Spousal Support Advisory Guidelines July 2008

1. BACKGROUND — THE CURRENT LAW OF SPOUSAL SUPPORT

1.1 The Legislative Framework

Spousal support, when sought in the context of a divorce, is governed by the federal Divorce Act. There are also provincial and territorial laws that govern spousal support outside the divorce context, applying to unmarried couples and to married couples who have separated but are not applying for a divorce. The statutory provisions are an important starting point in understanding the law around spousal support; they provide the framework within which the proposed advisory guidelines will operate. The Advisory Guidelines do nothing to alter that legislative framework.

Federal and provincial/territorial spousal support legislation in Canada tends to take the form of relatively open-ended provisions incorporating a variety of factors and objectives. Much room is left for judicial discretion in the interpretation and application of the legislation. Judicial interpretations in turn guide lawyers and mediators advising clients negotiating spousal support settlements.

The specific focus of this project has been on developing informal guidelines to assist in the determination of the amount and duration of spousal support under the Divorce Act. The current Divorce Act, enacted in 1985, attempts to provide guidance for spousal support determinations by setting out, in s. 15.2 (6), four objectives for spousal support:

15.2 (6) An order… that provides for the support of a spouse should

  1. recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
  2. apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above the obligation apportioned between the spouses pursuant to subsection (8) [i.e. through child support];
  3. relieve any economic hardship of the spouses arising from the break-down of the marriage; and
  4. in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

In addition, s. 15.2 (4) lists certain factors to be taken into account in making support orders for a spouse:

15. 2 (4) In making an order — the court shall take into consideration the condition, means, needs and other circumstances of each spouse including

  1. the length of time the spouses cohabited;
  2. the functions performed by the spouse during cohabitation; and
  3. any order, agreement or arrangement relating to support of the spouse or child.

Finally, s. 15.2 (5) is more specific, indicating one factor that may not be taken into account — spousal misconduct:

15.2 (5) In making an order [for spousal support or an interim order] the court shall not take into consideration any misconduct of a spouse in relation to the marriage.

Provincial/territorial support law is governed by distinctive statutory regimes. However, in practice there is much overlap between federal and provincial/territorial support laws. The leading Supreme Court of Canada decisions on spousal support, Moge and Bracklow, which will be discussed in more detail below, articulated a broad conceptual framework for spousal support that has been relied upon in decisions under both provincial/territorial and federal legislation. Indeed Bracklow, which combined claims under both the Divorce Act and provincial legislation, made no real distinction between the two.

The Advisory Guidelines were specifically developed for use under the federal Divorce Act.
However, given the overlap between the spousal support regimes in practice, it is not surprising that lawyers and judges have used the Advisory Guidelines under provincial/territorial support legislation. It is important that such use take account of the distinctive features of these statutes. In Chapter 5 on application, below, we discuss in more detail some of the specific issues that arise in the application of the Advisory Guidelines to support determinations under provincial/territorial spousal support laws.

1.2 Judicial Interpretation[3]

In two important decisions, Moge v. Moge[4] in 1992 and Bracklow v. Bracklow,[5] in 1999, the Supreme Court of Canada has attempted to clarify the general principles that structure our law of spousal support. These decisions, together with the legislation, constitute the current legal framework for spousal support. Our proposed advisory guidelines do nothing to displace these decisions, but are rather an attempt to develop formulas to better implement the principles these decisions recognize.

The combined effect of these two decisions is a very broad basis for spousal support under the Divorce Act. Both Moge and Bracklow can be seen as responses to, and rejections of, the very limited view of spousal support that had emerged from the Supreme Court of Canada’s 1987 Pelech trilogy[6] which had emphasized the importance of finality and promoting a clean break between divorced spouses. In the wake of Pelech, spousal support came to be viewed as a transitional or rehabilitative remedy. Time-limited spousal support orders came to be the norm, even in cases of long, traditional marriages.

In the ground-breaking Moge decision in 1992, the Supreme Court of Canada clearly rejected the Pelech trilogy and the clean-break model of spousal support. The Court emphasized that all four support objectives in the 1985 Divorce Act had to be given weight and that the clean-break model of spousal support unduly emphasized only one of those objectives — the promotion of spousal self-sufficiency after divorce — at the expense of all the others. Former spouses were obligated to make reasonable efforts to maximize their earning capacity and contribute to their own support but the Court recognized that some spouses, despite their best efforts, would not be able to become self-sufficient. In the Court’s view, the clean-break model went too far in deeming spouses to be self-sufficient when they were not. In Moge the Court endorsed an expansive compensatory basis for spousal support, portraying its purpose as the equitable distribution between the spouses of the economic consequences of the marriage — both its economic advantages and disadvantages. While the Court recognized that many different circumstances could give rise to compensatory claims, the decision focused on the most common situation — where a spouse has sacrificed labour force participation to care for children, both during the marriage and after marriage breakdown. Under the compensatory approach of Moge, spousal support came to be understood primarily as a form of compensation for the loss of economic opportunity — or in the language of the Divorce Act, the economic disadvantage — resulting from the roles adopted during the marriage.

The compensatory principle from Moge continues to play a significant role in structuring our law of spousal support. However, when lower courts attempted to implement the compensatory principle, which the Supreme Court of Canada had presented at a high level of generality, they ran into some difficulties on both the practical and theoretical fronts.

On the practical front, the compensatory principle is difficult to implement. Establishing a support claim requires, in principle, individualized evidence of earning capacity loss. As the Supreme Court of Canada itself acknowledged in Moge, providing this form of expert evidence can be costly. Evidence of earning capacity loss can also be difficult to obtain and somewhat hypothetical, particularly in cases of long marriages where the spouse claiming spousal support had no established career before assuming the role of homemaker. Difficult questions of causation can also arise as to why a spouse remained out of the labour force or chose lowly paid employment. On a practical level, effective implementation of the compensatory principle requires the development of proxy measures of economic loss that will inevitably involve some sacrifice of accuracy and theoretical purity.

After Moge, Canadian courts showed no enthusiasm for reliance upon expert economic evidence documenting loss of earning capacity.[7] Instead, "need" — the traditional conceptual anchor of spousal support — became a convenient proxy measure of economic disadvantage. A spouse in economic need was presumed to be suffering economic disadvantage as a result of the marriage; conversely, a spouse not in need was presumed not to have suffered any economic disadvantage as a result of the marriage. The use of need and standard of living as proxy measures for loss of opportunity was expressly endorsed by Bastarache J. A. (as he then was) in Ross v. Ross, a New Brunswick case involving a long traditional marriage:

It is in cases where it is not possible to determine the extent of the economic loss of the disadvantaged spouse that the Court will consider need and standard of living as the primary criteria, together with the ability to pay of the other spouse.[8]

At least in longer marriages, need came to be measured against the marital standard of living, a measure suggested by the Supreme Court of Canada itself in Moge:

As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.[9]

The rule that emerged in many lower court decisions was that the goal of spousal support, after a long marriage, was to provide the support claimant with a reasonable standard of living judged in light of the marital standard of living. In some cases, as in Ross, the principle for long marriages has been expressed as providing similar lifestyles or roughly equivalent standards of living for each of the spouses.

On the theoretical front, the post-Moge case law also revealed concerns with the limitations of a pure compensatory analysis that would confine the basis for spousal support to economic loss caused by the roles adopted during the marriage. Some judges shifted the compensatory focus to the economic advantages of the marriage in the form of the earning capacity the payor spouse was able to maintain and enhance. Other judges found the compensatory framework itself too restrictive. Compensatory theories narrowed the basis for entitlement. This was something many judges resisted. Some judges read the Divorce Act spousal support objectives more broadly, focussing on the section referring to the relief of economic hardship caused by the marriage breakdown. Others read Moge as a general directive to ameliorate the post-divorce impoverishment of former spouses. The most serious limitations of a compensatory analysis arose in cases involving ill or disabled spouses whose economic needs were not related to marital roles and who could not claim spousal support based on losses or gains in earning capacity during the marriage.

The Supreme Court of Canada directly addressed these limitations of the compensatory principle in its 1999 decision in Bracklow. In that case the Court ruled that there is also a non-compensatory basis for spousal support under the Divorce Act based on "need alone." Thus a former spouse has an obligation to pay spousal support if the other spouse is experiencing economic need at the point of marriage breakdown, even when that need does not arise from the roles adopted during the marriage. The Court based this obligation on a view of marriage as a relationship involving mutual obligations and complex interdependencies that may be difficult to unravel when the marriage breaks down. The Court also spoke of marriage as involving the assumption of basic social obligations, reflecting the view that primary responsibility for support of a needy partner rests upon the family rather than the state. The Court went on to say that the extent of a former spouse’s obligation to meet his or her former partner’s post-divorce needs would be dependent upon many factors, including the length of the relationship, the way the parties had structured their relationship, ability to pay, and the re-partnering or remarriage of the former spouses.

Bracklow clearly expanded the basis of the spousal support obligation under the Divorce Act to include need as well as compensation. However, in the course of doing so the decision increased the level of uncertainty about the nature and extent of the spousal support obligation, well beyond what had existed after Moge. The Supreme Court of Canada failed to provide a definition of "need", leaving open the question of whether it meant an inability to provide a basic standard of living or whether it should be assessed in the context of the marital standard of living. After Bracklow, many argued that any spouse who experienced a significant decline in standard of living after marriage breakdown was entitled to spousal support.

Even more significantly, Bracklow emphasized the highly discretionary, individualized nature of spousal support decisions. The Court was clear that the Divorce Act endorses no single theory of spousal support and must retain flexibility to allow judges to respond appropriately to the diverse forms that marital relationships can take. The Court presented spousal support determinations as first and foremost exercises of discretion by trial judges who were required to "balance" the multiple support objectives and factors under the Divorce Act and apply them in the context of the facts of particular cases. One of the main messages of Bracklow was that there were no rules in spousal support.

1.3 The Problem of Spousal Support and the Need for Guidelines

The culture of spousal support after Bracklow was one that emphasized individualized decision making and an absence of rules. Multiple theories of spousal support competed with each other while, on the ground, spousal support cases were negotiated and argued under an amorphous needs-and-means framework dominated by budgets. "Need" means many different things to different people and many different theories of spousal support can be couched in the language of need. The guidelines project sprang from the growing concern expressed by lawyers and judges that the highly discretionary nature of the current law of spousal support had created an unacceptable degree of uncertainty and unpredictability.[10]

Similar fact situations could generate a wide variation in results. Individual judges were provided with little concrete guidance in determining spousal support outcomes and their subjective perceptions of fair outcomes played a large role in determining the spousal support ultimately ordered. Appeals were often be of little help because appeal courts frequently dispose of appeals with little explanation, deferring to trial judges on issues of quantum and duration. Lawyers in turn had difficulty predicting outcomes, thus impeding their ability to advise clients and to engage in cost-effective settlement negotiations.

And for those without legal representation or in weak bargaining positions, support claims were simply not pursued. Despite a very broad basis for entitlement under the existing law, many spouses did not claim spousal support, being unwilling to engage in the difficult and costly process required.

More generally, the uncertainty and unpredictability that pervaded the law of spousal support was undermining the legitimacy of the spousal support obligation. The widely differing understandings of the nature of the spousal support obligation generated concerns about unfair outcomes at both ends of the spectrum. In some cases awards were perceived as too low, in others as unjustifiably high.

The Advisory Guidelines were a response to these concerns. They were developed for the purpose of bringing more certainty and predictability to spousal support determinations. They incorporate the basic principles of compensation and need that the Supreme Court of Canada has identified as the bases for spousal support under the Divorce Act but provide a more structured way of implementing those principles through formulas based on income sharing, i.e. formulas based on sharing specified percentages of spousal incomes.

1.4 Why Guidelines Now?

Spousal support guidelines rely upon mathematical formulas that determine spousal support as a percentage of spousal incomes. When spousal support guidelines were considered in the past, the idea was rejected as both impossible and undesirable. The conclusion was that it would be impossible to draft guidelines with sufficient flexibility to respond to the diversity of marriages and the multiple objectives of spousal support. The disadvantages of guidelines, in terms of a loss of flexibility, were seen to outweigh any advantages in terms of efficient dispute resolution. In our view, when the Advisory Guidelines project commenced in 2001, the time was ripe for reconsideration. What had changed?

First and foremost, the law of spousal support had become more unstructured, more discretionary and more uncertain over time, particularly since 1999 in the wake of Bracklow. After Moge and prior to Bracklow, there had been some hope that a principled approach to spousal support was developing through the case law. It subsequently became clear that the normal process of judicial development had effectively come to a halt. In that situation, spouses, lawyers and judges began to find attractive the greater certainty and predictability that guidelines would bring, even guidelines that were not perfect.

Second, since 1997 experience with child support guidelines, both at the federal and provincial/territorial levels, had changed the legal culture. Their formulaic approach had accustomed lawyers and judges to the systemic advantages of average justice rather than individualized justice, to determining support without budgets and to the concept of income sharing after divorce.

Third, Spousal Support Advisory Guidelines were not simply an abstract concept any more. Some American jurisdictions had successfully experimented with such guidelines for more than a decade, as explained in the Background Paper that was prepared for this project.[11] Most recently, the influential American Law Institute (ALI) had recommended a formulaic approach to spousal support as part of its comprehensive rethinking of the law of family dissolution, a process begun in the 1990s and culminating in the Institute’s final report in 2002.[12] Some American jurisdictions had begun to implement the ALI guidelines. Greater experience with guidelines was yielding more sophisticated models.

Finally, we could see the beginnings of formulaic approaches to the determination of spousal support in the current law. With the greater prevalence of computer software, especially since the Federal Child Support Guidelines came into effect in 1997, lawyers and judges could have readily available information on net disposable incomes or monthly cash flow, tax calculations and household standards of living. Armed with this information, some courts began looking to income sharing and standards of living, rather than budgets, to resolve spousal support issues.

All of these changes made spouses, lawyers, mediators and judges more interested in spousal support guidelines. In weighing the advantages and disadvantages of such guidelines, more saw the balance tipping in favour of some type of Spousal Support Advisory Guidelines.

As we embarked upon this project we identified four advantages of a scheme of Spousal Support Advisory Guidelines. These became the objectives of the project:

  1. To reduce conflict and to encourage settlement. All other financial matters on family dissolution are now governed by rules — property division, pensions, child support. Spousal support is the last remaining pool of unfettered discretion. It is also typically the last financial issue to be resolved. Spousal support thus becomes the flashpoint for unhappiness with all the other financial rules, as well as for any remaining bitterness between spouses. Advisory guidelines can limit the range of results and constrain the issues and information required, thereby encouraging settlement and damping down some of the conflict between the parties.
  2. To create consistency and fairness. When spousal support is determined in an excessively discretionary context, similar fact situations can generate wide variations in results. Moreover, the widely differing understandings of the nature of the spousal support obligation generate concerns about unfairness at both ends of the spectrum — in some cases awards may be too high, and in others too low. Advisory guidelines should create more consistent treatment of spouses who are in similar circumstances as well as more open explanations of how those outcomes were reached. This can enhance the legitimacy and perceived fairness of spousal support awards, as has been the case with the child support amounts.
  3. To reduce the costs and improve the efficiency of the process. In financial matters, it is ultimately dollars weighed against dollars, i.e. the cost of legal fees and disbursements weighed against the money gained or lost in support or property. Advisory guidelines can provide a starting point from which the parties can each decide whether further negotiation or litigation is warranted. Moreover, some spouses who previously would have given up on seeking spousal support because of the costs and unpredictable results of the highly discretionary regime will be more likely to obtain support if advisory guidelines are in place. Guidelines are even more important where one or both parties are unrepresented.
  4. To provide a basic structure for further judicial elaboration. Advisory guidelines can act to encourage or more accurately, kick start, the normal process of legal development in an area of judicial discretion. Under the current discretionary law, that process had nearly ground to a halt. Advisory guidelines can give basic structure and shape to the law, with room left for lawyers and courts to adjust, modify, and identify possible new exceptions, etc. By their very existence, advisory guidelines will create pressure to give reasons for any departures in negotiations or decisions.

The goal of the project was not to raise the current levels of support over the broad run of cases. Greater consistency under a scheme of advisory guidelines would mean that some spouses would see higher support awards and others would see lower awards. We did recognize that a scheme of advisory guidelines would likely lead to more frequent spousal support awards as spouses who previously would have given up on seeking spousal support because of the costs and unpredictable results of the highly discretionary regime would find it easier to claim spousal support.

We move next, in Chapter 2, to a more detailed description of the Advisory Guidelines project, including a discussion of the nature of the guidelines developed and the process that was used to develop them.


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