A fresh perspective on divorce, spousal support, child support, parenting after separation and everything family law

Incomes over $350,000.00: Spousal Support Advisory Guidelines

I receive a weekly e-mail from Supreme Court Advocacy (a boutique law firm in Ottawa focusing on Supreme Court of Canada advocacy and agency).

The newsletter from Supreme Court Advocacy is a great resource and provides an up to date summary of activity at the Supreme Court of Canada.

Earlier in March, this newsletter provided a very good summary of the case of Hathaway v. Hathaway (2014 BCCA 310).

In this case, Mr. Hathaway (a high income earner) had been ordered, by the British Columbia Supreme Court, to pay child support of $12,814.00 per month and spousal support of $24,124.00 per month. At the trial level Mr. Hathaway’s income was determined to be one million dollars a year by the Honourable Mr. Justice Abrioux.

Mr. Hathaway appealed this decision and the British Columbia Court of Appeal denied his appeal.

Mr. Hathaway, at the Court of Appeal, contended that the trial judge erred in three respects (failing to consider Section 11 (which sets a ceiling for incomes over $350,000.00 per annum) and Section 12 (relating to property division) of the Spousal Support Advisory Guidelines, failing to consider the provisions of the Federal Child Support Guidelines regarding incomes over $150,000.00 (Section 4), and the principles relating to reapportioning family assets). Mr. Hathaway’s appeal was dismissed by the Court of Appeal and leave to the Supreme Court of Canada was also dismissed.

The case of Hathaway highlights the importance of considering/arguing Section 4 of the Federal Child Support Guidelines and Section 11 of the Spousal Support Advisory Guidelines at a trial level. A failure to do so will limit the ability to make such arguments or considerations at an appeal level (as per paragraph 34 of the Court of Appeal Decision).

The upshot of this case, from my perspective, is:

  • Reading the Child Support Guidelines and the Spousal Support Advisory Guidelines is a free and useful exercise if support issues are at play in your family law matter (regardless of your income);
  • If you are dealing with a case where incomes are over $150,000.00 per annum pay special attention to Section 4 of the Child Support Guidelines;
  • If you are dealing with a case where incomes are over $350,000.00 per annum pay special attention to Section 11 of the Spousal Support Advisory Guidelines;
  • It is helpful to get advice from an accountant in a case where you are working to determine an appropriate guideline income for support purposes (I encourage my clients to consult with an accountant regarding determination of income for support purposes regardless if they are paying or receiving support – it is very helpful); and
  • This is a first world problem to have…
    Guideline income

  • Undue Hardship: what is it and do I qualify?

    A decision released today by the Supreme Court of British Columbia sets out a useful summary of the law of undue hardship.

    What is Undue Hardship?

    Undue hardship has a few legal definitions and meanings.

    In family law undue hardship refers to something a parent could claim under the Federal Child Support Guidelines (Section 10) in certain cases.  Section 10 of the Guidelines sets out some circumstances that might lead to a finding of undue hardship, as follows:

    • the parent has responsibility for an unusually high level of debts reasonably incurred to support the parents and their children prior to the separation or to earn a living;
    • the parent has unusually high expenses in relation to exercising access to a child;
    • the parent has a legal duty under a judgment, order or written separation agreement to support any person;
    • the parent has a legal duty to support a child, other than a child of the marriage, who is: under the age of majority, or the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life; and
    • the parent has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability.

    According to Justice Canada’s website:

    In some situations, the amount of child support set in the child support tables, combined with other circumstances, could create undue hardship for you, for the other parent, or for a child. In those situations, a different child support amount could be determined.

     What is the test for undue hardship?

    The British Columbia Court of Appeal explained the two part test in a 1993 decision as follows:

    The undue hardship test under s. 10 is two-fold. The spouse applying for relief under this section must prove that payment of the table amounts would cause undue hardship under s. 10(1) having regard to the criteria in s. 10(2). If this test is met, the applicant must go on to establish that, if required to pay the amount of maintenance otherwise payable under the guideline table, the standard of living of his or her household would be lower than that of the household of the other spouse. If this dual test is met, the court has a discretion to award a different amount of maintenance than that otherwise required under the Guidelines.

    Part 1: What is evidence of undue hardship

    Master McCallum, as he then was, gave some examples of what might constitute hardship in a 1999 Supreme Court of British Columbia decision:

    Evidence of hardship might include evidence of having to move from one’s accommodation, give up a vehicle, operate on a restricted diet and so forth.

    Part 2: Standard of living comparison

    The standard of living comparison  reminds me of the lyrics in Gold Digger:

    I know somebody payin child support for one of his kids
    His baby momma’s car and crib is bigger than his
    You will see him on TV Any Given Sunday
    Win the Superbowl and drive off in a Hyundai

    I am reminded of the Gold Digger lyrics for two reasons (neither of which being that I like the message in the song).  They are:

    1. The examples given would not likely, on their own, lead to a successful undue hardship claim.  As the British Columbia Court of Appeal has said (adopting an Ontario judgment): “Undue hardship is a tough threshold”; and
    2. Undue hardship is one area of family law that does invite parties to compare the standard of living in their respective households.   The Guidelines state that an application for undue hardship must be denied if it is of the opinion of the court that the household of the spouse who claims undue hardship would (after determining the amount of child support) have a higher standard of living than the household of the other spouse.  Basically, if the gentleman described by Kanye did have a bigger house and car than the mother of his child, he would fail in his hardship claim.

    The  British Columbia Supreme Court decision released today not only provides a useful review of the law surrounding undue hardship – it is also interesting because it adopts language from Saskatchewan Court of Queen’s Bench decision Jackson v. Holloway, stating  a party “has an obligation and is expected to organize his … affairs with due regard to that obligation.”

    Divorce: love mail to prevent seven year itch?

    In 2011, more than 2.1 million couples got divorced across China, which is up by approximately 710,000 from 2007 according to a report in CHINADAILY.com.cm.

    It is reported that China’s state run post is taking measures to curb the rising divorce rate by giving recently married couples the chance to send each other a sealed love letter – to be opened in seven years…around the time of the seven year itch.  According to the BBC:

    The post office is hoping its scheme will stop some couples from reaching the divorce courts.

    They are also producing special stamps, postcards and even a Love Passport which can be stamped on every anniversary.

    The success of the scheme will not be known for another seven years, believes its creator, Sun Buxin, a manager of a Beijing post office branch.

    Is love mail a good idea?  I think it would be fun to write a letter to your spouse at the time of your marriage, only to have your spouse open it seven years later.  However, the article goes on to raise a good point:

    As for those who divorce during this period, they could be in for an unwelcome surprise.

    “If couples don’t tell us to cancel the service,” said Mr Sun, “we’ll still deliver the letter”.

    One example that comes to mind, is a spouse arguing his or her former spouse should go back to work after separation and not stay at home with the children, and thus spousal support should not be payable.  If you were the spouse seeking to reduce your spousal support obligations, you would not want a letter attached to an affidavit in a spousal support claim reading “I promise to take care of you, provide for you, and spoil you forever.  You will never have to work outside of the home for the rest of your life – you will stay at home and raise our six wonderful children.”

    On another note, is 2.1 million divorces a lot?

    China’s 2.1 million divorces reported in 2011 seems like quite a few.

    In Canada, Statistics Canada reports that there were 70,226 divorces in 2008 (as a note, Statistics Canada stoppped collecting numbers on Canada’s annual marriage and divorce rates in 2011).

    While it may appear that China has a very large number of divorces, but when you consider that China’s population as of December 31, 2011 was 1,347,350,000, the divorce rate is not actually that high. By way of comparison,  Canada’s population as of March 22, 2012 is 34,745,000.

    Per capita, based on my general calculations, as supported by a self-labeled “outdated” article from Wikipedia, Canada’s divorce rate is twice that of China’s.

    It is important to note that there are differences in calculating divorce rates around the world.

    China’s method of calculating the divorce rate was revised in 2005:

    For years, the country’s official divorce rate has been calculated on the basis of the number of people divorced, the China Daily newspaper reports.

    Now Chinese statisticians have decided to follow the international practice of counting the number of actual divorces, and has seen its divorce rate cut in half.

    The 2005 rate fell from 2.76 divorces per 1,000 people to 1.38.

    NOTE – my calculations are in not to be relied upon or viewed as accurate … but you get the idea.