A high asset divorce can introduce a number of complications or areas to address not typically found in an ordinary divorce. An example of this is when one former spouse claims the other has more than enough money to get by, and as such the payor of spousal support should be free of their support obligation. This was recently the issue in a trial before the Ontario Superior Court of Justice.
The couple were married for 24 years before their separation in July 2014. They had three children while married, all of whom are adults (though the youngest was still in university). The husband’s career started in computer software. He met the wife when he was her patient at her optometry practice. As the husband’s business prospered, the wife stopped working full-time in 1993 in order to work inside the home.
The husband sold his company to AT&T after they approached him with an offer in 2000. The company was eventually sold for $31 million, 75% of which went into a family trust. The husband eventually started another company, which re-sold cyber-security software and provided services along with it. The husband also became a prominent personality on two reality television shows as well as a participant in another. He had an affair in 2014, which led to the couple’s separation in July of that year. An application for divorce was served on March 3, 2015.
The parties’ incomes
In beginning its analysis for support, the court pointed out that both child and spousal support require the court to determine the income of each of the parties. The Child Support Guidelines (CSGs) outline how income is to be determined. The courts have generally applied the same principles to income for the purposes of spousal support.
The court first looked at the wife’s income. Since she was not working at the time, the court turned to her available capital, applying a reasonable interest rate. The wife testified she anticipated spending $8 to $10 million on a house, and about $1 to $2 million on a cottage. The court did not find this unreasonable, given the family’s standard of living. As of August 2018 the wife had $19,365,000, an amount which would increase by more than $5 million after receiving an equalization payment. The court found that she would have about $13.25 million left after purchasing her home and cottage as well as paying for the fees associated with those purchases and the trial. Based on this, the court agreed with an expert who stated she should be able to generate an annual income of $679,725 based on the interest from her remaining capital.
The husband’s annual income was more difficult to calculate, but the court eventually settled on an amount averaging between $5.5 and $6 million for each year from 2013 to 2017 .
Entitlement to support
Despite most of the family’s income coming from the husband’s business, the couple agreed that they were partners in their marriage, especially since the wife’s work and sacrifices early in their marriage were partially responsible for the husband’s business success. The court found the wife had “suffered compensable loss on account of her taking on primary responsibility for the children and the household.”
The court found it could not place the wife’s capital and its income in insolation. The husband has a larger capital base and can continue to generate new income, which the wife would have a much more difficult time managing. The court did not agree with the husband’s argument that both parties would have similar asset bases after equalization. The court also found that while the wife is still wealthy by any standard, she does not enjoy the quality of life she once did, and as a result has suffered economic hardship as a result of the end of the marriage. As a result, the court ordered the husband to pay a monthly amount of $125,000 in spousal support, as well as just over $14,000 a month in child support to their youngest child so long as she is enrolled in post-secondary education.
If you are considering a separation or divorce, the experienced and compassionate team at Borden Family Law is ready to help. We have over 17 years of experience helping business owners and high-net worth clients in Oshawa, Brooklin, Pickering, Ajax and the surrounding areas through the divorce process, ensuring that their interests are taken care of, and managing their legal and financial risk. Call us at 905.576.6090 or contact us online to book your consultation. Ask about our bundled services and flat fees.