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FactsEdit

The parties were married for 14 years and had four children. They operated a resort lodge in Algonquin Park in the summer and lived in Toronto in the winter. Both parties worked in the business; the husband handled the finance and the wife the day-to-day operation of the lodge. When they separated in 1993, both parties were in their early 40s and all the children were under 8 years old. The wife wanted to stay home with the children given their ages. After around fifteen months of negotiation, the parties signed an agreement, wherein:

  • the husband kept the lodge and his start-up business;
  • the wife kept the matrimonial home in Toronto (worth approximately the same as the lodge at $250,000);
  • the husband would pay $60,000/year in child support;
  • a consulting agreement providing the wife with $15,000/year for five years, renewable on consent; and
  • a full and final release of any future spousal support claims.

After the divorce judgment was issued in 1997, the wife's childcare obligations changed and the consulting agreement was not renewed. She applied to the court for relief, including spousal support. The trial judge referred to the husband as "manipulative" and "obsessive". The application was allowed, child support was brought in line with the Guidelines and the wife was awarded support of $4,400/month for five years. The Court of Appeal affirmed the judgment regarding spousal support, and the husband was given leave to appeal to the Supreme Court of Canada.

IssueEdit

  1. When should a support agreement be upheld by the courts?

DecisionEdit

Appeal allowed; original support order stands.

ReasonsEdit

MajorityEdit

Arbour and Bastarache, writing for the majority, stress finality and certainty as key principles in support agreements, citing s. 9 of the Divorce Act; these are contracts and as long as they were entered into openly, the courts should enforce them.

They state that when considering whether to uphold a support agreement, there is a two stage analysis:

  1. The formation of the agreement: was the agreement "unimpeachably negotiated"?
    • Factors to consider:
      1. representation by counsel: the degree of professional assistance received by the party is relevant, but a court should not presume an imbalance of power.
      2. circumstances: was one or both parties vulnerable and if so, did presence of counsel rectify this vulnerability?
      3. duration of negotiations: was the agreement negotiated over a reasonable amount of time?
    • Substance of the agreement: does the agreement remain in substantial compliance with the objectives of the Divorce Act?
      • The analysis should not be restricted to the spousal support component – look at the whole agreement; the agreement as a whole should substantially comply with the factors and objectives of the Act (including the principles of certainty, autonomy and finality).
      • An agreement can be modified to bring it in line with the principles in the Act.
  2. Agreement's correspondence to the parties' original intentions: were the current circumstances anticipated when the agreement was drafted?
    • Foreseeability is interpreted broadly; circumstances do not have to have been explicitly considered/contemplated
      • Foreseeable circumstances include a change of job, assets going down in value, etc.

Generally, where negotiation of the agreement was correct and the agreement remains in substantial compliance with the Act, the court should defer to the wishes of the party and accord the agreement great weight.

Applying this to the case at bar:

  1. Both parties had engaged the services of expert counsel and negotiations persisted over a lengthy period. Although the husband may have been the dominant party, the wife had adequate counsel; there was no hint of any vulnerabilities that might not be compensated by counsel.
  2. The quantum of child support established in the agreement intended to provide the wife with a minimum amount of income in contemplation of her not working. While the wife argues that the business generates income, this was accounted for when the assets were valued and divided. The consulting contract reflects the parties' intention to provide the wife with a source of employment income for a limited time. The wife chose not to go back to the workforce, and had substantial assets even without support; there was no hardship or long-term disadvantage.

In the result, the original order should stand.

DissentEdit

LeBel and Deschamps, in the dissent, stress very different concepts: interdependence and unequal bargaining power. They propose a simpler test; is the agreement objectively unfair when considered now?

The dissenters disagree with the majority in two key areas. One, the presence of counsel may not be enough to negate a power imbalance, and two, that very little deference should be given to agreements that deviate from the objectives in s. 15.2(6) of the Act; any fair agreement should reasonably realize the four stated objectives.

RatioEdit

  • Establishes the test for enforcement of support agreements.
  • Miglin applies only to final spousal support agreements. A final agreement is one which limits the amount or duration of support or waives support entirely; it does not contemplate variation.

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