DOUBLE DIPPIN AND SPOUSAL SUPPORT
JANUARY 9 2015
Hickey v Princ, 2014 ONSC 5272
This case addresses the issue of double-dipping with respect to spousal support.
The parties were married on October 6, 1984 and separated December 7, 2001. There are no surviving children of the marriage. The Applicant was employed with the Ontario Provincial Police (OPP) throughout the marriage. The Respondent was self-employed as a model/actress commencing in 1986. The Divorce order in 2004 included an order for spousal support in the amount of $2,000.00 per month, on consent, based on the Applicant’s annual income of $78,286.
The Applicant’s pension “was equalized at its highest value based on the assumption that the Applicant would likely retire on the earliest date that he could retire with a full unreduced pension, that date being October 31, 2013” (paragraph 9). The Applicant did in fact retire from the OPP on October 31, 2013, and is now requesting a reduction in the quantum of spousal support based on a material change to his income following his retirement.
The Court commenced its analysis of this matrimonial matter by finding that the Applicant’s current annual pension income was $76,477 and that he had no other employment income. The Court further found that based on the “actuarial evidence proffered by the Applicant on this motion, $26,517.00 of his pension income was previously equalized with the Respondent” (paragraph 14). The Court also found that the Respondent had a total annual income from all sources in the amount of $35,140.44 and that her annual expenses were in the amount of $78,852, as per the Respondent’s Financial Statement. The Respondent, therefore, suffered a shortfall of $43,711.56 year over year, to which the Respondent provided no reasonable nor adequate explanation. As such, the Court found that the Respondent is supporting a lifestyle that she apparently cannot afford.
The Court held that before making a variation of an Order in accordance with Section 17 of the Divorce Act, it must first satisfy itself that “a change in the condition, means, needs, or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order” (paragraph 26). The court further held that a “payor should not be estopped from seeking a variation in his spousal support obligations on the ground his retirement was ‘foreseeable’ at the time of the original order” (paragraph 32).
The Court continued its analysis by considering the issue of double dipping and found that “when a pension changes from an asset to income the ‘double recovery’ difficulty can arise” (paragraph 35). The Court held with respect to this issue that it is generally “unfair to allow the payee spouse to reap the benefit of the pension both as an asset and then again as a source of income” (paragraph 36). However, the Court also held at paragraph 38:
Double recovery may be permitted where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and despite this, an economic hardship from the marriage or its breakdown persists.
As such, the Court found that it would “be unfair to allow the Respondent to reap the benefit of the pension both as an asset and then again as a source of income, meaning the $26,517 of pension income previously equalized with the Respondent” (paragraph 51). Further, given the above-mentioned findings of the Court, the Court found that there had been a material change in circumstances. Further, the Court found that the Applicant’s annual income was in the amount of $49,960, and imputed an income of $14,400 per annum to the Respondent.
The Court continued its analysis by discussing the issue of an end date for spousal support. The Court found that the Court has jurisdiction to make “support payable for a definite or indefinite period” (paragraph 63). The Court held that,
Non-compensatory support needs should not necessarily result in life long support. The difficulty is the extent to which the support payor must (or must not) support their former spouse for life, if disability prevents the recipient from earning income (paragraph 67).
After considering the Respondent’s documented disabilities, the Court concluded in light of all the circumstances of this case, “illness does not equate to a never ending support entitlement” (paragraph 76). In exercising its discretion, the Court found that a “further eight years of support meets the four spousal support ‘objectives’ set out in s. 17(7) of the Divorce Act”.
As such, the Court varied spousal support ordering that spousal support is to be paid by the Applicant to the Respondent in the amount of $1,050 per month, with support terminating on a final basis as of October 31, 2021.
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