Spousal Support Advisory Guidelines July 2008

5. APPLICATION

In Chapter 4 we dealt with the threshold issue of entitlement that must be addressed before the Advisory Guidelines, and more specifically the formulas, are applied. In this chapter we deal with several other preliminary issues of application that, like entitlement, must be addressed before the formulas are applied.

5.1 Application to provincial/territorial law

The Advisory Guidelines were specifically developed under the federal Divorce Act and intended for use under that legislation. Provincial/territorial support law is governed by specific statutory regimes.

However, in practice there is much overlap between federal and provincial/territorial support laws. The broad conceptual framework for spousal support articulated by the Supreme Court of Canada in Moge and Bracklow has been applied under both provincial and federal legislation. Indeed Bracklow, which combined claims under the Divorce Act and provincial legislation, made no real distinction between the two.

In the Draft Proposal we recognized that it was possible, given this overlap, that the Advisory Guidelines would be used under provincial/territorial support legislation. In our view there was sufficient flexibility in the Advisory Guidelines, given their informal and non-binding nature and their use of ranges for both amount and duration, to deal with any distinctive patterns in provincial/territorial law. The three years of experience with the Advisory Guidelines since the release of the Draft Proposal have borne out this prediction. The Advisory Guidelines have frequently been used in spousal support determinations under provincial legislation, in cases involving both married couples who have separated but not yet commenced divorce proceedings[46] and unmarried couples.[47]

We recognize that there are some differences between provincial/territorial support laws and the Divorce Act. Many provincial/territorial laws have specific provisions governing entitlement, for example provisions determining which non-marital relationships give rise to a spousal support obligation. However, as discussed in Chapter 4, the Advisory Guidelines only deal with the amount and duration, and not entitlement.

Once an unmarried couple satisfies this additional provincial requirement, e.g. cohabitation for two or three years and proves entitlement, the Advisory Guidelines can then be applied. Under the without child support formula, the period of cohabitation for an unmarried couple is the same as the "length of the marriage" for a married couple. Similarly, under the with child support formula, there is no distinction drawn, as this formula is driven by net incomes, custodial arrangements and child support obligations.

Provincial/territorial statutes often include specific provisions governing the effect of agreements. However, as will be discussed immediately below, because the Advisory Guidelines do not deal with the effect of agreements there will be no conflict.

Finally, it is important to note that the list of specific factors to be considered in determining spousal support does vary from statute to statute, with some provincial/territorial legislation making explicit reference, for example, to factors such as property[48] and conduct,[49] although the impact of these differences in wording on spousal support outcomes is unclear.[50]

5.2 Application to agreements

The Advisory Guidelines confer no power to re-open or override final spousal support agreements. This issue like entitlement, is outside the scope of the Advisory Guidelines and continues to be dealt with under existing law —the common law doctrine of unconscionability, the evolving law applying the Supreme Court of Canada’s recent decision in Miglin,[51] and provincial statutory provisions which deal with the effect of a prior agreement on spousal support. When the Federal Child Support Guidelines were brought into force, changes were made to the Divorce Act providing, in essence, that the Guidelines would prevail over inconsistent child support agreements. The Spousal Support Advisory Guidelines, given their informal nature, do not have such an effect. They do not confer any power to override existing agreements. A final agreement — i.e. one waiving or terminating spousal support or setting a fixed amount with no provision for review or variation — will thus preclude the application of the Advisory Guidelines unless the agreement can be it set aside or overridden under existing law.[52]

The Advisory Guidelines do have an important role to play in the negotiation of agreements by providing a more structured framework for negotiation and some benchmarks of fairness. One possible effect of the Advisory Guidelines may thus be a reduction over time in the number of agreements that are subsequently perceived to be unfair by one of the parties. Furthermore, when an agreement is challenged, courts may use the outcome under the Advisory Guidelines to assist in identifying unfair agreements. The case law offers several examples of the Advisory Guidelines being used in this way, in the context of either a Miglin analysis or an application to override an agreement under provincial legislation.[53]

If a final spousal support agreement is set aside or over-ridden on the basis of Miglin or other applicable legal doctrines, the Advisory Guidelines may be relied upon in determining the amount and duration of support.[54] However, as is recognized in Miglin, in some cases the parties’ intentions, as reflected in their agreement, may still continue to influence the spousal support outcome and lead the courts to an outcome different from that suggested by the Advisory Guidelines.[55]

It should not be assumed that the mere presence of a spousal support agreement precludes the application of the Advisory Guidelines. If the agreement is not a final agreement, but one which provides for review or for variation upon a material change of circumstances, the Advisory Guidelines may be applicable to the determination of the amount and duration of spousal support on review or variation. This application of the Advisory Guidelines is discussed further in Chapter 14 which deals with variation and review.

5.3 Interim orders

The Advisory Guidelines are intended to apply to interim orders as well as final orders. The interim support setting is an ideal situation for the use of guidelines. There is a need for a quick, easily calculated amount, knowing that more precise adjustments can be made at trial.[56] Once an income can be established for each party it is possible under the formulas to generate ranges of monthly amounts with relative ease.

Traditionally, interim spousal support has been based upon a needs-and-means analysis, assessed through budgets, current and proposed expenses, etc. All of that can be avoided with guidelines formulas, apart from exceptional cases. Further, conflict between spouses at this interim stage can be significantly reduced and settlements encouraged, another benefit for the spouses and any children of the marriage.[57]

The Advisory Guidelines do recognize that the amount may need to be different during the interim period while parties are sorting out their financial situation immediately after separation. To accommodate these short-term concerns, the Advisory Guidelines recognize an exception for compelling financial circumstances in the interim period which is discussed in Chapter 12, dealing with exceptions.

There is another critical way that the Advisory Guidelines apply to interim orders. Any periods of interim spousal support are to be included within the durational limits fixed by the Advisory Guidelines under either formula. If the computation of duration did not include the period of interim orders, there would be incentives for some parties to drag out proceedings and for others to speed them up. Further, differing periods of interim support would result in inequities amongst spouses, with some receiving support longer and others shorter, a concern especially in cases of shorter marriages.

5.4 Review and Variation

The primary application of the Advisory Guidelines is to interim and initial determinations of spousal support at the point of separation or divorce, whether through negotiated agreements or court orders. The Advisory Guidelines also have a role to play in the determination of spousal support in the context of variation and review, but it is a somewhat more limited role. We set out three aspects of this limited role below.

First, the Advisory Guidelines do nothing to change the current structure of the law governing variation and review, including the threshold determinations of whether the conditions for a variation or review have been met.

Second, given that the Advisory Guidelines are based on income sharing, they are well-suited to adjusting spousal support amounts to changing incomes over time. The Guidelines can thus be applied in a very straightforward way to increases in the recipient’s income and decreases in the payor’s income. However, in some cases, such as post-separation increases in the payor’s income or reductions in the recipient’s income, there are threshold issues of the relevance of the changed income to the spousal claim — issues essentially of "entitlement." These threshold issues must be dealt with first, to determine to what extent, if any, the income change is to be taken into account, before the Guidelines can be applied.

Third, the impact of re-partnering, re-marriage and second families on spousal support have proven the most difficult to reduce to a formula given the uncertainty in the current law. We have left these issues to discretionary determinations under the evolving framework of the current law.

The application of the Advisory Guidelines in the context of review and variation is dealt with more extensively in Chapter 14.