The goal of temporary support is not to “pay for the costs of imprudent purchases,” according to the Ontario court in a recent case named Angst v. Angst.
The husband and wife had separated after 24 years of marriage. The wife asked the court to order the husband to pay her temporary support – designed to tide her over until the trial of the broader issues in their divorce. Despite showing actual expenses of $5,800 per month, and despite the husband’s existing $5,800 monthly payments, the wife requested a dramatic increase to the amount that he should pay.
She claimed the husband’s ability to pay support was far greater than the $107,000 per year income that he had shown on his latest tax return. In fact, he had two corporations with retained earnings of $3 million overall, which had netted a combined after-tax net income of over $610,000 in the most recent tax year.
The wife asked the court to deem the husband as having $718,000 in annual income, and to use the Spousal Support Advisory Guidelines (SSAGs) as a benchmark. This would put her support entitlement in the $21,000 to $28,000 per month range.
The husband, meanwhile, conceded that he owed the wife temporary support, but felt that with the uncertainty around him dividend-based income and the corporations’ value, it was premature to set such a high figure. The amount the wife was requesting was about four times the amount the couple had actually lived on, prior to their separation.
The court agreed that there was uncertainty around the husband’s income, including the fact that both parties admitted running some of their personal expenses through the corporation. The husband also owed some child support, which impacted the calculations.
Next, the court noted the SSAGs are not mandatory, but rather could be deviated from where the court feels it appropriate. In this case, to award the SSAGs-dictated amount would allow the wife a far more opulent lifestyle than the one she’d actually enjoyed while married:
… [U]sing the SSAGs would result in a spousal support award that would give the applicant a radically different lifestyle than the one enjoyed by the parties during their cohabitation. The [husband] deposes that the parties lived a modest lifestyle in order to save for retirement and to provide something to give to their children one day. …
In addressing the wife’s actual needs as it pertained to the proper support amount, the court described the purpose behind temporary support orders this way:
The goal of a temporary support order is to maintain as much as possible the parties’ pre-separation lifestyle pending trial …
The court added that the wife had had incurred expenses that were not, strictly speaking, justifiable in the circumstances:
Since separation, the applicant has purchased a $455,000 waterfront home and spent $11,000 furnishing it. By trading in her previous vehicle and with help from the [husband] she is driving a 2016 luxury car. She even bought herself a $19,500 Donzi boat and trailer. Thus, the applicant is now living roughly the same lifestyle that she had before separation.
The [wife] complains that she had to cash in RRSPs to purchase some of these things, but the goal of a temporary spousal support award is not to rebuild the recipient’s asset base. Nor is it to pay for the costs of imprudent purchases. The [wife] applicant also complains that she had to borrow funds for the purchase of her house at exorbitant interest rates that are costing her more monthly than they should. But this is entirely the [wife’] fault. She purchased the home while the parties were still attempting to negotiate a resolution of their family issues. When that failed, she had to look to a mortgage broker to be able to close the deal. In any event, the [wife’s] present needs of $5,800 per month include her mortgage payments.
The court ultimately concluded that to maintain her pre-separation lifestyle, the wife’s temporary support entitlement should be closer to the $5,800 she paid in actual monthly expenses. Adjusting that figure upward to take into account the tax implications, it awarded her $8,500 a month.
For the full text of the decision, see:
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