Lump Sum Spousal Support Payments
December 12, 2011Although both the Family Law Act (for non-married spouses) and the Divorce Act (for married spouses) specifically permit the payment of a lump sum for spousal support. However and in an Ontario Court of Appeal decision of Mannarino v. Mannarino, the Court noted that lump sum spousal support was only to be awarded in very unusual circumstances, where there was a real risk where periodic support would not be paid and that lump sum spousal support should not be awarded and that lump spousal should not be awarded to effect a redistribution of property in guise of support, or where it would be unfair to deprive the payor of the ability for a variation of spousal support at a later point in time.
In the recentOntarioCourt of Appeal case ofDavisv. Crawford, the Court essentially re-visited this issue.
Davis involves a common-law couple who separated after 23 years of cohabitation, when they were 66 and 64 years of age. In this case, the trial Judge noted that the woman was deprived of any claim for property, because the parties were not married. However and as the Judge noted, that did not mean that the man’s assets should not be available for a support order, if the woman was otherwise entitled to spousal support.
Having regard to their respective financial circumstances, including their respective incomes, the trial Judge awarded a lump sum spousal support payment in the amount of $135,000.00.
The Court of Appeal confirmed the trial Judge’s decision and noted that a lump sum spousal support award should not be made for purposes of re-distributing assets. Nevertheless, a lump sum order can be made to relieve against financial hardship and the real question that the trial Judge must ask himself/herself, what is underlying purpose of the order.
The Court of Appeal noted:
- “Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.
- The advantages of making such an award will be highly variable and case- specific. They can include but are not limited to: terminating ongoing contract or ties between the spouses for any number of reasons (for example: short-terms marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependent spouse; ensuring adequate support will be paid in circumstances where there is a real risk on non-payment of period support, lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive support.
- Similarly, the disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.
- In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award.”
In summary, the Court of Appeal did not endorse the submission that the lump sum spousal support awards must be limited to very unusual circumstances; however, they agreed that most spousal support orders will be in the form of periodic payments.