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Lorne MacLean
An interesting BC Spousal Support Advisory Guidelines SSAG- with child formula- decision was handed down by our Court of Appeal recently. The BC Spousal Support and BC Child Support case dealt with an appeal by the wife in a long marriage from a variation of spousal and child support application that left her with slightly more or slightly less than half of the lawyer husband’s income depending on what figure he earned depending on bonuses and expenses. The court dealt with recent disclosure by the husband and concluded he had been frank and honest with the court contrary to the allegations of his ex-wife, although in prior proceedings his disclosure had been inadequate. The court dismissed the wife’s appeal which argued she received less than a strict application of the guidelines demanded and interestingly pointed out that while a judge must give reasons for departing from the Child Support Guidelines the court need not give reasons if it chooses to depart from the BC spousal support advisory guidelines.
The BC Spousal Support appeal pointed out that caution should be used in applying the SSAG guidelines automatically in variation proceedings and in cases where the paying spouses income exceeds $350,000 per year. To read the court’s comments click below.
25] At para. 50 of her reasons, Prowse J.A. agreed with the appellant that the baseline for her support order should not be less than the original order of $6,500 per month made following a trial in 2003, after the divorce, the respondent’s discharge from bankruptcy, his recovery from depression, and his resumption of work that provided an annual income of $312,000. She noted that, since that original order, the respondent’s income had increased, he had married a woman who owns the house in which they live, and his expenses had decreased with the coming to an end of his responsibility for the daughter who had lived with him. Madam Justice Prowse also noted (at para. 56) that the (2005) Federal Spousal Support Guidelines suggested a range of “with child” spousal support for an income of $330,000 of $8,500 to $10,000 and that, at the lower end of that range, the appellant “would be left with approximately 48.9% of Mr. Beninger’s net disposable income.” The award of $9,000 suggests almost equal net disposable incomes after payment of child and spousal support.
[26] The appellant suggests the same proportional sharing of the respondent‚Äôs income should continue so she and her daughter can maintain the standard of living they enjoyed during the marriage insofar as the respondent can afford it. Undoubtedly, the appellant meets the requirements for a presumptive claim to equal standards of living of which L‚ÄôHeureux-Dub?© J. wrote at para. 84 in Moge v. Moge, [1992] 3 S.C.R. 813:
[84] Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement (citations omitted). Furthermore, great disparities in the standard of living that would be experienced by spouses in absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as joint adventure, the longer the relationship lasts and the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution (citations omitted).
[27] The chambers judge did not refer expressly to that presumptive claim. She did, however, by a reference to para. 58 in the reasons of Prowse J.A., acknowledge the importance of both compensatory and non-compensatory factors and the desirability of attempting to “adjust to some degree for the disparity in the standards of living of the parties taking into account the relatively high standard which they enjoyed during the marriage.” (at para. 77) She also referred to the amounts suggested by the Spousal Support Advisory Guidelines which take account of that factor. At para. 79, she noted that the Guidelines suggest a range for spousal support between $10,885 and $12,875 on an income of $416,400 with child support of $40,560, and between $9,261 and $11,049 on an income of $366,400. Because of the risk inherent in reliance on a bonus, she settled on an award toward the lower end of the respondent’s potential range of income which would give the appellant more than half the net disposable income at $366,400 (even if child support were paid as required by that level of income) and 47% at $416,400.
[28] In my view, the appellant overstates the power of the Spousal Support Advisory Guidelines in her circumstances when she argues the chambers judge was required to apply them unless she justified not doing so. While it is preferable for a court to organize its analysis by reference to the Guidelines as well as the statutory requirements and authorities applying them, neither the Divorce Act nor the authorities require justification for deviation from them. The appellant’s proposition does apply to the Child Support Guidelinesbecause of the requirements in s. 17(6.1) and 17(6.3) of the Act to apply the Guidelines and to give reasons for deviating from them where deviation is permitted. Nowhere in the Divorce Act are there comparable provisions requiring compliance with the Spousal Support Advisory Guidelines or reasons for deviating from them. As their name indicates, they are advisory and without statutory effect. That said, they provide helpful advice and this Court has been clear that their advice must be taken seriously and that best practice would include an explanation of any deviation from them.
[29] As Prowse J.A. noted (at para. 53), the authors of the Guidelines recommend caution in their application to the issues that arise on variation and review. One of those issues is a “ceiling” to appropriate indefinite spousal support. The authors note in their Executive Summary, as the appellant fairly acknowledged, that “[t]he ceiling is the income level for the payor spouse above which any formula gives way to discretion, set here at a gross annual income for the payor of $350,000.”
[30] On the facts of this case, I cannot find the chambers judge erred in her use of the Guidelines. She took them seriously and made an award within the suggested range. The approach she took to the bonus was reasonable.
[31] The appellant’s further submission – that the chambers judge erred in failing to determine the respondent’s income for the purposes of determining spousal support “as required under Sec 15.2(4) of Divorce Act but on an arbitrary range of current and potential future incomes, and in issuing a judgment which in reality (through seizure of this case) restricts future right of appellant to seek a variation order as mandated under Sec 17.4 (1) of Divorce Act” – reflects a misreading of the Divorce Act. Section 15.2(4) is irrelevant to a variation application; like s. 15.2(6), it applies only to an original application for spousal support. On a variation application, the applicable provisions are s. 17.4(1) and s. 17.1(7). However, both s. 15.2(4) and s. 17(4.1) require the court to determine the “condition, means and circumstances” of both the applicant for support and the proposed payor and to consider listed factors in determining the appropriate order to accomplish the objectives listed in s. 15.2(6) and s. 17(7) respectively. None of these provisions requires a precise determination of a spouse’s income. That determination is required only because it is the essential starting point to the use of the formulas in the Spousal Support Advisory Guidelines as it is to the application of the Child Support Guidelines.
[32] In my view, the chambers judge made good use of the Spousal Support Advisory Guidelines when she used them to determine a range of potential support orders based on evidence supporting a range of potential income dependent on a discretionary bonus. If account is to be taken of a discretionary bonus, the determination of actual income cannot be a purely mathematical calculation. Finally, nothing in the chambers judge’s reasons, including her decision to declare herself seized of future applications to vary child and spousal support in an effort to save judicial resources and the litigants’ financial and time resources can restrict either party’s right to seek a variation of either order on proof of a material change of circumstances.
[33] Ultimately, the question for this Court on a review of a judge’s exercise of discretion under the Divorce Act is whether that discretion was exercised judicially as explained in the passage I earlier quoted from Hickey. In my view, it was.
[34] For these reasons, I would dismiss the appeal.