British Columbia Family Law Blog

The B.C. family lawyers, MacLean Family Law Group, want the public to be aware of a new 2009 British Columbia spousal support advisory guidelines case which dramatically departs from previous B.C. spousal support and alimony cases.  In the family law and shared custody decision of Mann v. Mann, the British Columbia Court of Appeal applied a brand new spousal support advisory guideline calculation applying a modified “without child” formula instead of a traditional “with child” spousal support formula in situations of shared child custody. Vancouver family lawyer Lorne MacLean is concerned with the impact of this decision on households with income disparity.

 

Mann v. Mann (2009 BCCA 181) is a recent B.C. Court of Appeal decision (available on their website) which dealt with a few issues, notably spousal support. 

 

            The basic facts are these:  Mr. and Mrs. Mann had been married for some time, with two children, by the end of their cohabitation in 1999.  In October 2001, they had an oral agreement on the division of the family home.

 

Many judges have used a formula that equalizes the income in each household, in contrast to this new spousal support formula.  As a practice note, this new spousal support decision is also contrary to the DivorceMate software which automatically defaults to equalizing incomes in both households so there is not a have household v. a have-not household situation. 

 

               In addition, July 2009, Department of Justice (DOJ) Spousal Support Advisory guidelines noted problems with the “without child” formula in short marriages and suggested that “the formula may generate too little support for the low income recipient [in a marriage with a substantial income difference] even to meet her or his basic needs for a transitional period” under the Mann spousal support guidelines formula as opposed to the equalization of incomes in households formula that has been used previously.  The case points out the disparity that  exists in a very short marriage with children whereby over 50 percent of the net income would go to the sole custodial spouse versus a nominal payment to that spouse which would occur if no children were born under the “without child” formula.  In a shared custody situation, if both spouses share custody and direct costs for the child, an argument can be made for the new formula, although previous cases have not gone this route.  Consider also the situation of a short marriage where one spouse brings a child from a previous relationship into the marriage that could result in a very large payment of spousal support after a very short marriage.  In short—consult a lawyer at once if you are facing a marriage breakdown!

 

The Court of Appeal stated that “[t]he Spousal Support Guidelines cannot be applied in the circumstances of this case, without adjustment for the deferred application for spousal support, consideration of the respondent’s significant post-separation income increase, his underpayment for the family assets in 2001, as well as the amounts he actually paid under the parties’ shared custody arrangement.”

 

            In the trial judge’s decision, the concept of compensatory (as opposed to needs based) support was limited to the year immediately following separation.  In the Court’s view, compensatory support should more properly encompass “overlooked the disadvantage to her and the advantage to her husband [because] of the role she played during the marriage.”  It was stated that one can take into account a spouse’s post-separation earnings, which were supported by the advances made during the marriage.

 

Notably, the Court of Appeal approved of a modified “without child” formula, suggests in “The Spousal Support Guidelines: Buyer Beware! Read the Entire Manual and Apply with Care” found in Spousal Support Advisory Guidelines Update 2006 (Vancouver: Continuing Legal Education Society of B.C., 31 March, 2006).  This “without child” formula is in contrast to the “With child formula” which has—as the name suggests—been the normal standard applied when the spouses have children. in shared custody settings, particularly where “a payor spouse is paying the full table amount of child support.”

 

            This formula is best expressed as, “[Respondent’s income (Mr. Mann) - Adjusted child support paid] – [Appellant’s income (Mrs. Mann) + Child support paid + Child tax benefits] = Gross income difference.”  This income difference was then multiplied by 1.5-2% for each year of cohabitation, with a duration of the order to be from 0.5-1 year for each year of cohabitation.

 

To quote from paragraphs 85-88 of the judgment:

[85]  In February 2002, that formula would produce a gross income difference of $41,000 (($93,000 - $20,000) - ($16,000 + $15,000 + $1,000) = $41,000).

 

[86]      The percentage range would be 1.5% to 2% of that difference for each year of cohabitation (15 years) (22.5% to 30% x $41,000 = $9,225 to $12,300).  The duration would be 0.5 to 1 year for each year of cohabitation (7.5 to 15 years).  Thus, appropriate spousal support order would be $769 to $1,025 monthly for 7.5 to 15 years or a lump sum discounted for present value if paid immediately.

[87]      In 2007, the gross income difference would have been $46,500 (($111,500 – $15,000) – ($37,000 + 12,000 + 1,000) = $46,500).  The spousal support range would be virtually the same.  Capitalized, the suggested range of income streams translates to a minimum lump sum payment of about $63,000.  The trial judge’s award was substantially below the lowest end of the appropriate range.  Nevertheless, a payment of $63,000 would be beyond that which could reasonably be required of the respondent in his circumstances.

            In this manner, a lump sum amount awarded by the trial judge had been set aside, and Mr. Mann was directed to pay spousal support of $900 dollars monthly for eight years, as the court took “into account the appellant’s delay in pursuing spousal support, the additional commitments that delay permitted the respondent to make, and the fact that the appellant’s primary contribution was to the advancement of the respondent’s career, as opposed to the acquisition of property, his post-separation income increase, and the child support he paid.”

 

            In addition to the above formula, two important principles which were reiterated throughout the judgement were the ability of courts to look into the totality of circumstances, and the caution that people should pay close attention to any independent legal advice they may receive and act on that advice in a timely manner.