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Based on a LEAF press release (July 12, 2001, online at http://www.leaf.ca)
This past July, the Supreme Court of Canada released its decision in the Ontario case of Boston v. Boston ( SCJ No. 45, QL). The ruling addresses the issue of whether a pension income can be used as a source of spousal support after divorce.
The facts of the case involved a traditional long-term marriage, during which Willis Boston supported the family financially while Shirley Boston maintained the home and cared for their children. Upon the dissolution of their marriage in 1994, the Bostons agreed to separate and divided their assets. As required by Ontario law, Willis’ pension was included in the calculation of the couple’s assets as part of the equalization of matrimonial property.
In 1996,Willis Boston retired and began receiving his pension. In the same year, he applied to a court for a variation of his support payments. He argued that, because most of his pension had been “equalized” in the separation agreement, that portion should not be included as part of his income from which he would have to pay support. Otherwise, he argued, his former wife would be “double dipping,” or collecting income from the same source (the pension) twice. A motions judge accepted the husband’s position and reduced the amount of monthly support agreed on at separation from $3,433.12 to $950. On appeal, the support payment was raised to $2,000. Willis Boston appealed this order to the Supreme Court of Canada. Shirley Boston argued that the Ontario Court of Appeal’s judgment was reasonable and should be maintained.
The Women’s Legal Education and Action Fund (“LEAF”) intervened before the Supreme Court because the Boston case presented broad implications for the availability of spousal support for elderly women, particularly those who, like Shirley Boston, worked within the home during marriage and could never obtain the financial security of a pension. Further, while substantial assets were involved in the Boston case, many women are left impoverished after divorce. A recent gender equality study reveals that even women aged 45-64 who have worked outside the home earn “only 51% of their male counterparts. As retirement income is a function of lifetime earnings, women’s low income in this age group means that they will be at great risk of poverty in their retirement” (Dr. K. Hadley, “And We Still Ain’t Satisfied: Gender Inequality In Canada, A Status Report for 2001, released jointly by the Women and Economy Committee on the Status of Women and the CSJ Foundation for Research and Education, online at www.socialjustice.org).
Sacrifices that women have made for their families, such as delaying their careers and devoting significant time to unpaid work within the home, also increases women’s vulnerability to poverty upon divorce. In addition, women often require access to an ex-partner’s pension for support because they are frequently employed in non-unionized, low-paying, part-time and/or temporary jobs. The study indicates that while the decline of good, unionized, full-time jobs in the economy has negatively affected both men and women,” the vast majority — more than 72% — of part-time workers are women.” With these realities in mind, counsel for LEAF, Nicole Tellier and Joanna Radbord, argued that the Court should avoid imposing a strict rule against “double dipping,” and argued instead for an analysis of spousal support on a case by case basis.
The Supreme Court ruling restored the motions judge’s support award of $950. In arriving at this decision, the majority of the Court considered only the portion of the pension that was earned following the date of separation (the portion that was not included in the equalization of net family property). The majority ruling also supported a general rule of avoiding “double dipping” when possible.
LEAF was disappointed that the majority chose the avoidance of “double dipping” as a starting point in law, but was pleased that the Court acknowledged that there may be situations in which double recovery is necessary. As such, the majority’s decision reflects acceptance of LEAF’s primary submission that there should be flexibility within family law to deal with support issues generally.
The equalization process put a value on Mr. Boston’s pension rights and allocated most of the matrimonial property
to Ms. Boston. The dissenting opinion, written by Justice LeBel, noted that this arrangement left Mr. Boston with considerable financial security (Mr. Boston retained full rights to a pension that draws $8,000 per month), whereas Ms. Boston “got her long term security through the management of assets that must be used efficiently and remain exposed to a degree of market and economic risk.”
Justice LeBel further stated that spousal support cases like the Bostons’
… should not be overly influenced by catch words like “double dipping” and its alleged unfairness in the determination and process of support, where none really exists, once the legal principles are identified and applied. On the other hand, a lack of fairness should be found when a wife does not receive a level of support congruent with the lifestyle she enjoyed, although a separation or a divorce may lower the living standards of both parties. A spouse should not be penalized mainly because she adopted a moderate lifestyle and prudently invested her assets. The argument raised by the appellant, to a certain extent, reverts to the old idea that, after the breakdown of the marriage, the supported spouse is not really entitled to much more than a subsistence level income. The process of the division of assets must remain fair, but should also attempt to address in a realistic way the consequences of the breakdown of a marriage, in the context of the life experience of the spouses.
The majority of the Court acknowledged that the treatment of pensions on separation and divorce is in need of legislative reform, stating that “the issue of how a payor spouse is to settle his equalization obligation would benefit from much overdue and much-need legislative attention.” LEAF agrees that it is time for lawmakers to reform the way pensions are treated in family law so that couples are not forced into protracted and expensive legal proceedings.
LEAF is a national, non-profit organization working to promote equality for women and girls in Canada. Using the equality provisions from Section 15 of The Canadian Charter of Rights and Freedoms as a basis to advance women’s rights, LEAF presents arguments, or intervenes, in cases where women’s rights are at risk in Canadian courts.
Natalie Venslovaitis acted as the student research assistant for NAWL this summer. She is currently completing her second year of law school at the University of Ottawa.