Variation of Spousal Support and a Requirement to Utilize One’s Assets
Boudreau v Boudreau, 2015 ONSC 7956
This case deals with a husband’s application to vary or terminate a spousal support order, and stands for the fact that support recipients have an obligation to use their own assets to earn income.
The parties were married in October 1974. They separated almost 30 years later in February 2004, and have no children.
At the time of their separation, the Respondent husband was 51 years old and the Applicant wife was 50 years old. At the time of the motion for support variation, the husband was 62, and the wife was 61.
In 2006, the parties resolved all of their corollary matters on consent: they agreed that the wife would retain her 50% share of the net proceeds of sale from the matrimonial home; they agreed that she would also receive 50% of the accrued value of the husband’s pension; and they agreed that the husband would pay non-compensatory (needs based) spousal support in the amount of $2,000/month.
Throughout the marriage and after separation, the husband has been employed by the federal government; his annual income in 2006 was approximately $72,000, and in 2015 was $90,500.
Over the years, the wife also worked outside the home; she held part-time and temporary full-time positions in the retail sales and administrative office support fields. She recently developed arthritis-related mobility issues and this has restricted her employability.
Health issues had also arisen for the husband, and this prompted his decision to retire in January 2016 (he had also reached the maximum 35 years of pensionable service). As a result of his retirement, his cash flow will be significantly reduced by $44,000 per year. The husband therefore brings a motion under section 17 of the Divorce Act, seeking to terminate or reduce his spousal support obligations.
Pursuant to section 17 of the Divorce Act, before a court varies a spousal support order, it must be satisfied that “a change in the condition, means, needs or other circumstances of either former spouse has occurred” since the making of the original order.
The court must further consider the paying spouse’s ability to pay (and in this case, the fact that the husband’s income will soon be diminished). The court must balance that consideration with the recipient spouse’s needs, the costs associated with their maintaining a decent lifestyle, and their own ability to contribute to such a lifestyle.
The court notes the Supreme Court of Canada’s decision in Boston v Boston, 2001 SCC 43, and accepts that although double recovery may be permitted in some cases, a recipient spouse should generally not be allowed to maintain capital whilst the payor spouse is forced to draw down on their pension in order to support both of them.
The court begins by finding that the husband’s pending retirement constitutes a material change in circumstances; that the fact that his income will be reduced by almost 55% warrants a variation of the spousal support order.
The court then finds that the wife was overly selective when it came to finding new or adequate employment, and failed to make reasonable efforts to become self-sufficient. The court acknowledges however that it was not as if she made no effort or mismanaged her resources. The court further recognizes an unfairness in the fact that the wife did not use her equalized assets in an income producing way; that she was able to let income from her husband’s pension accrue for her future (in a way that he was unable to benefit from).
Despite this, the court accepts that although the husband’s income would be diminished, he would still be more than capable of meeting his own needs and paying a modest amount of spousal support.
Having balanced the competing factors and interests, the court concludes that the husband should continue to pay spousal support, but that this support should be reduced significantly. The court orders that hereafter, the husband shall pay the wife spousal support in the amount of $1,000/month.