Boston v. Boston (2001), 149 O.A.C. 50 (SCC)
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[French language version follows English language version]
[La version française vient à la suite de la version anglaise]
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Temp. Cite: [2001] O.A.C. TBEd. JL.034
Willis Barclay Frederick Boston (appellant) v. Shirley Isobel Boston (respondent) and Women’s Legal Education and Action Fund (intervener)
(27682; 2001 SCC 43)
Indexed As: Boston v. Boston
Supreme Court of Canada
McLachlin, C.J.C., L’Heureux-Dubé, Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ.
July 12, 2001.
Summary:
The parties separated in 1995 after a 36 year traditional marriage. Under a 1994 consent judgment, the wife received spousal support of $3,200/month. The husband sought, inter alia, a variation of support and rescission of support arrears.
The Ontario Court (General Division), inter alia, reduced spousal support to $950/month and rescinded the support arrears. The wife appealed.
The Ontario Court of Appeal, in a decision reported 126 O.A.C. 296, allowed the appeal and set support at $2,000/month. The husband appealed.
The Supreme Court of Canada, LeBel and L’Heureux-Dubé dissenting, allowed the appeal and, inter alia, reinstated the motions judge’s variation of the award of $950/ month.
Family Law – Topic 880.28
Husband and wife – Marital property – Distribution orders – Pensions – The Supreme Court of Canada stated that a pension was “property” under the Family Law Act (Ont.) and was to be included in the equalization of net family properties – The equalization entitlement could be implemented by the “if and when” method or by the lump sum method – The Supreme Court of Canada discussed these two methods of pension implementation and their respective advantages and disadvantages – See paragraphs 46 to 53.
Family Law – Topic 880.28
Husband and wife – Marital property – Distribution orders – Pensions – [See both
Family Law – Topic 4017
and first, second and third
Family Law – Topic 4022
].
Family Law – Topic 3997
Divorce – Corollary relief – General – Obligation to achieve financial independence – [See first
Family Law – Topic 4017
and second
Family Law – Topic 4022
].
Family Law – Topic 4009.1
Divorce – Corollary relief – Maintenance and awards – Awards – Effect of retirement of spouse – [See both
Family Law – Topic 4017
and first and second
Family Law – Topic 4022
].
Family Law – Topic 4017
Divorce – Corollary relief – Maintenance and awards – Awards – Variation of periodic payments – The parties separated in 1995 after a 36 year traditional marriage – The husband had earned $115,400/year – Under a 1994 consent judgment, the wife received spousal support of $3,200/month – There had been an equalization of marital property – The wife received assets of $370,000 in exchange for a share of the capitalized value of the husband’s pension – The husband retired in 1997 and received $8,000/month in pension income – His net capital assets were $7,000 – The wife’s income was $18,240/year and her assets had grown to $493,486 – The husband applied to reduce the amount of support arguing that his retirement, his reduced income and the systematic depletion of his pension as capital amounted to a material change in circumstances – The motions judge allowed the application and reduced support to $950/month – The Supreme Court of Canada, inter alia, affirmed the motions judge’s award based on the material change in circumstances and the wife’s ability to reasonably produce an income from her investments – The wife would not suffer hardship if double recovery from the previously equalized portion of the pension was not allowed – See paragraphs 67 to 81.
Family Law – Topic 4017
Divorce – Corollary relief – Maintenance and awards – Awards – Variation of periodic payments – The Supreme Court of Canada stated that there “is no reason per se that spousal support cannot continue past the date of retirement of the pension-holding spouse. However, several factors must be considered in making that decision. On retirement, the pension-holding spouse may apply to vary the support order if his
ability to pay
support is compromised… The decision of whether to vary support depends on whether the applicant can demonstrate that there has been a material change in circumstances… The payee spouse’s need and the payor spouse’s ability to pay are always factors which a court considers when determining spousal support… Another issue is the extent, if any, of ‘double recovery’…. To avoid double recovery, the court should, where practicable, focus on that portion of the payor’s income and assets that have not been part of the equalization or division of matrimonial assets when the payee spouse’s continuing need for support is shown….” – See paragraphs 61 to 64.
Family Law – Topic 4022
Divorce – Corollary relief – Maintenance and awards – Awards – To wife – Considerations – The Supreme Court of Canada stated that the “term ‘double recovery’ is used to describe the situation where a pension, once equalized as property, is also treated as income from which the pension-holding spouse… must make spousal support payments…. Double recovery appears inherently unfair in cases where, to a large extent, the division or equalization of assets has addressed the compensation required…. The apparent unfairness arises when the other spouse receives support payments from the pension income after the pension-holder retires.” – See paragraphs 34 to 36.
Family Law – Topic 4022
Divorce – Corollary relief – Maintenance and awards – Awards – To wife – Considerations – The Supreme Court of Canada stated that when “a pension is dealt with by the lump-sum method, the pension-holding spouse… must transfer real assets to the payee spouse… in order to equalize matrimonial property. The wife can use these real assets immediately. Under a compensatory spousal support order or agreement, the wife has an obligation to use these assets in an income-producing way. She need not dedicate the equalization assets to investment immediately on receiving them; however, she must use them to generate income when the pension-holding spouse retires…. the payee spouse must use the assets received on equalization to create a ‘pension’ to provide for her future support. This requirement is based on the principle that, as far as it is reasonable, the payee spouse should attempt to generate economic self-sufficiency. Self-sufficiency is only one factor of many that is weighed…. The obligation on the payee spouse to generate income from her assets would be satisfied by investing in a capital depleting income fund which would provide a regular annual income.” – See paragraphs 54 to 58.
Family Law – Topic 4022
Divorce – Corollary relief – Maintenance and awards – Awards – To wife – Considerations – The Supreme Court of Canada stated that “… double recovery cannot always be avoided. In certain circumstances, a pension which has previously been equalized can also be viewed as a maintenance asset. Double recovery may be permitted where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and, despite this, an economic hardship from the marriage or its breakdown persists. Double recovery may also be permitted in spousal support orders/ agreements based mainly on need as opposed to compensation…” – See paragraph 65.
Family Law – Topic 4022
Divorce – Corollary relief – Maintenance and awards – Awards – To wife – Considerations – [See both
Family Law – Topic 4017
].
Family Law – Topic 4022.1
Divorce – Corollary relief – Maintenance and awards – Awards – To spouse – Extent of obligation – [See both
Family Law – Topic 4017
and second
Family Law – Topic 4022
].
Family Law – Topic 4026
Divorce – Corollary relief – Maintenance and awards – Awards – Effect of use of marital home – The Supreme Court of Canada stated that when “spousal support plays a compensatory role on marriage breakdown, it may be unreasonable to expect the payee spouse to generate investment income from the matrimonial home. As far as is practicable, the support payments should provide a level of income sufficient to maintain a lifestyle that is comparable to that enjoyed during the marriage. The ability to remain in the matrimonial home usually assists the payee spouse and the children in maintaining their previous lifestyle…. Generally, the payee spouse would not be expected to sell or leave the matrimonial home, particularly if there are dependent children. However, in cases where the support order is based mostly on need as opposed to compensation, different considerations apply. It is not impossible to envisage circumstances where the value of the family home has become disproportionate to the means of the parties so that equity requires that it be sold and replaced appropriately.” – See paragraphs 59 and 60.
Family Law – Topic 4027
Divorce – Corollary relief – Maintenance and awards – Awards – Effect of income or potential income of claimant – The Supreme Court of Canada stated that “if the payee spouse receives assets in exchange for a share of the capitalized value of the other spouse’s pension and she does not invest those assets in an attempt to produce an income, the court should impute an income to the payee spouse based on what those assets could reasonably produce if invested. This should not be based on artificial assumptions but on professional actuarial advice.” – See paragraph 66.
Family Law – Topic 4027
Divorce – Corollary relief – Maintenance and awards – Awards – Effect of income or potential income of claimant – [See first
Family Law – Topic 4017
, second
Family Law – Topic 4022
and
Family Law – Topic 4026
].
Family Law – Topic 4034
Divorce – Corollary relief – Maintenance and awards – Awards – Effect of division of matrimonial property – [See both
Family Law – Topic 4017
, first, second and third
Family Law – Topic 4022
and
Family Law – Topic 4026
].
Words and Phrases
Double recovery
– The Supreme Court of Canada discussed the meaning of this phrase as it was used in the context of a pension-holding spouse making spousal support payments after retirement – See paragraphs 1 and 34 to 36.
Cases Noticed:
Best v. Best, [1999] 2 S.C.R. 868; 242 N.R. 1; 123 O.A.C. 1, refd to. [para. 33].
Veres v. Veres (1987), 9 R.F.L.(3d) 447 (Ont. H.C.), refd to. [para. 38].
Butt v. Butt (1989), 22 R.F.L.(3d) 415 (Ont. H.C.), refd to. [para. 38].
Linton v. Linton (1990), 42 O.A.C. 328; 1 O.R.(3d) 1 (C.A.), refd to. [paras. 39, 113].
Strang v. Strang, [1992] 2 S.C.R. 112; 137 N.R. 203; 125 A.R. 331; 14 W.A.C. 331, refd to. [paras. 39, 110].
Flett v. Flett (1992), 43 R.F.L.(3d) 24 (Ont. U.F.C.), refd to. [para. 40].
Rivers v. Rivers (1993), 47 R.F.L.(3d) 90 (Ont. Gen. Div.), refd to. [para. 40].
Grainger v. Grainger (1992), 100 Sask.R. 161; 18 W.A.C. 161; 39 R.F.L.(3d) 101 (C.A.), refd to. [para. 40].
Nantais v. Nantais (1995), 16 R.F.L.(4th) 201 (Ont. Gen. Div.), refd to. [paras. 41, 114].
Rintjema v. Rintjema (1996), 18 O.T.C. 385 (Gen. Div.), refd to. [para. 41].
Shadbolt v. Shadbolt (1997), 45 O.T.C. 124; 32 R.F.L.(4th) 253 (Gen. Div.), refd to. [paras. 42, 111].
Hutchison v. Hutchison (1998), 38 R.F.L.(4th) 377 (Ont. Gen. Div.), refd to. [para. 45].
Campbell v. Campbell (1998), 79 O.T.C. 274; 40 R.F.L.(4th) 462 (Gen. Div.), refd to. [para. 45].
Hickey v. Hickey, [1999] 2 S.C.R. 518; 240 N.R. 312; 138 Man.R.(2d) 40; 202 W.A.C. 40, refd to. [para. 72].
Moge v. Moge, [1992] 3 S.C.R. 813; 145 N.R. 1; 81 Man.R.(2d) 161; 30 W.A.C. 161, refd to. [para. 93].
Bracklow v. Bracklow, [1999] 1 S.C.R. 420; 236 N.R. 79; 120 B.C.A.C. 211; 196 W.A.C. 211, refd to. [para. 93].
Droit de la famille – 1688, [1992] R.J.Q. 2797 (C.A.), refd to. [para. 101].
Ross v. Ross (1995), 168 N.B.R.(2d) 147; 430 A.P.R. 147 (C.A.), refd to. [para. 104].
Iurincic v. Iurincic (1998), 69 O.T.C. 81; 40 R.F.L.(4th) 258 (Gen. Div.), refd to. [para. 108].
Dolman v. Dolman (1998), 63 O.T.C. 351; 38 R.F.L.(4th) 362 (Gen. Div.), refd to. [para. 112].
Carter v. Carter (1998), 76 O.T.C. 268; 42 R.F.L.(4th) 314 (Gen. Div.), refd to. [para. 112].
LeMoine v. LeMoine (1997), 185 N.B.R.(2d) 173; 472 A.P.R. 173 (C.A.), refd to. [para. 113].
Statutes Noticed:
Family Law Act, R.S.O. 1990, c. F-3, sect. 4(1)(c) [para. 31].
Authors and Works Noticed:
Goubau, Dominique, The Clear and Clouded World of Spousal Support in Canada (2000-2001), 18 C.F.L.Q. 333, generally [para. 100].
Hogg, Peter W., and Magee, Joanne E., Principles of Canadian Income Tax Law (2nd Ed. 1997), pp. 357, 358 [para. 115].
Hovius, Bernard, and Youdan, Timothy G., The Law of Family Property (1991), pp. 510 to 514 [para. 52].
McLeod, James G., Annotation to Shadbolt v. Shadbolt (1997), 32 R.F.L.(4th) 253, pp. 253 [para. 36]; 255 [para. 44].
Payne, Julien D., and Payne, Marilyn A., Canadian Family Law (2001), pp. 205 [para. 106]; 207 [para. 103]; 209 [para. 104].
Walker, Tom, Double Dipping: Can a Pension be Both Property and Income?, in The Best of Money and Family Law, (1994), vol. 9, no. 12, generally [para. 57]; p. 233 [para. 63].
Counsel:
J. Yvonne Pelley and Susan Tindal, for the appellant;
Maurice J. Neirinck, for the respondent;
Nicole Tellier and Joanna Radbord, for the intervener.
Solicitors of Record:
J. Yvonne Pelley, Kingston, Ontario, for the appellant;
Maurice J. Neirinck & Associates, Toronto, Ontario, for the respondent;
Nicole Tellier and Epstein Cole, Toronto, Ontario, for the intervener.
This appeal was heard on January 17, 2001, before McLachlin, C.J.C., L’Heureux-Dubé, Gonthier, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada. The decision of the Supreme Court of Canada was delivered in both official languages on July 12, 2001, and the following opinions were filed:
Major, J. (McLachlin, C.J.C., Gonthier, Iacobucci, Bastarache, Binnie and Arbour, JJ., concurring) – see paragraphs 1 to 82;
LeBel, J. (L’Heureux-Dubé, J., concurring) dissenting – see paragraphs 83 to 120.
