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Is $84,000 a Year Too Much to Spend on Post-Separation Rent?

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Is $84,000 a Year Too Much to Spend on Post-Separation Rent?

Is it unrealistic for a separated spouse to expect to maintain the same post-separation lifestyle as he or she enjoyed before the split? Is $7,000 per month for rental or mortgage payments trial too much to ask for, in advance of the divorce trial?

In at least one recent Ontario case called Kochar v. Kochar, the answer to both of those questions was: “Yes.”

The couple was married for 7 years and had two children. The husband, aged 33, earned about $205,000 per year as vice-president of a company, while the 30-year old wife was employed at the same place providing interior design services and earning about $78,000 per year. When they separated in 2012, the wife was terminated and given a six-month severance package. (And one of the issues in their scheduled divorce trial would be whether the wife actually provided services to the company, or whether it was merely an income-splitting arrangement.)

The husband now had a new partner, and was planning to move out of his rental accommodation into a home that was renovated by his parents. The parents would live there as well, as would the husband’s grandfather and his caregiver. The two children of the marriage would also live there part of the time, in keeping with the custody schedule agreed to by the parents.

On a motion to the court, the wife asked for an order for interim spousal support pending trial. The court set out the principles relevant to that general determination, as follows:

• Interim support is designed to provide income to dependent spouses from the time the proceedings start, until trial.

• The Court need not conduct a complete inquiry into all aspects and details to determine the extent to which either spouse suffered economic advantage/disadvantage as a result of the relationship. That question must be left to the trial judge.

• Interim support is essentially a “holding order” to maintain the accustomed lifestyle, if possible, pending final disposition. However, the person claiming interim support must be able to present a triable case that there has been economic disadvantage.

• Assuming such a triable case exists, interim support is to be based on the parties’ means and needs. However, the full merits of the case must await a final hearing.

Against this background, and in the course of asking that the husband be ordered to pay various amounts for interim spousal support, the wife in her proposed budget asked for $7,000 per month for rent or mortgage payments.

The court found this to be wholly unrealistic. Referring to the wife as either “Wife” and “Mother” by alternating turns, the court in its reasons explained:

The Court notes that the Mother in her proposed budget is asking for $7,000 a month for rent or mortgage payments, whereas the expenses for the existing home are approximately $2,000 per month. The Mother does not want to remain in the matrimonial home; she wants to move out and have it sold. When asked at the hearing as to what type of accommodation she wishes to have for $7,000 per month her counsel indicated that it would be the equivalent of the new accommodations of the Husband living with his parents.

The Wife’s assertion that she should be able to spend $84,000 a year on either mortgage payments or a rental payments is not realistic. The Wife is not contributing anything towards the family expenses, even though she is not working, not going to school, has a full-time nanny, the children are in school and they, the children, live week almost about with each parent.

The Wife’s expenses are unrealistic in relation to the Husband’s income and imputed income of $230,971.20. In the Court’s view, lifestyle and perks of both parties has been supported by the Husband’s parents and/or Phoenix Home and possibly by the Wife’s parents. These perks can be withdrawn by the parents and the company at will. There is no obligation to continue to provide them.

When the perks and lifestyle expenses are removed it is financially impossible and irresponsible for the former couple to expect to maintain a lifestyle post-separation, the way they did pre-separation.

Having made this finding as well as other numerical findings of fact relating to the husband’s income and other matters, the court sent each of the parties “back to the drawing board” to provide new calculations as to the interim spousal support that should be ordered. If they could not agree, then the court would itself set the amount.

For the full text of the decision, see:

Kochar v. Kochar, 2014 ONSC 3220

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.