'No incentive to settle'

The notion of a limited-term support is really the exception

Anne Marie Owens, National Post  Published: Saturday, December 08, 2007

Chris Wattie, Reuters File Photo

The courts have moved away from time-limited support.

The separation began quite amicably for Stephen Dunn and his wife. "We said, 'We're not going to be like those other couples. We'll sell the house, each move somewhere else, get on with our lives.' "

His wife, a 45-year-old business school graduate who had taken time out of the workforce to raise the couple's children, had continued doing consulting work for her husband's company and other firms and was talking about starting up her own business.

Five years later, the Toronto-area couple seem no closer to getting a settlement in what have become increasingly acrimonious divorce negotiations. According to the court proceedings, Mr. Dunn's ex-wife appears ill-inclined to look for a job and, now 50, is also much less likely to get one.

"She has no incentive to settle, no incentive to get a job," says Mr. Dunn, 54, resolution-weary and recently given a severance package from his high-paying job as a currency trader with Manulife.

Mr. Dunn may sound like just another disgruntled spouse unhappy with his lot in a bitter breakup, but his complaints are indicative of a growing concern among those involved in divorce law -- couples and lawyers -- that the system is no longer encouraging self-sufficiency among divorcing spouses.

Spousal support, once considered a transitional hand-up for the spouse (most often the wife) left at an economic disadvantage by the marital breakup, is increasingly being viewed by the courts as an indefinite obligation, or a lifelong handout.

There are myriad cases of divorcing couples with highly qualified partners who are neither expected, nor even encouraged, to return to work, even after their children are grown.

With equal opportunity and high employment, why do so many court judgments still assume that a partner, usually a wife, who has put aside work to raise a family, will remain out of the workforce forever? Is divorce court the last bastion of old-fashioned values about men and women and the equality of working?

One family-law expert says it is merely a case of the pendulum swinging back from the days when women were disadvantaged by time-limited support agreements with unrealistic expectations of how long it could take to reclaim decent salaries in the workforce.

Others see the new approach as an overreaction; one lawyer suggests a radical solution that assumes that unless there are extenuating circumstances (young children at home, the advanced age of the wife), most modern-day spouses have the ability to find some form of employment -- and should deduct a basic income off any spousal settlement accordingly.

That suggestion comes from Harold Niman, a prominent Toronto lawyer who specializes in family law and has represented dozens of clients astounded to discover they are on the hook to their wives -- not their children -- for a lifelong term.

"The notion of a limited-term support is really the exception rather than the rule these days," he said. "Forget about the notion of self-sufficiency --it's all about dividing not just the assets, but the net disposable income, and it's for the long haul."

Martha McCarthy, another family-law practitioner, said when she began practising in the early 1990s, "there were all kinds of time-limited spousal support deals" where upper-class housewives who hadn't worked while raising children signed agreements that terminated their spousal support after five years, considered enough time for them to get back on their feet financially.

"It was all part of promoting what was known as the clean-break theory," which encouraged self-sufficiency after divorce, she said.

Then, along came the case of Moge vs. Moge, in 1992, in which the Supreme Court determined that the husband should continue long-term support of his former wife, a cleaning woman with a Grade 7 education, deemed not economically self-sufficient even 16 years after separation.

Ms. McCarthy says all of spousal-support law since has relied on that ruling, which she describes as the pendulum swinging away from a system that put women at an "unreasonable disadvantage."

But there are many who argue the system has moved too far the other way, encouraging the lesser-earning spouse (usually the woman) to avoid the return to work and remain dependent on the higher-earner for life.

"Marriage appears to be the only form of partnership that can be ended unilaterally by one partner, with an ongoing claim on the income stream of the other partner after the assets are split," says one lawyer, himself embroiled in an ongoing, bitter divorce case. He does not want his name used.

He maintains that his case is a prime example of what is

wrong with the system:His ex-wife, five years after separation, is better off financially taking the court-ordered spousal support than she would be using her own professional qualifications that could earn her at least a $50,000 salary in her highly sought-after field.

But this approach may be changing. Mr. Niman was involved in a case that recently became known in legal circles as the "faint hope" for spousal support, because the judge took the rare step of finding that the combination of time passed and job skills compelled a return to work for the divorced spouse.

The ruling by a three-member panel of the Ontario Court of Appeal, delivered earlier this year, upheld a lower-court judge's decision to terminate spousal support because of what he characterized as "the flagrant circumstances where the mother has had ample time to obtain employment outside the home but has chosen not to do so."

The ruling in the case of the divorcing Walshes cited the section of the Divorce Act that states spousal support orders may be varied "in so far as practicable, to promote the economic self-sufficiency of each spouse within a reasonable period of time."

This is how the judge characterized the divorce proceedings between Michael Walsh, a vice-president of institutional investments at a large insurance company with an annual income of nearly $400,000 after the couple separated, and JoAnne Walsh, who temporarily shelved her own financial services career to raise their two adopted children: "Since the time of their separation, JoAnne has pursued Michael in the courts with unflagging vigour, with extraordinary dedication and with considerable apparent bitterness and emotion. Apart from raising and serving as principal caregiver to their two adopted children, it appears that pursuing Michael in the courts continues to be JoAnne's principal occupation."

Mr. Walsh argued in 2006, more than a decade after the couple separated, that his exwife's failure to make reasonable efforts to achieve self-sufficiency constituted a change in circumstances sufficient to justify him terminating spousal support.

The judge agreed. "In my opinion, JoAnne has had a very lengthy period of time to secure meaningful, full-time employment that is commensurate with her abilities. Instead, [she] has chosen not to return to a career for which she is professionally qualified, and not to obtain other gainful full-time employment."