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Spousal Support Means, Needs, and Circumstances Considerations

Kevin Heinrichs

Written by: Kevin Heinrichs (View All Posts • View Bio ) Published: May 31, 2016
Categorized: Case Analysis, Divorce, Ontario, Spousal Support.

The recent decision of Bhatnagar v Bhatnagar, 2016 ONSC 3054 (CanLII) excellently summarizes spousal support entitlement, quantum, and award basics, while also highlighting retroactive support considerations and the meaning of self-sufficiency in a long marriage.

Spousal misconduct & self sufficiency

Justice Hood confirmed the statutory exclusion of spousal misconduct from the assessment of spousal support claims (Divorce Act s 15.2). However, evidence of the husband’s treatment of the wife as “servant” throughout their marriage, did go towards determining the wife’s efforts in becoming self-sufficient. The Court explained, “He expected her to be there as his ‘servant’ when he wanted, which made it difficult for her to obtain work that did not have regular hours” (para 17).

The Court noted the husband’s hypocrisy in arguing that his wife, an uncertified teacher in her 60s, should have been able to find work, while he himself, with a much stronger resume and educational background, could not obtain anything when he found himself 64 and unemployed. Given the circumstances, it was found that it was not unreasonable for the wife to have not sought a new career. Citing Boston v Boston [2001] SCR 143, self-sufficiency will not be practicable for spouses who were homemakers during a long marriage. Further, while the amount the wife did receive post-separation was enough to survive, this case reminds us that self-sufficiency does not mean “simply surviving on a minimum income”. It means the ability to enjoy a reasonable standard of living (Fisher v Fisher [2008] ONCA 11)

Post-separation income & retroactive considerations

During the post-separation years, the husband’s income dramatically increased. He argued that his wife should not share in his increased income because it came from a new job at a new employer. Justice Hood found that just because there were new owners of the company he worked for, it remained the same company, and was the same job that his wife had supported him with throughout the marriage. Further, even if this could qualify as a “new entrepreneurial venture”, it did not detract from the fact that he severely underpaid his spouse in proportion to his actual pre-separation income for 5 years following separation.

While the wife was not seeking an equalization payment in the case at bar, the amount she should have on equalization been paid, was helpful in the Court’s determination of the quantum of retroactive and ongoing spousal support. In this case, the failure to properly equalize their property was a $75,479 advantage to the husband and a $75,479 disadvantage to the wife.

Even though the husband’s current income is limited (receives OAS and CPP) and he accumulated a large amount of his assets post-separation, Justice Hood emphasized it was no wonder he had amassed these assets with zero debt: he had been substantially underpaying his spouse and further never made a proper equalization payment. Retroactive considerations were key to this case. It was noted that, “The accumulation of his assets arose primarily on the back of the AW and his failure to pay what he should have” (para 49). The current disparity between the parties’ needs, means, and circumstances was highlighted. One party is travelling around the world, debt free, and living in an unencumbered condo. The other has debt, no assets, and is living in assisted housing. Had proper payment been made in the past, the economic hardships of marriage breakdown would have been more equalized (i.e. the wife could have created a retirement fund and not been forced to sell her home).

The wife claimed a $2,000 award indefinitely, or alternatively a lump sum payment of $200,000. A lump sum payment was the most appropriate form of support in this case given the historical risk of non-payment, and the husband’s own argument that his retirement income and low-income-generating assets would make periodic payments difficult. Justice Hood was not sympathetic to his having to collapse some of his accounts in order to pay up. He had the ability to pay.

This case is a good spousal support refresher, especially as applicable to long marriages with both parties at retirement age.

Cristina P. Baer

 

 

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