Coady v. Coady, (2014) 309 Man.R.(2d) 144 (QBFD)

• Judge: Johnston, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: September 08, 2014
• Jurisdiction: Manitoba
• Citations: (2014), 309 Man.R.(2d) 144 (QBFD);2014 MBQB 182

Coady v. Coady (2014), 309 Man.R.(2d) 144 (QBFD)

MLB headnote and full text

Temp. Cite: [2014] Man.R.(2d) TBEd. SE.025

Joseph Hugh Coady (petitioner) v. Deborah Gail Coady (respondent)

(FD 08-01-88214; 2014 MBQB 182)

Indexed As: Coady v. Coady

Manitoba Court of Queen's Bench

Family Division

Winnipeg Centre

Johnston, J.

September 8, 2014.

Summary:

The parties divorced. The husband applied for a termination or a variation of the spousal support component of the parties' separation agreements. In effect, citing the downturn in the economic fortunes of his corporation Langui, and his stated desire to retire, he sought to trigger the material change provision contained in the original agreement. Alternatively, he sought a reduction of spousal support payable and/or an "end date" upon which the obligation would cease. The wife cross-applied to effectively set aside the terms of the separation agreements, and for a reconsideration of the quantum and duration payable based upon the corporation's actual financial performance. Alternatively, she sought an indefinite extension of the spousal support provision with or without variation.

The Manitoba Court of Queen's Bench, Family Division, ordered that all payments due under the terms of the parties' three agreements be paid in full up to and including August 31, 2014; thereafter, the husband was obligated to pay continuing spousal support of $2,000/month for four years, whereupon his obligation and the wife's entitlement would cease.

Company Law - Topic 310

Nature of corporations - Lifting the corporate veil - General - [See Family Law - Topic 2210 ].

Family Law - Topic 2210

Maintenance of spouses and children - General principles - Calculation or attribution of income - The Manitoba Court of Queen's Bench, Family Division, discussed the imputation of income where the payor owned a company and spousal support, rather than child support, was the issue - The court discussed the treatment of retained earnings in particular - The court also discussed the issue of piercing the corporate veil in circumstances where the payor owned more than one company - The court stated that "In summary, while not accepting the assertion advanced on the payee's behalf respecting hidden corporate benefits nor 'piercing the corporate veil' to any significant degree, a 'means/needs' analysis reflects a continuing significant difference between the parties' standards of living." - See paragraphs 64 to 91.

Family Law - Topic 2384

Maintenance of spouses and children - Variation of - Grounds (incl. changed circumstances) - [See first Family Law - Topic 4009.1 ].

Family Law - Topic 3375

Separation agreements, domestic contracts and marriage contracts - Variation - Of maintenance - The parties divorced - The husband applied for a termination or a variation of the spousal support component of the parties' separation agreements - Citing the downturn in the economic fortunes of his corporation Langui, and his stated desire to retire, he sought to trigger the material change provision contained in the original agreement - Alternatively, he sought a reduction of spousal support payable and/or an "end date" upon which the obligation would cease - The wife cross-applied to set aside the terms of the separation agreements, and for a reconsideration of the quantum and duration payable based upon the corporation's actual financial performance - Alternatively, she sought an indefinite extension of the spousal support provision with or without variation - The Manitoba Court of Queen's Bench, Family Division, ordered that all payments due under the three agreements be paid in full up to and including August 31, 2014; thereafter, the husband was to pay spousal support of $2,000/month for four years, whereupon his obligation and the wife's entitlement would cease - The court considered, inter alia, that the parties' had cohabited for almost 18 years; 6.25 years of spousal support had been paid to date; there was no fraud or improper conduct; while the wife was now earning $41,000/year, the husband was still earning approximately three times as much as her; and the husband had a new partner, which enhanced his ability to pay - See paragraphs 1 to 117.

Family Law - Topic 4009.1

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of retirement of spouse - The parties divorced - The husband applied for a termination or a variation of the spousal support component of the parties' separation agreements - Citing the downturn in the economic fortunes of his corporation Langui, and his stated desire to retire, he sought to trigger the material change provision contained in the original agreement - Alternatively, he sought a reduction of spousal support payable and/or an "end date" upon which the obligation would cease - The wife cross-applied to set aside the terms of the separation agreements, and for a reconsideration of the quantum and duration payable based upon the corporation's actual financial performance - Alternatively, she sought an indefinite extension of the spousal support provision with or without variation - The Manitoba Court of Queen's Bench, Family Division, stated that the case was about a variation of a term of a separation agreement voluntarily entered into by the parties, and also one where the event triggering the request for variation (retirement) was one specifically contemplated by the parties at the time the original contract was executed - The husband's impending retirement appeared to be a "change in the conditions, means, needs or other circumstances of one of the former spouses" sufficient to merit consideration of the application - There also appeared to be two additional "material" changes, being: (a) the apparent economic downturn affecting Langui; and (b) the increased independent income now being earned by the wife - Thus, if the notice of the husband's intention to retire was insufficient to trigger this consideration, it, coupled with the two additional factors, certainly were sufficient to merit entertaining the variation - See paragraphs 51 to 54.

Family Law - Topic 4009.1

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of retirement of spouse - The parties divorced - The husband applied for a termination or a variation of the spousal support component of the parties' separation agreements - He argued, inter alia, that having received a "lump sum" payout of approximately one-third the value of his military pension, together with an approximate "equal" sharing of all RRSP or investment assets, and possibly an "unequal share" of family assets (i.e., the former family home) in the separation agreement, the wife had the same ability to generate post-retirement earnings as he had - The Manitoba Court of Queen's Bench, Family Division, rejected this "double dipping" argument - The wife was almost 58 years old - Her retirement investments and other assets were structured for her to safely begin to be drawn at age 62 - The goal of achieving an approximate "aggregate retirement savings for reasonable standards of living" suggested an extension of spousal support for an additional four years - The husband was almost 62 years old - Accordingly, his "early retirement" plan might be premature - To add an additional four years of spousal support, of some quantum, would carry forward the obligation only one year beyond the historical "normal" retirement age of 65 - Owing partly to the four year age difference between the parties, the "reasonableness" of expecting the payee to rely, even partly, on her "pensionable resources" seemed inappropriate - See paragraphs 96 to 105.

Family Law - Topic 4017

Divorce - Corollary relief - Maintenance and awards - Awards - Variation of periodic payments or lump sum award - [See Family Law - Topic 3375 ].

Family Law - Topic 4018

Divorce - Corollary relief - Maintenance and awards - Awards - Variation of - Jurisdiction - [See first Family Law - Topic 4009.1 ].

Family Law - Topic 4021

Divorce - Corollary relief - Maintenance and awards - Awards - Considerations - General - The parties divorced - The husband applied for a termination or a variation of the spousal support component of their separation agreements - Alternatively, he sought a reduction of spousal support payable and/or an "end date" upon which the obligation would cease - The wife cross-applied to set aside the terms of the separation agreements, and for a reconsideration of the quantum and duration payable - Alternatively, she sought an indefinite extension of the spousal support provision with or without variation - The Manitoba Court of Queen's Bench, Family Division, noted the division of significant family assets between the parties as documented in the initial separation agreement - In addition to the appropriate receipt by the payee of the "lump sum" payout of the net equalization of the parties' pensions, other significant assets were divided, including the "inter-spousal" transfer of the former family home to the payee, virtually free and clear of all encumbrances - When the parties' relative financial position at the commencement of the marriage was considered, it was obvious that both spouses received an "economic advantage" and benefit from their 18 years of cohabitation - Accordingly, the case was not about "compensatory" spousal support - Rather, it might be about contractual support - It was definitely about relieving economic hardship arising from marriage breakdown - See paragraphs 43 to 45.

Family Law - Topic 4021.4

Divorce - Corollary relief - Maintenance and awards - Awards - Considerations - Ability to pay (incl. potential to earn income and calculation of income) - [See Family Law - Topic 2210 ].

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance and awards - Awards - To spouse - Extent of obligation - [See Family Law - Topic 3375 ].

Family Law - Topic 4022.1

Divorce - Corollary Relief - Maintenance and awards - Awards - To spouse - Extent of obligation - [See Family Law - Topic 4039 ].

Family Law - Topic 4025.1

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of income or potential income of payor's spouse (incl. common law spouse) - The Manitoba Court of Queen's Bench, Family Division, discussed the effect of re-partnering on a payor's ability to pay spousal support - The court stated that "The enhancement is even greater in circumstances where the payor has the ability to 'sprinkle income' to his new spouse" through a closely held corporation - See paragraphs 92 to 95.

Family Law - Topic 4027

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of income or potential income of claimant - The parties divorced - The husband applied for a termination or a variation of the spousal support component of the parties' separation agreements - Citing the downturn in the economic fortunes of his corporation Langui, and his stated desire to retire, he sought to trigger the material change provision contained in the original agreement - Alternatively, he sought a reduction of spousal support payable and/or an "end date" upon which the obligation would cease - The wife cross-applied to set aside the terms of the separation agreements, and for a reconsideration of the quantum and duration payable based upon the corporation's actual financial performance - Alternatively, she sought an indefinite extension of the spousal support provision with or without variation - The Manitoba Court of Queen's Bench, Family Division, ordered that all payments due under the three agreements be paid in full up to and including August 31, 2014; thereafter, the husband was to pay spousal support of $2,000/month for four years, whereupon his obligation and the wife's entitlement would cease - The court considered, inter alia, that the parties' had cohabited for almost 18 years; 6.25 years of spousal support had been paid to date; there was no fraud or improper conduct; while the wife was now earning $41,000/year, the husband was still earning approximately three times as much as her; and the husband had a new partner, which enhanced his ability to pay - See paragraphs 1 to 117.

Family Law - Topic 4034

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of division of matrimonial property - [See second Family Law - Topic 4009.1 and Family Law - Topic 4021 ].

Family Law - Topic 4039

Divorce - Corollary relief - Maintenance and awards - Awards - Spousal support - Suspension or termination of - The parties divorced - The husband applied for a termination or a variation of the spousal support component of the parties' separation agreements - Citing the downturn in the economic fortunes of his corporation Langui, and his stated desire to retire, he sought to trigger the material change provision contained in the original agreement - Alternatively, he sought a reduction of spousal support payable and/or an "end date" upon which the obligation would cease - The wife cross-applied to set aside the terms of the separation agreements, and for a reconsideration of the quantum and duration payable based upon the corporation's actual financial performance - Alternatively, she sought an indefinite extension of the spousal support provision with or without variation - The Manitoba Court of Queen's Bench, Family Division, ordered that all payments due under the three agreements be paid in full up to and including August 31, 2014; thereafter, the husband was to pay spousal support of $2,000/month for four years, whereupon his obligation and the wife's entitlement would cease - The court considered, inter alia, that the parties' had cohabited for almost 18 years; 6.25 years of spousal support had been paid to date; there was no fraud or improper conduct; while the wife was now earning $41,000/year, the husband was still earning approximately three times as much as her; and the husband had a new partner, which enhanced his ability to pay - See paragraphs 1 to 117.

Cases Noticed:

Melnyk v. Melnyk (2010), 253 Man.R.(2d) 253; 2010 MBQB 121, refd to. [para. 15].

Lindsay v. Lindsay (1989), 59 Man.R.(2d) 186; 21 R.F.L.(3d) 34 (Q.B.), refd to. [para. 17].

Hykle v. Hykle (2007), 219 Man.R.(2d) 198; 2007 MBQB 243 (Fam. Div.), refd to. [para. 38].

Moge v. Moge, [1992] 3 S.C.R. 813; 145 N.R. 1; 81 Man.R.(2d) 161; 30 W.A.C. 161, refd to. [para. 39].

R.P. v. R.C., [2011] 3 S.C.R. 819; 425 N.R. 1; 2011 SCC 65, refd to. [para. 40].

Bracklow v. Bracklow, [1999] 1 S.C.R. 420; 236 N.R. 79; 120 B.C.A.C. 211; 196 W.A.C. 211, refd to. [para. 41].

Cleven v. Cleven (2014), 304 Man.R.(2d) 260; 2014 MBQB 86 (Q.B. Fam. Div.), refd to. [para. 44].

Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. et al. (1996), 2 O.T.C. 146; 28 O.R.(3d) 423 (Gen. Div.), refd to. [para. 68].

Wildman v. Wildman (2006), 215 O.A.C. 239; 82 O.R.(3d) 401 (C.A.), refd to. [para. 69].

Thompson v. Thompson, 2013 ONSC 5500, refd to. [para. 72].

Shaw v. Shaw (2009), 283 N.S.R.(2d) 388; 900 A.P.R. 388; 2009 NSSC 353, refd to. [para. 73].

Poirier v. Poirier, [2010] O.T.C. Uned. 920; 81 R.F.L.(6th) 161; 2010 ONSC 920, refd to. [para. 74].

Martin v. Orris (2009), 246 Man.R.(2d) 262; 2009 MBQB 290 (Fam. Div.), refd to. [para. 75].

Koester v. Koester, [2003] O.T.C. 1140; 50 R.F.L.(5th) 78 (Sup. Ct.), refd to. [para. 78].

Nesbitt v. Nesbitt (2001), 156 Man.R.(2d) 238; 246 W.A.C. 238; 19 R.F.L.(5th) 359; 2001 MBCA 113, refd to. [para. 78].

Dyck v. Dyck (2008), 231 Man.R.(2d) 246; 437 W.A.C. 246; 2008 MBCA 135, consd. [para. 82].

Miller v. Joynt (2007), 422 A.R. 150; 415 W.A.C. 150; 48 R.F.L.(6th) 256; 2007 ABCA 214, refd to. [para. 84].

Hausmann v. Klukas (2009), 265 B.C.A.C. 219; 446 W.A.C. 219; 91 B.C.L.R.(4th) 201; 2009 BCCA 32, refd to. [para. 84].

Gosse v. Sorensen-Gosse (2011), 311 Nfld. & P.E.I.R. 76; 967 A.P.R. 76; 2011 NLCA 58, refd to. [para. 84].

Beattie v. Beattie (1998), 418 Sask.R. 119; 2013 SKQB 127 (Fam. Div.), agreed with [para. 92].

Bullock v. Bullock, [2004] O.T.C. 227 (Sup. Ct.), refd to. [para. 97].

McKay v. Adams (2013), 298 Man.R.(2d) 97; 2013 MBQB 236, refd to. [para. 97].

Boston v. Boston, [2001] 2 S.C.R. 413; 271 N.R. 248; 149 O.A.C. 50; 2001 SCC 43, dist. [para. 100].

Meiklejohn v. Meiklejohn, (2001), 150 O.A.C. 149 (C.A.), refd to. [para. 103].

Cymbalisty v. Cymbalisty (2003), 180 Man.R.(2d) 112; 310 W.A.C. 112; 2003 MBCA 138, refd to. [para. 104].

Counsel:

George E. Ulyatt, for the petitioner;

Norman L. Yusim and Marcelin F. Murray, for the respondent.

This case was heard by Johnston, J., of the Manitoba Court of Queen's Bench, Family Division, Winnipeg Centre, who delivered the following decision on September 8, 2014.