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In High Net Worth Asset Division Cases:  Is Spousal Support Still Payable?

Sonia Kainth

Written by: Sonia Kainth (View All Posts • View Bio) Published: August 5, 2016

Categorized: Case Analysis, Maintenance, Property Division, Spousal Support.

The short answer is, YES, but it is case specific and may not be the amount recommended by the Federal Spousal Support Guidelines.

The leading case in BC that addresses this issue is Chutter v. Chutter, 2008 BCCA 507 (CanLII), 301 D.L.R (4th) 297.  In this case, the parties were married for 28 years during which time they built up significant assets.  The wife worked part-time as a dental hygienist throughout the marriage but her primary role was care-giver to the parties’ only son.  The husband’s annual income was over $150,000.00.  The wife was successful in obtaining an interim order for spousal support but at trial, the wife’s application for spousal support was dismissed.  During the trial, the parties reached an agreement with respect to the division of their assets in which each party retained $4 million worth of assets.  The trial judge held that $4 million in assets was enough to provide both parties with a comfortable living with this decision focusing on compensatory support (no reference to non-compensatory support).

The Court of Appeal reversed the trial decision and awarded spousal support to the wife despite her having received $4 million in assets.  In reaching this decision the court went through an analysis of compensatory and non-compensatory support.  Paragraphs 50 – 53 deal with compensatory support.  At paragraph 52, the court discusses Moge and the relevance of the parties’ standard of living in the context of compensatory support:

[52]          Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement….  As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.

At paragraph 53, the court referenced W. v. W., 2005 BCSC 1010 (CanLII), 19 R.F.L. (6th) 453, to discuss how the courts in BC have interpreted paragraph 52 above:

[11]      In British Columbia this comment in Moge has been interpreted to mean that in long marriages the result will likely be a rough equivalency of standards of living.  Doing so recognizes that the longer a marriage lasts, the more intertwined the economic and non-economic lives of the spouses become.

[12]      Throughout the marriage, each spouse makes decisions that accommodate the economic and non-economic needs of the other.  The decisions include the way in which child care and other family responsibilities will be handled and the way careers will develop.  These decisions can have a significant impact upon the income earning ability of each at the time of separation.  Yet it is not easy to determine exactly the relationship between these decisions and the consequent benefits and detriments to each spouse. The rough equivalency of standard of living approach has operated as a workable substitute to assess compensatory claims.  See for example, Dithurbide v. Dithurbide (1996), 1996 CanLII 1236 (BC SC), 23 R.F.L. (4th) 127 (B.C.S.C.); Rattenbury v. Rattenbury2000 BCSC 722 (CanLII)Rinfret v. Rinfret, [1999] B.C.J. No. 2945 (S.C.); O’Neill v. Wolfe(2001), 2001 BCSC 135 (CanLII), 14 R.F.L. (5th) 155 (B.C.S.C.); Walton v. Walton, [1997] B.C.J. No. 1089 (S.C.); Ulrich v. Ulrich,2003 BCSC 192 (CanLII); and Carr v. Carr (1993), 46 R.F.L. (3d) 326 (B.C.S.C.).

With respect to non-compensatory support, in discussing the objective of self-sufficiency, the court referenced Allaire v. Allaire (2003), 170 O.A.C> 72, 35 R.F.L. (5th) 256 where it was found that the determination of self-sufficiency also encompassed consideration of parties’ standard of living (paragraph 56).   The court referred to Yemchuk v. Yemchuk and 2005 BCCA 406, Tedham v. Tedham, 2005 BCCA 502, 20 R.F.L. (6th) 217, to state that in longer marriages, courts are measuring need against the marital standard of living (paragraph 58).  The court also referred to and Hodgkinson v. Hodgkinson, 2006 BCCA 158, 25 R.F.L. (6th) 235 for the principle that “an analysis of the support-seeking spouse’s “needs” under non-compensatory support, i.e.: the objectives of ss. 15.2(6)(c) and 15.2 (6)(d) of the Divorce Act, requires some consideration of the standard of living enjoyed by the parties during the marriage and by the other spouse after the marriage” (para. 60).

 

In determining whether a support award was warranted in the face of considerable asset division, the court found that case authorities support the view that spousal support is not precluded in high asset cases (para. 80). Ultimately the court found that the wife was entitled to both compensatory and non-compensatory spousal support but at an amount that was less than what was recommended by the Federal Spousal Support Guidelines (consideration of factors leading to the determination of amount of support is found at paragraph 107).  With respect to compensatory support, the court stressed that when the recipient receives substantial assets, this does not preclude a claim to spousal support (at para. 82).  Regarding compensatory support, the court held that a recipient must not have to encroach on capital to maintain a standard of living similar to that enjoyed during the marriage as that is a hardship resulting from the breakdown of the marriage (at para. 90).

 

– Sonia Kainth

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