Variation of a Life-Time Spousal Support Agreement
Spousal Support Modification as Income Changes
Background: The parties separated after being married for 17 years and entered into a settlement that was incorporated into a court order under the Divorce Act. The divorce judgment required the husband to pay spousal support in the amount of $4,000.00 per month "until the wife dies". The husband was a dentist earning an income between $250,000 and $300,000 at the time of the settlement.
As his retirement approached, the husband notified the wife that he would eventually seek spousal support termination. Once he was retired, his income dropped to about $65,000 per year, plus approximately $27,000 of investment income. When the parties were both 73 years old, the husband brought a motion to vary the spousal support amount. The motion judge reduced the spousal support from $4,000 to a $1,000/month and found there were two material changes in circumstances:
- the wife's failure to seek employment since the separation
- the significant drop in income by the husband on his retirement
The husband was 72 at the time of retirement and the motion judge did not find he took early retirement to avoid a support obligation.
The court of appeal disagreed with the motion judge that the wife's failure to seek employment constituted a change in circumstances.
The divorce judgment set out that support was payable for life. The court commented that the wife was entitled to rely on the divorce judgment, and the respondent had waited too long to raise the issue of the wife’s employment. Now in her seventies, she was precluded from finding gainful employment to become financially independent.
The court of appeal supported the motion court judge’s finding that the husband's significant drop in income constituted a material change of circumstances and entitled the husband to a variation of his spousal support obligation.
The court of appeal disagreed with the motion court's analysis of the support issue because they found that the motion court judge did not take the original divorce judgment into account in determining the appropriate variation. In their view, the motion court judge should have used the original support order and varied it only to the extent required by the change.
Keeping the original divorce order in mind, the court of appeal reduced the spousal support set out in the original order in proportion to the respondent's decreased income, using the SSAG as a guide. They noted that the original support order constituted 2/3 of the low end of the SSAG and, accordingly, they used the same formula, but based upon the husband's current income.
The court ultimately ordered that the husband pay $850.00/month for life in spousal support.
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