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Supreme Court of Canada Curtails Ability to Change Spousal Support Agreements

Supreme Court of Canada Curtails Ability to Change Spousal Support Agreements

In a decision rendered in the past week, the Supreme Court of Canada has reinforced the desire for predictability and certainty in freely-negotiated spousal support agreements between divorced couples, and confirmed that they should be varied only in specific narrow circumstances.

The Court heard appeals in two matters: L.M.P. v. L.S. and R.P. v. R.C., both of which emanated from the Quebec Court of Appeal. In each case, the respective spouses had negotiated spousal support agreements which had been embodied in formal court orders several years previously.

In the first case, the couple had been married in 1988; the wife was diagnosed with multiple sclerosis shortly afterward and never worked outside the home during the marriage. When they separated 15 years later, they signed a comprehensive agreement giving the wife more than $3500 in monthly support, with no termination date. However, five years later the husband applied to have that order varied to have the support amount reduced and eventually cancelled entirely. The husband claimed that his earnings had been reduced since the time the agreement was entered into, and that his former wife should have become self-sufficient in the interim. The trial judge agreed, and ordered the support should be reduced and ultimately eliminated effective August of 2010; the Quebec Court of Appeal affirmed that decision on the basis that the wife’s failure to become self-sufficient was a “material change in circumstances” which warranted changing the original agreement.

In the second case, the couple had separated in 1974 after 16 years of marriage, and had waited another 10 years – until 1984 – to formally divorce each other. Meanwhile, the husband had been paying almost $2000 per month in child and spousal support to the wife, pursuant to the agreement they had reached at the time. In 2008, however, the now-retired husband applied to terminate his spousal support obligations based on the serious losses he had suffered due to the downturn in the stock market. The trial judge granted his request; the Quebec Court of Appeal also ordered that his payments should be gradually reduced and eventually eliminated altogether in September of 2010.

In overturning both of these appeal-level decisions, the Supreme Court of Canada confirmed the longstanding legal principle that there must be a “material change in circumstances” before a variation to such a court order is justified. For these purposes, that meant a change that, “if known at the time, would likely have resulted in different terms”. Neither of the circumstances in these two fact scenarios met the necessary threshold.

In the first case, the husband had been fully aware of the wife’s multiple sclerosis, and in dealing with various insurers and tax and pension representatives over the years had confirmed that she was unable to work. His apparent reversal to claim that she was now employable was “both unpalatable and unworthy of serious consideration”, according to the Supreme Court.

In the second case, the Court found that the husband had insufficient factual evidence to show that there the necessary material change existed. He had provided no information about whether he had sold his investments in 2008 when they declined in value, nor did he provide any evidence of his financial circumstances at the time of the original order. The Court concluded that the husband could not “cherry pick” a date on which his investments had decreased in value and claim there had been a material change in circumstances.

Ultimately, the Supreme Court found that where – as in these two cases – spouses had reached a comprehensive, final separation agreement which had been incorporated into a court order, the agreement’s spousal support provisions were to be given considerable weight in any subsequent court application to vary them.

The decision emphasizes the need for separating and divorcing spouses to consult an experienced family lawyer who will draft an agreement that will remain satisfactory even over a long period of time. This may include provisions allowing for a review of support in certain stipulated circumstances, such as retirement or significant changes in economic circumstances.

For the full text of the decision, see:

L.M.P. v. L.S., 2011 SCC 64   http://scc.lexum.org/en/2011/2011scc64/2011scc64.html

R.P. v. R.C., 2011 SCC 65   http://scc.lexum.org/en/2011/2011scc65/2011scc65.html

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit www.RussellAlexander.com