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MAINTENANCE AND SUPPORT - Spousal support - Needs and means test

Thursday, October 29, 2020 @ 9:06 AM  

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Appeal by the wife from a chambers judge’s decision reducing spousal support and cancelling a life insurance requirement. The parties married in 1974, separated in 2001 and divorced in 2003. They raised four children in a traditional marriage. In 2003, a summary trial judgment ordered spousal support of $8,000 per month based on the husband’s annual salary of $210,000, with a formula for sharing any bonuses. The order included cost of living adjustments that raised the monthly amount payable to $10,000 as of 2019. In addition, the order required the husband to maintain a $200,000 term life insurance policy as security. The wife also received an equalization payment of $480,125. Thereafter, the wife suffered from mental health issues arising from the unexpected death of a child. The wife’s health issues led to financial mismanagement and bankruptcy. In 2019, the husband applied to terminate or vary support based on his retirement income of $171,232. The chambers judge found that retirement constituted a material change. The wife had a continuing entitlement to support on a compensatory and needs basis. The judge reduced spousal support to $3,000 per month and quashed the life insurance requirement. The wife appealed.

HELD: Appeal allowed. There was no basis for interference with the determination that the husband’s retirement income would be significantly lower than his working income and thus retirement constituted a material change. The chambers judge was entitled to find that prudent financial management of the matrimonial property settlement would have yielded a comfortable income for the wife, weakening the compensatory basis for ongoing support, while the needs basis remained high due to no prospect of economic self-sufficiency. However, in determining the quantum of support payable, the judge failed to consider the needs-based economic hardship exception to the rule against double dipping. But for that reviewable error, a higher level of support would have been awarded. Correcting that error based on the record and the Guidelines, and recognizing the wife’s obvious financial need, the award below was varied to $4,500 per month. The life insurance requirement was reinstated, as its cancellation was requested only in the event support was terminated and the need for security remained.

J.L.B. v. W.M.B., [2020] A.J. No. 952, Alberta Court of Appeal, B.K. O'Ferrall, J. Strekaf and R. Khullar JJ.A., September 16, 2020. Digest No. TLD-October262020008