A Tough Pill to Swallow: Indefinite Spousal Support is Here to Stay

IMG_0277While several jurisdictions in the US, including New Jersey, Maine, and Massachusetts, have made efforts to rein in life-time spousal support, I predict that Canadian law makers will not jump on the bandwagon anytime soon. In fact, I believe Canadian spouses (read “women”) will hold their place as the “most likely to succeed” financially post-separation, particularly in relation to their American sisters.

Yes, it’s true that it hasn’t always been this way. In the early 1980’s a majority of the Supreme Court of Canada in Messier v. Delage held strong to the philosophy that the obligation of support between ex-spouses “should not continue indefinitely when the marriage bond is dissolved,” and decried the notion that “one spouse could continue to be a drag on the other indefinitely; acquire a lifetime pension as a result of the marriage; or luxuriate in idleness at the expense of the other.”

The support noose got even tighter in 1987 after a trio of cases made their way up to Canada’s highest court. In Pelech v. Pelech, Caron v. Caron and Richardson v. Richardson the Court determined that spouses who had signed agreements dealing with spousal support could not easily shake loose of them.

The test to challenge an agreement that denied a spouse spousal support, or an attempt to increase or extend the time period for support required the applicant spouse to show there had been a radical change in circumstances causally linked to the marriage.

The first part of the legal requirement, establishing that a change was radical, was relatively easy. If a wife agreed to take no support and later became disabled or unemployable it was not difficult to characterize the change in her ability to work as radical.

More stringent, however, was the additional requirement that the radical change be attributable to the marriage. So, for example, if a wife signed a separation agreement that gave her no spousal support because she was fully self-supporting, and she later became disabled from an illness that did not manifest itself until after the divorce, her financial need could not be linked to her marriage. No link, no support.

For women who found themselves in this situation, their only hope was family support, welfare, or a second marriage.

Meanwhile, the federal government overhauled the Divorce Act 1968 and replaced it with a new Divorce Act in 1985. The new model for support called for an analysis of the economic advantages and disadvantages suffered by both spouses from the marriage or from the breakdown of the marriage. The stage was now set for a groundbreaking Supreme Court of Canada decision.

In 1992 the support pendulum swung hard in the opposite direction with a case that involved a spousal support payment of a mere $100.00 per month. In Moge v. Moge the Supreme Court of Canada introduced a new way of thinking about spousal support, with a support rationale that was based on compensation to a spouse, instead of just a consideration of “means and needs”.

In this ground breaking decision the Court directed judges to explore the economic consequences of divorce with a greater focus on women’s work at home as mothers and wives and the aftermath of staying at home, while their husbands worked.

The Court recognized that women in this position typically had no job skills, limited opportunities for education, and no pensions, savings, or health benefits.

Fast forward to 2006 when the federal government introduced Canada’s Spousal Support Advisory Guidelines, a further move to a more generous system of spousal support. The Guidelines provided a scheme to ensure that supported spouses received support that could be as high as 43% of their partner’s gross income. They also set a formula to determine how long support would be paid.

The upshot was that spouses who were married for 20 years or more typically received indefinite support that could be reviewed or varied if there was a material change in circumstances. Spouses in marriages under 20 years would receive support equivalent to the length of their marriage, also subject to variation if the supporting spouse could show a material change in circumstances.

While this analysis is a simplification of the Guidelines, there can be no doubt that the Spousal Support Guidelines benefitted women, and men were burdened with higher support payments, paid for a greater length of time.

In recent cases in British Columbia, men seeking to decrease their support have only been mildly successful, while most obtain no relief at all. Even men in their 60’s and 70’s who legitimately wish to retire, are often forced to keep working in order to pay support to their former wives. Yes, even if they have second wives and families.

In 2012 the Supreme Court of Canada reinforced their model of generosity in L.M.P.v. L.S. when they decided that spouses receiving support pursuant to an agreement were not necessarily bound by the terms of their agreement because recipient spouses may have been under intense emotional strain at the time they negotiated their agreements. In other words, even if the agreement called for the end of support, a court may well ignore the agreement.

As a result of this decision husbands in Canada can now wave good-bye to well-established principles of certainty and finality when they settle support issues.

Hearkening back to my original point, the Canadian trend in spousal support in no way resembles the burgeoning alimony reform sweeping through the United States. In fact, Canada continues to move in a direction that will eventually financially cripple husbands, particularly those that pay both child support and spousal support.

Yes, we need alimony reform, directed at spouses who are able to contribute to their own support, but choose not to, but we are unlikely to get it anytime soon.

Lawdiva aka Georgialee Lang

Is Double-Dipping Fair?

GEO_edited-1A common complaint from ex-spouses who are obliged to pay spousal support is that all too often, the supported spouse gets a double-dip, and I don’t mean an ice cream cone.

Double-dipping occurs when a payor spouse pays support based on his employment income, but also pays support on his investment, rental or capital gains income arising from assets that were divided between the spouses, or for which the supported spouse received compensation through the receipt of cash or the retention of the family home.

Let me give you an example. If a husband retains a rental property valued at $100,000 and an investment portfolio worth $200,000 and in return the wife receives the former matrimonial home with a basement suite, valued at $300,000, it seems unfair for her husband to include these additional income sources as income for the purpose of paying spousal support. Yes, he may earn income on his share of the family property, but the wife also has that option.

As well, consider that the wife’s home has a basement suite she declines to rent and therefore eliminates an additional source of income for herself.

On top of all that, keep in mind that for Canadians, the matrimonial home is a tax-free asset, while the husband’s rental property will attract capital gains tax as will the investment portfolio.

Another common example of this practice is where a business is valued by capitalizing the business’ income stream and the wife is compensated for her interest, while the husband is ordered to pay support on that same income stream.

Do our courts care? Nope. But lawmakers in California thought it was an important issue when Bill SB 481 was tabled in the Senate with the goal of passing legislation that would give judges the discretion to consider the sources of income utilized for a support calculation to prevent unfair, blatant double-dipping.

Regrettably, this attempt to address double-dipping faltered,dying in the Senate in January 2012, with no pending legislation.

The treatment of this issue by North American courts is divergent to say the least. In Mississippi the courts have declared double-dipping a “glaring inequity” while in other jurisdictions there is passive tolerance with no apparent will to resolve the unfairness that can occur.

Of course, cynics will say that because double-dipping most frequently prejudices husbands, not wives, it will be a long time until our courts get around to fixing the problem.

California was on the right track with their double-dipping bill, a proposal that would at least encourage judges to consider whether paying spousal support on income derived from divided family assets is equitable. Certainly, the draft legislation only opened the door for an inquiry, nothing more.

Perhaps it will resurface in California and then catch on in other jurisdictions. Let’s hope so. Fair means fair for everyone.

Lawdiva aka Georgialee Lang

Supreme Court Says “No” to Common Law Spouses in Quebec

The Supreme Court of Canada put an end today to the long running saga of Quebec’s most famous common law spouse when they confirmed that neither she nor any other common law spouse in Quebec is entitled to spousal support.

The story is classic. Wealthy, thirtyish businessman falls for 15-year-old Latino bombshell, has three children with her, and calls it quits after a seven-year extravaganza of “champagne wishes and caviar dreams”. The titillating tale unfolds in the Reasons for Judgment from the Quebec Superior Court in A. v. B. 2009 QCCS 3210.

In Quebec, unlike the rest of Canada, legal matters concerning persons, relationships and property are subject to a code of law based on French Napoleonic law.

The dilemma Ms. A faced is that the Quebec Civil Code did not make provision for spousal support after unmarried couples separate, while married spouses and spouses joined in a civil union have that benefit.

In every other province in Canada she would be entitled to apply for support and so, Ms. A. tried to persuade a judge that the Quebec Civil Code was discriminatory under the Charter of Rights and Freedom because it treated married and unmarried couples differently.

The Court acknowledged that Quebec has the largest population of unmarried couples, rising from 8% to 35% between 1981 and 2006 and 60% of children born in Quebec are the offspring of unmarried parents. The Canadian average for common law unions is a mere 18%.

Ms. A. argued that the Civil Code should be changed to accommodate unmarried spouses by introducing a law that would provide equal treatment if a couple had cohabited for three years or had a child and lived together for at least one year. She audaciously sought $56,000 a month in spousal support, together with $5 million dollars.

The Quebec Court disagreed, holding that an amendment to the Code was not within their purview, rather it was up to legislators to change the law if they so desired.

The Court also found that the Civil Code was not discriminatory, emphasizing that the objective of Quebec’s support law is to preserve freedom of choice and respect the dignity and autonomy of common law relationships. Simply put, if a person desires the legal treatment afforded married couples, then that person should get married.

Quebec’s Court of Appeal saw it differently, finding that no support for common law spouses was discriminatory and unconstitutional.

In today’s decision, the Supreme Court of Canada issued diverse opinions dismissing Ms. A’s appeal, but confirming that Quebec’s law was either not discriminatory, or if it was, it was a reasonable intrusion, justified by the well-established regime of legal marriage and civil unions in Quebec.

While Ms. A’s loss today in the highest court will no doubt be disappointing, the good news is that her legal journey has been relatively comfortable as she resides in a $2.4 million dollar home and enjoys the benefits of her ex-boyfriend’s largesse, which reportedly includes $34,000 per month in child support, travel reimbursement, the provision of a driver, use of a Lexus automobile, and the payment of taxes, insurance and general maintenance and renovations of her home.

The term “gold digger” suddenly comes to mind…

Lawdiva aka Georgialee Lang

Family Law in Canada? It Depends Where You Live

BarristerToday’s decision from the Supreme Court of Canada in A. v. B. has closed the door for common law spouses in Quebec to receive spousal support upon the demise of their conjugal relationships, a ruling that signaled the conclusion of a long-running legal saga launched by the former common law spouse of a Canadian billionaire.

While married spouses and those in civil unions are entitled to apply for support, “de facto” spouses, the term used for common law spouses in Quebec, may not, unless they have entered into a cohabitation agreement with their partner which provides for support upon the breakdown of their relationship.

Quebec’s distinctive language and culture is also accompanied by a Napoleonic legal system which is not shared by other provinces in Canada. Our highest Court examined the spousal support provisions of the Quebec Civil Code and determined that freedom of choice and personal autonomy trumps a family law regime that imposes obligations on spouses who do not expressly consent.

The upshot? If you want spousal support in Quebec you need to be married, in a civil union, or have a cohabitation agreement which covers support if the relationship fails.

Ironically, while the absence of support for common law spouses in Quebec has now been confirmed as constitutional, the British Columbia legislature is mere weeks away from ushering in new law that will see common law spouses, including same-sex partners, enjoy the same benefits as married couples in regards to the division of property.

All Canadian provinces, with the exception of Quebec, provide for spousal support for common law spouses, but British Columbia’s new law is cutting-edge, albeit B.C. is not the first province in Canada to afford property rights to common law spouses. Those honours belongs to Manitoba, Saskatchewan and New Brunwick. However, it is a radical departure from the law as we know it today.

Presently, British Columbia couples are obliged to share all of their property, even if the property is brought into the marriage by one of the spouses. Our new law will ensure that if a spouse brings property into a marriage or common law relationship, that property will belong solely to the spouse who owns the property. However, if the property increases in value during the marriage or common law relationship, the increase in value may be shared by the parties.

As well, certain property will be exempt from sharing, including inheritances, which in our current law has been the source of bitter disputes, particularly when a large inheritance has been received by one spouse in the waning years of a marriage.

Another feature of B.C.’s new law will be the introduction of family law arbitration, a dispute resolution mechanism which is “old hat” in Ontario. In fact, Ontario lawyers have advanced to “med-arb”, a process where a senior lawyer or retired judge first tries to mediate a dispute and if that is unsuccessful, assumes the role of arbitrator and makes a final decision for the parties.

While Canada’s federal Divorce Act remains unchanged, with the exception that same-sex couples may now divorce, family law is rapidly evolving throughout Canada, depending upon where you live, and will likely not slow down anytime soon.

How could it be otherwise? Lawmakers across Canada need to figure how to approach sperm and gamete donation, donor parents, surrogacy contracts, and other intricacies of the new technology, together with the ramifications of same-sex marriage and divorce: all of which is changing what families look like in Canada today.

I’ll Just Leave the Country and Pay Nothing!

DSC01152_2 (2)_2One of the most common threats a lawyer may hear from a beleaguered client is the cry that “I might as well quit work, if I have to pay that much to my ex-wife”. Another is “I’ll just leave the country and then he/she will get nothing.”

Usually these threats are spoken out of frustration and rarely are they acted upon, however, from time to time a parent will abandon his or her family, rather than obey a court order that is perceived by them to be onerous and unfair.

In a recent Ontario case, Hans Mills did just that. He left the country to avoid paying his ex-wife, Donna Mills, spousal and child support of $3772.00 per month, $2235.00 for the children and $1537.00 for his wife.

A very bleak situation for Ms. Mills who is caring for a 10-year-old with cancer in remission, a Downs Syndrome 14-year-old, a depressed teen, age 17, and a 19-year-old son on methadone treatment. How did everything go so wrong?

After separating in 2005, the Mills reached an agreement in 2008 which gave Ms. Mills sole custody of the children, and the family home, valued at $1.2 million (with a $600,000 mortgage), in exchange for a payment to Mr. Mills of $175,000. Because she received the lion’s share of the equity in the home, she agreed to forego spousal support. Mr. Mills earned approximately $100,000 per year and would pay child support.

Three years after their agreement, money issues began to simmer and a trial was scheduled to deal with the problems that had arisen, including Ms. Mill’s alleged inability to work. In an interim application before the trial, the Court ordered Mr. Mills to pay his ex-wife spousal support, including retroactive support and court costs, in spite of the fact that she had received two-thirds of the family home.

Recognizing that the interim order was a precursor to worse things to come, Mr. Mills sold his house, cashed in his pension, paid his bills, and moved to the Philippines, a country where he had done business for years and a country that had no support treaty with Ontario.

Ms. Mills had always feared he would just leave and implored the government agency that collects child and spousal support to register a lien against his house and seize his Canadian and European passports, but to no avail. And then he was gone. His email to his ex-wife read:

“The result of the legal instrument which you recently designed and implemented
is that there is no possibility of a comfortable life or a (secure) retirement for me in
Canada at all. Therefore, I have left the country to seek greener pastures elsewhere
and will never return. Well done Einstein. Good luck and good bye.”

Ms. Mills is perilously close to financial, emotional, physical, and spiritual bankruptcy, but says she will not let her children down, despite the dire circumstances.

As for “Father of the Year”, his actions are despicable. His departure was fueled by a court order to pay spousal support, which he now uses to justify his decision to stop supporting his children. He has expressed hope that one day he can reconcile with his children, “but not in Canada, a morally bankrupt state”.

It is Hans Mills that is “morally bankrupt”.

Lawdiva aka Georgialee Lang

Ten Signs Your Divorce is “Off the Rails”

Don’t we all like to think that if divorce was in our future, our uncoupling would be civilized, respectful and rational. For many divorcing spouses it can be that way, particularly where there are no children and minimal assets, however, all the best intentions for an amicable parting can quickly dissipate once spouses abandon the high-road for the ditch.

If you are involved in a so-called “amicable divorce”, are there identifiable signs that signal your divorce may be meandering to the low-road? Of course, there are. Be aware of the following:

1. YOU HAVE A NEW PARTNER Often amicable divorces remain that way until a husband begins a serious relationship with a new lady. One of the easiest ways to have your divorce come “off the rails” is to flaunt a new paramour, before your wife is emotionally ready, which in some cases is never.

2. YOU DECIDE TO CLOSE THE CREDIT CARD ACCOUNTS It is not uncommon for husbands to maintain the financial status quo until they realize their separated spouses’ credit card spending is three times the pre-separation amount. Delicacy is required to rein in the spending, without ruining the convivial settlement discussions. A useful strategy is to terminate all major credit cards except one, which remains available to your spouse, albeit with a much lower credit facility. This can only be done with advance notice to your spouse.

3. YOU TAKE THE CHILDREN ON A VACATION WITH YOUR NEW “FRIEND” You have pleasant post-separation discussions and agree on summer vacation access with your kids, but fail to tell your wife you will be bringing along your 25-year-old girlfriend. Surprises are always dangerous. You are better off to advise your spouse in advance and find a compromise if she adamantly opposes the extra company. Perhaps the girlfriend only visits for a couple of nights or not at all?

4. YOUR WIFE FINDS YOUR PRE-SEPARATION CREDIT CARD STATEMENTS WITH JEWELLERY PURCHASES SHE KNOWS NOTHING ABOUT The divorce process always involves the exchange of financial information, including credit card statements. If your wife finds purchases from Tiffany’s or Birk’s, made before the separation and she is not the recipient, watch out. Still worse, are cancelled cheques on your joint account confirming you were paying your girlfriend’s rent before you and your spouse separated.

5. YOUR WIFE FINDS OUT YOU WERE SLEEPING WITH THE NANNY IN THE MARITAL BED The marriage is now over but your wife learns from reliable sources that you were sleeping with the children’s nanny during the marriage. This is a sure-fire way to generate anger and humiliation in your wife, something that usually gets in the way of future courteous communication.

6. YOUR WIFE LEARNS THAT THE “SMALL” MORTGAGE ON THE FAMILY HOME EATS UP OVER HALF OF THE HOME EQUITY Your secret financial dealings during the marriage are now exposed and your wife is shocked to learn that what she thought was a $100,000 mortgage on the family residence is actually $250,000 as a result of undisclosed stock investments made with borrowed monies. It’s even worse if the stock is now worth considerably less or nothing at all.

7. YOU ADVISE YOUR SPOUSE THAT YOU WILL NEVER GIVE UP CUSTODY OF THE FAMILY PET You think everything is settled and leave the conversation about Muffy and Fido to the end, only to realize that neither of you will give up the family pet. Yes, judges now also decide who gets custody of the cat and dog, where the parties cannot agree. This issue can be a deal-breaker.

8. YOU GRADUALLY CANCEL MANY OF YOUR ACCESS VISITS WITH YOUR CHILDREN You tell your spouse you want to remain an active, involved parent, but your weekly visits are now monthly visits and you have failed to show up for some of your visits, leaving your children crying and your ex seething.

9. YOUR SPOUSE MAKES IT DIFFICULT TO SEE THE CHILDREN Parenting time starts off well but disintegrates when your spouse realizes her financial expectations are unrealistically inflated and she now needs leverage to obtain a better financial outcome. What better pawn than the children?

10. YOU TELL YOUR STAY-AT-HOME SPOUSE YOU WILL QUIT YOUR JOB BEFORE YOU EVER PAY HER SPOUSAL SUPPORT You are usually a traditional husband who has no problem paying child support, but believes a 50-year-old wife who worked as a bank teller twenty years ago, should immediately find full-time employment because the children are all in school. What else is she going to do all day?

Negotiating a reasonable divorce settlement can be a minefield if a spouse is not aware of the dangerous trigger points that invite hostility, embarrassment or distrust. A strategic family law lawyer is one who can assist you to manoeuvre the settlement terrain without stepping on a divorce landmine.

Lawdiva aka Georgialee Lang

Should Abusive Spouses Receive Spousal Support?

In the aftermath of a California court ordering an abused wife to pay spousal support and court costs to her abusive husband, Democrat Assemblywoman Toni Atkins has introduced legislation that would eliminate entitlement to spousal support for abusive spouses.

Crystal Harris from San Diego was violently sexually abused by her husband who was imprisoned for his crimes against her. To her dismay and consternation, Ms. Harris was victimized a second time by a family court judge who ordered her to pay support and court costs to her abuser.

The Assemblywoman said “Victims of violent sex crimes already suffer physical trauma, fear and an assault on their privacy and dignity.” To make them pay alimony is “cruel and makes a mockery of the intent behind the laws…”

In the early 1900’s in Canada and Great Britain, women who committed adultery were not entitled to spousal support based on a system of fault. Today, spousal conduct does not come into play in decisions regarding alimony.

The California bill is supported by the San Diego District Attorney’s office and is receiving bilateral legislative support. This bill may signal a return to fault-based considerations in the area of spousal support.

Lawdiva aka Georgialee Lang

No Spousal Support Reform for Canadians

While alimony reform is on the march in the United States, I predict that Canadian law makers will not jump on the bandwagon. In fact, I believe Canadian spouses (read “women”) will hold their place as the “most likely to succeed” financially post-separation, particularly in relation to their foreign sisters.

Yes, it’s true that it hasn’t always been this way. In the early 1980’s a majority of the Supreme Court of Canada in Messier v. Delage held strong to the philosophy that the obligation of support between ex-spouses “should not continue indefinitely when the marriage bond is dissolved,” and decried the notion that “one spouse could continue to be a drag on the other indefinitely; acquire a lifetime pension as a result of the marriage; or luxuriate in idleness at the expense of the other.”

The support noose got even tighter in 1987 after a trio of cases made their way up to Canada’s highest court. In Pelech v. Pelech, Caron v. Caron and Richardson v. Richardson the Court determined that spouses who had signed agreements dealing with spousal support could not easily shake loose of them.

The test to challenge an agreement to obtain support, to increase support, or to extend support required the applicant spouse to show there had been a radical change in circumstances causally linked to the marriage.

The first part of the legal requirement, establishing that a change was radical, was relatively easy. If a wife agreed to take no support and later became fully disabled it was not difficult to characterize the change in her ability to work as radical.

More stringent, however, was the additional requirement that the radical change be attributable to the marriage. So, for example, if a wife signed a separation agreement that gave her no spousal support because she was fully self-supporting, and she later became disabled from an illness that did not manifest itself until after the divorce, her financial need could not be linked to her marriage.

For women who found themselves in this situation, their only hope was family support, welfare, or a second marriage. Meanwhile, the federal government overhauled the Divorce Act 1968 and replaced it with a new Divorce Act in 1985. The new model for support became an analysis of the economic advantages and disadvantages suffered by both spouses from the marriage or from the breakdown of the marriage. The stage was now set for a groundbreaking Supreme Court of Canada decision.

In 1992 the support pendulum swung hard in the opposite direction with a case that involved a spousal support payment of a mere $100.00 per month. In Moge v. Moge the Supreme Court of Canada introduced a new way of thinking about spousal support with a support rationale that was based on compensation to a spouse, instead of just a consideration of “means and needs”.

In this ground breaking decision the Court directed judges to explore the economic consequences of divorce with a greater focus on women’s work at home as mothers and wives and the aftermath of staying at home, while their husbands worked.

The Court recognized that women in this position typically had no job skills, limited opportunities for education, and no pensions, savings, or health benefits.

Fast forward to 2006 when the federal government introduced Canada’s Spousal Support Advisory Guidelines, a further move to a more generous system of spousal support. The Guidelines provided a scheme to ensure that supported spouses received support that was up to 43% of their partner’s gross income. They also set a formula to determine how long support would be paid.

The upshot was that spouses who were married for 20 years or more typically received indefinite support that could be reviewed or varied if there was a material change in circumstances. Spouses in marriages under 20 years would receive support equivalent to the length of their marriage, also subject to variation if the supporting spouse could show a material change in circumstances.

While this analysis is a simplification of the Guidelines, there could be no doubt that women benefitted and men were burdened with higher support payments paid for a greater length of time.

In recent cases in British Columbia, men seeking to decrease their support have only been mildly successful, while most obtain no relief at all.

Last month the Supreme Court of Canada reinforced their model of generosity in L.M.P.v. L.S. where they decided that spouses receiving support pursuant to an agreement were not necessarily bound by the terms of their agreement because recipient spouses may have been under intense emotional strain at the time they negotiated their agreements.

As a result of this decision husbands in Canada can now wave good-bye to well-established principles of certainty and finality when they settle support issues.

Hearkening back to my original point, the Canadian trend in spousal support in no way resembles the burgeoning alimony reform sweeping through the United States. In fact, Canada continues to move in a direction that will eventually financially cripple husbands, particularly those that pay both child support and spousal support.

Yes, we need alimony reform but we are unlikely to get it anytime soon.

Lawdiva aka Georgialee Lang

Warning to Men: Just When You Thought It Couldn’t Get Worse– New Alimony Law

You can’t quarrel with the fact that a stay-at-home mom, who has been married for 20 years, has three kids and has never worked, is a worthy recipient of spousal support. And, believe me…she needs it.

It took some time for Canadian men to accept that if they had income and their ex-wife did not, they were bound to pay some spousal support, even if their spouse left the marriage or worse even took up with another partner. Forty-years ago it was not too big a “hit”, as our Courts favored a “clean break” approach, meaning not much support, for not very long.

A few years later, as lawyers, legislators and judges encouraged and promoted support agreements, supported spouses who entered into separation agreements, but wanted or needed more support, had to prove their increased need was based on a “radical” change in their circumstances, causally related to the marriage. That too posed a challenge for women seeking support and carried on the pattern of low support orders for limited periods of time.

In the 1990’s the law changed rapidly and saw more women getting more support for longer periods of time, until 2006 when the federal government empowered law professors Carol Rogerson and Rollie Thompson to create “Spousal Support Advisory Guidelines”, which though never passed into law, were quickly adopted by all the Provinces.

This was real change. It became more difficult for a smooth-talking lawyer to convince a judge that the old rules still applied, namely that spousal support should be “short and not sweet”. The Guidelines provided schedules based on the payor’s income that introduced consistency in support awards across Canada and the new theme meant that men had to dig deeper and pay for a much longer period of time, even indefinitely.

Any hope of reprieve for long-time support payors was that when their financial circumstances changed due to illness, retirement or the vicissitudes of life, they could go back to court and apply for a reduction in spousal support, based on a “material change” in circumstances, theirs or their ex-spouse’s.

Yesterday, the Supreme Court of Canada gave short shrift to support payors’ “faint-hope”. What the majority of the Court said was because a separation “may result in dramatic life changes and emotional stress…these circumstances give rise to the possibility that the ability of separating spouses to realistically and objectively assess their current and future needs and preferences, can be impaired”.

In other words, don’t count on a separation agreement dealing with spousal support to be upheld in Canada. The Court held that the notion that separation agreements should be accorded “significant weight…is problematic”. Now they tell us?

Lawyers, who have been criticized for years, for “promoting” litigation, have just learned that Canada’s highest court eschews long-held contract principles of finality and certainty, comparing them to the condemned “clean break” approach of the 1970’s.

For what good it does, it must be noted that Chief Justice McLachlin and Justice Cromwell took a different view, holding that a support agreement plays a central role in the variation of a support order. They voiced puzzlement at the logic employed by the majority of the court, saying their approach is at odds with the “basic purpose of agreements, namely to apportion the risks of future uncertain events in order to achieve finality and certainty.”

What is certain is that while there is a new wave of American lawmakers restricting long-term alimony, Canada is on the opposite track. If this is the Court’s way of discouraging divorce, they may be on to something.

Lawdiva aka Georgialee Lang

Divorce and Double-Dipping

A common complaint from ex-spouses who are obliged to pay spousal support is that all too often, the supported spouse gets a double-dip, and I don’t mean an ice cream cone.

Double-dipping occurs when a payor spouse pays support based on his employment income, but also pays support on his investment, rental or capital gains income arising from assets that were divided between the spouses, or for which the supported spouse received compensation through the receipt of cash or the retention of the family home.

Let me give you an example. If a husband retains a rental property valued at $100,000 and an investment portfolio worth $200,000 and in return the wife receives the former matrimonial home with a basement suite, valued at $300,000, it seems unfair for her husband to include these additional income sources as income for the purpose of paying spousal support. Yes, he may earn income on his share of the family property, but the wife also has that option.

As well, consider that the wife’s home has a basement suite she declines to rent and therefore eliminates an additional source of income for herself.

On top of all that, keep in mind that for Canadians, the matrimonial home is a tax-free asset, while the husband’s rental property will attract capital gains tax as will the investment portfolio.

Do our courts care? Nope. But lawmakers in California are addressing this issue. Bill SB 481 has been tabled in California’s Senate with the goal of passing legislation that would give judges the discretion to consider the sources of income utilized for a support calculation to prevent unfair, blatant double-dipping.

Another common example of this practice is where a business is valued by capitalizing the business’ income stream and the wife is compensated for her interest, while the husband is ordered to pay support on that same income stream.

The treatment of this issue by North American courts is divergent to say the least. In Mississippi the courts have declared double-dipping a “glaring inequity” while in other jurisdictions there is passive tolerance with no apparent will to resolve the unfairness that can occur.

Of course, cynics will say that because double-dipping most frequently prejudices husbands, not wives, it will be a long time until our courts get around to fixing the problem.

California is on the right track with their double-dipping bill. Perhaps it will catch on in other jurisdictions. Let’s hope so. Fair means fair for everyone.

Lawdiva aka Georgialee Lang