When couples separate one of the first legal issues to consider is whether one spouse should pay the other interim spousal support. Interim spousal support is support intended to ensure that the lower income, or non-income earning spouse has sufficient income to support her or himself until matters are finalized, either though settlement or at trial.
In an unusual case out of Ontario, Bridge v. Laurence, 2017 ONSC 7417, Mr. Laurence presented his separated spouse with a cheque for $1 million dollars, after their 30-year marriage ended.
The parties had been in mediation and he asserted that he and his wife had concluded an agreement whereby she would receive 49.9% of the shares of his very successful company, which included 18% of shares she already owned. He then declared a dividend in her favour of $1 million dollars. He would also receive a similar dividend. Earlier the parties had each received nearly $1 million dollars in the division of other family property. On this basis he concluded that his wife would not require interim support as she would have sufficient funds to support herself.
Ms. Bridge initially advised the mediator that she agreed “generally” to her husband’s proposal, but shortly thereafter changed her mind, after she consulted her lawyer. She sent the cheque back to her husband and said that since she only owned 18% of the company, she was entitled to a dividend of $360,000 and no more, since she was not willing to give up spousal support.
Mr. Laurence, however, refused to provide her with a cheque for $360,000 leading to a stalemate that required court intervention.
The Court was not amused by either husband or wife, mildly scolding them for failing to collaborate to ensure efficient and cost-effective litigation, with consequential “litigation gridlock”. Mr. Laurence was also criticized for filing material “without limit”, demanding irrelevant disclosure from his wife, and “stubbornly refusing” to reciprocate in the disclosure department. In a final shot, the Court noted that Ms. Bridge had refused payment, but foolishly expended over $200,000 on legal fees:
“The parties seem determined to pay their lawyers to fight about almost every aspect of issues that should have been resolvable well before now.”
Ms. Bridge earned a law degree but had retrained and worked as a school teacher earning $111,000 per year. In the two preceding years her husband’s company earned $1 million dollars in annual income. The Court held that:
“Need is relative. Interim spousal support is intended to preserve the accustomed lifestyle of the support recipient pending the trial. Both parties live frugally despite their wealth. As a consequence, the evidence does not show that the applicant has accumulated significant debt since separation. Nor has she been required to significantly liquidate her assets. On the other hand, during the same period, the respondent has continued to accumulate wealth.”
Ultimately, the Court ordered Mr. Laurence to pay a dividend of $360,000 to his wife and to pay himself a $1 million dollar dividend, if he so chose. The remaining dividend of $640,000 would be held in escrow pending the trial or settlement of the family dispute. In addition, Ms. Bridge would receive $300,000 in lump sum interim spousal support, payable in 90 days, an amount easily payable by Mr. Laurence from his dividend cheque or other funds.
Ms. Bridge’s claim for $12,544 a month in interim spousal support and $350,891.00 in retroactive support was dismissed.
This is yet another case where money, energy, and time is wasted which could be better spent working with a tax specialist/accountant to craft a division of corporate property beneficial to both parties, accompanied by a determination of the income status of each party after the pie is divided. Only then can there be a proper analysis of the need or not, for spousal support.
Lawdiva aka Georgialee Lang