Separation Agreement Rolled into a Court Order – “Material Change of Circumstances” Still Required
The trend towards spouses resolving their family disputes through negotiation rather than litigation is an inspiring and positive one. However, there is a resulting and necessary interplay between dispute-resolution methods and court processes, and sometimes legal conundrums develop. The Supreme Court of Canada recently addressed the question of how to deal with an application to vary a court order that embodied the terms of a separation agreement that the spouses had themselves negotiated, and freely agreed to.
In L.M.P. v. L.S., the husband and wife had married in 1988, and the wife was diagnosed with multiple sclerosis shortly after. She never worked during the marriage; instead, she cared for the children and looked after the household while the husband pursued his career. When they separated in 2002, they reached a comprehensive agreement to settle their affairs, which obliged the husband to pay the wife $3,688 per month indefinitely (i.e. with no end date). In 2003, the terms of this agreement were incorporated into a formal court order by a judge.
Later, however, the husband brought an application under the Divorce Act to vary this order, claiming that the spousal support he paid to the wife should be reduced, and ultimately should end completely as of August 31, 2010. He claimed that despite the indefinite nature of the agreement and the resulting order, the wife was now capable of working and had an obligation to become self-sufficient. The court accepted the husband’s arguments as to the wife’s level of self-sufficiency, and changed the order accordingly. The wife appealed unsuccessfully to the Court of Appeal.
The matter then came before the Supreme Court of Canada, which was asked to address an important legal question: in cases where the support terms of an agreement have been incorporated into a court order, what is the proper approach by a court to an application to vary?
The court observed that section 17 of the Divorce Act allows a court to vary any spousal support order, provided it is satisfied there has been a “material change” in the “condition, means, needs, or other circumstances of either former spouse” since the original order (or last variation) was made. The section makes no reference to situations where the terms of the order are dictated by the parties’ own separation agreements. There is also a presumption that every court order – whether incorporating the separation agreement or not – is presumed to be in compliance with the Act and its various objectives.
When faced with an application to vary an order, the court should not ignore a mutually-accepted separation agreement such as the one reached by these spouses; however, it will be only one of several factors that goes into the threshold question of whether there has been a “material change” in circumstances since the initial order was made. An agreement that contains only general terms, including a blanket statement of finality as to the fact that matters were now settled between the parties, will provide little guidance to a court which is given the task of assessing the importance to the parties of various subsequent life changes they may experience, and how their respective support rights/obligations might be affected.
With this legislative framework in mind, the Supreme Court determined that the trial judge had been remiss in failing to apply the “material change in circumstances” test first, before assessing the wife’s ability to work. Similarly, the Court of Appeal had erred by making a finding that the wife was now able to work despite her multiple sclerosis, and that this amounted to the requisite material change in circumstances.
Instead, both lower courts appeared to disregard the fact that the situation between the parties had not changed at all since 2003 when the separation agreement and resulting court order were made: At that time, the wife was already suffering from multiple sclerosis, and was not expected to look for employment outside the home. The parties had reached a comprehensive agreement that they intended would reflect their final, non-time-limited settlement of outstanding issues between them. It was indexed to reflect inflation and contained no review mechanism.
In short: there was no material change as required by section 17 of the Divorce Act, so there was no legal basis on which a court could vary the order. The Supreme Court of Canada allowed the wif’es appeal, and restored the original 2003 order which reflected the terms of the parties’ own separation agreement, including the indefinite spousal support.
For the full-text of the decision, see:
L.M.P. v. L.S., 2011 SCC 64 http://canlii.ca/t/fpddd