The obligation to pay spousal support can be a tough pill to swallow for some, and despite the legal requirements to pay it, some people take measures to avoid paying it. While there are valid reasons for spousal support to be reduced or terminated, trying to skirt the law is not a recommended tactic. Take for example the situation in a case recently heard by the Supreme Court of Nova Scotia.

A material change in circumstances?

The parties were married for 34 years before separating. The husband co-owned a pharmacy and a 2014 order required him to pay $5,000 per month in spousal support. However, he told the court that a number of events have led to a material change in circumstances. But whether the court agreed with him on any of those events is a different matter. Let’s look at them one-by-one.

CRA re-assessment

A 2017 CRA re-assessment of the husband left him with an income tax bill of $295,000. This was in addition to other debts of about $60,000 and a mortgage of $375,000 on the home he shared with his second wife. As a result of this he declared bankruptcy on May 1, 2017.

The husband’s bankruptcy documents said he would entitled to an automatic discharge on January 29, 2018. However, the husband said he didn’t know when he would be discharged, stating it would not be until he repaid all his money owing.
Additionally, the husband said he was paying his bankruptcy trustee $500 per month, when his bankruptcy documents say he was only obligated to pay $180 per month.

The court found that once his bankruptcy is discharged, he no longer has to pay back any money previously owed. As a result, it should not prevent him from paying spousal support. As a result, it was not found to be a material change in circumstances.

Retirement

The husband opened a pharmacy in 1984 with an ownership stake of 40%. He began receiving Canada Pension Plan payments in mid-2015 and sold his interest in the pharmacy later that year for $455,000.

He had kept the marital home following the divorce, and after the divorce he renovated it, replacing the flooring, windows, and roof. However, following his retirement, he tore down the home and used the money from the sale of the pharmacy to build two homes; one for his new family (his second wife and their three children) as well as his second wife’s parents.  

The court found that the husband could not have retired, lacking the means to do so. He saved none of the money from the sale of his business, and he took on additional responsibility by adopting the young children of his second wife. The court found no material change in circumstance here.

Separation from the second wife and financial obligations related to their three children

The husband also claimed that he could not pay spousal support due to the obligations he had for his second family. However, the court noted that he wasn’t with the second wife when he got divorced. Separating from the second wife is not a material change in circumstances, but rather a return to the previous situation.

The husband and the second wife have an agreement where neither has to pay spousal support, and they continue to share their home.

The court also found that there were no child support payments on the husbands tax documents, likely because he was paying it voluntarily. The court found that all of the husband’s money was deposited into the second wife’s bank account, an amount higher than he was obligated to provide.

Altogether, the court found that there was no material change in circumstances related to any of the husband’s claims. As a result, his obligations to pay $5,000 in spousal support remain unchanged.

Contact NULaw as soon as possible if you are contemplating a separation, or have already begun the process. We are dedicated to pursuing your interests and getting exceptional results. Let us focus on your rights and negotiate the best possible outcome for you while you focus on rebuilding and moving on. Contact us online or at 416-481-5604 to book a consultation.

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