The Court of Appeal for Ontario heard an appeal concerning a motion to change a divorce judgment.
The original judgment included a provision for increased spousal support upon default.
The motion judge had found no material change in circumstances but nevertheless varied the judgment by declaring the default provision an unenforceable penalty and reducing the interest on arrears.
The Court of Appeal held that a judge cannot vary a spousal support order under s. 17 of the Divorce Act without a material change in circumstances, as the common law rule against penalty clauses applies to contracts, not to court orders that have been consented to and incorporated into a judgment.
However, the court affirmed the motion judge's power to vary the post-judgment interest rate under the Courts of Justice Act, as this power is distinct from varying support provisions under the Divorce Act.
The appeal was allowed in part, reinstating the default support provision but upholding the revised interest rate.