The Spousal Support Advisory Guidelines & The Fisher Decision

The January 2008 Fisher v. Fisher decision marks the first time the Ontario Court of Appeal addressed the Spousal Support Advisory Guidelines (“the Guidelines”).

While Fisher does not make the use of the Guidelines by courts or lawyers compulsory, it does recognize the Guidelines as a “useful tool” that is becoming an increasingly important part of everyday spousal support decision-making.

The Guidelines were developed with a view to bringing more certainty and predictability to the determination of spousal support under the federal Divorce Act. The Final Version of the Guidelines was published in July 2008, but a Draft Proposal was released back in January 2005.

Rather than conclusively determining the quantum and duration of spousal support to be paid, the Guidelines contain two basic formulas to determine an appropriate range for quantum and duration. An in-depth examination of these formulas is beyond the scope of this article.

The without child support formula is used where there are no dependent children of the marriage and where there is accordingly no child support obligation. This formula focuses on the gross income difference between the spouses and the length of the marriage.

The with child support formula is used where there are dependent children of the marriage and there is a corresponding child support obligation. This formula gives primary importance to child support, and the amount of spousal support payable is not altered by the duration of the marriage. The with child support formula uses the pool of net incomes between the spouses, rather than the gross income difference between the spouses as in the without child support formula.

Fisher involved a 19 year marriage without children. The appellant had worked while the respondent completed his education and she relocated with him to accommodate his advancing career. The respondent’s income continued to increase post-separation.
The respondent husband left the appellant wife to live with another woman and her two children. The respondent voluntarily assumed most of the financial responsibility for his new family. At the time of trial, the respondent’s income was approximately four times that of the appellant.

The Court of Appeal held that the respondent’s obligations to his second family were not to be relied upon to reduce support since his new partner was capable of working but chose not to do so. The Court awarded to the appellant seven years of transitional support to allow her to adjust to her new, post-separation standard of living.

In Fisher, Justice Lang of the Ontario Court of Appeal emphasized that the Guidelines do not replace an individualized analysis, but rather supplement it; that is, the Guidelines are to be applied in their entirety with attention to issues such as entitlement, ceilings and floors, restructuring and exceptions.

Earlier case law indicates that there is no automatic entitlement to spousal support. The Guidelines do not automatically assume entitlement; rather, they help to calculate a range of appropriate amounts once entitlement has been found.

The Guidelines establish ceilings and floors, in that they are not applicable where the payor has a gross annual income of $20,000 or less or where the payor has a gross annual income of $350,000 or more. Where the payor’s annual income is outside this range, or close to being outside this range, spousal support is at the discretion of the trial judge.

Restructuring, usually applicable to cases under the without child support formula, can be used in at least three different ways:

1. to front-end load awards by increasing the amount beyond the formula’s range for shorter duration;
2. to extend duration beyond the formula’s range by lowering the monthly amount; and
3. to formulate a lump sum payment combining amount and duration.

In Fisher, Lang J. used restructuring to provide for a higher amount over a shorter duration. After using the traditional method to determine the appropriate level of spousal support in this case, Lang J. used the without child support formula amounts as a “litmus test of reasonableness”. The Court of Appeal accordingly made an award of spousal support consistent with the Guidelines.

Fisher makes restructuring the first step to be considered when the ranges generated by the Guidelines appear to be unreasonable in the circumstances; however, there will be situations where restructuring will be insufficient or inappropriate and it will be necessary to turn to the exceptions in the Guidelines.

The Guidelines provide for a host of exceptions, including, but not limited to, prior support obligations; special needs of a child; illness and disability; and compelling financial circumstances in the interim period.

At the trial level in Fisher, both parties raised the Guidelines, but there was no reference to the Guidelines in the trial judgment. Lang J. pointed out that this was likely due to the fact that the Guidelines were relatively new when the trial took place; however, it is now law that if one of the parties argues the Guidelines, the trial judge should address them in his or her decision.

As well, if the quantum of support fixed is outside of the range suggested by the Guidelines, the trial judge’s reasons should explain why the range provided by the Guidelines would be inappropriate in the circumstances.

While the Guidelines are not law and Fisher does not elevate them to such a status, this case nonetheless makes the Guidelines an important consideration in any spousal support claim made in Ontario.