Jul 5, 2019

What Happens to Spousal Support when the Recipient Remarries?

Wegler v. Wegler, 2012 ONSC 5982 (CanLII)

What happens when somebody who is receiving spousal support after a divorce remarries? The spouse who is paying (usually the ex-husband) will often apply to have the support payments reduced or cancelled altogether. Whether a court agrees with this will depend on the circumstances. The support payment is not always reduced, particularly if it is viewed as compensation for economic loss incurred by the spouse who gave up her career to raise the children.

The old-fashioned traditional family (husband works, wife stays at home to take care of the kids) is less common, but it still exists. If such a marriage ends in divorce after many years, the wife is compensated through spousal support. This reflects the economic loss she has suffered from not developing her career. In such a situation, the spousal support award may be of indefinite duration, essentially for the recipient’s lifetime.

Spousal Support as Compensation for Not Pursuing a Career

The courts recognize that spousal support has multiple purposes. In some instances, particularly where the paying spouse has a relatively low income, it is set at a minimal level based on the pressing needs of the recipient. Among more affluent, educated couples, it is more likely to have a substantial compensatory character.

In many such situations, the wife may be highly educated, but she abandoned or restricted her pursuit of a career so that her husband could pursue his. If the marriage ends when she is middle aged, she can never recapture the lost years. Even if she manages to get back into the work force, it will be in a lower level job, and she will not be able to work enough years to earn a full pension. She has suffered a permanent loss. Moreover, the wife's loss was her husband's gain, as her sacrifice allowed him to build his career. Therefore, it can be said that she has a long-term entitlement to a share of his income regardless of whether she remarries.

The Divorce Act is a federal statute that applies uniformly across Canada to people who were married. It states as a general principle that in awarding spousal support, courts should “recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown.” Applying this broad principle to the myriad different circumstances of each couple can be challenging.

Splitting the Difference where Spousal Support is only partly Compensatory

The outcome in such cases will vary with circumstances. One of the leading cases in Ontario, from the Court of Appeal, largely split the difference. It took the view that remarriage is a “material change in circumstances” that needs to be considered in applications to vary support. It may lead to reduction of the spousal support, particularly to the extent that the support is viewed as originally having been awarded due to need.

It is often assumed that support can be partially based on need and partially compensatory, and in the absence of other evidence it is assumed to be half and half. In Harris v. Gilbert, 1997 CanLII 14497 (ON CA), <http://canlii.ca/t/233fp> the court stated:

“We agree that the wife's remarriage was a material change in circumstances within the meaning of s. 17(4) and that some variation was required since the wife had obtained self- sufficiency to a substantial degree. However, s-s. (7)(a) requires that each variation order "recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown". As the original divorce decree was made without a full trial and merely implemented the minutes of settlement, there was no material before the court at that time as to the economic disadvantage suffered by the wife… That she did incur such disadvantage is, however, self-evident. During most of the marriage, she did not pursue any career, nor was she able to make provision for any pension. The effect of that disadvantage remained at the time of the application for the variation. The wife has a relatively low-paying job with uncertain prospects. While she has been able to put some money aside for her retirement, it is nothing like the husband's military pension.”

In Harris v. Gilbert, the trial judge had reduced support from $1054 per month to $1. It was restored to $500 by the Divisional Court, and the Court of Appeal rejected both the appeal and cross-appeal against this. More recently, the BC Court of Appeal in Zacharias v. Zacharias, 2015 BCCA 376 (CanLII), <http://canlii.ca/t/gkzwx> approved cutting spousal support in half (from $6000 per month) after the wife’s remarriage, based on similar reasoning.

The reasoning in Harris v. Gilbert highlights the rough justice that may occur when there is a lack of evidence. It would be prudent for the parties to document these issues when crafting their separation agreement. There are a few where the compensatory element is explicitly stated, and that can help reduce future disagreements.

No Reduction in Support after Remarriage when the Support is Compensation for the Wife’s Economic Loss from Abandoning Her Career

There have been a number of cases where the circumstances were found not to justify any reduction in the spousal support after remarriage or “repartnering.” In these, the judge was able to find evidence that the spousal support was primarily compensatory.

The cases where there is no reduction also have an element of modern gender equality. The woman says (and the judge believes) that her new spouse expects her to contribute to household expenses. In the modern world, the fact that a man with a high income marries a woman with a lower income does not necessarily mean that he expects to support her.

Cases of this type in Ontario include Cassidy v. Cassidy, 2018 ONSC 7222 (CanLII), <http://canlii.ca/t/hwf3r> and Wegler v. Wegler, 2012 ONSC 5982 <http://canlii.ca/t/ftjn6>. Both were cases where the ex-wife was receiving substantial spousal support after her remarriage or repartnering to affluent new spouses.

In Wegler, the ex-wife had partnered with an engineer, and they had bought an expensive home together (she had received a substantial lump sum when her marriage failed). However, she had also dropped out of university to raise the children, and her earning prospects were severely reduced even after the children grew up. Her ex-husband had become a chartered accountant, aided by her role in the family, and was currently earning about $240,000 per year. The judge accepted the fact that she was expected to contribute to the household expenses that she shared with her new partner.

[95] On the one hand, by reason of the child care arrangements the parties made during the marriage and post separation, [the ex-wife] has had and continues to have compensatory claims based on economic disadvantages flowing from her assumption of primary responsibility for child care, not only during the marriage but also after separation. While that hobbled [her] ability to work, it freed Eric to work long hours without impediment. She has continued to incur financial consequences as a result.

The clearest statement of these principles comes from a 2015 decision of the British Columbia Court of Appeal, Morigeau v. Moorey, 2015 BCCA 160 (CanLII), <http://canlii.ca/t/gh7r5>. This was also a case where the ex-wife had stayed home through a long marriage to raise the children. A few years after the divorce, she started cohabiting with a man who earned about $155,000 per year, compared to her ex-husband who earned about $120,000 per year. He applied to have the monthly support payment of $1800 reduced or eliminated, on the grounds that his ex-wife’s household was now more affluent than he was. The courts roundly rejected this argument:

[33] … in my view, the spousal support order was, in the circumstances of these parties, primarily compensatory. This, as I have noted, was a long marriage. The parties had two children. Ms. Morigeau did not work outside the home for 12 years of the marriage. As the judge correctly observed, Ms. Morigeau will never achieve the same income or security that Mr. Moorey enjoys.

[36] Mr. Moorey argued that Ms. Morigeau’s cohabitation with Mr. Arens inevitably means that she enjoys a combined household income substantially greater than his own. In my opinion, that argument must fail because it is clear the primary basis for the spousal support order was compensatory…. If the original order or agreement was primarily compensatory in nature, windfall benefits are not relevant. This is because the award is not focused primarily on need, but rather on the equitable sharing of the economic consequences of the marriage or its breakdown.

Each case is decided on its own facts, but there is certainly strong precedent for the view that spousal support will not necessarily be reduced after remarriage.

There are many Canadians in second marriages, so it goes without saying that remarriage after divorce is pretty common. Most people fail to plan for its consequences in their separation agreements. This is obviously easier said than done, as there are many rancorous issues to go through when a marriage ends. However, thinking about it in advance and spelling out the consequences can avoid the need to return to court later.

The author is Principal of Spiro Law P.C., www.peterspiro.com, and Counsel to Monkhouse Law.