31 May 2017

Is income from a new spouse relevant in an application to cancel or reduce spousal support ?

by Karen F. Redmond
Family Law Lawyer

I am involved in an interesting case this week where the husband is applying to reduce his spousal support.  The case has raised a number of interesting issues which I will post more about this week.  The first question is whether the income of the husband's common law wife is relevant to the application for cancellation or reduction of spousal support. 

The answer to the question of whether a new spouse's income is relevant, in short, is yes, for both the recipient and the payor, in different ways, and of course it depends on the particular facts of the case and whether the application is for a change in child or spousal support.

It is fair to say, however, that income from a payor’s new spouse is relevant to a determination of support owing to a former spouse.  I looked at a few cases including:

  1. Chevalier v. Chevalier, 1993 CanLII 4475 (NS SC)  (child and spousal support variation application)   Chevalier v. Chevalier
  2. Redpath v. Redpath, 2008 BCSC 68 (child and spousal support variation application) Redpath v. Redpath
  3. Rakose v Rakose, 2008 BCSC 1165  (application to vary spousal support) Rakose v. Rakose
  4. Moreau v. Fliesen, 2008 BCSC 1358  (application to vary child support) Moreau v. Fliesen
  5. Chalmers v. Chalmers, 2009 BCSC 517   (application to vary spousal support)  Chalmers v. Chalmers

These cases say that the new spouses either are, or should be, contributing to the household expenses thus making more money available to the payor for payment of support.  I found it particularly interesting that in the Chevalier case the Judge even included the unemployment insurance of the new common law spouse as part of the payor’s household income.  The cases I read all say, in a nutshell, when the court considers an application to end spousal support and to vary child support, it should consider the earning capacity of the parties and the means of any new spouse. 

 For the recipient, re marriage will also be looked at by the Courts but not necessarily in the same way. For example in L.J.Z v. J.A.Z 2014 BCJ No. 1925 the 61 year old husband applied to cancel spousal support based on the wife’s re marriage.  The parties had been married for 29 years and the wife was 55 years old and had been receiving support for only 4 and a  half years at the time of the application.  The wife successfully argued that since the original order contained compensatory elements, the husband had not met the obligation of compensating her for the economic consequences of the marriage breakdown. 

From paragraph 57:   “If the evidence shows the recipient spouse's circumstances have materially changed to the extent they no longer need financial support to achieve a standard of living that approximates what they enjoyed during the marriage, absent a compensatory basis for the award, attachment to the payor spouse's income can no longer be justified. In the present case, therefore, the wife's remarriage and the resulting financial benefits she receives from it become relevant to determining whether she still needs financial support to allow her to maintain the marital standard of living.  And paragraph 58:  "The parties divided the family assets equally. Therefore, to the extent that the wife is entitled to compensation for economic disadvantages she sustained and the economic advantages the husband gained arising from the marital relationship, it must come through a spousal support order, whether lump sum or periodic."   Paragraph 59:  "As noticed earlier, the wife acknowledged in her affidavit that the support order contained both compensatory and non-compensatory consideration. As is most often the case, however, the order does not divide the support amount into compensatory and non-compensatory parts. In my opinion, the most practical way in this case to address that is to determine a percentage reasonably representative of the weight of evidence supporting a compensatory amount. This at least would be a useful starting point……"   The Judge went on to consider the evidence provided by the parties and found that there were both compensatory and non compensatory elements to the original support order. 

Even if the support is based also solely on non compensatory grounds, the Courts still consider the means and needs of the parties.  For example, Aujla v. Singh, [2012] ONSC 5217   Aujla v. Singh  and a line of Ontario cases including Pindur v. Pindur, [2015] O.J. No. 1598 provide direction in non-compensatory cases that involve disabled recipients.  In both the Aujla and Pindur cases, the marriages were under ten years and the husbands were both able bodied and the wives became disabled during the marriage and unable to work.  Neither cases contained strong components of compensatory support.  The Courts, in relying on Bracklow v. Bracklow, [1999] S.C.J. No. 14, said that the cases give rise to entitlement by a disabled spouse regardless of the absence of a compensatory claim (cited at paragraph 39 of Aujla).  In the Bracklow case the marriage was only 7 years and the wife became totally disabled from working.  She was unable to establish any compensatory basis for her claim and although the British Columbia Court of Appeal dismissed her appeal, the Supreme Court of Canada allowed her appeal stating that her claim could be maintained on a non-compensatory basis, at paragraph 48:

Divorce ends the marriage.  Yet in some circumstances the law may require that a healthy party continue to support a disabled party, absent a contractual or compensatory entitlement.  Justice and considerations of fairness may demand no less……….

At paragraph 31:

…. It places the primary burden of support for a needy partner who cannot attain post marital self-sufficiency on the partners to the relationship, rather than on the state, recognizing the potential injustice of foisting a helpless former partner onto the public assistance rolls.

In the Aujla case, the wife had not given up any part of her career to further the applicant’s interests and until she became disabled she was gainfully employed.  She lost her job because of her disability not because of her marriage (para 45).  At paragraph 55 the Court said, “notwithstanding that the Guidelines suggest a maximum duration of spousal support of five years, I will order the applicant to pay spousal support for an indefinite period, subject only to variation based on a material change in circumstances.”  Counsel for the wife argued for indefinite support on the basis that the payments should be based on her need, because of her disability, saying, “anything less will leave her destitute.  Apart from spousal support, her income is fixed and is entirely beyond her control.  In addition, her expenses are entirely beyond her control, and indeed they are relatively modest.  Anything less than the amount she has requested will means that she will be in poverty, and cannot live with any dignity.”

As always, speak to a family law lawyer about the particular facts of your case, but it seems, that from the perspective of the Courts, spousal support is an obligation that you can't easily contract out of, especially if you have a disabled spouse. 

FOOTNOTE:  in Court last week Mr. Justice Leask found that the income of the payer's new spouse was relevant and he was not prepared to hear the application without the information.  If we get a written decision I will post. 

Karen F. Redmond

10 May 2017

Annual Review of Child Support


Karen Redmond

Family Law Lawyer

I thank my colleague Georgialee Lang for bringing this case to my attention. 

When child support is payable under a separation agreement, the terms of payment, including the amount of the support, are reviewed on an annual basis.  This is provided for in the Federal Child Support Guidelines which can be found here.  FCSG

When drafting separation agreements, we as lawyers, try to set out as clearly as we possibly can, the procedure for annual review of child support, by detailing the timing and details of documents need to be provided to each party.  The clause usually reads something like this

"For so long as the Children are eligible to receive child support, the parties will exchange copies of their respective income and corporate tax returns for the previous year, including all attachments, by no later than May 31 each year and copies of any Notice of Assessment or Reassessment provided to them by Canada Revenue Agency immediately upon receipt, with child support to be adjusted, if necessary, for the following year beginning July 1 of each year based upon the Respondent’s financial information.”

The Court of Appeal in  R.A. v. W.A. 2017 BCCA 126  has drawn attention to this clause as follows:

"The difficulty is that the provision, while stating that support is “to be adjusted” does not explicitly set out how it is to be adjusted. There are various possibilities. The adjustment might be “automatic”, based on a tax return and the table set out in the Federal Child Support Guidelines. Alternatively, it might require agreement or a court order. If agreement or a court order is required, it is not clear what sort of interim adjustment, if any, is to be made, or who bears the onus of bringing the matter to court for resolution...   I make the obvious observation that, particularly in high-conflict family cases, it is essential that obligations under court orders are easily ascertainable. Where an order provides for adjustment of child support, the mechanism for adjustment should be fully articulated."

A good reminder to lawyers and separating parties that, although it seems tedious, and you may roll your eyes when you are presented with a 30 page separation agreement, more detail up front, saves aggravation and legal fees down the road.    My suggestions to avoid the pitfalls outlined above are:

1. Clearly set out the mechanism and timing for review.

2. Clearly set out the mechanism for dispute resolution if no agreement can be reached.

3. Attach to your separation agreements, a document where the parties can formalize the changes to child support on an annual basis. I call this "Addendum:  Annual Child Support Review"

I am happy to share it with you, just send me an email.

to email me click HERE

As always, talk to your lawyer if you  need legal advice