Richardson v. Richardson, 1987 CanLII 58 (SCC), [1987] 1 SCR 857
Donna Gail Richardson Appellant
v.
George Edward Richardson Respondent
indexed as: richardson v. richardson
1986: March 24, 25; 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 ontario
Divorce ‑‑ Maintenance ‑‑ Variation ‑‑ Settlement agreement ‑‑ Agreement prior to divorce providing for wife support for a period of one year ‑‑ Wife unable to find work during that period and supported by public assistance claimed maintenance in divorce proceeding ‑‑ Power of the court to vary maintenance provision of the agreement under s. 11(1) of the Divorce Act.
Divorce ‑‑ Maintenance ‑‑ Escalator clause ‑‑ Settlement agreement ‑‑ Whether a court can insert an escalator clause in a decree nisi where the parties did not have such a clause in their settlement agreement ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 11(1).
Married in 1967, the parties separated in 1979. They had two children. The wife was not employed at the time of the separation but had worked full time until 1974 and for one month during that year and three months in 1976. Her husband has been a police officer since 1964. The proceeding commenced pursuant to the Ontario Family Law Reform Act ended with a settlement exemplified by minutes of settlement at a pre‑trial conference where both parties were represented by counsel. Under the settlement agreement, the respondent was required to pay maintenance to the appellant for a period of one year. Provision was also made for the child in custody of the appellant. After the one‑year period, appellant was still unemployed and was receiving social assistance. In the divorce action, she requested a variation of the terms of the minutes of settlement claiming maintenance for herself and an increase in maintenance for the child in her custody. The trial judge did not vary the child maintenance but awarded maintenance to the appellant and ordered an annual review of the maintenance to keep up with changes caused by inflation and the financial circumstances of the respondent. On appeal, the Court of Appeal found no change of circumstances in either the appellant or the respondent that would justify the allowance and struck the award for continued maintenance to the appellant and the "escalator" clause. The Court also ordered an increase in the child maintenance. This appeal is to determine when it is fit and just for a judge to make an order for spousal maintenance under s. 11(1) of the Divorce Act in an amount different from that agreed upon by the parties in an antecedent settlement agreement.
Held (La Forest J. dissenting): The appeal should be dismissed.
Per Dickson C.J. and McIntyre, Lamer, Wilson and Le Dain JJ.: A court should vary a settlement agreement only where there has been a radical change in the circumstances of a former spouse and that change is the result of a pattern of economic dependency generated by the marriage relationship. This test, enunciated in the Pelech case in the context of an application under s. 11(2) of the Divorce Act, is applicable as well to a s. 11(1) application. In this case, the test was not met and the agreement should stand. Not only had there been no change of circumstances between the time of the separation agreement and the divorce proceeding, but it is also questionable whether appellant's unemployment at the time of the petition for divorce could be attributed to a pattern of economic dependency developed during the marriage. Appellant worked during a good part of her marriage. Thus, it cannot be said that the marriage atrophied her skills or impaired their marketability.
The fact that the former spouse has become a public charge does not by itself justify the variation of a spousal maintenance order. In the absence of a radical change in circumstances tied to marriage related pattern of economic dependency, the obligation to support her should be, as in the case of any other citizen, the communal responsibility of the state.
Appellant's support payments cannot be increased simply because she has custody of her child. Where a court is concerned with the welfare of a child, that concern should be addressed, as did the Court of Appeal, by varying the amount of child support. A court is always free to intervene and determine the appropriate level of child support notwithstanding any settlement agreement between the spouses.
Appellant's allegation that the parties limited the period of spousal maintenance to one year because it was their common expectation that she would be employed within that period is not supported by the evidence and does not justify a departure from the settlement agreement. In a case like this one, where the parties' expectation is unclear or where there is no evidence of a common expectation, the agreement entered into by the parties freely and on the advice of independent legal counsel (which are not unconscionable in the substantive law sense) should be respected.
Finally, where the parties do not have an escalator clause in their settlement agreement, a trial judge cannot insert one in the decree nisi where there is no change of circumstances justifying a variation of the agreement.
Per La Forest J. (dissenting): Section 11(1) of the Divorce Act provides that a "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 an order for a spouse to pay a lump sum or periodic sums for maintenance. Under that section, the discretion to award maintenance is vested in the judge in the divorce action, not anyone else. The parties, therefore, cannot oust his jurisdiction by contract. Although the existence of a separation agreement is an important fact to be considered by the judge in exercising his discretion, the judge is not bound by it. The agreement should not lightly be disturbed, but if the court feels, having regard to the factors spelled out in s. 11(1), that there is need for change, it should allow it. The judge's discretion is not limited only to cases where there has been a radical change in the circumstances of a former spouse after the agreement was made. This test enunciated in the Pelech case in the context of s. 11(2) is not applicable to a s. 11(1) application. There are significant differences between the two types of decision. When the trial judge exercises an original discretion in a divorce action to make an order for maintenance where the parties have entered into an agreement, it comes to the judge for the first time and he must review all the circumstances as a whole in exercising the discretion given by the Divorce Act to do what is fit and just. However, when variation of such an order is sought under s. 11(2), the judge is dealing with an order by which it has already been judicially determined under the Act that the agreement was fit and just. The judge's authority is under the Act then confined to considering circumstances that have since intervened. Under these circumstances, a judge should adopt a far more stringent attitude before disturbing the agreement incorporated into a maintenance order. To do otherwise would amount to a reconsideration of the original order which was never intended by s. 11(2) of the Act.
Further, a separation agreement made pursuant to provincial family relations legislation while the marriage subsists is substantially different from one approved by a divorce court. A divorce is meant to be final. By contrast, s. 18(4) of the Family Law Reform Act, under which the agreement in this case was made, expressly provided for variation, both where the provision for support "results in circumstances that are unconscionable", and where the person supported "qualifies for an allowance for support out of public money". Had an application been made for a variation under this Act, or its successor, there is no reason why it could not have been varied.
Where the trial judge exercises his jurisdiction on a proper basis in making an order pursuant to s. 11 of the Divorce Act, a court of appeal has no right to interfere. The court of appeal cannot usurp the trial judge's jurisdiction in this area and should not substitute its discretion. Thus, in reviewing his judgment, a court of appeal is restricted to dealing with the matter in conformity with traditional principles of appellate review, such as material error including a misapprehension of the evidence, the exercise of discretion on an incorrect basis, and the like.
In the case at bar, appellant's lack of employment flowed directly from the role she played in the marriage. During the years she stayed home with the children, her skills have atrophied and she was unable to gain the new skills that are necessary today in her field as well as in others to compete against younger people with recent training. She is now in her mid‑forties and must find time and energy to care for a child. The trial judge, weighing the relevant factors, determined that it would not be fit and just to permit the parties' relationship to continue to be governed by a provision of the separation agreement under which a destitute spouse was to receive low support for one year only, a period that had expired when the divorce decree was issued. The suggestion in the evidence that the common expectation of the party was that appellant would be able to find work within one year for which support was provided also supported the trial judge's decision to order maintenance, and indeed, the parties in their pleadings agreed that these common expectations existed. No sufficient reason has been advanced to disturb the trial judge's decision and the Court of Appeal should not have done so.
Finally, a court has the power to include an escalator clause in a maintenance order. Inflation is a perennial problem in making compensation awards. Such an attempt to give a constant value to an award does not go beyond the meaning of periodic payment or amount to a variation. Here, no compelling reasons have been presented for interfering with the trial judge's order in this regard and it should be restored.
Cases Cited
By Wilson J.
Applied: Pelech v. Pelech, 1987 SCC 57 (SCC), [1987] 1 S.C.R. 801; distinguished: Barrett v. Barrett (1985), 1985 5088 (ON SC), 43 R.F.L. (2d) 405; referred to: 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; Joyce v. Joyce (1984), 1984 1967 (ON CA), 47 O.R. (2d) 609; Sumner v. Sumner (1973), 1973 1949 (BC SC), 12 R.F.L. 324; Paras v. Paras, 1970 370 (ON CA), [1971] 1 O.R. 130; Jull v. Jull (1984), 1984 51 (AB CA), 42 R.F.L. (2d) 113; Re Cartlidge and Cartlidge, 1973 844 (ON CJ), [1973] 3 O.R. 801; Malcovitch v. Malcovitch (1978), 1978 1270 (ON SC), 21 O.R. (2d) 449; Hansford v. Hansford, 1972 410 (ON SC), [1973] 1 O.R. 116; Dal Santo v. Dal Santo (1975), 21 R.F.L. 117; Mercer v. Mercer (1978), 1978 3055 (ON SC), 5 R.F.L. (2d) 224; Collins v. Collins (1978), 1978 652 (AB SCTD), 2 R.F.L. (2d) 385; Krueger v. Taubner (1974), 1974 2193 (MB QB), 17 R.F.L. 86; Doepel v. Doepel (1983), 1983 4555 (ON SC), 36 R.F.L. (2d) 316; Van Doorn v. Van Doorn (1985), 1985 4964 (ON SC), 46 R.F.L. (2d) 186.
By La Forest J. (dissenting)
Pelech v. Pelech, 1987 SCC 57 (SCC), [1987] 1 S.C.R. 801; Messier v. Delage, 1983 SCC 31 (SCC), [1983] 2 S.C.R. 401; Hyman v. Hyman, [1929] A.C. 601; Harrington v. Harrington (1981), 1981 1762 (ON CA), 33 O.R. (2d) 150; Ross v. Ross (1984), 1984 2924 (MB CA), 39 R.F.L. (2d) 51; Newman v. Newman (1980), 1980 2594 (MB CA), 4 Man. R. (2d) 50; Katz v. Katz (1983), 1983 3679 (MB CA), 33 R.F.L. (2d) 412; Thompson v. Thompson (1974), 1974 2178 (SK QB), 16 R.F.L. 158; Jull v. Jull (1984), 1984 51 (AB CA), 42 R.F.L. (2d) 113; Van Doorn v. Van Doorn (1985), 1985 4964 (ON SC), 46 R.F.L. (2d) 186; 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; Joyce v. Joyce (1984), 1984 1967 (ON CA), 47 O.R. (2d) 609; Malcovitch v. Malcovitch (1978), 1978 1270 (ON SC), 21 O.R. (2d) 449; Fabian v. Fabian (1983), 1983 4443 (ON CA), 34 R.F.L. (2d) 313; Doepel v. Doepel (1983), 1983 4555 (ON SC), 36 R.F.L. (2d) 316; Barrett v. Barrett (1985), 1985 5088 (ON SC), 43 R.F.L. (2d) 405; Yeates v. Yeates (1982), 1982 4652 (NS SC), 31 R.F.L. (2d) 71; Ursini v. Ursini (1975), 1975 1879 (ON CA), 24 R.F.L. 261; Lardner v. Lardner (1980), 1980 368 (BC CA), 20 R.F.L. (2d) 234; Droit de la famille‑‑193, /fr/qc/qcca/doc/1985/1985canlii5011/1985canlii5011.html, [1985] C.A. 252; Droit de la famille‑‑221, [1985] C.A. 394; Ménard v. Ricard, [1974] C.A. 157; D'Errico v. D'Errico, [1980] C.A. 27; Laflamme v. Levallée, [1981] C.A. 396; Jarvis v. Jarvis (1984), 1984 4748 (ON CA), 45 R.F.L. (2d) 223; Moosa v. Moosa, Ont. Prov. Ct. (Family Division), June 17, 1981, unreported.
Statutes and Regulations Cited
Child and Family Services and Family Relations Act, S.N.B. 1980, c. C‑2.1, s. 115(5).
Divorce Act, R.S.C. 1970, c. D‑8, s. 11(1), (2).
Family Law Act, 1986, S.O. 1986, c. 4, Preamble, s. 33(4).
Family Law Reform Act, R.S.O. 1980, c. 152, s. 18(4).
Family Law Reform Act, S.O. 1978, c. 2, s. 18(4).
Family Law Reform Act, S.P.E.I. 1978, c. 6, s. 19(4).
Matrimonial Property and Family Support Ordinance, S.Y.T. 1979 (2nd), c. 11, s. 30.5(4) [en. 1980 (2nd), c. 15, s. 7(1)].
Authors Cited
Abella, Rosalie S. "Economic Adjustment on Marriage Breakdown: Support" (1981), 4 F.L.R. 1.
Berger, Thomas R. "Forms of Support Orders Under the Divorce Act". In Family Law: Dimensions of Justice. Edited by Rosalie S. Abella and Claire L'Heureux‑Dubé. Toronto: Butterworths, 1983, pp. 67‑76.
Cook, Gail C. A. "Economic Issues in Marriage Breakdown". In Family Law: Dimensions of Justice. Edited by Rosalie S. Abella and Claire L'Heureux‑Dubé. Toronto: Butterworths, 1983, pp. 19‑26.
Payne, Julien D. "Approaches to Economic Consequences of Marriage Breakdown". In Family Law: Dimensions of Justice. Edited by Rosalie S. Abella and Claire L'Heureux‑Dubé. Toronto: Butterworths, 1983, pp. 27‑34.
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 Ontario Court of Appeal (1985), 1985 4989 (ON CA), 44 R.F.L. (2d) 355, varying a judgment of Perras L.J.S.C., [1983] W.D.F.L. 829. Appeal dismissed, La Forest J. dissenting.
Janet M. Wilson, for the appellant.
D. Wayne Lalonde, for the respondent.
The judgment of Dickson C.J. and McIntyre, Lamer, Wilson and Le Dain JJ. was delivered by
Wilson J.‑‑The issue in this case is when is it "fit and just" for a judge to make an order for spousal maintenance under s. 11(1) of the Divorce Act, R.S.C. 1970, c. D‑8, in an amount different from that agreed upon by the parties in an antecedent settlement agreement.
The parties were married on November 18, 1967 and separated in November 1979. There are two children of the marriage neither of whom has attained the age of majority. Since 1964 the respondent has been a member of the Ottawa City Police Force. By the time of the divorce proceedings he had attained the rank of sergeant. From the time of her marriage until the birth of her second child in 1974 the appellant worked as a clerk‑typist with the National Research Council of Canada. Apart from two jobs of very short duration in 1974 and 1976 the appellant has not worked since 1974. In 1980 she moved to North Bay to live with her parents. She is now aged 46 and her former husband 43.
Proceedings under the Family Law Reform Act, R.S.O. 1980, c. 152, were commenced in Ottawa in 1980. When the appellant moved from Ottawa to North Bay she retained counsel there. At the pre‑trial conference which was held at the courthouse in Ottawa the appellant was represented by the Ottawa agent for that counsel. The appellant does not contend that her legal representation was deficient in any respect. At the pre‑trial conference the Family Law Reform Act proceeding was settled by handwritten Minutes of Settlement dated April 14, 1981. The settlement agreement was executed by Mrs. Richardson in North Bay in the presence of her counsel.
The settlement agreement gave custody of one child to the appellant and custody of the other child to the respondent. The respondent agreed to pay spousal support to the appellant in the amount of $175 per month for a period of one year and to pay support for the child in her custody in the amount of $300 per month with no limit as to the duration of that support. The parties agreed to share equally a $20,000 debt owing to the wife's parents. The respondent assumed debts accumulated during the marriage in the amount of $9,513.53. The appellant released her interest in the matrimonial home to the husband. The total equity in the home was valued at the time of the divorce hearing at $20,921.80.
Although the handwritten Minutes of Settlement contained no clause providing that the settlement was final and conclusive of all claims between the parties, it appears that counsel for the respondent inserted such a clause in the final typewritten version of the Minutes. That version did not differ in any other respect from the handwritten version and was signed by both parties.
Following the settlement of that litigation Mrs. Richardson commenced proceedings for divorce claiming inter alia maintenance for herself (the one‑year period having expired) and increased maintenance for the child in her custody. The divorce action was tried before Perras L.J.S.C. in the Supreme Court of Ontario. The appellant was then in receipt of social assistance. Perras L.J.S.C. gave judgment on May 12, 1983. He found that "because of these present handicaps experienced by Mrs. Richardson this is a sufficient case in which to ignore the earlier minutes of settlement". The trial judge then fixed the monthly maintenance for the wife at $500 and the monthly maintenance for the child in the wife's custody at $300. The judge also ordered an annual review and variation of the maintenance in order to keep up with "changes which may be caused by inflation and the financial circumstances of the respondent". The actual adjustment formula was based on changes in the husband's annual income as recorded in his T4 slip.
The respondent successfully appealed the trial judgment to the Ontario Court of Appeal (1985), 1985 4989 (ON CA), 44 R.F.L. (2d) 355. Judgment was given orally by Grange J.A. on behalf of the Court. Counsel agree that in the course of counsels' argument the Court referred to and adopted as the governing law its earlier decisions in 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 and Joyce v. Joyce (1984), 1984 1967 (ON CA), 47 O.R. (2d) 609. The effect of these cases was to require a "catastrophic" change in circumstances to justify an interference with the provisions of a valid and enforceable separation agreement. Speaking for himself, Dubin and Finlayson JJ.A., Grange J.A. stated in his oral reasons for judgment (at p. 358):
The trial judge granted maintenance to the wife notwithstanding the minutes of settlement upon the grounds that there had been a change of circumstance entitling the wife to that allowance. We can see no change of circumstance in either the wife or the husband that would justify that allowance.
It is possible that the parties contemplated when limiting the support for the wife to the one‑year period that the wife would, during that period, not only seek, but obtain employment. Indeed there is some suggestion in the evidence of the husband that that was so. The difficulty with that assumption, however, is that when the solicitor for the wife was examined in the previous proceedings, he was not permitted to give the substance of his advice to the wife and consequently, we do not know whether or not that was her contemplation at the time.
The award of continued maintenance to the appellant was struck from the order of Perras L.J.S.C. However, the Court of Appeal, quite properly, did not consider itself bound by the terms of the Minutes of Settlement as far as maintenance for the child was concerned and ordered that the monthly payment for the child be increased to $500. Grange J.A. also struck from the order the so‑called "escalator" clause providing for the automatic variation of maintenance depending on changes in the respondent's income. It became academic as far as the appellant was concerned since the Court of Appeal found that she had no entitlement to maintenance and it was, so that Court held, inappropriate so far as the child's maintenance was concerned.
- In approaching this case the Court should have regard to the principles enunciated in Pelech v. Pelech, 1987 SCC 57 (SCC), [1987] 1 S.C.R. 801 (reasons for judgment released concurrently), that a court should vary a settlement agreement only where there has been a radical change in the circumstances of a former spouse and that change is the result of a pattern of economic dependency generated by the marriage relationship. I appreciate that that principle was stated in the context of a s. 11(2) application and that this case involves s. 11(1). I appreciate also that the wording of the two subsections is different. Section 11(1) provides that the court may make the order it thinks fit and just having regard to the condition, means and other circumstances of the parties. Section 11(2) states that an order made under s. 11(1) may be varied if the court thinks it fit and just to do so having regard to any change in the condition, means or other circumstances of the spouses. Nevertheless, in my view, despite the difference in the statutory language, when a court is confronted with a settlement agreement reached by the parties the same criteria should be applied under both sections. The underlying rationale is the same under both, namely 1) the importance of finality in the financial affairs of former spouses and 2) the principle of deference to the right and responsibility of individuals to make their own decisions. It is true that in an application under s. 11(2) the settlement agreement is incorporated in a decree nisi and this is not so in the case of an application under s. 11(1). However, as was noted by Zuber J.A. in Farquar v. Farquar, supra, at p. 250:
In this case, the parties not only agreed to settle their own affairs but the agreement was incorporated into a divorce decree. In my view, the additional fact of the decree confirming the agreement adds little, if anything, to the problem. The centre of the problem is the agreement itself set out in the minutes.
If Zuber J.A. is correct in this, and I think he is, it is not surprising that when faced with a settlement agreement the courts have applied the same criteria in deciding when to depart from that agreement in both s. 11(1) and s. 11(2) applications. As Blair J.A. noted in Webb v. Webb, supra, at p. 133: "In practice. . .there has been considerable intermingling of the subsections in cases involving prior agreements between the parties". He then went on to state, after a review of the case law, that generally under s. 11(1) the courts have only interfered with the terms of a separation agreement where there has been a change of circumstances of sufficient magnitude to justify the variation and that this is the same test as is applied under s. 11(2).
In my view, the only difference under the two subsections is that in a s. 11(1) application the change being considered will have occurred between the signing of the agreement and the application for the decree nisi whereas in the s. 11(2) application the change will have occurred between the granting of the decree nisi and the application for variation.
Given that the Pelech test is applicable in a s. 11(1) as well as a s. 11(2) application, the test is not met on the facts of this case. No event has occurred which the appellant is peculiarly unable to deal with because of a pattern of economic dependency generated by the marriage. At the time the separation agreement was concluded Mrs. Richardson was unemployed and Mr. Richardson was a sergeant in the Ottawa Police Force earning approximately $40,000 per annum. The same conditions existed when the divorce proceeding was heard. Not only had there been no change of circumstances, as the Ontario Court of Appeal found, but it was also questionable whether Mrs. Richardson's position at the time could be attributed to a pattern of economic dependency developed during the marriage. As has already been mentioned, Mrs. Richardson was married in 1967 and worked continuously as a clerk‑typist until the birth of her second child in 1974. She worked for one month in 1974 and for three months in 1976. The couple separated in November 1979. In sum, she was employed more often than not during the marriage. Moreover, the period of time from her last employment until the date of the separation was not that great. In this sense it cannot be said that the marriage atrophied her skills or impaired their marketability.
Counsel for the appellant relies, however, on comments in the case law which suggest that certain factors may per se justify a court in varying the terms of a settlement agreement. He submits, for example, that the fact that the appellant is now in receipt of public assistance is one such factor. However, as mentioned in Pelech, the fact that a former spouse has become or may become a public charge does not by itself justify the variation of a spousal maintenance order. In the absence of a radical change in circumstances tied to a marriage related pattern of economic dependency "the obligation to support the former spouse should be, as in the case of any other citizen, the communal responsibility of the state" (Pelech v. Pelech, supra, at p. 852). Otherwise a person who has once been married continues to be contingently liable for the support of his or her former spouse for the duration of their joint lives.
Another specific factor sometimes identified in the case law as justifying a variation of spousal maintenance is the indirect deprivation of children caused by the quantum of spousal maintenance agreed to in the settlement agreement. In this case Mrs. Richardson has custody of one child. The financial position of the custodial spouse may determine the standard of living of the children as well as the spouse. Indeed, changes in either child support or spousal maintenance may affect the economic viability of the unit as a whole: Sumner v. Sumner (1973), 1973 1949 (BC SC), 12 R.F.L. 324 (B.C.S.C.), at p. 325; Paras v. Paras, 1970 370 (ON CA), [1971] 1 O.R. 130 (C.A.), at p. 135; Jull v. Jull (1984), 1984 51 (AB CA), 42 R.F.L. (2d) 113 (Alta. C.A.), at p. 118; Bertha Wilson, "The Variation of Support Orders", in Rosalie S. Abella and Claire L'Heureux‑Dubé (eds.), Family Law: Dimensions of Justice (1983), at p. 42.
This inter‑relationship should not, however, lead us to exaggerate its extent or forget the different legal bases of the support rights. The legal basis of child maintenance is the parents' mutual obligation to support their children according to their need. That obligation should be borne by the parents in proportion to their respective incomes and ability to pay: Paras v. Paras, supra. The duration of the obligation of support varies with the provisions of each provincial statute. As a general proposition it can be stated that the obligation of support lasts until a child is between 18 and 21 years of age. It can last longer than that if there are special circumstances such as the presence of physical or mental handicaps in the child or the child is in full time attendance at an educational institution. Child maintenance, like access, is the right of the child: Re Cartlidge and Cartlidge, 1973 844 (ON CJ), [1973] 3 O.R. 801 (Fam. Ct.) For this reason, a spouse cannot barter away his or her child's right to support in a settlement agreement. The court is always free to intervene and determine the appropriate level of support for the child: Malcovitch v. Malcovitch (1978), 1978 1270 (ON SC), 21 O.R. (2d) 449 (H.C.); Hansford v. Hansford, 1972 410 (ON SC), [1973] 1 O.R. 116 (H.C.), at pp. 117‑18; Dal Santo v. Dal Santo (1975), 21 R.F.L. 117 (B.C.S.C.); Mercer v. Mercer (1978), 1978 3055 (ON SC), 5 R.F.L. (2d) 224 (Ont. H.C.); Collins v. Collins (1978), 1978 652 (AB SCTD), 2 R.F.L. (2d) 385 (Alta. S.C.), at p. 391; Krueger v. Taubner (1974), 1974 2193 (MB QB), 17 R.F.L. 86 (Man. Q.B.) Further, because it is the child's right, the fact that child support will indirectly benefit the spouse cannot decrease the quantum awarded to the child.
The obligation to provide spousal support arises from different bases and therefore has different characteristics. As discussed in Pelech, the courts in making an award of spousal maintenance are required to analyze the pattern of financial interdependence generated by each marriage relationship and devise a support order that minimizes as far as possible the economic consequences of the relationship's dissolution. Financial provision may be temporary or permanent. Spousal maintenance is the right of the spouse and a spouse can therefore contract as to the amount of maintenance he or she is to receive. Where this happens the court will be strongly inclined to enforce that contract: see Pelech v. Pelech, supra.
Given these differences between spousal and child maintenance, if the court's concern is that the child is being inadequately provided for, then that concern should be addressed by varying the amount of child support. This approach has several advantages. First, it explicitly identifies the area of the court's concern. Second, the benefit accrues to the individual whose legal right it is. The duty to support the child is a duty owed to the child not to the other parent. Third, the traditional characteristics of the child maintenance order better reflect the court's concern for the child's welfare than do the traditional characteristics of the spousal maintenance order. For example, while the court could order that a spousal maintenance order would cease when the children were no longer dependent, child maintenance always ceases when the children are no longer dependent. Further, the amount of child support in child maintenance orders is based on the demonstrated need of the child. Although increased child support may indirectly benefit the custodial spouse, it will not be based on the court's assessment of the spouse's need. Finally, an individual will be unable to evade spousal maintenance provisions in a contract simply by pointing to his or her custody of the children. Accordingly, in the circumstances of this case Mrs. Richardson's support payments should not be increased simply because she has custody of a child. The Court of Appeal adopted the proper route and increased the child support payments. This part of the order is not being contested.
Counsel for the appellant also relies on another ground of appeal. He argues that the parties in this case limited the period of spousal maintenance because it was their common expectation that Mrs. Richardson would be employed within that period of time. This expectation did not materialize and therefore the judge hearing the petition for divorce was free to make the order he considered "fit and just" without regard to the Minutes of Settlement entered into by the parties. Counsel argues, in effect, that the lost or failed expectation represents a change of circumstances from those anticipated by the parties justifying a departure from the settlement agreement under s. 11(1) of the Divorce Act. This position seems to have been adopted in a number of cases: see Doepel v. Doepel (1983), 1983 4555 (ON SC), 36 R.F.L. (2d) 316 (Ont. H.C.); Van Doorn v. Van Doorn (1985), 1985 4964 (ON SC), 46 R.F.L. (2d) 186 (Ont. H.C.); Barrett v. Barrett (1985), 1985 5088 (ON SC), 43 R.F.L. (2d) 405 (Ont. H.C.)
However, the evidence of the parties' expectation in this case is unclear. When asked why spousal support was restricted to a one‑year period the husband stated "It was my understanding that during the one‑year period my wife was to seek and obtain active employment". The husband may have merely hoped that his wife would find employment within the year or he may have had a firm expectation to that effect which was, in his mind, the reason for limiting the spousal maintenance to one year. The trial judge made no finding on this point. He ignored the Minutes of Settlement simply because of the "present handicaps" experienced by Mrs. Richardson. There was no evidence at all of the appellant's expectation. The Ontario Court of Appeal in face of the evidence or lack of same refused to make a finding as to the parties' expectation.
In the absence of evidence of a common expectation of the parties it seems to me that the Minutes of Settlement entered into freely by the parties and on the advice of independent legal counsel (which are not unconscionable in the substantive law sense) should be respected subject to the principle enunciated in Pelech. The possibility that Mrs. Richardson would not be employed at the end of the one‑year period was not unforeseeable. Although she had clerk‑typist skills she had not been recently employed. It is not as though Mrs. Richardson had been guaranteed a specific job and through a series of unexpected events that job fell through. This distinguishes the present case from Barrett v. Barrett, supra, where the court found that the parties' common expectation about the wife's future employment had been unexpectedly defeated and a variation of the maintenance order was therefore justified. In that case the husband agreed to pay the wife a sum of $300 per month maintenance which would then be increased to $500 per month. The payments would continue until such time as the wife remarried. The wife intended, and the husband was aware of this intention, to move back to England and accept her sister and brother‑in‑law's offer to work full time in a business as manager and book‑keeper. Upon her arrival in England, however, it became immediately apparent that there was not enough work for her to do and that her sister and brother‑in‑law were not satisfied with the work she did do. Approximately six weeks after her arrival she was unemployed. The court ordered a variation of her maintenance.
Having regard to Mrs. Richardson's circumstances at the time of the agreement including her skills, her previous record of employment and the fact that no employment position had been guaranteed to her, it cannot be said that the possibility of her being unemployed was completely outside the reasonable contemplation of the parties. I do not believe therefore that Mrs. Richardson is entitled on that ground to be relieved from the clause in the Minutes of Settlement which provides for the cessation of her maintenance at the expiry of the one‑year period.
The appellant also challenges the Court of Appeal's decision to strike out the escalator clause inserted in the decree nisi by Perras L.J.S.C. This case does not require us to examine the question whether in general a trial judge has power to insert an escalator clause in a decree nisi. This case requires us to decide only whether a trial judge can insert an escalator clause in the decree nisi where the parties do not have such a clause in their settlement agreement. Since there has been no change in circumstances of the kind required to justify a variation of the Minutes of Settlement entered into by the parties, the trial judge's action in this regard cannot stand.
For these reasons I would dismiss the appeal but in the circumstances without costs.
The following are the reasons delivered by
La Forest J. (dissenting)‑‑The issue to be determined is whether, in the circumstances of this case, the judge in a divorce action properly exercised his discretion in making an order for spousal maintenance under s. 11(1) of the Divorce Act, R.S.C. 1970, c. D‑8, in an amount different from that agreed upon by the parties in settling an antecedent action under the Ontario Family Law Reform Act, R.S.O. 1980, c. 152 as amended.
The facts and the judicial history have already been adequately given by my colleague Wilson J., and I need not repeat them at length. I should, however, observe that our perception of some of the facts and the inferences to be drawn from them at times differ, and I shall have occasion to refer to these later.
Section 11(1)(a) of the Divorce Act, which is the relevant provision, reads as follows:
(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;
Section 11(1)(b), it may be noted, makes similar provision for maintenance orders by wives to husbands and children, and s. 11(1)(c) provides for custody orders.
As Chouinard J. made clear in Messier v. Delage, 1983 SCC 31 (SCC), [1983] 2 S.C.R. 401, at p. 408, the provisions of the Divorce Act constitute the only source for the award of maintenance on divorce. It is not a common law power and a court is bound, as in the case of other statutes, to approach the issue by reference to the intention of Parliament as revealed by the words of the statute.
What immediately strikes the reader on perusing s. 11(1) is that the discretion to award maintenance is vested in the judge in the divorce action, not anyone else. The parties, therefore, cannot oust his or her jurisdiction by contract. I agree, however, that the existence of a marriage settlement is an important fact to be considered by the judge in exercising his or her discretion. While the weight to be accorded separation agreements has varied with changing social attitudes and conditions, the basic proposition that the courts may override them has remained since it was enunciated in Hyman v. Hyman, [1929] A.C. 601 (H.L.) My colleague, Wilson J., has fully reviewed the jurisprudence on this aspect of the case in relation to s. 11(2) of the Divorce Act, which provides for a variation of such orders, in the companion case of Pelech v. Pelech, 1987 SCC 57 (SCC), [1987] 1 S.C.R. 801, also delivered today, under the heading V. "Preliminary Observations", and I need simply refer to that part of her judgment to confirm this point. As she notes, the Hyman principle underlies the decision of this Court in Messier v. Delage.
Nor may a court of appeal usurp the jurisdiction of the trial judge in this area. The discretion to award maintenance is the trial judge's, and it is not open to a court of appeal, including this Court, to substitute its discretion for that of the trial judge. Appeal courts are restricted to dealing with the matter in conformity with traditional principles of appellate review. Here, too, I need only refer to Wilson J.'s discussion of the matter in her judgment in Pelech under the heading IV. "Jurisdictional Issues". Like her, I would adopt the approach set forth by Morden J.A. in Harrington v. Harrington (1981), 1981 1762 (ON CA), 33 O.R. (2d) 150 (C.A.) A court of appeal's jurisdiction, in other words, is limited to reviewing the trial judge's judgment on traditional grounds such as material error including a misapprehension of the evidence, the exercise of discretion on an incorrect basis, and the like. If the judge exercises his or her jurisdiction on a proper basis, a court of appeal has no right to interfere. In the present case, the Court of Appeal reversed the decision of the trial judge, and unless that reversal can be justified on the basis of the traditional jurisdiction of a court of appeal, then the trial judge's judgment must be restored.
To determine whether the Court of Appeal was justified in its action, it is first necessary to see precisely what the trial judge's discretion is and what factors he or she must, under the legislation, consider in exercising that discretion.
What, then, is the discretion of the trial judge? Section 11(1)(a) provides the answer. In its words "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 an order for the husband to pay a lump sum or periodic sums for maintenance. The question for the trial judge to decide, then, is what, in the circumstances, he or she thinks "fit and just". The discretion is to do what is both "fit" and "just". Matas J.A. caught the flavour of this expression in Ross v. Ross (1984), 1984 2924 (MB CA), 39 R.F.L. (2d) 51 (Man. C.A.), at p. 63 where he stated:
One of the meanings listed in The Oxford Universal Dictionary for "fit" is "Suited to the circumstances of the case, answering the purpose, proper or appropriate". As for "just", one of its definitions reads: "Consonant with the principles of moral right; equitable; fair. Of rewards, punishments, etc.: Merited. Constituted by law or by equity, lawful, rightful; legally valid." And so when judges talk of provision for maintenance being "reasonable" or "fair" or "adequate" or "proper", they are using different words to express (on some occasions perhaps more broadly than on others) what they are mandated to do under the legislation. [Emphasis added.]
- This then is the mandate of the trial judge under the legislation. As Chouinard J. noted in Messier v. Delage, supra, at p. 414: "each case is sui generis". He further observed that the judge's discretion must be exercised "in accordance with the factors mentioned" in the provision. These factors, Chouinard J. tabulated as follows, at p. 411:
(a) the conduct of the parties;
(b) their respective conditions;
(c) their means;
(d) the other circumstances of either of them.
- In a word, the judge has a wide discretion which, as Chouinard J. noted (p. 408), has led some commentators to criticize the provision because of its lack of precision and insufficiency. Yet as he further noted, this should rather be seen as "an intentional flexibility", a flexibility no doubt thought by Parliament to be advisable because every case is in the nature of things different ‑‑ all the more so because of the overarching reality that the institution of marriage is, and was at time of the passing of the Act, in a state of flux. There are today many different kinds of marriages. One cannot treat a couple in their fifties, where the wife has stayed home for many years caring for a family, in the same way as two young childless professionals who decide to go their separate ways after a few years of marriage. Both the expectations of, and the economic implications for the spouses are vastly different, including their ability to cope adequately with the fallout from the break‑up of a marriage. This is especially true having regard to the different roles that may have been adopted by the spouses in the marital relationship. That, as I said, appears to be why Parliament was "intentionally flexible" in enacting s. 11(1). In a technical sense, this position is equally applicable to men and women because it applies to s. 11(1)(b) as well, but it would be idle to pretend that today men and women are generally subject to the same economic disabilities flowing from marriage and its collapse. I see not paternalism, but realism, in the following remarks of Matas J.A. in Ross v. Ross, supra, at p. 64:
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.
I agree with him, too, in saying of two marriages such as those above described that:
It would be patently unfair to try to force both these kinds of marriages into specific categories in order to decide the appropriate level of maintenance to be paid, or to decide if the court should intervene to correct an unjust agreement. Obviously, it would be unusual to find marriages to fit these circumstances exactly. Additional factors will surely be present in any real situation. But the examples, in this simplistic form, may serve to highlight the profound differences which may exist between one marriage and another.
Similar sentiments have been expressed in the Quebec Court of Appeal; see Vallerand J.A. in Droit de la famille‑‑193, /fr/qc/qcca/doc/1985/1985canlii5011/1985canlii5011.html, [1985] C.A. 252, at p. 259, and LeBel J.A. in Droit de la famille‑‑221, [1985] C.A. 394, at pp. 400‑01.
At all events, the factors to be considered are those dictated by the Act, and the person assigned the task of assessing these factors is the trial judge, not the Court of Appeal or this Court nor the parties themselves by means of a contract.
To allow separation agreements the kind of compelling weight argued for in this case is effectively to rewrite the Act so as to provide that where such an agreement exists, the trial judge's discretion is solely to vary the agreement in those cases only where radical or, to use the expression employed in some cases, catastrophic changes have occurred since it was made. That I have correctly understood this approach is clearly revealed in the dissenting judgment of Huband J.A. in Ross v. Ross, supra, pp. 73‑74, cited by Wilson J. in Pelech as follows:
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.
I am not, as I mentioned earlier, saying that a separation agreement is not an important fact to be considered by the judge in exercising his or her discretion. Such an agreement falls within the factors "conduct of the parties" or "other circumstances" mentioned in s. 11(1). It is obviously better for the parties to settle their affairs whenever possible. As well, settlement by the parties assists the courts in performing their function; it can save time and costs. Still, the latter considerations should not be used as an excuse to displace the court's function. Consequently, as many courts have stated, while such an agreement should not lightly be disturbed, at the end of the day, the judge cannot be bound by it. It is the judge who has been given the discretion to decide what is fit and just in the circumstances. See, in this context, Gagnon J.A. of the Quebec Court of Appeal in Ménard v. Ricard, [1974] C.A. 157, at p. 159. Undoubtedly, the judge should, in the exercise of that discretion, respect an agreement that is reasonably fair and equitable, and failure to do so may well provide grounds for appellate intervention. But how can his adoption of an agreement that is manifestly harsh and unfair be "fit and just"? And such harshness and unfairness may manifest itself either at the time the contract is made or when the time has come for the judge to make his or her decision.
As will be obvious, so far as an order for maintenance under s. 11(1) of the Act is concerned, I am in general agreement with the approach adopted by the Manitoba Court of Appeal described by my colleague's judgment in Pelech under the heading VI. B. "The Court's Overriding Power". I repeat the words of Monnin J.A. in Newman v. Newman (1980), 1980 2594 (MB CA), 4 Man. R. (2d) 50, at p. 52, but I would underline that he was there dealing with an order for maintenance under s. 11(1) and not s. 11(2):
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.
See also Katz v. Katz (1983), 1983 3679 (MB CA), 33 R.F.L. (2d) 412 (Man. C.A.), and Ross v. Ross, supra.
I would add that this approach to s. 11(1) is not confined to the Manitoba courts. The same approach has been taken in Saskatchewan and Alberta; see the judgment of Bayda J. (as he then was) in Thompson v. Thompson (1974), 1974 2178 (SK QB), 16 R.F.L. 158 (Sask. Q.B.) as well as Jull v. Jull (1984), 1984 51 (AB CA), 42 R.F.L. (2d) 113 (Alta. C.A.) The Ontario courts' position does not until now seem to have been substantially different. In Harrington v. Harrington, supra, the Ontario Court of Appeal, acting under s. 11(1), ordered an increase in the wife's maintenance over what had been provided in a marital settlement on the basis that the husband's income had increased by 50 per cent during the intervening period. See also Van Doorn v. Van Doorn (1985), 1985 4964 (ON SC), 46 R.F.L. (2d) 186 (Ont. H.C.), which bears some resemblance to this case. The Quebec cases I have cited also favour the general approach I have taken.
In adopting the view that a court should vary a separation agreement only where there has been a radical change in the circumstances of a former spouse after the agreement was made, my colleague, Wilson J., relies on the test she formulated in Pelech regarding a variation of an original maintenance order under s. 11(2) of the Divorce Act. The cases upon which she principally relies, 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, and Joyce v. Joyce (1984), 1984 1967 (ON CA), 47 O.R. (2d) 609, all in the Ontario Court of Appeal, also deal with variation orders. I shall have more to say about the approach that should be taken in dealing with variation orders in my judgment in Pelech v. Pelech, supra. It is sufficient here to say that I see significant differences between the two types of decision. When the trial judge exercises an original discretion in a divorce action to make an order for maintenance where the parties have entered into an agreement, it comes to the judge for the first time and he or she must review all the circumstances as a whole in exercising the discretion given by the Divorce Act to do what is fit and just. When variation of such an order is sought, however, the judge is dealing with an order by which it has already been judicially determined under the Act that the agreement was fit and just. The judge's authority is under the Act then confined to considering circumstances that have since intervened. Under these circumstances, a judge should adopt a far more stringent attitude before disturbing the agreement incorporated into a maintenance order. To do otherwise would amount to a reconsideration of the original order which, in my view, was never intended by s. 11(2) of the Act. Other courts have noted the more stringent onus that lies on a party seeking a variation of a maintenance order incorporating an agreement of the parties than that which lies on a party when an agreement is originally considered at the time the maintenance order is first made; see Malcovitch v. Malcovitch (1978), 1978 1270 (ON SC), 21 O.R. (2d) 449, at p. 457, per Walsh J., cited by Blair J.A. in Webb v. Webb, supra, at pp. 140‑41.
I should observe here, too, that a separation agreement sanctioned by a provincial family relations Act while the parties are married serves a different purpose from that of an agreement sanctioned in a divorce proceeding. A separation agreement made under a regime of provincial law is intended to deal, and can only constitutionally deal, with continuing marital obligations. A divorce, on the other hand, is a final dissolution of a marriage and should be interpreted with finality in mind. Lamer J. in his dissent (with whom McIntyre and Wilson JJ. concurred) expressed this thought in the following manner in Messier v. Delage, supra, at p. 421:
Furthermore, quite apart from the fact that the woman rather than the man is the recipient of maintenance, the divorce itself is intended to dissolve the marriage bond, whereas separation only changes the living arrangements. 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. [Emphasis added.]
In her heading VII. "Conclusions" in Pelech, my colleague suggests that the case by case approach and the continuing surveillance of separation agreements by the courts will ultimately reinforce the bias that Matas J.A. refers to in the passage in Ross v. Ross, supra, and she seeks to find a more precise standard for the exercise of the courts' functions. She further asserts that people should, as an overriding policy consideration, be encouraged to take responsibility for their own decisions in these matters. I do not, of course, quarrel with the goal of having people settling their financial affairs, marital and otherwise, in a mature and responsible fashion. We would have far less need for law courts if they did. What we really disagree about, I suppose, is the effectiveness of the means she proposes to achieve those results and, more importantly, whether in interpreting s. 11(1) in this way we are not developing judicial policy as opposed to the policy spelled out in the Act. I would again underline what I have previously said, that there is a world of difference between surveillance of marital agreements before and after divorce.
Assuming courts have authority to develop the policies proposed, I think that the adoption of these rigorous policies in regard to a separation agreement can have little, if any, influence on people who are now or soon will come before divorce courts. On any standard, the suggested educational function can scarcely be expected to have any real impact on those people. Apart from this, I seriously doubt that the adoption of such a judicial policy would have much effect on what people will do at what, for most of them, is one of the most stressful periods of their lives. Lawyers and judges alike are prone to exaggerate the influence legal rules of this kind have on people's behaviour. What we do know for certain is that many people under these circumstances do very unwise things, things that are anything but mature and sensible, even when they consult legal counsel.
Even if I thought that the adoption of such a judicial policy would have the desired effect, I do not think we are given the power to do this at the expense of those whom Parliament sought to protect by giving jurisdiction to a judge to order what he or she thinks is "fit and just" having regard to the factors spelled out in the legislation. Parliament's policy, as Chouinard J. noted, is one of "intentional flexibility" aimed at meeting the variegated situations a trial judge must face in divorce matters. I am confident that trial judges are in a better situation to respond to this policy than appeal court judges; trial judges hear the matter first hand. Parliament obviously took this view in vesting the discretion in them. Theirs is the task of making the decision, weighing the factors prescribed by the Act. Courts of appeal undoubtedly have a role within the limits previously described, in seeing that trial judges properly exercise their discretion by adequately weighing the factors they are required to consider, but the search for precision must be confined within the intentionally flexible policy adopted by Parliament. There is no flexibility in a judicially created policy that requires a judge to exercise his or her discretion to do what is fit and just in accordance with the provisions of a separation agreement unless radical changes have occurred since the agreement was made. Under such a policy, the judge's discretion simply becomes no more than one to vary a separation agreement when subsequent radical circumstances have occurred. This, in my view, amounts to rewriting the Act. This we have no right to do.
We are told that recent statutory provisions reinforce the judicial policy by encouraging out‑of‑court settlement of marital disputes. I agree that conciliation procedures to encourage such settlements in divorce proceedings are a desirable innovation. But we are not talking about that kind of procedure, and as I read the more modern statutes they do not support the proposition that separation agreements are to have virtually binding force unless radical changes have since occurred. The Divorce Act itself contemplates a flexible regime as I have been at pains to note. And the various provincial family law Acts of recent years appear to me to reveal a quite different approach to separation agreements than has been argued for here. To begin with, the central philosophy of these Acts is to recognize the equal position of the spouses in the marriage partnership and in support of such recognition to provide for an orderly and equitable resolution of their affairs on the breakdown of their marriage (see the Family Law Act, 1986, S.O. 1986, c. 4, Preamble; see also its predecessor, the Family Law Reform Act, supra, which governs here). To this end, it contemplates the equal division of assets. Furthermore, while parties may contract out of this regime, since 1978 the Act has provided that the court may set aside a provision for support in a marital contract if such provision "results in unconscionable circumstances" (emphasis added); see S.O. 1978, c. 2, s. 18(4), a provision repeated with modifications in s. 33(4) of the 1986 Act, supra. It will be observed that this provision is not limited to common law unconscionability under which a contract may be avoided because of unconscionable action at the time of the agreement, but by referring to results extends its application into the future. This is consistent, incidentally, with the law in several other jurisdictions; see New Brunswick, Child and Family Services and Family Relations Act, S.N.B. 1980, c. C‑2.1, s. 115(5); Prince Edward Island, Family Law Reform Act, S.P.E.I. 1978, c. 6, s. 19(4); Yukon, Matrimonial Property and Family Support Ordinance, S.Y.T. 1979 (2nd), c. 11, s. 30.5(4), enacted S.Y.T. 1980 (2nd), c. 15, s. 7(1); for the similar situation in Quebec, see Ménard v. Ricard, supra; applied in D'Errico v. D'Errico, [1980] C.A. 27, at pp. 28‑29. It strikes me as strange that a court would feel justified in setting aside a separation agreement under the common law doctrine of unconscionability while ignoring the doctrine of unconscionability expressly provided for under the specific legal regime under which the agreement in this case was made.
The Family Law Reform Act, supra, also provides that the court may set aside a provision for support in such agreement where the person supported qualifies for an allowance for support out of public money; see s. 18(4)(b), now replaced by s. 33(4)(b) of the Family Law Act, 1986, supra. This provision underlines the public aspect of marriage and in particular recognizes that the role of one of the partners in a marriage may impede that partner in the job market, and that the choice of marriage roles adopted by the parties should, in a measure, be borne by both partners to the marriage. Otherwise, marriage partners could arrange their affairs on the break‑down of the marriage in total disregard of the public interest; see Fabian v. Fabian (1983), 1983 4443 (ON CA), 34 R.F.L. (2d) 313 (C.A.)
I shall now briefly examine the facts of this case in the light of the foregoing considerations. The Richardsons were married in 1967, both for the first time. He was then 23 and she, 27. They were divorced sixteen years later in 1983, when he was 40 and she was 43. They had two children. On divorce, she was given custody of one of the children and he of the other. The judge accorded her $500 monthly as maintenance for herself and $300 for the child. Mr. Richardson had been a police officer since 1964 and is now a sergeant with the Ottawa Police Force with an annual income at the time of the divorce of approximately $40,000. At the time of the marriage, Mrs. Richardson was employed as a clerk‑typist with the National Research Council and continued to work there until the birth of their second child in 1974. During the remainder of the marriage, she did not work outside the home, except for negligible periods of one month in 1974 and three months in 1976. The parties separated in 1979. The husband then went to reside with the co‑respondent in the divorce action, Mrs. Richardson remaining in the matrimonial home until 1980. In 1980, the parties commenced proceedings under the Family Law Reform Act, supra, and it was under the aegis of these proceedings that the separation agreement was made. Under the agreement, Mr. Richardson retained the equity in the marital home (valued at roughly $21,000 at the time of the divorce), he and Mrs. Richardson equally assumed a debt of $20,000 owed to Mrs. Richardson's parents, and he assumed other marital debts amounting to some $9,500. Thus he was left with net assets which were not very large but included the equity in the family home, while she was left with a debt of $10,000. She was, however, to be paid maintenance of $175 per month for herself for the period of one year and $300 per month in respect of the child of whom she had custody. While these proceedings were going on, Mrs. Richardson moved to North Bay to live with her parents because of financial difficulties. At the time of the divorce, Mrs. Richardson had not yet been able to obtain employment.
During the years she stayed home with the children, her skills would, in my view, not only have atrophied; she would not have been able to gain the new skills that are so necessary today in her field as well as in others. To use the words of Judge Rosalie S. Abella, "The years when the husband was increasing his educational and career prospects, were years which increasingly diminished the wife's prospects in the labour force"; see "Economic Adjustment on Marriage Breakdown: Support" in Family Law and Social Policy Workshop Series (Faculty of Law of the University of Toronto, January 14, 1982), at p. 19 [published (1981), 4 F.L.R. 1]; cited with approval by L'Heureux‑Dubé J.A. in Droit de la famille‑‑193, supra, p. 256. Nor must one overlook that Mrs. Richardson is now in her mid‑forties and must find time and energy to care for a child, factors that are by no means negligible in assessing her competitive position as against younger people with recent training. Her present situation thus flows directly from the marriage. All of the above matters taken together are surely sufficient to justify the trial judge's decision in the exercise of his discretion that it would be fit and just to order an award of maintenance for Mrs. Richardson in the amount of $500 per month having regard to her former husband's current situation. This order can be varied either way later, as the need arises, under s. 11(2) of the Divorce Act.
But what of the agreement? While, as I stated earlier, such agreements must be given appropriate weight, a situation that is not fit and just will not be made so because an agreement has been made. That would amount to repudiating Hyman v. Hyman, supra, which, it is common ground, remains the law. The trial judge, weighing the relevant factors, has determined that it would not be fit and just to permit the parties' relationship to continue to be governed by a provision of the separation agreement under which a destitute and indebted spouse was to receive support at the rate of $175 for one year only, a period that had expired when the divorce decree was issued. No sufficient reason has been advanced to disturb the trial judge's decision and, in my view, the Court of Appeal should not have done so.
I should perhaps repeat here that a separation agreement made pursuant to a provincial family relations Act while the marriage subsists is substantially different from one approved by a divorce court. A divorce is meant to be final. By contrast, s. 18(4) of the Family Law Reform Act, under which the agreement in this case was made, expressly provided for variation, both where the provision for support "results in circumstances that are unconscionable", and where the person supported "qualifies for an allowance for support out of public money". Had an application been made for a variation under the Family Law Reform Act, or its successor, the Family Law Act, 1986, before the divorce, I see no reason why it could not have been varied. Under all these circumstances, I cannot see how the trial judge can be faulted, in the exercise of his discretion to do what is fit and just under s. 11(1) of the Divorce Act, for ordering the payment of compensation to Mrs. Richardson in the amount already mentioned.
Another matter requires mention. Counsel for the appellant asserts that it was the common expectation of the parties that Mrs. Richardson would be able to find work within the one‑year period for which support was provided. He relies on such cases as Van Doorn v. Van Doorn, supra; Doepel v. Doepel (1983), 1983 4555 (ON SC), 36 R.F.L. (2d) 316 (Ont. H.C.) and Barrett v. Barrett (1985), 1985 5088 (ON SC), 43 R.F.L. (2d) 405 (Ont. H.C.) While the evidence is sparse on the matter, there is, as the Court of Appeal notes, some suggestion in the evidence of the husband that this was so. That would, in any event, seem to be a reasonable inference. The trial judge observed that judging from the low support allowance her husband conceded her at the conclusion of the Ottawa proceedings, she would not have been able to maintain herself and her son in Ottawa for any period of time. Indeed counsel for Mr. Richardson does not contest the nature of the expectations of the parties at the time. Not only does he agree with Mrs. Richardson's counsel's assertion in his statement of fact that "It was the evidence of both parties that their expectation was that the wife would seek and obtain employment within the one‑year period", he states in his own factum that "It was his [Mr. Richardson's] understanding that the spousal support was restricted to a one‑year period because the wife was to seek and obtain employment." At all events, are we to assume that Mrs. Richardson would have entered into an improvident transaction that would have placed her in a position where she would, within a matter of months, necessarily become dependent on public assistance? Under these circumstances, I do not think it can be said that the trial judge incorrectly exercised his discretion to do what he thought was fit and just by ordering maintenance. Apart altogether from the harshness of the result for Mrs. Richardson, I do not think this is a situation where the public interest can be ignored; see Fabian v. Fabian, supra, per Lacourcière J.A., at p. 316. This is not a case where there has been an attempt to use Chouinard J.'s expression in Messier v. Delage, supra, at pp. 416‑17, for one spouse "to luxuriate in idleness at the expense of the other" indefinitely. As I noted, Mrs. Richardson's lack of employment flows directly from the role she played in the marriage. I agree with the trial judge that in the event that she obtains gainful employment the order can be varied.
A final point requires determination. The trial judge added an escalator clause to provide for changes caused by inflation and the financial circumstances of Mr. Richardson based on his changing yearly income as revealed in his income tax T4 slip. Since the Court of Appeal held that Mrs. Richardson was not entitled to maintenance, this clause became academic as to that part of the trial judge's order. It also found, however, that it was "inappropriate" as regards the child's allowance.
The first issue to be determined is whether under s. 11(1) a court has the power to include an escalator clause in a maintenance order. The only case I have found that expresses the view that no such power exists is Yeates v. Yeates (1982), 1982 4652 (NS SC), 31 R.F.L. (2d) 71 (N.S.S.C.T.D.), at p. 77. In Nathanson J.'s view in that case, this was inconsistent with the fact that such an order must be based on need. In Ursini v. Ursini (1975), 1975 1879 (ON CA), 24 R.F.L. 261, at p. 263, it is true, Brooke J.A., speaking for the Ontario Court of Appeal, stated that generally an order for maintenance must be varied by a further court order, but he left the door open, simply holding that in the circumstances of the case an escalator clause was not appropriate. It may also be argued, I suppose, that an increasing amount is not a "periodic payment" within the meaning of s. 11 of the Divorce Act and that the proper method of varying a maintenance order is provided by s. 11(2).
A number of courts, however, have held that an escalator clause is permissible. In Lardner v. Lardner (1980), 1980 368 (BC CA), 20 R.F.L. (2d) 234 (B.C.C.A.), at pp. 235‑36, Hinkson J.A. stated that such a clause is appropriate in proper circumstances; this was also the view taken in the following decisions, Moosa v. Moosa, Ont. Prov. Ct. (Family Division) Judge Abella, June 17, 1981, unreported; Laflamme v. Levallée, [1981] C.A. 396; Jarvis v. Jarvis (1984), 1984 4748 (ON CA), 45 R.F.L. (2d) 223 (Ont. C.A.) In some cases, such clauses have been expressed in terms of the Consumer Price Index, while in others, they have been keyed to the supporting spouse's actual wage or salary.
I agree with these courts. Inflation is a perennial problem in making compensation awards. I do not think that an attempt to give a constant value to an award goes beyond the meaning of periodic payment or amounts to a variation. The idea has generally been welcomed by commentators; see the following articles in Family Law: Dimensions of Justice (1983), Rosalie S. Abella and Claire L'Heureux‑Dubé (eds.): Julien D. Payne, "Ap‑ proaches to Economic Consequences of Marriage Breakdown", p. 27, at p. 30; Gail C. A. Cook, "Economic Issues in Marriage Breakdown", p. 19, at p. 20; and Thomas R. Berger, "Forms of Support Orders Under the Divorce Act", p. 69, at p. 75.
Escalator clauses can, no doubt, give rise to difficulties. For example, in a case like the present, Mr. Richardson may get an increase in salary from a promotion owing to his performance rather than from a regular advance to meet the cost of living. I do not believe Mrs. Richardson should be entitled to the benefits of her former husband's promotions of this kind. These have nothing to do with the marriage. However, any necessary adjustments can be made by way of a variation. As Gail Cook has observed, supra, any distortions that may arise from escalator clauses are far less than the current practice of no indexation. Escalator clauses also have the desirable side effect of cutting down the number of variation orders that must be made to adjust maintenance orders on account of inflation.
While there may be circumstances where a court of appeal may set aside an escalator clause as being inappropriate, generally I tend to view this as an aspect of the trial judge's discretionary power. Here no compelling reasons have been presented for interfering with the trial judge's order in this regard, and I do not, therefore, think it should be disturbed.
For these reasons, I would allow the appeal, reverse the judgment of the Court of Appeal and restore the trial judge's order.
Appeal dismissed, La Forest J. dissenting.
Solicitors for the appellant: Bastedo, Cooper & Shostack, Toronto.
Solicitors for the respondent: Lalonde & Eisen, Toronto.
