Issue: Whether the payor of spousal support who retires, is entitled to seek the reduction of support payments on basis that the pension being received was previously considered in equalization of matrimonial property. Complete Decision.
The Facts: The parties were married 36 years. On the divorce, their assets were equally partitioned resulting in each receiving approximately $370,000. The husband paid spousal support of $3,200 monthly. However upon the husband’s retirement, he applied to reduce the amount of spousal support. The trial judge reduced it to $950 per month. The Ontario Court of Appeal turned over the decision and set the support at $2,000 per month.
Decision: The Supreme Court of Canada upheld the trial judge’s decision to reduce the support at $950 per month. It held that it is generally unfair to allow the receiver of spousal support to reap the benefit of the pension both as an asset and then again as a source of income (“Double Recovery”). To avoid double recovery, the court should, where practicable, focus on the portion of the payor’s income and assets which have not been a part of the equalization division when the payee spouse’s continuing need for support is shown. Double recovery cannot always be avoided, and a pension previously partitioned can also be viewed as a maintenance asset: where the payor has the ability to pay, where the payee has made a reasonable effort to use equalized assets in an income-producing way and despite this, economic hardship from the marriage or its breakdown persists. Double recovery may also be permitted in spousal support orders/agreement based upon need as opposed to compensation. In this case, the amount of support should be reduced based on the material change in circumstances and the ability of the wife to reasonably produce an income from her investments.