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In a recent decision of the Ontario Superior Court of Justice (Noel v. Noel), the Court awarded spousal support to Mr. Noel, finding that he was entitled to this award on both a compensatory and non-compensatory basis.
Spousal Support Awards: Divorce Act and Guidance from the Supreme Court of Canada
When making an order requiring a spouse to pay spousal support, the Divorce Act sets out several factors a court must take into consideration.
Section 15.2(4) provides as follows:
Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
Section 15.2(6) sets out the objectives that an order for spousal support must achieve:
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
In addition to the guidance provided by the Divorce Act, there are two leading Supreme Court of Canada decisions (Moge v. Moge and Bracklow v. Bracklow) from which the following principles about spousal support can be gleaned:
- There are three conceptual bases to spousal support: compensatory, contractual and non-compensatory. Entitlement is often based on both a compensatory and non-compensatory basis;
- The crucial question of entitlement on a compensatory basis is equitable sharing of the economic consequences of marriage and its breakdown. One spouse’s legitimate needs alone may be enough to establish entitlement on a non-compensatory basis; and
- There are no “magical cut-off dates’ for spousal support.
Compensatory and Non-Compensatory Claims
Compensatory claims are based on either the recipient’s economic loss or disadvantage because of the marriage or on the recipient’s conferral of an economic benefit on the payor without adequate compensation. Often in long marriages with children the marital standard of living is used as a proxy measure of compensatory gains and losses.
Non-compensatory claims involve claims based on need. Need can mean an inability to meet basic needs, but it has also generally been interpreted to cover, as an aspect of economic hardship, a significant decline in standard of living from the marital standard. Non-compensatory support reflects the economic interdependency that develops as a result of a shared life, including significant elements of reliance and expectation.
Spousal Support Award in Noel v. Noel
Mr. and Mrs. Noel were married for 21 years. In the first 9 years of their marriage, they individually pursued their own careers. Mr. Noel was a member of the armed forces working as a military air controller and then he obtained a permanent position with the OPP. He gradually rose in the police force, while Mrs. Noel became an RN. During this time the couple pooled their financial resources. Mr. Noel earned the majority of the income, but Mrs. Noel contributed as well.
In 1995 Mr. Noel cashed his army pension and the couple bought a house. Mrs. Noel decided she didn’t like nursing any longer and she wanted to change careers. She gave birth to the couple’s child in April 2002, then enrolled in law school full time in September 2002.
The debts of the family slowed increased and Mr. Noel cashed an RRSP to help pay them. He also purchased back his army pension, which was financed with a $40,000 joint loan and a payroll deduction.
Mrs. Noel was called to the bar in 2007 and has built a lucrative personal injury law practice since then.
Throughout the parties’ lengthy marriage they intended full financial integration of their affairs. Mr. Noel assumed the bulk of the family’s financial burden for over 10 years while Mrs. Noel got training for the very lucrative personal injury legal practice she later established for herself. He assumed a large portion of child care and general household responsibilities while Mrs. Noel traveled daily to attend law school. Mr. Noel accepted a lower standard of living and the accumulation of family debts permitting his wife to reach her professional goals.
Seven years after Mrs. Noel was called to the bar, the parties separated. As a result of the breakdown of the marriage, Mr. Noel suffered an economic disadvantage. The separation was a joint decision, but the breakdown of the marriage left him with an economic situation less than what they had jointly planned. Mr. Noel’s standard of living was curtailed, his debts remained, especially the obligation to repay the buy-back of his pension. He had a monthly budgetary deficit of $3,000.
Mr. Noel was entitled to spousal support on both a compensatory basis and a non-compensatory basis. Mrs. Noel’s average net income was fixed at $269,600, and Mr. Noel was awarded spousal support in the amount of $2,000 per month for an indefinite period.
Although the main purpose of the spousal support award was to enable Mr. Noel to enjoy a reasonably comparable post-separation lifestyle to the marital standard, the Court also recognized that Mr. Noel should be adequately and fairly compensated for the fact that he provided Mrs. Noel with a long term economic benefit.
If you have questions about spousal support or any other family law matter, contact Gelman & Associates at (416) 736-0200 or 1-844-742-0200 or contact us online for a confidential initial consultation.
