In this recent decision by the Superior Court of Justice, the Court confirms that Separation Agreements registered under section 35(2) of the Family Law Act are not capable of being varied pursuant to section 17 of the Divorce Act. This case also serves as a useful reminder for ensuring that the proper procedure is followed with regards to varying Separation Agreements, particularly when those Agreements have not been incorporated into a divorce Order.
Background
The parties were married on July 8, 1978, and separated on January 15, 2002. Their divorce was finalized on February 15, 2010. However, their divorce Order did not provide for any corollary relief. There are three children of the marriage who were all living independently at the time of the divorce.
The parties had a long term marriage. The wife moved to England with the husband where he obtained his law degree. While the husband was in school, the wife worked to support the family. Upon the husband’s graduation, the family moved to Ontario where the husband began working in a law practice. The wife was trained as a teacher. However, during the marriage, she took on a full-time caregiver role, foregoing full-time employment, but she did work part-time teaching English.
From 1981 – 2001, the husband worked in public service with the government, after which he entered private practice in international trade. At the time of the parties’ separated in January 2002, the husband’s income from his law practice was $150,000.00 per year, and the wife was employed part-time as an ESL teacher.
On October 23, 2006, the parties entered into a comprehensive separation agreement which settled the issues of property, spousal support, and child support on a final basis. Within that agreement, the husband agreed to pay to the wife $6,500.00, with an annual cost of living increase.
Following the signing of the Separation Agreement, the parties entered into multiple amending agreements pursuant to changes in the husband’s income. In September, 2008, an amending agreement increased the spousal support amount to $7,000.00 per month. In August, 2014, an amending agreement increased the spousal support amount to $8,615.00 per month, retroactive to January 1, 2013. There was no provision in this amending agreement which provided that the parties could vary the support upon a material change in circumstances. The amending agreements were not incorporated into the divorce Order or any other order.
In April, 2015, the husband received notice of a reduction in his income from his law firm, which reduced his income to $424,000.00 per year. Upon receiving this notice, the husband advised the wife of same, and asked for a decrease in spousal support, as the reduction in his income was to continue into 2016.
The husband filed the parties’ agreements with the Court pursuant to section 35 of the Family Law Act, as is permitted by that provision, which provides that an application for variation can apply to an agreement of the spouses as if it was an order of the Court. However, the husband sought his variation pursuant to Section 17 of the Divorce Act, claiming that for the purposes of an agreement filed with the Court, the agreement becomes a support order and therefore section 17 of the Divorce Act is engaged. It is the wife’s position that this matter should be treated as an initial application under s. 15.2 of the Divorce Act.
If the Court accepts the husband’s position that the agreement can be varied pursuant to section 17 of the Divorce Act, the Court can reduce his spousal support obligation in accordance with the amount his income has reduced, without a hearing de novo, which essentially means without considering of all the factors within section 15.2 of the Divorce Act.
If the Court accepts the wife’s position that this matter should be treated as an initial application, the Court will hear the application de novo, which essentially means the matter will be considered from the beginning, and the Court must consider the factors as set out within the Divorce Act, including the agreements signed by the parties.
The parties agreed that any variation to their agreement could not be considered pursuant to the Family Law Act, as they are not spouses as defined therein.
Analysis
In making its decision, the Superior Court of Justice considered the case of Droit de la famille – 091889 [2011] SCR 775, which confirmed that a motion to change an order is neither an appeal of the order nor a new hearing of the matter, but instead, the Court must consider the changes since the original agreement was entered into.
The Court confirmed that an agreement registered pursuant to the Family Law Act does not become an Order under the Divorce Act. The fact that the Family Law Act can be used to register an agreement as an Order does not mean it is an Order for the purposes of federal legislation. The Court concluded that section 17 of the Divorce Act does not apply, as there is no order under that act which the Court may vary. If the husband wants to pursue the relief requested on this motion, he must do so by pursuing a claim under Section 15.2 of the Divorce Act. The Court could not entertain a claim pursuant to Section 15.2 at this time, because no relief was before the Court regarding same by either party.
However, the Court did invoke Rule 2 of the Family Law Rules which directs the Court to deal with cases justly and fairly. The Court notes that neither of the parties utilized the proper procedural process to deal with the substantive issues in this matter. As such, the Court dismissed the motion, but permitted the parties to preserve the litigation by accommodating counsel’s time to determine the next step, which may include amending pleadings.