They were deducted from capital annually, not from income: court
In a spousal support dispute, the BC Court of Appeal affirmed that legitimately incurred bank carrying charges should not be deducted from income for support calculations.
In Riecker v. Parton, 2024 BCCA 114, Florian Riecker and Mary Parton separated after cohabiting since 1994. The case centred on the treatment of bank carrying charges deducted from investment income for tax purposes but contested in the calculation of spousal support.
The appeal was rooted in a technical issue regarding whether approximately $100,000 in carrying charges, which Riecker deducted from his 2021 investment income, should be added to his income when determining the interim support payable to Parton under the Spousal Support Advisory Guidelines.
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Throughout their relationship, Riecker and Parton maintained a cohabitation agreement outlining their financial contributions and responsibilities. However, Parton became financially dependent on Riecker following his Parkinson's Disease diagnosis, leading to disputes over support following their separation. Parton sought increased support while Riecker proposed payments within the advisory guidelines range, adjusting for specific deductions.
The chambers judge decided that the carrying charges, although legitimately incurred, should not be deducted in calculating available income for support purposes, reasoning that they were deducted from capital annually, not from income. This led to a determination of interim spousal support at $12,000 per month.
Riecker's appeal argued against including carrying charges in the income calculation for support purposes. However, the Court of Appeal upheld the discretionary nature of the lower court’s decision, emphasizing the challenges in distinguishing between expenses related to income production and those tied to capital appreciation in interim support scenarios.
The appellate court underscored its deference to trial judges in family law matters, particularly in interim orders where a detailed financial analysis is not feasible. The court also highlighted the importance of adequately justifying deductions from income in support calculations and the careful consideration required in disputes involving complex financial backgrounds.
