While it’s unfortunate, it is not uncommon to see a spouse with child or spousal support obligations attempt to reduce their income or assets in order to lower the amount of support they have to pay per month. To preemptively address this, courts can include orders that a support-paying spouse to not deplete their assets. In a recent case heard before the Ontario Superior Court of Justice, the court was asked to determine if a father was in violation of such an order when he withdrew funds from his RRSP.
The mother and father had four children during their time together. They separated in October 2009 after being married for eight years. They divorced in 2012 after two years of extensive litigation. During this time the court eventually made an order for support. Included in this order was the wording, “The (mother) and the (father) shall be restrained from depleting their respective property.” However, in the time following the signing of the order, the husband made a number of withdrawals from his RRSP. These withdrawals totaled $104,941.62. When the mother learned of this, she took it to be a violation of the order.
The father tries to explain
The father told that court that he had used the money to pay legal bills, credit card bills, and rent to his parents, with whom he had been living. He told the court,
“He understood non-depletion to mean that he was not to pay anything that was not part of his normal day-to-day living expenses. He was not to ‘abscond with the money,’ ‘be irresponsible,’ ‘go to Cuba type of thing’ or ‘you know, buy a Ferrari.’ He stated that he believed he could pay legal bills, pay rent, and pay for living expenses. He said that (his lawyer) told him that ‘you gotta do what you gotta do.’ At the same time, he stated that he was not ‘putting (his lawyer) under the bus’ and that he knew there was a possibility that he could be found in contempt.”
The court doesn’t buy it
The court found that the father’s legal advice was “less clear than it could have been about what constitutes depletion.” The court also found that the husband’s income of $70,000 per year was enough for him to meet his living expenses.
The Supreme Court of Canada had previously laid out the elements that must be established to find someone in contempt of an order. They are:
a. The order alleged to have been breached must state clearly and unequivocally what should and should not be done;
b. The party alleged to have breached the order must have actual knowledge of it;
c. The party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to the act that it compels.
The court found the facts in this case to have met all of the requirements. The order was clear and understood by the father. His actions were an intentional violation of the order. The court stated the husband should have sought permission from the court in order to take the actions he did.
The court found the husband to be in contempt, but gave him a short period of time (about a month) to repay the money he took out of his RRSPs.
Contact Gelman & Associates if you are involved in a separation or divorce and have questions about spousal or child support, including order made in the past. In addition to our firm’s separation and divorce handbook and numerous web-based resources, all prospective clients are given a comprehensive family law kit during their initial consultation, with ample information and resources to help individuals understand and navigate the separation and divorce process. We can be reached by phone at 1-844-769-0737 or online in order to schedule an initial consultation