After Separation Support Increases involve different rules depending on whether the payment sought to be increased relates to either child or spousal support. In child support cases, an annual correction is routine. However, in spousal support cases, the change will involve an analysis of whether there has been a “material change” in the two separated partners circumstances or in cases of a “review” a decision afresh on the current income, expenses, and means of the two ex-spouses. A recent Court of Appeal Decision from BC made headlines. Lorne N MacLean, QC was successful counsel for Mr. Leskun at trial in Canada’s leading case on spousal support reviews in Leskun v. Leskun. MacLean also set a record high child and spousal support award of over $85,000 a month in Devathasan. MacLean focuses on high net worth financial disputes.
In today’s blog by Lorne MacLean, QC we will deal with:
- how income for the paying spouse is correctly determined if they own a company or practice;
- rules for how post-separation increases impact a spousal support payment change
- what is a review and how does it differ from a variation;
After Separation Support Increases Call 1 877 602 9900
The 2019 BC Appeal Court decision of Helle v Helle overturned a trial judge’s ruling that there should be no change to spousal support after a husband’s income increased substantially after separation. The court found the trial judge:
- was mistaken on there being an unequal division of property at trial;
- failed to apply the SSAG;
- failed to consider pre-tax profits of the husband’s business;
- failed to assess the connection of the wife’s contributions during the marriage to the income increases of the husband.
Our award-winning After Separation Support Increases lawyers act out of 6 offices across BC and in Calgary located in Vancouver, Surrey, Kelowna, Fort St John, Richmon d and Calgary Alberta.
Onus On Business Owners For Pre Tax Profits
TIP: Never use business owners or professionals personal tax return to calculate their real income. Plugging in the wrong income on a free support calculator is sheer negligence.
Our After Separation Support Increases team points out the law is clear:
The onus is on the payor to provide the necessary evidence that the corporation’s pre-tax income is not available to the payor. The court should not have to ferret out the necessary information from inadequate or incomplete financial disclosure. While Bartkowskisays the evidence of the payor must be compelling, I prefer to use the word clear when discussing the necessary evidence of business circumstances as the former word might be taken to suggest a higher standard of proof than is called for by Kowalewich.
Spousal Support Post Separation Income Increases
The BC Appellate court summarized the After Separation Support Increases Rules are as follows:
[35] In my view, the judge’s analysis here is faulty. In Judd v. Judd, 2010 BCSC 153, Punnett J. helpfully reviewed cases that carefully analyze how to address post-separation increases in income. After noting these cases and then citing at length from the decision in Hartshorne v. Hartshorne, 2009 BCSC 698, Punnett J. says:
[23] The resolution of the issue of post-separation wage increases is clearly fact based. The principle that appears to emerge from current case authority is that the connection the increase in salary has to the recipient’s contribution during the marriage is determinative. If the increase in salary is founded in expertise and seniority established during the marriage and no intervening event or events are the cause of the increase, then the increase is to be included unless the recipient’s role during marriage necessitates a different determination. If an event after separation is the reason for the increase, in whole or in part, then the increase may be excluded from consideration, also in whole or in part.
Reviews and After Separation Spousal Alimony
So how do reviews differ from variations in After Separation Support Increases cases? The review threshold is much lower but if a review is to occur parties must set the ground rules.
[15] In Domitri v. Domitri, 2010 BCCA 472, Smith J.A. described reviews conducted pursuant to such orders as follows:
[39] …[T]he focus of the review hearing before the chambers judge should [be] a “reconsideration” of the respondent’s entitlement and quantum (amount and duration) of spousal support. The chambers judge [is] required to consider both these issues having in mind the guidance offered by SSAG (see Yemchuk v. Yemchuk, 2005 BCCA 406, 44 B.C.L.R. (4th) 77; Tedham v. Tedham, 2005 BCCA 502, 47 B.C.L.R. (4th) 254; Redpath v. Redpath, 2006 BCCA 338, 62 B.C.L.R. (4th) 233; and McEachern v. McEachern, 2006 BCCA 508, 62 B.C.L.R. (4th) 95).
[16] The distinction between reviews and variation applications was canvassed in Jordan v. Jordan, 2011 BCCA 518:
[33] By comparison, the right to a review of a support order is created by a term or condition of an agreement (see Scott v. Scott, 2008 BCCA 457 at para. 24, McEachern v. McEachern, 2006 BCCA 508 at para. 32) or court order (see Schmidt v. Schmidt, 1999 BCCA 701 at paras. 8-9, Domirti v. Domirti, 2010 BCCA 472at paras. 32-34). A review hearing does not require a preliminary threshold finding of a change of circumstances, but the agreement or order will usually define a period of time that must pass or an event or condition that must occur before the right to a review is triggered. If the condition is met, the court moves directly into a consideration of the issue(s) to be reviewed and whether the evidence supports a change in the earlier order.
[17] The injunction to specify in s. 15.2(3) orders the criteria that will determine the outcome of the review is clearly stated Leskun v. Leskun, 2006 SCC 25 where the court wrote:
- Review orders under s. 15.2 have a useful but very limited role. As the amicus curiaepointed out, one or both parties at the time of trial may not, as yet, have the economic wherewithal even to commence recovering from the disadvantages arising from the marriage and its breakdown. Common examples are the need to establish a new residence, start a program of education, train or upgrade skills, or obtain employment. In such circumstances, judges may be tempted to attach to s. 15.2 orders a condition pursuant to s. 15.2(3) of theDivorce Act, that entitles one or other or both of the parties to return to court for a reconsideration of a specified aspect of the original order. This will properly occur when the judge does not think it appropriate that at the subsequent hearing one or other of the parties need show that a change in the condition, means, needs or other circumstances of either former spouse has occurred, as required by s. 17(4.1)of theDivorce Act.
