Retirement is a Material Change in Circumstances

The British Columbia Court of Appeal (“BCCA”) confirmed on 26 September 2022 in Hauge v. Hauge, 2022 BCCA 325 that a spouse’s obligation to pay spousal support can be varied if the paying spouse retires.

The BCCA upheld The Honourable Mr. Justice Baird’s decision in Hague v. Hague, 2021 BCSC 771 where Mr Hauge’s obligation to pay spousal support was terminated due to his retirement. Justice Baird, the chamber’s judge, stated,

The respondent’s decision to retire was reasonable in the circumstances. It constitutes a material change in his economic circumstances. Financially speaking the parties are in equivalent positions. I hereby order that the respondent’s obligation to pay spousal support is terminated.

The chamber’s judge gave consideration to the facts that Mr Hauge’s decision to retire was voluntary, Mr Hauge was not ill or disabled, he could have continued to work, and he was not dismissed or laid off. The judge found however, that the retirement was not an early retirement, as considered in the Spousal Support Advisory Guidelines:

When will a retirement be described as “early”? The courts are not always clear. For our purposes, an “early” retirement is either a retirement on a reduced pension or a retirement on a full or unreduced pension before 65 years of age, in the absence of health issues or other special circumstances. If the court sees the early retirement as “voluntary” and not necessary or reasonable, then it is likely that spousal support will not be changed.

The judge further found that, (1) Mr Hauge was over 65 when he retired, (2) had worked for 45 years. (3) his pension was fully vested and payable, (4) people generally retire at this stage of life, (5) Ms Hauge had permanently left the workforce herself and it was reasonable for Mr Hauge to do the same thing, (6) there was no evidence that Mr Hauge’s decision was motivated by a desire to stop paying support, and (7) there was no reason to think that Mr Hauge would return to work.

The judge also noted that, (1) the economic consequences of the marriage and its breakdown have been equitably shared, (2) both parties were at an acceptable age for retirement, (3) their assets had been divided equally, (4) Ms Hauge was in a good financial position, (5) Mr Hauge had paid a significant sum in support since the separation, (6) the parties’ future incomes would be similar, and (7) the parties had liquid assets of a similar value.

Mr Hauge owned a home whereas Ms Hauge did not. But the court found it was Ms Hauge’s choice not to use her matrimonial settlement money to buy a home, so Mr Hauge was not liable to compensate her for this.

The BCCA did agree that the chambers judge misapprehended and misstated certain facts. However, it did not find that those facts were material, nor did it affect the overall case. The BCCA dismissed Ms Hauge’s appeal upholding the chamber’s judge’s decision.

The information published here is general information and not intended to be legal advice. For legal advice regarding your particular circumstances, always consult a lawyer.