If I had a Million Dollars: How the Wealthy Divorce

Halliwell v. Halliwell 2017 ONCA 349

In this case, the Court of Appeal for Ontario is tasked with determining a spousal support obligation for a wealthy spouse. Ultimately, the judges conduct an individualized fact-specific analysis to reach their decision.

Background

When Mr. and Mrs. Halliwell originally divorced in 2006, the trial judge ordered over $3 million in equalization to be paid to the wife. An additional $29,000 per month in spousal support and $1 million in retroactive spousal support were also ordered. The husband’s income was unknown, so the trial judge imputed his income to $1 million per year because that was the average of the two numbers presented by each party’s experts. All of these amounts were appealed by the husband.

Analysis

Spousal support in Canada is calculated using the Spousal Support Advisory Guidelines. These formulas take into account a variety of factors, namely income. However, it only accounts for income amounts up to $350,000 per year. So, what happens when your income exceeds this?

The guidelines indicate that at the ceiling of $350,000, the formulas cannot be applied automatically anymore. Though this number does not actually limit the possibility of a larger spousal support payment, the courts are afforded more discretion to assign an amount that is fair in light of each case’s facts. For example, in this case the courts could apply the formula to a $1 million income or simply apply the amount as though the husband made $350,000.

What is important to note is that the trial judge in this case made an error in awarding this much spousal support because he failed to take into account the sizeable equalization payment that the wife received and the continued benefit she would receive from its interest – $3 million should go a long way to compensate her.

The Court of Appeal, in overturning the trial judge’s finding, imputed an income of $675,000 instead of $1 million. This amount is half-way between the ceiling amount and the imputed income of $1,000,000. This approach is suggested as a reasonable mid-point by the SSAGs in addressing incomes over the ceiling. The Court also reduced the wife’s monthly spousal support to $21,000 per month.

Andrew Feldstein

The Feldstein Family Law Group (FFLG) is one the largest family law firms that practices Family Law exclusively in Greater Toronto, with ten lawyers and counting. The boutique law firm has won the Top Choice Award for Family Law™ in Toronto for the past eleven years (2007 to 2017 inclusive).

Managing Partner Andrew Feldstein has been practicing family law for more than 20 years and frequently comments on Family Law issues through the media. The Feldstein Family Law Group offers vast written, video, and media resources on its website to those who find that they need to end their relationship.

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