Supreme Court

                                                                      S. F. H. No. 1201-54224 (001394)

                        IN THE SUPREME COURT OF NOVA SCOTIA

                                               FAMILY DIVISION

                            [Cite as: Beaton v. Beaton, 2001 NSSF 30]

BETWEEN:

NANCY IRENE BEATON,

-Petitioner

-and-

JOHN BERNARD BEATON,

-Respondent

                                                     DECISION

BEFORE THE HONOURABLE  JUSTICE R. JAMES WILLIAMS

PLACE OF HEARING:            Halifax Nova Scotia

DATE OF HEARING:             July 26, 2001

DATE OF DECISION:  November 29, 2001

COUNSEL:          Gordon Kelly, counsel for the Applicant

D. Timothy Gabriel, counsel for the Respondent

WILLIAMS, J. S. C. (F. D.)

Nancy Irene (Beaton) Devoe and John Bernard Beaton married on June 29, 1979.  They separated in the summer of 1999.  They are now divorcing.  They have resolved the issues related to division of their property.  They cannot agree on the issue of spousal maintenance.

A.      FACTUAL BACKGROUND

The parties married in Alderpoint, Cape Breton on June 29, 1979.  Ms. Devoe was 22 and Mr. Beaton was 21.  Neither had been previously married.  They do not have children. 

Ms. Devoe had commenced a nursing program in 1975.  She left it in 1976.  In 1977-1978 she completed a secretarial course at Cape Breton Business College.

Mr. Beaton left school in Grade 8 or 9 and worked as a fisherman's helper.  He joined the Armed Forces (Navy) in the fall of 1977.

The parties started dating in early 1976.   They married on June 29, 1979.

Their work and residential history is outlined by them (in affidavits) as follows:

B.      SEPARATION

He said:

- Ms. Devoe would not move to British Columbia with him - saying she did not want to leave her family, job or home;

- Mr. Beaton drove to British Columbia;

- Mr. Beaton was nominated but not chosen for Commission Officer training.

She said:

- Mr. Beaton had to got to British Columbia until at least Christmas 1999.  The posting would be for an indefinite time.  She would stay in Nova Scotia to see if it went beyond a few months;

- he chose not to take Commission Officer training;

- August 19 he phoned from British Columbia and said he wanted a separation.

C.      POST-SEPARATION

Ms. Devoe indicates that, as a result of the separation, she was on medical leave from work until November 1, 1999.  She has seen a counsellor for some time "to help her deal with the breakdown of her marriage".  She felt "lost".  She lost considerable weight.  She indicates he was dominating during the marriage.  He denies this conduct, says she would not accompany him to British Columbia and says physical separation was not new to the relationship, pointing out that he was, culminatively, away for over 13 years of the marriage.

Ms. Devoe issued the Petition for Divorce September 14, 1999.

In October 1999 it was informally agreed that Mr. Beaton would put monies into their joint account monthly to cover the mortgage and provide her with two $250.00 allotments per month (as he had in the past).  He was receiving a $1,200.00 per month tax-free temporary family moving allowance as a result of his posting to British Columbia.  He had the accelerated mortgage payments they were making reduced from $554.00 bi-weekly to $254.00 bi-weekly in November 1999.  He paid the mortgage and bills from July when he left until October 1, 2000 (the effective date of their Interim Agreement).

On November 28, 2000 the parties entered an Interim Agreement.  It provided for Mr. Beaton to pay Ms. Devoe support of $1,100.00 per month commencing October 1, 2000 to and including July 1, 2001 - a period of nine months.  This was extended to October 1 by agreement at the time of the hearing.  The $1,200.00 monthly tax free "family" moving allowance terminated upon the signing of the agreement.

Mr. Beaton was released from the military in March 2001.   He now  works as a Maintenance Operator for Azurix North America in Hamilton, Ontario.  He earns $17.88 per hour on 40-hours per week, totalling $37,190.00 per year.  He also receives overtime and shift differentials.  His income appears to be between $37,000.00 and $42,000.00 per year.  He receives a military pension of $1,666.48 per month, for a total of $19,997.76 per year.  Ms. Devoe's employment income is $24,620.00 per year.

D.     PROPERTY DIVISION

The parties have agreed that issues under the Matrimonial Property Act will be resolved with Mr. Beaton making an equalization payment of $17,762.50 to Ms. Devoe to achieve an (equal) division of assets pursuant to s. 12 of the Matrimonial Property Act.  The asset division is as follows (taken from p. 8 of Ms. Devoe's counsel's Pre-Trial Memorandum):

E.      MS. DEVOE’S CLAIM TO SUPPORT ENTITLEMENT

Ms. Devoe asserts entitlement to support on each of the three grounds referred to in Bracklow v. Bracklow (1999) 1 R. F. L. (4^th) 1 (S. C. C.) - compensatory, contractual and non-compensatory.

Compensatory

Ms. Devoe and Mr. Beaton did not have children.  Ms. Devoe was effectively absent from the workforce for approximately four years (for approximately three years when the parties moved to Cape Breton, and for approximately one year on their return to Halifax).  She had left employment with St. Mary’s University in 1985 when they went to Cape Breton.  She secured her current employment with the library in 1989.  She asserts a right to spousal support to compensate her for loss of seniority, promotion opportunities, training and pension contributions.

Ms. Devoe also refers to her stress leave and counselling post-separation.

Contractual

Ms. Devoe asserts that this was a marriage “in which there was an arrangement in place throughout the marriage whereby the Respondent

(Mr. Beaton) provided the Petitioner (Ms. Devoe) with funds to enable her to meet her expenses.”

Non-compensatory

Ms. Devoe asserts that she has suffered economic hardship as a result of the breakdown of the marriage.   The length of their relationship (twenty years) also gives rise to potential obligations.

F.      IS IT IMPORTANT TO DETERMINE THE SPECIFIC BASIS OF ENTITLEMENT TO SPOUSAL SUPPORT?

In Bracklow (supra) the Supreme Court of Canada dealt with the issue of entitlement.  In doing so, it identified two theories of “marriage and post-marital obligation”:

The first theory of marriage and post-marital obligation is the ‘basic social obligation’ model...the payment corollary of this theory has been referred to as the ‘income replacement model’ because the primary purpose of alimony payments, under this basic social obligation model, is to replace lost income that the spouse used to enjoy as a partner to the marriage union.

...

At the other end of the spectrum lies what may be termed the ‘independent’ model of marriage... The theory of spousal support that complements this model of marriage is the ‘clean break’ theory in which a former spouse, having compensated in a restitutionary sense any economic costs of the marriage on the other spouse moves on with his or her life, possibly to enter into more such relationships.  Again, the proponents vary in their degree of allegiance.  Some prefer to characterize the clean-break model as encompassing ‘transitional support’, in addition to straight restitution, due to the general dislocation costs of unwinding the partnership.

...

The independent clean-break model of marriage provides the theoretical basis for compensatory spousal support.  The basic social obligation model equally undergirds what may be called ‘non-compensatory’ support.  Both models of marriage and their corresponding theories of spousal support permit individual variation by contract, and hence provide a third basis for a legal entitlement to support... (at p. 23)

...The contractual or consensual basis for support finds its source in s. 15(4) of the Divorce Act (‘In making an order under subsection (1)...the court shall take into consideration...(c) any order, agreement or arrangement relating to support of either spouse’).  Consensual arrangements may either create or negate an obligation to support, under appropriate circumstances. (at p. 27)

The Supreme Court of Canada acknowledged that marriages:

...may fit neither model (or both models).  Many modern marriages are a complex mix of interdependence and independence...(at p. 24)

and that:

It is not a question of either one model or the other.  It is rather a matter of applying the relevant factors and striking a balance that best achieves justice in the particular case... (at p. 26)

The model of marriage dictates the context(s) in which the parties’ separation will be seen by the court, and in turn the purpose of support.  The “models of separation” are embedded with potentially different policy priorities - need, for example, is arguably more critical to consideration of non-compensatory support than compensatory.  Hanging over these models of separation is the recognition that there may be a “contractual or consensual basis” for either departing from the two identified “models of separation/rationale for support” or creating an obligation for support where none can be rationalized on a compensatory or basic social obligation/non-compensatory model.  It is less than clear what degree of deference should be given contracts concerning support between adult parties, how aggressive courts should be in implying contracts from consensual behaviour or whether the use of the word “consensual” implies only distinct overt consent or whether it also encompasses implied arrangements from more passive acceptance of informal arrangements between parties.  Where we as courts go with issues such as this will inevitably influence the separation and post-separation advice given by counsel.

The “model of marriage”, separation or support used to rationalize support defines the purpose of the support order.  The court then needs to determine first which (and how many) of the rationale for support exist.  Then the court should consider what quantum (amount and duration) is appropriate - on the basis of the rationale or purpose(s) of the support.

G.      QUANTUM OF SUPPORT:  STATUTORY CONSIDERATIONS

The Divorce Act states:

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).

(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

            (4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

                        (a) the length of time the spouses cohabited;

                        (b) the functions performed by each spouse during cohabitation; and

                        (c) any order, agreement or arrangement relating to support of either spouse.

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

In Bracklow, the Supreme Court of Canada has indicated that quantum refers to amount and duration of the order.  The form of the order (lump sum or periodic) is also a consideration.

H.      DETERMINING SPOUSAL SUPPORT

It seems then that a trial court must work through a series of issues when considering spousal support.  They include:

1.       Entitlement

a.       Can entitlement to support be rationalized as either, or both compensatory or non-compensatory?

b.       Are there contractual or consensual factors that affect entitlement - creating, negating or limiting it?

Then for each and the combined rationale for entitlement,

2.       Quantum (Duration, Amount and Form of Order)

a.       the condition, means, needs and other circumstances of each party including length of cohabitation, functions during cohabitation, any order, agreement or arrangement, age, property division, etc. (s. 15.2(4);

b.       the goals of support (arising from s. 15.2(6))

- recognize any economic advantages or disadvantages arising from the marriage

- apportion consequences of child care (beyond child support)

- relieve any economic hardship arising from breakdown of the marriage

- insofar as practicable encourage self-sufficiency within a reasonable period of time

c.       the purpose of the support and factors arising from that, i.e. compensatory and/or non-compensatory.

I.        DECISION

1.       Entitlement

Ms. Devoe was out of the work force for approximately four years when the parties moved to Cape Breton (1985-1989) as a result of Mr. Beaton’s job transfer.  They moved in with her parents.  Apart from the move back to Halifax (1989) she did not move again despite his having had a variety of postings.  Her limited employment in Cape Breton appears, to a degree, to have been convenient.  When they went to Cape Breton she left employment with St. Mary’s University.  She secured her current employment in 1989.  She appears content with it.  I have limited or no evidence quantifying her  “loss of seniority, promotion opportunities, training and pension contributions”.   I would conclude that she is entitled to very limited compensatory support in these circumstances.

The parties married in 1979 and separated in the summer of 1999.  They were together 20 years.  They were an economic union for those 20 years.  She earned less than him - her employment income was $20,000.00 to $24,000.00 per annum over the last five years; his income was $52,000.00 to $58,000.00 until retirement from the military.  He now has approximately $20,000.00 per year in pension income and $37,000.00 to $42,000.00 per year in employment income.  In these circumstances, I conclude that there is an entitlement to support on a non-compensatory basis.

The informal financial arrangements between the parties during the marriage (essentially payment of mortgage and related expenses as well as the provision of additional monies of approximately $500.00 per month towards other expenses) do not, in my view, amount to a contractual or consensual arrangement that could be a rationale for a support order.  He was away a lot, they arranged their household management this way.  The interim arrangement they entered into after separation was for a fixed duration.  It would, in any event, be inappropriate to imply a support rationale from interim arrangements in the absence of specific evidence - to do so would only discourage such interim agreements.  I conclude that there is no contractual or consensual rationale for support entitlement - no such circumstances that independently create, negate or limit entitlement to support.

2.       Quantum (Amount, Duration and Forms of Order)

Ms. Devoe was born July 12, 1956.  She is 45.  Mr. Beaton was born June 4, 1958.  He is 43.  Neither has any disability.  Both are able to work.  Ms. Devoe took some stress-related leave following their separation.  There is nothing in the record to indicate that her employability or functioning is in the long term compromised in any way.

The parties had no children and were separated for lengthy periods during their marriage.  They were physically apart for some 13 of their 20 years together (according to Mr. Beaton).  I recognize that this assertion ignores weekends, holidays and the commuting he did from some postings home.  It also includes his time at sea.  Because of the periods of separation, Ms. Devoe managed the household on her own for extended periods of time.

Ms. Devoe earns $24,662.00 per year.  Mr. Beaton has employment income of $37,190.00 per year (plus overtime).  For the purpose of this proceeding, I would conclude that he has yearly employment income of $42,000.00 per year.  He has pension income of $20,000.00 per year that he has been receiving since after leaving the military in March 2001.  In the year 2000 he received (until the parties formalized their separation with a written document) a tax-free spousal relocation allowance.  Ms. Devoe has retained the parties’ home - valued at $217,000.00 (less encumbrances).

The parties have had, effectively, two interim arrangements - one informal arrangement from October 1999 until November of 2000 (funded to a significant degree by the tax-free allowance) and an interim agreement that he pay spousal support of $1,100.00 per month, made in November 2000, but effective from and including October 1, 2000 to July 2001 - a total of ten months.  At trial this was extended three more months to and including October 1, 2001 by agreement.

The parties have also agreed on the division of their assets.  Mr. Beaton retains his pension (valued at $162,000.00), land in Cape Breton ($13, 500.00), RRSPs ($40,950.00).  He retains a 1998 Honda vehicle and its loan (which is $825.00 more than its value).  He must make a $17,762.50 equalization payment to Ms. Devoe. Ms. Devoe retains their home ($217,000.00), her pension ($8,812.00), RRSPs ($7,085.00), a joint bank account ($4,236.00) and two-thirds of the home furnishings (based on value).  She receives the $17,762.50 equalization payment.  She retains a 1994 Honda ($8,000.00).  She assumes responsibility for the $35,405.00 mortgage and $31,314.00 credit line.  The home, bank account and equalization payment total: 

$217,000.00

    17,762.50

 +   4,236.00

$238,998.50

The major debt (which  

she assumes) is:            $31,314.00

+35,405.00

         $66,719.00

The balance:                 $238,998.50

-   66,719.00

$172,279.50

Ignoring her modest pension and RRSP holdings, she has approximately $172,279.00 in assets at her potential disposal.

In Boston v. Boston (2001) 17 R. F. L. (5^th) (S. C. C.) the Court dealt at some length with the problem of “double recovery” or “double dipping”.  It (“double dipping”) was recently commented upon in Meiklejohn v. Meiklejohn (2001) Carswell, Ontario 3480 (Ont. C. A.), at p. 4:

[11]...As explained by Major J. for the majority at paragraph 1, these terms "describe the situation where, after an equal division of assets on marriage breakdown, one spouse claims continued support from the previously divided or equalized assets of the other spouse". Major J. described at paragraph 3 how the problem arises where, as here and as in Boston, a pension is involved:

When a pension changes from an asset into income the "double recovery" difficulty can arise, usually in the following way. On marriage dissolution, the parties equalize the matrimonial assets. The pension-holding spouse (the husband in this appeal) must include the future right to his pension as part of his net family property. For the husband to retain his pension, the payee spouse (the wife in this appeal) must get other assets of the same value, in order to equalize their net family property. While the husband is still employed, he may be obliged to make spousal payments to the wife. When he retires, however, and his pension comes into pay, the wife is said to be making a double recovery if she continues to receive spousal support from the husband's pension income, as she received assets equal to the capital value of the pension at the time of settlement. If support payments from the pension are maintained, she is collecting twice from the same source.

[12] Major J. concluded at paragraph 63 that it is "generally unfair to allow the payee spouse to reap the benefit of the pension both as an asset and then again as a source of income", particularly where the payee spouse receives capital assets that she retains to increase her estate. To avoid double recovery, the court where practicable is to focus on that portion of the payor's assets that was not part of the equalization or division of matrimonial assets.

                        [13] Major J. recognized, however, that there are a number of caveats to the generally undesirable double recovery. A rationale for avoiding double recovery is that the payee spouse is in a position and under an obligation to generate income from the assets that have been transferred to her upon separation. However, as Major J. pointed out at paragraph 59, "it may be unreasonable to expect the payee spouse to generate investment income from the matrimonial home". The support payments should provide "a level of income sufficient to maintain a lifestyle that is comparable to that enjoyed during the marriage". Allowing the spouse to remain in the matrimonial home contributes to this goal.

                        [14] Major J. also recognized, at paragraph 65, that where the spousal support agreement is based mainly on need, rather than compensation, double recovery may be permitted. As he also said, "Double recovery may be permitted where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and, despite this, an economic hardship from the marriage or its breakdown persists

Counsel for Mr. Beaton argues that his pension income should not be included when spousal support is examined.

Ms. Devoe asserts she has been disadvantaged and suffered hardship arising from the marriage breakdown, that her standard of living has been reduced, that her employment and career was secondary to his.

Ms. Devoe seeks $1,400.00 per month in spousal support.  She asserts that this would give them roughly equal disposable income (based on he having income of $58,779.00 (i.e. including his pension income) and she having income of $24,620.00 (not attributing any income to her assets).  Calculations submitted by her suggest this would give her $2,535.00 per month and he $2,559.00 per month in disposable income.  She requests also that he be ordered to carry life insurance of $243,000.00 to insure support payments of $1,400.00 per month until he reaches 65 years of age (she would be 67 years of age).

 Ms. Devoe has chosen to stay in the parties’ home.  She has filed a budget setting out her needs.  It proposes to combine the mortgage and line of credit debts (some $65,000.00) and to pay out the new mortgage over 20 years.  Her new mortgage and taxes would cost $740.87 per month.  The budget includes a modest RRSP of $50.00 per month and $350.00 per month for “Investment” to buffer income tax on spousal support.  The tax calculations on the budget, however, include tax on the level of support “proposed” in the budget - $1,100.00 per month.  Her budget deficit is $194.24 per month.  Taking off the $350.00 in savings leaves her with a surplus of approximately $150.00 per month.  The equalization payment is apparently to be paid to her over a period of months, sooner if Mr. Beaton can sell the property in Cape Breton.  Once received, it could be applied to the mortgage debt and Ms. Devoe’s needs reduced.

I also consider the goals of support as set out in s. 15.2(6) and the rationale for entitlement to support as earlier discussed.

This is a relatively lengthy marriage.  There are no children.  Ms. Devoe has had a difficult time adjusting emotionally to the separation.  In the circumstances there can be expected to be some transition economically also.  This is not a situation where, in my view, Ms. Devoe is entitled to indefinite or lifetime support.  She is 45, employed, and will have assets approaching $200,000.00.  The assets she has retained are not convertible to income as readily as (was) Mr. Beaton’s pension.  She should be allowed a reasonable period of time to reorganize herself financially.  That said, she has chosen a division of assets that does not split his pension - she would have been entitled to half or nearly half of the pension.  This would have given her additional income of almost $10,000.00 per year.  Her income would, then, have approached $35,000.00.  She has chosen the house rather than pension income.  Mr. Beaton should not be expected to support her indefinitely in circumstances where her need arises, to a significant degree, from the retention of the home.  I believe appropriate support should:

(a)     compensate her for the period of under-employment in Cape Breton, and loss of benefits;

(b)     give her time to make decisions regarding the home (whether selling it, taking in a boarder, etc.) and provide her with a transition period that is meaningful having regard to the length of the marriage and economic disadvantages arising from the separation;

(c)     provide her and Mr. Beaton with comparable levels of disposable income for a fixed period, recognizing that Mr. Beaton has a “basic social obligation” to her arising from the marriage;

(d)     expect that she utilize her resources to support herself at the end of this time frame.

Mr. Beaton shall pay her $1,000.00 per month for a period of one year  commencing November 1, 2001, to and including October 1, 2002.  This amount is based on her current budget.  It is made giving some consideration to the division of assets, including the delay in payment of the equalization payment.  It considers his pension income - for a fixed period - giving her time to make arrangements to generate some income from or alter arrangements regarding the matrimonial home and her need as it arises from it.

It is not appropriate to consider his pension income as a source of support on an on-going basis.  Based on his having employment income of $42,000.00 and she having employment income of $25,000.00, a maintenance payment of $725.00 per month would (ignoring his pension income and for that matter her capital in the home) leave them with income  that is approximately equal.  This will be paid commencing November 1, 2002 for a period of twelve months to an including October 1, 2003, at which time spousal support will terminate.

The result will be, that following a 20-year marriage and division of assets, support will have been paid to Ms. Devoe for a period of:

                               thirteen months at $1,100.00 per month;

                                    one year at $1,000.00 per month;

                                     one year at $725.00 per month.

Ms. Devoe will have received support for a period of three years (from October 2000) that either leaves her with similar or more disposable income than Mr. Beaton (ignoring his pension).  I have treated their financial arrangements from October 1999 to October 2000 apart from support.  The bulk of monies received by Ms. Devoe during that time arose from the non-taxable family moving allowance - a sort of “family” windfall.

That said, she and the matrimonial assets were financially “supported” for that time period too.

I regard the orders, their amounts and duration as appropriate considering:

- her entitlement to compensatory and non-compensatory support;

- the factors enumerated in s. 15.2(4) of the Divorce Act, including their division of assets;

- the goals of support orders enumerated in s. 15.2(6) of the Divorce Act.

J. S. C. (F. D.)

Halifax, Nova Scotia