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Spousal Support Variation - SSAG

By: Philip Epstein

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Gray v. Gray, 2014 CarswellOnt 13066 (Ont. C.A.):

This is another spousal support case on a variation application by the Ontario Court of Appeal. This case is to be contrasted with Lalonde v. Lalonde, 2014 CarswellOnt 11921 (Ont. S.C.J.), and demonstrates a different approach to the Spousal Support Advisory Guidelines on a variation.

The parties were married in 1980 and had four children. They separated after 14 or 16 years depending on whose version one has accepted.

The husband is now remarried and lives in the United States and has an income of about $175,000 per year.
The wife on the other hand has not worked out of the home since she had a heart attack in December 1994. She also has leukemia and is on long term CPP disability benefits with an income of about $33,500 per year. She lives in the former matrimonial home which has a small equity and virtually little else.

The final order for divorce provided for support in the amount of $800 per month and the trial judge noted that the quantum of support was less than required by the husband because the trial judge found that the needs of the children took precedence.

Ultimately the child support was terminated by way of a court order. When the child support order was terminated, the motions court judge increased spousal support on an interim basis to $3,000 per month.

At trial, the trial judge found that the child support order should have been eliminated earlier and that the husband had overpaid in child support by at least $75,000. That was not disputed. The motions judge, however, rejected the wife's request for spousal support on a compensatory basis, but found that she was entitled to spousal support on a needs basis. The motion judge found that the wife's current income was a small fraction of what the marital standard of living was prior to separation and that her current income was a small fraction of the husband's income. He found that her need for spousal support was no greater today than it was in 1998, and with the recent increase in her benefits and the children no longer being at home, it was arguable that her need was somewhat less. He thus ordered that the $800 per month in spousal support, as indexed, be continued.

The Court of Appeal framed the issue as whether "The spousal support ordered by the motion judge was adequate in light of the law as applied to the facts".

Of course, the Court of Appeal reiterated that they should not overturn a support order unless it discloses an error in principle, or a significant misapprehension of the evidence, or the award is clearly wrong. See Hickey v. Hickey, 46 R.F.L. (4th) 1 (S.C.C.), at para. 11.

The Court of Appeal found that the spousal support of $800 per month was clearly wrong and that they were in a position to arrive at an appropriate result without the need to order a new trial. (See Cassidy v. McNeil, 2010 CarswellOnt 1637 (Ont. C.A.)).

The Court of Appeal found that the motion judge was correct in that the wife was entitled to spousal support on a needs basis, but that the trial judge's determination of her actual need was wrong in fact and in principle. The Court of Appeal noted:

One of the objectives of the Divorce Act is to relieve economic hardship. Need is not measured solely to ensure a subsistence, but rather should be assessed through the lens of viewing marriage as an economic partnership. As stated by this court in Marinangeli v. Marinangeli (2003), 66 O.R. (3d) 40 at para. 74, in determining need, courts ought to be guided in part by the principle that the spouse receiving support is entitled to maintain the standard of living to which she was accustomed at the time cohabitation ceased. The analysis must consider the recipient's ability to support herself, in light of her income and reasonable expenses.

In the case before us, Ms. Gray's health prevents her from working. This is relevant to the assessment of her needs. As stated by the Supreme Court in Bracklow v. Bracklow, [1999] 1 S.C.R. 420, "in some circumstances the law may require that a healthy party continue to support a disabled party, absent contractual or compensatory entitlement. Justice and consideration of fairness may demand no less." (at para. 48).

The Court of Appeal noted that the spousal support ordered in 1998 was not based on the wife's actual need because it gave precedence, as it should have, to the child support. Accordingly, measuring her present need against the original $800 a month was an error in principle.

Most importantly the Court of Appeal disagreed with the motion judge's conclusion that the wife was not entitled to spousal support on a compensatory basis. The Court of Appeal found that the motion judge failed to offer any analysis of the economic consequences of the marriage or its breakdown as the Supreme Court of Canada required in Moge v. Moge, 43 R.F.L. (3d) 345 (S.C.C.). As the Court of Appeal noted:

The purpose of compensatory support is to share the economic advantages and disadvantages that accrued because of the marriage and its subsequent breakdown. In Moge v. Moge, at p. 861, para. 70, the Supreme Court explained the principle behind the compensatory model of support as follows:

Today, though more and more women are working outside the home, such employment continues to play a secondary role and sacrifices continue to be made for the sake of domestic considerations. These sacrifices often impair the ability of the partner who makes them (usually the wife) to maximize her earning potential because she may tend to forego educational and career advancement opportunities. These same sacrifices may also enhance the earning potential of the other spouse (usually the husband) who, because his wife is tending to such matters, is free to pursue economic goals.

I note that if these principles are applied to Lalonde, above, these two judgments cannot stand together.

The Court of Appeal then turned to the SSAG. They noted:

The SSAG are neither legislated, nor binding. However they are a useful tool with which to measure the quantum and duration of spousal support. The motion judge referred to the SSAG but did not advert to them when the set the amount of spousal support. He seemed to see his task as setting the SSAG numbers for the next review of spousal support, but not the review that he was engaged in.

This court commented in Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, at para. 96 that the SSAG only apply to initial support applications, and not to variation proceedings. Fisher was not a variation proceeding that entailed consideration of s. 15.3 of the Divorce Act. At the time of Fisher the final publication of the SSAG had not been released. The July 2008 SSAG publication contemplates that the guidelines have a role to play on variation. The SSAG expressly comment that it should be possible for either spouse to apply to cross over from the "with child support" formula to the "without child support" formula, to affect the amount of spousal support ordered.

The approach taken by Cohen J. in Abernathy v. Peacock, 2012 ONCJ 145, [2012] O.J. No. 1203 is appropriate in the current case. As in Abernathy, Ms. Gray is entitled to support on a need and compensatory basis. The 1998 support order was deliberately lower than it ought to have been in recognition of her receipt of child support, as permitted by s. 15.3 of the Divorce Act. In such circumstances, the SSAG offer a valuable tool in assessing a reasonable amount of spousal support, and should be routinely consulted. The motion judge erred in failing to do so.

In some cases, there are complicating factors that must be considered before a court applies the SSAG wholesale. Complicating factors that courts ought to consider include variations based on the post-separation income increase of the payor, or situations with second families. In such cases, the court must conduct an analysis of the facts of the specific case to assess whether the SSAG ranges are appropriate.

This is, I think, a very accurate statement of the Guidelines and what the Guidelines intended with respect to variation applications. The suggestion that the Guidelines are of no assistance at all in variation applications and that they do not apply to them is simply wrong, and this binding decision of the Court of Appeal for Ontario should not now make that abundantly clear. In the end, spousal support was set at the lower end of the SSAG range and on an indefinite basis.
The Court of Appeal said this about the durational limits:

For a 16 year marriage, with the incomes of these parties, the SSAG suggest report for a duration of 8 to 16 years from the date of separation, subject to variation and possibly review. The motion judge declined to terminate spousal support, and instead granted an indefinite award, subject to review. He noted that Ms. Gray continued to need support, based on her income and precarious health. I agree in this instance, that support ought to be indefinite, until a review occurs as a result of a material change in circumstances.

This section of the judgment is not a careful analysis of the SSAG durational limits and readers are reminded that SSAG are a package. That is, the quantum and duration go together and one should not be separated from the other. However, there is the exception here of illness or disability and in those circumstances there is a logical and reasonable argument for not imposing a time period. This does not mean that the support will go on forever, but rather until there is a material change in circumstances. That will likely be the husband's retirement. Accordingly, the Court of Appeal made the order indefinite until there was a material change in circumstance.

There is a slightly troubling sentence as part of that order. Justice Lauwers says "I agree in this instance, that support ought to be indefinite, until a review occurs as a result of a material change in circumstance." Respectfully it is dangerous to use the word review when discussing a material change of circumstance. If there is a material change of circumstance and the threshold is met, under Willick v. Willick, 6 R.F.L. (4th) 161 (S.C.C.), then the court will adjust the support to take into account the material change that has occurred. See Droit de la famille - 091889, 6 R.F.L. (7th) 1 (S.C.C.) [LMP]. A review and material change are two distinctly different animals and must not be confused.

Justice Lauwers notes in any event, that in light of Bracklow v. Bracklow, 44 R.F.L. (4th) 1 (S.C.C.), the wife's ill health results in extending the duration of spousal support beyond the timeframe suggested by the SSAG. Although he notes that since the wife has only had an increase as of recently, she may not ultimately get spousal support for a longer period than is suggested by the SSAG.

The Court of Appeal struck out the motion judge's order for a review of spousal support regardless of whether there had been a change of circumstances. The Court of Appeal saw no basis upon which to adopt the review approach and left it to either party to seek a variation if there was a material change of circumstances.

This is an important decision of the Court of Appeal about the Guidelines and about compensatory support and should, in large part, end the debate about the role of the SSAG in variation proceedings.

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