The Spousal Support Advisory Guidelines (also referred to as the “SSAGs”) were developed to bring more consistency and predictability to spousal support awards and help courts determine an appropriate amount of support that should be paid. Generally, support depends on both the recipient’s need and parties’ income and courts can review a range of factors in deciding whether or not to make an award for spousal support. Importantly, courts have confirmed that the SSAGs must be considered in the context of the parties’ case and cannot be looked at in isolation.
The Spousal Support Advisory Guidelines are an important tool, but there are still complexities in fixing an appropriate quantum of support. In Mason v. Mason, the trial judge looked at the SSAGs and found that the husband’s income of $400,000 produced a range for spousal support of $8,215 to $10,233 per month, and then set the support amount at the mid-range. The husband raised a number of issues on appeal, including whether the trial judge’s determination of spousal support should be revised.
The Executive Summary to the SSAGs explains that they were intended to bring greater certainty and predictability when determining spousal support awards. However, writing for the Ontario Court of Appeal, Justice Simmons acknowledged that the SSAGs are advisory rather than mandatory. In this case, the trial judge was not required to apply the SSAGs when determining the amount of support. At the original trial, the wife’s position was that the ranges set out by the SSAGs should be used to determine the amount the husband would pay. On appeal, Justice Simmons looked to the case of Fisher v. Fisher and the Court commented that they cannot be used as a formula that calculates a specific amount of support for a certain period of time. The Court also warned that the SSAGs “must be considered in context and applied in their entirety”.
Justice Simmons explained that the SSAGs “are income-based guidelines that require careful attention to the actual incomes, or the income earning capacities, of both spouses”. Consequently, the provisions for determining income need to be considered before looking at the ranges of support set out by the SSAGs.
In this case, the trial judge did use the SSAGs to calculate the amount of spousal support. However, he failed to use the SSAGs provisions for determining income or to explain why they were not applicable. The trial judge arrived at a figure of $400,000 as the combined salary and after-tax corporate profits the husband would have available. But he did not provide reasons for how he arrived at that figure. This departure from the SSAGs needed further explanation, and in these circumstances the trial judge’s findings about the husband’s income was unreasonable.
Nairne v. Nairne was a case that explained how a spousal support award can be viewed holistically within the financial circumstances between the parties, and further, how creative approaches can be used to resolve issues. In this case, the parties were married for 21 years and at the date of separation the husband was earning an annual income of $423,748, while the wife had an income of $118,516.
At trial, the judge awarded the wife with spousal support of $2,500 a month until the husband retired. During the original trial, the husband proposed to transfer the matrimonial home to allow the wife and their children to remain in the home and the wife accepted the proposal. The terms of this arrangement were that the matrimonial home would be transferred to the wife, with the husband’s 50% share of the equity forming an interest free mortgage to the wife until she died, sold the home, or no longer resided in it full time, at which point the mortgage would come due.
The judge found that the wife’s claim for needs based spousal support was “questionable after considering her income and expenses” and that she refused to provide financial documents. The judge also acknowledged that both parties were near to retirement and that afterwards their incomes would not be significantly different. The husband was 60 years old and intended to retire in five years. After retirement, his income was expected to range between $105,775 and $115,209 and would steadily decline as his capital declined. However, the wife appealed both the quantum and duration of spousal support. She argued that the trial judge failed to account for the fact that the husband’s income was significantly greater and also didn’t acknowledge the different contributions they made throughout the marriage in raising their children and maintaining the household.
On appeal, the Court noted that spousal support decisions are owed significant deference. Earlier cases had cautioned that “appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong”. The essence of the wife’s argument was that the support award was too low and that the trial judge was in error in terminating spousal support when the husband retired from his current employment.
When reviewing the quantum of spousal support, Justice Favreau wrote that the award of $2500 “cannot be looked at in isolation”. It was necessary to consider the financial benefit that the wife would receive from the interest-free mortgage on the matrimonial home which had the potential to benefit her for the rest of her life. This amounted to a mortgage of approximately $561,000, and although the trial judge did not calculate a specific value to that benefit, the Court of Appeal had no doubt that it was significant. As Justice Favreau noted, the value of that loan would continue to accrue after the husband retired and when “the disparity between the parties’ incomes will be much smaller”.
While the mortgage was a benefit, it did not provide the wife with additional finances. However, when looking at the totality of the payments, there was no error in the way the trial judge awarded support. The award was found to be consistent with the purposes of a spousal support order set out in section 33(8) of the Family Law Act. The trial judge found the wife was entitled to retroactive spousal support at the mid-range of support set out in the SSAGs and had some entitlement until the husband’s retirement. Therefore, there was no basis to interfere with that award.
Spousal support awards may not always align with the ranges suggested by the SSAGs. Instead, courts may look at the financial award as a whole and weigh the benefits a party is receiving. Parties can also negotiate creative solutions to financial issues that can align with their own interests, and courts can take these arrangements into consideration.
Spousal support can be a contentious issue in divorce proceedings, and courts will consider several factors before making an order. At NULaw, our trusted team of family lawyers work closely with each client to understand their circumstances and needs. We will conduct a thorough assessment of your situation and advise you on your options in order to move forward, allowing you to make informed decisions every step of the way. We ensure that your rights remain protected so that you can continue to live comfortably as your circumstances change. To discuss your family law matters with a member of our team, contact us online or call us at 416-481-5604.