BACKGROUND
The parties were married in 1993 and separated in 2015. They had two children, who were 19 and 20 years old at the time of separation. At the time of separation, the wife earned $118,516 per year, and the husband earned $423,748 per year.
At the time of the trial, the husband was 60 years old, and intended to retire at age 65, where he would earn between $105,775 and $115,209. This amount was expected to decline as the husband’s capital declined. The wife intended to retire at 67 years old and would earn approximately $6,878.26 per month.
At trial, the issues that remained included spousal support, child support, section 7 expenses, and the sale of the matrimonial home. The trial judge ordered retroactive child support to the wife and found the husband was entitled to reimbursements of section 7 expenses.
For the spousal support issue, the trial judge awarded the wife $2,500 a month until the husband retired from his current employment. Further, the trial judge accepted the husband’s proposal to transfer the matrimonial home to the wife as a form of payment with an interest-free mortgage.
The wife appealed the quantum and duration of the spousal support awarded by the trial judge.
ISSUES
- Did the trial judge err in awarding $2,500 per month in spousal support?
- Did the trial judge err in terminating spousal support when the husband retired?
ANALYSIS
- Did the trial judge err in awarding $2,500 per month in spousal support?
The court found that the wife financially benefited from receiving the $561,000 interest-free mortgage on the matrimonial home, potentially for the rest of her life. While the trial judge did not calculate the specific value of this benefit to the wife, it is undoubtedly significant, even if it runs only to the point when and if the wife no longer resides at the property full-time or sells it.
Considering that the wife received an interest-free mortgage of approximately $561,000 and was awarded $2,500 per month in spousal support, the court found the wife benefited as a whole. Essentially, the Ontario Court of Appeal ruled that the $2,500 per month award while the husband works must be viewed in combination with the value of the interest-free mortgage. This is especially true since the value of the interest-free loan will continue to accrue to the wife after the husband retires, at a time when the disparity between the parties’ incomes will be much smaller.
Further, although the wife sought additional spousal support, she did not make complete financial disclosure.
Thus, considering the benefit she received from the interest-free mortgage and lack of disclosure, the $2,500 quantum was appropriate in this case.
- Did the trial judge err in terminating spousal support when the husband retired?
The Court determined that the trial judge did not err in ordering spousal support to terminate when the husband retired. This is because the court found that despite the spousal support award ending, the wife will be able to continue benefiting from the interest-free mortgage.
However, the court altered the order by removing the reference to his employment ending with his current employer during the trial to allow for the possibility of him having another employer before he retires.
CONCLUSION
The Appeal was dismissed. The interest-free mortgage the wife received was a huge benefit and should be considered with the $2,500 per month for the quantum and duration of the spousal support received.