Voluntary retirement: Is it grounds for termination of support?

The short answer to the title question of this blog, as with most legal issues, is “it depends”. 

This question was most recently considered by the Court of Appeal in their decision in Savage v. Savage, released December 13, 2019.  In the Savage case, the trial judge found that the spousal support payor’s retirement from his teaching career at the age of 57 was a material change in circumstances and terminated spousal support.  The support recipient appealed, and her appeal was ultimately dismissed by the Court of Appeal for Ontario.

In the case of Savage, the payor retired from his teaching career at the age of 57 with a full pension.  The support recipient was also retired, having taken retirement at the age of 56. The parties had separated in 2012 after a 25-year marriage.  The payor sought to terminate spousal support in 2017, after having paid support for only five years. The recipient wife appealed the decision of the trial judge, arguing that the judge erred by finding a material change in circumstances where the retirement was early and voluntary. The Court of Appeal upheld the trial judge’s decision and in doing so noted that (1) the recipient also retired early, (2) the original Consent Order permitted either party to seek a change in the event of a material change in circumstances, whether it was “foreseen”, “foreseeable”, “unforeseen” or “unforeseeable”, and (3) that the payor did not retire in an effort to frustrate the support obligation.

The Court of Appeal distinguished the Savage case from their decision in Haworth v. Haworth (2018), where the court found that retirement was a material change in circumstances, but declined to terminate support in light of an existing Order which provided spousal support was to be paid until the payor’s death.

Another retirement case, which is arguably distinguishable from the Court of Appeal’s decision in Savage, is the decision of the Divisional Court in Hickey v. Princ (2015).  The Divisional Court overturned the decision of the Trial judge in the case of a police officer who retired at the age of 51 with full pension benefits.  The Trial judge had found the retirement was a material change in circumstances, and granted a reduction in spousal support. In this case, the Divisional Court found that Mr. Hickey’s motion to change spousal support must fail as the voluntary retirement was not a material change in circumstances.  Of note in this case was the lack of a term in the Final Order permitting variation in the event of a “foreseen” change, something that was present in the Final Order in Savage.

The following are a few important things to take from the Savage decision and the other cases mentioned in this post:

  • Careful consideration should be taken when drafting Consent Orders or Separation Agreements.  In the event of request for variation, courts will pay close attention to the wording of the underlying Agreement or Court Order.
  • A voluntary retirement before the usual age of 65 may be a basis to terminate spousal support, but it also may not.  For that reason, if you have a spousal support obligation, it is very important to obtain legal advice from an experienced family lawyer before making the decision to retire.
  • In retirement cases, as with most family law cases, the outcome is largely driven by the facts and circumstances of each individual case.

At Kay & McCourt, our lawyers are experienced in dealing with Family Law cases, including cases involving the variation of spousal support. If you think we can help you with your case, contact our office at (905) 372-1994.

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