MacDonald-Hills v Hills (2021), 55 R.F.L. (8th) 46 (Ont. SCJ)
Retirement changes the financial circumstances of many people. But what happens to a person’s support obligations if a person chooses to take an early retirement?
This case surrounded a husband’s request on a motion to change to discontinue child support for his 3 adult children and to terminate spousal support. In the wife’s Response, she requested that the current order for spousal support be increased and claimed she was entitled to arrears in child support and spousal support dating back to 2021.
The parties were married in 1992, separated in March 2007, and were divorced as of June 2011. The three children were all over 18 years of age at the time the motion was brought. In 2009, the parties entered into Minutes of Settlement which dealt with child support, spousal support and property division. The Minutes were incorporated into a final order which also provided that the husband’s pension income would not be included in any future calculation of his income. The order provided that the husband would pay the wife $1,275 per month in child support and $750 per month in spousal support. In 2009, Peter applied to vary the order and in 2011 the court lowered the husband’s spousal support obligation to $904 per month and stated that there would be no order as to retroactivity or adjustments to spousal support.
The husband had been a registered nurse in a mental health unit for 29 years. The stresses associated with the job caused personal and mental health issues for the husband at which point his doctor recommended that he retire early to address his health. The husband notified the wife of this decision in April 2021 with an expected early retirement date of July 2021. The wife agreed that during the marriage the husband had intended to retire when he was 55 years old. At the time of this motion to change, the husband was 56 years old. The husband argued that that upon his retirement, spousal support should terminate. The wife disagreed, arguing that she had not been able to work since 1996 as a result of a stroke and other physical health issues and her condition was worsening. Since 1996, and continuing up to the date of this motion the wife was receiving monthly CPP disability benefits and other government programs as her only source of income.
Referencing the ages of the children, who were all over the age of majority when this motion was heard, Justice Sproat found that the husband had been entitled to stop paying child support. Further, Justice Sproat accepted that the parties had discussed the husband’s intention to retire at 55 and the wife always understood that this was possible.
Justice Sproat relied on the 2013 decision in Smith v Smith for the following propositions; a person who meets the pension criteria for an unreduced pension is not taking an “early retirement”; 65 is no longer the presumptive retirement date, the decision to retire when an individual is entitled to an unreduced pension is a foreseeable event that should have been expected and the fact that the parties had discussed the payor’s intention to retire when they qualified for a pull pension is relevant.
Justice Sproat believed that the wife was attempting to resile from the Minutes of Settlement. Relying on the 2008 decision is Liberale v Spadafora, the court said that when parties who are represented by counsel enter into Minutes of Settlement, it is presumed that the parties weighed the strengths and risks of entering into the Minutes. Furthermore, the court in Liberale confirmed that it is only when a party was coerced, a victim of a fraud, or a victim of a mistake known to the opposing party that those minutes of settlement can be set aside.
Justice Sproat did not agree that any of those situations above to the instant case and that the wife fully understood, at the time of signing the minutes, that the husband may retire at age 55 which could result in his spousal support obligation ending. The court emphasized the importance in abiding by minutes of settlement unless one of the situations above applied.
Relying on the Minutes executed by the parties, the husband’s deteriorating physical and mental health and the fact that he had already been paying spousal support for over 14 years when the parties were only married for 14.5 years, Justice Sproat did not find it appropriate to impute any employment income to the husband. As such, Justice Sproat reduced the husband’s spousal support obligation to $1 per month after a transition period of $375 a month step down support for 2 years. The only provision the court put on this order is that the husband had a duty to advise the wife if he received any income or self-employment income before he turns 65 years old. The court in this case deeply considered both the husband’s health and the fact that the wife knew that this was a possibility when she entered into minutes of settlement in ultimately deciding to lower his support obligations.
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