On January 15, 2021, the B.C. Court of Appeal issued reasons for judgment in the case French v. French, 2021 BCCA 30. In French, the issue was the amount of income to be used to calculate spousal support for Ms. Cindrich (formerly Mrs. French). She had been in a car accident and unable to work. In theory, she might be compensated by ICBC for her lost wages, but she had not been compensated yet. The issue was whether her pre-accident income should be used to calculate spousal support. The B.C. Court of Appeal held that her actual income should be used instead of her pre-accident income. It is wrong to impute income to a party who cannot work due to injuries because they might expect to receive compensation from ICBC in the future.
Basic Legal Principles
French was an appeal from an application to change a spousal support order. Applications to change spousal support are heard by a “chambers judge” at the Supreme Court of British Columbia.
Before a judge will change a spousal support order, the judge must be satisfied that there has been a “material change of circumstances” since the spousal support order was made. In other words, there has to be a change of facts that would have caused a different order when the original order was made. The change must be something that was not thought of at the time that the original order was made.
Sometimes when a judge makes an order for spousal support or child support, the judge will “impute” income to a party. Imputing income to a party means that the judge calculates support as if the party were making a higher income. For example, a judge may impute income to a party if the party is deliberately underemployed for the purpose of lowering his or her income.
The Case at the Supreme Court of British Columbia
Mr. French was ordered to pay Ms. Cindrich $1,625.00 per month in spousal support in 2011. Four years later, Ms. Cindrich had a motor vehicle accident that left her unable to work. Two years after that, Mr. French lost his job. He then applied to court to cancel spousal support and reduce child support until he was working again. A judge suspended spousal support until Mr. French could find another job. The judge also ordered that if Mr. French found another job but earned less than he did previously, then the amount of spousal support would be reviewed. Mr. French found another job, but it earned less than he did previously. Instead of having a judge review the amount of spousal support, Mr. French unilaterally changed the amount he was paying Ms. Cindrich. Ms. Cindrich then applied to court to vary spousal support. Mr. French filed an application response asking for spousal support to be reduced.
Ms. Cindrich argued that her income was zero because she could not work for medical reasons. Mr. French did not accept that her current income should be zero. She was receiving $300 per week from ICBC in temporary total disability benefits. He asked for “all her current income should be attributed to the calculation” including her disability benefits. He did not ask that her pre-accident income be used as her income.
The chambers judge considered three options for determining Ms. Cindrich’s income:
- Zero income (Based on the fact that Ms. Cindrich was unable to work due to the accident)
- $14,400.00 (Based on the annual value of the total disability benefits Ms. Cindrich was receiving)
- $48,000.00 (Based on Ms. Cindrich’s annual income before the accident)
The Chambers Judge’s Decision
The chambers judge imputed Ms. Cindrich’s pre-accident income to her. Ms. Cindrich’s income was imputed to be $48,000.00 (much more than the disability benefits she was receiving). The judge pointed out that she expected to return to work in the following year. The judge further explained that she was not at fault for her accident and would “presumably be able to recover her past wages net of taxes once her claim has resolved. If her claim for past wage loss was ignored for spousal support purposes, the respondent would be unfairly penalized for something that neither he nor the parties’ marriage played any role.”
The Court of Appeal’s Decision
The Court of Appeal decided that Ms. Cindrich’s accident was a material change of circumstances. A material change of circumstances requires some degree of continuity. It cannot simply be temporary: L.M.P. v. L.S., 2011 SCC 64. Ms. Cindrich was unable to work for 18 months. It was long enough to be a material change of circumstances.
The Court of Appeal also found that imputing income to Ms. Cindrich was a mistake. The fact that Ms. Cindrich could not work due to her injuries meant that income should not have been imputed to her. It was wrong to impute income to Ms. Cindrich based on the possibility that Ms. Cindrich might be overcompensated because she could collect lost wages from ICBC and spousal support from Mr. French.
The Court of Appeal found that Ms. Cindrich’s situation was different from the cases Neufeld v. Neufeld, 2001 BCSC 1197 and M.K. v. R.A.S., 2004 BCSC 1798. In those cases, a spouse had already received damages for a motor vehicle accident and the issue was how much of those damages came from lost wages. Those cases are different from French because Ms. Cindrich had not yet received any compensation for her lost wages.
The correct approach was to calculate spousal support using Ms. Cindrich’s actual income. An order could have been made for Ms. Cindrich to inform Mr. French if and when she recovered past wage loss from ICBC, and then Mr. French could request a retroactive adjustment of spousal support (i.e. the adjustment could be backdated for the period she recovered her lost wages).
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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