Pelech v. Pelech, 1987 CanLII 57 (SCC), [1987] 1 SCR 801

Pelech v. Pelech, 1987 CanLII 57 (SCC), [1987] 1 SCR 801

Shirley Mae Pelech Appellant

v.

John Pelech Respondent

indexed as: pelech v. pelech

File No.: 19265.

1986: March 24; 1987: June 4.

Present: Dickson C.J. and McIntyre, Chouinard*, Lamer, Wilson, Le Dain and La Forest JJ.

*Chouinard J. took no part in the judgment.

on appeal from the court of appeal for british columbia

Divorce ‑‑ Maintenance ‑‑ Variation ‑‑ Agreement made after divorce providing for lump sum to wife in full satisfaction of future claims for maintenance ‑‑ Court's order incorporating parties' agreement ‑‑ Wife's financial situation deteriorating substantially over the years because of health problems ‑‑ Application to vary the maintenance order ‑‑ Whether the agreement should be respected and preclude judicial intervention ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 11(2).

Courts ‑‑ Jurisdiction ‑‑ Divorce ‑‑ Maintenance agreement incorporated in court order ‑‑ Ex‑wife's application to vary allowed ‑‑ Jurisdiction of the Court of Appeal and the Supreme Court of Canada to review orders made under s. 11 of the Divorce Act ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, ss. 11(2), 17(2), 18(1).

Courts ‑‑ Jurisdiction ‑‑ Powers of the reviewing court ‑‑ Divorce ‑‑ Maintenance agreement incorporated in court order ‑‑ Ex‑wife's application to vary allowed ‑‑ Whether appellate court should interfere with trial judge's discretion in the absence of material error ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, ss. 11(2), 17(2).

Married in 1954, the parties divorced in 1969. With advice of independent legal counsel, they entered into a maintenance agreement which provided for the payment by respondent of a lump sum over a period of thirteen months, while appellant agreed to accept the payments in full satisfaction of all future maintenance claims. The agreement was incorporated into an order of the court and respondent paid the maintenance monies as agreed. During the subsequent years, appellant's physical and mental problems increased. As a result, she was often unable to work and was forced to use her maintenance fund in order to survive. In 1982, the fund was depleted and she lived on welfare. By contrast, respondent had become after the divorce a person of ample means. Notwithstanding the agreement, she applied to the British Columbia Supreme Court for a variation of the maintenance award made twelve years earlier under s. 11(1) of the Divorce Act. The Supreme Court allowed the application but the judgment was reversed by the Court of Appeal. This appeal is to determine (1) the jurisdiction of the Court of Appeal to review orders made under s. 11 of the Divorce Act and the jurisdiction of this Court to entertain appeals from judgments of the provincial appellate courts in relation to such orders, and (2) the effect of a valid and enforceable settlement agreement on the court's discretionary power under s. 11(2) of the Divorce Act to vary maintenance orders.

Held: The appeal should be dismissed.

Section 17(2) of the Divorce Act which empowers a court of appeal to "pronounce the judgment that ought to have been pronounced" does not confer on the courts of appeal a broad power to review discretionary decisions made in the courts below. A court of appeal should only interfere with the trial judge's decision where it is persuaded that his reasons disclosed material error. The purpose of the enumeration of powers in s. 17(2) is to set out alternative dispositions open to the court in granting or dismissing an appeal in conformity with traditional principles of appellate review and does not give a court of appeal an independent discretion to decide a case afresh.

The present case, however, raises the question as to what the criteria are for determining the appropriateness of judicial intervention under s. 11(2) of the Divorce Act, i.e., when it is "fit and just" for the court to vary a s. 11(1) order in the face of an antecedent valid and enforceable settlement agreement. The criteria for the exercise of judicial discretion are essentially legal criteria and their delineation, as well as their non‑application or misapplication, raises a question of law. This question of law is sufficient in itself to ground the Court of Appeal's jurisdiction, and on further appeal, to give jurisdiction to the Supreme Court of Canada under s. 18 of the Divorce Act. Section 41(1) of the Supreme Court Act can also serve as a basis for jurisdiction for this Court where s. 41(1) is not in conflict with s. 18 of the Divorce Act.

Cases Cited

Applied: Harrington v. Harrington (1981), 1981 1762 (ON CA), 33 O.R. (2d) 150; not followed: Piller v. Piller, 1975 943 (BC CA), [1975] 4 W.W.R. 342; Carmichael v. Carmichael (1976), 1976 1122 (BC CA), 27 R.F.L. 325; Guberman v. Guberman, 1976 1566 (MB CA), [1977] 2 W.W.R. 1; considered: Nash v. Nash, 1974 22 (SCC), [1975] 2 S.C.R. 507; Posener v. Posener (1984), 1984 237 (BC CA), 4 D.L.R. (4th) 385; Massicotte v. Boutin, 1969 97 (CSC), [1969] S.C.R. 818; distinguished: Swain v. Dennison, 1966 42 (SCC), [1967] S.C.R. 7; referred to: Carnochan v. Carnochan, 1955 14 (SCC), [1955] S.C.R. 669; Ashby v. White (1703), 2 Ld. Raym. 938, 92 E.R. 126; Gazdeczka v. Gazdeczka (1982), 1982 399 (BC CA), 30 R.F.L. (2d) 428; Schmeiser v. Schmeiser (1982), 1982 2449 (SK CA), 21 Sask. R. 437; Dwelle v. Dwelle (1982), 1982 ABCA 349, 31 R.F.L. (2d) 113; MacAllister v. MacAllister (1984), 1984 4781 (NB CA), 39 R.F.L. (2d) 307; Webster v. Webster (1978), 1978 3734 (NS CA), 25 N.S.R. (2d) 33; Droit de la famille‑‑182, [1985] C.A. 92; Hallberg v. C.N.R. (1955), 1955 239 (SK CA), 16 W.W.R. 538; Baumgartner Estate v. Ripplinger (1984), 1984 2567 (SK CA), 34 Sask. R. 181; Csada v. Csada (1984), 1984 2403 (SK CA), 35 Sask. R. 301; Lensen v. Lensen, 1984 2424 (SK CA), [1984] 6 W.W.R. 673; Caron v. Caron, 1987 59 (SCC), [1987] 1 S.C.R. 892; Richardson v. Richardson, 1987 58 (SCC), [1987] 1 S.C.R. 857.

Per Dickson C.J. and McIntyre, Lamer, Wilson and Le Dain JJ.: The court's supervisory jurisdiction over spouse's maintenance cannot be extinguished by contract. However, where the parties have negotiated their own agreement, freely and on the advice of independent legal counsel, as to how their financial affairs should be settled on the breakdown of their marriage, and the agreement is not unconscionable in the substantive law sense, it should be respected. It is only where a future misfortune has its genesis in the fact of the marriage that the court should be able to override the agreement. Accordingly, where an applicant seeking maintenance or an increase in the existing level of maintenance establishes that he or she has suffered a radical change in circumstances flowing from an economic pattern of dependency engendered by the marriage, the court may exercise its relieving power. Otherwise, the obligation to support the former spouse should be, as in the case of any other citizen, the communal responsibility of the state. In the case at bar, no link was found between the gross change in circumstances of appellant and her former marriage to respondent. Therefore, despite appellant's dependency on social assistance, the maintenance agreement should stand.

Per La Forest J.: Where the parties have attempted to finally settle their financial situation and a court, in the exercise of its discretion under s. 11(1) of the Divorce Act, has confirmed that settlement as being "fit and just", the element of finality inherent in divorce and in such an arrangement must be respected in the absence of the most cogent reasons. Where there has been a change of a highly significant character in the circumstances of a former spouse after the settlement was made and that such a change has a real causal connection with the marriage relationship or the settlement, the court may, under s. 11(2) of the Divorce Act, vary the settlement incorporated in an original maintenance order. There may also be exceptional cases, beyond those of unconscionability in the technical sense, where it is not so much the dimensions of the change as the circumstances existing at the time the original order was made that will warrant the making of a variation.

In the present case, the trial judge erred in ordering a variation. Although there were undoubtedly marked changes in the fortunes of the parties, appellant's poverty was not attributable to the marriage or the settlement. The fact that appellant's misfortune has resulted in her being a charge on the public purse was not a reason to transfer that burden to the respondent simply because he has had good fortune. The obligation to support her in such a case is on the public.

Cases Cited

By Wilson J.

Considered: Farquar v. Farquar (1983), 1983 1946 (ON CA), 1 D.L.R. (4th) 244; Webb v. Webb (1984), 1984 2110 (ON CA), 39 R.F.L. (2d) 113; Katz v. Katz (1983), 1983 3679 (MB CA), 33 R.F.L. (2d) 412; Newman v. Newman (1980), 1980 2594 (MB CA), 4 Man. R. (2d) 50; Ross v. Ross (1984), 1984 2924 (MB CA), 39 R.F.L. (2d) 51; referred to: Collins v. Collins (1978), 1978 652 (AB SCTD), 2 R.F.L. (2d) 385; Goldstein v. Goldstein (1976), 1976 ALTASCAD 95, 23 R.F.L. 206; Dal Santo v. Dal Santo (1975), 21 R.F.L. 117; Hyman v. Hyman, [1929] A.C. 601; Messier v. Delage, 1983 31 (SCC), [1983] 2 S.C.R. 401; Connelly v. Connelly (1974), 1974 1319 (NS CA), 47 D.L.R. (3d) 535; Piasta v. Piasta (1974), 15 R.F.L. 137; Gandy v. Gandy (1882), 7 P.D. 168; Fabian v. Fabian (1983), 1983 4443 (ON CA), 34 R.F.L. (2d) 313; Barrett v. Barrett (1985), 1985 5088 (ON SC), 43 R.F.L. (2d) 405; Jull v. Jull (1984), 1984 51 (AB CA), 42 R.F.L. (2d) 113; Binns v. Binns (1985), 1985 5084 (NS FC), 45 R.F.L. (2d) 369.

By La Forest J.

Referred to: Richardson v. Richardson, 1987 58 (SCC), [1987] 1 S.C.R. 857; Messier v. Delage, 1983 31 (SCC), [1983] 2 S.C.R. 401.

Statutes and Regulations Cited

Court of Appeal Act, R.S.S. 1978, c. C‑42, s. 8.

Divorce Act, R.S.C. 1970, c. D‑8, ss. 3, 11, 17(2), 18(1).

Judicature Act, R.S.O. 1970, c. 228, s. 30(1).

Supreme Court Act, R.S.C. 1970, c. S‑19, ss. 41(1) [rep. & subs. 1974‑75‑76, c. 18, s. 5], 42, 44, 47.

Authors Cited

Abella, Rosalie S. Economic Adjustment On Marriage Breakdown: Support (1981), 4 F.L.R. 1.

Canada. Law Reform Commission. Family Law. Ottawa: Law Reform Commission of Canada, 1976.

Canada. Law Reform Commission. Maintenance on Divorce (Working Paper 12). Ottawa: Law Reform Commission of Canada, 1975.

Payne, D. Julien. "Policy Objectives of Private Law Spousal Support Rights and Obligations". In Contemporary Trends in Family Law: A National Perspective. Edited by K. Connell‑Thouez and B. M. Knoppers. Toronto: Carswells, 1984, pp. 55‑103.

Wilson, Bertha. "The Variation of Support Orders". In Family Law: Dimensions of Justice. Edited by Rosalie S. Abella and Claire L'Heureux‑Dubé. Toronto: Butterworths, 1983, pp. 35‑67.

APPEAL from a judgment of the British Columbia Court of Appeal (1985), 1985 394 (BC CA), 45 R.F.L. (2d) 1, 17 D.L.R. (4th) 147, 61 B.C.L.R. 217, allowing respondent's appeal from an order of Wong L.J.S.C. (1984), 1984 629 (BC SC), 41 R.F.L. (2d) 274, granting appellant's application to vary maintenance agreement incorporated in court order. Appeal dismissed.

Scott Hall, for the appellant.

R. Kasting, for the respondent.

The judgment of Dickson C.J. and McIntyre, Lamer, Wilson and Le Dain JJ. was delivered by

1. Wilson J.‑‑Section 11(2) of the Divorce Act, R.S.C. 1970, c. D‑8, confers on the court the power to vary a previous order for maintenance "having regard to the conduct of the parties since the making of the order or any change in the condition, means or other circumstances of either of them". This appeal specifically addresses the extent of the constraints, if any, imposed on that power by the existence of a valid and enforceable maintenance agreement. Should the parties be held to the terms of their contract or should the court intervene to remedy the inequities now alleged by one of the parties to be flowing from the bargain previously entered into freely and on full knowledge and with the advice of counsel?

2. An ancillary issue raised on this appeal concerns jurisdiction ‑‑ the jurisdiction of the Court of Appeal to review orders made under s. 11 of the Divorce Act and the jurisdiction of this Court to entertain appeals from judgments of the provincial appellate courts in relation to such orders.

I. The facts

3. The parties were married in 1954. They had two children. The respondent, Mr. Pelech, ran a general contracting business which later expanded and diversified. The appellant assisted her husband by acting as a receptionist and bookkeeper until the mid‑1960's. The parties were divorced on May 1, 1969. Wilson C.J. of the British Columbia Supreme Court who presided at the petition for divorce found that Mrs. Pelech had serious psychological problems and awarded custody of the children to Mr. Pelech. He also awarded Mrs. Pelech permanent maintenance and referred the case to the Registrar for recommendations in this regard.

4. The parties, after obtaining the advice of counsel, entered into a maintenance agreement on September 15, 1969 which was approved by the Registrar. The agreement provided for a total payment of $28,760 over a period of thirteen months. Clause (b) of the agreement stated:

(b) The Petitioner agrees to accept the foregoing periodic payments in full satisfaction of all claim she now has or may have in the future for maintenance from the Respondent.

Mrs. Pelech also agreed to transfer to Mr. Pelech one share which she held in a business operated by him. The agreement, on the recommendation of the Registrar and with the consent of the parties, was confirmed and incorporated into an order of the court. Mrs. Pelech subsequently transferred the share to Mr. Pelech and Mr. Pelech paid the maintenance monies as agreed. Mrs. Pelech was 37 years old at the time of the divorce and Mr. Pelech 44.

5. At the time of the divorce in 1969 Mr. Pelech's net worth was $128,000. Fifteen years later, when the current application to vary the original order was heard, that net worth had increased to $1,800,000. The intervening years were not so kind to Mrs. Pelech. She invested most of the money she received for maintenance and endeavoured to live on the interest from it supplemented by income she was able to earn from temporary work as a bookkeeper and sales clerk. However, over the years her psychological problems increased and were compounded by severe physical problems. Because of her bad health she was often unable to work and she encroached on the capital of her maintenance fund in order to survive. In April 1982 the fund was depleted and Mrs. Pelech applied for social assistance. Later that same year she received an inheritance which enabled her to make a $15,000 down payment on a bachelor apartment. The balance of the purchase price was financed with a $16,000 mortgage. The judge at first instance summarized the state of Mrs. Pelech's affairs at the time of this application as follows:

The wife currently receives monthly welfare payments of $430, from which she pays all her living expenses. Other than the mortgage, she has no other debt. At present, this woman is definitely living at a poverty existence level. The medical prognosis for her future ability to undertake gainful employment appears to be guarded. In view of the wife's history of ongoing disabilities together with her inability to either obtain or retain gainful employment for any appreciable period of time, I think the realistic prospects of this 53‑year‑old woman to obtain any type of future gainful employment will be most unlikely.

Mrs. Pelech is now 54 years old and Mr. Pelech 61. The two children are grown up and fend for themselves.

II. The Legislation

6. In December 1982, Mrs. Pelech brought a motion under s. 11(2) of the Divorce Act to vary the award of maintenance made to her twelve years earlier under s. 11(1) of the same Act. Section 11 reads in its entirety:

7. (1) Upon granting a decree nisi of divorce, the court may, if it thinks it fit and just to do so having regard to the conduct of the parties and the condition, means and other circumstances of each of them, make one or more of the following orders, namely:

(a) an order requiring the husband to secure or to pay such lump sum or periodic sums as the court thinks reasonable for the maintenance of

(i) the wife,

(ii) the children of the marriage, or

(iii) the wife and the children of the marriage;

(b) an order requiring the wife to secure or to pay such lump sum or periodic sums as the court thinks reasonable for the maintenance of

(i) the husband,

(ii) the children of the marriage, or

(iii) the husband and the children of the marriage; and

(c) an order providing for the custody, care and upbringing of the children of the marriage.

(2) An order made pursuant to this section may be varied from time to time or rescinded by the court that made the order if it thinks it fit and just to do so having regard to the conduct of the parties since the making of the order or any change in the condition, means or other circumstances of either of them.

7. Since the scope of an appellate court's power in reviewing a lower court's order is also put in issue on this appeal, I reproduce s. 17(2) of the Act:

8. (1) ...

(2) The court of appeal may

(a) dismiss the appeal; or

(b) allow the appeal and

(i) pronounce the judgment that ought to have been pronounced including such order or such further or other order as it deems just, or

(ii) order a new trial where it deems it necessary to do so to correct a substantial wrong or miscarriage of justice.

8. In addition, the respondent challenges the jurisdiction of this Court to hear this case on the basis of s. 18(1) of the Act which provides:

9. (1) An appeal lies on a question of law to the Supreme Court of Canada with leave of that court from a decision of the court of appeal under section 17.

Sections 41(1), 42 and 44 of the Supreme Court Act, R.S.C. 1970, c. S‑19 as amended, are also relevant to this latter issue:

41. (1) Subject to subsection (3), an appeal lies to the Supreme Court from any final or other judgment of the highest court of final resort in a province, or a judge thereof, in which judgment can be had in the particular case sought to be appealed to the Supreme Court, whether or not leave to appeal to the Supreme Court has been refused by any other court, where, with respect to the particular case sought to be appealed, the Supreme Court is of the opinion that any question involved therein is, by reason of its public importance or the importance of any issue of law or any issue of mixed law and fact involved in such question, one that ought to be decided by the Supreme Court or is, for any other reason, of such a nature or significance as to warrant decision by it, and leave to appeal from such judgment is accordingly granted by the Supreme Court.

42. Notwithstanding anything in this Act, the Supreme Court has jurisdiction as provided in any other Act conferring jurisdiction.

43. (1) No appeal lies to the Supreme Court from a judgment or order made in the exercise of judicial discretion except in proceedings in the nature of a suit or proceeding in equity originating elsewhere than in the Province of Quebec and except in mandamus proceedings.

(2) This section does not apply to an appeal under section 41.

III. The Courts Below

9. Mrs. Pelech's application for a variation of the original maintenance award was granted by Wong L.J.S.C. of the British Columbia Supreme Court (1984), 1984 629 (BC SC), 41 R.F.L. (2d) 274. Wong L.J.S.C. first rejected Mrs. Pelech's allegation that her health problems stemmed from the physical cruelty of Mr. Pelech during their marriage. He found that there was no evidence of such cruelty and, indeed, that Mrs. Pelech's psychological problems were a contributing factor in the marriage breakdown. He expressed his satisfaction that Mrs. Pelech had been represented by independent counsel at the time of the divorce and that therefore the maintenance agreement could not be viewed as unconscionable. Moreover, its terms had long since been fully discharged. The question therefore became whether the court should vary the freely negotiated and fully discharged maintenance agreement which had formed the basis of the original court order.

10. The respondent submitted that the jurisdiction of the court under s. 11(2) depended upon there being an existing court order and that, once the s. 11(1) order had been fully discharged, nothing remained for the court to vary. He cited the decision of the Alberta Supreme Court in Collins v. Collins (1978), 1978 652 (AB SCTD), 2 R.F.L. (2d) 385 in support. In that case Dechene J. at p. 390 quoted with approval the comments of Sinclair J.A. dissenting in Goldstein v. Goldstein (1976), 1976 ALTASCAD 95, 23 R.F.L. 206 (Alta. C.A.) where he said at p. 216:

I say this because it is my view that Parliament did not intend that after divorce the divorced spouses were to be forever contingently liable for the support of each other. In my opinion Parliament must have intended that at some stage or another a divorced person is entitled to say `That's it: my responsibilities to my former partner are at an end; I can look forward to a new life free of any contingent liability to my former spouse and can plan my affairs accordingly.'

Dechene J. also relied on the statement of Anderson J. in the British Columbia Supreme Court in Dal Santo v. Dal Santo (1975), 21 R.F.L. 117 to the effect that it is in the community interest to encourage parties to negotiate an agreement upon which they may rely in the future and that "contracts of this kind should not be lightly disturbed" (p. 120).

11. Wong L.J.S.C. rejected this approach to s. 11(2). He felt that the need to preserve the court's jurisdiction to supervise the maintenance of former spouses "as an incident of divorce" was fully as important as the need for finality in the marital obligations of ex‑spouses. He saw "the divorced relationship" as a continuing relationship involving an ongoing power in the court to supervise maintenance presumably for as long as the parties lived. He did not think that a broader interpretation of s. 11(2) had the effect of excluding the considerations voiced by the court in Collins. He accepted the view expressed in the authorities that a court should not ignore or lightly upset a previous agreement when making an order that is "fit and just" under s. 11(2). Judicial intervention therefore should only occur when there is "a gross change in circumstances" or when "the conscience of the court is shocked". Wong L.J.S.C. felt that at the time Mr. and Mrs. Pelech entered into the agreement they both assumed that Mrs. Pelech was employable and would become financially self‑sufficient. Mrs. Pelech's current dire need constituted a gross change in circumstances and Mr. Pelech was now, by contrast, a person of ample means. The burden of maintaining Mrs. Pelech should therefore fall upon her ex‑spouse rather than on the public purse. Wong L.J.S.C. ordered Mr. Pelech to pay periodic maintenance of $2,000 per month to Mrs. Pelech.

12. Lambert J.A., for a unanimous Court of Appeal, overturned Wong L.J.S.C.'s decision to vary the original order (1985), 1985 394 (BC CA), 45 R.F.L. (2d) 1, 17 D.L.R. (4th) 147, 61 B.C.L.R. 217. Although he agreed that the court's jurisdiction could not be extinguished by the fulfilment or satisfaction of the terms of the previous order, he had a different view of when it was appropriate to exercise that jurisdiction. Lambert J.A. referred to the extensive jurisprudence on this issue and suggested that the recurring concern in the modern authorities is that parties should be able to rely on their agreements. He quoted with approval Zuber J.A.'s reasons in the Ontario Court of Appeal in Farquar v. Farquar (1983), 1983 1946 (ON CA), 1 D.L.R. (4th) 244 to the effect that, since changes in circumstance are inevitable, such changes should not be used to justify judicial intervention into otherwise valid and binding contractual arrangements. "If the parties agree to settle their affairs", said Zuber J.A., "then their affairs should be regarded as settled" (p. 253). Zuber J.A. went on to say, however, that if the agreement they enter into is vulnerable on some other basis, then the changes in circumstance will be a factor to be taken into account in determining the appropriate award of maintenance. In Lambert J.A.'s view Zuber J.A.'s reference to some other basis was to the traditional common law and equitable defences to the enforcement of ordinary contracts as well as to a "narrow range of cases" where relief is appropriate despite the binding effect of the contract.

13. Unfortunately Lambert J.A. did not elaborate on what he considered comprised the narrow range of cases in which a binding settlement agreement could be varied other than to say that cases "where the maintenance provisions adversely affect the custody of children come instantly to mind, as an example". Instead, he concentrated on the principle he was relying on for not intervening in this case, namely that where:

(a) there is an agreement for the payment of maintenance as a lump sum or as periodic payments for a set period, and

(b) the agreement releases all claims for future maintenance, and

(c) the agreement was valid and enforceable when it was made, and

(d) the agreement was not an unreasonable or unfair one when it was made, and

(e) the provisions of the agreement for payment of maintenance are incorporated in a court order without any change that has not been agreed to by the parties, and

(f) the agreement and the court order are carried out, and all maintenance payments are made, and

(g) there are no children whose care is directly affected by any subsequent application to vary the maintenance order...

there should be no intervention. Judicial intervention should be the exception and not the rule:

The rule is that settlement agreements must be respected. Marriage partners who decide to go their own way should be able to set for themselves, if they wish, the terms on which they will part, without risk of judicial intervention. If an agreement is not final and binding, then nothing can be achieved by making the compromises required to reach agreement, and the parties will have little incentive or encouragement to settle their differences.

Lambert J.A. acknowledged that the consequence of this principle was that Mrs. Pelech and others in similar circumstances would remain a public charge. However:

...against that must be weighed, among other financial consequences, the financial advantages to the community in having binding maintenance settlements made by the parties themselves, rather than by judges and other public officers in facilities provided and maintained at public expense.

Lambert J.A. concluded by allowing Mr. Pelech's appeal and dismissing Mrs. Pelech's application for a variation of the 1969 maintenance order.

IV. Jurisdictional Issues

A. The Powers of the Reviewing Court

14. The appellant submits that the principle enunciated by Lambert J.A. in the Court of Appeal amounts to a fettering of the trial judge's discretion under s. 11(2). That discretion, the appellant argues, confers on the trial judge "an untrammeled right to vary a maintenance order in appropriate circumstances". The Court of Appeal, on the other hand, does not have a wide open discretion to substitute its view for that of the trial judge but can only interfere where there has been error of law in the court below. The appellant cites Harrington v. Harrington (1981), 1981 1762 (ON CA), 33 O.R. (2d) 150 (C.A.) in support.

15. The respondent takes issue with this view of the Court of Appeal's jurisdiction and refers to the proposition advanced in Piller v. Piller, 1975 943 (BC CA), [1975] 4 W.W.R. 342 (B.C.C.A.), to the effect that s. 17(2) of the Divorce Act does indeed give the Court of Appeal an independent discretion to decide the case afresh. I reproduce the section once more for convenience:

16. (1) ...

(2) The court of appeal may

(a) dismiss the appeal; or

(b) allow the appeal and

(i) pronounce the judgment that ought to have been pronounced including such order or such further or other order as it deems just, or

(ii) order a new trial where it deems it necessary to do so to correct a substantial wrong or miscarriage of justice.

The respondent also relies on the comment of Laskin C.J. in Nash v. Nash, 1974 22 (SCC), [1975] 2 S.C.R. 507, where he said at p. 516:

Counsel for the appellant founds himself, first, on the position that the Court of Appeal ought not to have interfered with the discretion of the trial judge in ordering periodic payments....On the first point taken, s. 17 of the Divorce Act gives the widest powers to the Court of Appeal, and I am unable to say in this case that if that Court had the power to order security for the payment of periodic maintenance it was wrong in doing so.

16. Implicit in the appellant's argument is the premise that the trial judge in the present case acted within his discretion and that, as no error of law was demonstrated, the appellate court must defer to his decision. However, the appellant's description of the s. 11(2) jurisdiction of the trial judge as "an untrammeled right to vary...in appropriate circumstances" begs the question. The right is not "untrammeled"; it is clearly constrained by the appropriateness of the circumstances. While I agree that the so‑called "principle" enunciated and applied by Lambert J.A. in this case is merely an illustration of one set of "appropriate circumstances" rather than a proposition of law, the criteria for the exercise of judicial discretion are essentially legal criteria. Their delineation, as well as a failure to apply them or a misapplication of them, raises a question of law. In my view, the present case squarely raises the question as to what the criteria are for determining the appropriateness of judicial intervention under s. 11(2) or, to use the language of the statute, when is it "fit and just" for the court to vary a s. 11(1) order in the face of an antecedent valid and enforceable settlement agreement. As this question of law is sufficient in itself to ground the Court of Appeal's jurisdiction, it is not, strictly speaking, necessary to resolve the disparate views expressed in the Piller and Harrington cases. However, the point has been raised by the parties and would appear to require clarification.

17. The decision in Piller stands for the proposition that s. 17(2)(b)(i) of the Divorce Act confers a broad power on courts of appeal to review discretionary decisions made in the courts below. This interpretation was reaffirmed in unequivocal terms in Carmichael v. Carmichael (1976), 1976 1122 (BC CA), 27 R.F.L. 325 (B.C.C.A.) In that case Farris C.J.B.C., who also delivered the judgment in Piller, stated at p. 329:

In approaching the question of whether the order made below is appropriate, this court has an independent discretion. It need not be shown before we can intervene that the trial judge proceeded on some wrong principle or failed to take into consideration factors that he should have, or took into consideration factors which were not appropriate: see Piller v. Piller, 1975 943 (BC CA), 17 R.F.L. 252, [1975] 4 W.W.R. 342 at 345, 54 D.L.R. (3d) 150 (B.C.C.A.). I therefore approach this problem as if the court was hearing the matter anew. The fact that I differ in the result does not necessarily mean that Aikins J. was wrong. It simply means that reasonable men may differ in their view of what is appropriate.

This expansive interpretation of s. 17(2) has generally been adhered to in the B.C. courts and has in addition found favour with the Manitoba Court of Appeal in Guberman v. Guberman, 1976 1566 (MB CA), [1977] 2 W.W.R. 1.

18. A more restrictive view has been espoused by the Ontario courts. The following passage from Morden J.A.'s reasons in Harrington articulates the rationale for this alternative approach (at pp. 154‑55):

The purpose of s. 17(2)(b)(i) of the Divorce Act, which enables us to "pronounce the judgment that ought to have been pronounced" is to prescribe the general kind of disposition open to us, on allowing an appeal, as an alternative to ordering a new trial (s. 17(2)(b)(ii)) and is not intended, in my view, to provide the rule governing when we will interfere with the challenged judgment, i.e., it does not set forth the standard for determining whether or not the challenged judgment should be set aside. The language of s. 17(2)(b)(i) is not new and is rather familiar in statutes relating to appeals (see, e.g., 1857 (U.C.), c. 5, s. 7, in a statute relating to the Court of Error and Appeal in Upper Canada, and the Judicature Act, R.S.O. 1970, c. 228, s. 30(1)), and its function is, to repeat, to prescribe one aspect of the nature of our power after it has been decided, on proper grounds, that the appeal should be allowed.

Where the ultimate disposition turns on the relative weighting of principles and considerations (the broad mandate is set forth in s. 11(1) of the Divorce Act), different minds may fairly come to different conclusions, and there are no fixed rules for determining "correctness", it seems to me that general practicality and fairness require an appellant to show some material error in the reasoning of the trial Judge for an appellate Court to interfere. This approach applies with particular force in a case (and this is not one) where the only issue is the amount of entitlement. Because he has the benefit of the atmosphere of the trial, a trial Judge is generally in a better position than an appellate Court to exercise his evaluative judgment correctly. Also, an independent discretion, approach, involving a reconsideration of all matters de novo, would inevitably result in there being a fairly arguable appeal in just about every case.

19. Both the Piller and the Harrington lines of authority are of great force and persuasion. However, it seems to me that if one examines the basis of each approach and, in addition, their impact in general terms on traditional notions of appellate review, the views expressed in Harrington afford the most acceptable result.

20. The court in Piller drew support from Martland J.'s reasons in Swain v. Dennison, 1966 42 (SCC), [1967] S.C.R. 7, and from the remarks referred to earlier by Laskin C.J. in Nash. The legislative provision at issue in Swain v. Dennison was s. 17 of the Testator's Family Maintenance Act, R.S.B.C. 1960, c. 378. It provides:

21. From any order made under this Act a party deeming himself prejudicially affected may appeal to the Court of Appeal within the same time and the same manner as from a final judgment of the Court in a civil cause.

Martland J. reasoned that because of the discretionary nature of the trial judge's jurisdiction under the Act and the specific right of appeal conferred in s. 17, the appellate court was empowered to reach its own conclusion whenever a party deemed itself "prejudicially affected". It seems to me, however, that the language of the legislation in Swain v. Dennison differs significantly from that of s. 17(2) of the Divorce Act. The former provision sets out the conditions under which a party may appeal, i.e., whenever it deems itself prejudiced by the decision at first instance. In order that that very broad right of appeal be meaningful the court to which such an appeal is taken should be able to intervene on the same basis and correct the prejudice complained of. This is dictated both by common sense and the principle in Ashby v. White (1703), 2 Ld. Raym. 938, 92 E.R. 126, which presumes that the conferral of a right is accompanied by the conferral of a remedy. Thus s. 17 of the Testator's Family Maintenance Act, by identifying the scope of a party's appeal rights, by implication identifies the scope of the reviewing court's power to intervene.

21. In contrast, s. 17(2) of the Divorce Act sets out the remedial powers of the reviewing court upon hearing an appeal rather than the conditions under which that appeal can be heard in the first place. Those powers are threefold: it may dismiss the appeal, allow the appeal and pronounce judgment that ought to have been pronounced below or allow the appeal and order a new trial. It is the phrasing of the second remedial alternative in terms of pronouncing the judgment "that ought to have been pronounced" which has given rise to the divergence in views. However, I do not think that by itself the reasoning in Swain v. Dennison requires the enlarged interpretation of what "ought to have been pronounced" proposed by Farris C.J.B.C. Rather I would agree with Morden J.A. in Harrington that the purpose of the enumeration of powers in s. 17(2) is to set out alternative dispositions open to the court in granting or dismissing an appeal in conformity with traditional principles of appellate review. The legislation in Swain v. Dennison does not directly address this remedial aspect of the court's jurisdiction.

22. On the other hand, Laskin C.J.'s remarks in Nash offer support for the Piller approach which is not in any way dependent on the parallel treatment in Swain v. Dennison of the Testator's Family Maintenance Act. The substantive issue in Nash was whether the Court of Appeal could condition the grant of a decree nisi on the provision of adequate security for maintenance payments. In Laskin C.J.'s view neither the trial judge nor the Court of Appeal had jurisdiction to fashion such a remedy. Consequently, he did not have to deal with the issue of whether the court was additionally prevented from doing so because of the traditional limits on appellate review. Strictly speaking, therefore, the comments relied upon by the respondent in the present appeal and Farris C.J.B.C. in Piller are obiter. Nevertheless they are fairly weighty obiter and they do indeed suggest that in Laskin C.J.'s view s. 17(2) would have allowed the Court of Appeal to substitute its own discretion for that of the trial judge.

23. Morden J.A. did not address the impact of Laskin C.J.'s comments in Nash other than to state that he did not interpret them as leading to the conclusion that s. 17 of the Divorce Act gives the Court of Appeal an independent discretion. He went on to point out at p. 155 that "such an approach has not been followed with respect to other kinds of decisions, such as those relating to the decree nisi of the divorce itself and to custody, which are appealable under s. 17".

24. With regard to this latter point, it appears that even the B.C. Court of Appeal which has, in general, adhered to the Piller approach has expressed its doubts with regard to the suitability of that approach where custody is at issue. In Gazdeczka v. Gazdeczka (1982), 1982 399 (BC CA), 30 R.F.L. (2d) 428 (B.C.C.A.), the central issue concerned an award of custody made incidentally to proceedings for divorce. In the course of dismissing the appeal from the trial judge's decision, Hinkson J.A. for the court stated (at pp. 430‑31):

In Genest v. Genest (1970), 1970 762 (BC CA), 3 R.F.L. 97, 73 W.W.R. 81, 11 D.L.R. (3d ) 254, this court had occasion to consider an appeal in a custody matter. McFarlane J.A. made reference to the decision in Bickley v. Bickley, 1957 46 (SCC), [1957] S.C.R. 329, 7 D.L.R. (2d) 465, and what was said there by Cartwright J. (as he then was) at p. 333, as follows:

"...in the light of all evidence in the record we find it impossible to say that he (that is, the learned trial judge) did not make full judicial use of the opportunity given to him, and denied to the appellate Courts, of seeing and hearing the parties; the advantage thus afforded to the trial judge is always great but peculiarly so in a case of this sort where so much depends upon the character of the parents whose claims are in conflict."

It seems to me that that principle has application in the present case.

Hinkson J.A. went on nevertheless at the urging of counsel to draw his own conclusion in the matter on the basis of Piller. However, even on this approach, he found himself in agreement with the trial judge's disposition.

25. A further erosion of Piller seems to have occurred in a recent decision by MacFarlane J.A. in Posener v. Posener (1984), 1984 237 (BC CA), 4 D.L.R. (4th) 385 (B.C.C.A.) In Posener the parties were divorced in 1973. There was no claim for maintenance in the divorce petition and no provision in that regard in the decree nisi. However, the parties had previously arranged their affairs in a separation agreement which provided inter alia that the husband pay periodic maintenance to the wife. The amount of maintenance was varied under the Family Relations Act, S.B.C. 1972, c. 20, in 1975. The husband complied with the amended terms of maintenance until 1979. In 1981, the wife commenced an action for a judgment in the amount of the arrears. The husband counterclaimed for an order varying the decree nisi by incorporating the amended agreement, by making further changes in the amount of periodic maintenance, and by rescinding the arrears. The trial judge granted the order for variation in part. He incorporated the agreement but refused to rescind the arrears. He also refused to vary the amount of periodic maintenance other than by providing a formula by which maintenance could be reduced if the husband's income was reduced. On appeal, MacFarlane J.A. refused to interfere with the trial judge's ruling. Although he does not refer to either the Piller or Harrington lines of authority, the perception of the limits on appellate review of s. 11(2) orders which emerges from MacFarlane J.A.'s reasons clearly subscribes to the traditional notions put forward by Morden J.A. in Harrington. For example, MacFarlane J.A. states on p. 387:

The finding made by the chambers judge, however, reveals that he was alive to the question whether the balance between the parties had become so distorted that it was unjust. He considered not only the amount by which the wife's income had increased and the husband's had become reduced, but he considered a number of other factors which would have some bearing on his conclusion. It is not for us to retry that issue, the judge having had before him all the necessary and relevant evidence.

MacFarlane J.A.'s adherence to the principle of deference to matters which fall within the special province of the trial judge is stated with even greater clarity in this later passage at p. 388:

Interference would only be justified if this court was clearly of the opinion that the chambers judge had acted on a wrong principle or had wrongly exercised his discretion, or that the decision might result in an injustice. I am not persuaded that the chambers judge acted on any wrong principle and I do not think the circumstances warrant any interference with the discretion exercised by the judge. He considered the relevant law and all of the relevant facts.

MacFarlane J.A. then alludes to the particular reluctance of courts to disturb contractual arrangements between parties and concluded on p. 389:

In this case, having heard argument at great length, it appears that what we are really being asked to do is to substitute our opinion for that of the chambers judge as to the quantum of maintenance. We ought not to do that. The judge considered the proper question, that is, whether there were unusual circumstances requiring alteration of the terms of the separation agreement. He found one unusual circumstance and remedied the defect in the way in which I have indicated. I think that was appropriate. Otherwise, the circumstances are not so compelling that I would interfere further with the terms of the separation agreement. I would dismiss the appeal.

26. Thus to a certain extent, the British Columbia courts have questioned, if not departed from, the idea that s. 17(2) confers a broad unconstrained discretion on appeal courts to decide matters anew. In addition the narrower and more traditional view put forward in Harrington appears to have found favour in several other jurisdictions, either by express reference to Morden J.A.'s reasons or simply by an assertion that only material error or a decision that is wrong in principle warrants intervention: see Schmeiser v. Schmeiser (1982), 1982 2449 (SK CA), 21 Sask. R. 437 (C.A.); Dwelle v. Dwelle (1982), 1982 ABCA 349, 31 R.F.L. (2d) 113 (Alta. C.A.); MacAllister v. MacAllister (1984), 1984 4781 (NB CA), 39 R.F.L. (2d) 307 (N.B.C.A), and Webster v. Webster (1978), 1978 3734 (NS CA), 25 N.S.R. (2d) 33 (C.A.) The Quebec Court of Appeal also seems to prefer the Harrington approach although there is disagreement over exactly what this means in terms of its application. (See Droit de la famille‑‑182, [1985] C.A. 92.)

27. In my view, however, the most compelling reason for adhering to the Harrington approach lies in the similarity noted by Morden J.A. between the wording of s. 17(2) of the Divorce Act and that of s. 30(1) of The Judicature Act, R.S.O. 1970, c. 228. That section states:

30.‑‑(1) The court upon an appeal may give any judgment that ought to have been pronounced and may make such further or other order as is considered just.

Section 47 of the Supreme Court Act which governs appeals to this Court also employs similar wording although there is no direction as to further orders:

47. The Court may dismiss an appeal or give the judgment and award the process or other proceedings that the court, whose decision is appealed against, should have given or awarded.

Furthermore, s. 8 of the Court of Appeal Act, R.S.S. 1978, c. C‑42, provides an instructive contrast:

8. Upon appeal from, or motion against, the order, decision, verdict or decree of a trial judge, or on the rehearing of any cause, application or matter, it shall not be obligatory on the court to grant a new trial, or to adopt the view of the evidence taken by the trial judge, but the court shall act upon its own view of what the evidence in its judgment proves, and the court may draw inferences of fact and pronounce the verdict, decision or order that, in its judgment, the judge who tried the case ought to have pronounced.

9. The clear mandate to "act upon its own view of what the evidence in its judgment proves" and the permission to "draw inferences of fact" would seem to signal a deliberate departure from the principles that are considered in some other jurisdictions to circumscribe appellate powers. Because of the section Gordon J.A. in Hallberg v. C.N.R. (1955), 1955 239 (SK CA), 16 W.W.R. 538 concluded at p. 544 that the powers of the Saskatchewan Court of Appeal are "the widest powers given an appellate court in Canada". In spite of this, however, recent decisions in Saskatchewan seem to have taken a more cautious approach to the powers set out in s. 8. In Baumgartner Estate v. Ripplinger (1984), 1984 2567 (SK CA), 34 Sask. R. 181, Brownridge J.A. was careful to justify the court's intervention on established principles before invoking the further authority to be found in s. 8. In Csada v. Csada (1984), 1984 2403 (SK CA), 35 Sask. R. 301, Bayda C.J.S. drew a distinction between primary and inferential facts, stating that s. 8 only allows findings with regard to the latter to be disturbed on appeal. Finally in Lensen v. Lensen, 1984 2424 (SK CA), [1984] 6 W.W.R. 673, although Tallis J.A. distinguished the leading authorities on appellate jurisdiction on the basis of s. 8, the question of fact raised at the appeal had not been the subject of a finding by the trial judge.

10. While the breadth of the Saskatchewan provisions is not at issue in the present appeal, it would seem surprising if equally broad powers were conferred on this Court and on courts of appeal whose enabling legislation uses wording similar to that in the Divorce Act. Such a departure from established principles would seem to require clearer language than the legislative direction to pronounce the judgment that "ought" or "should" have been pronounced and to give such further orders as are "deemed" and "considered" just. Indeed, it seems implicit in such language that the judgment which was pronounced below should not have been pronounced, i.e., that it contained some vitiating element that led to an injustice which must be corrected on appeal. In summary, I agree with Morden J.A.'s delineation of appellate powers in the following passage from his reasons in Harrington at p. 154:

As far as the applicable standard of appellate review is concerned I am of the view that we should not interfere with the trial Judge's decision unless we are persuaded that his reasons disclose material error, and this would include a significant misapprehension of the evidence, of course, and to use familiar language, the trial Judge's having "gone wrong in principle or (his) final award (being) otherwise clearly wrong": Attwood v. Attwood, [1968] P. 591 at 596. In other words, in the absence of material error, I do not think that this Court has an "independent discretion" to decide afresh the question of maintenance and I say this with due respect for decisions to the contrary: see, e.g., Piller v. Piller (1975), 1975 943 (BC CA), 54 D.L.R. (3d) 150, [1975] 4 W.W.R. 342, 17 R.F.L. 252 (B.C.C.A.), and Carmichael v. Carmichael (1976), 1976 1122 (BC CA), 69 D.L.R. (3d) 297, 27 R.F.L. 325 (B.C.C.A.)

B. The Jurisdiction of this Court

30. The second jurisdictional question involves the basis on which appeals may be heard by this Court. The respondent makes the same argument with regard to this Court's reviewing power that the appellant has made with regard to the British Columbia Court of Appeal's power to overturn the trial judge. The respondent contends that s. 18 of the Divorce Act which gives this Court a limited jurisdiction to hear appeals on questions of law cannot be broadened by s. 41(1) of the Supreme Court Act which allows the Court to hear questions of "public importance". The respondent cites Massicotte v. Boutin, 1969 97 (CSC), [1969] S.C.R. 818, and Carnochan v. Carnochan, 1955 14 (SCC), [1955] S.C.R. 669, in support.

31. Again the implication is that the court below, in this instance the Court of Appeal, acted within its discretion and therefore no question of law arose. The short answer, once more, is in my opinion that the articulation of the criteria according to which judicial discretion must be exercised involves legal principles. The appeal therefore comes within s. 18. This is consistent with the jurisprudence cited by the respondent.

32. The respondent submits that in Massicotte v. Boutin this Court held that s. 18 of the Divorce Act rather than s. 41(1) of the Supreme Court Act provides the enabling jurisdiction for this Court. However, in that case the governing principle was enunciated by Fauteux J. (as he then was) as follows at p. 821:

[TRANSLATION] When faced with two acts of Parliament, one of which, generally, is intended to deal with the establishment of the Supreme Court and the appelate jurisdiction possessed by it, and the other one of which, specifically, is intended to deal with divorce, and does, in fact, deal with the subject exhaustively, we must, in my view, apply the principle which states that the provisions of the specific statute, in cases where they cannot be reconciled with those of the general statute, must take priority over those of the general statute.

Thus the gist of Massicotte is that where s. 18 of the Divorce Act and s. 41(1) of the Supreme Court Act conflict, the provisions of the more specialized Divorce Act prevail. Presumably then, where there is no conflict, both statutes may serve as a basis for jurisdiction. Indeed, leave to appeal in the companion cases to the present case, Richardson v. Richardson, 1987 58 (SCC), [1987] 1 S.C.R. 857, and Caron v. Caron, 1987 59 (SCC), [1987] 1 S.C.R. 892, was granted under s. 41(1) of the Supreme Court Act.

33. The respondent also argues that this Court's decision in Carnochan established that a s. 11 order is by definition an exercise of judicial discretion. Since s. 44 of the Supreme Court Act in general precludes this Court from reviewing discretionary decisions, appeals of s. 11(2) orders must inevitably fail at this level. However, no such hard and fast proposition emerges from Carnochan. The decision turned on s. 12(1) of The Married Women's Property Act, R.S.O. 1950, c. 233, which uses some of the same language as s. 11(2) of the Divorce Act, namely that "the judge may make such order with respect to the property in dispute ... as he thinks fit...." Cartwright J. (as he then was) for the Court granted the motion to quash the leave application on the basis that the trial judge acted within his discretion and that therefore s. 44 of the Supreme Court Act, which is the same as the current provision, precluded a further appeal. However, Cartwright J. stated in the course of his reasons at p. 673 that "There may well be cases falling within s. 12 of The Married Women's Property Act in which an appeal lies to this Court". He gave as an example the case of a dispute as to title where the judge fails to decide the matter in accordance with the applicable principles of law. In my view, any situation in which the court below errs in formulating the principles upon which it exercises its discretion gives rise to a question of law. In addition, the discretion in s. 11(2) of the Divorce Act is a much more structured one than the discretion in s. 12(1) of The Married Women's Property Act since it is to be exercised "having regard to the conduct of the parties since the making of the order or any change in the condition, means, or other circumstances of either of them". Indeed, part of the task before this Court is to identify the legal content to be given to "change in the condition, means, or other circumstances...."

V. Preliminary Observations

34. The central issue in this case concerns the effect of a valid and enforceable antecedent settlement agreement on the court's discretionary power under s. 11(2) to vary maintenance orders. Some preliminary observations might be helpful.

35. The first observation concerns the principle that a maintenance agreement can never totally extinguish the jurisdiction of the court to impose its own terms on the parties. This principle derives from the House of Lords' decision in Hyman v. Hyman, [1929] A.C. 601. In that case, Lord Hailsham L.C. stated at p. 614:

However this may be, it is sufficient for the decision of the present case to hold, as I do, that the power of the Court to make provision for a wife on the dissolution of her marriage is a necessary incident of the power to decree such a dissolution, conferred not merely in the interests of the wife, but of the public, and that the wife cannot by her own covenant preclude herself from invoking the jurisdiction of the Court or preclude the Court from the exercise of that jurisdiction.

36. The view that a freely negotiated and informed waiver of legal rights cannot oust the jurisdiction of the court is supported by the language of s. 11(2) and by the case law. Although the recent decision of this Court in Messier v. Delage, 1983 31 (SCC), [1983] 2 S.C.R. 401, did not involve a maintenance agreement, the Hyman principle underlies the view expressed by Chouinard J., speaking for the majority of the Court, that s. 11(1) orders can never be truly final. Chouinard J. described the implications of the scheme in s. 11 in the following passage at pp. 411‑12:

In the case at bar the issue turned exclusively on s. 11 of the Divorce Act. Subsection (2) of that section is concerned with four factors:

(a) the conduct of the parties;

(b) their respective conditions;

(c) their means;

(d) the other circumstances of either of them.

Section 11(2) states that an order may be varied from time to time or rescinded in light of the foregoing factors, which the Court must weigh against each other. In my opinion what is significant about this subsection is that an order is never final. It may be varied from time to time or rescinded if the Court thinks it fit and just to do so, taking these factors into consideration.

37. Hyman and Messier settle the narrow issue of the court's jurisdiction to intervene. However, they do not answer the broader question of when it is fit and just to exercise that jurisdiction having regard to the enumerated factors. Accordingly, the second observation I would make concerns the change in emphasis which has occurred since the enactment of the current legislation in 1968. The jurisprudence discloses a distinct movement away from the concept of moral blameworthiness or "fault" and towards a search for what is fair and reasonable having regard to all the circumstances of the parties including their means and needs.

38. Prior to 1968, the granting of a decree of divorce under the various legislative schemes operative throughout Canada was linked to the commission of a matrimonial offence. The 1968 Act consolidated several regimes into a single code and by and large preserved the concept of matrimonial fault as the measure of relief. However, it also introduced in s. 4 the criterion of permanent marriage breakdown as an alternative basis of relief. MacKeigan C.J. summarized the shift in attitude signalled by the new legislation in Connelly v. Connelly (1974), 1974 1319 (NS CA), 47 D.L.R. (3d) 535 (N.S.C.A.), at p. 539:

I respectfully agree with this implied recognition that the Canadian Divorce Act of 1968, 1967‑68 (Can.), c. 24, by making marriage breakdown the primary practical basis for divorce, has removed "blame" as a determining factor in maintenance. No longer is it necessary, if it ever was necessary, which may be doubted, to balance and assess relative degrees of "guilt". Certainly there is now no basis in the Act for applying a moralistic appraisal process to breakdown cases in general.

39. The judicial response however has by no means been uniform and, indeed, it would seem that the legislative direction in s. 11 to have regard to the "conduct of the parties" is inconsistent with the clear departure from culpability and punishment in s. 3. As Her Honour Judge Rosalie Abella has pointed out in Economic Adjustment On Marriage Breakdown: Support (1981), 4 F.L.R. 1, the introduction of the concept of marriage breakdown as a basis for divorce has made the court focus on the financial relationship of the parties during the marriage as being more relevant in determining what is a fit and just disposition of their assets than an apportionment of blame. She explains the trend at p. 6 in terms of the privacy rights of spouses:

Government really has no business assessing the moral quality of a marriage relationship to decide what economic consequences should flow from the marital behavior. The conduct should be relevant only insofar as it reveals a history of financial interaction which will likely predetermine monetary needs and capacities when the relationship ends.

Bayda J. (as he then was) expresses the same sentiment in Piasta v. Piasta (1974), 15 R.F.L. 137 (Sask. Q.B.), at p. 139:

I do not propose to dissect each petty squabble (and there were many) recounted in evidence and with respect to each squabble identify the victim and the victimizer, for I do not intend to penalize either one party or the other for supposed misbehaviour in the course of their unhappy married life. The circumstances here disclose matters, more material and important, that have to be looked at and examined if I am to make a "fit and just" order under s. 11 of the Divorce Act. It should be realized that whereas in times past when considering matters of maintenance great emphasis was placed upon the conduct of the parties, now a new order of priorities has been established and conduct does not occupy the position of prominence it once did. And I have no hesitation in saying that in the case now before me, a better use of the Court's time and counsel's would have been to concentrate on what really matters, the financial position of the family.

40. While the shift in focus away from moral blameworthiness is salutory, it renders the calculation of what is "fit and just" under s. 11 much more difficult and complex. The courts are required to analyze the pattern of financial interdependence generated by each particular relationship and devise a support order that minimizes as far as possible the economic consequences of the relationship's breakdown. In this sense, each case is sui generis as declared by this Court in Messier. However, the order made must meet a uniform standard of fairness and reasonableness. As Monnin J.A. (as he then was) stated in Katz v. Katz (1983), 1983 3679 (MB CA), 33 R.F.L. (2d) 412 (Man. C.A.), "fairness is the essential consideration". He then went on to dismiss the applicant's request for increased maintenance because in his view she could "reasonably live" on the current amount of periodic support and had failed to demonstrate "meritorious need". The Law Reform Commission of Canada in Family Law (1976) suggests at pp. 42‑43 that "reasonable needs" should be assessed upon a weighing of the following factors:

(a) the division of function in the marriage;

(b) the express or tacit understanding of the spouses that one will make financial provision for the other;

(c) custodial arrangements made with respect to the children of the marriage at the time of dissolution;

(d) the physical or mental disability of either spouse that affects his or her ability to provide for himself or herself; or

(e) the inability of a spouse to obtain gainful employment.

The Commission goes on to suggest that "A right to financial provision should continue for so long as the reasonable needs exist, and no longer; financial provision may be temporary or permanent".

41. The change in focus from apportionment of blame to an assessment of what is reasonable based on the needs and means of the parties applies both to orders made under s. 11(1) as in Connelly and variation orders made under s. 11(2) as in Katz. In the latter context the added criterion of change can thus be viewed in terms of changes in circumstance which make the original order no longer fair and reasonable.

42. The third and final observation I want to make concerns the significance under s. 11 of the fact that the parties have themselves agreed on the issue of maintenance. It is clear from the case law that this has to be an important factor in the court's consideration under either subs. (1) or (2). It is clear also that it has a significant impact on the degree or nature of the change in circumstances required to trigger the s. 11(2) discretion. Unfortunately, the extent of this impact has eluded definition. Blair J.A. in Webb v. Webb (1984), 1984 2110 (ON CA), 39 R.F.L. (2d) 113 (Ont. C.A.), summarizes at p. 131 the various attempts to do so:

Canadian courts have recognized, when making or varying maintenance orders pursuant to s. 11 of the Divorce Act, that a pre‑existing agreement cannot be "lightly disregarded", as Morden J.A. said in Harrington v. Harrington (1981), 1981 1762 (ON CA), 33 O.R. (2d) 150 at 154, 22 R.F.L. (2d) 40 at 45, 123 D.L.R. (3d) 689 (C.A.). A more rigorous test applies to the change of circumstances justifying a departure from the terms of an agreement, upon which a divorce decree is based, than applies to ordinary applications for variation under s. 11(2). A variety of words, phrases and epithets have been used to describe this higher standard including a "very significant change (of) circumstances" in Bjornson v. Bjornson (1970), 1970 1559 (BC CA), 2 R.F.L. 414 at 415 (B.C.C.A.), Davey C.J.B.C.; a "gross" change in Ditullio v. Ditullio (1974), 1974 581 (ON SC), 3 O.R. (2d) 519, 16 R.F.L. 148 at 151, 46 D.L.R. (3d) 66 (H.C.), DuPont L.J.S.C.; an "unexpected change ... quite outside the realization of expectations" in Burns v. Burns, 1963 157 (ON SC), [1963] 2 O.R. 142 at 146, 38 D.L.R. (2d) 572 (H.C.), Gale J.; and "not only some change in circumstances but conditions which arouse the conscience of the court, and call for action" in Poste v. Poste, 1973 462 (ON SC), [1973] 2 O.R. 674 at 676, 11 R.F.L. 264, 35 D.L.R. (3d) 71 (H.C.) Wright J.

43. The inevitable imprecision of such a standard has created great uncertainty and lies at the heart of the divergence of views expressed by the parties and by the courts below in the present appeal. An examination of the case law reveals that the spectrum of opinion ranges from an extremely restrictive approach, which would allow intervention only where children are at risk or where the agreement is unconscionable, to a very broad approach which gives the parties' agreement very little weight and affirms the position of the court as the arbiter of what is fair and reasonable.

44. These preliminary observations may be summed up as follows:

1. It is a well established principle that the court's supervisory jurisdiction over maintenance cannot be extinguished by contract.

2. The general trend of the case law in fashioning maintenance orders has been to move away from "fault" and achieve an arrangement that is fair and reasonable in light of all the circumstances of the parties including their means and needs.

3. While it is generally accepted that the existence of an antecedent settlement agreement made by the parties is an important fact, there is a wide range of views as to how this affects the legal principles governing the exercise of the discretion conferred in s. 11.

VI. Alternative Views

45. Lambert J.A.'s decision in the Court of Appeal reflects the view that an antecedent settlement agreement effectively restricts the power of the court under s. 11 of the Divorce Act. The clearest expression of this view is to be found in the judgment of the Ontario Court of Appeal in Farquar v. Farquar, supra, in which Zuber J.A. held that the courts should overturn a valid and enforceable maintenance agreement only in "a narrow range of cases".

46. A very different and arguably more paternalistic philosophy is manifest in judgments of the Manitoba Court of Appeal such as Newman v. Newman (1980), 1980 2594 (MB CA), 4 Man. R. (2d) 50 which minimize the importance of freedom of contract and impose on the parties a judicial standard of reasonableness notwithstanding their agreement to the contrary.

47. A third "compromise" view emerges from Webb where Blair J.A. suggests that the change in circumstances which triggers the court's discretionary power in s. 11(2) must be a "gross" or "catastrophic" change.

48. Finally, a fourth possibility is suggested by recurrent references in the case‑law to specific categories of change as a justification for judicial intervention rather than simply change of a certain magnitude.

A. The "Private Choice" Approach

49. In Farquar the respondent wife expressly waived her right to maintenance in the minutes of settlement which were incorporated in the divorce decree. A year later she applied for a s. 11(2) variation and was granted a lump sum order. The husband appealed. Zuber J.A., for a unanimous court, agreed that the maintenance provisions imposed by the trial judge were much more appropriate than those arrived at by the parties in the minutes of settlement. However, he found that that was not the issue before him; the issue before him was whether the settlement should be respected and precluded judicial intervention.

50. Zuber J.A. started with the proposition that it is preferable for parties to settle their own affairs. He gave a number of reasons for this including that (1) the parties are more likely to accept and live with an arrangement they have made themselves as opposed to one imposed upon them; (2) the administrative burden of the courts is relieved by respecting the parties' freedom of contract; and (3) treating the agreement reached by the parties as final allows them to plan their separate futures with relative peace of mind. In this last regard Zuber J.A. quoted from Anderson J.'s decision in Dal Santo v. Dal Santo, supra, at p. 120:

It is of great importance not only to the parties but to the community as a whole that contracts of this kind should not be lightly disturbed. Lawyers must be able to advise their clients in respect of their future rights and obligations with some degree of certainty. Clients must be able to rely on these agreements and know with some degree of assurance that once a separation agreement is executed their affairs have been settled on a permanent basis. The courts must encourage parties to settle their differences without recourse to litigation. The modern approach in family law is to mediate and conciliate so as to enable the parties to make a fresh start in life on a secure basis. If separation agreements can be varied at will, it will become much more difficult to persuade the parties to enter into such agreements.

Zuber J.A. also observed that property issues and maintenance issues are nowadays frequently intertwined in the terms of a settlement. Thus, it might be quite unfair to alter the provisions for maintenance without also altering the division of property.

51. Zuber J.A. acknowledged that there were nevertheless two kinds of circumstance in which a settlement is not binding. The first is where the settlement is invalid according to traditional common law or equitable doctrines. The second is comprised of "that narrow range of cases where a court will relieve against a matrimonial settlement even though the contract is valid" (p. 252). Unfortunately, Zuber J.A. did not find it necessary to elaborate on this "narrow range of cases" other than to reject the notion that change by itself is a determining factor. In this regard he said at p. 253:

In my respectful view, changed circumstances, even substantially changed circumstances, are not a sufficient basis for avoiding the minutes of settlement. It is inevitable that the circumstances of the contracting parties will change following the agreement. If the change of circumstances would allow a party to avoid an otherwise enforceable agreement, then it is apparent that no separation agreement or minutes of settlement can ever finally resolve anything. If the parties agree to settle their affairs, then their affairs should be regarded as settled. Changed circumstances, however, are not irrelevant. If the agreement is vulnerable on some other basis the new circumstances of the parties will be a factor in the determination of the amount of maintenance.

Zuber J.A. applied these principles to the case before him and concluded that the Court had no basis on which to intervene and that the settlement freely negotiated by the parties should be respected.

B. The Court's Overriding Power

52. The core values underlying the approach in Farquar are those of individual responsibility and freedom of contract. An opposing view is to be found in the judgments of the Manitoba Court of Appeal in Newman v. Newman, supra, Katz v. Katz, supra, and Ross v. Ross (1984), 1984 2924 (MB CA), 39 R.F.L. (2d) 51. In this line of cases the Court asserts its supervisory role and finds that it is not significantly constrained by the presence of a binding agreement. Although the Court often acknowledges that the existence of an agreement is an important circumstance to be considered and that finality in the ordering of post‑marital obligations is a laudable objective, a finding that the agreement does not meet the court's standard of fairness or reasonableness justifies an exercise of the s. 11(2) power.

53. In Newman, Monnin J.A. (as he then was), Matas J.A. concurring, considered the relevance of a prior separation agreement to a s. 11(1) order for maintenance and stated at p. 52:

I have always been and still am of the view that under Sec. 11 of the Divorce Act, a court can do what it thinks proper under the circumstances with respect to maintenance for the wife and children and the hands of the court cannot be fettered by a written agreement executed by the parties. It is clear though that, in order to encourage at all times this type of settlement, rather than to encourage litigation between the spouses, the court should not lightly disturb the terms of a duly negotiated contract. But if the court feels that there is need for change, it allows it.

The agreement in question provided inter alia that the wife was to receive maintenance of $450 per month. At the hearing the wife argued that the payments were inadequate. The Court, on finding that the husband could "without difficulty" afford to pay more, raised the rate to $650 per month. O'Sullivan J.A. registered a strong dissent criticizing the decision in Hyman and urging the Manitoba Court to follow the English Court of Appeal's decision in Gandy v. Gandy (1882), 7 P.D. 168 which held that a contract should not be interfered with unless one of the parties has acted in a way which disentitles him or her to rely upon its terms. O'Sullivan J.A. construed the s. 11 power to vary maintenance orders as a power to award an amount for maintenance over and above the terms of an agreement if appropriate. He stated that where children are involved or where there is a danger that one of the parties will become a public charge, public policy considerations might favour an increase in maintenance. Otherwise, respect for the parties' contract should be the rule.

54. In Katz, Monnin J.A. and Hall J.A. in separate reasons both acknowledged that the agreement entered into by the parties was a factor to be considered but went on to suggest that, where the dependent spouse can demonstrate a need, a variation could be granted. Hall J.A. rejected the trial judge's test of "moving hardship" in the following passage at p. 422:

With great respect, it is my opinion that it is both fit and just to grant the wife a variation, having regard to the change in her circumstances and the presumed financial ability of the husband to afford those changes. Indeed, I am sure he would want to make them if the law so provides, notwithstanding that the settlement agreement is being varied.

In my view, the test is what is reasonable rather than one of moving hardship. What is the just course for the husband to follow? The settlement agreement is only a factor to be taken into account and is not conclusive of the issue of variation.

55. This broad approach to the court's discretion under s. 11 has recently been affirmed in Ross. In that case the parties negotiated a settlement which in the court's view did not reflect the husband's relatively extensive financial resources. There was evidence that during the negotiations the husband pressured the wife with threats into accepting his offer. However, the wife did have assistance from independent counsel before executing the contract and in fact a certificate of independent legal advice was attached to the agreement. Hall J.A., with whom Monnin C.J.M. and O'Sullivan J.A. concurred, after stating that the contract was an "important circumstance" and should not be "lightly disturbed", went on to hold at p. 54:

But where, as here, there exists an unfair and unbalanced settlement arrived at in the circumstances described, I think the learned trial judge was justified in making the award which he did. In other words, it was reasonable in the circumstances for him to have added a lump sum award maintenance to that provided in the separation agreement.

56. Matas J.A. also approved of the trial judge's test of what is fair and reasonable. His reasons, however, are especially useful in that he discussed the underlying rationale for advocating a larger role for the courts. At page 64 he wrote:

In my opinion, we have not yet reached the stage where we can safely say that generally husbands and wives are equal or nearly so, in earning capacity, or where we can necessarily say that generally the responsibilities of marriage have not disadvantaged the earning potential of the wife. In many cases, especially of more recent marriages, the courts could rely on the fairness of imposing an obligation on the wife to quickly become self‑supporting. In some cases, the court could not.

Only Huband J.A. in dissent took issue with the broad flexible approach of the majority. He wrote at p. 68:

I subscribe to the general statement in the reasons of Hall J.A. that the court has the right to depart from the terms of a separation agreement under certain circumstances. Differences, however, arise in attempting to determine those proper circumstances. As Hall J.A. has noted, the presence of a separation agreement is an important circumstance for the court to take into account when exercising jurisdiction under s. 11(1) of the Divorce Act, R.S.C. 1970, c. D‑8. The question is no longer what is reasonable maintenance, but, rather, what is reasonable maintenance, given that the parties have executed an agreement to determine that issue? Normally, a separation agreement constitutes a formidable limitation on the court's discretion. If it were not so, there would be no point in parties bothering to negotiate an out‑of‑court maintenance agreement.

What is reasonable maintenance must be determined in light of a valid, voluntary separation agreement. Conversely, it is prima facie unreasonable for a party to such an agreement to take benefits under the contract and then seek court assistance to obtain more favourable maintenance arrangements.

And later at pp. 73‑74:

With respect, I do not think that the fact that a separation agreement is, or seems to be, unfair to one of the parties, is a sufficient foundation for the court to vary the terms of a separation agreement. There are many contracts which, in retrospect, may be viewed as "unfair" to one of the contracting parties, but that is not, of itself, in law or in equity, a basis for altering the agreement.

Huband J.A. went on to find that the application to vary should be dismissed.

57. In summary, the Manitoba decisions do not distinguish in any significant manner between applications for maintenance in the face of an antecedent agreement and applications in which there is no such agreement. The court exercises its discretion on the basis of what it considers fair and reasonable whether or not the parties have, in effect, settled their own financial affairs.

C. The Compromise

58. In some cases an attempt has been made by the courts to forge a middle ground between the Farquar and Ross approaches by holding that, when there is an antecedent agreement, the s. 11(2) criterion of change can only be satisfied by a change of considerable magnitude. The courts which apply this standard often attempt to rationalize judicial intervention in terms of contract principles by describing such a change as one which negates a fundamental assumption upon which the original agreement was premised.

59. Wong L.J.S.C.'s decision at trial is an illustration. He regarded Mrs. Pelech's current impoverishment as a "gross" change in circumstances. In addition, he seems to suggest that the contractual arrangements were predicated on Mrs. Pelech's employability and eventual self‑sufficiency. Time did not bear out that prediction. Although Wong L.J.S.C. does not expressly find that this vitiates the agreement, it seems to be an important legitimating factor in his ultimate decision to intervene.

60. The emphasis on the magnitude of the change is also at the root of the Ontario Court of Appeal's decision in Webb. The parties in Webb entered into an agreement in 1981 which made ample provision for the wife and which expressly stated that the periodic payments were not subject to variation. Shortly after the issuance in 1982 of a decree nisi incorporating the agreement (minus the non‑variation clause), the husband experienced a catastrophic and unforeseeable financial loss. He applied to vary the maintenance award. His application was dismissed at trial.

61. Arnup J.A., with whom Weatherston J.A. concurred, allowed Mr. Webb's appeal. He maintained that Zuber J.A.'s statement in Farquar that change, even if it is substantial, is not a sufficient basis for avoiding the terms of a valid agreement, did not extend to all change regardless of magnitude. Rather, he interpreted Zuber J.A.'s proposition as simply imposing an extremely heavy onus on the party seeking the variation. He found, therefore, that there was no distinction in principle between the views of the Ontario Court of Appeal and those of the Manitoba Court of Appeal as expressed in Ross. In addition, like Wong L.J.S.C., Arnup J.A. reinforced his decision by alluding to the lack of a factual basis at the time of the application to support the assumptions implicit in the separation agreement. In the present appeal Wong L.J.S.C., before concluding that the maintenance provision should be varied, emphasized the expectation of the parties that Mrs. Pelech would be employable, something which had not happened. In Webb, Arnup J.A. pointed to the belief that the husband would be in receipt of large amounts of capital in the future. Like Mrs. Webb's employability the capital did not materialize and Arnup J.A. accordingly concluded that the contract should be varied.

62. Blair J.A., in separate reasons, concurred in Arnup J.A.'s disposition of the case. He reviewed the jurisprudence and agreed that Farquar does not preclude a court from exercising its power where there has been a "profound change". He added that even in the absence of such change the courts will intervene in a "narrow range of cases where public policy is offended if [the agreement] makes a spouse a public charge, deprives children or is unconscionable" (p. 145).

D. Specific Categories of Change

63. Blair J.A.'s enumeration of separate categories of change in Webb suggests a fourth approach. Indeed, in several cases the courts have justified upsetting the terms of a valid agreement because of the nature rather than the degree of change experienced by the applicant. As Blair J.A.'s comments suggest, the cases can be divided into at least three separate types: where the applicant has become a public charge, where the terms of the existing agreement cause deprivation to children, and where the agreement is unenforceable on other grounds.

64. (1) Public Charge

65. In the present case the appellant, Mrs. Pelech, has become a public charge. As Professor Julien D. Payne points out in his article "Policy Objectives of Private Law Spousal Support Rights and Obligations" in K. Connell‑Thouez and B. M. Knoppers (eds.), Contemporary Trends in Family Law: A National Perspective (1984), the factual circumstance of an applicant's dependence on the state for sustenance is often an unspoken but influential element in the private law response to maintenance claims. He states at pp. 86‑87:

The conservation of public funds is a commonly unacknowledged objective of the private law system of spousal and child support. Indeed, the private law system is premised on the foundation that the primary family support obligation falls on the individual, not on the State. It is only when this obligation is not, or cannot be, discharged by the individual that the State intervenes to provide a subsistence level of financial support for the economic victims of marriage breakdown and divorce. Even in this latter context, the need to protect the public purse has been legislatively recognized in the province of Alberta and elsewhere. There are statutory provisions that authorize (or require) the appropriate authorities to obtain reimbursement for social assistance payments made to dependent spouses and children from the financially independent spouses and parents upon whom the primary obligation for family support is imposed by the private law system.

The Scottish Law Commission has emphatically rejected the conservation of public funds as an appropriate objective of the law regulating spousal financial provision on divorce. It stressed that the whole point of divorce is to sever the relationship between husband and wife and to require former spouses to maintain each other is contrary to this objective.

In contrast, the Institute of Law Research and Reform in the province of Alberta has stated:

The principal objective of the system of support obligations is to obtain money for spouses and children who need it. The importance of that objective can hardly be over‑emphasized. As we have already said, a second objective is to reimburse the state (in this case, the province) for the cost of providing such support when the other spouse, or a parent, can provide all or part of the necessary money but does not do so.

66. An examination of Hyman reveals that part of the rationale for the principle expressed in that case that the court's jurisdiction cannot be extinguished by contract relates to the concern for burdening public funds. Lord Hailsham L.C., in discussing the court's power to compel a husband to provide for his wife upon divorce, stated at p. 608:

Such a provision is not made solely in the interests of the wife, but also in the interests of third parties who may deal with the wife or who may, as in the case of Poor Law Guardians, become responsible for her sustenance.

67. One can surmise from this that Lord Hailsham L.C.'s reference to the public interest in his concluding statement quoted in the earlier part of these reasons is a reference to the interest in having husbands rather than the state support indigent ex‑spouses. Lord Atkin's accompanying reasons are, if anything, even more explicit. He states at pp. 628‑29:

The necessity for such provisions is obvious. While the marriage tie exists the husband is under a legal obligation to maintain his wife. The duty can be enforced by the wife, who can pledge his credit for necessaries as an agent of necessity, if, while she lives apart from him with his consent, he either fails to pay her an agreed allowance or fails to make her any allowance at all; or, if she lives apart from him under a decree for separation, he fails to pay the alimony ordered by the Court. But the duty of the husband is also a public obligation, and can be enforced against him by the State under the Vagrancy Acts and under the Poor Relief Acts. When the marriage is dissolved the duty to maintain arising out of the marriage tie disappears. In the absence of any statutory enactment the former wife would be left without any provision for her maintenance other than recourse to the poor law authorities. In my opinion the statutory powers of the Court to which I have referred were granted partly in the public interest to provide a substitute for this husband's duty of maintenance and to prevent the wife from being thrown upon the public for support. If this be true, the powers of the Court in this respect cannot be restricted by the private agreement of the parties....The wife's right to future maintenance is a matter of public concern, which she cannot barter away.

68. In Canada the leading case in this regard is Fabian v. Fabian (1983), 1983 4443 (ON CA), 34 R.F.L. (2d) 313 (Ont. C.A.) In that case a separation agreement was entered into which did not provide for the support or maintenance of the wife. The husband was ordered to pay spousal support in the course of the subsequent divorce proceedings. His appeal of the order was dismissed by a unanimous court. Lacourcière J.A. held at p. 316:

We are also satisfied that it is incumbent on the court to have regard to the interest of the public as well as to that of the deserving spouse. A spouse's primary obligation and duty of maintenance should be enforced when necessary to prevent the other spouse from having to seek or continuing to receive public support....

69. This statement was recently put forward as a principle of law by Filer L.J.S.C. in Barrett v. Barrett (1985), 1985 5088 (ON SC), 43 R.F.L. (2d) 405 (Ont. H.C.), a case which also turned on the effect of a contract in light of an ex‑spouse's dependence on public assistance. Filer L.J.S.C. reviewed the case law at pp. 417‑18:

In his reasons in the Webb case, Arnup J.A. (with whom Weatherston J.A. concurred) stated at p. 467 O.R., p. 127 R.F.L.:

"...the burden of showing that the interests of justice require the intervention of the court is a very heavy one..."

At p. 473 O.R., p. 133 R.F.L., Blair J.A. lists:

"...three situations which are clearly accepted as justifying a departure from the terms of a separation agreement in the decree nisi even though there has been no change in circumstances:

(1) Where the failure to provide maintenance in the agreement is likely to result in a spouse becoming a public charge the courts have frequently refused to be bound by the agreement: Fabian v. Fabian (1983), 1983 4443 (ON CA), 34 R.F.L. (2d) 313 (Ont. C.A.)".

See also Hall v. Hall (1979), 1979 540 (BC SC), 13 R.F.L. (2d) 77 at 79 (B.C.S.C.):

"Maintenance is not only for the benefit of the wife but also for the benefit of the general public in the sense that it may relieve the public from supporting a divorced spouse."

In Collins v. Collins (1978), 1978 652 (AB SCTD), 2 R.F.L. (2d) 385 at 392, 5 Alta. L.R. (2d) 315, 10 A.R. 214 (T.D.), Dechene J. stated "...the public has an interest in assuring that spouses do not become public charges."

He then concluded at p. 418:

The consequences of her return and her present circumstances are so serious that they necessitate the plaintiff's partial reliance at this time upon welfare assistance. On the evidence, there was a period of some four months where she was even more dependent on welfare. In the circumstances this court is bound to act to vary the amount of maintenance being provided for the plaintiff wife, in accordance with the principles enunciated in Fabian v. Fabian, supra, and cited with approval by Blair J.A. in the case of Webb v. Webb, supra.

70. However, there is also some indication of judicial dissatisfaction with the public charge basis for intervention. Although it was not directly relevant to the case before him, Kerans J.A. in Jull v. Jull (1984), 1984 51 (AB CA), 42 R.F.L. (2d) 113 (Alta. C.A.), expressed the view that such intervention was inconsistent with the current trends in the jurisprudence. He wrote at p. 116:

At least until recently, the "public purse" exception was well established. The leading case is Hyman v. Hyman, [1929] A.C. 601 (H.L.), where Lord Atkin said at p. 628: "But the duty of the husband is also a public obligation..." and, at p. 629, that the power of the court to override an agreement was "...granted partly in the public interest to ... prevent the wife from being thrown upon the public for support". This rule has come to be doubted. Sinclair J.A., as he then was, suggested in Goldstein v. Goldstein, 1976 ALTASCAD 95, [1976] 4 W.W.R. 646 at 656, 23 R.F.L. 206, 67 D.L.R. (3d) 624 (Alta. C.A.), that:

"...it is my view that Parliament did not intend that after divorce the divorced spouses were to be forever contingently liable for the support of each other."

A minority of the Supreme Court of Canada in Messier v. Delage, 1983 31 (SCC), [1983] 2 S.C.R. 401, 35 R.F.L. (2d) 337, 2 D.L.R. (4th) 1, 50 N.R. 16, affirmed and enlarged upon this point of view. The majority decided the case on the narrow ground that the order under appeal was improperly speculative. Chouinard J. added [at pp. 416‑17]:

"That does not mean that the obligation of support between ex‑spouses should continue indefinitely when the marriage bond is dissolved, or that one spouse can continue to be a drag on the other indefinitely or acquire a lifetime pension as a result of the marriage, or to luxuriate in idleness at the expense of the other, to use the expression one finds in some discussions of the subject..."

However, as the facts were such that the exception did not arise in the case before him, Kerans J.A. found it unnecessary to pursue the matter further.

71. (2) Indirect Deprivation of Children

72. The second category mentioned by Blair J.A. in Webb is made up of cases in which the terms of a valid and binding agreement adversely affect the well‑being of children in the custody of the dependent ex‑spouse. While it is fairly clear that a parent cannot barter away his or her child's entitlement to parental support, and thus the courts may always intervene to change agreed terms relating to child support, the more difficult question is whether the courts should acknowledge the reality that the nurture of children is inextricably intertwined with the well being of the nurturing parent. Thus, in some circumstances a denial of spousal maintenance will result in the deprivation of the children of the marriage.

73. I suggested an affirmative answer to this question in "The Variation of Support Orders", in Rosalie S. Abella and Claire L'Heureux‑Dubé (eds.), Family Law: Dimensions of Justice (1983), and there is now some support for it in the case law.

74. In Jull v. Jull, supra, the parties entered into an agreement at the time of divorce which gave custody of the children to the wife as well as more than her share of the matrimonial assets. The wife waived her claim to maintenance and the husband undertook to pay child support. At the time the wife ran a profitable business. However, two years later because of a downturn in the economy her business suffered a loss. She had no other source of income. She applied to vary the divorce decree in order to obtain spousal maintenance and increased child maintenance.

75. Kerans J.A. for the Court of Appeal examined the various approaches. As mentioned earlier, he expressed dissatisfaction with the notion that an applicant's dependence on public assistance is a justification for judicial interference with the parties' contract. He then quoted from the authorities favouring freedom of contract in the interest of finality and concluded at p. 118:

I am inclined to agree that the standards for interference offer too little security to contractual arrangements and must tend to discourage settlements at least where both spouses keep their careers throughout the marriage and there are no children. In such cases, it is curious that we would refuse to enforce a bargain arrived at by two competent and informed equals, and I think that the Alberta courts have tended to affirm this view.

76. Kerans J.A. also pointed out that it could reasonably be assumed that the wife's waiver of spousal maintenance was given partly in consideration for an unequal division of assets in her favour. In his view this was a circumstance which spoke strongly against interference. However, he went on to find that the issue of spousal support could not be disentangled from the issue of child support. He wrote at pp. 118‑19:

On the other hand, one cannot, in this case, treat spousal maintenance in isolation from the problem of support for the children. The figure ordered directly in the name of the children was, apparently, settled by consent. This does not deprive the court, however, of jurisdiction to make a different order. The comfortable standard of living previously offered to these children by these parents could not possibly be maintained at $150 or indeed at $225 monthly. These awards assume that somebody is making a major contribution by some other means. An examination of the $1,800 monthly expenditure of the mother demonstrates that the bulk is expended for the children. This is not a case where the mother has received a handsome property settlement or lump sum maintenance to provide for such expenses. It is a proper case to accept and apply this observation by Wilson J. ["The Variation of Support Orders", op. cit.] (at p. 42):

"While it may make sense in principle to differentiate between the enforceability of separation agreements as they affect child maintenance as opposed to spousal maintenance, I wonder whether as a practical matter we may not to some extent be deluding ourselves when we do this. A family is an indivisible economic unit. When a needy spouse is denied maintenance because she has unwisely, but freely, bargained her rights away, the children who live with that spouse inevitably are affected adversely. Anderson J. of the British Columbia Supreme Court in Sumner v. Sumner (1973), 1973 1949 (BC SC), 12 R.F.L. 324 at 325, recognized the realities of the situation:

`In conclusion, I wish to add that in my opinion the children have a right to an increased standard of living, in accordance with the combined increase in the earnings of their parents. This increase in the standard of living cannot be limited to the children. The family unit cannot be divided into parts so that the standard of living of the children increases while that of their mother, who maintains and cares for them, remains the same. This will be so even if the petitioner would not have been entitled to increased maintenance for herself had the children remained with and been maintained by the father.' "

Kerans J.A. accordingly granted the wife's appeal and made an order for spousal maintenance.

77. The principle in Jull was also applied in the Nova Scotia Family Court in Binns v. Binns (1985) 1985 5084 (NS FC), 45 R.F.L. (2d) 369. As in the former case, the wife in Binns obtained custody of the children of the marriage and waived her right to spousal maintenance in a separation agreement. A few years later the wife left her job in order to care for her children full time. The husband agreed to increase his child support payments. As well, the wife sought spousal maintenance for herself under s. 11(2). Butler Fam. Ct. J. granted the application. He commented on Jull as follows at p. 374:

It is interesting to note that the Court of Appeal of Alberta took this action in spite of the minutes of settlement. What is more interesting is that the court linked the mother to the children. The children being deprived because of the mother's dire circumstances brought the matter to the court's attention and she was granted her maintenance. There appears to have been no concern about the fact that a benefit was being conferred on the mother as long as the children benefited.

78. (3) Unconscionability

79. Blair J.A.'s third category comprises cases in which the maintenance provisions are part of an invalid and unenforceable contract. Zuber J.A. treats this as a separate category entirely and I think rightly so. If the contract is invalid then the question as to whether or not the court should defer to its terms disappears. Thus, unconscionability in the technical sense, it seems to me, is not properly a part of this discussion. However, I would like to address the comment of Lambert J.A. that unconscionability is only indirectly relevant to a s. 11(2) application since the order made under s. 11(1) would not be a nullity even if the agreement it incorporated was found to be unconscionable. While this is technically correct, it seems to me that a court in these circumstances would legitimately feel less constrained in exercising its power to vary, the rationale for judicial restraint being deference to presumably valid arrangements. Conversely, I agree with Zuber J.A.'s view in Farquar that, where the incorporated agreement is valid, the fact of its incorporation into the order does not add much weight. What is important is the fact that the parties endeavoured to settle their obligations through negotiation rather than litigation and arrived at a valid and enforceable agreement.

VII. Conclusions

80. The need to compensate for systemic gender‑based inequality advanced by Matas J.A. in Ross forms a counterpoint to the need for finality identified by Anderson J. in Dal Santo and approved by Zuber J.A. in Farquar and Lambert J.A. in the present appeal. The Alberta Court of Appeal in Jull describes the tension in terms of the competing values of fairness and freedom. While I am in sympathy with Matas J.A.'s concern, I believe that the case by case approach and the continuing surveillance by the courts over the consensual arrangements of former spouses which he advocates will ultimately reinforce the very bias he seeks to counteract. In addition, I believe that every encouragement should be given to ex‑spouses to settle their financial affairs in a final way so that they can put their mistakes behind them and get on with their lives. I would, with all due respect, reject the Manitoba Court of Appeal's broad and unrestricted interpretation of the court's jurisdiction in maintenance matters. It seems to me that it goes against the main stream of recent authority, both legislative and judicial, which emphasizes mediation, conciliation and negotiation as the appropriate means of settling the affairs of the spouses when the marriage relationship dissolves.

81. However, as I stated at the outset, the Hyman principle that parties cannot by contract oust the jurisdiction of the court in matters of spousal maintenance is an established tenet of Canadian law. The question thus becomes the nature and extent of the constraint imposed on the courts by the presence of an agreement which was intended by the parties to settle their affairs in a final and conclusive manner. The Webb standard of catastrophic change (by which is meant, I believe, that the change must be "dramatic" or "radical" or "gross", not that it must be the result of a catastrophy) is one attempt to reconcile the competing values represented by Farquar and Ross and still remain within the ambit of the Hyman principle and the language of the statute. However, although I agree that radical change should be an important factor in a court's decision to interfere with freely negotiated minutes of settlement, by itself it provides too imprecise a standard. It fails to relate the change in any way to the fact of the marriage so as to justify attributing responsibility for it to the former spouse. Moreover, the legitimation offered in Webb and by Wong L.J.S.C. in the present appeal in terms of a change which negates a fundamental premise of the contract provides no guidance whatsoever in cases of totally unexpected and unanticipated misfortunes.

82. The approach taken by Zuber J.A. in Farquar also falls short of articulating a workable criterion by failing to identify the requisites of the "narrow range of cases". I do, however, agree with Zuber J.A.'s emphasis on the importance of finality in the financial affairs of former spouses and that considerable deference should be paid to the right and the responsibility of individuals to make their own decisions.

83. It seems to me that where the parties have negotiated their own agreement, freely and on the advice of independent legal counsel, as to how their financial affairs should be settled on the breakdown of their marriage, and the agreement is not unconscionable in the substantive law sense, it should be respected. People should be encouraged to take responsibility for their own lives and their own decisions. This should be the overriding policy consideration.

84. The test of radical change in Webb is an attempt to carve a fairly narrow exception to the general policy of restraint. It fails, however, in my opinion in one important particular. It makes the mere magnitude of the change the justification for the Court's intervention and takes no account of whether or not the change is in any way related to the fact of the marriage. In order to impose responsibility for changed circumstances on a former spouse it seems to me essential that there be some relationship between the change and the marriage. Matas J.A. hinted at this in Ross. In the case of a wife who has devoted herself exclusively to home and children and has acquired no working skills outside the home, this relationship is readily established. The former spouse in these circumstances should have a responsibility for a radical change in his ex‑wife's circumstances generated as a consequence of her total dependency during the period of the marriage. By way of contrast, a former spouse who simply falls upon hard times through unwise investment, business adversity, or a life style beyond his or her means should not be able to fall back on the former spouse, no matter how radical the change may be, simply because they once were husband and wife.

85. Absent some causal connection between the changed circumstances and the marriage, it seems to me that parties who have declared their relationship at an end should be taken at their word. They made the decision to marry and they made the decision to terminate their marriage. Their decisions should be respected. They should thereafter be free to make new lives for themselves without an ongoing contingent liability for future misfortunes which may befall the other. It is only, in my view, where the future misfortune has its genesis in the fact of the marriage that the court should be able to override the settlement of their affairs made by the parties themselves. Each marriage relationship creates its own economic pattern from which the self‑sufficiency or dependency of the partners flows. The assessment of the extent of that pattern's post‑marital impact is essentially a matter for the judge of first instance. The causal connection between the severe hardship being experienced by the former spouse and the marriage provides, in my view, the necessary legal criterion for determining when a case falls within the "narrow range of cases" referred to by Zuber J.A. in Farquar. It is this element which is missing in Webb. Accordingly, where an applicant seeking maintenance or an increase in the existing level of maintenance establishes that he or she has suffered a radical change in circumstances flowing from an economic pattern of dependency engendered by the marriage, the court may exercise its relieving power. Otherwise, the obligation to support the former spouse should be, as in the case of any other citizen, the communal responsibility of the state.

VIII. Disposition of the Appeal

86. The dependency of the appellant Mrs. Pelech on social assistance is evidence of the extremity of her need. In addition, there are the observations of Wong L.J.S.C. at trial that her impoverishment is dire and her future prospects limited if not non‑existent. However, although I agree with him that her present state evidences "a gross change in circumstances" since the time of the original order incorporating the minutes of settlement in 1969, no link is found by the trial judge between the change of circumstances and her former marriage to Mr. Pelech. Indeed, quite the contrary. Wong L.J.S.C. found that the psychological problems which have resulted in her inability to care for herself pre‑dated the marriage and contributed to its failure. He specifically rejected the submission that they stemmed from the marriage or from the behaviour of the respondent during it.

87. Wong L.J.S.C. also rejected the submission that the agreement was improvident and unconscionable. He found that it was entered into freely by Mrs. Pelech on the advice of counsel and was perfectly fair at the time it was made. He found, however, that the basic premise on which it was entered into, namely that Mrs. Pelech would be able to work and support herself, had not materialized.

88. While I realize that Mrs. Pelech's present hardship is great, to burden the respondent with her care fifteen years after their marriage has ended for no other reason than that they were once husband and wife seems to me to create a fiction of marital responsibility at the expense of individual responsibility. I believe that the courts must recognize the right of the individual to end a relationship as well as to begin one and should not, when all other aspects of the relationship have long since ceased, treat the financial responsibility as continuing indefinitely into the future. Where parties, instead of resorting to litigation, have acted in a mature and responsible fashion to settle their financial affairs in a final way and their settlement is not vulnerable to attack on any other basis, it should not, in my view, be undermined by courts concluding with the benefit of hindsight that they should have done it differently.

89. For these reasons I would dismiss the appeal. I would make no award as to costs.

The following are the reasons delivered by

90. La Forest J.‑‑This case is concerned with the nature of "the change in the conditions, means or circumstances" that will, under s. 11(2) of the Divorce Act, R.S.C. 1970, c. D‑8, justify a court in ordering a variation of an order for maintenance made under s. 11(1) of that Act. I have had the advantage of reading the judgment of my colleague, Justice Wilson, and I agree with her proposed disposition of this case. I also agree with her reasons for judgment regarding the jurisdictional issues and, subject to the remarks in this judgment and in my judgment in the companion case of Richardson v. Richardson, 1987 58 (SCC), [1987] 1 S.C.R. 857, with those regarding the meaning and effect of s. 11(2) as well. It may be useful, however, for me to succinctly set forth my views on some of the central issues in my own words.

91. Inherent in the nature of divorce is the element of finality. Spouses wish to put an end to their relationship and Parliament has provided a legal procedure for doing so. All aspects of the marital relationship should, as much as possible, come to an end on divorce. As Lamer J., McIntyre and Wilson JJ. concurring, put it in Messier v. Delage, 1983 31 (SCC), [1983] 2 S.C.R. 401, at p. 421: "If the divorce terminates the marriage, it is desirable that the Divorce Act should apply to ensure the termination of all relations, even those that are financial, provided‑‑this must be borne in mind‑‑that such a thing is possible." Lamer J. was dissenting in that case, but I see no real difference on this point between him and Chouinard J. who gave the majority judgment. At page 416, Chouinard J., speaking of the situation in that case, made it clear that "the obligation of support between ex‑spouses should [not] continue indefinitely when the marriage bond is dissolved, or that one spouse can continue to be a drag on the other indefinitely...".

92. Yet as the proviso in Lamer J.'s judgment indicates, it is often not possible for all financial ties to be severed on divorce, and it becomes necessary to "require that the former spouse who does not have an economic need created by the marriage to assist the one who has such a need to become financially rehabilitated". (The words are those of the Law Reform Commission of Canada in its Working Paper No. 12, Maintenance on Divorce (1975), p. 30, which is cited with approval by Lamer J. at pp. 421‑22.) Moreover, both the Commission and Lamer J. recognize that in some cases maintenance must be permanent.

93. Section 11(1) provides for all these eventualities with its intentional flexibility, to use Chouinard J.'s phrase. In some respects, it is true, as he points out, that a maintenance award is never final, for Parliament has by s. 11(2) provided for variations to maintenance orders where there is any change in the conditions, means of other circumstances of the parties. Chouinard J.'s words must, however, be read in the context in which they were made, one involving periodic maintenance where the wife had as yet been unable to find employment following the divorce.

94. The situation here is entirely different. Where the parties have attempted to finally settle their financial situation and a court, in the exercise of its discretion under s. 11(1), has confirmed that settlement as being "fit and just", the element of finality inherent in divorce and in such an arrangement must be respected in the absence of the most cogent reasons. As Wilson J. has stated extrajudicially, "The court applied to must start off with the premise that the order sought to be varied was a proper one when made"; see her paper, "The Variation of Support Orders" in Rosalie S. Abella and Claire L'Heureux‑Dubé (eds.), Family Law: Dimensions of Justice (1983), p. 35, at p. 36. Here it is not argued that the original order was inequitable. The trial judge stated that viewed objectively, even in retrospect, he could not say the settlement was unfair.

95. Where, in my view, the trial judge erred was in the changes he took into account in ordering a variation. There were undoubtedly marked changes in the fortunes of the parties. Mr. Pelech's affairs prospered and he is now a wealthy man. By contrast, Mrs. Pelech, owing to ill health, is unable to work and is now receiving public assistance. But neither the affluence of the one nor the poverty of the other is really attributable to the marriage or the marriage settlement. They arise, rather, from circumstances unconnected with them.

96. So far at least as spousal maintenance is concerned, I agree with Wilson J. that in employing the phrase "any change" in s. 11(2), Parliament did not have in mind changes having no real causal connection with the marriage relationship or the settlement. Broad general words like these must, of course, be read in context and in light of the intention of Parliament. What Parliament has sought to do by the Divorce Act is to bring an end to the marriage while providing a mechanism to apportion equitably the burden of the economic disadvantages that may have resulted to a spouse by reason of the marriage. Mrs. Pelech's misfortune has resulted in her being a charge on the public purse. But that is no reason to transfer that burden to Mr. Pelech simply because he has had good fortune. The obligation to support her in such a case is on the public. This is not a case, as in my view Richardson is, where the poverty of the spouse results from the marriage.

97. It is not so much that the changes in circumstances are not radical that is important here, but that these changes are irrelevant to the nature of the change required to warrant a variation. I might add that I agree that the changes will usually need to be of a highly significant character to warrant a variation of a settlement incorporated in an original maintenance order. However, I can imagine cases beyond those of unconscionability in the technical sense where it is not so much the dimensions of the change as the circumstances existing at the time the original order was made that will warrant the making of a variation, but these too will be highly exceptional cases.

98. For these reasons, I would dispose of the appeal in the manner proposed by Wilson J.

Appeal dismissed.

Solicitors for the appellant: Buffam, Hall, Victoria.

Solicitors for the respondent: Stewart, Aulinger & Company, Vancouver.