Murray v. Murray [Indexed as: Murray v. Murray]
2005 30422 (ON CA), 76 O.R. (3d) 546
2005 30422 (ON CA), [2005] O.J. No. 3563
Court of Appeal for Ontario,
Catzman, Laskin and Armstrong JJ.A.
August 29, 2005
Application for leave to appeal to the Supreme Court of Canada was dismissed January 19, 2006 (McLachlin C.J.C., Binnie and Charron).
Family law -- Support -- Spousal support -- Separation agreement containing explicit release of spousal support -- Child support provisions of [page547] agreement providing for recalculation of husband's child support obligation if his income increased materially -- Trial judge implying term in agreement requiring husband to disclose material increases in his annual income and finding that husband was in breach of that term -- Trial judge finding that agreement linked release of spousal support to fulfillment of husband's obligations under child support provisions, including implied obligation to disclose material increases in his income -- Term should not be implied if it contradicts express term in agreement -- Term implied by trial judge contradicting express release of spousal support -- Trial judge erring in setting aside agreement and awarding wife retroactive and future spousal support.
The parties were married in 1978 and separated in 1994. At the time of separation, the husband had recently started a business. When the parties executed a separation agreement in 1995, he estimated his income to be approximately $25,000 per year. This estimate turned out to be wrong, and his income for 1995 was approximately $63,000. The wife was not employed outside the home after the birth of the first of the parties' three children. At the time of separation, she was receiving dividends from one of the husband's companies in the amount of $21,600 per year. The 1995 separation agreement provided for the transfer of all of the husband's equity in the family home to the wife in lieu of ongoing child support; a right of review of the child support obligation in the event that the husband's income was materially greater than $25,000 up to 1998 and materially greater than $47,000 after 1998; continued payment of the value of the company dividends for almost three years; and a waiver of spousal support upon receipt of the value of the dividends.
Section 12(3) of the agreement provided that if the wife received the value of the dividends from the husband's company up to May 31, 1998, then "the court shall not make any order for spousal support which shall extend beyond May 31, 1998". Section 12(4) of the agreement stated: "Upon completion of the husband's obligations pursuant to this section [the spousal support section] the parties agree that the wife shall be self- sufficient and that the wife shall have no further entitlement to support from the husband". Section 13 of the agreement stated: "The parties acknowledge that upon the property transfers and payments being made as set out in sections 11 [the child support section] and 12 of this agreement, each shall be deemed to be self-supporting and not in need of support from the other ... No change whatsoever, even if it be material, profound, catastrophic, or otherwise, shall give either party the right to claim or obtain support from the other pursuant to the Family Law Act, the [cf 2]Divorce Act, or any other statute or law". The husband complied with his obligations under the agreement. From June 1998 to May 1999, he voluntarily paid the mortgage on the wife's house. After May 1999, the wife received no further payments from the husband. She depleted her savings, sold her house and moved in with her mother. She was on the verge of qualifying for social assistance when she issued a petition for divorce in 2001 in which she sought spousal support. The husband had prospered. In the three years prior to trial, his average annual income was $208,000.
The trial judge found that the circumstances at the time of the negotiation and execution of the separation agreement were satisfactory and that the agreement as a whole substantially complied with the objectives of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) at the time it was executed. The trial judge went on to find that the husband was in breach of an implied term of the separation [page548] agreement to disclose to the wife the increase in his annual income in order to afford her an opportunity to invoke the recalculation provision in respect of the quantum of child support. She found that the language of s. 13 of the agreement linked the release of spousal support to the fulfillment of the husband's obligations under the child support provisions, including the implied obligation to disclose material increases in his annual income. She set aside the separation agreement and awarded the wife retroactive and future spousal support. The husband appealed.
Held, the appeal should be allowed.
To be implied, a term must not be contradictory of an express term in the agreement. The express language of s. 12(3) and (4) was contradictory of an implied obligation of the husband to disclose his annual income for the purpose of providing a basis for making an order for spousal support which had been released by the wife. The trial judge erred in her interpretation of the separation agreement and in her conclusion that the spousal support release should be set aside in respect of the wife's claim for retroactive spousal support. The reasoning which the trial judge employed to override the spousal support release and to award retroactive spousal support was similarly employed in respect of the order for future spousal support. For the same reasons, the trial judge erred in awarding future spousal support.
APPEAL from the judgment of Croll J., (2003), 2003 64299 (ON SC), 66 O.R. (3d) 540, [2003] O.J. No. 3350 (S.C.J.) awarding retroactive and future spousal support.
Marinangeli v. Marinangeli (2003), 2003 27673 (ON CA), 66 O.R. (3d) 40, [2003] O.J. No. 2819, 228 D.L.R. (4th) 376, 174 O.A.C. 76, 38 R.F.L. (5th) 307 (C.A.); Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, [2003] S.C.J. No. 21, 66 O.R. (3d) 736n, 224 D.L.R. (4th) 193, 302 N.R. 201, 34 R.F.L. (5th) 255, 2003 SCC 24 (sub nom. M. (L.S.) v. M. (E.S.)), consd Statutes referred to Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 15.2
Brinley Evans and D. Smith, for appellant. Patrick D. Schmidt and George Karahotzitis, for respondent.
The judgment of the court was delivered by
1ARMSTRONG J.A.:-- Mr. Murray appeals the divorce judgment of Justice Croll of October 9, 2003 requiring him to pay to Mrs. Murray retroactive spousal support of $274,591 plus pre-judgment interest and costs, all of which total in excess of half a million dollars. He also appeals the judgment requiring him to pay future spousal support in escalating amounts to 2009 and indefinitely thereafter. The main issue raised by this appeal concerns the effect of a provision for the release of spousal support contained in a separation agreement between the parties. [page549]
Background
2Mr. and Mrs. Murray were married on October 14, 1978. They separated in October 1994. There are three children of the marriage: Sarah, Adrienne and Jennifer ages 23, 21 and 18.
3At the time of separation, Mr. Murray had recently started a business with his brother related to the promotion of the golf industry. At the time of the execution of the separation agreement in October 1995, he estimated his income to be approximately $25,000 per year. By the time he filed his 1995 income tax return, this estimate was wrong. The trial judge found as a fact that his income was approximately $63,000 for 1995.
4Mrs. Murray was not employed outside the home after the birth of their first child. At the time of separation, she was receiving dividends from one of Mr. Murray's companies in the amount of about $21,600 per year.
5Both Mr. and Mrs. Murray retained lawyers who advised and assisted them in the negotiation of the separation agreement. The agreement provided:
(a) joint custody of the children;
(b) transfer of all of Mr. Murray's equity in the family home of $84,000 in lieu of ongoing child support;
(c) a right of review of the child support obligation in the event that Mr. Murray's income was materially greater than $25,000 up to 1998 and materially greater than $47,000 after 1998;
(d) continued payment of the value of the company dividends for almost three years; and
(e) a waiver of spousal support upon receipt of the value of the dividends.
6Mr. Murray satisfied all of his obligations under the express terms of the separation agreement.
7Mrs. Murray received her final dividend payment in accordance with the terms of the separation agreement on May 31, 1998. From June 1998 to May of 1999, Mr. Murray voluntarily paid Mrs. Murray's mortgage payments on the house in which she and the three daughters were then residing in the monthly amount of $1,400.
8After May 1999, Mrs. Murray received no further payments from her husband. In order to meet the day-to-day living expenses of the children and herself, Mrs. Murray depleted her [page550] existing savings. Mrs. Murray sold their house in March 2000 and moved into rental accommodation and eventually moved into her mother's townhouse in September 2002.
9Mr. Murray prospered in the post-separation period. Mr. Murray agreed that his annual income increased by a huge amount. The trial judge found that in the three years prior to trial, his average annual income was $208,000. At the time of the trial, Mr. Murray was living in a house which backed onto the Hunt Club golf course in the Scarborough area of Toronto. Title to the property was held by a corporation of which Mr. Murray was the sole shareholder. Mr. Murray had an interest in two other properties in Toronto. By the time of trial, all three daughters had left their mother's residence. They preferred to live with their father. Adrienne lived part of the year in Halifax where she attended Dalhousie University. Sarah was employed at a salary of $27,000 per year and was not required to pay rent to her father. Mr. Murray leased a second car for the use of the three daughters.
10The trial judge accepted the evidence of Mrs. Murray that at the time of trial, she had only $100 in the bank and some modest furniture and paintings in storage valued at less than $10,000. Mrs. Murray had explored making application for social assistance and was advised that if she disposed of her few assets, she would qualify for assistance. An expert in vocational assessment testified at trial that Mrs. Murray's prospects for employment were restricted to the low end of the service industry with minimal remuneration.
11In May 2001, Mrs. Murray issued a petition for divorce in which she sought child support and spousal support from her husband. During the course of the trial Mrs. Murray abandoned her claim for child support, based on the circumstances of the daughters' living arrangements with their father. According to the trial judge's reasons at paras. 88 and 89:
[Mrs. Murray] submits that, in light of the ages of the children, any award arising from the changes in Mr. Murray's income should be one of spousal support. Her hope is that if she enjoys some financial independence, she will be able to leave her mother's home for a home of her own, and the girls will be able to decide more freely where they want to live.
I accept Mrs. Murray's submissions with respect to spousal support being the most appropriate remedy. Child support is generally intended to meet the ongoing needs of the children. As the lump sum child support that Mrs. Murray received under the agreement was not reflective of Mr. Murray's income over the years, it did not allow Mrs. Murray to provide the same financial benefits to the children that their father could provide, and was very probably the reason that all of the girls ultimately moved in with their father. But in some sense that is of historical importance only. [page551] There was no evidence that the needs of the Murray daughters were not met over the years; instead, the evidence indicates that it is Mrs. Murray who has suffered. To make a lump sum award of child support today would in effect be to countenance a redistribution of assets in the guise of maintenance: Yiannitsopoulos v. Patseas (1997), 1997 3461 (BC CA), 28 R.F.L. (4th) 246 at para. 16 (B.C.C.A.).
12Mr. Murray opposed the request for spousal support based upon the express provision of ss. 12 and 13 of the separation agreement.
13Section 12 of the agreement provided for the continued payment of dividend income to Mrs. Murray until May 31, 1998 as spousal support.
14Section 13 of the agreement provided for the release of spousal support:
- RELEASE OF SPOUSAL SUPPORT
(1) The parties acknowledge that upon the property transfers and payments being made as set out in sections 11 and 12 of this agreement, each shall be deemed to be self-supporting and not in need of support from the other. Both parties accept the terms hereof in full satisfaction of all claims and causes of action which he or she now has or may hereafter acquire against the other for support whether under the Family Law Act, the Divorce Act, the Succession Law Reform Act, or otherwise, under presently existing legislation or future legislation whether in this jurisdiction or any other jurisdiction. This agreement and this paragraph in particular may be pleaded as a complete defence to any claim brought by either spouse to assert a claim for support.
(2) The parties realize that there may be future changes in their financial circumstances by reason of their health, the cost of living, their employment, financial mismanagement, financial reversals, inheritance, windfalls or otherwise. No change whatsoever, even if it be material, profound, catastrophic or otherwise, shall give either party the right to claim or obtain support from the other pursuant to the Family Law Act, the Divorce Act, or any other statute or law.
15Mr. Murray's position simpliciter was that the parties intended that he would have fully met his obligation for spousal support once the dividend payments had been paid pursuant to para. 12. He further argued that para. 13 of the agreement provided a complete release in respect of all past or future payments for spousal support.
16The trial judge approached the issue of spousal support by conducting a review of the separation agreement in accordance with the two-stage analysis mandated by the majority judgment of the Supreme Court of Canada in Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, [2003] S.C.J. No. 21, assisted by reference [page552] to this court's judgment in Marinangeli v. Marinangeli (2003), 2003 27673 (ON CA), 66 O.R. (3d) 40, [2003] O.J. No. 2819 (C.A.).
17Before turning to the trial judge's approach, I think it would be useful to set out the framework of the two-stage analysis postulated by the Miglin majority.
The Two-Stage Miglin Analysis
18Stage one of the Miglin analysis includes two steps. Step one involves a consideration of "the circumstances in which the agreement was negotiated and executed to determine whether there is reason to discount it". While the majority declined to provide a definitive list of factors for consideration, they suggested that the court should look for "circumstances of oppression, pressure or other vulnerabilities, taking into account all of the circumstances ...". A court "should be loathe to interfere" where no vulnerabilities are present or are compensated for by the advice of counsel.
19If a court is satisfied with the circumstances in which the separation agreement was negotiated and executed, then step two of the stage one Miglin analysis dictates that a court review the substance of the agreement. In this respect, a court should consider whether the agreement satisfies the objectives of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). Here a court must decide if there is substantial compliance with the spousal support considerations in s. 15.2 of the Divorce Act as well as the factors of finality, certainty and the desirability for the parties to determine their own affairs. The relevant provisions of s. 15.2 of the Divorce Act are as follows:
15.2(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabitated;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should [page553]
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
20If a court concludes that the particular separation agreement satisfies the requirements of stage one of the Miglin analysis then:
... the court should defer to the wishes of the parties and afford the agreement great weight. Nevertheless, the vicissitudes of life mean that, in some circumstances, parties may find themselves down the road of their post- divorce life in circumstances not contemplated. Accordingly, on the bringing of an application under s. 15.2, the court should assess the extent to which enforcement of the agreement still reflects the original intention of the parties and the extent to which it is still in substantial compliance with the objectives of the Act. [Miglin para. 87]
21It is in stage two of the Miglin analysis that a court is required to consider whether the agreement "still reflects the original intention of the parties and the extent to which it is still in substantial compliance with the objectives of the Act".
22The Supreme Court majority was careful to strike a note of caution in the approach to stage two. The court stated at para. 89:
We stress that a certain degree of change is foreseeable most of the time. The prospective nature of these agreements cannot be lost on the parties and they must be presumed to be aware that the future is, to a greater or lesser extent, uncertain. It will be unconvincing, for example, to tell a judge that an agreement never contemplated that the job market might change, or that parenting responsibilities under an agreement might be somewhat more onerous than imagined, or that a transition into the workforce might be challenging. Negotiating parties should know that each person's health cannot be guaranteed as a constant. An agreement must also contemplate, for example, that the relative values of assets in a property division will not necessarily remain the same. Housing prices may rise or fall. A business may take a downturn or become more profitable. Moreover, some changes may be caused or provoked by the parties themselves. A party may remarry or decide not to work. Where the parties have demonstrated their intention to release one another from all claims to spousal support, changes of this nature are unlikely to be considered sufficient to justify dispensing with that declared intention.
(Emphasis added)
23The majority in Miglin added what appears to be the guiding principle of the stage two analysis at para. 91: [page554]
Parties must take responsibility for the contract they execute as well as for their own lives. It is only where the current circumstances represent a significant departure from the range of reasonable outcomes anticipated by the parties, in a manner that puts them at odds with the objectives of the Act, that the court may be persuaded to give the agreement little weight.
The Trial Judge's Approach
24The trial judge, in approaching stage one of the Miglin analysis, concluded that the circumstances at the time of the negotiation and execution of the separation agreement were satisfactory. The trial judge had regard to the fact that Mrs. Murray's counsel had retained an accountant to review the prospects for Mr. Murray's golf promotion business. The accountant concluded that Mr. Murray's business was in a difficult position in the summer of 1995 and that its future success was uncertain. The trial judge also took note of the fact that Mrs. Murray acknowledged that at the time of the execution of the agreement in October 1995, she believed that its terms were reasonable. Mrs. Murray, nevertheless, argued at trial that the accountant's opinion of the prospects for her husband's business created an aura of insecurity. Mrs. Murray submitted that the uncertainty and lack of confidence as to the future of Mr. Murray's business placed her in a vulnerable position and, as a result, she signed an agreement that was not in her best interest. The trial judge rejected Mrs. Murray's position at para. 23 of her reasons for judgment:
I do not accept this position. As the majority of the court stated in Miglin, vulnerability and an imbalance of power should not be assumed in the absence of a fundamental flaw in the bargaining process: Miglin, supra, at para. 82. The court went on to say that any systemic imbalance of power would usually be overcome by professional assistance. In this case, the negotiations leading up to the agreement lasted almost six months. I am satisfied that Mrs. Murray received thorough and careful legal advice from her counsel Ms. Christen, and that she entered into the agreement freely and with knowledge of its consequences.
25I agree with the trial judge's conclusion that the circumstances at the time of the negotiation and execution of the separation agreement were satisfactory.
26In her consideration of the second step of the stage one Miglin analysis, the trial judge concluded at paras. 34 and 35 of her reasons:
Although it is imprecise to compare apples and oranges, that is, the financial benefits from the agreement with more conventional periodic child support and spousal support, my review of what might have occurred had there been no agreement illustrates that the agreement as a package [page555] was a reasonable one for Mrs. Murray. This is especially true in light of the legitimate uncertainty about Mr. Murray's income in 1995.
In my view, the agreement reflects what Justice l'Heureux- Dubé held in Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813 at p. 849 to be the underlying theme of the 1985 Divorce Act, namely the "fair and equitable distribution of resources to alleviate the economic consequences of marriage or marriage breakdown." The bulk of the family capital was left with Mrs. Murray to help her establish a new home for the three children. Mrs. Murray was also provided with some time limited spousal support, presumably in recognition of her desire to work and the need for some time to retrain and enter the workforce. The agreement also promotes the certainty, self-determination and finality that are implicitly acknowledged by s. 9(2) of the Divorce Act. Accordingly, I am satisfied, upon reading the agreement as a whole, that it substantially complied with the objectives of the Divorce Act at the time it was executed.
27I agree with this conclusion.
28The trial judge, in considering the second stage of the Miglin analysis (whether the agreement still reflects the original intention of the parties and is in substantial compliance with the Divorce Act) focused on Mr. Murray's significant increase in annual income in the post-separation period and the provision of s. 11(3) of the separation agreement which permits the recalculation of the quantum of child support. Although Mrs. Murray had abandoned the claim for child support, the trial judge concluded that Mr. Murray was in breach of an implied term of the agreement to disclose to his wife the increase in his annual income in order to afford her an opportunity to invoke the recalculation provision in respect of the quantum of child support. The trial judge linked this implied breach to Mr. Murray's spousal support obligations which led her to set aside the separation agreement and, in particular, the spousal support release contained in s. 13 of the agreement.
29I have already referred to the spousal support provisions and the spousal support release contained in ss. 12 and 13 of the agreement. In order to appreciate the trial judge's analysis, it is necessary to consider the relevant text of the child support provision in para. 11 of the agreement:
- CHILD SUPPORT
(1) The parties acknowledge that the husband is currently employed in his own business. His annual income is approximately $25,000.00. The wife is a homemaker who has not worked outside of the home since the birth of the parties' first child and she currently receives dividend income of about $21,600.00 a year.
(2) The parties agree that in lieu of ongoing payments for child support the husband is transferring to the wife the balance of his share of the proceeds of the matrimonial home in the approximately amount of $84,000 (after the payment of $5,000 to Blaney, [page556] McMurtry, Stapells, Friedman, in trust for the husband) as lump sum support for the children ...
(3) The parties acknowledge and agree that if the husband's income remains relatively consistent with his present income until 1998 and if his income thereafter is about $47,000 a year, a lump sum payment of $87,700 would provide support for each of the children until age 23 at the levels set out in para. (2), above, as provided by the Federal/Provincial Support Guidelines and taking into account increases in the cost of living. The parties acknowledge and agree that the lump sum child support of about $84,000 provided for herein will substantially satisfy the husband's ongoing obligation to provide support to the children of the marriage although it may not completely meet that obligation if each child were entitled to support to age 23 and that it may exceed that obligation if any or all of the children ceased to be entitled to support under the Family Law Act or the Divorce Act at an age younger than 23 years. The parties further acknowledge and agree that in the event the husband's income increases by a material amount above the amounts set out above for the periods set out above during the course of the children's upbringing, the husband's obligation to pay support for the children may then be re- calculated with reference to the then income of the husband and the wife and to the needs of the children at that time. Should such a re-calculation of support occur, the court shall have regard to the lump sum payment made by the husband and shall reduce the amount of periodic support that would otherwise be ordered by the amount of periodic support that has been calculated as set out in para. (2), above and already been paid by the husband in advance by way of the lump sum, taking into account that the lump sum reflects support payments for each child to age 23.
30The trial judge accepted that there was no express obligation contained in the separation agreement which required Mr. Murray to advise Mrs. Murray of the material increases in his annual income. However, she concluded at para. 44 of her reasons:
In my view, it was implicit under the agreement that Mr. Murray would advise Mrs. Murray of material increases to his income. In his evidence, Mr. Murray specifically denied any such obligation. He stated that it was his position that Mrs. Murray had to ask for the recalculation, and that he had no duty to advise her that his income had changed. However, the absurdity of this position was made apparent when Mr. Murray was asked how Mrs. Murray would ever know of any increase in his income, unless he told her about it. Not surprisingly, Mr. Murray had difficulty providing a cogent reply to this question.
31The trial judge's rationale was based upon her conclusion that the child support and spousal support sections in the agreement were interdependent. In her view, the language of s. 13 of the agreement links the release of spousal support to the fulfillment of Mr. Murray's obligations under the child [page557] support provisions, including the implied obligation to disclose material increases in his annual income. In particular, the trial judge relied upon the following language in para. 13(1) of the agreement:
The parties acknowledge that upon the property transfers and payments being made as set out in sections 11 and 12 of this agreement, each shall be deemed to be self-supporting and not in need of support from the other.
(Emphasis added)
32According to the trial judge, "the agreement contemplated disclosure of Mr. Murray's income to ensure [the agreement] continued to meet the objectives of the Divorce Act" in accordance with the second stage of the Miglin analysis.
33The trial judge also relied upon this court's judgment in Marinangeli, supra. In Marinangeli, Weiler J.A. concluded in the particular limited circumstances of that case, that it was appropriate to imply a term in minutes of settlement requiring the husband to disclose a change in his financial circumstances to give business efficacy to the agreement, i.e., in order to avoid undermining "the very rationale for entering into the agreement".
34Weiler J.A. indicated in Marinangeli that before a court will imply such a term, the court must be satisfied that the implied term is (a) reasonable and equitable; (b) capable of clear expression; and (c) not contradictory of an expressed term in the contract. The trial judge in this case concluded that all three of the aforesaid factors were satisfied.
35The trial judge acknowledged that the minutes of settlement in Marinangeli were significantly different from the agreement in this case and appears to conclude, in any event, that her second stage Miglin analysis supported her conclusion that the spousal release in the Murray separation agreement should be set aside.
36In the result, the trial judge ordered Mr. Murray to pay Mrs. Murray retroactive spousal support and future spousal support for an indefinite period.
Did the trial judge err in making an order for retroactive spousal support?
37As stated above, Weiler J.A. concluded in Marinangeli that unless the obligation of the husband to disclose his annual income was implied, the very rationale for entering into the minutes of settlement would be undermined. In my view, that is not this case.
38In this case, the language of the agreement reveals that Mr. and Mrs. Murray intended that Mrs. Murray would receive [page558] approximately three years of dividend income from one of Mr. Murray's businesses and thereafter she would be responsible for her own support. In respect of the children, the parties intended that Mrs. Murray would receive virtually all the cumulative net worth of the marriage in order to care for the children subject to a passive right of review contained in s. 11(3) of the agreement.
39In my view, the trial judge's analysis of the language of the separation agreement fell into error by focusing too narrowly on the following language of s. 13(1) of the agreement:
The parties acknowledge that upon the property transfers and payments being made as set out in sections 11 and 12 of this agreement, each shall be deemed to be self-supporting and not in need of support from the other.
40It is from this language that the trial judge derived her notion that the child support and spousal support provisions were interdependent. The trial judge accepted the submission of counsel for Mrs. Murray "that because of the interdependency ... of child support and spousal support, the failure to address child support vitiates the spousal support release". In this respect, the trial judge concluded at para. 49 of her reasons:
As stated earlier, I am satisfied that when the agreement was entered into, it met the test of being unimpeachably negotiated, as described in Miglin. I am also satisfied that at that time, the agreement met the overall objectives of the Divorce Act. However, the agreement contemplated disclosure of Mr. Murray's income to ensure that it continued to meet the objectives of the Divorce Act. The child support and spousal support provisions in the agreement were interdependent. Section 13 of the agreement sets out the release of spousal support and specifically provides that upon payments being made as set out in section 11 (the child support section), the spouses shall be deemed to be self- supporting and not in need of support from each other. In light of this interdependency, disclosure was essential to the objectives of sharing the financial consequences arising from the care of the children and reducing the economic hardship imposed on Mrs. Murray as a single mother with three children, but with limited career opportunities. Had the financial disclosure been made as anticipated, the agreement would have continued to be effective. However, in accordance with the principles laid down in para. 89 of Miglin, I find Mr. Murray's lack of disclosure not to be the sort of outcome that Mrs. Murray should be expected to have reasonably contemplated at the time the agreement was made. To suggest otherwise leads to the incongruous conclusion that Mr. Murray could enter into an agreement that anticipates possible increases in income, deny any obligation to disclose any material increases in income, and then rely on that agreement to forestall any change in support based on an increase in income.
41In my view, ss. 11, 12 and 13 must be read together and not in isolation. To state again, in Marinangeli, this court said [page559] that to be implied, a term must not be contradictory of an express term in the agreement (see Marinangeli at para. 65).
42The separation agreement here provided in s. 12(3) that if Mrs. Murray received the value of the dividends from her husband's company up to May 31st, 1998, then "the court shall not make any order for spousal support which shall extend beyond May 31st, 1998". In s. 12(4) of the separation agreement, the parties agreed:
Upon completion of the husband's obligations pursuant to this section [the Spousal Support section] the parties agree that the wife shall be self-sufficient and that the wife shall have no further entitlement to support from the husband.
(Emphasis added)
43The express language of ss. 12(3) and (4) is contradictory of an implied obligation of the husband to disclose his annual income for the purpose of providing a basis for making an order for spousal support which has been released by the wife.
44In my view, the trial judge erred in her interpretation of the Murray separation agreement and in her conclusion that the spousal support release should be set aside in respect of Mrs. Murray's claim for retroactive spousal support.
Did the trial judge err in making an order for future spousal support?
45The reasoning which the trial judge employed to override the spousal support release in the separation agreement and to award retroactive spousal support was similarly employed in respect of the order for future spousal support. For the reasons already advanced, I believe the trial judge was also in error in awarding future spousal support.
46It may be that if this case had been placed before the trial judge on a different basis, the stage two Miglin analysis may have led to an order for spousal support. I note that the evidence at trial suggests that since the execution of the separation agreement, Mrs. Murray has been transformed from a woman who had enjoyed a comfortable lifestyle during the course of her marriage to a woman who, according to the trial judge, exists in "impoverished circumstances" and is virtually eligible for social assistance.
47Whether Mrs. Murray could have succeeded on a claim based on an appropriate stage two Miglin analysis is not an issue before this court. We cannot re-try the case. [page560]
Disposition of the Appeal
48In the result, I would allow the appeal and set aside the judgment in respect of retroactive and future spousal support, interest and costs but without prejudice to the right of Mrs. Murray to move for spousal support based on an appropriate stage two Miglin analysis.
Costs
49If the parties cannot agree on the costs of the trial and the appeal, they may make brief written submissions with bills of costs attached. Counsel for Mr. Murray shall make written submissions (not to exceed five pages double spaced) by September 15, 2005. Counsel for Mrs. Murray shall make written submissions in response (not to exceed five pages double spaced) by September 22, 2005. Counsel for Mr. Murray may file a written reply (not to exceed three pages double spaced), if so advised by September 29, 2005.
Outstanding Motion
50During the period of time that this court has had this appeal under reserve, we received a motion on behalf of Mrs. Murray to dismiss Mr. Murray's appeal on the ground of his failure to pay the monthly spousal support ordered by the trial judge after January 31, 2005. In a separate brief endorsement, we have dismissed Mrs. Murray's motion.
Appeal allowed.