Developing Spousal Support Guidelines in Canada: Beginning the Discussion
II. THE CURRENT LAW OF SPOUSAL SUPPORT
It is not the purpose of this paper to provide a comprehensive over-view of the current law of spousal support. That has been done elsewhere. Rather this portion of the paper will simply provide a brief overview of some of the main features of the current landscape of spousal support in the post-Bracklow world. This will serve two purposes. The first is to highlight the problems which have generated the need for guidelines. The second is to establish the broad framework within which any informal guidelines of the sort being proposed here would be required to operate and to show the ways in which recent developments have created fertile territory for the implementation of guidelines. Of particular interest is a series of recent decisions, best represented by the Ontario Court of Appeal decision in Andrews, where informal, judicially-crafted guidelines, are beginning to emerge.
Five central features of the current law have been identified:
- multiple theories of spousal support or no theory at all
- increasing dominance of "needs and means" analysis
- expansive basis for entitlement
- reluctance to impose rigid durational limits
- quantum is the "wildcard," but some patterns are emerging
Each will be discussed briefly in turn.
A. Multiple Theories of Spousal Support or No Theory At All
The current world of spousal support is one of conceptual confusion. Post-Bracklow there is no clear sense of what spousal support is about. Expanding on the framework articulated in Moge, Bracklow not only recognized three different bases for spousal support—compensatory, non-compensatory, and contractual—but left unanswered many questions about the nature of each kind of claim and the inter-relationship between the different kinds of support. In particular, the basis for non-compensatory support is hopelessly confused. Taking the view that there is no dominant model or philosophy of spousal support under the Divorce Act, the Supreme Court of Canada eschewed any responsibility to provide conceptual structure and guidance, and delegated to trial judges the determination of which kind of support is appropriate on the facts of any particular case.
Numerous variants of compensatory and non-compensatory theories are being drawn upon by individual judges, or no theories at all—for Bracklow's vision of spousal support as largely discretionary and fact-driven has introduced a strong anti-theoretical element into the law of spousal support. Bracklow has directed energy away from the challenge of developing coherent explanations of the basis of the spousal support obligation. Many judges have been encouraged by Bracklow to simply apply very unstructured and often unarticulated norms of "fairness" (which are typically brought to bear in interpreting the vague concept of "need"). As will be argued in the Part III of the paper, which reviews theories of spousal support in more detail, a crucial step in bringing more structure into the law of spousal support will be the clarification of the basic principles which structure the obligation. Part of this process must involve asking the question of whether all of the concepts currently being used to ground the support obligation are theoretically sound.
B. The Increasing Dominance of "Needs and Means" Analysis
In the spousal support trenches, judges and lawyers have responded to the conceptual confusion in the post-Bracklow world in one of two ways. Some continue to place primary reliance on the compensatory principle as the primary analytic tool, reserving non-compensatory support as a narrow, residual category for atypical spousal support cases not involving children and with no claims of earning capacity loss. In the majority of cases, however, courts recognize an expansive role for non-compensatory support. In a number of cases both compensatory and non-compensatory bases for any support obligation are recognized, but increasingly claims are analyzed only in non-compensatory terms. We thus see both the merger of compensatory and non-compensatory claims and the increasing dominance of a non-compensatory analysis. Certainly the non-compensatory language of "needs and means" has come to dominate spousal support discourse. These terms have become the primary analytic tools for determining spousal support, even when it is acknowledged that there may be a compensatory component to the award. This has led to a heavy emphasis on individual budgets as the primary determinant of outcomes.
The "needs and means" analysis of spousal support is the source of much of the uncertainty in the current law. "Need" can be understood in many different ways—basic needs, average needs, or those associated with the marital standard of living. An understanding of the purpose of the support obligation is necessary to structure and give content to the idea of need; but in the post-Bracklow world such theorizing has become unpopular. The assessment of need has thus become very subjective, interpreted in light of many unarticulated assumptions about the purpose of spousal support. "Needs and means" is not a theory of spousal support—it is a conduit for many different theories.
The "needs and means" framework has many attractions, particularly from a practical perspective. It avoids the complex issues of evidence and causation raised by a compensatory/economic loss model of spousal support and focuses on what is actually known at the time of the divorce—the parties' incomes and expenses and deficits. It can easily move in the direction of income-sharing, theoretically defensible models of which have been articulated and which will be reviewed in Part III of the paper, below. However, under the current "needs and means" approach, there is no clear conception of the basis for sharing income, and as a result there is a significant risk of the analysis generating results that are unjustifiable.
At one end of the spectrum, the "needs and means" analysis has led in some quarters to a resurgence of the traditional model of spousal support, generating claims for life-long support at the marital standard of living after the breakdown of any marriage, whatever its length or nature, if breakdown will leave the parties in significantly different financial positions. Such a model is theoretically unjustifiable, absent fault, and will only serve in the long run to de-legitimize the spousal support obligation. As will be shown in the review of theories of spousal support in Part III, below, plausible models of income-sharing exist, but they all in some way link the support obligation to the length and nature of the marriage or the presence or absence of children. They are not based on the fact of marriage itself or any promise or expectation of support flowing from it.
A more realistic fear is that a "needs and means" framework creates significant opportunities for spousal support to be unjustifiably denied or limited. It is very easy for concepts of need to collapse into notions of basic self-sufficiency. There is thus a risk that spouses may be under-compensated for their child-rearing responsibilities because they have managed to attain a basic level of economic self-sufficiency and to recover from any dependency during the marriage, or alternatively because they have managed to maintain a basic level of self-sufficiency during the marriage.
The move to a "needs and means" framework, while appearing to simplify the law of support around a uniform standard, has actually contributed to its fragmentation given the variety of ways in which need can be interpreted. On one view, the "needs and means" approach may ultimately facilitate the introduction of an income-sharing methodology under guidelines by having shifted the focus of spousal support analysis away from the compensatory concept of loss to that of standard of living. However, it also imposes significant impediments to a move in the direction of guidelines. For "needs and means" involves a highly individualized decision-making process in which budgets play a central role. As under the child-support guidelines, a methodology of income-sharing would eliminate the use of individual budgets. It would also eliminate the whole concept of "need," converting spousal support into an "entitlement" to a share of the other spouse's income.
C. Expansive Basis for Entitlement
With Bracklow's expansion of the basis for spousal support beyond compensation, entitlement has virtually disappeared as a significant issue in spousal support law. Even if there is no compensatory basis for support, "need alone may be enough" to ground an award of support; and if need is interpreted broadly to cover any significant drop in standard of living after marriage breakdown, as it generally has been in the post-Bracklow case law, the basis for entitlement is very broad. Disparity in income alone, regardless of type and length of marriage, is usually sufficient to trigger an entitlement to spousal support.
Spousal support law was already moving in this direction after Moge, but Bracklow has confirmed the trend. Quinn J. of the Ontario Superior Court of Justice recognized the disappearance of entitlement as a serious issue in the following statement from his judgment in Keller v. Black:
[para. 22] It seems that Bracklow has taken us to the point where any significant reduction in the standard of living of a spouse resulting from the marriage breakdown will warrant a support order—with the quantum and/or duration of the support being used to tweak the order so as to achieve justice in each case.
As Quinn J. recognizes, most of the action in spousal support cases is now with respect to quantum and duration. However, what ultimately structures determinations of quantum and duration is an understanding of the basis for entitlement. Failure to adequately understand or clarify the basis of entitlement—a common feature in the current case law—leads to uncertainty and confusion in shaping actual spousal support awards.
D. Reluctance to Impose Rigid Durational Limits
If one feature of our current law is an expansive basis for entitlement, another feature, which began with Moge and has been reinforced by Bracklow, is the increasing duration of the spousal support obligation. In general, there is a reluctance or hesitancy on the part of courts to impose durational limits so long as a support claimant can demonstrate economic need. What constitutes need is, of course, open to varying interpretations, but in marriages of any significant duration there is an increasing tendency for need to be measured against the marital standard of living and found whenever there remains a significant disparity in the post-divorce economic circumstances of the parties.
Most strikingly, time-limited orders, which were once so common, have become relatively rare. The standard spousal support order is an order for indefinite duration. In many cases it is now contemplated that spousal support will be on a permanent basis, at least of a top-up variety. Even in those cases where an eventual termination of the obligation is contemplated—for example, because of improvements in the economic circumstances of the support recipient—the preference is for such termination to be accomplished by means of a subsequent variation application when circumstances change, or by means of an order for review of spousal support at the time when such a change might be likely, rather than through a time-limit. Where re-training and re-integration into the labour force are contemplated, the time periods now being allowed for the attainment of self-sufficiency are increasingly generous. Post-Moge, courts are hesitant to make findings that a spouse has failed to make reasonable efforts to attain self-sufficiency.
Indefinite orders and review orders allow many difficult issues related to duration—such as determination of the income level at which a spouse will be understood to have become "self-sufficient" or to no longer be in "need"—to simply be put off until another day, for determination by another judge. In many ways, uncertainty about duration is tied to uncertainty about quantum. In the absence of a clear sense of what income level former spouses should end up at, there is no benchmark to determine when support is no longer needed. And in the other direction, uncertainty about duration has had an impact on quantum. Given a reluctance to impose stringent duration limits, we often see orders for modest amounts stretched out over indefinite periods, rather than more generous orders for shorter periods of time.
Time-limited orders are now generally confined to exceptional cases where the entitlement to support is clearly perceived to be of a limited and defined nature. They are used most often in very short marriages. However, post-Bracklow some judges (still a minority) have also started using time-limited orders to deal with "pure" non-compensatory support claims. In these cases, time limits reflect a particular understanding of non-compensatory support as a limited, transitional obligation, despite on-going disparities in income or even the on-going existence of basic and compelling need.
E. Quantum is the "Wildcard", but Some Patterns are Emerging
Given an expansive basis for entitlement and a general reluctance to impose rigid durational limits in cases involving significant post-divorce income disparities, most of the serious issues in spousal support come down to issues of quantum. And, not surprisingly, this is where most of the uncertainty in the current law exists. A sense of guiding principles is necessary to determine quantum, and it is thus here that the current lack of clarity with respect to the basis of the support obligation becomes apparent. There is by and large little discussion of the principles being used to determine quantum. Widely divergent, and often unarticulated, understandings of the purpose of the spousal support obligation determine how the amorphous concept of "need" is understood and thus what amount of spousal support is required to satisfy that need.
There are few discernible patterns with respect to quantum. Even in the most compelling cases for spousal support—very lengthy traditional marriages—one cannot find in the current case law any widespread acceptance of a principle of income-equalization. While there is now the occasional reference to a principle of income equalization (more often than not in Ontario), the most generous standard is typically expressed as a principle of rough equivalency of standards of living. Equivalent standards of living rarely translates, in practice, into equalization of income. And many courts even refuse to adhere to that principle, preferring to apply a standard of meeting "reasonable" needs as demonstrated in a budget. Prior research has shown that, in general, in cases of long marriages where there are no longer dependent children former wives are left with gross incomes (taking into account payment of support and their own earnings) that are between 55 and 65 percent of their husband's incomes (after deduction of support).
Outside the range of the "easiest" cases of long marriages with significant income disparities, there are even fewer patterns or principles with respect to quantum. However, there have been some interesting developments in a subset of cases where claims for spousal support are combined with child support claims. These cases show courts adopting a quasi-formulaic approach to assessing spousal support, and moreover an approach which explicitly draws on concepts of income equalization. The methodology used in these cases, which involves a comparison of net disposable household incomes, relies upon computer-generated calculations using programs developed to assist in the calculation of child support under the Guidelines.
In a number of cases involving spousal support claims where there are dependent children, courts have begun to award spousal support in an amount that, when combined with child support and the custodial parent's earnings, will result in an equalization of net household incomes. Professor Thompson has called this the "weak" version of equalization. The Ontario Court of Appeal decision in Andrews v. Andrews (and its subsequent decision in Adams v. Adams) adopt a "stronger" version of equalization. In both cases the court endorsed a methodology for assessing spousal support which would provide the wife, when combined with child support and her earnings, with 60 per cent of the parties' net disposable income and the husband with 40 per cent. Andrews goes beyond equalization of income and generates results that leave more than half the income in the household of the custodial parent. The principle informing Andrews is somewhat unclear. On the surface the decision appears to involve a complete "bundling" of child and spousal support, and a global allocation of 60% of net income to the residential parent. One might read the case as reflecting a principle of equalization of household standard of living (which takes into account the number of people living in each household and hence the greater needs in the custodial parent's household). But equalization of standards of living is not actually being achieved under Andrews—the results are simply coming closer to that than would a simple 50/50 division of income. It is unclear how one would justify a 60/40 income split on a principled basis. A better explanation of the Andrews result is that it reflects the operation of a principle, as between the spouses, of a 50/50 division of any income which remains after the payment of child support.
Even the "weak" version of equalization is not widely adopted as a method of calculating spousal support in cases where there are dependent children, and the Andrews approach is even rarer—being confined largely to Ontario, and even within Ontario to a range of higher-earner cases. Neither version of equalization reflects a dominant trend in the case law, but these cases suggest interesting possibilities for the future development of the law. These cases offer the clearest example in the current case law of courts gravitating towards a guideline approach to the calculation of spousal support. These cases also raise questions, which will be explored further in Part III below, about the basic theory of entitlement which informs them. Is it the presence of dependent children which is moving the law to adopt principles of equalization of income, or do these cases suggest an emerging norm of equalization applicable to a wider range of spousal support cases?
F. Rebuilding the Law: Next Steps
The framework for spousal support that has emerged post-Bracklow—one of conceptual confusion that emphasizes multiple bases for spousal support and encourages a large element of discretion in shaping spousal support award—has created significant uncertainty and unpredictability. Spousal support awards reflect the incredible variation generated by differing subjective perceptions of fair outcomes on the part of judges (in cases where spousal support is litigated) and individual lawyers (in cases of negotiated agreements). For every decided spousal support case, one can find another decision in which similar facts resulted in a very different spousal support award. It is this uncertainty which creates the current support for guidelines and the structure they can bring to a difficult and confused area of law.
However, while there is much uncertainty in the law, some general contours have also been established which might actually facilitate the implementation of a guideline approach. The increasing dominance of a "needs and means" analysis, although a source of much of the uncertainty in the current law, also creates fertile territory for the implementation of guideline-based schemes of income-sharing. An expansive basis for entitlement and a reluctance to impose rigid durational limits have meant that quantum—the issue which guidelines are best able to handle—has become the main issue in spousal support. As might be expected, over time certain some patterns can be discerned in the law, particularly with respect to certain kinds of marriages. Some of the patterns are generally shared across the country, some are more a reflection of local legal and social cultures. Decisions such as Andrews show that there are already some attempts within the current system to craft quasi-formulaic approaches to the calculation of spousal support. The emerging patterns in the law will constitute important "building blocks" in any project of trying to develop informal guidelines "from the ground up."
However, given that conceptual confusion has played such a large role in the fragmentation of the law of spousal, an important first step in the process of "rebuilding" is to go back to basics—back to theory. A review of the competing theories of spousal support will help us understand why the law has evolved in the way it has and assist in clarifying the basic principles which structure the spousal support obligation.
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