N. Effect of Separation Agreement or Consent Order on Subsequent Application for Spousal Support

Author:Julien D. Payne - Marilyn A. Payne

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By a majority of seven to two, the Supreme Court of Canada in Miglin v Miglin322endorsed the following principles to be judicially applied pursuant to section 15.2 of the Divorce Act when a spousal support order is sought that would override the provisions of a pre-existing spousal agreement.

1) The courts retain a supervisory jurisdiction to determine whether an order for spousal support should be granted pursuant to section 15.2 of the Divorce Act in the face of a purportedly final spousal agreement.3232) The narrow test imposed by the Pelech trilogy under the 1968 Divorce Act is inappropriate under the 1986 Divorce Act. The provisions of a spousal agreement that limits the amount or duration of spousal support or waives any right to spousal support may be overridden by an order for spousal support granted pursuant to section 15.2 of the Divorce Act on grounds that are somewhat broader than those defined in the Pelech trilogy. It is no longer necessary for the applicant who seeks a support order under that section to prove there has been a radical and unforeseen change of circumstances that generates a need for spousal support that is causally connected to the roles assumed by the spouses during their marriage. The emphasis of the Pelech trilogy on economic self-sufficiency and a clean break is inconsistent with the current model of compensatory support espoused in Moge v Moge324and the conceptual analysis of compensatory and non-compensatory support in Bracklow v Bracklow.325

Economic self-sufficiency, nevertheless, remains as one of the objectives

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of spousal support orders, and the policy of encouraging spouses to resolve their disputes by agreement remains of vital importance.

3) Although a material change in the condition, means, needs, or other circumstances of either of the former spouses is a threshold requirement on an application to vary a pre-existing spousal support order pursuant to section 17 of the Divorce Act, no similar prerequisite applies where an original order for spousal support is sought pursuant to section 15.2 of the Divorce Act. In the latter context, a change of circumstances since the execution of a pre-existing spousal agreement has no relevance except with respect to its impact when the court has regard to "any order, agreement or arrangement relating to support of either spouse" as required by section 15.2(4)(b) of the Divorce Act.

4) Where an application for spousal support under section 15.2 of the Divorce Act is inconsistent with a pre-existing spousal agreement, the court should examine the agreement in two stages. First, the agreement should be reviewed in light of the circumstances that existed at the time of its negotiation and execution. As of this date, the court should ascertain whether one spouse was vulnerable and whether the other spouse took advantage of that vulnerability. In assessing the issue of vulnerability, the court need not adhere to the stringent requirements of the doctrine of unconscionability that are applied to commercial transactions. Vulnerability and an imbalance of power should not be assumed, however, in the absence of evidence of a fundamental flaw in the negotiation process. The existence of emotional stress on separation or divorce should not be judicially perceived as negating the ability of the spouses to freely negotiate a mutually acceptable agreement. Any systemic imbalance of power between spouses will usually, but not always,326be overcome if each spouse has independent legal representation. After addressing the circumstances attendant on the execution of the agreement, the contents of the spousal agreement should be examined as of the date of its execution to see whether they substantially comply with the overall objectives of the Divorce Act, which include an equitable sharing of the economic consequences of the marriage and its breakdown in accordance with section 15.2(6) of the Divorce Act and the promotion of certainty, autonomy, and finality that is implicitly acknowledged by section 9(2) of the Divorce Act. Where the spousal agreement is unimpeachable as of the date of its execution, the court will pursue the second stage of its inquiry by examining the spousal agreement in light of the facts existing at the time of the application for a support order under section 15.2 of the Divorce Act. As of that date, the court should determine whether the

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applicant has established that the agreement no longer reflects the original intention of the spouses and whether it is still in compliance with the overall objectives of the Divorce Act.327In this context, the applicant must show that new circumstances have arisen that were not reasonably anticipated by the spouses when their agreement was executed and that these changes have led to a situation that cannot be condoned. Changes that occur in the ordinary course of people’s lives, such as health problems, changes in the job market, business upswings or downturns, remarriage, or increased parenting responsibilities will not justify judicial interference with a final spousal settlement. It is only where the current circumstances represent a significant departure from the range of reasonable outcomes anticipated by the spouses, in a manner that puts them at odds with the overall objectives of the Divorce Act, that the court may be persuaded to give little weight to the agreement on the application for a spousal support order under section 15.2 of the Divorce Act.328

The co-existence of diverse competing and conflicting objectives under the Divorce Act manifests Parliament’s intention to vest a significant discretion in trial judges to assess the weight to be given to each objective against the particular backdrop of the spouses’ circumstances. However, the objectives of spousal support orders that are set out in section 15.2(6) of the Divorce Act do not confer an unfettered discretion on trial judges to substitute their own view of what is required for that which the spouses found mutually acceptable. A court should be loath to interfere with a pre-existing spousal agreement, unless the court is convinced that the agreement does not comply substantially with the overall objectives of the Divorce Act. Courts should not condone spousal agreements that are manifestly prejudicial to one spouse but, equally important, they should not stand in the way of spouses bringing their personal concerns, desires, and objectives to the bargaining table in their negotiation of a mutually acceptable agreement that they regard as balancing economic fairness with the need for certainty and finality on the dissolution of their marriage. This is especially important when spousal support provisions constitute only one aspect of a comprehensive settlement that encompasses such interrelated matters as family property division and child support. In reviewing a comprehensive settlement, the court must look beyond the parameters of section 15.2(6) of the Divorce Act, which is written in permissive language and is expressly confined to defining the objectives of spousal support orders. Moge v Moge clearly affirms that an equitable sharing of the economic consequences of the marriage and its breakdown can be achieved by means of property division, spousal support, child support, or any combination thereof. A policy of promoting negotiated settlements is clearly endorsed by section 9(2) of the Divorce Act,

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which imposes a duty on every lawyer to discuss with his or her client the advisability of negotiating matters that may be the subject of a support or custody order. Certainty and finality that is achieved by means of freely negotiated settlements are fundamental objectives of the Divorce Act when it is viewed as a whole. If that were not the case and agreements could be lightly set aside, spouses would have little incentive to negotiate the economic consequences of their divorce.

Applying the aforementioned principles, the judgment of the Ontario Court of Appeal granting the wife periodic support for an indefinite term was reversed by the majority judgment of the Supreme Court of Canada, which vacated the order on the basis that the wife was bound by her waiver of spousal support, which constituted one aspect of a final spousal settlement. An agreement between the spouses need not specifically address all of the objectives and factors set out in the Divorce Act. So long as a fairly negotiated agreement that represents the intentions and expectations of the parties is in substantive compliance with the objectives of that legislation as a whole, it should be given considerable weight.329Where a spousal support agreement includes no expiry or review date, public policy may compel a court to intercede where the contract leaves one party in penury, but there are no public policy grounds for disturbing a contract that pays too much support or tolerates the recipient’s failure to secure full-time gainful employment.330Whether the spousal support provisions of an agreement are contractually valid, and whether they are impeachable under the criteria defined by the Supreme Court of Canada in Miglin v Miglin, are questions to be determined in a single proceeding. In determining whether the spousal support provisions of a purportedly final settlement comply with the objectives of the Divorce Act as defined in Miglin, the court must guard against analyzing particular clauses in isolation; rather, the settlement must be viewed as a whole to determine whether the spousal support provisions comply with the statutory objectives.331In...

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