Former Husband Income Loss Can’t Reduce Support Obligations


Former Husband Income Loss Can’t Reduce Support Obligations
Posted in Family Law, Stephen Kirby Posted on January 10, 2020

Former husband responsible for own income loss can’t reduce support obligations to ex-spouse

 

A recent Superior Court judgment shows former spouses may struggle to reduce their support obligations if they are at fault for their own income loss, says Toronto family lawyer Stephen Kirby.

The case of S. v S. concerned a former husband’s attempt to vary the terms of his settled divorce due to the closure of his pub, which he claimed had left him with just a modest pension to live on. 

But the judge granted summary judgment in favour of his ex-wife, dismissing the man’s request to terminate spousal support. 

Kirby, an associate with MacDonald & Partners LLP, acted for the successful wife along with firm partner Michael Stangarone.

“What’s interesting about the case is that there was no real dispute that he had actually lost his income,” Kirby says. “But it ultimately didn’t matter, because the only available evidence showed that it was his own fault.”

The case has a long and tortured history, dating back more than a decade to the parties’ separation in 2007 after 34 years of marriage. 

Following the split, the couple’s interest in a profitable Oakville pub took centre stage in their dispute, and in one key 2012 ruling, a judge ordered that ownership of the popular establishment transfer fully from the husband to the wife.

However, as part of a final settlement reached in 2014 and converted to a final order by the court, the wife returned the pub to her former spouse. For his part, the husband agreed to pay his ex-wife $5,000 per month in spousal support and to designate her as the beneficiary of two life insurance policies with face amounts of $100,000. 

But the husband almost immediately failed to comply with the terms of the order, and by September 2019, his spousal support arrears had surpassed $200,000.

In July 2018, shortly after the pub’s demise, the husband moved to terminate support, relying on a term of the 2014 final order specifying that “the landlord’s refusal to renew the lease for [the pub], through no fault of the respondent, shall constitute a material change in circumstances.” 

He also asked for the support termination to be backdated to January 2015, arguing his personal and business income were insufficient to satisfy the obligation. 

Kirby explains that the wife’s motion for summary judgment was brought in response as a way of preventing her former spouse benefiting from his own misconduct.

During argument, he and Stangarone drew the judge’s attention to a court ruling in the separate dispute between the pub’s ownership and its landlord over the lease. The judge, in that case, ruled against the husband’s company, relying in part on an audit report that showed he had underreported the pub’s revenues and failed to pay his rent promptly. As a result of these breaches, the landlord declined to renew the lease, according to the decision. 

In the family law case, the husband argued that summary judgment was unavailable because the court did not have enough evidence to decide whether he was at fault for the lease termination. 

However, the judge disagreed, ruling that the motion to change should be dismissed as there was no genuine issue requiring a trial. If there was any evidence to support the husband’s case, now was the time to present it, the judge added, noting that parties are required to put their “best foot forward” on motions for summary judgment. 

“In the absence of such evidence, I am of the view that I can comfortably draw the inference that there is no further evidence that would help him to show that the termination of the lease was through no fault of his own,” she wrote.

Even if a trial had been required, the judge wrote that she would have stayed the husband’s motion to change until he was in compliance with previous court orders. By allowing the face value of one of his life insurance to fall to $50,000, she ruled that he was in breach of the 2014 final order, while he had also failed to pay two subsequent costs orders made in his ex-wife’s favour. 

“It has been a very difficult time for our client, and she is very pleased with the result,” Kirby says.

 

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