This article was originally published by Law360 Canada (www.law360.ca), part of LexisNexis Canada Inc.
The importance of the case of Nairne v. Nairne,  O.J. No. 3083 is not the facts or the legal decisions, but the implication of a creative arrangement about property that impacted spousal support.
It is not easy to provide a neutral opinion on a case where the woman sought compensatory indefinite spousal support of $13,500 per month but received a trial judgment of a need-based spousal support award of only $2,500 per month until the husband’s retirement.
Both parties were chartered accountants. The husband obtained his certification before the marriage and the wife obtained hers five years after the couple’s eldest child was born. The husband’s income at trial was $464,442 and the wife’s was $122,000. The trial judge did not believe the woman’s assessment that her career was hampered by a greater parental and homemaking role during the marriage.
The unusual aspect of this case is the implications of the husband making a proposal which was
agreed to by the wife, whereby he deferred receiving his $561,000 buyout from the house through an interest-free mortgage to the wife until her death, until she sells the home, or until she stops living there full time.
The woman appealed the support decision. The appellate court indicated that the trial judge may have taken a narrow approach to arrive at the conclusion that the mother established a
“questionable” needs-based entitlement, not a compensatory entitlement. However, the appellate court considered the judge’s award as a whole, including the benefits the mother would receive from the interest-free mortgage, and that the mother would keep benefiting from the interest-free mortgage well beyond the date of the husband’s retirement, and did not interfere with the trial decision.
In non-court negotiations, we routinely achieve creative solutions that aim to satisfy the needs of
both parties, but creative solutions are analyzed and compared to more traditional “legal”
frameworks. The powerful restructuring tool in the DivorceMate program helps to quantify the impact of after-tax lump sum payments. We also employ the services of accountants and actuaries to evaluate the present value and the long-term impacts of scenarios just like the interest-free mortgage in the Nairne case. Clients need these types of calculations to make informed decisions.
In the Nairne case, the wife’s desire to keep the house was prioritized but she agreed to the interest-free loan before knowing how much spousal support she would be receiving. Query if she would have agreed to it if she had been told that she would only receive $2,500 per month until the husband’s retirement.
I continue to encourage the family law bar to suggest creative solutions to our clients, but with the proper analysis of various comparative options, including a more traditional “legal” framework to ensure the clients make informed decisions.
Nathalie Boutet of Boutet Family Law & Mediation is an experienced family law lawyer, accredited mediator and certified family enterprise adviser, skilled at providing unique strategies and out-of-court results to the complex legal, financial and human matters related to separation or divorce for high-net-worth families and business owners.
The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.