On January 19, 2017, the Supreme Court of Canada dismissed the Claimant Mr. Parrett’s application for leave to appeal the BC Court of Appeal decision, reported at 2016 BCCA 151. Mr. Parrett is a retired Supreme Court judge who applied for a reduction in spousal support after he retired. At the time that he made his application, nearly all of his income came from his entitlement to judicial annuity benefits under the Judges Act, R.S.C. 1985, c. J-1 (i.e. what is sometimes called a “judge’s pension”). The BC Court of Appeal decided that spousal support should continue notwithstanding the fact that Ms. Parrett already received a portion of Mr. Parrett’s judge’s pension. The facts of this case are very straightforward but interesting because it deals with double dipping and spousal support in the context of the judge’s pension.
Mr. Parrett was appointed a judge in 1990. The parties separated in March 2000. In May 2007, the parties came to a settlement at a settlement conference. They entered into a consent order, which included terms dealing with spousal support. One of the paragraphs relating to spousal support stated that
The payment of spousal support will be subject to variation and/or rescission on a material change of circumstances of either the Plaintiff or the Defendant pursuant to paragraph 17 of the Divorce Act (Canada); and without limiting the generality of the foregoing a material change in circumstances shall include the Plaintiff retiring fully from his employment as a Judge of the Supreme Court of British Columbia and/or the receipt by the Defendant of pension monies including the Defendant’s share, if any, of the Plaintiff’s Judge’s Annuity Benefits.
By 2010, Ms. Parrett had been diagnosed with rheumatoid arthritis and was unable to work. She later retired without a pension.
In 2010, Ms. Parrett received a lump sum payment for her share of Mr. Parrett’s judicial her husband’s judges pension for 1990-2000 (i.e. the annuity benefits under the Judges Act, RSC 1985, c J-1). Mr. Parrett retired in 2015, and applied for an order terminating spousal support.
The chambers judge found that there had been a material change in circumstances and terminated spousal support. Ms. Parrett appealed, alleging
The Learned Chambers Judge erred in holding that where there is a division of that portion of a judge’s annuity which had accrued by the time of separation, payment of spousal support from the income generated by the portion of the annuity which accrued after separation is double recovery.
The Learned Chambers Judge erred in holding that the unique nature of a judicial annuity precluded the application of the approach in Boston.
The Learned Chambers Judge erred in holding that the Appellant was not entitled to ongoing spousal support on either a compensatory or a needs basis.
Mr. Parrett’s counsel argued that the Judges Act was “designed to prevent double recovery ‘by not allowing more than one division of any portion of an annuity”.
Two of the issues on appeal revolved around whether continuing spousal support would be “double dipping” or “double recovery”.
Mr. Parrett argued that having to pay Ms. Parrett spousal support after he retired was “double dipping”. She had already received part of his pension when they divided their assets. He was retired, so his income came from the judge’s pension. If he was paying her part of his income from the judge’s pension, then he would essentially be paying her twice. Mr. Parrett also argued that the Judges Act was specifically designed to avoid “double dipping” to safeguard judicial independence.
The weakness with Mr. Parrett’s argument, as explained by the BC Court of Appeal, is that Ms. Parrett only received a lump sum payment for her interest in Mr. Parrett’s pension for the time that they were living together (1990-2000). From 2000 to 2015, Mr. Parrett continued to contribute to the judge’s pension. Ms. Parrett had not received compensation for any of the pension attributable to the 15 years after they separated.
The BC Court of Appeal referred to Boston v. Boston, 2001 SCC 43, the leading case on double recovery from the Supreme Court of Canada, in which the majority stated
To avoid double recovery, the court should, where practicable, focus on that portion of the payor’s income and assets that have not been part of the equalization or division of matrimonial assets when the payee spouse’s continuing need for support is shown (see Hutchison, supra, at para. 9) …
… Double recovery may be permitted where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and, despite this, an economic hardship from the marriage or its breakdown persists.
[Emphasis in Parrett]
The BC Court of Appeal did not see any negative impact on judicial independence by allowing Ms. Parrett to continue to receive spousal support.
Brennan J. Clarkson has helped clients with family law and estate law cases since 2008. He practices in Port Moody, British Columbia at Clarkson Law Corporation.
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