The parties separated after 35 years of marriage. The husband was the primary wage earner and she stayed home with their seven kids. When they separated they agreed the husband was going to keep his pension and the wife was going to keep the matrimonial home, an approximate even split. The husband was to pay spousal support of $3,200/month. Six years later, after remarriage, the husband retired and began collecting his pension of ~$8,000/month. Of the $8,000 around $2,300 was earned after separation while $5,700 was earned during the marriage. The wife had prudently invested her share of the matrimonial property. The husband applied to have the support reduced because he his pension had already been divided and the payment of support would constitute double dipping. The motions judge accepted the husband's position, and reduced the amount of monthly support from $3,433.12, indexed, to $950, unindexed. The Court of Appeal raised this amount to $2,000/month, indexed to the cost of living. The husband appealed from this decision.
- Should support payments be reduced on grounds that one party would be paying support out of an asset received upon division of the matrimonial property?
The majority of the court held that it would not be fair to divide the property and then expect one spouse to support the other with their share of the divided property. Both spouses are obligated to use their property reasonably to maintain themselves in their retirement. When spousal support plays a compensatory role on marriage breakdown, it may be unreasonable to expect the payee spouse to generate investment income from the matrimonial home, as the ability to remain in it usually assists the payee spouse and children to maintain their previous lifestyle. When support is based on need, different considerations apply, so that where the value of the family home has become disproportionate to the means of the parties, equity may require that it be sold and replaced appropriately.
- As a general rule, any property that has already been divided should be excluded from a person's means to avoid double dipping.
- Despite the inequity of double dipping, because non-compensatory support is need based, it cannot always be avoided.
- Both spouses have a duty to reasonably use their property to maintain themselves; after retirement, they must do so in a capital-depleting manner - they must draw on savings to support themselves after retirement.
- If a spouse (payor or recipient) does not reasonably use their assets to generate income, income can be imputed to them.