Category: Spousal Support

When a court orders that one of the parties are entitled to a specific amount of spousal support in accordance with the SSAG, the Court will also award a lump sum retroactive spousal support award from the date of the application until the present day.

The first issue is how the Court determines said amount.

At first glance, it seems reasonable and obvious that the Court would multiply the amount awarded in spousal support per month by the amount of months in arrears. However, in reality, that is not a fair and reasonable figure as it does not take into account the fact that monthly spousal support payments are deductible to the payor and taxable to the recipient. Therefore, decisions such as Hume v. Tomlinson, Elgner v. Elgner, and Vanasse v. Seguin, stress that the Court has an obligation to consider the tax consequences when ordering a lump sum retroactive spousal support award.

In Thompson v. Thompson, the Court explained its position on the matter as follows:

“The quantification of retroactive spousal support, the range that is generated by the SSAG must be adjusted because these ranges are based upon periodic ongoing payments which are presumed to be taxable in the hands of the recipient and tax deductible by the payor. A retroactive award must be netted down to account for its non-taxable status in the recipient’s hands, and its non-tax deductible status in the payor’s hands.”

To learn more about lump sum retroactive spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

In cases where a party is awarded spousal support, the recipient will want to obtain some sort of guarantee in the event the payor suddenly dies. It is for this reason that courts have the ability to compel a spousal support payor to alter his/her life insurance policies and name the recipient as a beneficiary to the life insurance policy.

As was witnessed in Scheelar v. Scheelar, this can pose a significant problem if the payor dies without complying with the clause in the separation agreement that compels him/her to name the recipient as beneficiary to the policy. In such cases, if the parties included in the agreement a standard clause such as the following, “in the event that the husband should die without such life insurance being in effect, notwithstanding that he remain subject to the obligation to pay child and/or spousal support, the wife shall be entitled to a first claim upon the estate of the husband for the sum of $500,000,” then the payor must have assets for the recipient to collect on his/her spousal support entitlement.

In cases where the payor did not have sufficient assets, courts such as the one in Scheelar, refused to order that the life insurance policies be paid to the recipient nonetheless.

It, therefore, would be wise to make the payor and recipient joint owners of the policy. That way, if the payor decided to amend the designation of the beneficiary of the policy, the joint owner would be notified.

To learn more about life insurance policies as well as the services provided by Krol & Krol, call 905.707.3370 today.

In many matrimonial cases, one of the parties will find themselves in a precarious financial situation. More often than not, a mother who sacrificed her career to take care of the children of the marriage, will find herself in need of interim spousal support upon the dissolution of the marriage.

Justice Douglas, in Horowitz v. Nightingale, outlined the various principals of interim spousal support as stated in the case of Driscol v. Driscol. They are:

1. On applications for interim support the Applicant’s needs and the Respondent’s ability to pay assume greater significance;

2. An interim support order should be sufficient to allow the Applicant to continue living at the same standard of living enjoyed prior to separation if the payor’s ability to pay warrants it;

3. On interim support applications the court does not embark on an in depth analysis of the parties’ circumstances which is better left to trial. The court achieves rough justice at best;

4. The courts should not unduly emphasize any one of the statutory considerations above others;

5. On interim applications the need to achieve economic self-sufficiency is often of less significance;

6. Interim support should be ordered within the range suggested by the spousal support advisory guidelines unless exceptional circumstances indicate otherwise;

7. Interim support should only be ordered where it can be said a prima facie case for entitlement has been made out; and,

8. Where there is a need to resolve contested issues of fact, especially those connected with a threshold issue, such as entitlement, it becomes less advisable to order interim support.

To learn more about interim spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

The case of Djekic v. Zai is a proper example and model of how the courts will and should determine the issue of spousal support.

When a Judge is tasked with the burden of issuing a ruling regarding spousal support, the Judge is required to look at the case as a whole. This means that the Court will look at all the circumstances that surround the parties to the matter. The issue of Quantum is related to the issue of duration.

In the above-mentioned case, the Court ruled in favor of the Applicant and varied the decision made by the Trial Court. The Court of Appeal explained that, in its decision to vary spousal support whereby the Applicant would be entitled to support on an indefinite basis, it was incumbent on the Court to consider all of the circumstances of the Applicant; including the fact that she was over the age of 65, disabled, and received a small pension.

This case has strengthened what Family practitioners and adjudicators have come to know as the Rule of 65; essentially, another consequence of courts taking all relevant circumstances into account when ruling on the determination of spousal support.

To learn more about spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

As is prevalent in most Family Law cases in Ontario, each matter is judged on its specific facts. The common law is considered to be judge-made law. This is because, unlike other Civil law traditions which are based on an actual code, the common law is predicated on the rulings of courts. Therefore, the common law is consistently and continuously evolving and changing.

In the case of Rozen v. Rozen, Justice Bernard was faced with a motion brought by the former husband, the payor, to vary spousal support due to his retirement and non-competition clause. The husband was earning significantly more money in the previous couple of years, and now felt as though he should not be paying the amount the parties had agreed upon in the year 2003 because circumstances had changed.

Justice Bernard rejected the husband’s position and ruled that because the support was based on compensatory grounds, coupled with the fact that had the case been brought when the SSAG existed – the actual quantum awarded would have been less than the mid-range SSAG quantum, the husband could not argue to vary the quantum of spousal support due to his recent retirement.

To learn more about spousal support and retirement as well as the services provided by Krol & Krol, call 905.707.3370 today.

When determining spousal support, a court will look to the objectives listed in section 15.2 of the Divorce Act. Section 15(2) states as follows:

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should,

(a) Recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) Apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) Relieve any economic hardship of the spouses arising from the breakdown of the marriage; and,

(d) Insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

In the case of Morneau v. Morneau, Justice Cole stated in response to a wife’s claim for a review of spousal support that although self-sufficiency was an important objective of the Divorce Act, it should not be given priority over the other objectives enumerated in section 15(2) of the Divorce Act. Justice Cole stated as follows:

“The fact that a party has failed to take reasonable steps to become financially self-sufficient is a relevant factor to consider when deciding on the issue of spousal support. Insofar as marriage may have created dependencies, it is the duty of dependent spouses to strive to free themselves from their dependencies and to assume full self-sufficiency, thereby mitigating the need for continued compensation” (Bracklow at para. 29).

However, the objective of self-sufficiency is only one of the objectives listed in section 15.2 of the Divorce Act, and it should not be given priority over the other objectives (Moge at p. 853). In addition, a party’s failure to achieve self-sufficiency is not breach of “a duty” and is simply one factor amongst others to be taken into account (Leskun v. Leskun, 2006 SCC 25 at para. 27).

Therefore, it is important to understand that, although a change in spousal support could be awarded on a needs-based approach, a court will hold a recipient of spousal support accountable if he/she has not taken reasonable measures to become self-sufficient and independent of their former spouse.

To learn more about spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

In Ontario, the issue of whether support payments made to a dependant are taxable or deductible often arises in family law courts.

The law in Ontario is that child support is not tax-deductible to the payor, and is free of taxation in the hands of the recipient. However, spousal support, on the other hand, is tax-deductible to the benefit of the payor, and taxable in the hands of the recipient.

It is interesting to point out that although courts do not have jurisdiction to award spousal support free of taxation, this past year in 2014, Justice Wong of the British Columbia Superior Court, did just that.

In the case of Boekhoff v. Boekhoff, a wife sought to claim over $100,000 in arrears of spousal support that had been owed to her since 2001.

Throughout the 13 year period where arrears had allegedly accumulated, the wife settled down with a new common law partner, and subsequently negotiated an agreement with her former husband that would see him pay a smaller amount in spousal support per month than was previously ordered.

Justice Wong ruled that the agreement was valid and that the fact that the wife had allowed the agreement to survive for a number of years without enforcing the original court ordered spousal support amount, re-enforced the notion that their had been a valid subsequent agreement reached between the former spouses.

Justice Wong thereby ruled that the wife was estopped from claiming arrears of spousal support corresponding to the original court order. However, he ordered that the amount originally ordered by the first instance court was justified, and therefore, the husband would continue paying the wife the amount of spousal support that had been originally ordered by the first instance court.

However, shockingly, Justice Wong concluded his ruling by allowing these future support payments to be “tax-free” in the hands of the wife; an order he did not have the right to make.

To learn more about shared parenting as well as the services provided by Krol & Krol, call 905.707.3370 today.

 

 

The case of Ontario (Director, Family Responsibility Office) v. Van Westerop was one that saw the court rule on an application by the Family Responsibility Office to have the husband imprisoned for non-payment of spousal support.

In this case, the husband owed the full amount of $900,000 in spousal support. The husband had consented to an order that he was obliged to make these support payments, and he had many opportunities to comply with the order over the course of 13 years.

Because the husband was unable to prove his case, as was made in Ontario (Director, Family Responsibility Office) v. Buffan, that there was a material change in circumstances since he consented to the order, the Family Responsibility Office application for committal for non-payment of spousal support was granted. The Court of Appeal stated in its reasoning:

Recognizing that a statue gives the court the power to make a committal order as a term of a temporary order made in a default proceeding does not, of course, speak to the propriety of imposing that term in any given case. the FRSAEA and predecessor legislation dealing with the enforcement of default orders have always regarded imprisonment for non-payment of those orders as the enforcement mechanism of last resort. Something more than non-payment is required. The payer’s conduct must demonstrate a wilful and deliberate disregard of the obligation to comply with court orders: see e.g. Allen v. Morrison (1987), 11 F.R.L. (3d) 225 (Ont. Div. Ct.), at para. 11, aff’g on this point Allen v. Morrison (1986), 4 R.F.L. (3d) 113 (Ont. Dist. Ct.); Ricafort v. Ricafort (2006), 35 R.F.L. (6th) 210 (Ont. C.J.), at para. 49; Ontario (Director, Family Responsibility Office) v. Belic (2006), 30 R.F.L. (6th) 127 (Ont. S.C.J.), at para. 29.

However, it is important to note that the husband’s incarceration did not negate his obligation to pay the arrears of $900,000 and future spousal support payments.

To learn more about spousal support obligations as well as the services provided by Krol & Krol, call 905.707.3370 today.

Married spouses or divorced spouses may apply for spousal support under the Family Law Act and the Divorce Act. If the claimant of support has already divorced his/her spouse, the claimant must bring his/her claim under the Divorce Act. On the other hand, spouses that have not yet been granted a divorce, must bring their claim under the Family Law Act.

The Divorce Act defines “spouse” as either of the two people who are married to each other (section 2 of the Divorce Act). The Family Law Act defines “spouse” more broadly as follows:

• Either of two persons who are married to each other or have entered into a marriage that is voidable or void in good faith;
• Either of two persons who are not married and have cohabited continuously for a period of at least three years in a conjugal relationship; and,
• Either of two persons who are not married but who are in a relationship of some permanence if they are the natural or adoptive parents of a child.

Both the Family Law Act and the Divorce Act recognize the task courts are faced with when confronting a spousal support claim is for compensation of the economic realities and consequences of spousal relationships. Thus, relevant factors that judges take into account when ruling on a spousal support claim are the duration of the relationship, the financial circumstances of the parties, and what roles they played while they were together.

Bracklow v. Bracklow is a leading case in the sense that it created three different conceptual models when awarding spousal support.

First, a judge will investigate whether there were any agreements or contracts made between the parties. This is referred to as the contractual basis for support.

Second, courts will compensate the spouse who has experienced an economic disadvantage on account of the marriage. Alternatively, the Court will also compensate the spouse who has contributed to the economic advantage of his/her spouse. This method is referred to as the compensatory basis for support.

Finally, the court will determine whether one spouse is in need of support based on their financial circumstances. This is referred to as the needs-based method of support.

To learn more about spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

The Divorce Act and the Family Law Act both recognize that spouses may subsequently seek to set aside the spousal support agreements they have already negotiated domestically.

The Divorce Act states that a court is permitted to take the following approach, albeit a narrow one, in determining whether to set aside the domestic contract:

• The court will review the context and circumstance of the agreement. This should point towards whether the agreement was in substantial compliance with the objectives and spirit of the Divorce Act (i.e. finality, autonomy, and certainty); and,
• The court will also depict whether the agreement is still a reflection of the parties’ original intention and whether it still complies with the objectives of the Divorce Act.

Ultimately, as was evidenced in the leading case Miglin v. Miglin, if the terms were unimpeachably negotiated, the agreement is a comprehensive one, and it stands in compliance with the Divorce Act, the courts will predominantly uphold the terms of the agreement.

However, the Family Law Act states that a court has the jurisdiction to set aside an agreement entailing a waiver of spousal support if it was negotiated within unconscionable circumstances. That is, if the circumstances during the execution of the contract, the results of the support clause, and the parties’ circumstances at the time of the hearing were unconscionable.

To learn more about setting aside spousal support agreements as well as the services provided by Krol & Krol, call 905.707.3370 today.