Saturday, April 16, 2011

Davis v. Crawford: Ontario Court of Appeal on Lump Sum Spousal Support Awards

The Court of Appeal for Ontario's April 14 ruling in Davis v. Crawford, 2011 ONCA 294, appears to broaden the circumstances in which lump sum spousal support awards may be made by Ontario's courts.

The case is noted in our Court of Appeal Report this week, and it is certainly worthy of a further highlight, via this post.

Traditionally lump sum awards for spousal support have only been awarded in situations where the payor's ability and willingness to pay periodic support payments are of serious concern. The Court's previous approach was articulated in Mannarino v. Mannarino(1992), 43 R.F.L. (3d) 309 (Ont. C.A.), in which it held:

The law is clear that lump sum maintenance should be awarded only in very unusual circumstances, where there is a real risk that periodic payments would not be made. Such awards should not constitute a redistribution of family assets in the guise of support. See Jazenko v.Jazenko (1985), 46 R.F.L. (2d) 351 ( Ont. Dist. Ct.), and Zabiegalowski v. Zabiegalowski (1992), 40 R.F.L. (3d) 321 (Ont. U.F.C.).
Indeed, the Court's unanimous ruling in Davis affirms that these remain important consideration, both at common law and from s.33(9) of the Family Law Act. However, Davis affirms that judges' statutory discretion to order lump sum spousal support payments extends considerably beyond those historically-limited circumstances:
[51] We reject the appellant’s submission that Mannarino should be treated as restricting a court’s ability to award lump sum spousal support to situations “where there is a real risk that periodic payments would not be made” or to other limited and “very unusual circumstances”. To the extent that Mannarino has been interpreted in that way, in our view, that interpretation is incorrect.

[52] Both the Family Law Act, R.S.O. 1990, c.F.3 and the Divorce Act (1985, c. 3 (2nd Supp.)) contain provisions conferring a broad discretion on judges to make an award of periodic or lump sum spousal support, or to make an award comprising both forms of support...

[67] The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example: short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.

[68] Similarly, the disadvantages of such an award can include: the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.

[69] In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award.
Will we see more lump sum spousal support awards in the post-Davis family law environment? Certainly, the decision appears to recognize that a broad judicial discretion in this area may be utilized to effect appropriate outcomes in a broader variety of circumstances than was previously understood to be the case. 
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