Does Wife’s 27-Year-Long Failure to Look for Work Override Her Right to Spousal Support “Until Death”?
The Ontario Court of Appeal was asked to address some interesting questions in a recent case called Haworth v. Haworth. The former spouses – who had actually separated more than 30 years ago – came before the Court for its ruling on whether a 1991 spousal support agreement they had reached should be varied. The questions were these:
Should that 1991 agreement, which granted the wife spousal support until death, still be valid once the husband retires from his lucrative profession? And should it matter that the wife did not look for work at all throughout those 27 years?
The spouses had been married for 17 years when they separated and were now both 73 years old. The wife, who was a research assistant at university, had stopped working outside the home after the birth of their second child. The husband had been a successful dentist – earning up to $300,000 per year – until he retired at the age of 72.
The 1991 agreement, which was enshrined by a court in a Divorce Judgment, provided that the wife should receive $4,000 per month until death. The husband claimed that since his post-retirement income had now dropped to about $65,000 per year, the wife’s support entitlement should come to an end completely.
An earlier motion court judge had agreed, finding that the combined effect of the husband’s decreased income and the wife’s failure to look for work post-separation justified dropping her support entitlement to only $1 per month. In fact, the motion court judge said the wife’s failure to look for work was “the most significant material change”, adding that she should manage her assets (including properties in France and Panama) in a way that achieved a reliable income stream for herself.
On the wife’s later appeal, the Appeal Court disagreed on this last point specifically. The wife’s failure to seek employment was not a “material change in circumstances”; moreover, the husband had been tardy in raising the issue. The Court wrote:
We disagree that the [wife’s] failure to seek employment since 1991 constitutes a material change in circumstances. The clear wording of the divorce judgment was that spousal support would continue to death. The [wife] was entitled to rely upon that judgment. The [husband] waited far too long to raise the [wife’s] decision not to seek gainful employment until an age when she was effectively precluded from correcting the situation.
Simply put: The 1991 agreement (as reflected in the Divorce Judgment) was a valid contract; it was safe to assume that at the time they entered into it, the spouses had contemplated the future certainty that the husband would be retiring at some point.
Plus, the agreement called for $4,000 per month support, which was actually a low figure given the husband’s income. This spoke to the fact that it was intended not to reflect the current situation, but rather it was a “long view” arrangement that was intended to cover the wife’s support needs over her lifetime. It also contained some measure of recompense for the fact that the wife had left her career to raise the couple’s children.
On the other hand, the husband’s sharp drop income was a “material change” allowing for a variation of the level of support. The Appeal Court noted that while the fact of retirement may have been within the spouses’ contemplation in 1991, the effect of the retirement was not a factor in fixing the amount of support the wife was to receive. The spouses, and the judge confirming that 1991 agreement, could not know at that time what the husband’s financial circumstances would be some 25 years later.
In adjusting the support amount, the Spousal Support Advisory Guidelines (SSAGs) could still be used as a benchmark today, even though they did not exist in 1991. Reasoning that it should use the same ratio as the original agreement and order, the Court said:
Looked at in this way, the original order was for a low amount of support, i.e. only $4,000, but for a potentially much longer period of time, i.e. the [wife’s] lifetime. Now that the [husband’s] income has decreased to the equivalent of an earned income of $65,000 plus a return on his investment estimated at 27,000 per year (3% on one half of his jointly owned “open investments” of $1.8 million), and the [wife’s] income has increased to $32,000 per year, the amount of support should be varied accordingly. Given that the original support constituted approximately two-thirds of the low end of the SSAGs, we would continue with that same formula, but based upon current income. Having regard to the parties’ current income, today the low end of the SSAGs would be $1,275. Two-thirds of that amount is $850 per month for life.
For the full text of the decision, see:
Earlier motion to change: