Oct 7, 2014

Family law; Spousal support; Imputed earnings

Jendruck v. Jendruck, 2014 BCCA 320 (CanLII)

The court may impute income to the recipient spouse for the purpose of calculating spousal support in cases where the recipient spouse has failed to take steps toward financial self-sufficiency

BACKGROUND: The parties married in 1977 and separated in 2011. The Respondent, Ms. Jendruck, brought a claim for spousal support and the division of assets. At the time of the trial in 2013, the Respondent was not employed. She had worked for approximately 20 years in a bank during the marriage, and when that employment ended she began to work in childcare. She stopped providing childcare around the time the parties separated, and had not returned to work between 2011 and the time of the trial. The trial judge found that the Respondent had made no effort to achieve self-sufficiency, and attributed this in part to the conduct of the Appellant, Mr. Jendruck. The trial judge noted that the Respondent wished to operate a daycare in the family home, and remarked that had the Appellant approached this possibility more constructively, the Respondent might have been in a better financial position. The Appellant asked the trial judge to impute between $20,000 and $25,000 in income to the Respondent when calculating spousal support. The trial judge refused to do so, attributing the Respondent's failure to take steps towards self-sufficiency to the emotional consequences of the unanticipated end of the marriage, and the Appellant's disparagement of her. The Appellant testified that his income could be expected to decline, and that in 2013 it would be approximately $80,000. The trial judge noted that the Appellant's income had been in decline, but elected to use the Appellant's 2012 income with a $10,441 downward adjustment, resulting in an annual income of $95,559. The spousal support award was based on the upper range of the Spousal Support Advisory Guidelines, and the trial judge ordered that either party could apply for a review of the Appellant's spousal support obligations within 90 days of the Appellant turning 65 in 2020. The Appellant contested the trial judge's refusal to impute income to the Respondent, the determination of his own income level, and the term postponing any review of spousal support until 2020.

APPELLATE DECISION: The appeal was allowed in part. On the first issue, the Court of Appeal noted that the Divorce Act establishes the objective of striving for economic self-sufficiency, while recognizing that its full attainment may not be practicable. The Court went on to state that to the degree a party could make the effort to contribute to his or her own support in the circumstances, but made no such effort, the jurisprudence is clear that the consequences of the party's choice falls on them. The Appellant submitted that the trial judge erred in attributing the Respondent's failure to seek financial self-sufficiency to her emotional state and to attribute that state to the Appellant's negative view of the daycare idea. The Respondent's pleadings did not claim this was the case, and there was no evidence that she sought care for a disabling emotional or physical condition arising from the separation. The Court held that the trial judge's conclusions on this issue were unsupported on the record and were in error. The Appellant further argued that the trial judge erred in excusing the Respondent for failing to seek outside paid employment because she would not be likely to find other than unsatisfying minimum pay work. The Court similarly adopted this reasoning, noting that minimum wage would not be far from the Respondent's starting pay scale in her prior employment, and "happiness with a position is not the measure of a reasonable person seeking an income-earning opportunity." The Court considered the record sufficiently complete to impute income and adjust spousal support on appeal, rather than remit the matter to the trial court. The Respondent's income was imputed to have been $1,000 per month. On the question of the Appellant's income, the Court found that it was open to the trial judge to calculate it as he did, and that he had made no reviewable error. The Court also found the order setting the review date as 2020 a reasonable one, as it would coincide with the Appellant's retirement and a likely corresponding reduction in income. Should his circumstances change unexpectedly before that time, the Appellant would be able to seek a variation under s. 17 of the Divorce Act.