Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Share on twitter
Share on facebook
Share on linkedin

Why Lump Sum Spousal Support?

Share on twitter
Share on facebook
Share on linkedin
Share on email

Why Lump Sum Spousal Support?

Posted April 16, 2018

Both the Family Law Act in Ontario and the federal Divorce Act give the authority for judges to order periodic spousal support, lump sum spousal support, or both.

As pointed out in a recent post, periodic spousal support is tax efficient.   So why, then, would a lump sum support order be requested in a spousal support case?

Until 2011, lump sum spousal support awards were relatively rare.  That year, the Court of Appeal released the decision of Davis v. Crawford, which clarified that lump sum support awards did not need to be limited to cases where judges were concerned that the payor would default on periodic payments.

Davis has encouraged many recipients (and some payors) to request that support be made in lump sum format.  There are many advantages to lump sum payment.  From the recipient’s perspective, a lump sum payment means that there is no ongoing worry of enforcement and there is an ability to invest or make a capital expenditure.  For both parties, there is no need for ongoing interaction between them, and there is complete financial independence following the lump sum payment.  Both parties can then feel free to retire or reduce work hours without the worry of imputed income, or, conversely, earn more without the concern that this will impact support.

Davis sets out considerations for deciding if lump sum support is appropriate.   There must be an entitlement to spousal support – lump sum support should not be a property award disguised as support.  The payor’s ability to pay a lump sum must be considered.  The payor’s future financial self-sufficiency should not be jeopardized.    Judges should consider the benefits of terminating contact between spouses, avoiding risks of non-payment, while considering that lump sum support is not flexible in that neither party can return to court if their needs and means change in the future.

Once a judge completes this analysis, considerable deference is owed to the decision.   As one of many examples, see Zenteno v. Ticknor, heard shortly after Davis, where the Court of Appeal refuses to interfere with the judge’s decision to order lump sum support.

While lump sum support is certainly appropriate following many short term relationships with young spouses with no children, where the total quantum of support payable can be easily calculated, judges can also order lump sum support in long term marriages or with older spouses, provided that the appropriateness of such an order is properly analyzed, as set out in Davis.

This blog post was written by Mary Cybulski a member of the Family Law team.  She can be reached at 613-566-2073 or at mary.cybulski@mannlawyers.com.

More Resources

Blog |
Employment, Labour, and Human Rights

By: 

Generally, the Employment Standards Act, 2000 (“ESA”) has been interpreted to protect non-unionized employees from “temporary” lay offs unless their employment contract permits such a[...]
Blog |
Business Law

By: 

Posted October 20, 2021

On October 19, 2021, the new Ontario Business Registry System launched. This new online registry now enables businesses and not-for-profit corporations to directly access services[...]
Blog |
Environmental Law

By: 

Posted October 14, 2021

In the decision of Greenpeace Canada (2471256 Canada Inc. v. Ontario (Minister of the Environment, Conservation and Parks), 2021 ONSC 4521, released September 3, 2021,[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted October 1, 2021

This blog continues our exploration of the potential employment law consequences stemming from the degree of control a party exerts within a variety of business[...]
Blog |
Personal Injury

By: 

Posted September 27, 2021

Personal Injury lawyers and their clients are all too familiar with the carnage and suffering caused by impaired drivers.  Canada has the worst rate of[...]
Blog |
Bankruptcy and Insolvency, Business Law

By: 

Posted September 24, 2021

As is noted by the Court of Appeal in McEwen (Re), released August 12, 2021, referred to here as “Traders”, the BIA is a complete[...]

Subscribe to Our Newsletter

Name*
Consent*
This field is for validation purposes and should be left unchanged.