In a recent case, a court refused to reduce or terminate spousal support, in part, because the husband claimed he had retired when, in fact, he had not.
The husband applied to court to vary his obligation to pay spousal support to his ex-wife. Specifically, he asked to reduce his ongoing payments, reduce arrears, and have a termination date imposed.
The couple had been together for 34 years. A 2014 order obliged the husband to pay $5,000 per month to his ex-wife.
The husband based his application on four changes in his circumstances since the 2014 court order:
- the Canada Revenue Agency (“CRA”) had re-assessed him for income taxes of $295,000. He had additional debts of almost $60,000 and there was a mortgage of $375,000 on his home. As a result of his financial position, he declared bankruptcy on May 1, 2017;
- he had retired;
- he had separated from his second wife; and
- he had financial obligations for the three children of his second marriage.
The court had to consider the parties’ circumstances when the 2014 court order was granted in deciding whether the changes claimed by the husband were material.
At the outset, the court explained that the husband had to prove there had been a change in his condition, means, needs or other circumstances or those of his former wife before the court would vary the 2014 spousal support order. The change “must have some degree of continuity, and not merely be a temporary set of circumstances”.
Regarding the CRA reassessment and the husband’s subsequent bankruptcy, the court found that, once the husband was discharged, the bankruptcy actually improved his ability to pay spousal support because it would relieve him from the requirement of paying the re-assessment and other debts. The court therefore found that the bankruptcy did not eliminate the husband’s spousal support arrears, stating:
“[The husband’s] bankruptcy is a temporary circumstance which ultimately improves his ability to pay spousal support. The CRA re-assessment is not a material change in circumstances.”
With regard to the husband’s retirement, the court noted the wife disagreed with the husband’s assertion that the was retired.
The evidence showed that the husband had, in fact, never stopped working entirely. He had sold his business in 2016; however, he had continued working on a part-time basis.
As a result, the court found that the husband had not retired and this claim could not be a material change in circumstances.
Additionally, the court found that the husband had not proven that his separation from his second wife was a change in circumstances. The court stated that it could not conclude that the separation had affected the husband’s ability to pay spousal support.
Finally, the court stated that the husband’s evidence regarding the obligation to support his three children was not convincing, in part because his tax returns didn’t show any child support payments. The court concluded that this was because his payments were voluntary and not made under an agreement or order and therefore did not constitute a material change in circumstances.
As a result, the court concluded that there had not been a material change in circumstances and the husband’s monthly spousal support payments of $5,000 to his ex-wife must continue. The court also dismissed the husband’s request to reduce the arrears of spousal support. Finally, the court found that there was no evidence to support a termination of spousal support and dismissed the request.
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaum is able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (416) 777-8433 or toll-free at (877) 275-4792 to book a consultation.