Jul 10, 2018

Spousal Support Holiday? Vacation's Over! - ONCA Response to Departure from SSAGs

McKinnon v. McKinnon, 2018 ONCA 596 (CanLII)

The Ontario Court of Appeal has again made it clear in another decision that while they are not technically legislated nor binding, the Spousal Support Advisory Guidelines (“SSAGs”) are more than a useful reference point that should not be deviated from lightly. The decision of McKinnon v. McKinnon (2018) 596 (CanLII) provides yet another example of the Court reaffirming this principle into practice.


I. Basic Facts

The parties were married for 28 years before they separated in 2007. They are the parents of three children. Following separation, the parties executed a separation agreement which provided for spousal and child support.


Prior to the trial decision, the Wife suffered from a number of serious health aliments and received Canada Pension Plan (CPP) disability pension of $10,770 per year while supporting her two disabled children, aged 34 and 22, who were also in receipt of Ontario Disability Support Program (ODSP).


The Husband also had a number of significant events which influenced the judge trial in this matter. Three months prior to it, he had left his employment, made an assignment into bankruptcy and had his driver’s license suspended by the Family Responsibility Office (FRO) for defaulting on his support payments.


On January 3, 2017, Justice R.T. Bennett heard submissions from both parties at trial, neither of whom were represented by counsel. He made a final order which included a variation of the child and spousal support provisions within Justice Hughes previous order dated October, 2014.


Specifically, Justice Bennett held that the Wife was still entitled to spousal support and refused to impute income greater than the amount she was receiving in CPP disability. Conversely, he also noted that because the Husband had “apparently no income,” and currently had his driver’s license suspended by FRO, the trial judge exercised its leniency by allowing him the opportunity to “get himself on his feet,” to gain employment and pay spousal support. To this, he ordered the following:


1. Husband’s income was imputed to $35,000 for spousal support purposes;


2. Agreed to grant the Husband’s request to terminate spousal support effective February 1, 2015;


3. Required the Husband to recommence paying spousal at $500/month commencing 90 days after his driver’s licence was reinstated or May 1, 2017 until April 1, 2022;


4. Fixed spousal support at $250/month from May 1, 2017 to April 1, 2032.


II. Issues

The Wife appealed Justice Bennett’s decision on three grounds:

1. Refusing to impute an annual income of $60,000 to the Husband from January 1, 2016 onward;


2. Terminating spousal support on February 1, 2015 and not requiring spousal support to be paid for approximately two years;


3. Departing from the SSAGs in fixing spousal support.


III. Position of the Parties

The Wife did not dispute Justice Bennett’s final order in terminating child support or his requirement to provide life insurance for that specific child.


However, she did argue that imputing income of $35,000 to the Respondent wasn’t enough and should be $60,000 given the fact he was previously a licensed mechanic who earned approximately $91,000 per year (based upon a 3 year average) and voluntarily left his employment prior to trial.


She also took exception to the fact that the Husband was essentially granted a two-year reprieve on his spousal support obligation with little explanation as to how this aspect of the decision was arrived at.


The Husband, without a factum or legal representation, simply argued that the trial decision was correct without actually responding to the Wife’s submissions on appeal.

IV. Decision of the Court

The Ontario Court of Appeal dealt with the imputation of income issue as a matter of deference to the trial judge. They confirmed that Justice Bennett considered the relevant factors for imputation of income including his qualifications, age (60), his employment history and his relative good health, and that his best earning opportunity and income actually generated was as an auto mechanic. (para. 22)


Furthermore, the Court pointed out that while his Line 150 income was $104,246.45 for 2015, over $70,000 of this consisted of RRSP withdrawals, RRIF or LIF annuity payments. As such, a finding at trial that the Husband's income was $35,000 was reasonable given the circumstances.


However, the Court of Appeal made it very clear that granting the Husband a “support holiday” from paying spousal support and awarding future support at a discount without explanation was not reasonable:


to give the respondent a two year “support holiday”, and to award future support below the level recommended by the SSAGs – constitute unjustified departures from the SSAGs and therefore errors. The SSAGs are the presumptive starting point for awarding support. Any departure from them requires adequate explanation” (para. 24)


Apparently, the trial judge was influenced by the Wife’s “relentless pursuit” of support as the reason for losing his support (para. 26) However, the Court of Appeal was not persuaded this was an appropriate justification to award a complete termination of support for over two years.


The Court of Appeal also held it was an error for the trial judge to depart from the SSAGs based primarily upon an unimplemented settlement agreement the parties had reached prior to trial. Justice van Rensburn stated the following pertaining to unimplemented settlements:


Offers to settle are inadmissible in subsequent family law proceedings except when dealing with costs issues: see rule 18(8) of the Family Law Rules, O. Reg. 114/99. The same applies to draft minutes of settlement tendered on another party but not signed: Parreira v. Parreira, 2013, ONSC 6595. This rationale extends to a settlement that was agreed upon but could not be implemented. The trial judge here ought to have made his decision based on the evidence he heard. In any event, the terms of the unimplemented settlement agreement could not justify a departure from the SSAGs in the determination of the respondent’s spousal support obligations, and was not a reason for interrupting spousal support for two years, and then fixing support at a level below the recommended SSAGs range” (para. 30)


Given this error in principle with regards to spousal support from February 1, 2015 onward, the Court of Appeal exercised its jurisdiction and fixed spousal support at the mid-point at $1,034 per month as recommended by SSAGs and specifically excluded the Husband’s encroachment on his retirement saving as income for support purposes.


For spousal support going forward, the Court refused to interfere with the trial judge’s decision to impute income at only $35,000 or to depart from the mid-point as suggested by SSAGs.


Finally, the Court of Appeal was also called upon to address the issue of contempt. Justice van Rensburg provided a helpful refresher of the applicable test for civil contempt of court orders as outlined in the Supreme Court of Canada’s decision of Carey v. Laiken (2015), 2 S.C.R. 79:


Civil Contempt require that the moving party establish beyond a reasonable doubt that:


1. The order alleged to have been breached states clearly and unequivocally what should or should not be done;


2. The alleged contemnor had actual knowledge of the order’s terms;


3. The alleged contemnor intentionally did the act the order prohibited or intentionally failed to do the act the order required.


A judge retains an overriding discretion to decline to make a contempt finding where the foregoing factors are met where it would be unjust to do so, such as where the alleged contemnor has acted in good faith to take reasonable steps to comply with the relevant court order: Carey v. Laiken, [2015] 2 S.C.R. 79 at paras. 33-35, 37. The trial judge’s reasons on the contempt issue are conclusory. He does not explain why he concluded that contempt had not been made out and, on a review of the evidence, there was no valid reason to reuse a contempt order in this case.” (para. 36)


The Court of Appeal did not find the Husband’s explanation (lack of funds) for failing to obtain and maintain a life insurance policy very convincing. This was especially so given the fact he cancelled the policy and purchased a new truck with monthly payments equaling $1,100 per month when the evidence that such a life insurance policy would only cost $135 per month.


As such, the Court exercised its jurisdiction under Rule 31(5) of the Family Law Rules and ordered the Husband to pay a penalty of $2,295 being the total amount of monthly premiums the Husband avoided paying from when he cancelled the insurance in June 2015 for the next 17 months.


V. Final Thought

The Ontario Court of Appeal decision in Gray v. Gray (2014) ONCA 659 identified some factors which may justify a departure from the SSAGs including issues involving post-separation income increases to the payor or situations involving with second families. In Slongo v. Slongo (2017) ONCA 272, the Court went further and explained that the applicability of SSAGs were not only useful but are the starting point for awarding support.


In McKinnon, the Court of Appeal clearly considered these two principles when it disagreed with the trial judge’s departure from the SSAGs. In doing so, they continued to send the message that the days of awarding support based solely on a trial judge’s discretion are over. The SSAGs are the reference point upon which all support orders will either be made or any departure from them will be justified through. These rationales of usefulness and applicability remains the prevailing viewpoint of the Court that does not appear to be changing anytime soon.



Jon is a family lawyer practicing exclusively in all areas of family law with Jaskot Family Law in Burlington, Ontario.




jon@jaskotfamilylaw.ca


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This article is intended for informational purposes only. It does not constitute legal advice nor form a client/solicitor relationship. For more information or require legal assistance, please contact us at www.jaskotfamilylaw.ca for more information.