Many aspects of the process require resolution when a couple goes through separation or divorce. These include child support, spousal support, division of property, and more. For people who are high-income earners or have significant assets, these issues can be fairly complex.
In a recent decision by the Court of Appeal of Ontario, a couple who had separated and gone through the process to determine spousal support and the fate of the matrimonial home, the court took some time to discuss the importance of looking at how this wide range of issues is resolved in a holistic manner rather than focusing on one specific area, such as the matrimonial home.
Accountants split and have assets divided
The parties involved in the matter were married for 21 years. They had two children while they were married and separated in 2015. The parties were both accountants, and at the time of the separation, the wife made an annual income of $118,516, while the husband’s income was $423,748.
Following the separation, the trial judge determined that the wife was entitled to spousal support for $2,500 per month until the husband retired. The judge also made an order based on a proposal by the husband that the wife would receive title to the matrimonial home. Rather than paying the husband his share of the home’s equity, the husband’s portion of the home would be an interest-free mortgage to the wife that was not payable until she died, sold the home, or decided to move out of it. Essentially this meant the wife did not have to take equity out of the home to give to the husband.
The wife appealed the trial judge’s decision, arguing that the judge did not consider the significance of the gap in the parties’ incomes or the contributions she made throughout their marriage, including taking on much of the responsibility of looking after their children.
At the time of the original trial, the husband was 60 years old and was intending to retire in five years. The trial judge found that his income upon retirement would be between $105,000-$115,000 and would decline along with his capital. The wife’s income was not as high as the husband’s, and she intended to retire at 67 (which would have occurred in 2022). She anticipated her monthly income during her retirement would be about $6,878.26.
The wife had originally sought spousal support and child support, but the trial judge only ordered spousal support. The children were adults by that point, and while they would have been eligible to receive child support if they were enrolled in post-secondary education, there was no evidence that they had done so. However, the judge did order retroactive child support for $103.368 (they had separated seven years earlier). This amount was reduced by about 30% after the judge concluded the wife was responsible for paying the husband for section 7 expenses.
Regarding spousal support, the wife asked for a total of $849,250 retroactively and $13,438 going forward. The husband’s position was to pay a lump sum of $238,329 retroactively, followed by spousal support payments at the lower end of the spectrum going forward.
When the trial judge turned to spousal support, the trial judge rejected the wife’s claim that she should be compensated via spousal support for her role in being the primary caregiver for their children, stating,
“Based on the Applicant’s (the wife’s) evidence, which was accepted by the Respondent (the husband), I find that the Applicant worked full-time through their marriage except for two periods of maternity leave that lasted six months. The children were in daycare from the age of six months. The parties employed a housekeeper for most of their marriage. The parties equally shared the responsibility of dropping off and picking up the children. Generally, the Respondent father dropped off the children in the morning and the Applicant mother picked up the children in the afternoon. If the Applicant had to work late, then they would switch roles. The Applicant was primarily responsible for taking the children to their activities. She states that the Respondent did “some” cooking, gardening, and repairs around the home. Starting in 2010, the Respondent worked long hours and weekends. The parties became disengaged, as the Respondent shopped and cooked for himself.
The Applicant’s closing submission that she was the primary parent during the marriage is not supported by the evidence. Further, when asked in cross-examination, what sacrifices she made during the marriage, the Applicant did not respond to the question, but instead described how she had reduced her household expenses after their separation.”
As we wrote earlier, the trial judge ultimately awarded the wife $2,500 monthly in spousal support, scheduled to last until the husband retired. The judge also accepted the proposal the husband made (and the wife accepted) for the matrimonial home. The trial judge wrote that the home’s value was about $1.8 million, and that the equity in it was far more than the $239,329 the trial judge calculated the wife to have been owed for retroactive spousal support.
The Court of Appeal asks whether it should overturn the trial judge’s support order
The court began its analysis by stating that the starting point in any spousal support decision was established by the Supreme Court of Canada in 1998. It stated that “appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is wrong.”
In turning to the issues raised in the appeal, the court found the wife’s primary submission was that the judge’s setting of spousal support at $2,500 monthly was too low and failed to account for the role she played at home with their children. She suggested $15,000-$20,000 per month would be more appropriate.
The court found that the quantum of the award could not be looked at in isolation, pointing out that the trial judge acknowledged the value the wife was receiving in the interest-free mortgage as per the details concerning the matrimonial home, which she could benefit from for the rest of her life. The court wrote that after accounting for retroactive child and spousal support, the value of the mortgage was about $561,000, which would only grow as the wife worked towards retirement. The court found that this brings the parties’ income gap to a small amount.
This led the court to conclude that the trial judge made no reversible errors and that while his approach may have been narrow, it was not cause for being overturned.
Howie Johnson Barristers & Solicitors In Windsor Can Help You With Your High-Asset Divorce
You need personal support and attention to detail when going through a high-asset divorce. We have over 25 years of experience handling divorce issues for clients with significant and complex assets at Howie Johnson Barristers & Solicitors in Windsor. To speak with an experienced Windsor family lawyer about high-asset divorce issues, call 519.973.1500, or contact us online.