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Old 12-21-2011, 02:31 PM
realitychick realitychick is offline
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Default Supreme Court clamps down on changes to spousal support agreements

In today's Globe and Mail:

Top court clamps down on changes to spousal support agreements

Estranged spouses who reach agreement on spousal support will have great difficulty changing the terms in future years, the Supreme Court of Canada said Wednesday.

In a pair of keenly-awaited family law judgments, the court refused to let spouses argue their way out of agreements that had been negotiated and later enshrined within formal court orders.

The court said that spousal support arrangements can only be changed if the spouse who is paying can establish a genuine and significant change in circumstances, such as a serious downturn in their financial status.

Toronto family lawyer Phil Epstein said the decisions accentuate the importance of divorcing couples crafting agreements that are meant to stand the test of time.

“At stressful times following separation, couples sign agreements to end the dispute,” Mr. Epstein said. “But they need to pause and remember that these agreement may bind them for a lifetime. Long-term agreements therefore need change mechanisms that can be utilized to make sure they remain fair.”

The principles of “certainty and finality” are paramount, Mr. Epstein said. “But those principles can create great hardship for the payor if he is unable to get relief when his circumstances actually change.”

Today’s judgments revolved around the need for a former spouse to show that there has been “a material change in circumstances” that would justify altering the original order. The interpretation of material change has been an ongoing pursuit for appellate courts.

The first couple in the first case, identified as L.M.P and L.S., were married in 1988. Shortly afterward, the wife was diagnosed with multiple sclerosis and has never worked outside the home since then.

When they separated in 2002, the couple reached a comprehensive agreement that gave the wife indexed spousal support of $3,688 per month.

However, in 2007, the husband sought a reduction and eventual cancellation of his spousal support obligation on the grounds that he was no longer making as much money and that his ex-wife ought to have sought employment.

The trial judge who heard the husband’s application concluded that the wife was, indeed, able to work outside the home. He ordered a reduction of support leading to its termination in August, 2010. The Ontario Court of Appeal later affirmed the decision, concluding that the wife’s failure to become self-sufficient amounted to a material change in circumstances.

In a 7-0 decision today, the Supreme Court restored the terms of the agreement the couple had reached. It faulted the trial judge and the Court of Appeal for making a determination that the wife had the capacity to work and considering that this amounted to a material change of circumstances.

“Not only was the husband fully aware of her medical condition, he made representations, before and after the separation, to her disability insurer, to pension personnel, and to tax authorities that she was unable to work,” Madam Justice Rosalie Abella and Mr. Justice Marshall Rothstein said.

“His changed position at trial – that she can now work – is both unpalatable and unworthy of serious consideration,” they said.

“The expert evidence was that there has been little or no change in the wife’s medical condition in 19 years. That means that there has been no improvement. It is, in short, the same as when the order was made. And that in turn means that there has been no change, let alone a material one, since the order.”

In the second case, a couple identified only as R.P. and R.C. had married in 1958, separated in 1974 and divorced in 1984.

When they separated, the wife remained in the matrimonial home with their two children. The husband, who owned a file storage company, agreed to pay $1,950 in spousal and child per month.

In 1991, after the children no longer resided with the wife, the husband applied to have his support obligations terminated. A judge ordered that he pay $2,000 per month in spousal support on the basis that his ex-wife had never been able to become financially independent because of her domestic responsibilities.

In 2006, the husband retired and sold the house where he and his second wife lived for $2-million. Two years later, he applied to terminate his spousal support obligation based on the fact that he no longer had employment income, the stock market downturn had caused him to suffer serious losses and he had a son in university.
The husband is now 73. His former wife is 82.

The trial judge who initially heard the case decided that the economic downturn and the husband’s retirement constituted a “material change in circumstances” which justified reducing his spousal support obligation to $1,500 per month.

The Ontario Court of Appeal upheld the decision and ordered that spousal support be gradually reduced and finally terminated in September, 2010.

In today’s decision, the Supreme Court said that a material change in circumstances is one which, “if known at the time, would likely have resulted in different terms to the existing order.”

It said that the husband had failed to bring evidence that he had sold any of his investments, crystallizing his losses, when they declined in value in late 2008.
“He cannot, without more, simply cherry pick a date on which his investments decreased in value to claim that a material change of circumstances has occurred,” the majority said.

Mr. Epstein said that both cases demonstrate the need for separating spouses to obtain experienced legal advice and strong factual evidence.

“The test of material change is hard to meet and was not met in either case because of the failure of the husband to lead sufficient evidence that circumstances had actually changed,” he said. “Had the parties agreed that there would be a review of support in the event of retirement or significant changes in market conditions or economic circumstances, the result might well have been different.”
Old 12-21-2011, 03:22 PM
HammerDad HammerDad is offline
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Well, one thing I must point out is, if you are getting divorced, you gotta think long term. Don't sign an agreement simply to avoid issues today. Ensure you have clear and concise end dates, otherwise you'll be screwed.

Otherwise, only marry someone in your income bracket. And if you marry and have kids, ensure that both parents go back to work. This "staying home for the kids" is passe.
Old 12-22-2011, 11:22 AM
winterwolf7 winterwolf7 is offline
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Agreed Hammerdad!
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