, and there is no evidence that this is the case, doing so would attract significant tax consequences. [18] This is not a situation where the net assets far exceed the amount of the distribution claimed. In addition, ultimately the distribution may have to be by way of spousal rollover from the locked-in retirement funds as there appear to be no liquid assets available to the husband. [19] For these and other reasons, an order requiring the husband to take out loan to pay an interim distribution is not justified on the evidence. The wife’s application for an interim distribution is dismissed. [20] Given the mixed success, there shall be no order as to costs. J. G.V. GOEBEL
HELD: The application for interim spousal support was granted and the respondent ordered to pay $500 per month. The order was made to diminish the disparity between the income and lifestyles of the parties. The application for interim distribution of property was dismissed. The court found that this was not a situation where the net assets exceeded the amount of the distribution claimed. As the respondent had no liquid assets, the distribution of family property might eventually involve a spousal rollover from the pension funds to the petitioner.