Safeguard for honest mistakes.

• Author: Boll, Rosemarie

In the October/November 2001 issue I wrote about the Ontario Court of Appeal's decision in Miglin v. Miglin. That's the case where the court found that a separation agreement was invalid because the spousal support sections did not meet the objectives set out in the Divorce Act. Section 15.2(6) says:

"An order ... that provides for the support of a spouse should recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

relieve any economic hardship of the spouses arising from the breakdown of the marriage; and in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time."

Before this case, when someone wanted to challenge a separation contract, he or she had to prove a radical, unforeseen change in circumstances. The Miglin case has made it much easier -- the applicant need only prove that the contract did not meet the objectives set out in the Divorce Act.

Soon, the Supreme Court of Canada will hear the husband's appeal. As everyone waits for the final word, there has been much wailing and gnashing of teeth. Some lawyers say, "When we were in law school, they taught us that a contract is a contract. Courts shouldn't meddle when the parties have consented to something. How can we ever be sure that the separation contracts we write for our clients will stand up later? Contracts are contracts and courts shouldn't change them."

I have a different view. To me, comparing spousal support contracts with regular commercial contracts is both unfair and misleading. They are fundamentally different. Commercial contracts create a creditor-debtor relationship. Sam says to Susan, "Sure, I'll sell you my house -- when I get your money, you get my house." Susan goes to the bank and the bank says, "Yes, we've checked your credit rating and appraised the property. We'll lend you the money to buy it. In return, you pay back all the money with interest and you give us a mortgage." Susan is involved in two contracts -- the one with Sam and the one with the bank. There's usually not much risk to the seller. His contract says he gets the house back if he doesn't get all his money. Sam could lose some money if the deal doesn't go through, but likely he's quite safe. The bank is in...