Jordan v. Zanni

2024 BCSC 1452 Jordan v. Zanni

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Jordan v. Zanni, 2024 BCSC 1452 Date: 20240403 Docket: E172006 Registry: Vancouver Between: Cheryl Louise Jordan Claimant And: Louis William Zanni Respondent Before: The Honourable Justice Francis Oral Reasons for Judgment In Chambers Counsel for the Claimant: N. Radac The Respondent, appearing in person: L.W. Zanni Place and Date of Hearing: Vancouver, B.C. March 15, 2024 Place and Date of Judgment: Vancouver, B.C. April 3, 2024 [1] THE COURT: These are my reasons for judgment on the applications that were brought before me. If a transcript is ordered of these reasons, I may edit them somewhat to include full case citations and for grammar and clarity, but the substance and the result will not change. Introduction [2] Two applications were brought before me and heard at the same time in this family law dispute. The claimant, Ms. Jordan, has applied for an order varying the separation agreement the parties entered into in 2016. The respondent, Mr. Zanni, has also applied to vary the separation agreement by seeking to terminate all spousal support payable by him to the claimant. He also seeks various other alternative relief, including an order that the matter be referred to a mediator and an order that the matter be referred to the trial list. In light of my findings on the primary relief sought by Mr. Zanni, I consider it

unnecessary to determine the alternative relief he seeks. Factual Background [3] The parties began cohabiting on October 1, 1995. They have two children, Jordan, born in 1996, and Rebecca, born in 1998. Both children are now adults. When the parties separated in 2015, they were able to quite swiftly agree on terms of separation, and their separation agreement (the "Agreement") was executed in the summer of 2016. The Agreement sets out terms for parenting responsibilities, parenting time, child support, spousal support, and division of family property. [4] Paragraphs 8.4 -8.7 of the Agreement deal with child support and the means by which the children's post‑secondary expenses will be paid for. Paragraph 8.7 says that Mr. Zanni will assist both of the children financially with their post‑secondary educational expenses to obtain one degree or complete one diploma program, and if the children wish to continue their studies after that, the children will be responsible to pay for their own education expenses. The parties acknowledge and agree that the children are expected to contribute financially to their education through employment income, student loans, scholarships, and bursaries. [5] Paragraph 10 of the Agreement deals with spousal support. It sets out different components of the spousal support agreement, including a lump sum amount, and monthly support calculated with

reference to 45 percent of the difference between the mid range and the high range numbers of the Spousal Support Advisory Guidelines. Additionally, commencing on April 1, 2016, the respondent will pay the claimant 50 percent of each of the respondent's bonuses. [6] Paragraph 19.5 of the Agreement allows any party to take proceedings in court to enforce the provisions of the agreement. Paragraph 25.1 says that if a dispute arises concerning the Agreement, the parties will use reasonable efforts to resolve the dispute through mediation. [7] In February 2024, Ms. Jordan filed the Agreement with the court and thereby initiated a family law proceeding. In this application, she seeks to vary the Agreement for support purposes. Specifically, she seeks to quantify the amount of spousal support arrears to date and to put in place a process to facilitate future spousal support calculations without recourse to the court. Because she is seeking to vary the agreement simply to clarify the spousal support provisions so that they can be enforced, her counsel submits that this is an application that is contemplated to go to court under paragraph 19.5(b) of the Agreement, and she is not required to first mediate the issue pursuant to section 25 of the Agreement. [8] Mr. Zanni submits in response that his obligation to pay spousal support under the Agreement should be terminated. With respect

to arrears, he submits that both parties fell short in their obligations under the Agreement because Ms. Jordan failed to pay her share of s. 7 expenses. As such, he submits that no arrears ought to be payable by him. Threshold Issue: Mediation [9] There is a threshold issue that I will deal with first, which whether the parties are bound to take the issues raised in this application to mediation. Mr. Zanni submitted in the alternative that the Agreement requires the parties to submit all disputes to mediation. However, the primary relief he seeks in his application is a variation of the Agreement to terminate spousal support and arrears. As such, while the Agreement contemplates that the parties will first seek to resolve any differences under the Agreement at a mediation before proceeding to court, both parties have filed applications instead of pursuing mediation. They have thereby indicated consent to pursue litigation instead of mediation, notwithstanding the terms of the Agreement, and I am prepared to consider both of their applications. Nature of Applications [10] I turn now to a second threshold issue, which is the nature of these applications. Since a spousal support review requires a different analysis than an application to vary support, it is important to determine how these two applications should be characterized. [11] In my view, it is appropriate to

characterize Ms. Jordan's application as an application for support arrears, as well as an application for the court's assistance in interpreting the requirement for the annual review of spousal support contemplated under paragraph 10 of the Agreement, rather than as an application to vary the Agreement. Ms. Jordan is not asking to change her entitlement to spousal support. Nor is she seeking to change the method by which spousal support is calculated. She seeks to enforce the agreement and clarify the obligations to which the parties bound themselves in 2016. [12] Mr. Zanni's application is also framed as an application to vary the Agreement. However, it became apparent over the course of his oral submissions that what he is actually seeking is a review of both entitlement and quantum of spousal support, as contemplated by paragraph 10.1 of the Agreement. He submits that he has been seeking a review of spousal support for some time, and he would not have entered into the Agreement if he knew that he would not be entitled to have the claimant's entitlement to and quantum of spousal support annually reviewed. [13] Considering the Agreement as a whole and the surrounding circumstances, it appears clear to me that when the parties entered into the Agreement, they intended that both quantum and entitlement of spousal support would be revisited at a future point in time. I find this

both because there is no end date to spousal support under the Agreement, and because the parties expressly included an annual right of review as a term of the Agreement. [14] However, before I can consider Mr. Zanni's review application, I must determine the current state of affairs between the parties with respect to spousal support. The Agreement contains a formula for calculating spousal support rather than quantifying the amount of support payable. The parties do not disagree about the application of the formula, but they disagree about whether there was an additional oral agreement between them that a portion of the spousal support payable by Mr. Zanni to Ms. Jordan will be deducted to account for the claimant's share of the children's tuition fees. Therefore, I will first consider what the obligations of the parties are under the Agreement, and what payments, and arrears, flow from that. I will then go on to consider the review application. Obligations Under the Agreement [15] As I noted, pursuant to paragraph 10.1 of the Agreement, there are three components to spousal support payable to Ms. Jordan: 1. A lump sum of $60,000, which was paid from the sale of proceeds of the family home.

2. Commencing April 1, 2020, monthly spousal support was to be determined by calculating 45 percent of the difference between the mid range and the high range numbers of the Spousal Support Advisory Guidelines based on the incomes of the parties in 2020.

3. Commencing April 1, 2016, Mr. Zanni was obligated to pay Ms. Jordan 50 percent of his bonuses. [16] Ms. Jordan takes the position that Mr. Zanni has paid less than what is required in terms of monthly support calculated under paragraph 10.1(b) of the Agreement and has failed completely to pay Ms. Jordan's 50 percent of his monthly bonus payments as required by paragraph 10.1(c) of the Agreement. The alleged shortfall in payments is attached as an appendix to Ms. Jordan's notice of application (the "Appendix"). [17] Mr. Zanni does not take issue with Ms. Jordan's calculation of what he was required to pay under the terms of the Agreement as set out in the Appendix. His basis for disputing the amount of arrears claimed by Ms. Jordan relates to his evidence that he paid for all of the children's university tuition, which he says is over $40,000. He alleges that there was a separate agreement between the parties that because the children were unable to work and contribute to their post‑secondary education costs, as contemplated at paragraph 8.7 of the agreement, Ms. Jordan would contribute to a portion of the children's post‑secondary costs by way of a reduction in her share of Mr. Zanni's bonus payments. The parties' daughter Jordan has sworn an affidavit deposing that this agreement was known amongst all the family members. [18] Ms. Jordan denies that there was ever such an

agreement. [19] In the course of the hearing, I advised the parties that if Mr. Zanni was alleging that there was an oral agreement to vary Ms. Jordan's entitlement to half of his bonuses in order to account for her share of tuition expenses, and there was a direct conflict on the evidence as to the existence of such an oral agreement, I would not be able to decide that issue on the affidavits before me. Whether or not such an agreement exists would be highly relevant to the calculation of arrears. However, in the face of Mr. Zanni and the parties' daughter Jordan deposing as to such an agreement, and Ms. Jordan denying it whole cloth, cross‑examination would be required before I could make a factual finding about the existence and the terms of any such agreement. When this concern was raised with the parties, Ms. Jordan's counsel advised that in order to avoid further costly proceedings, she had instructions to waive Ms. Jordan's entitlement to $59,992 of arrears in the event that I found myself unable, on the record before me, to determine whether or not such an agreement existed. This amount represents the amount that Mr. Zanni deducted from Ms. Jordan's share of his bonuses while the children were in post‑secondary education. [20] Ms. Jordan's concession on this point simplifies the matter. Mr. Zanni has not raised any other viable argument as to why he should not be

responsible for paying the full amount of spousal support calculated in accordance with the agreement with reference to his annual income and the Spousal Support Advisory Guidelines. He also does not take issue with Ms. Jordan's calculation of the shortfall as set out in the Appendix. [21] The Agreement is not ambiguous. In his oral submissions, Mr. Zanni suggested that he misunderstood the Agreement and thought he only had to pay $1,500 a month in spousal support. However, the burden of that misunderstanding must fall on him as the Agreement is clear as to how spousal support is to be calculated on an ongoing basis. [22] Therefore, I find that arrears are payable in the amount of $79,351 in monthly spousal support from 2020 to 2023; and $69,430.52 in bonus payments from 2020 to 2023. I have taken these numbers from the Appendix. To be clear, Mr. Zanni is not responsible for paying the $59,992.90 shortfall in bonus payments from 2016 to 2019. Review of Spousal Support [23] The next issue I have to determine is a review of spousal support. How do the parties move forward from here in terms of their obligations under the Agreement? [24] In Morck v. Morck, 2013 BCCA 186, the Court of Appeal described the nature of an application to review spousal support as follows: [17] By contrast, on an application to review an earlier order of spousal support, the applicant need not establish

a material change in circumstances. Instead, the review is a hearing de novo, and treated as an initial application for support under s. 15.2 of the Divorce Act. [Or I will add parenthetically the Family Law Act.] This permits the court to adjust support in a manner that takes into account changes that may have been contemplated by the parties at the time the order was made, but were nevertheless uncertain. Because the issues on review are similar to those on an initial application, the Spousal Support Advisory Guidelines may be used for guidance: Domirti v. Domirti, 2010 BCCA 472 at paras. 32‑36, 10 B.C.L.R. (5th) 281; and Tedham v. Tedham, 2005 BCCA 502 at paras. 22, 47 B.C.L.R. (4th) 254. [25] Sections 15.2, 4, and 6 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) set out the factors to be considered on a review: (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. . . . . (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. [26] The objectives of spousal support as set out in the Divorce Act, and in the Family Law Act, S.B.C. 2011, c. 25. encompass both compensatory and non‑compensatory grounds for support: Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420 at paras. 34-43 and 49. [27] Compensatory support is intended to provide redress to the recipient spouse for economic disadvantage arising from the marriage or the conferral of economic advantage on the other spouse: Chutter v. Chutter, 2008 BCCA 507 at paras. 50-51 [Chutter]. The compensatory basis for relief recognizes that sacrifices made by a recipient spouse in assuming childcare and household responsibilities may impact their future financial prospects: Chutter at para.

50. There may be corresponding advantage to the payor spouse and the ability to pursue career opportunities free of such responsibilities. Compensatory support should continue until compensation for the economic disadvantage of the marriage and its breakdown are achieved: Chutter at para. 79. [28] Non‑compensatory support is grounded in the social obligation model of marriage in which marriage is seen as an interdependent union. Upon marriage breakdown, it falls on the former partner to meet the needs of a disadvantaged spouse, and not the state: Chutter at para. 54. "Need" in this context refers to something more than basic necessities of life. The concept of need may vary depending on the circumstances of the party. In longer marriages, courts may measure need against the marital standard of living: Chutter at para. 90. [29] As noted in Spousal Support Advisory Guidelines: The Revised User's Guide 2016 (Ottawa: Department of Justice): 3 Entitlement (SSAG Chapter 4) (f) Even if initial entitlement has been established, new issues of entitlement may arise in the context of variation and review. Issues such as the payor's post-separation increase and the impact of remarriage and repartnering take us back to the basis of entitlement, as do cases of the recipient's post-separation reduction of income. Furthermore, applications to terminate spousal support on the basis that the

recipient has become "self-sufficient" are really questions about whether the initial basis for entitlement continues to exist. Self-sufficiency can be interpreted differently depending on the initial basis of entitlement: see Fisher v. Fisher, 2008 ONCA 11 [30] If, on a review of spousal support, the recipient spouse establishes continuing entitlement to spousal support, whether on a compensatory or non‑compensatory basis, the question then becomes one of quantum. The Spousal Support Advisory Guidelines [SSAG] may provide guidance in setting the appropriate quantum, although with due sensitivity to the different considerations that arise on a review of spousal support as opposed to an original order: Morck at para. 17; Domirti v. Domirti, 2010 BCCA 472 at paras. 40-41. Relevant Factors [31] I must first consider the facts relevant to Ms. Jordan's entitlement to spousal support, and if I conclude she is not entitled to support on either compensatory or non‑compensatory grounds, the support will terminate. If I conclude that she is entitled, then I must consider quantum and duration. [32] In terms of entitlement, there is some disagreement between the parties about the extent to which Ms. Jordan stayed home during the children's infancy and the extent to which she engaged in paid work. However, I need not determine these issues because a number of uncontroverted facts have

emerged from the evidence before me and that enable me to determine her compensatory and non‑compensatory entitlement on this review. [33] First, Mr. Zanni's career working in the hotel industry required the family to move a number of times, including approximately five years in Hawaii and a period of time in Edmonton, which clearly impacted Ms. Jordan's ability to build a career in one place. Nevertheless, Ms. Jordan appears to have been engaged in the paid workforce for most of the marriage, including when the children were small. She worked at the children's elementary school when the family was in Hawaii. [34] Mr. Zanni travelled for work frequently, which necessitated Ms. Jordan to take on a large share of domestic responsibilities. This was a long marriage, approximately 20 years. [35] Ms. Jordan has worked full time as an interior decorator since November 2014. Her guideline income is $56,215. She owns a home with a BC assessed value of $648,000. She has a mortgage of just over $100,000, and she has additional approximately $50,000 in savings. [36] Mr. Zanni has a guideline income of $180,000. He is named on title as a 30 percent owner with his wife on a home with a BC assessed value of $1.7 million. The property is encumbered by a mortgage and a secured line of credit with a collective value of just over $1 million. He has pensions and RSPs with a collective value of

about $127,000. [37] Ms. Jordan has a long‑term partner, Tim Booth. She and Mr. Booth lived together from November 2021 to June 2023. They no longer live together, although they remain in a long term committed relationship. [38] Both parties are nearing retirement age. Both parties have suffered financially from rising interest rates. Ms. Jordan submits that she will need to sell her home due to her financial challenges. Mr. Zanni claims he has no equity in his real property due to his wife's contribution of the lion's share of the equity in the home, but claims he is responsible for the monthly payments on the secured line of credit and mortgage. Is Ms. Jordan Entitled to Ongoing Spousal Support? [39] There is no dispute in this case that at the time of the parties' separation, Ms. Jordan was entitled to spousal support on both compensatory and non‑compensatory grounds. Throughout the marriage, she had primary responsibility for caring for the parties' children and looking after the family home, even though she also engaged in paid employment outside the home. Ms. Jordan's contributions facilitated Mr. Zanni's career and limited her own earning potential. [40] However, in the nine years since separation, Ms. Jordan has achieved some financial independence. She has a stable full‑time career as an interior decorator. She owns a home with a modest mortgage. She is financially

stable, and while she cannot afford a lavish lifestyle, she has commendably made great progress towards financial self‑sufficiency. That said, absent spousal support, her annual expenses presently exceed her income by approximately $15,000 a year. I note that I have carefully reviewed her monthly expenses set out in her Form F8, and they are very modest. [41] Relying on the "rule of 65," Ms. Jordan claims an entitlement to indefinite support. Under the rule of 65, an order for indefinite support may be appropriate where, as in this case, the length of the marriage relationship and the recipient's age at separation combined exceeds 65 years. However, indefinite support does not necessarily mean permanent support. Spousal support orders that are indefinite, that is with no fixed duration, are still subject to variation and review. A variation or review may lead to time limits or even to the termination of spousal support where the circumstances warrant. [42] Having regard to all the relevant circumstances, particularly the length of the marriage and the contributions Ms. Jordan made to Mr. Zanni's ability to pursue a career that involved relocating the family at least three times, and the consequent sacrifice to her own stable career prospects that this arrangement necessitated, I conclude that Ms. Jordan has made progress towards but has not fully achieved self‑sufficiency,

notwithstanding reasonable efforts on her part. I find that her claim to compensatory support has not been extinguished, despite the nine years that have passed since separation. [43] In terms of the parties' current circumstances, they are roughly similar in their asset base. In saying this, I reject Mr. Zanni's claim that he has no beneficial interest in his home because his wife paid the down payment. He pays all the secured debt on the property, and it is his family home. He clearly has a beneficial interest in the equity in the home. [44] There is, however, a very large income disparity between the parties. At her current income, Ms. Jordan still does not make enough money to cover her basic expenses. Mr. Zanni also does not make enough money to cover his expenses as set out in his Form F8, although I note that his expenses include non‑necessity expenses such as $600 a month contributions to RRSPs, expenses for the couple's adult children, and other discretionary expenses that Ms. Jordan did not include on her F8. [45] In my view, Mr. Zanni still has some obligation on both a compensatory and non‑compensatory basis to make provision for Ms. Jordan. However, given the parties' circumstances, I cannot find that Ms. Jordan is entitled to ongoing indefinite support on either compensatory or non‑compensatory grounds. Both parties are financially stretched. Both parties are

nearing retirement. I find it is appropriate, given the passage of time and the success that Ms. Jordan has had in achieving financial stability, to order a transition period whereby spousal support should continue at a reduced level for three years prior to terminating completely. [46] Therefore, I order as follows: Ms. Jordan is entitled to spousal support calculated in accordance with the formula in the Agreement up until the end of May 2024. [47] Commencing June 1, 2024, Ms. Jordan should receive monthly spousal support at the low end of the range, calculated with reference to the prior year's income tax returns. To be clear, this means that the 2023 income of the parties will be used to determine payments of spousal support from June 1, 2024. To the extent that they have not done so already, the parties will exchange income tax information so that this amount can be ascertained by no later than May 30, 2024. [48] Annually by May 30 of each subsequent year, 2025 and 2026, each party will provide the other with a copy of their most recent income tax returns and notices of assessment, T4s, and other documents showing income, or bonuses received in the prior year, and will adjust the spousal support amount as of June 1st of every year on the basis of the prior year's income. [49] Spousal support will terminate after three years from the date of this judgment. To be clear, the

final spousal support payment will be payable on April 1, 2027. [50] Additionally, for the next three years, Mr. Zanni's bonuses should be divided equally in accordance with the Agreement. Costs [51] With respect to costs, as each party has had partial success on their respective applications, I will order that each party shall bear their own costs, and if there are any questions requiring clarification of the terms, I am happy to take those questions. [Discussion re: Clarification of Order Terms] [52] RESPONDENT L. ZANNI: Honourable Francis, can we clarify the bonus payable. Because the claimant was requesting that she receive the full bonus amount and that I only receive the benefit of the tax at the end of the year, and as was mentioned on the court day that, for example, if I get a $5,000 bonus from my company, I only get $2,500, and she ‑‑ [53] THE COURT: Right. [54] CNSL N. RADAC: ‑‑ was seeking the full $2,500. And I do not think that is fair ‑‑ [55] THE COURT: Yeah, okay. So, Mr. Zanni, I considered that, and I am reluctant to rule on it for this reason. There appears to be further discussion that needs to take place between the parties in order for you to be in the position where you can get the information you need to get your tax deduction; is that right? [56] RESPONDENT L. ZANNI: Yes, I ‑‑ [57] THE COURT: I recall you raising that. And that issue was not squarely

before me in the application, but those two issues are intertwined; right? So what I would like to do, because I do not want to penalize anybody from a tax perspective, I want to give the parties an opportunity to have a discussion about how to structure the payments in a way that ensures that nobody is paying extra tax to CRA. You want to keep as much as possible in the family pot. [58] And so what I am going to order with respect to that, Mr. Zanni, in order to preserve your ability to raise any issues that need to be raised, is I am going to adjourn the issue of the tax treatment of any payments, and I am going to direct that the parties exchange any necessary tax information that has yet to be exchanged. And I am going to give you leave to come back before me, either party, in order to address the tax issue if you cannot agree. [59] But it seems to me that there ‑‑ this is a matter on which you are better off exchanging information and having a discussion about how to structure the payments to save tax than having me make an order that could have a negative tax consequence for one or both of you. So I am going to adjourn the issue, give you a chance to discuss it. I will remain seized just of that issue, not of your case more generally, and if you cannot work it out, you can come back before me. [60] RESPONDENT L. ZANNI: Thank you. [61] THE COURT: All right. Okay. That

concludes my reasons. [62] Sorry, Ms. Radac, is there something else? I see you looking like you are about to speak. [63] CNSL N. RADAC: Just in terms of drafting the order, if I could dispense with Mr. Zanni signature on the order, please. [64] THE COURT: Yes, that is fine. The order will be sent directly to me, and I will have a look at it. But, yes ‑‑ [65] CNSL N. RADAC: Thank you. [66] THE COURT: ‑‑ we will dispense with signature. Yes. [67] CNSL N. RADAC: Thank you. [68] THE COURT: All right. Okay. Thank you very much. "Francis, J."