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Court Orders Dying Husband to Pay Wife $1 Million in Future Support

Court Orders Dying Husband to Pay Wife $1 Million in Future Support

Those who feel they are paying too much spousal support to their ex-spouses may take comfort from a recent Ontario decision where – in what may be the largest award of its kind – a Toronto millionaire with terminal cancer has been ordered to pay his ex-wife a lump sum of more than $1 million for future spousal support.

In Pollitt v. Pollitt, the parties came to court with many issues left unresolved between them, including the calculation of retroactive child support, how to deal with non-recurring income and pre-tax corporate income under the Child Support Guidelines, and how to deal with child support obligations for a university-age child who was independently wealthy. (In fact, when it rendered its decision the court had to issue its 192-page judgment in two separate parts.)

Among the key remaining issues was whether the wife was entitled to future (or “prospective”) spousal support, and if so, on what basis such support should be calculated.

The husband, aged 69, was an engineer, the controlling shareholder of a stock brokerage, and a successful speculator. He had been diagnosed with cancer in 1999, so his future health was uncertain, but he had already outlived doctors’ predictions as to his lifespan. His net worth was originally about $20 million, but he had begun to divest and give large sums to his many children (including three from a previous marriage) and to his new partner and her child. In light of his cancer diagnosis, it was clear that he had more than enough assets and income to satisfy his needs for however long he continued to live. On this point, the court said:

[280] Mr. Pollitt continues to have an uncertain future due to his health. It is not unreasonable for him to be worried about having sufficient funds set aside to meet whatever increased costs he may have associated with his care needs. At the same time, his willingness to give away much of his wealth to his children and his new partner and her daughter leaves me to conclude that he was comfortable with what remained for him and he should have, as part of his considerations, thought of this outstanding claim and his obligations.

The wife, on the other hand, had more than $2 million in savings and lived in a $1 million mortgage-free home. Still, she asked for lump-sum support for the future, and argued that it should be calculated to be the equivalent of her receiving $15,000 per month, which was the amount the husband had already been paying in accord with a interim court order issued in July of 2010. In her submission to the court, the wife had based her calculations and request for lump-sum support on this $15,000 figure only, and – as the court noted – had ignored the court’s advice by not instructing her actuary to take into account any of several factors it had drawn to her attention in an earlier order.

The husband had also not been forthcoming with his financial information, so the court struggled to determine his true income. For example, and despite his claiming that he had earned only $300,000 or $400,000 per year, the court noted that the husband had actually earned $1.8 million in 2008 alone as a result of commodity trading. The court was therefore forced to speculate because the husband’s financial information was chequered with inconsistencies and omissions.

After assessing the facts and weighing all the legal factors, the court ultimately decided that a lump-sum award to the wife would be appropriate. In the past, the parties had both expressed a desire to avoid further litigation between them and (eventually) their respective estates. In earlier negotiations the husband had expressed a desire to ensure that his children were financially secure and that his “the appropriate support for [his wife] will continue for her lifetime.” Moreover, the court concluded that the fairest way to deal with future contingencies was to refer to the parties’ own original separation agreement, with some adjustments. That agreement had allotted the wife almost $8,000 per month and – using that figure to calculate a lump sum going-forward – the wife would be entitled to more than $1 million for future support. The court made an order accordingly.

For the full-text of the decision, see: Pollitt v. Pollitt, 2011 CanLII 9356 (ON S.C.) http://bit.ly/ipdNIF

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