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The Spousal Support Advisory Guidelines: A New and

1. 15 year relationship with 3 children spousal support terminated on variation application six years after separation when husband earning 100 000 and wife earning 46 000 54 14 RETROACTIVE SUPPORT AND THE SSAG The Spousal Support Advisory Guidelines can be helpful in resolving an issue of increasing frequency that of retroactive support The term itself is often used loosely to mean simply any award of support for a period before the hearing of support issues rather than its more technical meaning 1 e an award of support for a period prior to the filing of an application or petition to the court In this context we will use the term here in its loose colloquial sense There are two settings where retroactive spousal support is raised most frequently 1 at trial where the court is asked to revisit the amount and duration of interim spousal support and 11 on an application to vary spousal support with a claim for retroactive support accompanying the claim for varied prospective support Quite often claims for retroactive spousal support are made at the same time as claims for retroactive child support The threshold issues in the law of retroactive spousal support will inevitably be influenced by the Supreme Court of Canada s recent decision on retroactive child support in D B S v S R G 2006 2 S C R 231 31 R F L 6 1 2006 SCC 37 Appeal courts in British Columbia and New Brunswick have adapted the D B
2. Along with the exceptions this is an area of Advisory Guidelines analysis that has too often been ignored or downplayed up to this point A more sophisticated approach to the Advisory Guidelines requires careful attention to choosing and justifying the location of an amount and duration within the ranges 2 39 10 RESTRUCTURING FV CHAPTER 10 Restructuring is an important part of the Guidelines structure that is often ignored in practice The result is the loss of an important element of flexibility that allows awards to be adjusted to meet the circumstances of individual cases while maintaining the benefits of structure and certainty offered by the Guidelines Although the formulas generate separate figures for amount and duration the Advisory Guidelines explicitly recognize that these awards can be restructured by trading off amount against duration so long as the award remains within the global ranges generated by the formula when amount is multiplied by duration Restructuring asks you to think in terms of the formulas generating global amounts or values which can be restructured or configured in many different ways a very useful tool in settlement negotiations Restructuring can be used in three ways e to front end load awards by increasing the amount beyond the formulas ranges and shortening duration see Fisher v Fisher 2008 O J No 38 2008 ONCA 11 and McCulloch v Bawtinheimer 2006 A J No 361 Q B e to exten
3. 12 5 The without child support formula ranges are driven by the length of the marriage as well as the gross income disparity In shorter marriages the formula assumes the sole basis for spousal support is non compensatory which then leads to a brief transitional award Where there are compensatory claims in shorter marriages an exception is required to generate potentially larger and longer awards of spousal support There are typically but not exhaustively three situations where compensatory support can be claimed in shorter marriages without children e The recipient spouse may have had to give up or compromise his or her job or career to move with the payor spouse An excellent analysis of such a case within this exception is Beardsall v Dubois 2009 O J No 416 2009 CarswellOnt 559 S C J wife left her employment to move to London with her husband e The recipient spouse moves to marry giving up his or her job or career to do so as was the case in Ahn v Ahn 2007 B C J No 1702 2007 BCSC 1148 or Fuller v Matthews 2007 B C J No 656 2007 BCSC 444 There was no mention of this exception in a recent custodial payor case where the husband had given up his career to marry and move to Vancouver R M S v F P C S 2009 B C J No 1925 2009 BCSC 1323 husband also provided significant care for the children another compensatory ground for support e The recipient spouse may work to put the other spouse through an e
4. 2009 NBQB 303 Dickson v Dickson 2009 M J No 374 2009 CarswellMan 515 2009 MBQB 274 e For examples of calculations of retroactive spousal support on variation applications see Chapman v Chapman 2010 O J No S C J Ellis v Ellis 2010 O J No 1250 2010 ONSC 1880 Krane v Krane 2010 O J No 1009 2010 ONSC 1488 and Mann v Mann 2008 O J No 2942 2008 ONCJ 231 For a review case see Kerman v Kerman 2008 B C J No 710 2008 CarswellBC 793 2008 BCSC 500 55 e In one case retroactive support was calculated once an agreement was set aside Leaman v Leaman 2009 N J No 359 2009 NLTD 199 no future support retroactive support calculated lump sum ordered e For the use of the Advisory Guidelines in an unusual retroactive support case see Hartshorne v Hartshorne 2009 B C J No 1050 2009 BCSC 698 where the court had to determine spousal support over a past ten year period as a result of the Supreme Court of Canada s decision on the property and marriage contract issues e Tax issues can complicate any retroactive spousal support order If the retroactive support is calculated using the Advisory Guidelines and converted into a lump sum payment then the lump sum should be discounted for income tax as the lump sum will usually not be deductible On the other hand if the intention is to make the retroactive support deductible and to reassess and adjust prior years taxes then that should
5. 380 e Insome high income with child support formula cases the courts have calculated the table amount of child support on the full payor s income and then calculated the formula range for a gross payor income of 350 000 for spousal support purposes J W J McC v T E R 2007 B C J No 358 2007 BCSC 252 and J E B v G B 2008 B C J No 758 2008 BCSC 528 Master Remember that if you do this hypothetical calculation for the spousal support range it is critical that you use the child support amounts appropriate for an income of 350 000 too and not the actual higher amount of child support an error made in the otherwise careful analysis in Dickson v Dickson 2009 M J No 374 2009 CarswellMan 515 2009 MBQB 274 39 12 EXCEPTIONS FV CHAPTER 12 In the Draft Proposal we set out exceptions categories of departures from the formula ranges for amount and duration Exceptions are the last step in a Guidelines analysis First location within the ranges can be used to adjust for some of the factors that underlie the exceptions Second restructuring provides another means to adjust amount or duration above or below the ranges while maintaining the consistency and predictability of the Advisory Guidelines Only if neither of these steps can accommodate the facts of a particular case should it become necessary to resort to these exceptions Six exceptions were listed in the Draft Proposal and we added another five in
6. BCPC 43 e In cases with minor children under the with child support formula there may be no ability to pay spousal support after the payment of child support which has priority These cases are often treated as no entitlement cases This may be incorrect Inability to pay should not be confused with lack of entitlement If there is entitlement but no current ability to pay s 15 3 of the Divorce Act allows for deferred payment of spousal support after the termination of child support See also the exception for inadequate compensation under the with child support formula FV 12 11 b Entitlement and the application of the Guidelines formulas Even if entitlement is found the basis of entitlement shapes the determination of the amount and duration of spousal support It thus informs many of the subsequent steps in the application of the Advisory Guidelines The Guidelines formulas reflect different bases of entitlement e the without child support formula is based on a mix of compensatory and non compensatory entitlement e when applied to short and medium length marriages without children it generates largely non compensatory support providing a time limited transition from the marital standard of living e when applied to longer marriages in which there may or may not have been children its ranges reflect a mix of compensatory and non compensatory support e the with child support formula is largely compensatory responding to th
7. S analysis to the spousal support context e g Reis v Bucholtz 2010 B C J No 382 2010 BCCA 115 and Brown v Brown 2010 N B J No 18 2010 NBCA 5 In other jurisdictions like Ontario and Nova Scotia the leading appellate authorities predate D B S e g Bremer v Bremer 2005 O J No 608 13 R F L 6 89 C A and Lu v Sun 2005 N S J No 314 2005 NSCA 112 There is not yet consensus on how the D B S analysis might be applied differently to retroactive spousal support These cases focus upon the threshold issues of entitlement to retroactive support and the court s discretion in granting such support Here we are interested in how the Advisory Guidelines can be used to work out the amount and duration of retroactive spousal support e The Advisory Guidelines can be and often are used to calculate the appropriate amount of spousal support once historical spousal incomes have been determined The duration of retroactive support is usually determined as part of the threshold analysis of entitlement and discretion e For examples of retroactive spousal support for the interim period being calculated with the SSAG see Reis v Bucholtz 2010 B C J No 382 2010 BCCA 115 Fisher v Fisher 2008 O J No 38 2008 ONCA 11 Teja v Dhanda 2009 B C J No 928 2009 BCCA 198 appeal allowed in part from 2008 B C J No 1052 2008 BCSC 733 and 2007 B C J No 1853 2007 BCSC 124 Purdue v Purdue 2009 N B J No 382
8. The exception also clearly arose on the facts and Petit was cited and applied in R M S v F P C S 2009 B C J No 1925 2009 BCSC 1323 husband exercised substantial access for two young children 1 Special needs of child FV 12 10 A child with special needs can raise issues of both amount and duration of spousal support issues that can often but not always be accommodated within the ranges In some cases however the duration of spousal support may have to be extended and or the amount may have to be increased above the upper end of the range See Yeates v Yeates 2007 O J No 1376 2007 CarswellOnt 2107 S C J affirmed on appeal 2008 O J No 2598 2008 ONCA 519 wife with care of disabled children spousal support well above range and Frouwes v Frouwes 2007 B C J No 282 2007 BCSC 195 wife no entitlement to spousal support where wife delayed claim and custodial husband bears full costs of children with special needs m Section 15 3 inadequate compensation FV 12 11 The full title for this exception is section 15 3 small amounts inadequate compensation under the with child support formula Section 15 3 of the Divorce Act requires that child support be given priority over spousal support which can mean little or no spousal support in cases where 47 there is a strong claim for compensatory support especially where there are more children requiring care The duration of spousal support may there
9. and often will end up above the set off amount and occasionally below it In some of these non set off cases the child support amount will have to be adjusted in determining spousal support but not usually depending upon the reason for the higher or lower than set off child support FV 8 6 2 e In the Final Version the limits of the range for spousal support in shared custody cases has been adjusted to ensure that a 50 50 split of the spouses net disposable income or monthly cash flow is always included in the formula range Many shared custody parents and some judges have used this equal net income split as a means of maintaining similar standards of living in each parent s household an approach also consistent with Contino see e g Swallow v De Lara 2006 B C J No 2060 2006 BCSC 1366 Master Fell v Fell 2007 O J No 1011 Ont S C J Nordio v Nordio 2007 B C J No 1710 2007 BCSC 1164 J W v M H W 2007 B C J No 1597 2007 BCSC 1075 This outcome is usually within the shared custody formula range but in some cases the formula range has to be extended at the upper or lower end to include it The software does this automatically FV 8 6 3 These Final Version adjustments to the shared custody formula were unfortunately not considered by the B C Court of Appeal in Mann v Mann 2009 B C J No 829 2009 26 BCCA 181 The Court of Appeal instead tried to construct its own hybrid formula for s
10. ceiling is not an absolute or hard cap as spousal support can and usually does increase for payor incomes above 350 000 Smith v Smith 2008 B C J No 1068 2008 BCCA 245 and Denofrio v Denofrio 2009 O J No 3295 2009 CarswellOnt 4601 S C J e The formulas are not to be applied automatically above the ceiling although the formulas may provide an appropriate method of determining spousal support in an individual case depending on the facts For cases where the formulas appear to be used automatically see E Y J v R Y N 2007 CarswellBC 782 2007 BCSC 509 or Teja v Dhanda 2007 B C J No 1853 2007 BCSC 1247 For a more individualized case specific use of the formula see J K S v H G S 2006 B C J No 2051 2006 BCSC 1356 In its most careful high income decision the B C Court of Appeal considered the formula ranges and the different approaches to these above ceiling cases Loesch v Walji 2008 B C J No 897 2008 BCCA 214 In four other decisions the Court offered less guidance Bell v Bell 2009 B C J No 1201 2009 BCCA 280 James v James 2009 B C J No 1151 2009 BCCA 261 Teja v Dhanda 2009 B C J No 928 2009 BCCA 198 and Smith v Smith 2008 B C J No 1068 2008 BCCA 245 e Above the ceiling spousal support cases require an individualized fact specific analysis In most cases the formula ranges are calculated as part of the individualized decision making process e g C L M
11. child shared custody two children no s 7 expenses and higher incomes higher incomes generally modest monthly amount of spousal support and short marriage see Venco v Lie supra and Abuzokkar v Farag 2009 O J No 2915 S C J e To convert periodic payments to a lump sum obviously there will have to be assets or resources available to the payor to make the lump sum payment c Restructuring under the custodial payor formula The custodial payor formula applicable in cases where there are dependent children but the recipient spouse is not the custodial parent is a modified version of the without child formula Its adoption of the without child support formula s durational ranges means that restructuring may be used the same way under this formula as under the without child support formula See Martin v Martin 2007 O J No 467 235 2 11 CEILINGS AND FLOORS The ceiling and the floor define the upper and lower boundaries of the typical cases where the formulas can be used Above the ceiling and below the floor the formulas alone cannot be used as individual adjustments are required much like for the exceptions Not surprisingly there is much more case law and discussion for incomes above 350 000 so we will address cases below the floor first and then the many cases above the ceiling a The floor payor incomes below 20 000 30 000 FV 11 2 11 4 In the Final Version the floor
12. costs of living see Eastwood v Eastwood 2006 CarswellNB 655 2006 NBQB 413 or because the income difference is not that significant see Vlachias v Vlachias 2009 B C J No 1241 2009 BCSC 843 e the recipient has not experienced any significant economic hardship or decline in standard of living from the marriage see Lamothe v Lamothe 2006 2006 CarswellOnt 8150 Ont S C J J J G v K M A 2009 B C J No 1568 2009 BCSC 1086 Lam v Chui 2008 B C J No 1648 2008 BCSC 1177 Beaudry v Beaudry 2010 A J No 170 2010 ABQB 119 e the income disparity is the result of post separation events or choices such as a job loss on the recipient s part see Rezel v Rezel 2007 O J No 1460 S C J and Barton v Ophus 2009 BCSC 858 2009 BCSC 858 or a post separation increase in the payor s income see Eastwood v Eastwood 2006 CarswellNB 655 2006 NBQB 413 and Fisher v Fisher 2009 A J No 1003 2009 ABQB 85 e property division has satisfied any compensatory or needs based claims most often in B C as a result of reapportionment on spousal support grounds see W J M v L A M 2007 B C J No 1283 2007 BCSC 842 and C J D v J H E 2009 B C J No 1716 2009 BCSC 1168 e the recipient abdicated financial responsibility during marriage or post separation Lamothe v Lamothe 2006 2006 CarswellOnt 8150 S C J v T S S 2006 A J No 1319 2006 ABQB 777 and G G F v R F 2009 B C J No 215 2009
13. dependent children at the time of separation and hence spousal support would have initially been determined under the with child support formula After child support has been terminated these cases may be brought under the without child support formula on an application for review or variation for example see Bockhold v Bockhold 2010 B C J No 283 2010 BCSC 214 It is important to be aware of this particular subset of cases e If the conditions for review or variation are satisfied crossover cases may require a redetermination of amount they may also involve a determination of duration including payor requests for termination The without child support formula will be used to redetermine the amount of spousal support As for duration given that the class of cases to which crossover applies will be medium to long marriages duration will be driven by length of marriage and so will be the same under both formulas For a fuller discussion of review and variation cases involving crossovers see FV 14 5 and below under Variation and Review A e These are cases with strong compensatory claims as compared to medium length marriages where there were no children of the marriage One would thus expect amount and duration to be near the high end of the range e In these cases s 15 3 of the Divorce Act and the Advisory Guidelines exception for inadequate compensation under the with child support formula may also be relevant If the amoun
14. duration is short see Arnold v Arnold 2009 B C J No 1999 2009 BCSC 1384 2933 2 e Computer software programs may assist in some of the calculations required by restructuring Even with software programs there will be a certain amount of guess work involved in restructuring But this is already familiar to family law lawyers who frequently make trade offs between amount and duration in settlement negotiations and spousal support agreements When should you think about restructuring In practice restructuring has often been ignored Here we try to flag the different kinds of fact situations under each formula where restructuring should be considered as an option a Restructuring under the without child support formula The primary use of restructuring will be under the without child support formula To trade off amount against duration ideally requires a fixed duration for the award As a result restructuring will generally only be advisable in cases where the formula generates time limits rather than indefinite duration not specified support More specifically think about restructuring in the following cases e short and short medium length marriages where the amount generated by the formula seems low in comparison to current awards which typically attempt to provide a transitional period of support that bears some relationship to the marital standard of living Here restructuring can be used to front end load the award inc
15. formula or the custodial payor formula The formulas produce ranges for amount and duration that seem too low or too short certainly to recipients Payors will want to argue the formula ranges primarily to time limit their spousal support in short to medium marriages Three approaches to disability cases can be identified in the decided cases with the first and second being the most common e Increase Amount Extend Duration Many courts respond to the greater need in disability cases by increasing the amount and extending the duration of support Rhynold v Rhynold 2009 O J No 4339 S C J van Rythoven v van Rythoven 2009 O J No 3648 S C J Steele v Steele 2009 O J No 2062 S C J Shaw v Shaw 2009 N S J No 559 2009 NSSC 353 Smith v Smith 2008 CarswellOnt 1921 Ont S C J Lepp v Lepp 2008 B C J No 640 2008 CarswellBC 717 2008 BCSC 448 Mumford v Mumford 2008 N S J No 138 2008 NSSC 82 Pegler v Avio 2008 CarswellBC 169 2008 BCSC 128 Wilson v Marchand 2007 O J No 3738 2007 ONCJ 408 although time limited still beyond range Peterson v Peterson 2007 S J No 474 2007 SKQB 316 Bramhill v Dick 2007 B C J No 387 2007 BCSC 262 Eng v Eng 2006 B C J No 2044 2006 BCSC 1353 e No Exception Disability cases should be resolved within the formula ranges for both amount and duration according to a slightly smaller group of cases In effect these courts do not reco
16. length of the marriage and too little to the age of the children and the obligations of the custodial spouse One of our concerns in revising this formula in the Final Version to add a range for duration was that some lawyers and courts might too readily opt for the lower end of the range without a sufficient recognition of the compensatory basis for support under the with child support formula Four basic points about duration need reiteration e The initial order under this formula should be indefinite duration not specified Any time limits should only be applied through the process of variation and review e The with child support formula is fundamentally compensatory which means that most time limits should fall towards the higher end of the range not the lower end e In shorter marriages the basis for compensation is not just the past disadvantage flowing from the spouse s disproportionate assumption of child rearing responsibilities relatively short but primarily the continuing disadvantages that flow from the spouse s ongoing and future responsibilities for child rearing e In shorter marriages with younger children then the length of the marriage is a very poor indicator of the depth of the recipient spouse s disadvantage For an excellent analysis of duration under the with child support formula see Dabrowska v Bragagnolo 2008 O J No 3155 2008 CarswellOnt 4763 2008 ONCJ 360 30 9 CHOOSING LOCATI
17. recalculation of spousal support at the SSAG midpoint see Swallow v De Lara 2009 B C J No 1339 2009 BCSC 911 e To provide a standard for assessing the fairness of an agreement Where the validity or enforceability an agreement is being challenged under existing law courts may use the ranges under the Advisory Guidelines to assist in identifying unfair agreements for example in determining whether there is substantial compliance with the Divorce Act objectives under either stage 1 or 2 of a Miglin analysis see Chepil v Chepil 2006 B C J No 15 2006 BCSC 15 W C L v R S U 2007 CarswellBC 666 2007 BCSC 453 Leaman v Leaman 2008 N J No 96 2009 CarswellNfld 87 2008 NLTD 54 Poitras v Garner 2009 B C J No 206 2009 BCSC and Covriga v Covriga 2009 O J No 3359 However the Guideline result must be balanced with respect for the parties own assessment of a fair outcome as reflected in their agreement see Turpin v Clarke 2009 B C J No 2328 2009 BCCA 530 Miglin stage 1 test of substantial compliance does not mean departure from SSAG will be reason to override agreement Vanderlans v Vanderlans 2007 CarswellNfld 119 2007 NLUFC 8 Rapley v Rapley 2006 B C J No 3213 2006 BCSC 1854 and Dobie v Rautenberg 2008 B C J No 1199 2008 BCSC 826 To determine the amount or duration of support if a final agreement is set aside or overridden If a spousal support agreement is set aside or overridden
18. see Francis v Logan 2008 BCSC 1028 and Gajdzik v Gajdzik 2008 BCSC 160 As well there may be issues of whether the payor s retirement was foreseen or foreseeable in the sense of having been taken into account when the initial agreement was made see Templeton v Templeton 2005 ABCA 14 R F L 6 161 and Fishlock v Fishlock 2007 46 R F L 6 254 Ont S C J e Retirement incentives There may be an issue of whether any retirement incentive received in the year of retirement will be treated as income for that year Typically the answer has been no see Hurst v Hurst 2008 O J No 3800 S C J and Gammon v Gammon 2008 CarswellOnt 6349 S C J e Boston and double dipping The Advisory Guidelines do not change the law from Boston v Boston 2001 2 S C R 413 which governs double dipping in respect of pension division and spousal support That law can best be understood as relating to entitlement entitlement to share in the already divided portion of the payor s pension income Under the Advisory Guidelines Boston is recognized as the basis of an exception FV 12 6 3 discussed below under Exceptions EHI Boston articulates a general rule against double dipping 1 e that spousal support should not be paid out of pension income from a pension that has already been divided as part of the property division between the spouses But Boston then goes on to recognize exceptions
19. to the rule exceptions which have been discussed at length in the appeal cases of Meiklejohn v Meiklejohn 2001 O J No 3911 C A Chamberlain v Chamberlain 2003 NBCA 34 36 R F L 5 241 and Cymbalisty v Cymbalisty 2003 MBCA 138 44 R F L 5 27 The most common exceptions to the rule against double dipping are based upon hardship and need Boston applies in cases where there has not been an in specie or statutory division of the pension but instead the recipient spouse has received other assets or a lump sum in lieu of the pension To apply the Boston rule against double dipping a court needs evidence of the prior valuation and division of the pension to determine which portion of the payor s current income has been divided In some cases the divided portion will be quite small relative to the undivided portion of the payor s pension income and Boston will not have any impact Leepart v Leepart 2009 CarswellSask 54 2009 SKQB 47 Where a pension is divided at source when it is paid out as is the case under British Columbia or Nova Scotia legislation then the problems of Boston can usually be avoided e g Trewern v Trewern 2009 B C J No 343 2009 BCSC 236 In these cases both spouses simply include the pension payments in their income and the previously divided portions of the pension effectively cancel each other out The application of Boston within the context of the Advisory Guidelines raises complex issue
20. using the Guidelines means just plugging the income figures into the software program getting the range and choosing the mid point There is more to the Advisory Guidelines than this and using them in this way can lead to inappropriate results In this document we offer a brief and handy step by step guide to the use of the Advisory Guidelines in the interests of promoting more informed and sophisticated use This guide e highlights the main practice issues at the different stages of a Guidelines analysis e reminds you of common mistakes and points that are often missed e notes additions and changes in the Final Version and e provides cross references to leading case law and to the relevant portions of the Final Version FV where an issue is more fully discussed Full summaries of the cases referred to can be found in the various updates which we have prepared and which are available at http www law utoronto ca faculty rogerson ssag html In addition to this User s Guide we would like to make you aware of some other resources that also provide helpful advice on applying the Advisory Guidelines e J B Boyd Obtaining Reliable and Repeatable SSAG Calculations November 28 2009 available at http www justice gc ca eng pi fcy fea spo epo calc index html e Lonny L Balbi Steps to Using the Spousal Support Advisory Guidelines October 2009 e Without Child Support Formula available at http www justice gc c
21. v Bishop 2005 N S J No 324 2005 NSSC 220 N S S C e If the concern is crystal ball gazing remember that time limited orders are subject to variation if there has been a material change in circumstances see Fisher v Fisher 2008 O J No 38 2008 ONCA 11 and Fewer v Fewer 2005 N J No 303 2005 NLTD 163 N L S C e Time limits under this formula can be used in a softer way similar to the use of the durational ranges under the with child support formula to structure the on going process of review and variation While the initial order is indefinite duration not specified a time limit may be imposed on a subsequent review or variation See Kerman v Kerman 2008 B C J No 710 2008 CarswellBC 793 2008 BCSC 500 Hanssens v Hanssens 2008 B C J No 526 2008 CarswellBC 591 2008 BCSC 359 Kelly v Kelly 2007 B C J No 324 2007 BCSC 227 Gammon v Gammon 2008 CarswellOnt 6349 S C J 10 year total duration after 15 year relationship with no children termination date set 4 years after separation on variation application after husband retires and Bourque v Bourque 2008 N B J No 469 2008 NBQB 16 year total duration set after 17 year marriage termination date set on review application 9 years after separation Another good example under the custodial payor formula is Puddifant v Puddifant 2005 N S J No 558 2005 NSSC 340 S C F D e If itis contemplated that support will be on going for an e
22. v R A M 2008 B C J No 608 2008 BCSC 217 O S v O C S 2008 CarswellBC 444 2008 BCSC 283 or Milton v Milton 2008 N B J No 467 2008 NBCA 87 affirming 2007 N B J No 414 2007 NBQB 363 Where the husband s income was far beyond the ceiling 1 6 million an entirely discretionary approach was adopted by the B C Court of Appeal in Loesch v Walji 2008 B C J No 897 2008 BCCA 214 See also Dobbin v Dobbin 2009 N J No 52 2009 NLUFC 11 1 5 million and Dyck v Dyck 2009 M J No 139 2009 MBQB 112 3 million e Where the payor s income is close to the ceiling the formula ranges will often be used to determine the amount of spousal support e g Hosseini v Kazemi 2009 B C J No 743 2009 BCSC 502 income 351 649 or Abelson v Mitra 2008 B C J No 1672 2008 BCSC 1197 income 355 000 As the payor s income rises higher and higher above the ceiling then courts begin to diverge from the formula ranges e Far too often in these high income cases lawyers and judges fail to consider the SSAG formula ranges at all in arriving at their conclusions Formula ranges can be calculated for different hypothetical income levels from 350 000 on up the scale to assist in defining the much broader range of potential outcomes and to offer helpful insights in determining the appropriate large amount For some examples of this approach see Rogerson and Thompson Complex Issues in B C above
23. CSC 205 e Section 7 expenses and the respective parental contributions have a critical impact upon the spousal support range generated by the formulas By definition any payment of s 7 expenses will reduce the range even for those expenses like child care that offer some tax break Further the correct parental contributions must also be input especially if the contributions are fixed without respect to the payment of spousal support or fixed on some basis other than incomes after spousal support Surprising lawyers and courts often fail to take s 7 expenses into account in calculating the spousal support range with the payor incorrectly paying more spousal support as a result For just a few cases where s 7 expenses were not considered there are more see Morey v Morey 2009 O J No 1160 2009 CarswellOnt 1502 S C J Boju v Corr 2009 O J No 443 2009 CarswellOnt 563 S C J Southcott v Southcott 2009 B C J No 1143 2009 BCSC 760 95 2 e Remember that permissible deductions for the calculation of individual net disposable income under the with child support formula do not include deductions for mandatory pension contributions for the reasons explained FV 8 3 1 The software does these net income calculations for you That said at lower income levels the size of the mandatory pension contributions may be relevant to choosing the location of an amount within the range to recognize limitations on the payor s
24. ON WITHIN THE RANGE Determining the ranges for amount and duration under the Spousal Support Advisory Guidelines is the beginning of the real analysis by lawyers and judges The ranges are quite broad under both formulas especially where the disparity in incomes is large or the marriage is long Too often the lawyer for the recipient asks for the high end the lawyer for the payor offers the low end and then the court opts for the mid range all with little in the way of reasons Our latest reviews of Ontario and British Columbia trial decisions do suggest a tendency to default to the mid range amount of spousal support an approach which should be avoided On duration there is less of a tendency to default to the middle of the range and more explanation for the outcome The Final Version details a series of factors that should be considered in determining location within the ranges for both amount and duration worth listing here e Strength of any compensatory claim Recipient s needs Age number needs and standard of living of children Needs and ability to pay or payor Work incentives for payor Property division and debts Self sufficiency incentives There are some good examples in the cases of careful explanation by the court for location within the range One of the best appeal court examples would be the recent custodial payor case in the Ontario Court of Appeal Cassidy v McNeil 2010 O J No 1158 2010 ONCA 218 lo
25. SERVING CANADIANS The Spousal Support Advisory Guidelines A New and Improved User s Guide to the Final Version March 2010 sos el i oe ee Canada The Spousal Support Advisory Guidelines A New and Improved User s Guide to the Final Version Prepared by Professor Carol Rogerson Faculty of Law University of Toronto Professor Rollie Thompson Dalhousie Law School Presented to Family Children and Youth Section Department of Justice Canada The views expressed in this report are those of the authors and do not necessarily represent the views of the Department of Justice Canada Aussi disponible en francais This report may be reproduced in part or in whole and by any means without charge or further permission from the Department of Justice Canada provided that due diligence is exercised in ensuring the accuracy of the materials reproduced that the Department of Justice Canada is identified as the source department and that the reproduction is not represented as an official version of the original report Her Majesty the Queen in Right of Canada represented by the Minister of Justice and Attorney General of Canada 2010 TABLE OF CONTENTS A like teennengehnsdedersternn eehenertnndehnenehinenarkeheeeeen 1 Entitlement FV Chapter 4 een neh ern rd nenee 3 a Entitlement as a threshold issue coconnooconnnnnccnnannnananononocnononnnnononononnononnnno non nnnoncnnoninannns 3 b Entitlement and the
26. a the step parent formula the custodial payor formula or the adult child formula The formula errors centre upon the failure to use the custodial payor or the adult child formulas Both of these are hybrid formulas formulas that give priority to child support but are constructed upon the same concepts as the without child support formula These two formulas emphasize length of marriage and merger over time and thus produce a different range of support outcomes than the other with child support formulas For example in Grinyer v Grinyer 2008 CarswellOnt 366 Ont S C J the Court used the basic formula instead of the correct custodial payor formula e Government benefits for children are large and have a real impact upon the ranges for the amount of spousal support as such benefits are treated as income for spousal support purposes In all cases for younger children under 6 years of age identify whether the Universal Child Care Benefit UCCB is being claimed see Tremblay v Tremblay 2008 O J No 420 Ont S C J P G v N L 2008 O J No 2045 Ont S C J UCCB not included In shared custody cases identify whether the spouses are rotating the Child Tax Benefit UCCB and child portion of GST Credit or whether just one spouse usually the lower income spouse is receiving these benefits as the courts did in Samson v Samson 2009 B C J No 952 2009 BCSC 635 and Bigelow v Downie 2009 B C J No 293 2009 B
27. a eng pi fcy fea spo epo dir wo sans html e With Child Support Formula available at http www justice gc ca eng pi fcy fea spo epo dir with avec html 2 ENTITLEMENT FV CHAPTER 4 An analysis of entitlement is an important first step before the application of the Guidelines In practice this step is often ignored e The Advisory Guidelines do not determine entitlement They deal with the amount and duration of support after entitlement has been established Entitlement is a threshold issue that must be determined before the Guidelines will be applicable This is still the case in the Final Version e As well even if entitlement is established a determination of the basis of entitlement will inform the appropriate application of the Guidelines Three appellate level decisions provide good models of this preliminary analysis of entitlement Yemchuk v Yemchuk 2005 B C J No 1748 2005 B C C A Chutter v Chutter 2008 B C J No 2398 2008 BCCA and Fisher v Fisher 2008 O J No 38 2008 ONCA 11 For a trial level decision see Purdue v Purdue 2009 N B J No 382 2009 NBQB 303 a Entitlement as a threshold issue On its own a mere disparity of income that would generate an amount under the Advisory Guidelines formulas does not automatically lead to entitlement There must be a finding or an agreement on entitlement on a compensatory or non compensatory basis before the formulas and the rest of the Guidelines ar
28. a formula for these cases in the Final Version e The most interesting of the remarriage cases is M K A v M P K 2008 CarswellBC 135 2008 BCSC 93 because Justice Barrow did try to construct a formula to guide a step down of spousal support by reducing support by 10 per cent a year until it ended 10 years later this after a 21 year traditional marriage e Step down orders are one common solution in these cases even if not formulaic Balazsy v Balazsy 2009 O J No 4113 S C J C L M v R A M 2008 B C J No 608 2008 BCSC 217 e Another solution is to reduce spousal support below the formula range in these cases Driscoll v Driscoll 2009 O J No 5056 S C J Rakose v Rakose 2008 B C J No 1632 2008 BCSC 1165 Coolen v Coolen 2005 N S J No 155 2005 NSSC 78 52 e Support can be terminated especially if the new husband makes more money than the old one Redpath v Redpath 2008 B C J No 68 2008 BCSC 68 upheld on appeal 2009 B C J No 813 2009 BCCA 168 f Second families or subsequent children FV 14 8 In the child support setting issues of subsequent children are dealt with by way of section 10 s undue hardship a demanding and discretionary test with no clear policy to resolve the conflict The conflict becomes even more acute where the trade off is between spousal support for a prior spouse and subsequent children There is no formulaic solution to be found in the Final Version a
29. a range e As we said in the Final Version Some rough notion of causation is applied to post separation income increases for the payor in determining both whether the income increase should be reflected in increased spousal support and if it should by how much It all depends on the length of the marriage the roles adopted during the marriage the time elapsed between the date of separation and the subsequent income increase and the reason for the income increase new job vs promotion with same employer or career continuation vs new venture e Most of the major cases on this issue are reviewed in Judd v Judd 2010 B C J No 177 2010 BCSC 153 Sawchuk v Sawchuk 2010 A J No 18 2010 ABQB 5 and D B C v R M W 2006 A J No 1629 2006 ABQB 905 Other helpful decisions are Chapman v Chapman 2010 B C J No 284 2010 BCSC 216 Coghill v Michalko 2010 A J No 86 2010 ABQB 59 Hartshorne v Hartshorne 2009 B C J No 1050 2009 BCSC 698 Kelly v Kelly 2007 B C J No 324 2007 BCSC 227 See also Chalifoux v Chalifoux 2008 A J No 174 2008 ABCA 70 no sharing e In Fisher v Fisher 2008 O J No 38 2008 ONCA 11 the Ontario Court of Appeal provided some limited sharing of the post separation income increase by taking a four year average income for both spouses including the year of separation when the husband s income first increased This partial sharing was not explained further but it would a
30. ability to pay e As for duration all initial orders or agreements under the basic shared custody and split custody formulas will be indefinite duration not specified with any time limits only imposed upon subsequent review or variation The range for duration under these formulas will be determined by two tests the length of marriage test and the age of children test whichever is longer for the upper and lower ends of the range a The shared custody formula FV 8 6 At the time the Draft Proposal was released we were still waiting for the Supreme Court s decision in Contino v Leonelli Contino 2005 3 S C R 217 19 R F L 6 272 Further in 2005 the Canada Revenue Agency quietly changed its policy on the payment of child related benefits in shared custody cases Finally we did some tweaking to the formula ranges based upon feedback from lawyers dealing with shared custody cases e We said it on the last page and we ll say it again it is critical to determine which spouse is receiving which child related government benefits in shared custody cases before calculating the range for spousal support FV 8 6 1 e The premise underlying the shared custody range is that the spouses have adopted the straight set off amount for child support plus any section 7 expenses As Contino makes clear the straight set off is not a default rule but the starting point for the determination of child support in a s 9 case Child support can
31. al obligation to both children para 40 For an example of the latter point see Kontogiannis v Langridge 2009 B C J No 2257 2009 BCSC 1545 11 year common law relationship husband no longer required to support wife s 20 year old child husband repartnered newborn child spousal support reduced to 600 mo below low end of range 1 034 mo due to subsequent child The Advisory Guidelines can assist in assessing the amount of any downward departure in a subsequent child case by adjusting the range for a notional amount of child support in the same fashion as one does for a prior child support obligation In Kontogiannis this would have reduced the low end of the range to about 770 per month suggesting that the court may have intuitively over adjusted for the subsequent child g Self sufficiency and termination FV 13 13 1 13 7 13 8 Some of the circumstances that trigger a variation or review the recipient finding employment the recipient s remarriage or repartnering the payor s retirement or loss of income etc may raise issues of continuing entitlement Entitlement is always a pre condition to the application of 253 2 the Guidelines Support may therefore be terminated entirely on a variation or review if entitlement has ceased It is often on a variation or review application that the durational limits generated under the SSAG formulas are implemented under either formula Even in longe
32. analyses of entitlement on non compensatory grounds Some lawyers and judges erroneously think that any long marriage gives rise to compensatory support but Fisher makes clear that this is incorrect e In many cases there may be entitlement on both bases For example in long marriages with children there are often significant elements of both compensatory and non compensatory support e A large property award does not necessarily preclude entitlement on either compensatory or non compensatory grounds see Chutter v Chutter 2008 B C J No 2398 2008 BCCA and Bell v Bell 2009 B C J No 1201 2009 BCCA e If there is a significant income disparity entitlement on either compensatory or non compensatory grounds may be established despite the fact that the recipient has a relatively high income and could on some understandings of the term be seen as self sufficient see Gillimand v Gillimand 2009 O J No 2782 S C J entitlement for wife earning 93 000 as pilot Gonabady Namadon v Mohammadzadeh 2009 B C J No 2061 2009 BCCA 448 entitlement for wife earning 150 000 as doctor Mehlsen v Mehlsen 2009 S J No 403 2009 SKQB 279 entitlement for wife earning 70 000 The Advisory Guidelines were drafted on the assumption that the current law of spousal support post Bracklow offers a very expansive basis for entitlement to spousal support leaving amount and duration as the main issues to be determined in spousal sup
33. application of the Guidelines formulas ur seen 5 c Entitlement issues on variation and review 00ooccccnnoocccnnnononnnononononononononnnnnnnnnnnnnnnnnnnnnnnnnnss 6 Agreements EV 5 2 A ccawselsceneeuehanindusucabstuescsiadeccculucasanseses 7 Application to Interim Orders FV 5 3 sesssecssocesooesooessocessccssocesocesoocesoosesoesssecssocesocescossoo 9 Income EV Chapter O aa er bier 11 a Differences in income for spousal SUPpPOTt ooooocnnncccnnncccnoncncnnnnnononcconnnacononcconnnccnnnncnnns 11 b Can a payor have two incomes nun unse enter 11 c Using alternative incomes to estimate ranges ceeseceesecceseeeceeeeeceeeeeceeeeecseeeeenaeees 13 d Other assorted INCOME ISSUES cccceceesessececesececeesenseaecececeeeeeessessnsecececceseseesnssaeeeseeeens 13 Use the Right Formul ae ir a s vveaashaidescessveen 15 The Without Child Support Formula FV Chapter 7 ssccssssccssssscsssscsssssccssscssssssees 17 a The problem of amount in short marriages without children FV 7 4 2 18 b Short marriages immigration sponsorship cases uneenneessersnnesnnesnnnennnennnnennnen seen 19 c Duration under the without child support formula FV TS oooocccninocacincnanoncnnnnonnnnnonnnos 19 d Duration and the rule of 65 FV 7 5 3 oocococcnononucananononnonononannnnnnnnonnononnnno no nnnnnccnonnnns 21 e Medium length marriages with children crossover cases after ch
34. apter BR nenne ee een 41 a Compelling financial circumstances at the interim stage FV 12 1 41 b Debt payments Ed Kurses Beni 41 c Prior support obligations PAI it E 42 d Illness and disability FV A Ss es Aa SiR EES 43 e The compensatory exception in short marriages without children FV 12 5 44 Property division reapportionment B C FV 12 6 1 ee eeeeseesseceseeeseeeeneeenaeenes 45 g Property division Boston FV 12 6 3 cccccssscscssscecsscecesececssececssececssececssececseeeeenseees 45 h Property division high property awards FV 12 6 2 oooonncccocococcconanconncnonnnnnnnnancnnn nono 45 i Basic needs hardship EV 12 7 wsssisseedisssevaccisedeccsavsavadsasegeadeaspavceva teen anaconda 46 G Non taxable payor income FV DI 46 k Non primary parent to fulfil parenting role FV 12 9 ooo eeeeeeeeeeneeenseeneenees 47 Di Special needs ofchild FV We MOY ac Na 47 m Section 15 3 inadequate compensation FV 12 11 oo eee eeeesecssececeeeeeeeteeeesteeeeneeees 47 n Other grounds for departures new exceptions uuesseessnersnnesnnernnnennnersnnennnennnn ern nnnn 48 13 Variation and Review FV Chapter 14 ccssccssssccsssscesssscesssccssseccssseccsssessssssscssnees 49 a Application of the SSAG on variation and review FV 14 1 14 2 49 b Application to pre SSAG orders mencion dean 50 c Crossovers between formulas when child support ends FV 14 5 50
35. are Benefit the child portion of the GST credit and any other child benefits for the children of the marriage are treated as income for spousal support purposes unlike for child support FV 6 3 6 4 The software automatically computes these benefits and thus these benefits should NOT be calculated manually and included as income as that will lead to double counting as occurred in Bigelow v Downie 2009 B C J No 293 2009 BCSC 205 and Lane v Creighton 2008 B C J No 2389 2008 BCSC 1689 e For spousal support payors like child support payors there are frequent claims from recipients for income to be imputed pursuant to s 19 of the Child Support Guidelines to raise the income of the payor What is different about spousal support are the claims by payors for income to be imputed to the recipient who has failed to make sufficient efforts to achieve self sufficiency These issues are considered below in the discussion of self sufficiency under Variation and Review b Cana payor have two incomes There are another set of difficult income issues which can be succinctly characterized as two incomes one for child support and another different income for spousal support The question is not can a payor have two incomes but really in what circumstances should a payor have two incomes These issues are difficult because they are not just about income but about 11 m
36. arent to fulfil parenting role exception under this formula it is possible to make an exception for both duration and amount Even if the parent suffers from some kind of disability this exception is driven by the spouse s parental role and it should be considered first before the illness or disability exception FV 12 9 28 e In many of these cases there will be disability issues for the recipient as that will explain her or his inability to assume primary care of the children Disability can obviously affect the income of the recipient and the recipient s ability to become self sufficient Disability can also affect location of an amount and duration within the ranges under the custodial payor formula Puddifant v Puddifant 2005 N S J No 558 2005 NSSC 340 Finally there is the illness or disability exception under the Advisory Guidelines and it can occur under the custodial payor formula in shorter marriage cases The disability exception will sometimes mean a longer duration than the upper end of the range under this formula and in some cases even an amount above the upper end of the range f The adult child formula FV 8 10 The adult child formula is another hybrid formula added subsequent to the Draft Proposal to address the situation where the child support for an adult child is fixed under s 3 2 b of the Child Support Guidelines Usually these are cases where the child has gone away to college or university o
37. band has retired with an annual income of 50 000 of which 30 000 represents the previously divided pension If the above Boston adjustment is used then the SSAG range would be 250 333 mo Treating the payor as a person living on 20 000 a year which is the floor for spousal support could lead to an award at the low end of the range or even to the 293 2 elimination of spousal support This would ignore the payor s base income of 30 000 upon which he can live In some recent SSAG cases courts have taken the full income of the payor into account in calculating the range relying upon the hardship and need exceptions to the double dipping rule see Scott v Scott 2009 O J No 5279 S C J and Jenkins v Jenkins 2009 M J No 271 2009 MBQB 189 Another aspect of the Boston double dipping rule is the requirement that the recipient spouse convert into income the assets received and traded off against the payor s pension in the property division In two recent cases the payor spouse took early retirement and then argued that the recipient wife in her early fifties should be required to access her share of the pension or have income imputed for SSAG purposes but the courts rejected this reverse Boston argument Szczerbaniwicz v Szcerbaniewicz 2010 B C J No 562 2010 BCSC 421 and Swales v Swales 2010 A J No 297 2010 ABQB 187 Drawing on capital After retirement income alone may n
38. be made clear and the proper forms filed with the Canada Revenue Agency e g Form T1198 Statement of Qualifying Retroactive Lump Sum Payment This area of the law remains less than clear Neither the parties nor the courts can direct the Canada Revenue Agency what to do but must structure their arrangements so as to attract the desired tax treatment For an example of a court acknowledging and providing for this uncertainty in its order see Chapman v Chapman 2010 O J No tax treatment treated as grounds for review of court order For another trial judge struggling with tax treatment of a retroactive order in a review situation see Kerman v Kerman 2008 B C J No 710 2008 CarswellBC 793 2008 BCSC 500 supplementary reasons on tax issues 2008 B C J No 1244 2008 BCSC 852 56
39. bed more fully in the Final Version 46 k Non primary parent to fulfil parenting role FV 12 9 This exception arises under the custodial payor formula in shorter marriages on a specific set of facts to justify increased spousal support for parenting purposes There are three requirements for this exception e the recipient spouse and non custodial parent must play an important role in the child s care and upbringing after separation e the marriage is shorter and the child is younger e the ranges for amount and duration are low enough and short enough under the formula that the non custodial parent may not be able to continue to fulfil his or her parental role Some of these cases involve illness or disability as that explains the non custodial status of the recipient spouse But in such cases this exception should be considered first before reaching the more common illness and disability exception A good example of the use of this exception is Mumford v Mumford 2008 N S J No 138 2008 NSSC 82 married 16 years 14 year old with husband wife with parenting time mental health issues for wife spousal support above range duration set at maximum This exception was recognized and applied in different circumstances in Petit v Petit 2008 O J No 5437 2008 CarswellOnt 8257 mobility case children moved with father support to wife increased above range to adjust for cost of travel for access in northern Ontario
40. ber of the cases involved longer marriages and non custodial spouses who once did a disproportionate share of the child rearing The durational limits under the with child support formula are described in the Final Version as softer or more flexible and take effect largely through the process of variation and review Since the release of the Final Version there has been a disconcerting pattern of initial time limits in with child support cases and often very short time limits There has been a tendency for courts to under estimate the compensatory loss i e the depth of the economic disadvantage that flows 29 from one spouse assuming a disproportionate share of the child rearing during the marriage and after separation In a review of British Columbia cases we found a serious problem of inappropriate use of time limits under this formula for marriages of varying lengths Rogerson and Thompson Complex Issues Bring Us Back to Basics The SSAG Year in Review in B C 2009 28 Can F L Q 263 at 311 15 The problems were most severe for medium length marriages in the range of 5 to 14 years Similar problems with too short time limits have appeared in the Ontario case law Thompson Following Fisher Ontario Spousal Support Trends 2008 09 2009 28 Can F L Q 241 at 251 53 In Ontario there was a tendency in shorter marriages to impose initial time limits around the length of the marriage which gives too much emphasis to the
41. by judge Hofman v Hofman 2008 O J No 5335 2008 CarswellOnt 8079 husband argued without child support formula again in step parent case wife argued correct with child support formula but Court split the difference e The same thing can happen in custodial payor cases but now the recipient spouse argues the wrong formula the without child support formula to increase support Cunningham v Montgomery 2009 O J No 1310 2009 CarswellOnt 1733 S C J and top end of wrong range used to make matters worse Gardner v Gardner 2009 O J No 340 2009 CarswellOnt 387 S C J crude adjustment attempted for child support that wife should have paid e Where there is a child support liability but none is actually paid notably in custodial payor cases sometimes the without child support formula is applied incorrectly as it fails to deduct notional child support for the custodial spouse and thus overstates the spousal support payable e In some cases there are older children attending university away from home yet lawyers and courts apply the without child support formula often without regard to the child support obligations still maintained by one or both parents Sarophim v Sarophim 2010 B C J No 284 2010 BCSC 216 no amount stated low end of range to adjust for university expenses stated Court but adult child formula range much lower The with child support formula is actually a family of different formulas drive
42. correctly using the without child support formula In Cassidy v McNeil 2010 O J No 1158 2010 ONCA 218 Justice Lang provided an excellent analysis and application of the custodial payor formula in reducing the amount of spousal support to the wife on appeal and also removing a time limit substituting an indefinite order after a 23 year marriage It is now the leading case on the custodial payor formula There are a number of practical issues to be flagged here e It is important to be clear whether the recipient of spousal support is or is not paying child support for the children in the higher income payor s primary care In a significant number of these cases the parties agree that no child support will be paid or the higher income spouse does not make a claim for child support If no child support is paid then there should be an adjustment with no grossed up deduction of child support from the recipient s gross income Absent this adjustment the formula range for spousal support will be too high e In some custodial payor cases the recipient spouse and non primary parent will continue to play an important role in the child s care and upbringing after the separation In cases where the marriage is short and the child is younger the custodial payor formula may not generate enough spousal support for the recipient to continue to perform that role see Mumford v Mumford 2008 N S J No 138 2008 NSSC 82 Under the non primary p
43. d Post separation income increase of the payor FV 14 3 eee eeescecsseeeeeteeeesteeeenaeeees 51 e The recipient s remarriage or repartnering FV 14 7 oo eeeseceeneeeeeeeeceeeeeceeeeeenaeees 52 f Second families or subsequent children FV 14 8 oooococnnccccnoccccconccononnnonanccinnnccnanncnnns 53 g Self sufficiency and termination FV 13 13 1 13 7 13 8 oooooonnnccccnoccccnonanonancconnnnn n 53 14 Retroactive Support and the SSAG eesssesscocssocessccesocesocescocessessocesocecoosesoeessecesocssoosssosssse 55 iii 1 INTRODUCTION In this document we provide a New and Improved User s Guide to the Final Version of the Spousal Support Advisory Guidelines The Final Version was released in July 2008 This is a revised updated and improved version of the User s Guide which was originally released by the authors in July 2008 This new version includes new case law up to the end of March 2010 We have also added some additional material to address new practice issues which have emerged since July 2008 The Advisory Guidelines have proven to be a very helpful tool in spousal support determinations but they are complex and they do not resolve all of the difficult issues of spousal support We know that the Final Version itself remains a lengthy somewhat daunting document even in its revised more user friendly form One of the challenges of the Advisory Guidelines is the problem of unsophisticated use For too many
44. d duration beyond the formulas ranges by lowering the monthly amount and e to formulate a lump sum payment by combining amount and duration The calculations involved in restructuring can be done with varying degrees of sophistication e When formulating a lump sum it is important to take into account the different tax treatment of lump sum and periodic awards This is often ignored It is an error just to convert the periodic payments under the Advisory Guidelines into a lump sum These periodic payments are assumed to be deductible The total of periodic payments must be discounted to reflect the non deductible non taxable nature of the lump sum Cases that do offer careful examples of restructuring to calculate a lump sum include Smith v Smith 2006 B C J No 2920 2006 BCSC 1655 Martin v Martin 2007 O J No 467 S C J Roach v Dutra 2009 B C J No 353 2009 BCSC Fountain v Fountain 2009 CarswellOnt 6342 S C J and Vanos v Vanos 2009 O J No 4217 S C J court averages lump sum present values for husband and wife e More sophisticated calculations may take into account the time value of money or the various future contingencies that could affect the value of awards over time For examples see Raymond v Raymond 2009 O J No 5294 S C J although the amount of the discount seems a little steep and Durakovic v Durakovic 2008 O J No 3537 However discounting for present value may not be necessary when the
45. ds on the issues raised on the particular application to vary or to review There may be added complexities and entitlement issues arising in some cases that may limit the use of the Guidelines as explained by the B C Court of Appeal in Beninger and Beninger 2007 B C J No 2657 2007 BCCA 619 For a review of the conflicting authorities on the application of the SSAG on variation see Bockhold v Bockhold 2010 B C J No 283 2010 BCSC 214 The Advisory Guidelines and the formulas can be and frequently have been easily applied to the most common issues on variation or review assuming that any threshold conditions have been satisfied a decrease in the payor s income e g change of employment retirement an increase in the recipient s actual income imputing income to a recipient who has made insufficient efforts toward self sufficiency a change in the custodial arrangements for children a change in child support amounts the end of child support crossover between formulas Variation or review cases that can raise entitlement or other complicating issues are a shorter list old orders made before the SSAG a post separation income increase of the payor a post separation income decrease of the recipient the remarriage or re partnering of the recipient second families and subsequent children applications to terminate support on grounds of no continuing entitlement In these cases the Advisory Guidelines can still be appl
46. ducation program but the couple separates before the recipient spouse has been able to enjoy any of the benefits of the payor spouse s enhanced earning capacity f Property division reapportionment B C FV 12 6 1 After the Draft Proposal the British Columbia courts affirmed a spousal support exception in cases where a sufficiently large reapportionment order is made under the property provisions of the Family Relations Act Tedham v Tedham 2005 B C J No 2186 2005 BCCA 502 20 R F L 6 217 Narayan v Narayan 2006 B C J No 3178 2006 BCCA 561 34 R F L 6 272 Only in B C you say pity to paraphrase the old Red Rose tea ad That s because only in B C does the property statute permit reapportionment or unequal division on spousal support grounds In practice there have been very few B C cases which fall within this exception Most frequently reapportioned is the equity in the matrimonial home and the size of the reapportionment is not large enough to justify departing from the formula range In our most recent review of B C cases we did not find any reapportionment cases that fell outside the ranges Rogerson and Thompson Complex Issues Bring Us Back to Basics The SSAG Year in Review in B C 2009 28 Can F L Q 263 at 297 98 and 308 09 13 cases one weird outlier case below range That pattern has continued to the present day In one recent B C appeal reapportionment of the home sale proc
47. e applied e Compensatory claims are based either on the recipient s economic loss or disadvantage because of the marriage typically a loss of earning capacity because of the roles assumed during the marriage or on the recipient s conferral of an economic benefit on the payor without adequate compensation Compensatory claims for lost earning capacity can be based not only on child rearing during the marriage but also on post divorce child rearing responsibilities While compensatory claims in theory require an individualized assessment in practice in long marriages with children the marital standard of living is used as a proxy measure of compensatory gains and losses For good analyses of compensatory claims see Yemchuk v Yemchuk supra Chutter v Chutter supra Mann v Mann 2009 B C J No 826 2009 BCCA 181 Cassidy v McNeil 2010 ONCA 218 and Beneteau v Young 2009 O J No 3244 S C J e Non compensatory claims involve claims based on need Need can mean an inability to meet basic needs but it has also generally been interpreted to cover as an aspect of economic hardship a significant decline in standard of living from the marital standard Non compensatory support reflects the economic interdependency that develops as a result of a shared life including significant elements of reliance and expectation See Fisher v Fisher 2008 O J No 38 2008 ONCA 11 and Arnold v Arnold 2009 B C J No 1999 2009 BCSC for nice
48. e economic consequences of both past and on going child rearing responsibility but there is also an element of non compensatory support e the delineation of the compensatory and or non compensatory basis for entitlement assists in the application of the formulas in two ways e to determine location within the ranges For example a strong compensatory claim may push toward the higher end of the range see FV Ch 9 for using the ranges e to determine whether or not the case justifies a departure from the ranges as an exception For example two exceptions are triggered by compensatory claims that may not be adequately satisfied by the formula ranges the compensatory exception for short marriages without children and in cases with children the s 15 3 exception for compensatory claims that must be deferred because of the priority of child support see FV Ch 12 for exceptions c Entitlement issues on variation and review Entitlement issues can also arise on review and variation e Applications to terminate spousal support based upon the recipient s remarriage or employment or simply by the passage of time will often require an analysis of whether the initial basis for entitlement continues to exist Although the issue on termination is often framed in terms of whether the recipient has become self sufficient the issue can also be seen as one of whether there is a continuing entitlement to support e self sufficiency can be interp
49. eeds was the only feasible remedy where the husband could not pay spousal support Young v Young 2009 B C J No 2636 2009 BCCA 518 husband earned 65 000 without child support formula range mostly zero crude without child support range calculations by Court to reject husband s argument that reapportionment disproportionate In a trial case involving a short relationship the Court found no entitlement to support after reapportionment in favour of the husband C J D v J H E 2009 B C J No 1716 2009 BCSC 1168 In the more common case where the reapportionment is not large a court can just fix an amount of spousal support at a lower point in the range than might otherwise be the case even the low end of the formula range as it did in MacEachern v MacEachern 2006 B C J No 2917 2006 BCCA 508 33 R F L 6 315 g Property division Boston FV 12 6 3 The Advisory Guidelines on amount and duration do not change the law from Boston v Boston 2001 2 S C R 413 governing double dipping mostly from pensions Boston expresses an entitlement principle as to what portion of a payor s income is available to pay spousal support Boston is however subject to a sizeable exception in cases of need An extensive discussion of the complexities of this exception and the cases where an adjustment has been made to prevent double dipping can be found above under The Without Child Support Formula Retirement case
50. elations Act This reapportionment usually has not proved large enough to warrant an exception FV 12 6 1 but it has often been a factor justifying an amount lower in the range than would otherwise have been chosen In some cases courts have pointed to a specific factor that influenced location within the range e High access costs Gibson v Gibson 2009 O J No 4172 high access costs after wife s move from Thunder Bay to Elliot Lake husband making payments on line of credit lower end of range Graham v Wilson 2009 O J No 1432 2009 CarswellOnt 1866 S C J travel for extensive weekend access low end Novlesky v Novlesky 2009 B C J No 1956 2009 BCSC 1328 wifes moves back to Brazil high travel costs low end Spikula v Spikula 2008 O J No 3931 S C J costs of shared custody low end e Work incentives Chapman v Chapman 2010 O J No S C J husband s income dependent on how hard he works low end of range for work incentives Savoie v Savoie 2009 N B J No 138 2009 NBQB 134 lower than mid range Lalonde v Lalonde 2008 O J No 4507 2008 CarswellOnt 6710 S C J significant overtime included in payor s income low end e Low estimate for payor s income Willi v Chapple 2009 O J No 3752 upper end of range for amount e High medical costs S J M v J L M 2010 B C J No 178 2010 BCSC 154 wife s extra medical drug and dental costs after divorce upper end of range
51. fore have to be extended to provide adequate compensation to the recipient And the amount of spousal support will sometimes have to increase as child support goes down For examples see Hajir v Farshidfar 2008 O J No 4712 2008 CarswellOnt 70047 S C J Danby v Danby 2008 O J No 3659 2008 CarswellOnt 5512 S C J and C E A P v P E P 2006 B C J No 3295 2006 BCSC 1913 n Other grounds for departures new exceptions The eleven exceptions listed in the Final Version represent recognized grounds or categories of departure from the formula ranges On a case by case basis there may be others that arise on the unusual facts of a particular case e g the unusual mortgage arrangements made after separation in S S V v G J V 2009 N B J No 220 2009 NBQB 195 husband jointly purchased home and cosigned mortgage or the wife s permanent arrangement to live with her mother thereby lowering her expenses in Schloegl v McCroary 2008 B C J No 2443 2008 BCSC 1722 amount lower than low end of range 48 13 VARIATION AND REVIEW FV CHAPTER 14 a Application of the SSAG on variation and review FV 14 1 14 2 There is a pervasive myth that the Advisory Guidelines do not apply on variation or review or if they do only after much angst and soul searching by lawyers and judges That is not correct The Advisory Guidelines do apply on variation and review How they apply that depen
52. found that the formula is widely used to determine amount but duration is often ignored This is a misapplication of the formula Amount and duration are interrelated parts of the formula Using one part of the formula without the other undermines its integrity and coherence Extending duration beyond the formula ranges for example requires a corresponding adjustment of amount by means of restructuring see below and FV Ch 10 e The problem of time limits This formula generates time limits when the relationship is under 20 years in length and the rule of 65 is not applicable In some cases these time limits 19 may appear to be inconsistent with current law which disfavours the use of time limits except in short marriages In dealing with time limits under this formula in particular as they apply to medium length marriages consider the following FV 7 5 6 e The law on time limits is in flux There is growing recognition of the appropriateness of time limits particularly when the basis of entitlement is largely non compensatory and the purpose of the award is to provide a transition to a lower standard of living see Fisher v Fisher 2008 O J No 38 2008 ONCA 11 7 years of support after 19 year marriage with no children within global range after restructuring Malesh v Malesh 2008 O J No 2207 Johnson v Angeline 2008 O J No 2327 2008 CarswellOnt 3467 Hance v Carbone 2006 CarswellOnt 7063 Ont S C J and Bishop
53. gnize any disability exception The prime example would be the B C Court of Appeal decision in Shellito v Bensimhon 2008 CarswellBC 469 2008 BCCA 68 which imposed a 543 time limit and produced a global amount above the Guidelines range but not that far above the maximum See also trial decisions Barton v Sauve 2010 O J No 1008 2010 ONSC 1072 Haggerty v Haggerty 2010 N S J No 5 2010 NSSC 9 T J M v C R M 2009 B C J No 1642 2009 BCSC 1122 amount above range but duration slightly below maximum McFadden v Sprague 2009 O J No 258 2009 CarswellOnt 294 S C J Rayvals v Rayvals 2008 B C J No 233 2008 BCSC 176 Williston v Williston 2006 B C J No 3248 2006 BCSC 1869 Wise v Wise 2006 B C J No 1143 2006 BCSC 945 Puddifant v Puddifant 2005 N S J No 558 2005 NSSC 340 For a rare case with a time limit and the low end of the range see Wilson v Wilson 2009 B C J No 1584 2009 BCSC 1021 e Lower Amount Extend Duration Some courts will extend the duration of spousal support even to be indefinite while keeping the amount within the range often at or near the low end Campbell v Campbell 2009 B C J No 1944 2009 BCSC 1330 Munro v Munro 2006 B C J No 3069 2006 BCSC 1758 Until appellate courts provide further guidance these divergent approaches towards illness and disability will continue e The compensatory exception in short marriages without children FV
54. hared custody a formula that contains serious flaws and should NOT be used For a more detailed discussion of Mann see Rogerson and Thompson Complex Issues Bring Us Back to Basics The SSAG Year in Review in B C 2009 28 Can F L Q 263 at 272 80 There are a surprising number of shared custody cases that involve large disparities in income after separation discussed by Rogerson and Thompson in the same article at 315 17 b Split custody FV 8 7 For whatever reason errors seem to occur with some frequency in split custody cases cases where each parent has primary care of at least one child e In some split custody cases the higher income spouse will not claim any child support from the lower income spouse In these cases an adjustment must be made to avoid stating too high a range for spousal support which assumes that the recipient of spousal support is in fact paying an amount for child support For cases that failed to make this adjustment see Paheerding v Palihati 2009 B C J No 830 2009 BCSC 557 or Santos v Santos 2008 O J No 5110 2008 CarswellOnt 7607 S C J c Mixed custody These are complex cases with children in one family subject to a mix of custody regimes e g one child in the primary care of one parent and another in shared custody or split custody of two children with a third sharing time between homes The software will solve any problems of notional child support in these mixed cust
55. he recipients basic needs and preclude resort to social assistance See Gidey v Abay 2007 O J No 3693 Ont S C J and T M v M A G 2006 B C J No 3479 2006 BCPC 604 B C P C Some of the identified exceptions may be relevant in these cases to justify a departure from the formula ranges e the compensatory exception in short marriages e the exception for compelling financial circumstances in the interim e the basic needs hardship exception However it does appear that the sponsorship agreement may be an independent factor in short marriages leading to either an amount or a duration outside the formula ranges e In some immigration sponsorship cases entitlement may be an issue Despite the sponsorship agreement there may be a finding of no entitlement see Mazloumisadat v Zarandi 2010 O J No 252 S C J 1 year marriage no entitlement because husband told wife not to come Merko v Merko 2008 CarswellOnt 6361 2008 ONCJ 530 very short marriage economic lives never intertwined each party no income e If the recipient spouse is not on social assistance the sponsorship agreement may not be a relevant factor in determining whether there should be an exception to the formula s ranges see Tailor v Tailor 2008 O J No 3900 S C J but compensatory exception still operating to justify award higher than SSAG c Duration under the without child support formula FV 7 5 e Do not ignore duration We have
56. hout explicitly invoking the exception Munro v Munro 2006 B C J No 3069 2006 BCSC 1758 A C v C G 2006 B C J No 1157 Prov Ct Frouws v Frouws 2007 B C J No 282 2007 BCSC 195 M P v S F 2006 B C J No 1344 2006 BCPC 289 In some cases courts will treat one spouse s payment of an equalization payment over time or the loan payments for such equalization as a debt as justification for a below range amount of spousal support but this is incorrect see e g Wright v Wright 2008 O J No 3118 S C J spousal support reduced well below range on account of equalization payments out of business income In these cases the spouse paying equalization by definition holds assets exceeding the equalization payment and thus does not qualify under this exception There is an overlap between this exception and the previous exception for compelling financial circumstances at the interim stage The most common compelling financial circumstance under the interim exception is the payment of mortgages and other debts pending the trial or pending the sale of the house The interim exception should be used in those cases leaving the debt exception to apply at later stages c Prior support obligations FV 12 3 The exception for prior support obligations is often not mentioned partly because this exception has a simple mathematical adjustment in the software an adjustment that just gets made with the simple inp
57. ied but more care is required as is explained below and in the Final Version As a preliminary matter when dealing with a variation or review you need to keep in mind that the Advisory Guidelines do not affect the basic legal framework of variation and review The threshold conditions for a variation material change in circumstances or review must be satisfied before the Guidelines can be used to redetermine amount and or duration With respect to a consent order see Hurst v Hurst 2008 O J No 3800 S C J consent order Advisory Guidelines may be applicable if agreement provides for review or variation see FV 14 1 49 b Application to pre SSAG orders The existing order which is being reviewed or varied may pre date the SSAG and the amount of spousal support may be much lower than the range the SSAG would have generated on the incomes at the date of the original order This may complicate the application of the SSAG ona variation or review e Some decisions speak of the SSAG serving as a check on pre Guidelines determinations of spousal support and a tool in the analysis leading to a determination of quantum on review Bryant v Gordon 2007 BCSC 946 cited in Bockhold v Bockhold 2010 B C J No 283 2010 BCSC 214 e On applications to reduce or terminate spousal support where the existing order is for an amount significantly lower than the SSAG a court may refuse to grant the reduction or termination see Ube
58. ild support ends 21 f Retirement cases under the without child support formula oooooconnnoccccnononcccnononnnnnonnnos 22 10 11 12 The With Child Support Formula FV Chapter 8 0 cs00000000s00000s00000000000200000000000000 25 a The shared custody formula FV Na A A AA At 26 DIESE CULO oC Se RER ES rar aces ook nex 21 A a Es tac EEE SR a a a eee otis 27 d Step children applying the formulas FV 8 8 0 0 eeeccecsseeecseececseececeteeeeneeeenaeeeeaees 27 e The custodial payor formula FV B N aussen 28 1 The adult child formula FV 8 Wii ias 29 g Issues of duration A kl ek abl 29 Choosing Location Within the Range ccscccsssscssssccssssccssssscssssccsssccsssssssssssssssssseesees 31 Restructuring FV Chapter 10 eeosniooiosi ontsoniniininionio seveesoevedsosetoovsecccsuncesdusonsoonestdoeassenees 33 a Restructuring under the without child support formula oooooconnnnconnoncccnnnnninoncninananinnnos 34 b Restructuring under the with child support formula ooononcccnonocinonccinononcnnnnncnnnnconnnnnon 35 c Restructuring under the custodial payor formula oooonococnnocccconcccnoncnononannnnnannnnnanonnnan ns 35 Ceilings and IQ OFS use nee iataesvecuntaadscececssvencveedsteevesi eee 37 a The floor payor incomes below 20 000 30 000 FV 11 2 11 4 cn 37 b Payor income above the 350 000 ceiling FV 1 1 11 3 ccc cece cesecsseeseeeseeeeeeteeneeenes 38 Exceptions EV Ch
59. n by custodial and child support arrangements Within this formula there is further potential for using the wrong formula discussed below 15 7 THE WITHOUT CHILD SUPPORT FORMULA FV CHAPTER 7 In cases where there are no dependent children the without child support formula applies This formula covers a wide range of fact situations As well in some cases the initial determination of support will initially take place under the with child support formula but once the children are independent there will be a cross over to this formula FV 14 5 for a determination of amount This formula relies heavily upon length of the relationship to determine both the amount and duration of support Both amount and duration increase with the length of the relationship This formula is constructed around the concept of merger over time which offers a useful tool for implementing the mix of compensatory and non compensatory support objectives in cases where there are no dependent children In short and medium length marriages without children the primary basis for entitlement will be non compensatory and the formula generates transitional awards with the length of the transition period proportionate to the length of the relationship In long marriages the basis for entitlement will vary depending upon the facts it may be primarily non compensatory marriages without children or a mix of compensatory and non compensatory marriages with g
60. nd we again have to wait for the law to develop The policy of first family first remains powerful in these cases and is still the most common approach to the trade off between families The payor s obligations to the children and spouse of the first marriage are seen to take priority over any subsequent obligations This was the approach adopted by the Ontario Court of Appeal in Fisher v Fisher 2008 O J No 38 2008 ONCA 11 but Lang J A emphasized that these obligations must be considered in context In Fisher it was a bad context for the husband perhaps the weakest possible second family claim imaginable para 41 a speedy post separation repartnering two step children rather than biological children child support received from the father of those two children a new wife who could requalify as a physiotherapist but preferred to stay at home and a large enough income by the husband that his support obligation to his first wife would not impoverish his second family Two interesting broader points made by Justice Lang in Fisher 1 despite the first family first principle inevitably new obligations to a second family may decrease a payor s ability to pay support for a first family para 39 and 11 where spouses separate the payor remarries and produces another child the context will be different and the obligations to the second child will affect support for the first family because the payor has an equ
61. ody cases Each of these mixed custody cases will include at least one child in shared custody which permits discretion in child support determination which can in turn complicate determining the range for spousal support as described above for shared custody cases d Step children applying the formulas FV 8 8 There was no specific mention of step children in the Draft Proposal nor of the appropriate formula to apply in such cases In the vast majority of cases the with child support formula will apply with no difficulty But some courts apply a very low threshold for step parent status especially in British Columbia There were concerns that the basic formula might generate spousal support obligations that were too substantial in these shorter marriage cases especially on duration The creation of a range for duration under this formula alleviated these concerns as the lower end of the range can be used in appropriate short marriage cases e As we noted above Use the Right Formula some lawyers and judges may incorrectly use the without child support formula in these cases There is a specific version of the with child support formula that applies in step parent cases e Under s 5 of the Child Support Guidelines it is possible for a step parent to pay less than the table amount of child support if appropriate Where the amount of child support is reduced under s 5 the with child support formula should be calculated u
62. of 20 000 is maintained i e the annual gross payor income below which spousal support is not generally payable There may be exceptional cases below 20 000 where support is sometimes payable For payor incomes between 20 000 and 30 000 there are ability to pay and work incentive concerns that may justify going below the formula ranges There was general consensus since the Draft Proposal that these floor amounts were reasonable e In the leading case below the floor the P E I Supreme Court did not order spousal support where the payor wife made 18 557 even though the disabled husband made even less at 13 525 A M R v B E R 2005 P E I J No 83 2005 PESCTD 62 In most cases however courts have not made reference to the floor Moores v Moores 2009 CarswellNfld 334 2009 NLUFC 39 both spouses disabled payor husband receives 14 700 no ability to pay Scheiris v Scheiris 2009 O J No 3795 S C J payor s pension income 10 000 wife s 3 600 no support Bains v Bains 2008 CarswellAlta 628 2008 ABQB 271 taxi driver earning 17 918 yr child support paid e Incases of very long marriages under the without child support formula courts will find an exception below the floor where the wife s income is zero as in M W M v M H S 2007 CarswellBC 2667 2007 BCSC 1629 and Pratt v Pratt 2008 N B J No 85 2008 NBQB 94 but the wife was on social assistance and support was only 300 mo e In those cases
63. on the basis of Miglin or other applicable legal doctrines the Advisory Guidelines may be relied upon in determining the amount and duration of support See R S M v M S M 2006 B C J No 1756 2006 BCCA 362 M K A v M P K 2008 CarswellBC 135 2008 BCSC 93 Gammon v Gammon 2008 O J No 603 S C J and Jenkins v Jenkins 2009 M J No 271 2009 MBQB 189 However consistent with Miglin the parties intentions as reflected in their agreement may still continue to influence the appropriate spousal support outcome and lead the courts to an outcome different from that suggested by the Advisory Guidelines See Santoro v Santoro 2006 B C J No 453 2006 BCSC 331 and Turpin v Clarke 2009 B C J No 2328 2009 BCCA 530 agreement set aside on Miglin stage 2 appropriate to adjust duration but not amount which was below SSAG 4 APPLICATION TO INTERIM ORDERS FV 5 3 The Advisory Guidelines are intended to apply to interim orders as well as final orders The interim support setting is an ideal situation for the use of guidelines There is a need for a quick easily calculated amount knowing that more precise adjustments can be made at trial Traditionally interim spousal support has been based upon a needs and means analysis assessed through budgets current and proposed expenses etc All of that can be avoided with guidelines formulas apart from exceptional cases In D R M v R B M 2006 B C J No 3299 2006 Car
64. opted for an amount at the low end of the higher income range which fell in the middle of the lower income range For examples of this at the interim stage see Kozek v Kozek 2009 B C J No 2544 2009 BCSC 1745 Master affirmed on appeal 2009 B C J No 2412 2009 BCSC 1663 dividend income and Muzaffar v Mohsin 2009 O J No 4005 S C J husband self employed One other example would be those cases where a court debates whether to impute income to a support recipient or how much in a self sufficiency case In the same fashion as for the payor alternative incomes will usually generate overlapping ranges Where the income disparity is great there will be considerable overlap often simplifying the outcome as was the case in Teja v Dhanda 2009 B C J No 928 2009 BCCA 198 trial judge considered ranges for wife s incomes of 25 000 and zero See also P D E v A J E 2009 B C J No 2497 2009 BCSC 1712 wife underemployed ranges determined for incomes of 20 000 40 000 and 50 000 terminating step down order made d Other assorted income issues Not covered here are a variety of income issues issues which receive specific treatment under a number of other headings in this User s Guide with the relevant sections of the Final Version also referenced below These issues will just be flagged here e Ceilings and floors incomes above the ceiling and below the floor dealt with below
65. ore fundamental principles of support Here are some examples of circumstances where the payor can have one income for child support and a different one for spousal support e Where the payor experiences a post separation income increase there is no question that the child should share fully in any increased income under the Child Support Guidelines The same cannot be said for spousal support as there is a threshold entitlement question to be considered namely whether the recipient spouse should share none some or all of the payor s increase in income discussed in FV 14 3 and below under Variation and Review A court can find that child support should increase but not spousal support under the Advisory Guidelines For good examples of these issues see Sarophim v Sarophim 2010 B C J No 284 2010 BCSC 216 income for spousal support excluding income from increased teaching post separation and Judd v Judd 2010 B C J No 177 2010 BCSC 153 full income increase included after careful discussion e Section 14 of the Child Support Guidelines fixes a very low threshold for an application to vary child support on the view that child support should readily adjust up and down with the payor s income at least for table amounts often on an annual basis By contrast the threshold for variation is more demanding for spousal support and some judges will thus attempt to determine more of a steady state income smoothing out fluct
66. ot be an accurate indicator of either recipients or payors economic circumstances and they may be required to draw on capital for support purposes This may require some imputation of notional income to determine support under the Advisory Guidelines The floor Often incomes are low after retirement so keep in mind that the SSAG floor is a payor income of 20 000 with the additional possibility of an exception to depart when the payor s income is between 20 000 30 000 See below under Ceilings and Floors Rule of 65 The rule of 65 may be applicable to extend duration Disability exception The disability exception may be relevant in cases involving older spouses and shorter marriages See below under Exceptions 24 8 THE WITH CHILD SUPPORT FORMULA FV CHAPTER 8 The with child support formula is actually a family of formulas built around the custodial and child support arrangements for the children The rationale for spousal support in these cases is primarily compensatory The interaction of child and spousal support can often raise tricky legal issues see Thompson The Chemistry of Support The Interaction of Child and Spousal Support 2006 25 Can F L Q 251 e Make sure that you are using the right formula among the six listed in Chapter 8 the basic formula recipient has primary care and received both child and spousal support the shared custody formula the split custody formul
67. ough that the marriage lasted 24 years that the support was compensatory that the husband acquired his skills during the marriage or that he continued to work as an electrician He had changed employers and he was working longer hours so that none of the increase was shared e In the past few years the issue of the payor s post separation income increase has been identified and argued more frequently a sign of increasing sophistication in the use of the Advisory Guidelines The law should become more consistent and more nuanced over time e The Guidelines formulas can be used to establish the outer boundaries of support amounts in every case by calculating the ranges for the separation date payor income and then for the increased current income of the payor Examples of this are provided in the Final Version e The recipient s remarriage or repartnering FV 14 7 The remarriage or repartnering of the support recipient does not mean automatic termination of spousal support but support is often reduced and sometimes even terminated Much depends upon whether support is compensatory or non compensatory as well as the length of the first marriage the age of the recipient and the standard of living in the recipient s new household Hinds v Hinds 2008 B C J No 2540 2008 BCCA 547 Bockhold v Bockhold 2010 B C J No 283 2010 BCSC 214 In many fact situations the outcomes are predictable but not predictable enough to construct
68. plied in setting aside or overriding an existing agreement includes the common law doctrine of unconscionability the evolving law under the Miglin decision of the Supreme Court of Canada which deals with the weight to be given to a spousal support agreement under the Divorce Act and where applicable on the facts provincial statutory provisions with respect to domestic contracts and their effect on spousal support Two cases where a binding agreement was found to preclude the application of the Advisory Guidelines are Woodall v Woodall 2005 O J No 3826 2005 ONCJ 253 and Carberry v Stringer 2008 N J No 6 2008 NLUFC 1 wife s attempt to set aside agreement unsuccessful The Advisory Guidelines may be helpful in three ways in cases involving agreements e To determine spousal support where the agreement provides for a review or variation It is important to determine whether or not the spousal support agreement is a final agreement If the agreement is not a final agreement but one which provides for review or for variation upon a material change of circumstances the Advisory Guidelines may be applicable to the determination of the amount and duration of spousal support on review or variation see for example Hurst v Hurst 2008 O J No 3800 S C J See FV Ch 14 which deals with the application of the Guidelines on variation and review For an interesting example of an agreement explicitly structured to provide for an annual
69. port cases e Asa general matter a significant income disparity will generate an entitlement to some support Even if there is not a compensatory claim a significant income disparity will give rise to a non compensatory claim based on a loss of the marital standard of living The Guidelines leave to the courts the issue of when an income disparity becomes significant enough to generate entitlement In some cases courts have denied entitlement on the grounds that the income gap does not suggest significant differences in standard of living e Cases where there has been a finding of no entitlement despite a significant income disparity are relatively rare Factors that have justified a finding of no entitlement despite income disparity include the following which often overlap e short marriage and limited period of financial interdependency see Beese v Beese 2006 B C J No 2903 2006 BCSC 1662 McKee v Priestlay 2007 B C J No 1297 2007 BCSC 85 Rezel v Rezel 2007 O J No 1460 S C J S C J v T S S 2006 A J No 1319 2006 ABQB Serpa v Yeuping 2007 CarswellBC 1795 2007 BCSC 43 Merko v Merko 2008 CarsellOnt 6361 2008 ONCJ 530 e despite the income disparity the parties have similar standards of living for example because there are differences in the parties asset positions see Elias v Elias 2006 B C J No 146 2006 BCSC and Johnson v Johnson 2006 B C J No 3308 2006 BCSC 1932 or differences in their
70. pousal support See Duggan v Elsom 2007 O J No 2168 for an Ontario case reflecting a shift in Ontario law to the result generated by the Guidelines e Remember the compensatory exception FV 12 5 which applies to short and short medium length marriages without children where there are significant compensatory claims that are not adequately redressed by the modest amounts generated by the formula which are non compensatory and transitional in nature e These compensatory claims may relate to an economic loss for example moving and or leaving a job to marry or to facilitate the other spouse s employment see Campbell v Campbell 2008 O J No 2168 Ahn v Ahn 2007 B C J No 1702 2007 BCSC 1148 B C S C Fuller v Matthews 2007 B C J No 656 2007 BCSC 444 B C S C Beardsall v Dubois 2009 O J No 416 S C J e Alternatively they may involve a restitutionary claim contribution to the other spouse s education or professional training and separation before the supporting spouse has a chance to enjoy any benefits of the enhanced earning capacity see Muchekeni v Muchekeni 2008 N W T J No 19 2008 NWTSC 23 These compensatory claims need to be assessed on an individualized basis e The interim exception for compelling financial circumstances above and FV 12 1 may also be applicable in short marriage cases where the amounts generated by formula do not provide realistic amounts to deal with the immediate transi
71. ppear to reflect the length of the marriage 19 years the immediacy of the increase the year of separation and the non compensatory basis for support less compelling argument for sharing e The B C and Ontario cases have taken a less demanding view of the links between the marriage and the post separation increase especially in longer marriages For example in Hartshorne the court found a clear temporal link between their marriage and this increase with no intervening change in Mr Hartshorne s career or any other event that could explain the increase At paragraph 111 the court reviews the case law and identifies what might qualify as intervening changes In Chapman after separation the banker husband had 51 changed from one big bank employer to another with more incentive based remuneration but his full increased income was considered after a 23 year marriage and the husband s long history in the banking business e By contrast the Alberta cases have demanded much more something like a causal link between the specific post separation increase and the contributions of the recipient spouse during the marriage For example Sawchuk held that the recipient spouse must show that he or she has contributed to the acquisition of the other spouse s skills or credentials thus contributing the ability to earn the increased income No such specific contribution by the wife was found In Sawchuk it was not en
72. pport formula but it may be a case for the compensatory exception in shorter marriages or the illness and disability exception or the basic needs hardship exception It will be the task of the responding lawyer to canvass the list of exceptions and to argue the applicable exception a Compelling financial circumstances at the interim stage FV 12 1 This exception was discussed above in Application to Interim Orders It should be one of the most commonly used exceptions always on the radar on any interim support application b Debt payments FV 12 2 In most cases marital debts are adequately taken into account in property division It is only where debts exceed assets that the allocation of debt payments can have an impact upon ability to 4 pay Even then most debt payments can be accommodated as a factor affecting location within the formula ranges In the Final Version the limits of this exception have been refined e The total family debts must exceed the total family assets or the payor s debts must exceed his or her assets the qualifying debts must be family debts and the debt payments must be excessive or unusually high There are relatively few reported cases involving the debt exception Only two openly discuss this exception Marche v Marche 2009 N J No 54 2009 NLTD 31 S C T D and Van Wieren v Van Wieren 2008 B C J No 26 2008 BCSC 31 Others go below the range for amount but wit
73. proach in these cases discussed below under Variation and Review There is one recent case that raises the possibility of departing from the formula range where the payor had long been supporting his parents from his income and they were providing child care Wang v Seow 2008 M J No 295 2008 MBQB 218 The marriage was a short one and one could argue that the husband had a prior support obligation to his parents As the categories of SSAG exceptions are not closed on the particular facts of a case there may be situations where support obligations towards other family members might be recognized d Illness and disability FV 12 4 A disproportionate number of cases that come before the courts involve the illness or disability of the recipient spouse as these are hard cases that don t settle Especially difficult are the cases that involve permanent illness or disability after a short to medium marriage The law in these cases is particularly uncertain and confused at the moment as the courts can t seem to work out a consistent approach The Supreme Court of Canada addressed some of these issues in Bracklow but we see the effects of its lack of guidance in these cases Illness and disability was recognized as an exception in the Draft Proposal but even the scope and operation of the exception is hard to nail down under the current law Under the Advisory Guidelines most of these cases fall under the without child support
74. r 20 years in length indefinite support may be appropriate under the rule of 65 Duration under the without child support formula will be indefinite duration not specified even if the relationship is shorter than 20 years if the length of the relationship in years plus the recipient s age at the date of separation equals or exceeds 65 There is often no explicit reference to the rule of 65 even when indefinite support is ordered see Busse v Gadd 2009 S J No 438 2009 SKQB 99 Robertson v Williams 2009 O J No 5451 S C J And in some cases a time limit is imposed when the rule of 65 would have suggested indefinite support see Hayes v Hanrieder 2009 O J No 421 S C J e Not applicable to short marriages Note that the rule of 65 for indefinite duration not specified support is not applicable in short marriages under 5 years e Age at the date of separation Remember that the calculation under the rule of 65 requires the recipient s age at the date of separation not his or her age at the date of trial or application for cases that made this error see Domirti v Domirti 2009 BCSC 749 and Smith v Smith 2008 B C J No 530 2008 BCSC 363 e Medium length marriages with children crossover cases after child support ends One group of cases that is beginning to appear under the without child support formula is medium length marriages with children In these cases there would have been
75. r makes a sizeable contribution to his or her own education or has other non parental resources to defray education expenses Child support will be determined on the budget method and will invariably be lower than the table amount For some reason the adult child formula seems to be the forgotten formula among the with child support formulas often overlooked Lawyers and courts will either apply the without child support formula or attempt to apply the basic with child support formula neither of which responds adequately to the issues raised in these cases e This adult child formula only applies where the child support for all the remaining children of the marriage one or more is determined under s 3 2 b of the Child Support Guidelines If there is another child of the marriage whose support is determined using a table amount then this formula does not apply e When deducting child support in this hybrid formula the child support amount must be grossed up as this is a gross income formula If child support is not grossed up then the spousal support range will be too high as was the case in Buchanan v Goldberg 2010 CarswellOnt 74 2010 ONSC 268 g Issues of duration FV 8 5 All initial orders under the with child support formula should be indefinite duration not specified given the strongly compensatory basis for spousal support in these cases The only exception is the custodial payor formula and even there a num
76. r marriage cases where the SSAG formulas indicate that the duration of spousal support will be indefinite duration not specified the support obligation may be terminated if entitlement has ceased For an example of the termination of support on variation see Gammon v Gammon 2008 CarswellOnt 6349 S C J 15 year relationship with no children separation 2004 initial order no duration specified variation application after husband retires amount reduced using SSAG and termination date set 10 years after separation The recipient s attainment of self sufficiency is one of the common arguments for no entitlement Case law establishes that self sufficiency is not an absolute standard and must be understood in the context of the parties standard of living The meaning of self sufficiency may also vary depending on whether the support claim is compensatory or non compensatory The determination of self sufficiency requires a highly individualized analysis that is not amenable to guidelines For a nice example of a review case where the court found that the wife was not yet self sufficient see Bockhold v Bockhold 2010 B C J No 283 2010 BCSC 214 17 year marriage review 10 years after separation and wife remarried For an example where support was terminated at a point far short of the high end of the durational range because the wife was found to have become self sufficient see Mills v Elgin 2009 B C J No 2310 2009 BCSC 1607
77. rall v Uberall 2010 B C J No 340 2010 BCSC 251 Sveinson v Sveinson 2009 B C J No 1494 2009 BCSC Fritsch v Fritsch 2008 O J No 5238 2008 CarswellOnt 7838 S C J and Barodoy v Baradoy 2009 A J No 443 2009 ABQB 249 c Crossovers between formulas when child support ends FV 14 5 In cases where there were dependent children at the time of separation spousal support would have initially been determined under the with child support formula After child support has ceased an application for review or variation will bring these cases under the without child support formula for example see Bockhold v Bockhold 2010 B C J No 283 2010 BCSC 214 e Ifthe conditions for review or variation are satisfied crossover cases may require a redetermination of amount they may also involve a determination of duration including payor requests for termination The without child support formula will be used to redetermine the amount of spousal support As for duration given that the class of cases to which crossover applies will be medium to long marriages duration will be driven by length of marriage and will be the same under both formulas e These are cases with strong compensatory claims as compared to medium length marriages where there were no children of the marriage One would thus expect amount and duration to be near the high end of the range e In these cases s 15 3 of the Divorce Act and the Advisory Guideline
78. rdship inability to meet basic needs in the transitional period in the immediate aftermath of separation There may thus be some overlap with the basic needs hardship exception FV 12 7 and even the disability exception FV 12 4 but it is preferable to use the interim exception for short term transitional needs e Fora rare case where the Court explicitly discussed the interim exception even though Melnick J found the exception not applicable on the facts see Garritsen v Garritsen 2009 B C J No 691 2009 BCSC 124 e To date few courts have explicitly recognized this important exception with most just departing from the formula amounts Van de Wint v McArthur 2009 B C J No 1870 2009 BCSC 1283 S C Dort v Dort 2009 N S J No 591 2009 NSSC 372 S C Thompson v Kirk 2009 O J No 3222 S C J Tenhoeve v Tenhoeve 2009 O J No 1423 2009 CarswellOnt 1882 S C J Agioritis v Agioritis 2008 S J No 270 2008 SKQB and Savage v Savage 2007 B C J No 2764 2007 BCSC 1566 unable to determine income at interim stage See also S A v E A 2010 N B J No 46 2010 NBQB 61 disability exception mentioned but interim circumstances the applicable exception e Any periods of interim support have to be included within the durational limits set by the Advisory Guidelines For an explicit application of this see Fisher v Fisher 2008 O J No 38 2008 ONCA 11 10 5 INCOME FV CHAPTER 6 The sta
79. re precise net income calculations the net income cap can be estimated crudely by hand at 48 per cent of the gross income difference This 48 per cent method is a second best but adequate alternative e If the ranges generated by the formula seem inappropriate consider restructuring below and FV Ch 10 and exceptions below and FV Ch 12 they will have their primary application to cases under the without child support formula Ei a a The problem of amount in short marriages without children FV 7 4 2 Under the without child support formula short marriages generate very limited awards if there is entitlement at all even in cases where there is a significant income disparity Typically the modest amounts generated by the formula are restructured into a lump sum or a very short transitional award This result is consistent with current law and generally raises no problems see Conquergood v Dalfort 2007 B C J No 2337 2007 BCSC 1556 Identified exceptions will cover most of the short marriage cases where the formula result seems inappropriate e In some parts of the country i e parts of Ontario one does find more generous transitional awards providing the marital standard of living for a significant period even after a short marriage For a recent example see Refcio v Refcio 2009 O J No 1539 Ont Div Ct This is a limited regional pattern that is difficult to justify under the current principles that govern s
80. reasing the amount by shortening duration For good examples see Fisher v Fisher 2008 O J No 38 2008 ONCA 11 and McCulloch v Bawtinheimer 2006 A J No 361 Q B In short marriages a lump sum may be appropriate to facilitate a clean break see Arnold v Arnold 2009 B C J No 1999 2009 BCSC 1384 e long term disability after a medium length marriage Here restructuring can be used to reduce the award to a more modest supplement that will extend over a longer duration see Bockhold v Bockhold 2010 B C J No 282 2010 BCSC 214 duration extended to indefinite rather than termination after 17 years amount below low end of SSAG range but also income over the ceiling e longer marriages where the formula generates a time limit but current practice dictates indefinite support e g marriages between 15 years and 20 years in length These may include cases initially involving dependent children which have crossed over to this formula after the children have become independent Here restructuring can be used to extend duration by choosing an amount of support in the lower end of the range or even below the low end of the range for examples see Domirti v Domirti 2009 BCSC 749 although no explicit reference to restructuring and Bockhold v Bockhold 2010 B C J No 282 2010 BCSC 214 disability as well as inability to become self sufficient justifying extension of duration beyond 17 years 234s b Restructuring under
81. reted differently depending on the initial basis of entitlement See Rezansoff v Rezansoff 2007 S J No 37 2007 SKQB 32 for an excellent discussion of this in the context of a case involving non compensatory support e the effect of remarriage can differ depending on whether the initial award was compensatory or non compensatory See J W J McC v T E R 2007 B C J No 358 2007 BCSC 252 and Kelly v Kelly 2007 B C J No 324 2007 BCSC 227 e Requests for an increase in spousal support either because of a decrease in the recipient s income or a post separation increase in the payor s income can also indirectly raise entitlement issues In these cases you cannot simply apply the formulas to the new incomes see FV Ch 14 Variation and Review There must be a threshold determination of whether the change in income is relevant to the support obligation and if so to what extent The analysis requires going back to the compensatory and non compensatory bases for spousal support 3 AGREEMENTS FV 5 2 The Advisory Guidelines as informal non legislated guidelines confer no power to re open or override final spousal support agreements e A final agreement 1 e one waiving or terminating spousal support or setting a fixed amount with no provision for review or variation will preclude the application of the Advisory Guidelines unless the agreement can be it set aside or overridden under existing law e The law to be ap
82. rown children e In calculating the length of the relationship be sure to include periods of pre marital cohabitation Also the period ends with the date of separation not divorce e It is important to identify the basis of entitlement when using this formula whether it is non compensatory compensatory or a mix see discussion above and FV Ch 4 This is important for determining location within the range and also for determining whether or not there is an exception that warrants an award outside the range e Although the formula works with gross income figures it is always important in determining a precise amount of support within the range to do a reality check by looking at net disposable income positions after payment of a given amount of spousal support particularly in cases of long marriages e Note the addition of an equalization of net income cap to the formula for amount in the Final Version FV 7 4 1 This cap applies to long marriages of 25 years or more where the range is 37 5 to 50 per cent of the gross income difference The cap implements the idea that the recipient should never receive an amount of spousal support that will leave him or her with more than 50 per cent of the spouses net disposable income or monthly cash flow The software programs can calculate this net income cap with precision and will present the cap as the upper limit of the range For those without software or without mo
83. rting point for the determination of income under the Spousal Support Advisory Guidelines is the definition of income under the Federal Child Support Guidelines For the most part the income issues are the same as those for child support purposes i e interpreting the provisions of sections 15 to 20 of the Child Support Guidelines and Schedule III a Differences in income for spousal support There are some distinctive income issues that do arise under the Advisory Guidelines e Social assistance is not income for spousal support purposes whatever its name even if it s called Ontario Works or Ontario Disability Support Program ODSP or some other confusing name FV 6 2 ODSP appears to fool lawyers and judges who erroneously treat it as income for the recipient and thus understate the spousal support range Macropoulos v Macropoulos 2008 O J No 4534 2008 CarswellOnt 6743 S C J For examples of the correct treatment of ODSP see Fountain v Fountain 2009 CarswellOnt 6342 S C J or Quattrochiocchi v Quattrociocchi 2008 O J No 5341 2008 CarswellOnt 7977 S C J The same mistake is made in some B C cases where social assistance has wrongly been treated as income Xu v Luo 2010 B C J No 282 2010 BCSC 196 Paheerding v Palihati 2009 B C J No 830 2009 BCSC 557 and E A C v L A C 2009 B C J No 283 2009 BCPC 49 e In the with child support formula the Child Tax Benefit the Universal Child C
84. s The Boston exception under the Advisory Guidelines recognizes that some adjustment may need to be made to the application of the SSAG to avoid double dipping but determining when and how that adjustment is to be made raises difficult issues in part because of the fuzziness of Boston itself In two Ontario cases courts have made a very formulaic adjustment to the Spousal Support Advisory Guidelines to avoid double dipping that may not accurately reflect the Boston ruling In each case the court reduced the payor s income by the amount of the divided pension and then calculated the without child support formula range on the reduced payor income Hurst v Hurst 2008 O J No 3800 S C J and Gammon v Gammon 2008 O J No 4252 2008 CarswellOnt 6349 S C J In both of these cases the previously divided pension was a small part of the payor s total income so the problems were not so obvious As well in Hurst this method of adjustment was dictated by the parties agreement In other cases however this formulaic adjustment of income may be too mechanical and rigid and may lead to inappropriate results It not only risks by passing the analysis of the exceptions that are built into Boston but may also lead to arbitrary results under the Advisory Guidelines To take a simple example assume the spouses have been married for 20 years and the wife has an income from non pension sources of 10 000 per year The payor hus
85. s exception for inadequate compensation under the with child support formula FV 12 11 may also be relevant If the amount of spousal support was inadequate in the past because of the priority to child support spousal support may have to continue beyond the maximum time limits generated by the formula in order to adequately satisfy the recipient s compensatory claims This exception is discussed below under Exceptions 50 d Post separation income increase of the payor FV 14 3 Since the Draft Proposal courts have continued to struggle with this hard question which presents a mix of entitlement and quantum issues While this question usually arises at the stage of variation or review it can also come up at the time of the initial order if there has been a lengthy period of time since separation or a sudden increase in income after separation as was true in the Fisher case from Ontario e It is incorrect to say that the Advisory Guidelines always require that incomes at the time of separation must be used in calculating the formula ranges e It is equally incorrect to state that the spouse s current incomes are always the correct incomes for formula purposes e Under the current law a post separation income increase on the part of the payor raises another distinct issue for spousal support analysis an entitlement issue namely whether all some or none of the increase should be taken into account in calculating the formul
86. s under the without child support formula h Property division high property awards FV 12 6 2 We did not recognize high property awards as an explicit exception in the Draft Proposal The Advisory Guidelines can already accommodate many of the high property concerns by imputing income by choosing an amount and duration within the ranges by individualizing 45 support determinations for payors above the 350 000 ceiling and in extreme cases by finding no entitlement There is still no explicit exception for high property awards in the Final Version The law in this area remains unclear The better view is that property and support are governed by distinctive laws and serve different purposes so that a high property award should not in and of itself dictate a significant reduction of spousal support This view is reflected in the B C Court of Appeal decisions in Chutter v Chutter 2008 B C J No 2398 2008 BCCA 507 and Bell v Bell 2009 B C J No 1201 2009 BCCA 280 But there is a minority view that does see these two remedies as substitutes one for the other so that a high property award always justifies lower spousal support We have left the law to develop further in this area which means we leave it up to lawyers to argue for and against such an exception outside of British Columbia i Basic needs hardship FV 12 7 The new basic needs hardship exception has already been discussed above under the
87. sing the full table amount AT 2 rather than the reduced amount If this adjustment is not made the result is an inappropriately higher spousal support range as occurred in Atkins v Burgess 2010 O J No 275 2010 ONSC 557 low end of range chosen for other reasons so still in lower half of range Hansen v Roy 2009 O J No 282 2009 CarswellOnt 302 high end of range chosen For an example of the correct application of this step parent formula see Collins v Collins 2008 N J No 296 2008 NLUFC 31 e Where the marriage is a short one a court will adjust under this formula not by lowering the amount but by imposing a time limit Collins v Collins above e The custodial payor formula FV 8 9 Where the payor of spousal support also has primary care of the children a different hybrid formula is applied first deducting grossed up amounts of child support from each spouse s gross income and then applying the without child support formula Most of these cases involve older children and longer marriages where the husband is the higher income payor and the parent with primary care In many of these cases there are disability issues facing the recipient wife A small number involve shorter marriages which raise some of the short marriage exceptions identified above under the without child support formula As noted above Use the Right Formula the custodial payor formula is often missed with one or both parties in
88. ss so for the determination of spousal support e Finally there may be situations where the inter relationship between property division and spousal support for spouses may mean a different and lower payor income is used for spousal support For example if stock options are valued and divided as part of the property divisions the same stock options may not be treated as income for spousal support purposes even in cases where the stock options might be considered as income for child support purposes On such benefits as stock options and bonuses see Cole The Dual Character of Employment Benefits 2009 28 Can F L Q 95 10 c Using alternative incomes to estimate ranges In some circumstances it may be difficult to ascertain the precise income of a payor or a recipient There may be uncertainty about income or difficult judgments in imputing income or inadequate evidence at the interim stage One way to solve this common problem is to estimate different ranges for amount based upon alternative income hypotheses Usually there will be some overlap in the ranges which can help in choosing a specific amount The B C Court of Appeal accepted this approach in upholding the variation decision in Beninger v Beninger 2009 B C J No 2197 2009 CarswellBC 2963 2009 BCCA 458 In a case above the ceiling the trial judge had considered ranges for incomes of 366 400 and 416 400 thanks to an uncertain bonus for the payor and then
89. swell BC 3177 S C Justice Martinson set out in detail the rationale for the application of the Advisory Guidelines to interim spousal support orders That view has been strongly restated on an appeal from a Master s order in Kozek v Kozek 2009 B C J No 2412 2009 BCSC 1663 The usefulness of the Guidelines in the interim context when there is limited information was emphasized in Langdon v Langdon 2008 CarswellOnt 545 and in Thompson v Thompson 2010 S J No 41 2010 SKQB 322 How to deal with the problem of not being able to ascertain precise income figures at the interim stage is discussed below under Income using alternative incomes to estimate ranges e The Guidelines do recognize that the amount may need to be different either higher or lower during the interim period while parties are sorting out their financial situation immediately after separation To accommodate these short term concerns the Advisory Guidelines recognize an exception for compelling financial circumstances in the interim period see FV 12 1 e Most often this will involve mortgage or debt expenses particularly under the with child support formula where the spouses are more often at the limits of their ability to pay after separation e In some cases particularly shorter marriages under the without child support formula where the amounts generated by the formula are relatively low this interim exception may also cover cases involving ha
90. t of spousal support was inadequate in the past because of the priority to child support spousal support may have to continue beyond the maximum time limits generated by the formula in order to adequately satisfy the recipient s compensatory claims See FV s 12 11 and the discussion of cases below under Exceptions f Retirement cases under the without child support formula In one subset of cases under the without child support formula one or both parties may be retired In some cases retirement has occurred prior to separation while in other cases it will occur post separation and may be the basis for an application for variation or review Spousal support cases involving retirement may raise complex issues of entitlement and income determination As well the circumstances of illness and low income that are often experienced by the elderly may require consideration of exceptions to the SSAG For an excellent overview see Marie Gordon Back to Boston Spousal Support After Retirement 2009 28 C F L Q 125 Particular issues to watch out for in retirement cases include e Material change If the payor s retirement and consequent drop in income is the basis for a variation application there may be an issue of whether retirement constitutes a material change in circumstances Thus early retirement may not count as a material change unless for health reasons and if it does courts may impute additional income that can be earned
91. the Final Version We also made some refinements to the existing exceptions Some of the new exceptions have already been mentioned above under the respective formulas Even now more than five years after the release of the Draft Proposal and almost two years after the release of the Final Version it is still surprising how often lawyers and judges fail to consider the exceptions It remains one of the great mysteries of the Advisory Guidelines so far Lawyers and judges just look at the standard formula ranges and then if they don t like those numbers they describe the Advisory Guidelines to be of little assistance and go back to budgets or net incomes or pure discretion to come up with an outcome How can a lawyer mediator or judge determine when one of the exceptions might be engaged e If the formula ranges for amount and duration just don t seem intuitively right then look at the exceptions If the amounts seem too high or too low or the duration seems too short there will usually be an exception that applies For recipients the exceptions will sometimes justify support above the ranges for amount and duration For payors the exceptions will sometimes justify support below those ranges e If one party really really likes the formula ranges that would be another clue to the potential for an exception For example the payor in a short marriage case will like the limited support generated by the without child su
92. the with child support formula For the most part restructuring has less relevance for marriages with dependent children The indefinite nature of awards under this formula and the absence of firm time limits make restructuring a more uncertain enterprise As well in cases of three or more children the payor s ability to pay will be limited thus often precluding the possibility of front end loading or a lump sum However the addition of a lower end to the durational range under this formula in the Final Version does create more room for negotiation over duration which creates the conditions amenable to restructuring in certain kinds of cases e The most likely circumstances for the use of front end loading or a lump sum under the basic with child support formula will be cases where the recipient wants spousal support above the upper end of the range for a shorter period e g to pursue a more expensive educational program or desires a lump sum to provide for accommodation see Card v Card 2009 B C J No 1283 2009 BCSC 865 Many of these will be shorter marriage cases In some cases a lump sum may be desired because of concerns about non payment of spousal support see Venco v Lie 2009 B C J No 1240 2009 BCSC 831 modest monthly amount of support combined with history of non payment e For front end loading to occur the following cases would be prime candidates as there will be some additional ability to pay available only one
93. tional needs resulting from the marriage breakdown e A basic needs hardship exception has been added in the Final Version FV 12 7 to recognize the specific problem with shorter marriages 1 10 years where the recipient has little or no income and the formula is seen as generating too little support for the recipient to meet his or her basic needs for any transitional period that extends beyond the interim exception Simpson v Grignon 2007 O J No 1915 2007 CarswellOnt 3095 Ont S C J offers an example of this exception One area where this exception can apply is immigration sponsorship cases see section b below 18 b Short marriages immigration sponsorship cases One category of short marriages those involving immigration sponsorship agreements raise some unique issues under the without child support formula These are cases where a marriage breaks down while a sponsorship agreement is in place Most spousal sponsorship agreements now run for a period of 3 years but in the past the duration was as long as 10 years In some cases involving very short marriages courts have used the duration of the sponsorship agreement as the appropriate measure for the duration of spousal support thus extending duration beyond the durational ranges generated by the Advisory Guidelines As well in such cases some courts have also ordered support in an amount beyond the high end of the range to generate an amount of support that will meet t
94. uations or predicting anticipated increases e g K D v N D 2009 B C J No 1482 2009 BCSC 995 fluctuating income e Where the payor s income exceeds the ceiling of 350 000 per year a court will usually order the formulaic table amount of child support for payor incomes up to 1 million per year but a lower income can be used for purposes of the Spousal Support Advisory Guidelines FV 11 3 For an example see Dickson v Dickson 2009 M J No 374 2009 CarswellMan 515 2009 MBQB 274 child support income for 2005 07 520 872 but 350 000 used for spousal support one small error in using higher amount of actual child support in calculating spousal support range at 350 000 rather than child support amount for 350 000 e There are often strong policy reasons to impute income to a payor for child support purposes for the child to obtain the full benefit of the earning capacity of the payor while the rationale is much weaker for spousal support For an example of this see Martin v Orris 2009 M J No 383 2009 MBQB 290 various corporate payments to family members and expenses treated as not reasonable to deduct from child support income but reasonable to recognize such long standing payments in determining income for interim spousal support Similarly a court may be prepared to attribute pre tax income from the payor s corporation as income for child support purposes under s 18 of the Child Support Guidelines but le
95. under Ceilings and Floors FV 11 e Non taxable payor income an exception was created in the Final Version where the payor derives all or most of his or her income from legitimately non taxable sources and the issue is covered here under Exceptions FV 6 6 and 12 8 e Post separation income increase of the payor this important and difficult issue is dealt with under Variation and Review FV 14 3 e Imputing income for self sufficiency dealt with below under Variation and Review FV 13 2 243 6 USE THE RIGHT FORMULA The dividing line between the two formulas is the presence of a child support obligation blindingly obvious you might think as the formulas are entitled without child support and with child support But in some cases a lawyer argues the wrong formula usually in step parent or custodial payor cases In others there is no child support paid In still others there may be an older child away at school Over time we would expect these wrong formula cases to disappear e Where the wrong formula is argued one would hope that the opposing lawyer or the judge would pick up the error but not always In step parent cases the payor may argue for the without child support formula to reduce spousal support rather than face the correct and more generous step parent version of the with child support formula Parsons v Watt 2008 M J No 444 2008 MBQB 328 4 year cohabitation range rejected
96. ut of the information Usually this will be a prior obligation for child support Lickfold v Robichaud 2008 CarswellOnt 6138 S C J no spousal support But every now and then it will be a prior spousal support obligation Robertson v Williams 2009 O J No 5451 S C J Sometimes the adjustment for prior support is not made with spousal support ordered well above the correct range e g De Haney v De Haney 2009 O J No 1569 S C J Czupiel v Czupiel 2008 CarswellOnt 6969 S C J Dickinson v Dickinson 2008 CarswellOnt 6788 S C J or MacNutt v MacNutt 2008 B C J No 1831 2008 BCSC 1290 In the Final Version we added one further refinement to this exception one that should be noted In most cases there will be a payment of prior child or spousal support by the payor spouse But a payor spouse might also have a prior child in his or her care a child who is not a child of the marriage In these cases there can be a notional child support amount determined and used for the adjustment FV 12 3 3 42 Although it may be obvious what is NOT included in this exception is second families or subsequent children The prior support exception reflects the law s general policy of first family first especially where it is prior child support There is no such consensus about support obligations towards subsequent spouses or subsequent children and that is reflected in the discretionary ap
97. w end appropriate where payor husband continues as custodial parent wife s income relatively high no time limit For two good trial court explanations Shorey v Shorey 2009 O J No 5136 2009 CarswellOnt 7514 S C J wife working 3 days week could make more some overtime attributed to husband he less able to increase income mid range or Cecutti v Cecutti 2009 O J No 580 S C J many factors lower end The basis for the entitlement is sometimes although not often enough considered explicitly as a factor affecting location Ross v Ross 2010 B C J No 65 2010 BCSC 52 wife maintained qualifications during marriage able to find full time work weaker compensatory claim Barry v Barry 2009 N J No 70 2009 NLUFC 13 weaker compensatory claim stronger non compensatory claim below mid range Some courts have properly acknowledged the inter relationship of duration and amount Cassidy v McNeil 2010 O J No 1158 2010 ONCA 218 trial amount above range no explanation not restructuring time limit not appropriate low end for amount Willi v Chapple 2009 O J No 3752 S C J low duration low income estimate for payor upper end of range for amount In British Columbia there is one factor under property division that is regularly considered in determining amount namely whether reapportionment of property has occurred on the spousal 23 support grounds of s 65 1 e and f in the Family R
98. where the payors made between 20 000 and 30 000 courts have generally awarded support amounts below the low end of the formula range after explicitly considering this exception Gustafson v Gustafson 2010 M J No 12 2010 MBQB 10 Kajorinne v Kajorinne 2008 O J No 2789 2008 CarswellOnt 4229 S C J Serpa v Yueping 2007 B C J No 1733 2007 CarswellBC 1795 2007 BCSC 1181 no entitlement Maitland v Maitland 2005 O J No 2252 Ont S C J Snowden v Snowden 2006 B C J No 1187 B C S C e In two with child support cases involving low incomes payors were ordered to pay small amounts of spousal support despite a zero formula range H P v D P 2006 N S J No 511 2006 CarswellNS 560 Fam Ct 175 mo spousal support until house sold rather than s 7 contributions Skirten v Lengyel 2007 O J No 679 Ont S C J husband should pay something 50 mo But these are freak cases 237 2 b Payor income above the 350 000 ceiling FV 1 1 11 3 There aren t that many of these cases but they are over represented in the decided cases partly because of the high stakes involved partly because they test the outer limits of our thinking about spousal support A number of these cases have made their way to the B C Court of Appeal in recent years Rogerson and Thompson Complex Issues Bring Us Back to Basics The SSAG Year in Review in B C 2009 28 Can F L Q 263 at 283 86 e The
99. without child support formula It is intended to deal with the problem of need in cases of shorter marriages where the recipient has little or no income j Non taxable payor income FV 12 8 One new exception in the Final Version is the non taxable payor income exception FV 12 8 Both formulas produce a gross amount of spousal support i e an amount that is deductible from taxable income for the payor and included in taxable income for the recipient But some payors have incomes based entirely or mostly on legitimately non taxable sources e workers compensation e disability payments e income earned by an aboriginal person on reserve e some overseas employment arrangements In these cases the payor is unable to deduct the support paid contrary to the assumption built into the formulas for amount In most cases the recipient of spousal support will still have to include the support as income and pay tax on it Under this new exception it will be necessary to balance the tax positions and interests of the spouses For examples of the fact situations see Paul v Paul 2008 N S J No 157 2008 CarswellNS 197 2008 NSSC 124 both aboriginal neither paying taxes amount below low end of range James v Torrens 2007 S J No 334 2007 SKQB 219 aboriginal payor earning income on reserve There are also a number of self adjusting mechanisms at work under both formulas that may limit the need to resort to this exception descri
100. xtended period in cases where the formula generates a time limit it is necessary to use restructuring to adjust the amount downward see below and FV Ch 10 e The meaning of indefinite support Duration under this formula is indefinite when the relationship is 20 years or longer or when the rule of 65 applies Many have misinterpreted this term Indefinite support does not necessarily mean permanent support And it certainly does not mean that support will continue indefinitely at the level set by the formula as such orders are open to variation as circumstances change over time In the Final Version we have developed a new term indefinite duration not specified to convey that such orders or agreements are subject to variation and review and through that process even to time limits and termination FV 7 5 2 For a good discussion of the meaning of indefinite support see Banziger v Banziger 2010 B C J No 253 2010 BCSC 179 20 e When a support award is indefinite recipients are under an obligation to make reasonable efforts toward self sufficiency even if they cannot attain full self sufficiency and a failure to make reasonable efforts may result in imputing income and a reduction of support on a subsequent review or variation See FV Ch 13 for a discussion of self sufficiency d Duration and the rule of 65 FV 7 5 3 When determining duration even if the relationship is unde

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