WHAT HAP­PENS WHEN YOUR EX WON’T WORK?

Judges have tools to de­cide if sup­port should end, Lau­rie H. Pawlitza says.

Edmonton Journal - - FINANCIAL POST - Fi­nan­cial Post Lau­rie H. Pawlitza is a se­nior part­ner in the fam­ily law group at Torkin Manes LLP in Toronto. lpawl­itza@tork­in­manes.com

A per­sis­tent ir­ri­tant for spouses obliged to pay spousal sup­port is the re­cip­i­ent spouse who re­fuses to work.

For the many pay­ors who con­tinue to work hard as they age, the thought of a for­mer spouse re­ceiv­ing sup­port for the priv­i­lege of not work­ing makes them see red.

When de­cid­ing en­ti­tle­ment, amount and du­ra­tion of spousal sup­port pay­ments, the Di­vorce Act re­quires judges to con­sider four ob­jec­tives: the ad­van­tages or dis­ad­van­tages aris­ing from the mar­riage or its break­down; the ap­por­tion­ment be­tween spouses of the fi­nan­cial con­se­quences aris­ing from car­ing for a child, over and above child sup­port; the re­lief of eco­nomic hard­ship aris­ing from mar­riage break­down; and in so far as is prac­ti­ca­ble, the pro­mo­tion of the eco­nomic self­suf­fi­ciency of each spouse within a rea­son­able pe­riod of time.

Most pay­ors want des­per­ately to be­lieve that the Di­vorce Act ob­jec­tive of self suf­fi­ciency re­quires the re­cip­i­ent to go out and get a job im­me­di­ately, so that in a few years, the re­cip­i­ent will be weaned from de­pen­dence on spousal sup­port and the payor’s obli­ga­tion will end for­ever. Anx­ious pay­ors should know, how­ever, that this is not the case.

The Supreme Court of Canada long ago con­firmed that no one of the four ob­jec­tives of the Act are paramount.

So what does that mean for sep­a­rat­ing spouses?

In a short re­la­tion­ship with­out chil­dren, it is likely that spousal sup­port will be “tran­si­tional,” that is, it will be struc­tured to al­low the lower in­come spouse to the new eco­nomic re­al­ity of be­ing self-suf­fi­cient. Any sup­port payable is likely to ter­mi­nate within a short time.

For long mar­riages (of 20 years or more) where spouses sep­a­rate in their 50s, it is un­usual for a court to ex­pect that the re­cip­i­ent will achieve self-suf­fi­ciency un­less the re­cip­i­ent has been out of the work­force for only a brief pe­riod, and there is lit­tle in­come dis­par­ity be­tween the spouses. Of­ten, spousal sup­port is in­def­i­nite, and is looked at only on the re­tire­ment of the payor.

Where the sep­a­ra­tion has oc­curred when the spouses are in their mid-40s with chil­dren, and one spouse was pri­mar­ily re­spon­si­ble for house­hold man­age­ment and child­care, it is also un­likely that the court will order that spousal sup­port ter­mi­nate at a par­tic­u­lar fu­ture date. In­stead, (de­spite the Supreme Court of Canada’s cau­tion to the con­trary), spousal sup­port is of­ten re­viewed three or five years af­ter the fi­nal agree­ment is reached or af­ter a trial. A com­mon rea­son for a re­view is to al­low the re­cip­i­ent spouse to re­train and get back into the work­force, be­fore de­cid­ing sup­port on a long-term ba­sis.

What hap­pens, then, when re­cip­i­ent spouses refuse to re­turn to work, work at some­thing non-re­mu­ner­a­tive, make bad in­vest­ments, spend be­yond their means or start busi­nesses which fail?

How do courts as­sess what type of order should be made which would pro­mote self-suf­fi­ciency “in so far as prac­ti­ca­ble?” And what are “rea­son­able ef­forts?”

There are few tools avail­able to a judge who is faced with a spouse who has failed to em­brace the ob­jec­tive of self-suf­fi­ciency.

In lim­ited cir­cum­stances, on a re­view, judges will con­sider ter­mi­nat­ing spousal sup­port, if not im­me­di­ately then af­ter a cer­tain num­ber of years. Jus­tice McDer­mot in the 2016 case of Morrow v Finch called this op­tion a “kick in the pants to make a claimant spouse go out and get a job.” In de­cid­ing what order would pro­mote self-suf­fi­ciency, McDer­mot found that that the wife ought to have “seen the writ­ing on the wall sooner” when she per­sisted in a horse-breed­ing busi­ness that was clearly fail­ing.

In Ye­ung v. Silva, the B.C. Supreme Court held in 2016 that spouses must make “pru­dent fi­nan­cial de­ci­sions.” In Ye­ung, while the wife said she had been “ac­tively search­ing for full-time em­ploy­ment,” the court found that there was a “dearth of re­li­able ev­i­dence” about this. In fact, the wife wanted to be fully avail­able to drive the par­ties’ 16-yearold son to and from his ac­tiv­i­ties. The Court in Ye­ung de­cided to “step down” the wife’s sup­port in three stages, with sup­port ter­mi­nat­ing four years af­ter the order was made.

One of the few re­main­ing tools avail­able to judges to pro­mote self suf­fi­ciency is to im­pute in­come to the re­cip­i­ent spouse, if the re­cip­i­ent spouse is found to be “in­ten­tion­ally un­der­em­ployed or un­em­ployed.” While the au­thor­ity to im­pute in­come is found un­der the Child Sup­port Guide­lines and is usu­ally ap­plied to pay­ors, judges rely on this pro­vi­sion when re­cip­i­ents ap­pear to be al­ler­gic to work.

To im­pute in­come to a re­cip­i­ent spouse, the payor must pro­vide some ev­i­dence of what the re­cip­i­ent spouse could rea­son­ably earn. The judge’s anal­y­sis then takes into ac­count the re­cip­i­ent ‘s age, ed­u­ca­tion, ex­pe­ri­ence, skills, and health, as well as the avail­abil­ity of em­ploy­ment op­por­tu­ni­ties.

Pay­ors who think that their spousal sup­port obli­ga­tion ends when their spouse fi­nally “gets a job” should also pro­ceed with cau­tion. In a mid-to-long tra­di­tional mar­riage, even if the re­cip­i­ent spouse has em­ploy­ment, it will rarely re­sult in a ter­mi­na­tion of spousal sup­port.

GETTY IMAGES/IS­TOCK­PHOTO

The self-suf­fi­ciency of a re­cip­i­ent spouse may not mean the end of spousal sup­port in cer­tain di­vorce cases.

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