MEMO TO:
Alexsei Demo
RESEARCH ID:
#4000292886fb2c
JURISDICTION:
British Columbia, Canada
ANSWERED ON:
January 22, 2021
CLASSIFICATION:
Family law

Issue:

In B.C., in instances in which there are post-separation increases in income, when do such post-separation increases in payor income result in increases of spousal support to support recipients and when do they not?

Research Description:

The parties were married for 17 years and separated in 2013. The 3 children are now all in undergraduate courses at 3 universities.

Mother had a career as a receptionist which she gave up for the 3 kids. Father got a better paying job as a physician but left his family behind. Mother was offered a receptionist job in 2011 but declined despite Father’s encouragement. Mother was told Nov. 2015 by a Case Conference judge she had to do her best to become self-supporting. Instead she spent most of the past 6 years doing nothing. She is now doing tutoring work at less than $20,000/year. The Nov. 2015 Order states that she is to be imputed at minimally $60,000/year income currently.

Conclusion:

The extent of the connection between the post-separation increase in salary of the payor spouse to the recipient spouse's contribution during the marriage is determinative of whether the payor spouse should increase their spousal support payments as a result of the increase in earnings. If the increase in salary is founded in expertise and seniority established during the marriage and no intervening event or events are the cause of the increase, then the increase is to be included, unless the recipient’s role during marriage necessitates a different determination. If an event after separation is the reason for the increase, in whole or in part, then the increase may be excluded from consideration, also in whole or in part. Two of the most important considerations from the jurisprudence are: the expertise the respondent acquired during the parties’ relationship, and the extent to which the respondent found himself in favourable circumstances as a result of the joint enterprise of the marriage (Younger v. Younger; Cote v Cote; Helle v. Helle)

Whether post-separation wage increases will lead to increased spousal support obligations is fact-based. Regular wage increases should be taken into account in determining the quantum of spousal support whereas increases in salary due to promotions should be taken into account when the promotion is sufficiently connected to the recipient spouse's contributions in the marriage. (Judd v. Judd)

The court may take into account the payor’s post-separation career efforts and consider it an “intervening event” that partially contributed to the payor’s increased income post-separation. In other words, the former spouse’s contribution to the payor’s career during the marriage does not always account for the post-separation increases. (Kotyk v Kotyk)

A significant factor in determining whether a payor’s post-separation income should be included in the crafting of a spousal support order is if the source or basis upon which the post-separation income was realized had changed since the marriage. (Hartshorne v. Hartshorne)

Sharing of post-separation income increase should not be automatic and is fact-based. In a long, traditional marriage it would be hard to find no connection between the marriage and the wage increase. When a recipient spouse makes no effort toward self‑sufficiency, it is not fair that the recipient spouse be rewarded with an increased level of support solely because the claimant continued to work hard and as a result enjoyed some economic success post-separation. (G.W.C. v. K.C.C.)

In calculating the amount of a lump sum award, the needs of the recipient and the ability of the payor to pay must be considered in determining whether the payor's post-separation income increase should be considered. (Hartshorne v. Hartshorne)

In Cote v Cote, the Court held that there was a clear link or connection between the marriage and the payor spouse's post-separation increase in income. Therefore, the Court used the payor spouse's new, increased income as the basis for calculating the spousal support payments that were owed to the recipient spouse, as opposed to using the payor spouse's pre-separation income.

In Younger v. Younger, the Court refused to assess the payor spouse's spousal support obligation based on his pre-separation income (as opposed to his post-separation income). The Court noted that the post-separation increase in the payor spouse's income was related to the expertise he developed during the marriage and that his post-separation increase in his income should factor into the assessment of spousal support, but should be taken together with the other factors. In its award of spousal support, the Court took into account approximately 60% of the payor spouse's increase since separation.

In Hausmann v. Klukas, the Court dealt with a situation in which the payor spouse's income increased post-separation. The recipient spouse applied for an increase in spousal and child support. The Court held that the recipient spouse should receive some benefit from the payor spouse's post-separation increased income. In coming to this decision, the Court noted that the recipient spouse was (and continued to be) the primary caregiver for the couple's children's including one of the children who had Down's syndrome and the fact that the recipient spouse sacrificed her career so that the payor spouse could devote himself full-time to work. However, in determining the quantum of the increase, the Court noted that the recipient spouse had not taken any significant steps to develop marketable skills that would allow her to enter the workforce even though all of her children were in school.

In Kotyk v Kotyk, the Court contrasted the recipient spouse's lack of any effort to become self-sufficient with the payor spouse's hard work post-separation. The Court ultimately held that the recipient spouse was entitled to spousal support at the low end of the range based on the post-separation income of the payor spouse.

In Kelly v. Kellythe payor spouse's income increased post-separation, but the Court reduced the spousal support obligations. The Court based its decision on the fact that the compensatory basis of the award had been achieved and the recipient spouse's new husband had a growing responsibility for her needs.

In G.W.C. v. K.C.C., although the payor spouse's post-separation income increased, the Court did not increase the recipient spouse's spousal support entitlement. The parties were married for eighteen years. The payor spouse had completed his education and training by the time of the marriage and worked during the marriage. The recipient spouse was a stay-at-home parent. The Court based the spousal support entitlement of the recipient spouse on the payor spouse's pre-separation income (as opposed to his post-separation income) and noted that the recipient spouse did not put her career on hold to care for the couple's children (because she did not have a career at the start of the marriage) and that she did not make any effort towards self‑sufficiency following the marriage. In its reasons, the Court also commented on the recipient spouse's inability to cope following the separation and the effect that this had on the parties' children.

Law:

In Helle v. Helle, 2019 BCCA 97 (CanLII), citing Judd v. Judd, 2010 BCSC 153 (CanLII) the BCCA held that the extent of the connection between the post-separation increase in salary of the payor spouse to the recipient spouse's contribution during the marriage is determinative of whether the payor spouse should increase their spousal support payments as a result of the increase in earnings. If the increase in salary is founded in expertise and seniority established during the marriage and no intervening event or events are the cause of the increase, then the increase is to be included, unless the recipient’s role during marriage necessitates a different determination. If an event after separation is the reason for the increase, in whole or in part, then the increase may be excluded from consideration, also in whole or in part. Two of the most important considerations from the jurisprudence are: the expertise the respondent acquired during the parties’ relationship, and the extent to which the respondent found himself in favourable circumstances as a result of the joint enterprise of the marriage:

[35] In my view, the judge’s analysis here is faulty. In Judd v. Judd2010 BCSC 153, Punnett J. helpfully reviewed cases that carefully analyze how to address post-separation increases in income. After noting these cases and then citing at length from the decision in Hartshorne v. Hartshorne2009 BCSC 698, Punnett J. says:

[23] The resolution of the issue of post-separation wage increases is clearly fact based. The principle that appears to emerge from current case authority is that the connection the increase in salary has to the recipient’s contribution during the marriage is determinative. If the increase in salary is founded in expertise and seniority established during the marriage and no intervening event or events are the cause of the increase, then the increase is to be included unless the recipient’s role during marriage necessitates a different determination. If an event after separation is the reason for the increase, in whole or in part, then the increase may be excluded from consideration, also in whole or in part.

[...]

[39] The judge did not expressly address factors that are important and relevant in determining whether post-separation income increases are included in the spouse’s guideline income. Two of the most important considerations from the jurisprudence are: the expertise the respondent acquired during the parties’ relationship and the extent to which the respondent found himself in favourable circumstances as a result of the joint enterprise of the marriage.

In Helle, the BCCA allowed the appeal and set aside the judge’s order dismissing the appellant’s application for a review of the spousal support payable pursuant to the divorce order. The Court took into account that the payor spouse's increase in income was connected to the recipient spouse's contributions during the marriage and that the spousal support the respondent paid under the original order was, at the time of the trial, "far lower" than the range described by the SSAG:

[36] In the case at bar, before reaching his conclusion with respect to the amount and duration of spousal support that should be ordered on review, the judge expressly considers only three facts, set out in para. 67 above, with respect to the appellant’s role in the respondent’s post separation success:

a) the appellant made no contribution to the respondent’s training, which occurred before the marriage (at BCIT and then at Coastland from 1981 to 1986);

b) the appellant made no contribution to Coastland or the establishment of that company; and

c) the appellant was not on a particular career path when she stopped working to give birth to her first child.

[37] The first two facts are of marginal relevance to the questions that should be considered in relation to this issue. The last is irrelevant.

[38] Further, the judge appears to have concluded that whether increases in post-separation income should be included was an all-or-nothing question. He does not appear to have contemplated the possibility, described in Judd, that post-separation income may be included, in part, in determining a party’s obligation to pay support.

[...]

[40] As in Judd and Hartshorne, it cannot be said that the respondent’s increased income through the change in his position at work is not connected to the appellant’s contributions during their marriage. The parties in this case made “a joint investment in one career” by having the appellant take on the bulk of the caretaking responsibilities with the couple’s children while the respondent pursued his career outside the home: Judd at para. 24, Hartshorne at para. 117.

[41] The judge also failed to address whether the spousal support the respondent paid under the original order was currently within the range described by the SSAG, regardless of whether the income increase was applicable. The judge did not address other facts, specific to this case, which indicated that the amount of the original spousal support order was no longer appropriate. For example, the judge did not assess the amount in light of the fact that there was no longer any offsetting allowance for child support because the parties’ children had reached the age of majority and were no longer dependent.

In Judd v. Judd, 2010 BCSC 153 (CanLII), the BCSC reviewed case law regarding whether post-separation increases in income should be taken into account in determining the quantum of spousal support ordered, and noted that the resolution of the issue of post-separation wage increases is fact-based. The Court held that regular wage increases should be taken into account in determining the quantum of spousal support and that increases in salary due to promotions should be taken into account when the promotion is sufficiently connected to the recipient spouse's contributions in the marriage:

[21] The issue of whether post-separation increases in income should be taken into account has been the subject of a number of decisions, both in British Columbia and elsewhere. I have been referred to Kelly v. Kelly2007 BCSC 227Logan v. Logan2007 BCSC 904Emery v. Emery2007 BCSC 1747, 47 R.F.L. (6th) 72; and Beninger v. Beninger2007 BCCA 619, 75 B.C.L.R. (4th) 228. I have also reviewed Hartshorne v. Hartshorne2009 BCSC 698, 70 R.F.L. (6th) 106; M.M.F. v. R.B.2008 BCSC 984, 57 R.F.L. (6th) 172; Walsh v. Walsh (2006), 2006 CanLII 20857 (ON SC), 29 R.F.L. (6th) 164 (Ont. S.C.J.); Chalifoux v. Chalifoux2006 ABQB 535D.B.C. v. R.M.W., 2006 ABQB 905, 69 Alta. L.R. (4th) 170; Rozen v. Rozen, 2003 BCSC 973, 37 R.F.L. (5th) 205; Giguere v. Giguere (2003), 2003 CanLII 64335 (ON SC), 46 R.F.L. (5th) 184 (Ont. S.C.J.); and Fletcher v. Fletcher, 2003 ABQB 890.

[22] In Hartshorne, Justice Leask addressed a number of the above authorities as follows:

[110] It is telling that both parties rely on D.B.C. The authorities canvassed in that decision illustrate the deeply contextual nature of these determinations. As was observed by the authors of the SSAG at c. 14.3, determining whether to consider post-separation increases in income involves a "complex, fact-based approach":

Some rough notion of causation is applied to post separation income increases for the payor, in determining both whether the income increase should be reflected in increased spousal support and, if it should by how much. It all depends on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase (e.g. new job vs. promotion within same employer, or career continuation vs. new venture). The extent of sharing of these post-separation increases involves a complex, fact-based decision. [Emphasis added]

[111] I have considered the authorities provided by the parties. The cases where post-separation increases in the payor's income are not considered, or are only partially considered, are distinguishable on their facts from the Hartshornes' situation. For example, they involve circumstances where the payor spouse changed positions or employers since separating, often making lifestyle sacrifices to do so [see Chalifoux v. ChalifouxD.B.C.Kelly]; the payor spouse's business underwent a reorganization requiring more work on the payor's part [see Rozen v. Rozen]; the payor spouse had been given new career opportunities by virtue of luck or connections [see Fletcher v. FletcherRobinson v. Robinson]; the initial increase in income occurred long after the divorce [see Bryant [v. Gordon2007 BCSC 946, 45 R.F.L. (6th) 99]; Kelly]; the recipient spouse was employed and/or was supported in her career aspirations by the payor during the relationship [see BryantKelly]; or the recipient spouse had not made reasonable efforts to become self-sufficient [see BryantWalsh v. Walsh].

[Citations for previously cited cases omitted.]

[23] The resolution of the issue of post-separation wage increases is clearly fact based. The principle that appears to emerge from current case authority is that the connection the increase in salary has to the recipient’s contribution during the marriage is determinative. If the increase in salary is founded in expertise and seniority established during the marriage and no intervening event or events are the cause of the increase, then the increase is to be included unless the recipient’s role during marriage necessitates a different determination. If an event after separation is the reason for the increase, in whole or in part, then the increase may be excluded from consideration, also in whole or in part.

[24] In this case, the husband, although trained before the marriage, developed his expertise and seniority during the marriage. The wife subordinated her career to the needs of the family by working part-time, becoming a full-time stay-at-home mother for a number of years, and, perhaps most significantly, moving to and remaining on the Sunshine Coast, where there are limited employment opportunities, for the benefit of their children. As noted by Leask J. in Hartshorne at para. 117, this couple “divide[d] their family responsibilities in such a way as to make a joint investment in one career”.

[25] The post-separation increases appear to be divisible into two categories: those arising from regular salary increases and those arising from the promotion. Should a distinction be drawn between them?

[26] The authorities noted above indicate that the portion arising from regular wage increases due to length of service with the same employer should be included for the purposes of a review, taking into account the length of the marriage and the roles of the parties in the marriage.

[27] More problematic is the increase arising from the promotion which presumably requires the husband to work longer hours and to take on more responsibilities. Arguably the promotion, at least in part, recognized the husband’s length of service and experience which were acquired during the marriage. Presumably, it also recognized his abilities and performance from both before and after the separation.

[28] The question, in this instance, is whether the promotion is sufficiently disconnected from the marriage that the salary increase should not be included in this review. In my opinion, the husband’s promotion is sufficiently connected to the wife’s contributions as a wife and mother and his increased income should be taken into account on this review.

[29] I decline to include the one-year increase arising from the husband’s additional duties with respect to the Olympics as that short-lived increase is based on a unique event which is not connected to what transpired during the marriage.

[30] For the purposes of the spousal maintenance claim, I set his income at $164,000.

In Hartshorne v. Hartshorne, 2010 BCCA 327 (CanLII), the BCCA considered whether the payor's post-separation income increase should be considered when calculating the amount of a lump sum award. The Court stated that the conceptual basis for the spouse's entitlement to support is an important consideration. Whether the basis is compensatory or non-compensatory, the Court must consider the needs of the payee and the ability of the payor to pay. In addition, the Court held that a significant factor in determining whether a payor’s post-separation income should be included in the crafting of a spousal support order is if the source or basis upon which the post-separation income was realized had changed since the marriage:

[54] The appellant submits that SSAG should not have been used to quantify the respondent’s claim as the authors did not contemplate its use in the unusual circumstances of this case where there existed many of the same factors that made SSAG difficult to apply in variation applications, including post-separation increases in the payor’s income, re-partnering, remarriage and second families. In the alternative, he contends that if SSAG is to be applied, the trial judge erred in quantifying the award based on the high end of the SSAG ranges in both amount and duration.

[55] As noted above, the trial judge made an initial order (not a variation order) pursuant to s. 15.2(1) of the Divorce ActTherefore, a consideration of SSAG was required: Yemchuk v. Yemchuk, 2005 BCCA 406, 16 R.F.L. (6th) 430Redpath v. Redpath, 2006 BCCA 338, 33 R.F.L. (6th) 91; Tedham v. Tedham, 2005 BCCA 502, 47 B.C.L.R. (4th) 254The authors of SSAG recommend that “unusual” situations are best left “to the discretionary, case-by-case determination under the evolving framework of current law.” They have also stated that consideration of a payor’s post-separation income for the purposes of spousal support is a “complex, fact-based decision”. See ch. 14 SSAG.

[56] Here, the trial judge made findings of fact that included: (i) the parties continued to function as a single economic unit until at least November 1999 (at para. 114); (ii) the financial dependencies in their relationship created a significant financial disparity in their standards of living after separation (at para. 97); and (iii) the respondent was left in a financially vulnerable position post-separation, where she had to struggle to gain self-sufficiency with limited means to do so (at para. 97). He was alive to the challenges of quantifying the respondent’s award on a lump sum basis and was aware of this Court’s jurisprudence on the application of SSAG. He considered the objectives and factors of ss. 15.2(4) and (6) in the Divorce ActHe also reviewed the authorities on when a payor’s post-separation income should be used to calculate the amount of spousal support: D.B.C. v. R.M.W., 2006 ABQB 905, 69 Alta. L.R. (4th) 170; Kelly v. Kelly, 2007 BCSC 227Bryant v. Gordon, 2007 BCSC 946, 45 R.F.L. (6th) 99; C.L.M. v. R.A.M., 2008 BCSC 217Chalifoux v. Chalifoux, 2006 ABQB 535, rev’d on other grounds 2008 ABCA 70Rozen v. Rozen, 2003 BCSC 973, 37 R.F.L. (5th) 205; Fletcher v. Fletcher, 2003 ABQB 890; and Robinson v. Robinson, 1993 CanLII 8491 (ON CA), 107 D.L.R. (4th) 78, 48 R.F.L. (3d) 265 (Ont. C.A.). He concluded that a significant factor in determining whether a payor’s post-separation income should be included in the crafting of a spousal support order is if the source or basis upon which the post-separation income was realized had changed since the marriage.

[57] The appellant submits there was no evidence that the respondent contributed to the acquisition of his skills or credentials, or to the advancement of his career in a manner that led to his ability to earn his now increased income (using the language of Langston J. in D.B.C. v. R.M.W.). However, the trial judge arrived at a fact-based determination for including the appellant’s post-separation income in his quantification of the lump sum award in accordance with the comments of the authors of SSAG (referred to at para. 37 above). In that regard he made the following findings: (i) that there was “a clear temporal link between their marriage and this increase [in the appellant’s income between 1987 and 1999] with no intervening change in Mr. Hartshorne’s career, or any other event, that could explain the increase (at para. 114); (ii) that “Ms. Hartshorne’s contributions in those years [between 1987 and 1998] helped Mr. Hartshorne establish his practice and contributed to his improved income in the 2000-2007 period” (at para. 116); and (iii) that the parties made a joint investment in Mr. Hartshorne’s career and therefore “[i]t would be unfair for him alone to reap the benefits” (at para. 117).

[58] The appellant acknowledges that the respondent has a significant claim for compensatory spousal support. The object of compensatory support is “to redress the economic disadvantage that arises from the marriage or the conferral of an economic advantage upon the other spouse” as well as “the economic advantages enjoyed by the other partner as a result of the recipient spouse’s efforts”: Chutter v. Chutter2008 BCCA 507 at paras. 50-51. The appellant’s claim that the respondent made no contribution to the advancement of his career because he was an established lawyer when their relationship began, ignores the contribution the respondent made by assuming the role of primary caregiver to the children, both during the marriage (between 1987 and 1998) and after separation (2000-2007), and how her assumption of that role gave him the opportunity to devote his time to the advancement of his professional development. It also ignores the sacrifice she made to her career by devoting her energies to the raising of the parties’ children, which in turn significantly impacted her ability to advance her professional development.

[59] The trial judge concluded that consideration of each party’s post-separation income would more accurately reflect the reality of the respondent’s economic disadvantage arising from the breakdown of the marriage. He found that it would be to the financial benefit of the appellant because the appellant’s income in 1999 (at $342,712) was higher than in each of the following years, and the respondent’s lack of income in 1999 subsequently increased as a result of her continued employment as a lawyer from 2001 forward.

[60] The spousal support order in Hartshorne 1999 did not include an award for compensatory support. This was a relationship of 12 1/2 years. It was of a sufficient length that consideration of the respondent’s standard of living post-separation was a relevant factor to determining the appellant’s entitlement to compensatory support: Moge v. Moge1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813 at 870. The effect of the spousal support award in Hartshorne 1999 and Hartshorne 2002 was to leave the respondent in a diminished financial state at a time when she had the greatest financial need. An award of compensatory spousal support had to “alleviate the economic consequences of marriage or marriage breakdown” (Moge at para. 47) for the respondent. In my view, the trial judge achieved that objective in crafting an award that fell at the high end of the quantum and duration ranges of SSAG.

[61] In my view, deference must be given to the trial judge’s findings of fact, which informed the basis for his quantification of the lump sum award. I see no error in principle in his quantification of the lump sum award and would not accede to these grounds of appeal.

In Cote v Cote, 2018 BCSC 639 (CanLII), Loo J. of the BCSC heard an application for summary trial for divorce and a final spousal support order. The Court held that there was a clear link or connection between the marriage and the payor spouse's post-separation increase in income. Therefore, the Court used the payor spouse's new, increased income as the basis for calculating the spousal support payments that were owed to the recipient spouse, as opposed to using the payor spouse's pre-separation income. Citing the SSAG, the Court noted that the presence of a link or connection between the marriage and the post-separation increase in income should be reflected in the decision about whether spousal support should be increased as a result of the increased income of the payor spouse: 

[46] In arguing that spousal support should not be based on his increased income from Lafarge, Mr. Cote relies on Judd v. Judd2010 BCSC 153 where on an application for review of spousal support, Mr. Justice Punnett reviewed the authorities relating to post-separation income. He stated:

[21] The issue of whether post-separation increases in income should be taken into account has been the subject of a number of decisions, both in British Columbia and elsewhere. I have been referred to Kelly v. Kelly2007 BCSC 227Logan v. Logan2007 BCSC 904Emery v. Emery2007 BCSC 1747, 47 R.F.L. (6th) 72; and Beninger v. Beninger2007 BCCA 619, 75 B.C.L.R. (4th) 228. I have also reviewed Hartshorne v. Hartshorne2009 BCSC 698, 70 R.F.L. (6th) 106; M.M.F. v. R.B.2008 BCSC 984, 57 R.F.L. (6th) 172; Walsh v. Walsh (2006), 2006 CanLII 20857 (ON SC), 29 R.F.L. (6th) 164 (Ont. S.C.J.); Chalifoux v. Chalifoux2006 ABQB 535D.B.C. v. R.M.W., 2006 ABQB 905, 69 Alta. L.R. (4th) 170; Rozen v. Rozen, 2003 BCSC 973, 37 R.F.L. (5th) 205; Giguere v. Giguere (2003), 2003 CanLII 64335 (ON SC), 46 R.F.L. (5th) 184 (Ont. S.C.J.); and Fletcher v. Fletcher, 2003 ABQB 890.

[22] In Hartshorne, Justice Leask addressed a number of the above authorities as follows:

[110] It is telling that both parties rely on D.B.C. The authorities canvassed in that decision illustrate the deeply contextual nature of these determinations. As was observed by the authors of the SSAG at c. 14.3, determining whether to consider post-separation increases in income involves a "complex, fact-based approach":

Some rough notion of causation is applied to post separation income increases for the payor, in determining both whether the income increase should be reflected in increased spousal support and, if it should by how much. It all depends on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase (e.g. new job vs. promotion within same employer, or career continuation vs. new venture). The extent of sharing of these post-separation increases involves a complex, fact-based decision. [Emphasis added by Leask J.]

[111] I have considered the authorities provided by the parties. The cases where post-separation increases in the payor's income are not considered, or are only partially considered, are distinguishable on their facts from the Hartshornes' situation. For example, they involve circumstances where the payor spouse changed positions or employers since separating, often making lifestyle sacrifices to do so [see Chalifoux v. ChalifouxD.B.C.Kelly]; the payor spouse's business underwent a reorganization requiring more work on the payor's part [see Rozen v. Rozen]; the payor spouse had been given new career opportunities by virtue of luck or connections [see Fletcher v. FletcherRobinson v. Robinson]; the initial increase in income occurred long after the divorce

[see Bryant [v. Gordon2007 BCSC 946, 45 R.F.L. (6th) 99]; Kelly]; the recipient spouse was employed and/or was supported in her career aspirations by the payor during the relationship [see BryantKelly]; or the recipient spouse had not made reasonable efforts to become self-sufficient [see BryantWalsh v. Walsh].

[Citations for previously cited cases omitted.]

[23] The resolution of the issue of post-separation wage increases is clearly fact based. The principle that appears to emerge from current case authority is that the connection the increase in salary has to the recipient’s contribution during the marriage is determinative. If the increase in salary is founded in expertise and seniority established during the marriage and no intervening event or events are the cause of the increase, then the increase is to be included unless the recipient’s role during marriage necessitates a different determination. If an event after separation is the reason for the increase, in whole or in part, then the increase may be excluded from consideration, also in whole or in part.

[47] In the Spousal Support Advisory Guidelines: The Revised User’s Guide, (Canada, Department of Justice: April 2016), Professors Carol Rogerson and Rollie Thompson state at p. 83:

In the SSAG (at 14.3), we stated in summary form, in a short section on the topic:

Some rough notion of causation is applied to post-separation income increases for the payor, in determining whether the income increase should be reflected in increased spousal support and, if it should, by how much. It all depends on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the subsequent income increase, and the reason for the income increase (new job vs. promotion with same employer, or career continuation vs. new venture).

That word “causation” has often been read without the preceding words “some rough notion of causation”. It would be better to describe it as a “link” or “connection”, between the marriage and the increase after separation. That has certainly been the approach of most courts, especially those in B.C. and Ontario.

… The looser test of connection is more consistent with the evolution of spousal support law in Canada since Moge, i.e. the recognition of a broad range of spousal support objectives and the rejection of any narrow “causal connection” test for entitlement.

The basis of entitlement has a significant impact upon the degree of sharing of increases, with compensatory claims more likely to result in sharing than non-compensatory claims, but not exclusively so. There can be sharing—partial, or even full—in non-compensatory cases too, especially after long marriages.

CONCLUSION

[48] There is clearly a link or connection between the marriage when Mr. Cote worked on a contract basis for Lafarge, and his increase in income from taking employment with Lafarge seven months after separation because he could no longer manage Woodshed without Ms. Cote’s direct assistance with the bookkeeping and paperwork.

[49] His work for Lafarge during the marriage resulted in an offer of employment by Lafarge relatively shortly after separation.

[50] Based on an annual income for Mr. Cote of $80,739 and an annual income for Ms. Cote of $21,625 results in a range of spousal support of $1,847 to $2,346, with a mid-range of $2,155 for an indefinite duration, and a 50/50 split of net disposable income of $2,346.

[51] Ms. Cote however expects to earn an increased income as her seniority with B.C. Liquor Distribution Branch increases. Using an annual income of $80,739 for Mr. Cote and an annual income of $29,713 for Ms. Cote, result in a range of spousal support of $1,595 to $2,052, a mid-range of $1,860 and a net disposable income of $3,631 and $3,630 respectively.

[...]

[53] I find that Ms. Cote is entitled to spousal support from Mr. Cote in the amount of $1,860 each month commencing February 1, 2018 and on the first of each month thereafter.

In Younger v. Younger, 2016 BCSC 990 (CanLII), Grauer J. of the BCSC refused to assess the payor spouse's spousal support obligation based on his pre-separation income (as opposed to his post-separation income). The Court noted that the question of whether post-separation increases in income should be taken into account is fact-driven and is dependent upon the connection that the increase has to the recipient’s contribution during the marriage. The Court noted that the post-separation increase in the payor spouse's income was related to the expertise he developed during the marriage and that his post-separation increase in his income should factor into the assessment of spousal support, but should be taken together with the other factors. In its award of spousal support, the Court took into account about 60% of the payor spouse's increase since separation:

[107] I am unable to agree that Dr. Younger’s ongoing spousal support obligation, which I have found to exist, should be assessed on the basis an income approximating what it was at the time of separation. The question of whether post-separation increases in income should be taken into account is a fact-driven one, depending upon the connection that the increase has to the recipient’s contribution during the marriage: Judd v Judd2010 BCSC 153.

[108] Here, the increase arises from Dr. Younger adjusting his practice, and his working hours, to facilitate his ability to produce medical-legal reports and engage in medical-legal consultations, both of which he has found lucrative. It is not simply a question of increasing seniority or experience, but it is related to the expertise he developed during the marriage. I do not consider it to be an all-or-nothing proposition. Although it is not entirely a “new venture”, it is a new focus he developed deliberately in order to allow him to satisfy his financial obligations post-separation.

[109] Moreover, it is evident from both the separation agreement and the MOA that Dr. Younger accepted that at least to some degree, his post-separation increases in income would result in an increase in spousal support.

[...]

[113] I do not, however, accept Dr. Younger’s proposition that spousal support should be set according to the SSAG ranges for an income of for $350,000. I conclude that the post-separation increase in his income should factor into the assessment of spousal support, but should be taken together with the other factors discussed in these Reasons. It should not be determinative.

[...]

[117] In all of the circumstances, I award spousal support of $7,000 per month. This is near the mid-range for an income of $600,000 (accounting for about 60% of the increase since separation), factoring in an imputed income of $25,000 for Ms. Riley, child support of $7,359, and section 7 expenses totaling $65,000, paid in proportion to the parties incomes.

In Hausmann v. Klukas, 2011 BCSC 1753 (CanLII), Adair J. of the BCSC dealt with a situation in which the payor spouse's income increased post-separation. The recipient spouse applied for an increase in spousal and child support. The Cout held that the recipient spouse should receive some benefit from the payor spouse's post-separation increased income. In coming to this decision, the Court noted that the recipient spouse was (and continued to be) the primary caregiver for the couple's children's including one of the children who had Down's syndrome and the fact that the recipient spouse sacrificed her career so that the payor spouse could devote himself full-time to work. However, in determining the quantum of the increase, the Court noted that the recipient spouse had not taken any significant steps to develop marketable skills that would allow her to enter the workforce even though all of her children were in school:

[143] In this case, Mr. Klukas acknowledges an obligation to pay spousal support based on the principles set out in Bracklow v. Bracklow1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420. The issues between the parties concern: the amount of support, including whether Ms. Hausmann is entitled to support based on Mr. Klukas’s post-separation increased income; the duration of support; and whether I should order the payment of retroactive support.

[...]

[153] Mr. Klukas acknowledges an obligation to pay Ms. Hausmann spousal support. However, he says that support should be set at $5,600 per month (time-limited), and should not be based on increases in his income post-separation. He says that this amount is sufficient for Ms. Hausmann to maintain a standard of living equivalent to that enjoyed during the marriage. Moreover, in Mr. Klukas’s submission, Ms. Hausmann benefits significantly from the high level of child support she has received, which has been based on Mr. Klukas’s increased income (including Pioneer’s pre-tax corporate income) post-separation. Accordingly, Mr. Klukas argues that spousal support should be set at a level that takes into account the child support Ms. Hausmann receives, tax free.

[154] In support of his position that Ms. Hausmann is not entitled to an increase in spousal support above the martial standard as a result of the post-separation in his income, Mr. Klukas cites (among other cases) Hartshorne v. Hartshorne2010 BCCA 327, at paras. 55-60. He says that his post-separation income is not attributable to any contribution by Ms. Hausmann to his skills or credentials. Rather, Mr. Klukas says it is attributable to his hard work and entrepreneurship in acquiring and restructuring Pioneer’s business. When the parties separated, he was an employee. It was only after the separation that he eventually became the owner of the business, and that process did not begin until the parties had been separated for almost two years. Mr. Klukas says that he was able to take Pioneer’s business to over $16 million in sales through hard work and long hours. Starting in 2002, he changed the focus and strategy of the business, moving into higher-margin value-added products and a broad range of hardware, and built the business through relationships he developed with customers and suppliers.

[155] In addressing a similar argument made by the husband in Hartshorne, D. Smith J.A. (for the court) wrote:

[57] The appellant [Mr. Hartshorne] submits there was no evidence that the respondent contributed to the acquisition of his skills or credentials, or to the advancement of his career in a manner that led to his ability to earn his now increased income . . . .

[58] . . . The appellant’s claim that the respondent made no contribution to the advancement of his career because he was an established lawyer when their relationship began, ignores the contribution the respondent made by assuming the role of primary caregiver to the children, both during the marriage (between 1987 and 1998) and after separation (2000-2007), and how her assumption of that role gave him the opportunity to devote his time to the advancement of his professional development. It also ignores the sacrifice she made to her career by devoting her energies to the raising of the parties’ children, which in turn significantly impacted her ability to advance her professional development.

[156] Here, I find that Ms. Hausmann’s assumption of the child care burden, especially as it related to JL, gave Mr. Klukas the time and opportunity to devote himself to Pioneer’s business, and diminished Ms. Hausmann’s economic prospects. Ms. Hausmann was the one who suffered the financial consequences arising from the care of the children of the marriage. Accordingly, in these circumstances, Mr. Klukas’s post-separation income is a factor, along with the martial standard of living, to be taken into account in determining the amount and duration of spousal support.

[...]

[160] I would say that Mr. Klukas, at least in part as a result of his involvement with the Down Syndrome Research Foundation as well as his time spent with JL, has considerably more optimism than Ms. Hausmann about the degree to which JL can develop the necessary skills to live a more independent life. He would like to encourage and support her to do so. Nevertheless, the current reality is that Ms. Hausmann remains the primary caregiver for the parties’ two younger daughters, and, given the special needs of JL, Ms. Hausmann will remain so for the foreseeable future. Mr. Klukas, at least until 2007, encouraged Ms. Hausmann to forego her career so that the parties’ daughters would have the benefit of her full-time parenting, and Ms. Hausmann made that sacrifice. As a result, in my view, Ms. Hausmann is entitled to enjoy some benefit from Mr. Klukas’s post-separation increased income, over the martial standard of living.

[161] Ms. Hausmann appeared to me to be very pessimistic about her chances of finding employment in the future, and her attitude appeared to be that, at her age and stage of life, it was pointless for her to make any efforts to that end. She is correct to say that her qualifications are now outdated and she lacks marketable skills. However, since the parties separated in 2000, Ms. Hausmann has done nothing, or virtually nothing, to upgrade her skills and education, although, especially once all three children were in school, there was time available to take steps (even if relatively small ones) in that regard. I did not hear that she had any health, physical or medical problems or incapacities that would affect (negatively) her employability. 

[162] Whether Ms. Hausmann’s pessimism about her employment prospects is justified is difficult to judge. Someone with no marketable skills will find it hard to secure paid employment. But, in my view, Ms. Hausmann’s current lack of marketable skills is, at least in part, self-inflicted. She did not lack the time or opportunity to develop some skills since she and Mr. Klukas separated. However, I have concluded that, given her age and the length of time she has been out of the work force, it will be difficult for Ms. Hausmann to obtain employment in the near future that would provide her with an income that, on its own, would be sufficient for her to enjoy a standard of living similar to the martial standard. 

[163] On the other hand, she needs to take responsibility for doing nothing to prepare herself to re-enter the workforce in some capacity. If she interpreted Mr. Klukas’s communications from time to time concerning supporting her so that she could stay at home and parent their children as a commitment by him to pay permanent support, it was not reasonable for her to do so, especially once the children reached an age when they no longer needed full-time care.

[164] An additional factor in this case is that Ms. Hausmann has benefitted personally from the amount of child support Mr. Klukas has paid since 2007. The retroactive child support paid in 2007 allowed Ms. Hausmann to rebuild her capital and (among other things) purchase the West Vancouver home. Ms. Hausmann has explained how the move to West Vancouver and the renovations have benefitted the children. However, as a result of the large amounts of child support paid since 2007, Ms. Hausmann has also benefitted and increased her current standard of living above the martial standard. But child support for three children will not continue indefinitely.

[...]

[168] I have concluded that Mr. Klukas should pay spousal support to Ms. Hausmann of $6,000 per month, beginning September 1, 2010 (the first month after Ms. Hausmann’s application was filed). The amounts proposed by Mr. McLean are, in my view, too low given that Ms. Hausmann continues to be the primary caregiver for JL and the fact that Ms. Hausmann sacrificed her career so that Mr. Klukas could devote himself full-time to Pioneer’s business. On the other hand, the amounts proposed by Ms. Dunnaway are, in my view, too high and (among other things) fail to take into account the benefits Ms. Hausmann receives from the high level of child support paid and payable by Mr. Klukas, based on his increased income. 

[169] I test the reasonableness of $6,000 per month against the SSAG ranges assuming an income of between $250,000 and $350,000 for the payor. Those ranges are approximately $5,500 (“high,” where Mr. Klukas’s assumed income is $250,000) and $6,500 (“low,” where the assumed income is $350,000). I have used a range of between $250,000 and $350,000 as the payor’s income because I have concluded above that Ms. Hausmann should receive some benefit from Mr. Klukas’s post-separation increased income. In my view, the assumed incomes sufficiently recognizes that benefit. In addition, in using $350,000 as the payor’s income for the purposes of the calculation under the SSAG, I have found the discussion in J.W.J. McC. v. T.E.R.2007 BCSC 252, at para. 92, helpful. 

In Kotyk v Kotyk, 2020 BCSC 1975 (CanLII), MacDonald J. stated that the quantum of spousal support is often based on the payor’s subsequent increases in salary, regardless of whether it is needs-based or compensatory. However, there are cases where support is based on the marital standard of living, not the post-separation increase. The court may take into account the payor’s post-separation career efforts and consider it an “intervening event” that partially contributed to the payor’s increased income post-separation. In other words, the former spouse’s contribution to the payor’s career during the marriage does not always account for the post-separation increases. In those circumstances, the marital standard of living may be used to calculate spousal support. The Court contrasted the recipient spouse's lack of any effort to become self-sufficient with the payor spouse's hard work post-separation. The Court ultimately held that the recipient spouse was entitled to spousal support at the low end of the range based on the post-separation income of the payor spouse:

[144] Mr. Kotyk’s income has gradually increased post-separation. In 2005 he was making $92,860 whereas in 2018 he made $130,000. He received discretionary bonuses and cashed in some investments to meet his expenses over the years.

[145] From his testimony, it is evident Mr. Kotyk worked hard post-divorce to advance his career and become financially stable. He took a job in Prince Rupert to earn a higher income, including discretionary bonuses. This required him to commute between Vancouver and Prince Rupert at a time when he was involved with Janine Kotyk and would have preferred to live in Vancouver. [...]

[...]

[208] The quantum of spousal support is often based on the payor’s subsequent increases in salary, regardless of whether it is needs-based or compensatory. However, the respondent referred to numerous cases where support is based on the marital standard of living, not post-separation increases: Rayvals v. Rayvals2008 BCSC 176; Judd v. Judd2010 BCSC 153;G.W.C. v. K.C.C.2015 BCSC 1802.

[209] In Judd, Justice Punnett held that there needs to be a connection between any increase in the payor’s salary and the recipient’s contribution during the marriage before post-separation increases can be factored into spousal support: at para. 23. In G.W.C., Justice Young stated that the “sharing of post-separation income increase should not be automatic”: at para. 114.

[...]

[221] The court may take into account the payor’s post-separation career efforts and consider it an “intervening event” that partially contributed to the payor’s increased income post-separation. In other words, the former spouse’s contribution to the payor’s career during the marriage does not always account for the post-separation increases. In these circumstances, the marital standard of living may be used to calculate spousal support: G.W.C.Walker at para. 43.

[222] While Ms. Kotyk’s entitlement is largely needs-based, I still find it troubling that she did not make any effort toward self-sufficiency post-separation. She is of the view that the parties’ income should be split equally going forward. However she did not attempt to contribute to the joint income, apart from her CPP benefits. There was not even a failed attempt to return to work. In contrast, Mr. Kotyk worked very hard post-separation and took a job out of town to increase his income despite personal hardship.

[...]

224] However, the reapportionment of assets in Ms. Kotyk’s favour does support a quantum of spousal support towards the low range: Guidelines, s. 12.6. Based on these facts, I find Ms. Kotyk is entitled to ongoing spousal support at the low end of the range provided for under the Guidelines for an indefinite duration

[...]

[258] [...] Orders

[...]

13. Mr. Kotyk shall pay Ms. Kotyk ongoing spousal support, based on the low range of spousal support, commencing October 1, 2020, and continuing on the first of each month thereafter. The parties are to calculate the precise amount based on the parties' incomes going forward, in accordance with these reasons.

Kelly v. Kelly, 2007 BCSC 227 (CanLII), involved an application by the payor spouse to terminate or reduce his spousal support obligation and an application by the recipient spouse to have the payor spouse's spousal support payments increased. The application was heard five years after spousal support was initially ordered. There were no dependent children. Since the initial spousal support order, the payor spouse's income increased from $70,000 to a range of approximately $180,000-$245,000. Both the payor spouse and recipient spouse had remarried. Barrow J. of the BCSC held that even though the payor spouse's income had increased, spousal support should be reduced. The Court based its decision on the fact that the compensatory basis of the award had been achieved and the recipient spouse's new husband had a growing responsibility for her needs: 

[51] I turn now to the issue of quantum. As noted, Mr. Kelly has been paying $1,000 per month in spousal support since March 2004. I consider it appropriate to reduce the amount of support to reflect both the fact that the compensatory basis of the award has been achieved and Mr. Dunsdon's growing responsibility for Ms. Kelly's need. Support will therefore continue in the amount of $750 per month from December 1, 2006 until and including November 1, 2007; from December 1, 2007 to November 1, 2008, it will be payable at the rate of $500 per month. Thereafter it will end.

[52] Some comment on the Guidelines is in order, given Ms. Kelly’s position that support should not only continue but increase based on Mr. Kelly’s increased income.

[53] As to the notion that Mr. Kelly’s increased income should result in an increase in support, the Guidelines do not dictate such a result. While the authors of the Guidelines found it possible to provide assistance in situations where the recipient spouse’s income increases or the payor’s income deceases, they were able to offer only limited guidance on the effect of increases in the payor’s income and the effect of remarriage. In that regard, they wrote that circumstances “such as post-separation increases in the payor’s income, re-partnering, remarriage and second families” are best left to a discretionary, case-by-case determination (Guidelines, c. 10). They reached this conclusion, in part, because the state of the law renders formulaic determinations of quantum impossible. They set out the two theoretical extremes from which increases in a payor’s income might be approached. Specifically they noted (c. 10.3):

At one extreme, one could decide that any post-separation income increase of the payor spouse should not affect the amount of spousal support. After all, some would suggest, the recipient is entitled to a sharing of the marital standard of living, but no more. Certainly, this bright-line method would be predictable and administratively simple. At the other extreme, one could argue that the formula should just continue to be applied to any income increase for the payor. This again would offer a predictable result, but one which the basic principles of spousal support would not justify in all cases.

When the conceptual basis for on-going support is need, then it seems to me that it is towards the ‘marital standard of living’ end of this theoretical continuum that the answer to the issue of quantum will be found.

In G.W.C. v. K.C.C., 2015 BCSC 1802 (CanLII), The Court stated that sharing of post-separation income increase should not be automatic and is fact-based. The Court noted that in a long, traditional marriage it would be hard to find no connection between the marriage and the wage increase. The Court also stated that when a recipient spouse makes no effort toward self‑sufficiency, it is also not fair that the recipient spouse be rewarded with an increased level of support solely because the claimant continued to work hard and as a result enjoyed some economic success post-separation. In this case, although the payor spouse's post-separation income increased, the Court did not increase the recipient spouse's spousal support entitlement. The parties were married for eighteen years. The payor spouse had completed his education and training by the time of the marriage and worked during the marriage. The recipient spouse was a stay-at-home parent. The Court based the spousal support entitlement of the recipient spouse on the payor spouse's pre-separation income (as opposed to his post-separation income) and noted that the recipient spouse did not put her career on hold to care for the couple's children (because she did not have a career at the start of the marriage) and that she did not make any effort towards self‑sufficiency following the marriage. In its reasons, the Court also commented on the recipient spouse's inability to cope following the separation and the effect that this had on the parties' children:

[107] The claimant says that it would be unfair to use his actual income at trial because he worked hard to achieve that income with no contribution from the respondent.

[108] In Judd v Judd2010 BCSC 153, Justice Punnett considered whether to rely on post‑separation increases in income to determine spousal support. At paras. 21 and 22 he reviewed a number of authorities and concluded at para. 23 that the resolution of issues of post‑separation wage increases is clearly fact-based and that there needs to be a connection between the increase in the payor’s salary and the recipient’s contribution during the marriage. The increase in income can be founded on expertise and seniority that the payor developed during the marriage. If the recipient was in a supportive traditional role during the marriage, freeing up the time of the payor to develop that expertise, then the post‑separation increase in income may be attributable to the marriage. If an event occurred after separation that benefited the payor and had no relationship to the spouses’ roles, then it might not be attributed to the marriage.

[109] In a long traditional marriage I think it would be hard to find no connection between the marriage and the wage increase.

[...]

[111] In the present case, the respondent didn’t have a career when the parties got married. The claimant had already trained in the field of helicopter logging either before the parties married or shortly after and he worked as a helicopter logging manager for the same company throughout the marriage. The respondent stayed home and took care of the children and the home. She did not continue her education or start a career. At the end of the marriage the claimant had many years managerial experience and a good job and the respondent had a grade 10 education and very limited work experience.

[112] The claimant continued to work at the same job for a few more years after the parties’ separation and then switched companies and received a substantial raise in his salary. Clearly, he drew from his years of experience gained during the marriage to make him an attractive candidate for the new position. The contributions the respondent made are indirect.

[113] The claimant referred to D.B.C. v. R.M.W.2006 ABQB 905, a decision of the Court of Queen’s Bench of Alberta which contains a review of several authorities dealing with post‑separation increases in income. The cases reviewed looked for a direct link between the income increase and the contribution of the spouse.

[114] The way to reconcile the cases is to look at the facts. The sharing of post‑separation income increase should not be automatic. The facts in the case before me are not as strong as the facts in Judd because the wife didn’t have a career to subordinate and didn’t move to advance her husband’s career, but she did put all development of a career on hold as she played a supportive role in the family.

[115] Post‑separation, the claimant ‘held the fort’, so to speak, while the respondent fell apart emotionally, drank heavily and was involved in abusive relationships. Her daughter left the respondent’s residence because she couldn’t bear to live in that environment. I suspect these bad choices had a lot to do with compensatory factors (young age at marriage, limited education, no work experience and low self-confidence) and may have had something to do with the respondent’s personality type. It appears from the limited evidence that I have that this respondent had a complete breakdown when the marriage ended. She then was injured and she developed a chronic pain disorder from her injuries. She sounds like a person who is not resilient and doesn’t adapt to adversity well. It is not fair to penalize her or consider fault.

[116] Having said that though, if she is not making any effort toward self‑sufficiency, it is also not fair that she be rewarded with an increased level of support solely because the claimant continued to work hard and as a result enjoyed some economic success.

[...]

[118] I find it equally unfair however to not acknowledge that the claimant didn’t waver. He kept his job, got the house sold in spite of the respondent’s efforts to thwart him, paid off debt, took his daughter in and parented her through her remaining years of high school and provided a home for their son while he finished university. The claimant has remained on that steady path for the last nine years. He obtained a new job with a higher income because of his skills and perhaps because he is a responsible, consistent and reliable person. Some of his work experience came during the marriage when the respondent was caring for the home and children but seven years of it came after when he was doing everything on his own. The nine year separation and the claimant’s efforts post‑separation could be considered as an intervening event that partially contributed to the increase.

[119] I don’t intend to penalize the respondent for her adverse reaction to divorce. I believe she is entitled to support but I do not believe she is entitled on these facts to share in the increased income of the claimant.

[120] I find that the fairest guideline income for the claimant is the $84,200 which was his average line 150 income for the last three years of the marriage. If a standard of living is to be shared after a 19 year marriage, I find on these facts that it should be the marital standard of living.

Authorities:
Helle v. Helle, 2019 BCCA 97 (CanLII)
Judd v. Judd, 2010 BCSC 153 (CanLII)
Hartshorne v. Hartshorne, 2010 BCCA 327 (CanLII)
Cote v Cote, 2018 BCSC 639 (CanLII)
Younger v. Younger, 2016 BCSC 990 (CanLII)
Hausmann v. Klukas, 2011 BCSC 1753 (CanLII)
Kotyk v Kotyk, 2020 BCSC 1975 (CanLII)
Kelly v. Kelly, 2007 BCSC 227 (CanLII)
G.W.C. v. K.C.C., 2015 BCSC 1802 (CanLII)