Court File and Parties

Court File No.: Toronto D 50645 10 Date: 2013-03-25 Ontario Court of Justice

Between: Dusanka Sabo, Applicant

— And —

Misko Sabo, Respondent

Before: Justice Carole Curtis

Motion Heard on: 29 January and 6 March 2013

Endorsement Released on: 25 March 2013

Counsel: Teresa Ciccone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . for the Applicant

The Respondent appeared unrepresented

Endorsement

CURTIS J.:

Background and Procedural History

1The parties were married on 24 May 1970. They separated on 1 November 2008. They signed a separation agreement on 2 December 2009, providing, among other things, for spousal support for the wife. The agreement was filed with the court for enforcement on 24 March 2010.

2The husband attempted to stop spousal support in 2011, after paying for only one year. The wife's lawyer asked him for disclosure, and he did not pursue the issue. Then he started this motion to change in April 2012, asking to end spousal support, starting on 1 April 2011.

3In response the wife asked the court to increase spousal support, starting 1 January 2012.

Ages of the Parties

4The husband, born 25 September 1943, was 66 years old when the separation agreement was signed, and 70 years old when the motion was heard. The husband was already retired when the parties separated, and when the agreement was signed.

5The wife, born 4 January 1952, was 57 years old when the separation agreement was signed, and 61 years old when the motion was heard.

Nature of the Agreement

6The parties reached a comprehensive agreement, with the assistance of lawyers, which they intended to be a final settlement of all the issues between them. At the motion to change, the parties agreed that the separation agreement was a valid subsisting contract. Neither party suggested the agreement was in any way subject to attack at the time it was signed. Neither party was asking to have the agreement set aside.

Issues Raised by the Parties

7The husband asked the court to terminate spousal support for two reasons:

a) The wife was living in a spousal relationship since December 2009 with another man, and no longer entitled to spousal support; and/or,

b) The wife is intentionally underemployed, and the court should impute income to the wife, and she would therefore no longer have need for spousal support.

8The wife asked the court to increase spousal support as she was no longer working as a hairdresser.

9This motion dealt with these issues between the parties:

a) Has there been a material change in circumstances since the signing of the agreement?

b) Is the wife in a spousal relationship with another man?

c) Is the wife intentionally underemployed and if so, should income be imputed to her?

d) Should the spousal support be increased?

Marriage and Family History

10The parties were married in Croatia (they were then 26 and 18 years old) and immigrated to Canada a few months later. They had three children, who were 40, 34 and 32 years old when the motion to change was heard.

11This marriage was a long-term traditional marriage (38 years). The husband was the primary income earner and worked as a plumber throughout the marriage. The wife raised the family's children, and also worked as a hairdresser. Her employment history was interrupted by the birth of the three children (in 1971, 1977 and 1980) and by caring for the children, and her income was used to supplement the family income during the marriage. She worked for 41 years as a hairdresser and retired in 2011.

Spousal Support Provisions

12The separation agreement provided for spousal support of $1,000 per month for the wife starting on the first day of the month following completion of the sale of the matrimonial home. The wife specifically released any right to retroactive spousal support in the agreement. Both parties were represented by lawyers.

13The spousal support provisions of the separation agreement are notable for what is not included:

a) There is no terminating event mentioned;

b) There is no time limit for the spousal support;

c) There is no review provision for the spousal support;

d) There is no cost of living clause;

e) There is no provision that the wife is expected to earn income, or not to earn income;

f) There is no provision specifying that if the wife earns over a certain stated amount, that the spousal support shall be reduced;

g) There is no clause terminating support if the wife lives with someone in a spousal relationship;

h) There is no statement of the incomes of the parties at the time the agreement was signed;

i) There is no statement of the income of the payor upon which the spousal support was based;

j) There were no financial statements or income tax returns attached to the signed agreement;

k) The spousal support is not life insured; and,

l) There is no indication of what might constitute a material change in circumstances.

14The wife said that she waived financial disclosure at the time of the separation agreement, and did not pursue retroactive spousal support, as she had no financial ability to litigate.

Income Information

15At the motion to change, the wife provided the following income information for the parties since separation, from their respective income tax returns. The wife said that both their incomes were disclosed at separation.

Year	The Husband	The Wife
2008	$83,017	$7,823
2009	$43,082	$8,717
2010	$47,942	$16,855
2011	$46,354	$13,724

16The parties did not provide any evidence of the method used to calculate the $1,000 per month of spousal support.

Legal Analysis

Has There Been a Material Change in Circumstances Since the Signing of the Agreement?

17This is not a hearing to determine whether or not the wife is eligible for spousal support. The separation agreement acknowledged the wife's eligibility for spousal support. Unless there has been a material change in circumstances since the agreement was signed, that issue is decided.

18This is not a fresh hearing on the issue of spousal support. It is a hearing on the sole issue of whether there has been a material change in circumstances sufficient to allow the court to change the spousal support terms in the agreement.

19The change in circumstances needed to change an agreement is a change which, if it existed or was known at the time of the agreement, would have resulted in different terms: Willick v. Willick, [1994] 3 S.C.R. 670. It must be change which requires the intervention of the court.

20It is difficult for parties to change the terms of a valid separation agreement, and with good reason. Courts protect the right of separating spouses to enter into their own arrangements. Courts believe that their decision to do so should be respected. There is a very narrow ambit within which a court can change the terms of a valid separation agreement. If the parties cannot fit their request into this narrow ambit, the court has no jurisdiction to examine or change the agreement, and there will be no changes made to the terms of the agreement.

Is the Wife in a Spousal Relationship with Another Man?

21The husband believes that the wife is living in a spousal relationship with a man who lived in Germany. This man was ill since 2011 and he died in February 2013.

22The wife admits to a friendship and a sexual relationship with this man. She admits that they travelled together. She visited him in Germany and he visited her in Canada.

23The wife admits that they bought an apartment as tenants in common in Croatia, intended as a vacation property for their children and as an investment for their children.

24The wife denied any spousal or financial relationship with this man. The wife said that she never lived with this man.

25Other than the husband's suspicions, there was no evidence that the wife lived with another man.

Is the Wife Intentionally Underemployed? If So, Should Income Be Imputed to Her?

26The wife retired from hairdressing in 2011, at age 60, due in part to deteriorating health. She noted that the husband also retired at age 60. At the time of the motion to change, the wife was living with her daughter. The wife's income (total $17,734.80) is from the spousal support payments ($12,000), HST entitlements, and the CPP which she started to receive in April 2012 (a further $5,734.80).

27There was no obligation in the separation agreement on the wife to earn any income, and no obligation for her to contribute to her own support. After the separation, she continued to work as a hairdresser. According to the wife's income tax returns, the wife's income increased after the separation agreement was signed, decreased after she retired in 2011, and then increased when she began to receive CPP in April 2012.

28The wife is not underemployed. Given the ages of the spouses at the signing of the separation agreement (the husband 66 and the wife 57) it would have been the intention of the parties that the wife would stop working at some point. The husband was already retired at both separation and at the signing of the separation agreement. The wife worked until she was 60, as the husband had.

Should the Spousal Support Be Increased?

29The wife asked to increase the spousal support as she is now retired. There is no basis to increase the spousal support, as there has been no material change in circumstances to support such a change. The parties signed a separation agreement when she was 57, and the fact that she would stop working would have been the intention of the parties at the time of signing. There is no specific language in the separation agreement identifying the wife's retirement as a material change in circumstances to support a change in spousal support. There should be no increase in the spousal support.

Decision

30The evidence discloses no change in circumstances that would be sufficient to justify changing the spousal support agreement. There is no change in circumstances here which requires intervention by the court.

Orders

31Both motions to change are dismissed. There has been no material change in circumstances.

Costs

32The motion to change was argued over a full court day. The motion involved two days of cross-examinations and the preparation of transcripts. The wife's lawyer prepared a large brief of disclosure, and a factum with authorities included.

33The parties had made offers to settle this matter, and they were not far apart on the settlement proposals (which amounts were disclosed as their positions at the motion), but they were unable to resolve the issue of costs.

34It is regrettable that this much time and effort was spent on these two motions to change. These parties appear to be of modest means.

35The wife is seeking costs of this motion.

36The parties may make written submissions regarding costs:

a) The costs submissions shall be no longer than five pages, double spaced, plus offers to settle and summaries of the costs incurred;

b) The submissions shall be filed with a Form 14B motion form, so they are brought to the judge to review;

c) The wife shall serve and file her submission by Friday 26 April 2013;

d) The husband shall serve and file his response by Friday 10 May 2013;

e) The wife may serve and file a reply, if any, by Friday 17 May 2013.