IN
THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100310

Docket:
E2624

Registry: Chilliwack

Between:

Margaret Annette Joy Lissner

Plaintiff

And

Murray Brent Lissner

Defendant

Before: The Honourable Madam Justice Bruce

Reasons for Judgment

INTRODUCTION

[1]            
The Plaintiff, Ms. Lissner, applies to vary an
order made by Mr. Justice Grist on September 24, 2004 addressing spousal support
(the “Order”). By the terms of the Order, spousal support originally ordered in
the amount of $1,400 per month was cancelled. In addition to fixing an amount
of spousal support, Ms. Lissner seeks an order imputing income to the
defendant, Mr. Lissner, and an order for retroactive spousal support. Although
the motion originally included an order for production of income tax returns and
notices of assessment, counsel abandoned this part of the application at the
commencement of the hearing.

[2]            
Mr. Lissner opposes the relief sought by Ms.
Lissner. He argues there has been no material change in circumstances
warranting a variation of the Order; that there is no evidence justifying an
imputation of income; and that he has no ability to pay spousal support.

BACKGROUND

[3]            
The parties were married in 1977 and they
separated in 2001.They had three children who are all self-supporting and have
been living independently for several years. In 2002, Mr. Justice Grist granted
the parties a divorce, determined the issue of spousal support for Ms. Lissner,
and divided the family assets. The reasons for this judgment are recorded as Lissner
v. Lissner, 2004 BCSC 933, 133 A.C.W.S. (3d) 127. The findings of fact made
by Grist J. include the following:

1.       Mr. Lissner is a registered nurse and at the time of trial
he earned approximately $67,500. At 56 years old, Mr. Lissner had some health
problems and thus expected to retire at age 60 in 2006. Mandatory retirement
was at age 65 at the hospital where Mr. Lissner worked.

2.       Ms. Lissner was 48 years old in 2002. She played the
traditional role as a housewife during the marriage and worked part time in a
small home-based business. After the parties separated she trained to be a
travel agent, but was not successful in obtaining employment in this field.
Instead, she secured a job as a manager at a local movie theatre and earned
$27,000 at the time of the trial.

3.       The family assets included the matrimonial home valued at
$260,000 with net sale proceeds expected to be between $120,000 and $125,000.
The parties had $40,000 in savings and property in Dawson Creek worth about
$26,000. Mr. Lissner had a pension from his employment.

[4]            
Although Ms. Lissner sought a redistribution of
the family assets in her favour, Grist J. awarded the parties an equal share
and compensated Ms. Lissner with an order for spousal support. His reasoning is
found at paras. 11 to 14 as follows:

[11] Here, Mr. Lissner’s retirement is
likely within four to nine years. Health may be a factor. On retirement there
will be no continuing disparity of opportunity. On the other side of it, Ms.
Lissner has overcome a degree of disadvantage and obtained a steady position at
a job which she enjoys. Her earning ability is, however, significantly less
than that of Mr. Lissner’s.

[12] The better remedy in this case, to my
mind, is continuing maintenance. It has the advantage of some flexibility of
review on significant change in circumstances, a feature not available on asset
redistribution. The objective of finding a level which compensates for a loss
of relative equality of opportunity is not an exact science. It depends on the
circumstances of each case and no one case will be the same as another. In this
case, I judge the appropriate maintenance to be $1400 per month.

[13] With maintenance set at an appropriate
level, there is, in my view, little basis for redistribution. Mr. Lissner makes
the point that he committed his inheritance to the family assets when he
received the monies and the land in 1997, that is now five years ago. This,
however, was a long-term marriage and there was some prior contribution of
funds from a personal injury settlement by Mrs. Lissner.

[14] On
balance, and keeping in mind the form of the test stipulated under s. 65 of the
Family Relations Act, I do not find an equal distribution of family
assets in this case unfair to either and there will be an equal distribution.
This will include a Part VI distribution of the pension entitlement; an equal
distribution of the sale proceeds of the matrimonial home; transfer of the
Dawson Creek property to the joint ownership of the parties as tenants in
common, each as to a one-half interest; each will retain the funds received
from the Investors Group investment and the other personal assets as indicated
by counsel during submissions.

[5]            
In or about January 2004 Mr. Lissner stopped
paying spousal support as ordered by Grist J. and, in or about March 2004, he
applied to vary the order for spousal support. Pending a hearing before Mr.
Justice Grist, Master Groves (as he then was) ordered that there would be no
further enforcement proceedings in respect of the spousal support order. However,
he also ordered that Ms. Lissner could take steps to enforce the arrears of
spousal support up to that date in the amount of $2,800. When the matter came
on for hearing on September 24, 2004, Grist J. ordered that spousal support be discontinued
effective May 17, 2004.

[6]            
After reiterating his finding from the trial in
2002 that Mr. Lissner’s heart problems made continued employment uncertain,
Grist J. concluded that by 2004 those health problems had worsened to the point
where Mr. Lissner had to leave full time employment as a registered nurse. Mr.
Lissner was now receiving his pension, but continued to work part time as a
casual employee in what Grist J. characterized as semi-retirement. Given the
relative equality of incomes as between the parties at that time, as well as
their overall financial positions, Grist J. suspended the obligation to pay
spousal support and defined the circumstances in which the issue of spousal
support could be reviewed at paras. 6 to 8:

[6] This is a case of a long term marriage
and the question of spousal maintenance will never, in those circumstances, end
absolutely, but I am of the view that in this case, in light of the rather
equal situation that they are in, at least in respect of actual income coming
in, that the order I made should cease as of the date it was suspended by the
master.

[7] I will require that there be production
of pay information quarterly beginning the 1st of December this year, by Mr.
Lissner to Mrs. Lissner, and if circumstances change, of course, the matter of
spousal maintenance can again be considered.

[8] But to
reiterate, in light of the very similar financial circumstances in their
present situations, the maintenance should be suspended.

[7]            
Mr. Lissner’s financial statement dated August 23,
2004 disclosed annual income as follows: (1) $12,854 pension benefits; and (2)
$17,130.00 employment income. Attached to the Form 89 was a pay stub recording
severance paid on January 16, 2004 in the amount of $24,016. In his affidavit
of August 24, 2004, Mr. Lissner deposed that his estimate of income for 2004
was derived from three sources: shifts at the hospital, work as a movie extra,
and teaching at Sprott-Shaw Community College. He also deposed that Ms. Lissner
could earn $757 on her RRSP monies and would receive about $700 per month as
her share of his pension. The severance pay monies were not included in his
estimate of income for 2004. Mr. Lissner’s 2004 income tax return, which was
not before Grist J., indicated total income of $70,789. This sum included
$31,842 as employment income, $876 in EI benefits, $12,854 in pension benefits,
$497 investment income, and $24,727 as severance pay.

[8]            
Ms. Lissner’s financial statement dated May 5,
2004 reported employment insurance benefits of $10,295 and income in 2003 of
$38,572, which included spousal support. Ms. Lissner deposed in her affidavit
of May 5, 2004 that after several months of personality conflicts and incidents
at Famous Players, she took stress leave and purchased a Curves franchise as an
investment. Ms. Lissner and her partner each paid $35,000 for the franchise. The
difficulties at work continued to worsen over the next few months and in April
2004 Ms. Lissner quit her job in frustration and began receiving EI benefits.
However, in her affidavit of September 15, 2004, Ms. Lissner deposed that she
had obtained a full time job with Regional Recycling of Abbotsford at $9.00 per
hour, 40 hours per week. She deposed that the work was hard and that she took
the job notwithstanding her migraine headaches and the arthritis in her right
hand. Instead of taking her share of Mr. Lissner’s pension as monthly income,
Ms. Lissner chose to take the cash value of her share of the pension and invest
it in a locked in RRSP fund. She was permitted to withdraw $800 per month from
this fund. Ms. Lissner’s 2004 income tax return, which was not before Grist J.,
indicated employment income of $18,223, EI benefits of $4,909, pension income
of $8,404, and business losses of $25,301.

[9]            
The parties’ financial circumstances did not
improve in the years following 2004. Both parties suffered business losses as a
result of poor investment decisions. Ms. Lissner lost her franchise in Curves
and her investment never produced a profit. Mr. Lissner and his new spouse, Ms.
East, also lost a considerable amount of their RRSP monies in a company called
Core Bumpers Inc. In 2006 Mr. Lissner and Ms. East started a business called
Pathways to Balanced Health (PBH). This business combined Ms. East’s long
standing work doing Vegatesting for naturopathic centres with alternate health
therapies and medicines. Ms. East left her job to devote her energies to PBH
and Mr. Lissner took costly training programs that qualified him to carry out
the advertised therapies. They also borrowed money to purchase an EPFX device
for $24,000. Unfortunately, PBH never produced the profits expected. In 2006
there was a loss of $3,333 and in 2007 there was nil income. In October 2007,
Mr. Lissner was hospitalized for heart problems and his financial circumstances
declined further. He and Ms. East negotiated an end to their business premise
lease and began operating PBH out of their home. PBH’s clientele did not
increase in 2008 and in or about May 2008 the business was discontinued except
for the Vegatesting, which Ms. East continued on her own. Mr. Lissner and Ms.
East eventually sold their home to pay off their business debts and moved into
a small condominium that is not suitable for a home office. Ms. East went back
to working on a casual basis for Fraser Health and Mr. Lissner continued to
work part time as a registered nurse.

[10]        
Although Ms. Lissner argues that PBH was very
successful and that Mr. Lissner has not made full disclosure of the financial
records associated with PBH, I am satisfied that this is not the case. There
are some minor discrepancies in the business receipts produced by Mr. Lissner;
however, these represent a nominal amount of income. There is no evidence that Mr.
Lissner has hidden assets or bank accounts containing undisclosed monies. While
his involvement in PBH ended around the time that Ms. Lissner discovered the
business and instructed counsel to make inquiries of him, I am satisfied that
this was merely coincidental. There is simply no cogent evidence that PBH made
significant profits that have not been disclosed. Moreover, it is apparent that
Mr. Lissner remains responsible for his share of the loan for the EPFX machine,
which appears to be the sole asset of the business.

[11]        
Despite business losses in regard to PBH and
Core Bumpers Inc., Mr. Lissner’s income increased from casual work as a
registered nurse both due to an increase in the hours worked and an increase in
pay rate. While Mr. Lissner deposed that he was forced to work to pay off the
business loans and despite his fragile health circumstances, it is apparent
that he earned substantially more than Ms. Lissner between 2006 and 2009. In
2006 Mr. Lissner earned $27,880 in employment income; in 2007 he earned
$27,251; in 2008 he earned $34,471; and in 2009 he earned $35,628. The year
2005 is the only exception. In that year, the parties’ incomes were relatively
equal.

[12]        
Ms. Lissner took medical leave from her job with
Regional Recycling in the fall of 2005 due to a diagnosis of fibromyalgia.
After three months she returned to work; however, her condition worsened and
she applied for long term disability benefits through Manulife, the insurer for
Regional Recycling. Pursuant to her employer’s benefit plans, Ms. Lissner
received $961 per month until November 2006 when her period of eligibility
ended. At that time her doctor was of the view that she should not return to
the job with Regional Recycling due to fibromyalgia and arthritis. A functional
capacity report dated November 17, 2006 concluded that Ms. Lissner was limited
to sedentary work involving stationary positioning in a light category on a
part time basis.

[13]        
Ms. Lissner did not work in 2007 and her Curves
franchise incurred losses. She closed the business in October 2007. She continued
to receive her life annuity payments in lieu of her share in Mr. Lissner’s pension
in the amount of $829 per month. In 2008, coincident with the market crash, her
life annuity payments declined to $255 per month. Ms. Lissner was in desperate
financial circumstances in 2007; she accepted a contract from Community Living
BC to house a disabled adult and earned a gross amount of $1,440 to $1,500 per
month. This increase in her income caused the Manulife disability payments to
cease. The Community Living contract was terminated in September 2008 and she
was not offered a new contract. Ms. Lissner refinanced her home and lived off
her line of credit. She currently cares for three children in her home after
school and earns $200 per month. Ms. Lissner has only a small amount of RRSP
monies remaining and is in danger of losing her home. She does not qualify for
social assistance because she owns real property. She does not qualify for CPP
disability benefits because she remains physically capable of some employment.

[14]        
From all income sources, Ms. Lissner received
$11,765 in 2006; in 2007 she received $11,334; in 2008 she received $9,195,
including $4,320 in RRSP monies; and in 2009 she received $4,800.

ARGUMENT

[15]        
Ms. Lissner argues that only the quantity of
spousal support is in issue because her entitlement was established during the
trial in 2002. Ms. Lissner also argues that due to a failure to disclose his
true income for 2004, Mr. Lissner improperly obtained the Order suspending
spousal support. Thus she argues that the spousal support should not have been
reviewed at all given Mr. Lissner’s income at that time.

[16]        
Alternatively, Ms. Lissner argues there has been
a material change in circumstances warranting a review of spousal support.
Since 2004 her health problems have increased; she is unable to work at any
physically demanding job or for more than part time hours; and her unsuccessful
investments have reduced her available income and depleted her asset base. She
argues that in terms of net worth she is in a far worse situation than Mr.
Lissner who has retained his share of the family assets and continues to work
part time. She also argues that PBH is a successful business and that Mr.
Lissner should be deemed to be earning additional income from this source due
to the failure to make proper disclosure of business records. Ms. Lissner argues
that Mr. Lissner’s financial circumstances have improved since he began sharing
expenses with Ms. East. It is also apparent that his wage rate has increased
over time.

[17]        
Ms. Lissner argues that Mr. Lissner has
exaggerated his health problems and is capable of working full time. She also
argues that his business losses should not be used as a reason for reducing
spousal support.

[18]        
Lastly, Ms. Lissner asks the court to award
spousal support retroactively from 2004 based on what Mr. Lissner should have
been paying pursuant to the Spousal Support Advisory Guidelines. She asks for the
costs of this application.

[19]        
Mr. Lissner argues there has not been a material
change in circumstances to warrant a review of spousal support. In particular,
there has been no substantial, unforeseen change of a continuing nature: Murphy
v. Murphy, 2000 BCSC 974, 8 R.F.L. (5th) 338 at para. 19 and G. (L.) v.
B. (G.), [1995] 3 S.C.R. 370, 127 D.L.R. (4th) 385.

[20]        
If the court concludes there has been a material
change in circumstances, Mr. Lissner argues that his and Ms. Lissner’s financial
circumstances are relatively equal at the present time and thus no spousal
support should be awarded. He argues that both parties have health problems
that preclude full time work, but Ms. Lissner voluntarily left her job with
Famous Players and is now capable of at least part time work. Further, Mr.
Lissner argues his unsuccessful investments have reduced his income and his
ability to pay spousal support. Mr. Lissner asks the court to reconsider the
issue of entitlement to spousal support in light of these new circumstances.

DECISION

[21]        
Ms. Lissner was originally awarded spousal
support based on a combination of factors, including the economic disadvantages
created by her long term, traditional marriage to Mr. Lissner. As a homemaker
and primary caregiver for the children, her ability to attain self sufficiency
and maintain this status was compromised by the circumstance of the parties’
relationship when the marriage ended. In an application to review spousal
support in this situation, it is not appropriate to revisit this question of
entitlement unless there is cogent evidence that the recipient spouse has
overcome the economic disadvantages created by the marriage breakdown and
clearly no longer requires spousal support to achieve a standard of living that
reflects what the parties enjoyed prior to separation. In this case, it is
apparent that Ms. Lissner has not overcome the economic disabilities created by
the sharing of responsibilities during her marriage to Mr. Lissner. Indeed, due
to health problems, her ability to become and remain economically self
sufficient has declined since Grist J. awarded her spousal support in 2002.

[22]        
I do not, however, accept Ms. Lissner’s argument
that had Mr. Lissner’s actual income for 2004 been disclosed to Grist J. there
would not have been an order varying or suspending spousal support. Because Mr.
Lissner’s severance payment was included in his financial statement, it is not
correct to say that he misled the court with respect to that part of his income
for 2004. Moreover, as a one-time payment, Grist J. may well have concluded
that the severance pay should not be included in the income available for the
payment of spousal support. It is apparent that Mr. Lissner’s actual 2004
earnings as a registered nurse were $13,700 greater than the estimate he
presented to the court. However, given Mr. Lissner’s decision to retire and
work as a casual nurse due to health problems, and the level of income Ms.
Lissner demonstrated she could earn from full time employment at the time of
the review, it is likely that spousal support would have been varied downward
or suspended in any event to reflect these changes in the parties’
circumstances.

[23]        
This conclusion does not end the inquiry as I am
satisfied that there has been a material change in circumstances since 2004
that entitles the court to review the decision to suspend spousal support. Ms.
Lissner is no longer capable of working full time due to her health problems
and her income has declined significantly. It is also apparent that despite Mr.
Lissner’s health problems, his employment income has not declined in the manner
suggested by his circumstances in 2004. In 2004 he earned $31,840 and in
succeeding years his income declined only slightly except for 2005. In 2008 and
2009 his employment income increased to $34,147 and $35,628 respectively. In my
view, these are substantial changes of a continuing nature.

[24]        
In coming to the conclusion that there has been
a material change in the parties’ circumstances, I have considered Ms.
Lissner’s ability to earn income without regard to the investment losses she
has incurred since 2004. In my view, it is inappropriate to revisit a distribution
of family assets by awarding additional spousal support when a recipient spouse
has reduced the value of her capital assets through poor investment decisions.
Thus while Ms. Lissner may have a proportionately smaller share of the family
assets to supplement her income due to the loss of the Curves investment,
and her decision to take a life annuity rather than a share of Mr. Lissner’s pension,
this is irrelevant to my determination of spousal support.

[25]        
Similarly, in assessing Mr. Lissner’s ability to
pay spousal support, it is inappropriate to consider his pension monies as an
enhancement of available income or to decrease his available income for spousal
support by considering investment losses. The ability to pay spousal support is
not dependent upon the payor spouse’s investment decisions. Nor should the
payor spouse’s income for spousal support include profits from a family asset
that has already been divided between the spouses.

[26]        
There are several factors to consider when
determining the quantity of spousal support in the circumstances of this case.

[27]        
First, both parties suffer from serious health
problems that preclude full time employment; however, Mr. Lissner’s training as
a registered nurse, as well as his long term employment relationship with the
hospital, continues to provide him with an ability to earn income that is far
superior to Ms. Lissner’s earning capacity. Having no trade qualifications or
long term work history, Ms. Lissner’s health problems have a far more adverse
impact on her ability to obtain any type of work and particularly work that
pays more than minimum wage.

[28]        
Second, both parties are nearing retirement age.
Mr. Lissner is close to full time retirement and deposes that the only reason
he continues to work is to pay off investment debts. Ms. Lissner, at 56, has
not reached the traditional retirement age; however, at this age her minimal
work history is a distinct disadvantage in terms of securing employment.

[29]        
Third, there is a disparity of income as between
the parties. Mr. Lissner earns about $35,000 per year and Ms. Lissner’s annual
income is less than $5,000. Her income in 2008 and 2007 was higher due to
disability benefits and a contract with Community Living BC. Ms. Lissner
deposed that she remains on the list for future contracts with Community Living
BC and, from this source, she could earn $1,500 per month. However, she is
hesitant to accept such a contract due to her past experience with a disabled
adult. In my view, because Ms. Lissner is capable of some type of employment,
she must either make additional efforts to obtain a contract from Community
Living BC or obtain part time work outside the home. If she chooses not to rent
out part of her home, it is reasonable to expect Ms. Lissner to sell this asset,
move to a smaller apartment, and use the net proceeds of sale to supplement her
monthly income. While this requires Ms. Lissner to utilize her capital assets
as an income source prior to her retirement, this is not unreasonable given Mr.
Lissner’s approaching retirement and his reduced ability to earn income due to
medical problems. In all of the circumstances, I find it is reasonable to expect
Ms. Lissner could earn $12,000 to $15,000 per annum.

[30]        
The Spousal Support Advisory Guidelines provide
a range of spousal support between $908 at the high end, $860 at the mid-range,
and $738 at the low end assuming Ms. Lissner’s income is $12,000 per year and
Mr. Lissner’s income is $35,600. When Ms. Lissner’s income is increased to
$15,000 per year, the range of spousal support is $793 at the high end, $751 at
the mid-range, and $644 at the low end. Taking into account the factors
outlined above, and considering the range of spousal support recommended by the
Guidelines, I find an award of $650 per month is appropriate.

[31]        
Ms. Lissner claims retroactive spousal support for
2004, and 2006 to 2009. While there was a disparity in the parties’ incomes
during this period, and it is apparent that Mr. Lissner’s 2004 earnings were
substantially greater than the estimate he provided to Grist J., I do not
consider this to be an appropriate case to make a retroactive order beyond the
date of Ms. Lissner’s application for review. While Mr. Lissner did not comply
precisely with the disclosure order made by Grist J. in the years following the
2004 review application, there is no evidence that he in fact earned
substantially more than he disclosed to Ms. Lissner. As I concluded earlier,
PBH was not a successful venture and ultimately there were no undisclosed
profits. Further, Ms. Lissner was aware of Mr. Lissner’s earnings as a
registered nurse each year after 2004, yet she chose not to file this
application until October 5, 2009. For these reasons, I award spousal support
retroactive to November 1, 2009.

[32]        
Mr. Lissner is ordered to pay spousal support to
Ms. Lissner in the amount of $650 per month commencing April 1, 2010 and
continuing on the first day of each month thereafter until further order of the
court. This order shall be reviewed in two years in light of Mr. Lissner’s
health, which will clearly have an impact on his ability to continue working
part time. This order is also retroactive between November 1, 2009 and March 1,
2010, and Mr. Lissner shall pay an additional $100 per month toward the arrears
of spousal support commencing April 1, 2010 and continuing on the first day of
each month thereafter until paid in full.

[33]        
Each party shall bear their own costs in light
of their divided success.

“Bruce J.”