When going through a divorce or separation, courts may make orders for temporary spousal or child support. The intent of these orders to allow the parties involved to maintain, as much as possible, their lifestyle pending trial. In a recent case before the Ontario Superior Court of Justice, the court was asked to determine whether a wife’s request for a dramatic increase in temporary spousal support should be granted.
Income at the time of separation
The couple separated in August 2017 after being married for 17 years, but together for 24. They had three children while together, with the youngest being 17 years old. She was living with the father at the time of the trial.
Both the wife and husband worked outside of the home throughout their relationship. The wife has a degree in mental health and addiction counseling and is also a registered travel agent. She lost her job at the time of the separation and received a $20,000 settlement as a result. She had been working for six months after that, but was fired in February 2018. She was not employed at the time of the trial, but conceded she was capable of earning as much as $43,109 per year.
The husband had a successful career as the owner of a number of Service Ontario outlets while also working as a private mortgage lender. While his 2017 tax returns showed an income of $108,063, he also owned two corporations which showed a combined after-tax net income of $610,000. The father acknowledged the companies had retained earnings of about $3 million.
A request for increased spousal support
Leading up to the trial the husband made advanced equalization payments totaling $160,000. He also made other payments, but the amounts of them were disputed at trial. He was also paying spousal support at the rate of $5,000 per month.
The wife’s application was a request for an increase in temporary spousal support. While her monthly expenses were reported to be approximately $5,800, she argued that she should receive support based on the Spousal Support Advisory Guidelines (the “SSAGs”). Her exact request was for payments between $21,104 and $28,138, which is the range of support payable for a payor earning $718,426 per year and a recipient earning $43,109.
Meanwhile, the husband argued that such an order would be premature. The couple had agreed to have an income report completed in order to determine his actual income as well as the value of the businesses. He claimed that $5,000 per month is more than enough to meet the wife’s needs, and that the amount she was asking for was about four times the amount they lived on prior to their separation.
The court’s analysis
The court was reluctant to rely on the SSAGs – which are not mandatory – for a number of reasons. The first was that the husband’s income was not yet known. A proper calculation of the husband’s income from his corporations, which was received through dividends, was not known at the time. Additionally, both the husband and wife admitted to paying some personal expenses through the corporations. Secondly, the SSAGs do not apply to payor’s with over $350,000 in annual income. Finally, if the amount being requested by the wife was granted, she would be put in a position where her post-separation lifestyle would be “radically different” than the one she enjoyed while married.
The amount of money the family lived on was in dispute. The husband claimed they averaged to spend about $6,000 monthly. The wife said that in addition to whatever personal income they spent every month, they both spent about $6,000 per month on credit cards in addition to purchasing good, gas, and alcohol on company credit cards.
The court determined that whatever the amount they lived on was, it was far short of what the wife was seeking. The couple was found to have spent less than what they made each month, though they did have a valuable home, new cars, and no debt.
It was stressed that the point of temporary support orders are to help a couple maintain their lifestyles pending trial. The court added, “the goal of a temporary spousal support award is not to rebuild the recipient’s asset base. Nor is it to pay for the costs of imprudent purchases.”
The court ultimately awarded the wife temporary spousal support in the amount of $8,500 per month.
Windsor family lawyer Jason P. Howie helps clients with any range of family law issues, including separation and divorce including issues around the division of assets, high net worth divorce. Jason P. Howie has over 25 years of helping clients through the stress and strain of a relationship ending, and is proud to state that most clients come by way of referral from former and current clients, as well as by lawyers, accountants and other professionals. Please call us at 519.973.1500 or reach us online to see how we can help you today.