Nov 23, 2010

When Enough is Enough

Duration of spousal support for mid-term marriages

In the first sentence of the Executive Summary that accompanied the Spousal Support Advisory Guidelines (SSAGs), the authors write that the SSAGs are intended to bring more certainty and predictability to the determination of spousal support. At some level, they have accomplished this goal. Certainly, if done correctly the determination of the quantum of spousal support has been made easier by the SSAGs and the accompanying software. However, the issue of the duration of support continues to be a vexing issue in most cases, and it remains an issue that can lead to wide swings in opinions and negotiations. This paper offers a specific opinion on the question of duration of spousal support for marriages / cohabitations in the mid range of years. The opinion is that for mid-term marriages, time limited support should be considered. This is especially so in marriages where there are no children or when the support is based on the needs of the recipient and not primarily on a compensatory model. The duration in those cases should be within the range suggested by the SSAGs of between one half to one year for each year of marriage.

The authors suggest that variations in the duration of spousal for short term marriages (less than 7 years ) and long term marriages ( above 13 years ) are much narrower and the issue therefore much easier to resolve. For example, in the vast majority of long term marriages the only dispute is going to be when, if ever, there will be a review of spousal support. In those cases, more often than not, spousal support will be of indefinite duration. In short term marriages, the strict application of the limits under the SSAGs will be the starting point for the negotiations and generally because the relative differential is small, settlement can be achieved. The more difficult cases are those of the mid range variety, where the factors that give rise to the duration question are complex and interwoven.

A review of recent cases both at the trial level and the appellate level do not shed a great deal of light on this discreet issue. The Ontario Court of Appeal, in a landmark statement of the obvious, recently stated that determining the duration of a spousal support order is a difficult issue . What we know as practitioners is that there are few hard-and-fast rules to rely on in calculating the duration of spousal support payable in the medium-term marriages. As a result, in the many cases dealing with spousal support, the court does not offer much assistance in its analysis of duration, focusing instead on the determination of the proper quantum.

Duration under the spousal support advisory guidelines

Duration under the spousal support advisory guidelines

Although it is tempting for a practitioner’s analysis of support duration in all marriages, but specifically those of the mid range, to begin and end with the ranges suggested by the SSAGs, the Ontario Court of Appeal has warned otherwise. Practical experience has also demonstrated that those models fail in as many cases as those in which they succeed. In Fisher v. Fisher, Lang J.A. cautioned that the SSAGs cannot be used as a software tool or formula that calculates a specific amount of support for a set period of time. They must be considered in context and applied in their entirety, including the specific consideration of any applicable variables… . In other words, it is incumbent upon the practitioner to consider a number of factors in calculating the duration of spousal support. In many circumstances the ranges set out in the SSAGs will be exceeded by the consideration of other critical factors. Conversely in other cases, the ranges set out by the SSAGs will properly balance the various objectives within the legislation and counsel should not be afraid to apply the SSAG ranges, regardless of whom they act for.

Legislative objectives and nature of entitlement

The objectives of a spousal support order as set out in section 15.2 of the Divorce Act are as follows:

The objectives of a spousal support order as set out in section 15.2 of the Divorce Act are as follows:

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

The Supreme Court of Canada has stated repeatedly that no single one of these objectives predominates and instead, the 4 objectives need to be balanced within the context of the circumstances of each particular case. It is the authors’ submission that in medium term marriages, and provided that the support is not strictly compensatory in nature, the promotion of economic self sufficiency within a reasonable period of time, is elevated in importance over the other stated objectives. Once this takes place the determination of the duration of support should be within the ranges set out in the SSAGs. There is, in this regard, a direct correlation between the nature of support, meaning whether it is compensatory or needs based as well as the relative weight to be given to the promotion of self sufficiency. Support which is awarded on a compensatory basis does not meet the objective of promoting self-sufficiency. Compensatory support serves the other stated objectives of the Act. Support that is primarily compensatory in nature has the effect of extending the duration of spousal support. On the other hand, where support is non-compensatory and entitlement is largely based on means and needs, the goal of promoting or assisting a spouse’s self-sufficiency should be elevated to prominence and support in those cases should be time limited.

The Ontario Court of Appeal seemed to break new ground in Fisher v. Fisher. The court determined that after a 19 year marriage, where the income gap between the parties was averaged to be about $55,000 the term of spousal support was fixed at 7 years from the date of separation. The amount of support was front end loaded, such that for the initial 3.5 year term the amount was greater than half of the income differential and stepped down for the latter half of the term. The fact that there were no children and the parties were in their 40’s cannot be overlooked. The case does not give any specific insight into the determination of the duration of support. The term totalling 7 years is not specifically explained. Rather, Justice Lang states that the award cushions the appellant wife’s drop in standard of living caused by the marriage breakdown.

One can draw an inference from this case, that being that the duration and amount of spousal support worked in concert to promote the economic self sufficiency of the wife. Justice Lang stated that self-sufficiency is a relative concept, linked to the ability to support a reasonable standard of living and to be assessed in relation to the economic partnership, or economic merger, enjoyed during the marriage . One can conclude that the court’s view was that relative economic self sufficiency for the wife would be successfully promoted by the time limited award of support. The goal of the award was not to make the wife self sufficient, nor to make the parties equal, but rather to create a platform within which the wife could achieve this goal.

Self-sufficiency has been defined as achieving a reasonable standard of living, having regard to the lifestyle sustained during the marriage . It is considered to be an attainable goal especially in short-term marriages where a lower income spouse has not become entrenched in a particular lifestyle or compromised career aspirations . In practical terms, the goal of promoting self-sufficiency of a recipient spouse is achievable within a reasonable period of time, and accordingly there will usually be strict limits on the duration of spousal support in short-term marriages. The same analysis, the authors submit, ought to hold true for the medium term marriages, where the merger of lifestyles can be ameliorated through a time limited support order.

While time limited support remains a viable, if underused, option, there are other recent examples where courts have combined time limited support with either a review or some other process on the back end. In Holmes v. Holmes the wife was awarded 3 years of spousal support with a review after a 19 year marriage . When the matter eventually returned to court, Justice Nolan found that because the basis for support was compensatory, it would be inappropriate to make a further review order. Instead, the support was ordered to continue for another 5 years until the specific termination date of December, 2010. In Elcich v. Olecka, the parties had been married for 14 years and the husband paid 12 years of blended child support/spousal support . Justice Tucker found that the wife’s support entitlement was compensatory in nature and ordered payment for another 2 years, following which support would terminate. Although the wife’s need would still exist when the support terminated, the compensatory element would be satisfied and the additional two years of support would provide her with time to plan for the future. In Waddle v. Waddle the parties had been married for 20 years . The husband commenced paying the wife support in 2001. The support entitlement was compensatory in nature and as such, was ordered to continue with a termination date set for 2016. After 15 years of support, the compensatory obligation would be satisfied.

Another way to solve the strict time limited scenario is to order a step down in the amount of support. In Klimm v. Klimm, compensatory support was awarded to a 43 year old wife after a 19 year marriage . The court found that although the husband supported the wife indirectly for 7 years following separation, the wife made no efforts to increase her income. Support in the amount of $1,800 per month was ordered for 2 years, then reduced to $900 for a remaining 2 years, after which time it would terminate. In Jiwaji and Jiwaji, a 50 year old wife made no effort to obtain employment after separation . The husband paid support for 6 years, which was almost the same length of time the parties were together. In light of the self-sufficiency objective, Justice Wood ordered support to continue for 2 years at the mid-range level of the SSAGs, followed by a reduction for 2 more years to the lower level. Either party would be able to seek a review as of right without demonstrating a material change in circumstances. In Balazsy v. Balazsy, a detailed 5 year stepped down support order was made on behalf of a wife who was lauded by the judge by her efforts to become economically self-sufficient but who was still entitled to compensatory support . The husband had already paid support for 5 years and was ordered to pay for an additional 5 years by way of a step down order. The amount payable was to reduce $100 per month each year for 5 years, after which time support would terminate.

A further alternative to strict time limits are review orders. Review orders are to be made when there is genuine and material uncertainly at the time of trial. Ratajczak v. Ratajczak was found to be an appropriate case for a review order where a former stay-at-home wife was retraining to become a nurse after a 14 year marriage . Even though the parties shared custody of the children, the court ordered full child and spousal support for 1 year to compensate and enable the wife to complete her re-training and find a job. It was anticipated that at the time for the review, the wife would be earning a reasonable income and it would be appropriate to revisit both child support and spousal support, with a view to reducing them. Petit v. Petit was also an appropriate case for a review order, according to Justice Planata. In this case, the parties separated after a 14 year relationship and the children lived with the husband. The wife intended at the a one year employment contract to upgrade and better her employability. The court found this to be reasonable, found that this was an appropriate case to deviate from the suggested range of the SSAGs and awarded 5 years of non-compensatory support to the wife, subject to a review de novo as to the issues of ongoing entitlement and quantum.

In the authors’ opinion, review orders are too often the result of the caution of counsel and the desire to engage a settlement at first instance. Regardless of the language of the review, meaning whether it is hearing de novo, or not, the fact is that it is a deferral of today’s problem to a later date. If acting for the payor, there is little utility in the review as they may envision that the review and a termination are the same thing. Acting for the recipient, it is another opportunity to carve out an additional sum of support, regardless of what transpires during the term of the support.

There remains a significant group of cases in the mid-term of duration, where the appropriate solution is indefinite support. In Steele v. Steele, a stay-at-home wife who had received 6 years of support following a 12 year marriage was awarded indefinite support . The court acknowledged that under the SSAGs, the wife was entitled to a maximum duration of 13 years but that it was not bound to order this.

In Smith v. Smith the parties were married for 10 years and had no children . The wife had physical and mental health issues which entitled her to needs based, non-compensatory support. Although the SSAG duration was between 5-10 years, the court found that the wife’s needs far exceeded this and ordered ongoing support, without a review or termination date.

Conclusion

The question of when is enough enough can be answered by saying enough spousal support has been paid when the payments to date have met the objectives of the Divorce Act. It should be specifically added that support should end when the payments have achieved the goal of promoting economic self sufficiency. In mid-term marriages, self sufficiency is achievable and time limited support is the appropriate vehicle to achieve that goal. This may mean that the support amount is at the high end of the scale for the term in which it is paid. It may also mean that the term is at the long end as suggested by the SSAGs or some combination of both. It may need a creative approach with differing amounts in different periods which is also suggested by the SSAGs. Counsel should not be afraid of these arrangements or of taking creative approaches. They are finding favour in the courts, both at the trial and appellate level.

By: Herschel Fogelman and Audrey Shecter Basman Smith LLP

Photography by Leland Francisco

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