The issue of voluntary retirement and health issues are a common theme in spousal support termination cases and Bendall v. Bendall 2019 ONSC 3588 is illustrative of this. The Bendall’s married in 1979, after cohabitating for almost a year, and separated in 1994, making theirs a 16-year relationship. In late 1997 Mrs. Bendall was awarded custody of the two children and received an order that her husband pay her $800.00 a month in spousal support, terms that were contained in minutes of settlement between the parties.
In 2000 Mr. Bendall applied for a divorce and sought to terminate spousal support. The divorce was granted, but the spousal support termination application was dismissed with a provision for a review of support in September 2005. After the parties’ son moved to his father’s home, Mr. Bendall brought an application in January 2002 to terminate child support for his son and spousal support for his ex-wife. Child support was terminated, but his spousal support application was dismissed.
Not one to give up easily, Mr. Bendall brought another application to terminate support in March 2003, but it was adjourned generally and never resurrected. The review that had been ordered to take place in 2005 was not pursued by either party, instead in November of 2008 Mr. Bendall brought an application to terminate spousal support effective the date of the ordered review, namely September 2005, and a cancellation of all support arrears back to September 2005.
In this 2008 application, Mr. Bendall deposed that he was earning $95,000 a year, was remarried to Susan, who earned $54,000 a year, and was supporting his second wife’s two children. We are not told the outcome of this application, but it appears that the support order remained in place until Mr. Bendall’s final termination application in 2019, which entailed a 2-day trial before Raikes J.
The 2019 application to terminate spousal support was based on Mr. Bendall’s retirement on January 1, 2018 at the age of 59, with pension income of $59,000 a year, and a net worth of $348,000, not including his pension. His former wife estimated her total 2018 income at $36,000, which included $2,000 a month in employment income, $800 a month in spousal support, and the balance, payments from various government programs. She inherited $120,000 in 2016 and purchased and renovated a house with her brother. Her net worth was $139,000. She had no pension.
At the date of separation Mr. Bendall was employed at a refinery in Sarnia, Ontario, a position he held until his 2018 retirement. He advised the court that his health had been compromised when he had a car accident in 1999, and over the ensuing years had received various treatments and nerve block injections. In 2014 he began receiving spinal facet injections and was diagnosed with severe spinal stenosis. His work duties had been restricted because of his physical limitations and near the end of his employment, he moved into training to avoid the rigours of operational work.
He also testified that he was being harassed at work by upper management and had appealed to his union to intervene and hired a lawyer as well. His work hours were reduced, but eventually he decided his best course of action was to retire. He had worked for 38 years and was eligible to retire at age 55 with a full pension.
His former wife, Arlene, had been a mother and homemaker for a time. Her employment history was at low-paying, menial jobs including working in retail as a cashier or clerk, and “pitching garbage” at a waste plant, until 2012 when she returned to school to obtain computer skills and registered in a two-year law clerk program at a local college.
She had suffered work-related injuries at the waste plant which affected her back and her hand and wrist and had been deemed 19% disabled. She also suffered from glaucoma and Meniere’s disease. At the time of trial, she was working for a lawyer 20 hours a week; filing, taking phone messages, banking, and other odd jobs.
The trial judge reviewed the applicable law, as follows:
“1. Parties cannot avoid support obligations by unilaterally deciding to leave the workforce, whether by retirement or otherwise: Cossette v. Cossette, [2015] O.J. No. 2073 (Div. Ct.) at para 13. See also Bullock v. Bullock, 2004 CanLII 16949 (ON SC), [2004] O.J. No. 909 (S.C.J.) at para 13 and the cases cited therein;
2. Evidence that a payor voluntarily retired or withdrew from the workforce in order to frustrate the payment of support is an important fact militating against a finding of material change. In that case, the court may impute income to the payor up to the amount he would have earned had he not retired or withdrawn: Hickey v. Princ, 2015 ONSC 5596 (Div. Ct) at para 59, citing Teeple v. Teeple, [1999] O.J. No. 3565 (C.A.);
3. The absence of evidence that the voluntary withdrawal from the workforce was for the purpose of reducing or avoiding the obligation to pay spousal support does not give rise to an automatic right to vary spousal support: Hickey v. Princ, supra, at para 60;
4. The court must still consider the payor’s ability to pay support, which includes a consideration of his capacity to earn income either from the job he chose to leave or from other employment having regard to his circumstances: Hickey v. Princ, supra, at paras 60 and 64;
5. Where the payor retires considerably earlier than expected and the recipient spouse has good reason to rely upon support being provided for several more years, the payor may well be expected to seek new employment opportunities: Dishman v. Dishman, 2010 ONSC 5239 at para 29;
6. Whether the payor considered the financial circumstances and impact on the recipient spouse is one of the factors which the court will consider on an application to vary spousal support: Roy v. Roy, [2015] O.J. No. 73 at para 40; Bullock v. Bullock, supra, at para 1;
7. The court should consider the motivation for retirement and whether it is reasonable in light of the ongoing spousal support obligations: Innes v. Innes, 2013 ONSC 2254 at para 30.
8. There is no general rule that paying spouses must work to age 65. Likewise, a retirement after the paying spouse becomes eligible to retire with a full pension does not automatically constitute a material change that guarantees a reduction or termination of spousal support payable.”
The trial judge made the following findings:
- Mr. Bendall’s retirement was voluntary as he was not forced to retire by his employer or for health reasons;
- His employer had a longstanding record of accommodating his work restrictions due to his physical problems;
- He had been working for 38 years and could have retired at age 55 with a full pension. He saw retirement as a well-earned choice;
- He did not retire to avoid or reduce his spousal support obligations.
Raikes J. considered Mrs. Bendall’s argument that her ex-husband’s 2018 income was almost the same as his 2000 income when the support order was pronounced, and that he had failed to keep her apprised of his increases in income over the years.
The court disagreed, saying that a dollar in 2000 is worth more than a dollar 18 years later, the income may be comparable, but the value is not. Raikes J. also noted that Mr. Bendall was not obliged by any order or the minutes of settlement to provide updated income disclosure. With respect to this argument, it is likely that Mr. Bendall did provide income disclosure for each of his multiple unsuccessful termination applications.
The court held that Mr. Bendall’s retirement was a material change in circumstances and that his reduced income and retirement date was unknown at the time of the 2000 support order. The support order was terminated effective the date of his retirement and any monies paid after that date were to be repaid to Mr. Bendall.
While this may seem like a harsh result, the court noted that the relationship had lasted 16 years, and the Spousal Support Guidelines provide for a duration of support for between 8 and 16 years, yet Mr. Bendall had supported his ex-wife for more than 20 years. The judge also found that Mrs. Bendall had 20 years to become economically independent and that her inability to become self-sufficient was not related to the marriage or its breakdown, but to physical ailments that occurred after the date of separation.
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