Thursday, February 18, 1999Pension at centre of pivotal family law case
Man argues divorce award to wife should be rolled back
OTTAWA - A pension is not like a house or other matrimonial assets, a lawyer for an Ottawa man fighting to roll back the amount awarded to his wife in their divorce told the Supreme Court of Canada yesterday.
WAYNE HIEBERT / OTTAWA CITIZEN
Ted Best is arguing in the Supreme Court of Canada that the amount of his pension awarded to his wife when they divorced should be rolled back.
Jirina Bulger, acting for Ted Best in a case considered to be pivotal for family law in Canada, told the highest court in the country that it was more difficult to put a specific value on the pension. She argued in favour of the "prorata" method - which divides the value of the pension equally between the number of years a person pays into it.
Frank Tierney, the lawyer for Marlene Best, is arguing in favour of the "value-added" ruling that she received - which provided her with half of the value added to the pension during the specific years of the marriage when the pension was growing much faster than it had in the earlier years.
The legal case is being watched closely by lawyers and actuaries for its potential impact on divorce settlements.
"This is a pivotal case," said Wayne Woods, an Ottawa-based actuary Last fall, Mr Woods chaired a Canadian Institute of Actuaries task force on the division of pension benefits upon marriage breakdowns.
"Very frequently I find as an actuary that the pension values [of individuals in the plans] surpass even the value of [their] houses." Mr. Woods said the Best case is considered so important that "right now there has been a lull in the last six months (of court cases involving divorces and pensions), because I think everybody's been sitting on the sidelines to see what happens." A decision by the court is expected in a few months.
Mr. Best, a former chairman of the Ottawa Board of Education, married Marlene Best in 1976, and they were divorced in 1988. Mr. Best's pension was valued at the time at about $425,000.
An Ontario court ruled in 1993 that Mrs. Best should receive $147,649 in equalization payments, based on the value-added method, as well as $2,500 per month in spousal support and $45,000 to cover her legal fees.
Mr. Best challenged that decision, but in 1997 the Ontario Court of Appeal upheld the ruling. Mrs. Bulger argued yesterday that the pro rata method was fairer to her client. That would have seen Mr. Best pay his former wife about $75,000.
But Mr. Tierney, representing Mrs. Best, said she deserved to receive money based on the value-added method.
"This is probably the most important case that the Supreme Court of Canada will hear this year in family law," Mr Tierney said in an interview.
Mrs. Bulger said it was one of the more complicated civil cases because it involved pensions.
"You cannot go and see an appraiser and say 'How much will you pay me for this pension?' You can do that with land, you can look at how much you have in your RRSP, you can look at a stock market and see how much a share was worth on that day. .. you look it up and there's the value.
"We don't have any such handy thing with respect to pension. It is not an asset like any other asset; it is an entitlement to future stream of income, assuming that you live long enough to get it." According to court documents, the Bests had a traditional relationship in which Mrs. Best handled household duties while her husband was a public school principal as well as school board chairman.
After they separated, Mr. Best was living on about $8,500 a month while Mrs. Best received $2,500.
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