A snapshot of cases from coast to coast tells the tale: when it comes to spousal support, the courts are all over the map for those in which the payor’s income exceeds $350,000. And so, some family law lawyers say it’s time for the Supreme Court of Canada to dust off the Brownie camera and develop that final picture. Toronto family law lawyer Will Abbott is one who thinks the scattered approach needs settling. “The Supreme Court doesn’t hear family law cases very often, but this is a situation where one should go.”
Support in this country has been an evolutionary process: first, the federal government’s child support guidelines became law. Then, Carol Rogerson and Rollie Thompson created the spousal support advisory guidelines; the key words being “advisory guidelines” as they were not law. Then, in 2008, Fisher v. Fisher said barring exceptional circumstances courts should follow the guidelines, and now it’s an uphill battle to go against them. But again, notice the key words: “exceptional circumstances.”
The guidelines give a range of low, medium, or high support an individual pays, but one of the exceptions is if the payor makes more than $350,000 a year. Abbott, a partner at MacDonald & Partners LLP, says: “There are very few cases on this across Canada, and what we’re seeing is a great divergence on how the courts handle it in the West as opposed to Ontario and the East.”
“In British Columbia it appears that judges, regardless if the spouse’s income is above $350,000, tend to rely heavily on the SSAGs,” says Shelly Kalra, an associate at MacDonald & Partners. “They do a cross-check with the partner who is receiving the spousal support, they look at their budget and their needs, and the means of the partner who’s paying, but all in all, the West Coast judges follow the guidelines and typically award the mid-range.”
Then, there’s Ontario: “Some judges rely upon the guidelines, while other judges pretty much say automatically as soon as someone’s income is over $350,000 the SSAGs do not apply. It is really quite different, it is fact-specific, it depends on how long the parties have been married and whether or not they have children,” says Kalra.
Before the child support guidelines, the Parras formula was the way to go, says Abbott, adding that some Ontario judges are suggesting use of the same sort of formula for spousal support. “So the support recipient puts together a budget, and quite often the payor will want to examine on that budget, there are cross-examinations, and then there is an argument on an interim motion and then on a final basis. . . . Obviously these people have money to litigate and there’s a lot at stake.”
Abbott adds that in Alberta, it’s much the same story as B.C. But again, in Ontario, “cases are all over the place.” In the 2009 Denofrio v. Denofrio decision in Ontario, Justice Maria Linhares de Sousa found that applying the SSAG on the interim motion on the husband’s income of above $350,000 would not be fair, just, or reasonable because the award would amount to a division of property and monies which had yet to be decided on its merits. In the same province, the same year, Justice Cory Gilmore in Korkola v. Korkola found that the husband’s income for support purposes was $540,000. In awarding spousal support the judge found it appropriate to award the wife 50 per cent of the parties’ net disposable income.
Ontario judges are demanding budgets, especially on the temporary orders when it involves a case of more than $350,000, says Kalra. But Abbott notes that “anybody can make a budget to fit within the guidelines, so that’s why you get a lot more people examining under oath what these people have put in their budgets.”
He adds however, that in the cases of more than $350,000, it’s “critical” for the recipient to add a budget to the Form 13.1 financial statement. “You’ll see some people even include cottage rental and winter vacations. That may seem excessive to the majority of Canadians, but if you’ve been living to a standard of $350,000-plus a year, it’s reasonable.”
Abbott says he thinks the cost of living in Toronto versus if a judge were sitting in Kitchener or Thunder Bay may account for some of the differences in Ontario-based decisions. And the incidence of wealth transfers also plays a role.
Meanwhile, an interesting wrinkle is starting to develop: lawyers are increasingly unaware of the final outcome of these cases because many are settling or going to arbitration. Abbott says he told one of his clients who earns $720,000, “I don’t know what’s going to be decided at court and so we settled because he’d rather have a sure thing. I think you’re going to see a lot of them settling or hiring private arbitration so the decision never gets reported; nobody knows how they’ve been decided.”
In fact, Abbott is a fan of this growing trend toward mediation and arbitration. “Why would you want all of your dirty laundry in a courtroom where you’re at the mercy of a judge and at the court’s scheduling time? The individuals can hire a very senior lawyer who specializes in family law, they can do it at a time that’s convenient — even on the weekend — and it’s all private.”
When Abbott meets new clients, there are two top questions: “How much am I going to pay and for how long am I going to have to pay?”
The answer, he says, “varies on who the judge is, so, I think what would be useful is if there were a formula as to how to pay support. While the courts have been able to figure it out in terms of under $350,000, it’s looking more and more like it’s going to have to go to the Supreme Court to get settled because we can’t give our clients definitive answers.”
Support in this country has been an evolutionary process: first, the federal government’s child support guidelines became law. Then, Carol Rogerson and Rollie Thompson created the spousal support advisory guidelines; the key words being “advisory guidelines” as they were not law. Then, in 2008, Fisher v. Fisher said barring exceptional circumstances courts should follow the guidelines, and now it’s an uphill battle to go against them. But again, notice the key words: “exceptional circumstances.”
The guidelines give a range of low, medium, or high support an individual pays, but one of the exceptions is if the payor makes more than $350,000 a year. Abbott, a partner at MacDonald & Partners LLP, says: “There are very few cases on this across Canada, and what we’re seeing is a great divergence on how the courts handle it in the West as opposed to Ontario and the East.”
“In British Columbia it appears that judges, regardless if the spouse’s income is above $350,000, tend to rely heavily on the SSAGs,” says Shelly Kalra, an associate at MacDonald & Partners. “They do a cross-check with the partner who is receiving the spousal support, they look at their budget and their needs, and the means of the partner who’s paying, but all in all, the West Coast judges follow the guidelines and typically award the mid-range.”
Then, there’s Ontario: “Some judges rely upon the guidelines, while other judges pretty much say automatically as soon as someone’s income is over $350,000 the SSAGs do not apply. It is really quite different, it is fact-specific, it depends on how long the parties have been married and whether or not they have children,” says Kalra.
Before the child support guidelines, the Parras formula was the way to go, says Abbott, adding that some Ontario judges are suggesting use of the same sort of formula for spousal support. “So the support recipient puts together a budget, and quite often the payor will want to examine on that budget, there are cross-examinations, and then there is an argument on an interim motion and then on a final basis. . . . Obviously these people have money to litigate and there’s a lot at stake.”
Abbott adds that in Alberta, it’s much the same story as B.C. But again, in Ontario, “cases are all over the place.” In the 2009 Denofrio v. Denofrio decision in Ontario, Justice Maria Linhares de Sousa found that applying the SSAG on the interim motion on the husband’s income of above $350,000 would not be fair, just, or reasonable because the award would amount to a division of property and monies which had yet to be decided on its merits. In the same province, the same year, Justice Cory Gilmore in Korkola v. Korkola found that the husband’s income for support purposes was $540,000. In awarding spousal support the judge found it appropriate to award the wife 50 per cent of the parties’ net disposable income.
Ontario judges are demanding budgets, especially on the temporary orders when it involves a case of more than $350,000, says Kalra. But Abbott notes that “anybody can make a budget to fit within the guidelines, so that’s why you get a lot more people examining under oath what these people have put in their budgets.”
He adds however, that in the cases of more than $350,000, it’s “critical” for the recipient to add a budget to the Form 13.1 financial statement. “You’ll see some people even include cottage rental and winter vacations. That may seem excessive to the majority of Canadians, but if you’ve been living to a standard of $350,000-plus a year, it’s reasonable.”
Abbott says he thinks the cost of living in Toronto versus if a judge were sitting in Kitchener or Thunder Bay may account for some of the differences in Ontario-based decisions. And the incidence of wealth transfers also plays a role.
Meanwhile, an interesting wrinkle is starting to develop: lawyers are increasingly unaware of the final outcome of these cases because many are settling or going to arbitration. Abbott says he told one of his clients who earns $720,000, “I don’t know what’s going to be decided at court and so we settled because he’d rather have a sure thing. I think you’re going to see a lot of them settling or hiring private arbitration so the decision never gets reported; nobody knows how they’ve been decided.”
In fact, Abbott is a fan of this growing trend toward mediation and arbitration. “Why would you want all of your dirty laundry in a courtroom where you’re at the mercy of a judge and at the court’s scheduling time? The individuals can hire a very senior lawyer who specializes in family law, they can do it at a time that’s convenient — even on the weekend — and it’s all private.”
When Abbott meets new clients, there are two top questions: “How much am I going to pay and for how long am I going to have to pay?”
The answer, he says, “varies on who the judge is, so, I think what would be useful is if there were a formula as to how to pay support. While the courts have been able to figure it out in terms of under $350,000, it’s looking more and more like it’s going to have to go to the Supreme Court to get settled because we can’t give our clients definitive answers.”
