Court Clarifies Purpose of Temporary Spousal Support
An Ontario court recently confirmed that the purpose of temporary spousal support is to “maintain as much as possible the parties’ pre-separation lifestyle pending trial” and not to “rebuild the recipients asset base” or “pay for the costs of imprudent purchases”.
The parties separated in August 2017 after a 17-year marriage (and 24 total years together). They have three children, two of whom are independent and the last of which is 17 years old and living with the father.
Both parties worked outside of the home during the marriage. However, at the time of separation, the wife had recently lost her job and received a settlement of $20,000. The father was a successful business owner and private mortgage lender. He acknowledged, during the legal proceedings, that his corporations had substantial retained earning of approximately $3 million, and an after-tax net income of over $610,000.
Following the separation, the mother received advance equalization payments of $160,000, and spousal support in the amount of $5,000 per month (based on an income of $250,000).
The Mother’s Request for Additional Support
The mother was seeking additional payment, namely spousal support between $21,104 and $28,138 (based on the range of support payable for a payor earning more than $718,000 and a payee earning just over $43,000).
The Father’s Response
In response, the father argued that the mother’s motion was premature and should be dismissed or adjourned until after all financial reports are prepared outlining the value of his business and his actual income.
He also contended that the $5,000 he was “voluntarily paying” was more than sufficient to meet the mother’s monthly expenses, and that the amount she was seeking would vastly exceed not only her present monthly expenses, but would be 4x the amount that the parties had spend monthly prior to their separation.
Justice Ellies noted that the mother was seeking temporary support based on the Spousal Support Guidelines (SSAG’s), but pointed out that the SSAG’s were not mandatory, and further noted that the SSAG’s were not an appropriate way to quantify spousal support for three reasons:
- The father’s income for support purposes was not yet known. This would otherwise be the starting point for an SSAG analysis. A number of factors could affect this income, including dividends and whether personal expenses were paid through the corporation.
- Once the father’s income for support purposes is determined, the SSAG may not be a useful guide. Once a payor spouse’s income exceeds $350,000 the SSAG formula’s no longer operate.
- Using the SSAG’s would result in a spousal support award that would provide the mother with a radically different lifestyle than the one enjoyed by the parties when they lived together.
The Goal of Temporary Support
Justice Ellies went on to say that:
The goal of a temporary support order is to maintain as much as possible the parties’ pre-separation lifestyle pending trial [emphasis added].
With respect to the mother’s post-separation lifestyle, Justice Ellies noted:
Since separation, the [mother] has purchased a $455,000 waterfront home and spent $11,000 furnishing it. By trading in her previous vehicle and with help from the [father], she is driving a 2016 luxury car. She even bought herself a $19,500 Donzi boat and trailer. Thus, the [mother] is now living roughly the same lifestyle that she had before separation.
The [mother] complains that she had to cash in RRSPs to purchase some of these things, but the goal of a temporary spousal support award is not to rebuild the recipients asset base. Nor is it to pay for the costs of imprudent purchases. The [mother] also complains that she had to borrow funds for the purchase of her house at exorbitant interest rates that are costing her more monthly than they should. But this is entirely the [mother’s] fault. She purchased the home while the parties were still attempting to negotiate a resolution of their family issues. When that failed, she had to look to a mortgage broker to be able to close the deal. In any event, the [mother’s] present needs of $5,800 per month include her mortgage payments [emphasis added].
Justice Ellies ultimately concluded that in order for the mother to maintain her pre-separation lifestyle, her temporary support payments should be closer to the $5,800 she had been spending monthly prior to separation. He adjusted this amount to account for tax implications and awarded her $8,500 per month.
If you have questions about separation or divorce, or related matters including spousal support or division of assets (particularly in a high net worth divorce), contact Windsor family lawyer Jason P. Howie. With more than 25 years of experience guiding husbands and wives through the stress and strain of separation, divorce, support and custody, Jason understands your frustrations and fears. He has seen all of the possible permutations when it comes to separation and divorce. Call 519.973.1500 or contact us online. Many of our clients are referred to us by former and current clients, as well as by lawyers, accountants and other professionals.