Does a court have to take into account the spousal support advisory guidelines when awarding support?

[17] Mr. Sebok submits the trial judge erred in his award of spousal support by failing to consider the SSAG and making an award to the higher‑earning former spouse. I agree.

[18] In the recent case of Parton v. Parton, 2018 BCCA 273 at paras. 38–48, Justice Dickson summarized the principles guiding entitlement to and quantum of spousal support. Although Parton was decided under the Family Law Act, the principles are the same under the Divorce Act.

[19] Relying on Chutter v. Chutter, 2008 BCCA 507, leave to appeal to SCC ref’d, 33002 (28 May 2009), Dickson J.A. in Parton explained that the underlying goal of compensatory spousal support is the “equitable sharing of the economic consequences of a marriage or its breakdown”. She also explained that compensatory support “provides redress for economic disadvantage arising from the marriage (such as diminished earning capacity and sacrificed career opportunities to take on child care responsibilities) or the conferral of an economic advantage upon the other spouse (such as contributions to enhanced career development)”: at para. 39.

[20] Justice Dickson also addressed the quantification of spousal support. She noted that, once entitlement to spousal support is established, “the amount and duration of spousal support are determined based on consideration of the conditions, means, needs and other circumstances of the spouses.” She then noted that a spouse’s means “include his or her capital base, employment income or earning capacity and any other available source of benefits or gains”: at para. 43.

[21] Justice Dickson recognized the important role the SSAG play in quantifying spousal support. She held:

[46] The SSAG is a useful tool in guiding the determination of the appropriate quantum and duration of spousal support. While advisory only, it is generally consistent with the law in British Columbia: Chutter at para. 100. The SSAG formulas provide a range for periodic payment or lump sum spousal support awards taking into account case‑specific factors, such as the length of the marriage, the parties’ ages and their respective incomes or capacities to earn.

[22] Turning to the case at hand, the trial judge was quite right to conclude that, by virtue of her role as primary caregiver of the children, Ms. Babits had established her entitlement to spousal support on a compensatory basis. This finding is not challenged on appeal. The issue is the judge’s quantification of spousal support.

[23] As noted by Dickson J.A. in Parton, the SSAG contain formulas that generate a range of periodic or lump‑sum spousal support awards. In all cases, the formulas suggest awards in favour of the lower‑earning spouse. In this case, an application of the SSAG would generate an award of spousal support payable to Mr. Sebok, not by him. The parties were unable to identify any case in which an award of spousal support to the higher‑earning spouse was either claimed or ordered.

[24] This Court has previously held that reference to the SSAG is required as part of the process of quantifying spousal support: Dunnigan v. Park, 2007 BCCA 329 at para. 16. This Court has also suggested that exceptional circumstances may be required to justify a substantial departure from the SSAG: Redpath v. Redpath, 2006 BCCA 338 at para. 42.

[25] More recently, in Lightle v. Kotar, 2014 BCCA 69, leave to appeal to SCC ref’d, 35841 (25 September 2014), this Court held:

[62] … While there is no necessity for a judge to set out the grounds for departure from the SSAG (Beninger v. Beninger, 2009 BCCA 458), where there is no apparent cause for doing so and reasons are not given, there is less justification for deference to the exercise of the trial judge’s discretion.

[26] In this case, the judge neither referred to the SSAG nor identified any justification for an award of lump‑sum spousal support that was wholly at odds with them. After reviewing the record, I am unable to discern any basis for the award made by the judge.

[27] To her credit, despite the sacrifices she made during the marriage, Ms. Babits quickly established herself as a capable income earner following the parties’ separation. She also has a capital base. The trial judge awarded her one half of the family property, including title to the family home.

[28] Turning to Mr. Sebok, the judge found that he was intentionally underemployed. The judge therefore imputed income to him, but of a relatively modest amount. Mr. Sebok was also awarded one half of the family property, including (subject to his ability to meet his obligations to Ms. Babits under the orders made by the judge) title to a rental property.

[29] The judge did not identify any unmet needs or any special conditions or circumstances affecting either party.

[30] Ms. Babits’ claim for spousal support was based on her submission that the judge ought to impute income of over $180,000 per year to Mr. Sebok. The judge did not accept Ms. Babits’ submission. Rather, the judge imputed less income to Mr. Sebok than the income actually earned by her. Further, he made no findings of exceptional circumstances that could support a spousal support award to the higher-earning former spouse.

[31] In all the circumstances of this case, I agree with Mr. Sebok that the judge erred in principle in failing to consider the SSAG and, in the absence of any discernable reason for doing so, awarding spousal support to the higher‑earning former spouse, Ms. Babits.

[58] Mr. Parton also contends that the judge treated the SSAG as having the force of law, rather than as advisory. For example, he stated Ms. Parton was entitled to indefinite support “on the basis” of the SSAG (para. 100), described the quantum and duration of support as that which was “appropriate” or “required” under the SSAG(paras. 101 and 103) and treated the objectives of spousal support as being met by the SSAG calculation (para. 105). Citing Chutter and Yemchuk, Mr. Parton emphasizes the SSAG are advisory only, and says the quantum and duration of support cannot be determined simply by looking at SSAG calculations. In his submission, that is, in substance, how the judge proceeded, thus failing to make a considered determination of the appropriate quantum and duration of spousal support.

[...]

[65] Nor did the judge treat the SSAG as having the force of law, rather than as merely advisory. He used the SSAG mid-points of $1,666 in periodic support and $388,591 in lump sum form as a reference point, but he did not make a spousal support order within the SSAG range. However, in making his spousal support order, he did conclude, correctly, that Ms. Parton is entitled to indefinite support, citing both the SSAG and Chutter as the basis of his conclusion. As noted, in Chutter this Court held that the SSAG is generally consistent with the law in this province. Although, in my view, the judge erred in determining the quantum of spousal support to award, he clearly made a considered determination on quantum and duration for the reasons that he fully explained.

[...]

[77] As discussed, though advisory only, the SSAG is a useful tool for guiding a judge’s determination of spousal support. Based on the parties’ ages and current incomes, and discounted for Ms. Parton’s life expectancy, the SSAG yielded a range for lump sum spousal support of indefinite duration from a low of $334,209 to a high of $413,364, with a mid-point of $388,591. The marital standard of living was sustained over the years at similar income levels, Mr. Parton would retain (at least) that earning capacity even if he retired as planned and Ms. Parton was entitled to spousal support until full compensation was achieved: Rozen. However, to recognize Mr. Parton’s excluded property claim, the judge awarded spousal support well below the SSAG range and Ms. Parton received no other form of compensation for the economic consequences of the marriage and its breakdown, such as a reapportionment of family property.

[78] As the Supreme Court of Canada held in Leskun, the “means” of a spouse for spousal support purposes include his or her capital base, employment income or earning capacity and any other available source of benefits or gains. In my view, the character of the asset(s) from which the spousal support order may be paid (i.e., family, excluded or other property) is irrelevant to the proper quantum of lump sum spousal support. It follows that the judge erred in taking into account Mr. Parton’s substantial excluded property claim when he determined the quantum of spousal support to which Ms. Parton is entitled. I agree with Ms. Parton that, in the absence of any reapportionment of family property, the $250,000 lump sum award does not fully meet the objectives of spousal support.

[79] Taking into account all of the circumstances, including the absence of exceptional circumstances that would justify an award substantially above or below the SSAG range, in my view the appropriate quantum of lump sum spousal support is $388,591.

[20] The trial judge found the appellant to be entitled to spousal support and ordered the respondent to pay support of $1,100 per month for 5 years. The duration of the spousal support was said to be reasonable in light of the length of the relationship of the parties (16 years) and the ability of the appellant to become and remain self-sufficient. There is no express reference in the reasons for judgment to the duration of the support recommended by the Spousal Support Advisory Guidelines (“SSAG”).

Grounds of Appeal

[21] The appellant says the trial judge erred in finding the respondent’s book of business was not a family asset available for division while at the same time apportioning a share of the contingent liability incurred in developing that business to her.

[22] The trial judge is said to have further erred both in using the appellant’s grossed-up income as the basis for assessing child and spousal support and in determining the amount of child support and the amount and duration of spousal support without appropriate reference to the SSAG or the Guidelines established pursuant to the Divorce Act. The figures fixed are said to vary dramatically from the Guidelines without justification for that variance.

[...]

[62] This Court described the appropriate role of the SSAG in Redpath v. Redpath, 2006 BCCA 338. Failure to refer to the SSAG may constitute a reversible error; however, substantial deviation from the range of outcomes established by the SSAG must be justified by special circumstances. While there is no necessity for a trial judge to set out the grounds for departure from the SSAG (Beninger v. Beninger, 2009 BCCA 458), where there is no apparent cause for doing so and reasons are not given, there is less justification for deference to the exercise of the trial judge’s discretion. As Huddart J.A. noted in Beninger v. Beninger:

[28] In my view, the appellant overstates the power of the Spousal Support Advisory Guidelines in her circumstances when she argues the chambers judge was required to apply them unless she justified not doing so. While it is preferable for a court to organize its analysis by reference to the Guidelines as well as the statutory requirements and authorities applying them, neither the Divorce Act nor the authorities require justification for deviation from them. The appellant’s proposition does apply to the Child Support Guidelines because of the requirements in s. 17(6.1) and 17(6.3) of the Act to apply the Guidelines and to give reasons for deviating from them where deviation is permitted. Nowhere in the Divorce Act are there comparable provisions requiring compliance with the Spousal Support Advisory Guidelines or reasons for deviating from them. As their name indicates, they are advisory and without statutory effect. That said, they provide helpful advice and this Court has been clear that their advice must be taken seriously and that best practice would include an explanation of any deviation from them.

[63] The practice of justifying departures from the SSAG was described as more of an obligation than a best practice by Smith J.A. in Kerr v. Baranow, 2009 BCCA 111, rev’d in part on other grounds 2011 SCC 10:

[84] In calculating the amount and duration of spousal support, the jurisprudence requires an application of SSAG unless reasons are provided for why SSAG may not be appropriate: Yemchuk [Yemchuk v. Yemchuk, 2005 BCCA 406], Tedham [Tedham v. Tedham, 2005 BCCA 502]. …

[64] In the case at bar, the trial judge looked to the SSAG and the “with child support” formula and expressed the view that he was using the $200,000 and $53,000 figures, determined above, to arrive at an appropriate amount of spousal support. He noted that the respondent had agreed to pay spousal support at the mid-level of the SSAG, stated to be $967 per month. This was increased to $1,100 per month by the trial judge with a view toward paying for the appellant’s further education. The duration of spousal support was set at 5 years.

[65] Both these awards fall below the low end of the support described by the SSAG, which, on the incomes referred to in the judgment, call for support in the range of $2,542 to $3,647 for a duration ranging from 8 to 16 years. The monthly payment appears to have been set at an inappropriately low figure as a result of the use by the trial judge of the calculations prepared by the respondent’s counsel. Counsel advises us those calculations were based on his submission that the respondent’s income for guideline purposes should be set at $100,000 per annum rather than $200,000 per annum. The reference by the trial judge to an amount in the midrange of the support described in the SSAG was apparently a reference to the midrange of the figures provided by the respondent’s counsel based on income levels rejected by the trial judge.

[66] I would order spousal support at the midrange of the SSAG, calculated on the basis of the parties incomes as determined by the trial judge (but adjusted, in relation to the appellant, downward to $42,500) at an amount of $3,095 per month.

[16] In determining the quantum of support the trial judge referred to the Spousal Support Advisory Guidelines, as he is obliged to do. Using Mr. Park’s income, and assuming an income of $12,000 per year for Ms. Dunnigan, the resulting range of spousal support $1,200 - $1,600 per month. The trial judge also estimated spousal support assuming an income of $22,000 per year for Ms. Dunnigan, the most she ever made in the marriage. The range in that case was $900 to $1,200 per month. An award of $1,200 per month left Mr. Park with after tax income of $2,400 per month, as compared with Ms. Dunnigan’s after tax income of $935 per month (exclusive of the income imputed to her). Given the length of the marriage, the roles played by the spouses during the marriage, the disproportionate effect of the marriage breakdown on Ms. Dunnigan as compared with Mr. Park and the current financial circumstances of the parties, I am satisfied that the trial judge was justified in making the spousal support order he did. In so doing, he properly used the Spousal Support Advisory Guidelines as just that, a guide to a range of awards, rather than as a set figure which must be applied or awarded.

[60] For a payor with income of $540,000 and a recipient with income of $18,000, the SSAG suggest a range in support at the low end of $11,093 per month, a mid-range of $12,941 per month, and a high range of $14,790 per month. A question arises as to whether or not the SSAG should be applied to alter the determinations I have reached in their absence, being an indefinite spousal support award of $10,000 per month for an indefinite period of time. The order formulated above in these Reasons is lower than the range provided in the SSAG but for a longer duration than would otherwise be provided by the SSAG. Below is a summary of judicial consideration of the appropriateness and requirement of applying the SSAG to a review application.

[61] Prior to the publication of the SSAG, Justice L’Heureux-Dubé stated that a possible disadvantage “lies in the risk that [they] may impose a strait-jacket which precludes the accommodation of the many economic variables susceptible to be encountered in spousal support litigation”: Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813 at 872, 43 R.F.L. (3d) 345.

[62] The Court of Appeal has noted that the SSAG are not binding, most recently in Mann v. Mann, 2009 BCCA 181 at paras. 72-73, where they were described as a useful tool to establish a pattern of predictable awards. However, the British Columbia Supreme Court still retains “a broad discretion”.

[63] However, in Redpath v. Redpath, 2006 BCCA 338 at para. 42, 33 R.F.L. (6th) 91, the Court stated it may be a reviewable error for a trial judge to make an award outside the range of quantum and duration predicted by the SSAG absent special circumstances. Subsequently, the Court of Appeal made reference to a trial judge’s obligation to at least consider the SSAG when fashioning an award of spousal support: Dunnigan v. Park, 2007 BCCA 329 at para. 16, 38 R.F.L. (6th) 241. In Fisher v. Fisher, 2008 ONCA 11 at para. 103, 47 R.F.L. (6th) 235 the Court stated:

In my view, when counsel fully address the Guidelines in argument, and a trial judge decides to award a quantum of support outside the suggested range, appellate review will be assisted by the inclusion of reasons explaining why the Guidelines do not provide an appropriate result. This is no different than a trial court distinguishing a significant authority relied upon by a party.

[64] Having stated a trial judge should address the Guidelines in his or her reasons, the Court in Fisher noted the Guidelines are inapplicable in certain cases (at para. 96):

Importantly, the Guidelines do not apply in many cases. They specifically do not apply at all in certain enumerated circumstances, including where spouses earn above $350,000 or below $20,000. Furthermore, they only apply to initial orders for support and not to variation orders. They are thus prospective in application. They do not apply in cases where a prior agreement provides for support and, obviously, in cases where the requisite entitlement has not been established. They will not help in atypical cases. As well, there will be regional variations, as well as rural and urban variations, that may be seen to merit divergent results based on variations in cost of living or otherwise. Importantly, in all cases, the reasonableness of an award produced by the Guidelines must be balanced in light of the circumstances of the individual case, including the particular financial history of the parties during the marriage and their likely future circumstances.

[65] In Bryant v. Gordon, 2007 BCSC 946, 45 R.F.L. (6th) 99, Mr. Justice Slade rejected “the plaintiff's argument that the Spousal Support Advisory Guidelines should apply to establish quantum on the basis of the present respective incomes of the parties… [t]he Spousal Support Advisory Guidelines are directed to an initial post-separation determination of spousal support, not a determination on review” (para. 44). “Though not directed to quantum on a review, the Advisory Guidelines indicated figures that may serve as a check on pre-Guidelines determinations of support, and a tool in the analysis leading to a determination of quantum on review” (para. 57).

[66] This conclusion was followed in Emery v. Emery, 2007 BCSC 1747 at para. 32, 47 R.F.L. (6th) 72, where Justice Powers stated, “I take it from these cases that the SSAG were not designed to deal with reviews or applications to vary spousal support, but that they do provide a form of checklist”.

[67] Madam Justice Bruce disagreed with this conclusion in Skelly v. Skelly, 2007 BCSC 810 at para. 8, stating “there is no supportable basis for excluding consideration of the Spousal Support Advisory Guidelines when the Court addresses the issues of quantum and duration in the course of a review application”. The New Brunswick Courts have reached a similar conclusion: Cavanaugh v. Cavanaugh, 2008 NBQB 387 at para. 57, 341 N.B.R. (2d) 166, rev’d on other grounds, 2008 CarswellNB 630 (C.A.).

[68] In Beninger v. Beninger, 2007 BCCA 619, 47 R.F.L. (6th) 11, the Court held that if approached with caution and on a fact specific basis, the SSAG may be used on a variation application, keeping in mind the SSAG are “a guide, not… the ultimate arbiter of either the amount or duration of support” (para. 57). This authority led Madam Justice L. Smith to conclude that the SSAG are relevant on review as well, but “similar caution and advertence to the context should apply” (J.M. v. L.D.M., 2008 BCSC 1235 at para. 73).

[69] In light of the conflicting authorities referred to above, the safest course to follow may be the approach outlined by Justice Metzger in Kerman v. Kerman, 2008 BCSC 500 at para. 76, 53 R.F.L. (6th) 156:

I turn to quantum. I bear in mind the principle from Bryant that the Guidelines may be less applicable on a review. I bear in mind also the principle from Redpath v. Redpath, 2006 BCCA 338 (B.C. C.A.), at para. 42, that it may be an error of law to "substantially" depart from the Guidelines in the absence of "exceptional circumstances" or, as subsequent cases have stated, at least a "reasonable explanation" (for example, McEachern at para. 64). In my view, the synthesis of these decisions is that the principle in Redpath continues to apply on a review, but the exceptional circumstance or reasonable explanation inquiry for departing from the Guidelines will usually be broader on a review, as per Bryant, than it might be on an initial determination.

[70] Interestingly, while the SSAG were referred to in Tedham v. Tedham, 2005 BCCA 502, 20 R.F.L. (6th) 217, the court did not apply them. Given that the marriage there was 16 years in duration, and the “Rule of 65” did not apply, the SSAG called for a time-limited order. The court held that a time-limited order would reflect the clean-break philosophy, and that compensatory aspects of support had only been partially achieved. The Court also awarded Ms. Tedham an award of support which was outside the SSAG range, taking into account a reapportionment of family property in her favour.

[71] As I have determined that the defendant’s income is in excess of $350,000, it is questionable whether the SSAG can even be applied in the circumstances. That being said, I have considered the SSAG. I have concluded that due to the circumstances of this case and in particular the circumstances of Ms. Bockhold, and particularly those related to her learning disability, it is appropriate to fashion an award which is lower than what the guidelines, if applicable, might call for but of a longer duration. In all the circumstances, an indefinite award in my view is appropriate.