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Court Shows Sensitivity To Husband’s Economic Downturn

Court Shows Sensitivity To Husband’s Economic Downturn

In an Ontario Court decision released just a few days ago, the Court demonstrated considerable understanding and sympathy to a husband who was experiencing a temporary setback in his employment situation, which affected his ability to make spousal support payments to his soon-to-be ex-wife.

In this case, the parties had been married for 33 years when they decided to separate in March 2011.  Since that time, the husband had been making voluntary support payments to the wife in the amount of about $3,000 per month, which had been confirmed in a consent order filed with the court.

However, in March of 2012, the husband had received a layoff notice from his $100,000-per-year job, indicating that he would be terminated in 35 months.  He decided to immediately accept a small severance package rather than wait for the 35 months to elapse.    

This gave rise to a disagreement by the parties as to how much support the husband should pay in these changed circumstances.   In fact, as of July 1, 2012, the husband took it upon himself to unilaterally reduce the amount of support he paid, to which the wife naturally voiced her objection.  

The wife claimed that the support levels initially agreed to should remain unchanged even in light of the husband’s job loss, because even with several previous job changes he had enjoyed fairly uniform levels of income in the past.   Moreover, she doubted his present sincerity in seeking similar employment, and pointed to the fact that he currently enjoyed a comfortable lifestyle with a home that he bought using funds that had been loaned to him by family members.  At the least, she said, his attributed income should be set at something in the $150,000 range, but certainly no less than about $70,000.

Meanwhile, the husband conceded that had managed to obtain employment in his field, but indicated that it was entirely commission-based, and that he would need time to develop his client base.  He claimed that in about 12 months’ time his income would still only be at about a $50,000-per-year level.

Against this background – and after commenting that there were no issues of credibility or bad faith conduct on the party of either spouse – the court commented that for this couple there was “vastly less income actually flowing than either was accustomed to during their 33 year cohabitation.”  The court then observed:

It is very difficult for separated people, who have for many previous years been financially interdependent, to resolve temporary arrangements when the expenses generated by separation are increased but the financial resources much reduced. Such circumstances naturally give rise to suspicion and mistrust, fear of being cripplingly impoverished without recourse, fear of being cripplingly overburdened without means to meet the obligations faced. No amount I could order on the evidence before me can be adequate for the Applicant Wife who is moving forward as well as can be expected in achieving some self-sufficiency. No amount I could order on this evidence before me can be comfortably paid by the Respondent Husband whose means of earning his usual income has been impacted by the economy.

The court then commented that – given that it was only being asked to set temporary spousal support levels pending trial – its best role was to “fairly distribute the distress of the current income position while also establishing a mechanism for a fair distribution of improved income when it goes up.”  

It concluded that the husband’s request for reduced support was reasonable:  his efforts to find work had been the same on his own, as they would have been if he was trying to support the intact (i.e. non-separated) family unit, and his new employment situation was in line with past fluctuations in his employment history.   His current lifestyle was the product of a non-arm’s length loan from sympathetic family members who were expecting repayment in 2013 at a point when his situation would be turned around.   Overall, the court said, the husband “needs a break to reorganize but also an expectation to keep him moving forward.”

Ultimately, the court reduced the husband’s support obligations to $400 per month for each of July/August 2012, $600 per month for each of September/October 2012, and $800 per month for each of November/December 2012.  After January 1, 2013, he would be obliged to pay the wife $1,000 per month.  The court also required the husband to report any monthly revenues that exceeded his income projections by more than 10%, and to report income from any other non-commission source.

For the full text of the decision, see:

Anders v. Anders, 2012 ONSC 4650  http://canlii.ca/t/fsb93

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders.  For more information, visit us at  www.RussellAlexander.com