When couples separate, one party often pays the other a specific amount in spousal support. However, individuals often wonder how long they are entitled to receive spousal support payments. In Eldridge v Eldridge, 2024 BCCA 21 (“Eldridge”), the BC Court of Appeal considered this question. In short, the answer depends on whether the individual receiving support continues to be entitled to it under at least one of the three grounds for spousal support.
The Scenario
Eldridge involved former spouses who had separated after 33 years of marriage. In 2015, they entered into a separation agreement where the appellant gained sole ownership over the parties’ company in exchange for the respondent receiving the family home. The agreement also required the appellant to pay spousal support on a monthly basis until reaching the age of 65, after which there would be a review of spousal support.
When the time to revisit spousal support arrived, the parties proceeded to arbitration where the arbitrator awarded prospective support, from May 2021, on a declining basis leading up to a termination date in 2025. This meant that the appellant would pay spousal support for a limited time and at a reduced amount, eventually stopping payments altogether. In an appeal to the BC Supreme Court, the judge overturned the arbitrator’s decision. In response, the appellant appealed to the Court of Appeal seeking to have the arbitrator’s decision reinstated.
Legal Principles
According to the Court of Appeal, the framework for reviewing spousal support follows two general steps. First, the court must determine whether the party receiving support continues to be entitled to it. If so, the court must then quantify the amount of spousal support to be paid. Determining entitlement to support and quantifying its amount involves different considerations.
Entitlement to spousal support is based on at least one of three grounds: compensatory, non-compensatory, and contractual. The goal of compensatory support is to equitably share the economic consequences of a marriage or its breakdown. Typically, support of an indefinite duration is appropriate in cases where there is a long marriage and a strong claim for compensatory support. For example, a spouse that takes on a domestic role to raise children in a long-term marriage experiences an economic loss that is often permanent and difficult to quantify that, in turn, benefits the other spouse. Non-compensatory support recognizes that spouses have an ongoing responsibility to care for one another. It is intended to address the gap between the needs and means of spouses resulting from the breakdown of the marriage. Contractual grounds for spousal support arise out of an agreement between parties such as a separation agreement.
In this case, the respondent had a strong entitlement to spousal support of an indefinite duration on compensatory grounds. During the parties’ marriage, the respondent was a stay-at-home mother who raised four children while the appellant was working on projects for the company. After the separation, the respondent was unable to earn more than $24,000 per year while the appellant earned substantially more. The Court of Appeal found that as long as the appellant continued to work that the respondent would be entitled to spousal support. Allowing the appellant to work without having to pay the respondent would defeat the purpose of the compensatory rationale for spousal support. The respondent would be unable to share in the economic advantage gained by the appellant during the parties’ marriage.
The second step, quantifying spousal support, requires considering sections 15.2 (4) and (6) of the Divorce Act, RSC 1985, c. 3 (the “Divorce Act”) as well as the Spousal Support Advisory Guidelines (the “Guidelines”). The Guidelines help assess the amount of the payor’s income and contain formulas for the calculation of spousal support. A proper analysis must examine the objectives in section 15.2 (6) in light of the means, needs, and other circumstances of each of the spouses, including the factors set out in section 15.2 (4). The Court reiterated that support cannot be determined based on speculative future events which include uncertain changes in a party’s income. However, future events contemplated by the parties at the time of the order that are too speculative may be addressed by a subsequent review if the uncertainty will be resolved in the not too-distant future.
The Court’s Analysis
While the Court of Appeal found no issues with the arbitrator’s calculation of the appellant’s income, it found that the arbitrator had erred by reducing and terminating spousal support. Specifically, the Court of Appeal found that the arbitrator had made several erroneous considerations to justify the cessation of spousal support.
- First, the arbitrator incorrectly considered the appellant’s age as the most significant factor. Rather, the appellant’s age should have had a miniscule impact on varying spousal support. The arbitrator relied on the appellant’s age as a basis for finding that he was of retirement age despite no evidence that the appellant intended to retire. The appellant’s age was only important as it triggered the review of spousal support according to the separation agreement.
- Second, the arbitrator did not base the variation of spousal support on the mandatory objectives outlined in the Divorce Act. The arbitrator incorrectly placed the parties’ needs for finality and certainty over the legislative objectives.
- Third, the arbitrator considered the financial difficulties of the appellant’s company as a basis for reducing and terminating support despite the respondent’s ongoing entitlement to support. While this factor should have been considered when quantifying the appellant’s available income as well as the spousal support, it should not have been used as a justification for ceasing support altogether. The arbitrator also relied on a speculative assessment of the appellant’s future income that was not based on any assessment of the appellant’s income at the time of the order.
- Fourth, the arbitrator’s decision would have been very unfair to the respondent if the appellant did not choose to retire in the future. Ordering spousal support to stop while the appellant was still earning income would defeat the purpose of the respondent’s entitlement to support on a compensatory basis.
- Fifth, the arbitrator departed from the Guidelines formulas without a sufficient explanation. With regards to the length of the parties’ marriage and their ages, the Guidelines provide for support of an indeterminate duration. The Court clarified that where a payor’s income is greater than $350,000, the Guidelines formulas cannot simply be disregarded. In such cases, while the formulas do not automatically apply to the income of the payor that is beyond $350,000, they do apply to the income below that level.
Lastly, while the Court of Appeal agreed with the Supreme Court in overturning the arbitrator’s decision, it was not satisfied with the Supreme Court’s method of determining support arrears and prospective support. The Supreme Court had calculated support based on formulas from the parties’ separation agreement. However, the agreement provided for a de novo review of spousal support which, the Court of Appeal found, provided for the possibility to depart from the formulas in the separation agreement. According to the Court of Appeal, the correct approach requires assessing whether the separation agreement formulas can provide a remedy in accordance with the relevant legislation. If not, then the Guidelines must be followed.
Overall, the Court of Appeal decided to remit the determination of prospective support, from 2021 and onwards, back to the arbitrator.
Main Takeaway
Entitlement to spousal support and quantifying its amount involve two different sets of considerations. Provided that an individual is entitled to spousal support, factors that can be considered when quantifying may not be used to justify the termination of support. In such cases, denying the entitled party spousal support contradicts the rationale for why they should have it in the first place.
The breakdown of a relationship can be complicated especially when separation agreements are involved. Former spouses or partners often continue to have obligations to one another even after the relationship or marriage is over. Baker Newby’s family law team is experienced in handling spousal support matters and providing clients effective representation. If you have questions as to your rights involving spousal support, we are here to assist!
