Caron v. Caron, [1987] 1 S.C.R. 892

Betty Anne Caron Appellant

v.

Antoine Caron Respondent

indexed as: caron v. caron

File No.: 19414.

1986: March 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 the yukon territory

Divorce ‑‑ Maintenance ‑‑ Variation ‑‑ Separation agreement ‑‑ Agreement providing for the cessation of maintenance payments to ex‑wife upon cohabitation ‑‑ Clause incorporated in decree nisi ‑‑ Clause enforced by ex‑husband ‑‑ Ex‑wife's application to vary decree nisi denied ‑‑ Power of the court to vary maintenance provision under the agreement and under s. 11(2) of the Divorce Act.

Court ‑‑ Jurisdiction ‑‑ Divorce ‑‑ Separation agreement providing for the cessation of maintenance payments to an ex‑wife upon her remarriage or cohabitation ‑‑ Power of the court to interfere with the agreement ‑‑ Divorce Act, R.S.C. 1970, c. D‑8, s. 11(2).

Married in 1964, the parties separated in 1978. Two years later, with advice of independent legal counsel, they concluded a separation agreement which settled property matters and provided, in paragraph 3, for the payment of spousal support to the wife "until such time as she shall remarry or cohabit as man and wife with any person for a continuous period of time in excess of ninety (90) days". In paragraph 7, the agreement provided also that "Notwithstanding the terms of the preceding paragraphs ... the quantum of monthly payments by the Husband to the Wife ... may be varied" by a court if the circumstances of the parties change after the agreement is entered into. The essential parts of the agreement, amongst others paragraph 3, were incorporated in the decree nisi. After the divorce, appellant cohabited with a man for a period exceeding three months and respondent, although he was still able to support her, ceased the maintenance payments. Appellant was then forced to take social assistance. Her application to the Supreme Court of the Yukon Territory for a variation of the decree nisi to resume her maintenance payments was denied and the judgment affirmed by the Court of Appeal. This appeal is to determine whether the court has the power under the separation agreement or s. 11(2) of the Divorce Act to interfere with the agreement.

Held: The appeal should be dismissed.

Per Dickson C.J. and McIntyre, Lamer, Wilson and Le Dain JJ.: Paragraph 3 of the separation agreement is a valid and enforceable provision and was properly invoked by respondent. Despite the non obstante language in paragraph 7, this paragraph does not empower the court to reinstate maintenance for the former wife where it has been validly discontinued under paragraph 3. The power to vary under paragraph 7 is limited to a power to vary quantum and does not extend to a power of reinstatement where the right to maintenance has been forfeited for a cause unrelated to the means or needs of the parties. The cessation of maintenance payments upon cohabitation was expressly contemplated by the agreement and it is therefore doubtful that it was intended by the parties to be a change justifying an order from the court for spousal maintenance.

The court should not reinstate maintenance for the wife under its power to vary maintenance under s. 11(2) of the Divorce Act. The court's power to vary maintenance in a divorce decree is very limited where the provisions in the decree are the result of a negotiated settlement (which is not unconscionable in the substantive law sense) freely entered into by the parties on the advice of independent legal counsel. The approach of the courts is to respect such settlements wherever possible and to exercise their power of intervention under the Divorce Act only in the case of a radical change in circumstances related to a pattern of economic dependency of one party on the other generated by the marriage relationship. In the case at bar, there was no such change in circumstances.

Per La Forest J.: The settlement agreement does not empower the court to vary that agreement and appellant has failed to discharge the onus that lies upon her to support a variation, under s. 11(2) of the Divorce Act, of the maintenance order incorporating that agreement.

Cases Cited

By Wilson J.

Followed: Pelech v. Pelech, 1987 CanLII 57 (SCC), [1987] 1 S.C.R. 801; referred to: Lowe v. Peers (1768), 4 Burr. 2225, 98 E.R. 160; Archer v. Society of the Sacred Heart of Jesus (1905), 9 O.L.R. 474; Bradley v. Bradley (1909), 19 O.L.R. 525; Lowe v. Lowe (1975), 1975 CanLII 1941 (BC SC), 20 R.F.L. 216; Perkins v. Perkins, [1938] P. 210; Barnard v. Barnard (1982), 1982 CanLII 3330 (ON CA), 30 R.F.L. (2d) 337; Neal v. Neal (1972), 1972 CanLII 1107 (BC SC), 8 R.F.L. 194; MacDonald v. Lee (1970), 1970 CanLII 1571 (NS CA), 2 R.F.L. 360.

Statutes and Regulations Cited

Divorce Act, R.S.C. 1970, c. D‑8, s. 11(2).

Matrimonial Property and Family Support Ordinance, S.Y.T. 1979 (2nd), c. 11, ss. 30.6(1) [en. 1980 (2nd), c. 15, s. 7(1)], 38.

Authors Cited

Treitel, G. H. The Law of Contract, 6th ed. London: Stevens & Sons, 1983.

APPEAL from a judgment of the Yukon Territory Court of Appeal (1985), 1985 CanLII 132 (YK CA), 45 R.F.L. (2d) 378, affirming a judgment of Maddison J. dismissing appellant's application to vary maintenance provisions of decree nisi of divorce. Appeal dismissed.

Ronald S. Veale, for the appellant.

Paul S. O'Brien, for the respondent.

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

1. Wilson J.‑‑At issue in this case is the power of the court to interfere with a separation agreement which provides for the cessation of maintenance payments to an ex‑wife upon her remarriage or cohabitation with another man for a prescribed period of time.

1. The Facts

2. The parties were married in July of 1964 and separated some time in 1978. There were two children of the marriage, both of whom continued to reside with the appellant after the separation. On June 17, 1980 the parties concluded a separation agreement. It is agreed that both had independent legal advice at the time of the signing of the separation agreement and fully understood its terms. The essential parts of the agreement were incorporated in the decree nisi of divorce which was granted by Maddison J. of the Supreme Court of the Yukon Territory on the same day the agreement was concluded. The decree absolute was granted on October 15, 1980.

3. The decree nisi provided that the appellant was to have custody of the children and that the respondent was to have liberal access to them. The respondent was to convey clear title to the matrimonial home to the appellant. He was also to pay the appellant $600 per month as maintenance "until such time as she shall remarry or cohabit as man and wife with any person for a continuous period in excess of ninety (90) days". This provision of the order came from paragraph 3 of the separation agreement. The respondent was also to pay the appellant $300 per month for each child's maintenance. In due course one of the children left home and became self‑supporting. One child remains with the appellant. Finally, the decree nisi obliged the respondent to pay the appellant a lump sum of $30,000. According to the terms of the agreement $5,000 of this sum was to be held in trust to pay for the appellant's moving expenses should she decide to leave the Yukon. She did not leave and, as agreed, the $5,000 was eventually returned to the respondent. The remaining $25,000 was paid to the appellant as required.

4. Some time after the final decree of divorce the appellant began living with a man and lived with him for a period in excess of 90 days. By March of 1982 the respondent knew of this cohabitation but it was not until May of 1983 that he applied to the court for an order releasing him from further maintenance obligations in respect of the appellant. No court ruling was in fact made. However, the respondent ceased payments to the appellant for her maintenance and, as the Court of Appeal found, "unfortunately the person with whom she cohabited did not support her after the maintenance was discontinued". Payments for maintenance of the children have always been made by the respondent as required.

5. The appellant and respondent are now aged 41 and 45 respectively and the 11 year old daughter continues to reside with her mother. The respondent is financially able to support the appellant if ordered by the court to do so.

6. It is agreed by the parties in the agreed statement of facts that without the support of the respondent the appellant came to rely on social assistance. The Court of Appeal (1985), 1985 CanLII 132 (YK CA), 45 R.F.L. (2d) 378 made reference to the paucity of evidence before them (at p. 379):

We are told that the cohabitation discontinued, but we know nothing of the present circumstances of the appellant other than she is in need, even after having sold the marital home and retained the proceeds of sale.

In oral argument before this Court counsel for the appellant stated that the appellant had received social assistance from January to May of 1984, that from June of 1984 until January of 1986 she was employed as a janitor, and that since January of 1986 she has been receiving unemployment insurance benefits arising from her employment. There is no evidence of these facts in the record. However, counsel for the respondent took no issue with appellant counsel's statements.

2. The Courts Below

7. On February 16, 1984 the appellant applied for a variation of the decree nisi so as to provide for the resumption of maintenance payments to her. The application was denied without reasons by Maddison J.

8. On May 2, 1985 the Court of Appeal for the Yukon Territory dismissed the appellant's appeal from the order of Maddison J. Speaking for himself, Seaton and Lambert JJ.A., Carrothers J.A. noted (at pp. 379‑80):

We do not have before us, nor did Maddison J. have before him, any evidence of change or special circumstances of the respective parties which might warrant or justify variation of the maintenance provisions, apart from consideration of the technical breach of the provision for termination. To strike out what I would call a dum sola clause such as this cannot be considered in isolation from all of the circumstances of both parties. In the result, I cannot say that Maddison J. was wrong. Indeed, I consider him to be correct on the basis of the facts upon which he made his finding.

Leave to appeal to this Court was granted on July 31, 1985, [1985] 2 S.C.R. vi.

3. The Issues

9. As established in Pelech v. Pelech, 1987 CanLII 57 (SCC), [1987] 1 S.C.R. 801 (reasons for judgment released concurrently), the test to be applied by the courts in interfering with minutes of settlement entered into by former spouses is a very stringent one. The applicant must satisfy the court that there has been a radical change in circumstances related to a pattern of economic dependency generated by the marriage relationship. In this case, however, the parties have agreed in paragraph 7 of their minutes of settlement that the wife's maintenance may be varied by the court where the circumstances of the parties change after the agreement is entered into. Paragraph 7 reads as follows:

Notwithstanding the terms of the preceding paragraphs, in the event that the circumstances of the Husband or the Wife shall change after the making of this agreement having regard to the ability of the Husband to make payments as aforesaid and/or to the needs of the Wife to be maintained by the Husband, then the quantum of monthly payments by the Husband to the Wife for the benefit of the children and the Wife may be varied by mutual consent or by reference to a court of competent jurisdiction.

The change contemplated by paragraph 7 may be either in the ability of the husband to pay the agreed upon amount or in the needs of the wife. There is no requirement that the change be either radical or related to an economic pattern generated by the marriage. A simple change in circumstances would appear to be enough. The power of the court to vary the provision for maintenance in the divorce decree must therefore be considered under two headings, namely (a) variation under paragraph 7 of the settlement agreement; and (b) variation under s. 11(2) of the Divorce Act, R.S.C. 1970, c. D‑8.

(a) Variation Under the Settlement Agreement

10. Counsel for the appellant argues that the cessation of maintenance forced the appellant to take social assistance and that this must be regarded as a change in circumstances which warrants an order from the court for increased spousal support. As noted earlier, due to the brief nature of the agreed statement of facts and the statements made by appellant's counsel during oral argument, the actual financial status of the appellant is unclear. The only change in circumstances that has occurred is that paragraph 3 of the separation agreement providing for the cessation of maintenance payments upon remarriage or cohabitation by the wife has been enforced by the husband. Counsel for the appellant is, in effect, stating that the enforcement of the clause constitutes a change in circumstances warranting the non‑enforcement of the clause. This does not appear to be a sensible interpretation of paragraphs 3 and 7. Since the cessation of maintenance in the circumstances of this case was expressly contemplated by the agreement, it seems doubtful that it was intended by the parties to be a change justifying an order from the court for spousal maintenance. The learned trial judge seems to have refused to treat it as such and the Court of Appeal agreed with him.

11. I should emphasize at this point that the appellant did not argue that on a proper construction of the agreement "cohabitation" meant more than simply living together and included the notion that the wife would be being supported by her new partner. In fact, it is agreed that she received no support from him. It might have been argued, therefore, that the conditions for the cessation of maintenance from the husband were not really met. Parties to a contract are, however, free to give their own meaning to a word and have that meaning govern. Neither has disputed the fact that the contingency in paragraph 3 which disentitled the wife to maintenance took place. Each accepted that "cohabitation as man and wife" meant simply engaging in sexual relations while living in the same dwelling. The clause as understood and intended by the parties would appear, therefore, to have been properly invoked by the respondent.

12. Counsel for the appellant, however, advances a different argument, namely that a clause providing for the cessation of maintenance upon the cohabitation of the recipient with another man is contrary to public policy. It is, he submits, a dum casta clause or something analogous thereto. Dum casta clauses, he points out, are prohibited in the Yukon Territory (see the Matrimonial Property and Family Support Ordinance, S.Y.T. 1979 (2nd), c. 11, s. 38) although the Act permits remarriage and cohabitation to operate as contingencies in separation agreements. With respect, I think that is precisely what we have here‑‑remarriage and cohabitation operating as a contingency. I see no merit, therefore, in this submission.

13. Nor, in my opinion, can the appellant derive much comfort from the ancient common law principle that contracts in restraint of marriage are contrary to public policy: Lowe v. Peers (1768), 4 Burr. 2225, 98 E.R. 160; Archer v. Society of the Sacred Heart of Jesus (1905), 9 O.L.R. 474 (C.A.); Bradley v. Bradley (1909), 19 O.L.R. 525 (Div. Ct.) The clause in the separation agreement is not within the principle of these cases which deal with promises not to marry or promises to pay someone money if they marry a particular person. A contract is not invalid merely because, as in the case of the clause before us, it may constitute a disincentive to one of the parties to marry: G. H. Treitel, The Law of Contract (6th ed. 1983), at p. 332.

14. The appellant submits also that the remarriage or cohabitation provision should not be enforced against her because neither remarriage nor cohabitation may affect her need for support. The new partner may not have the means to support her. Further, in the Yukon, in the case of cohabitation, the new partner may have no legal obligation to support her if they are not in a relationship of some permanence. See the Matrimonial Property and Family Support Ordinance, S.Y.T. 1979 (2nd), c. 11, s. 30.6(1) (en. S.Y.T. 1980 (2nd), c. 15, s. 7(1)), which provides that a support order can be made in respect of a man or a woman "who, not being married to each other and not having gone through a form of marriage with each other, have cohabited in a relationship of some permanence".

15. I do not believe that the cohabitation clause can be struck down on any of the grounds advanced. However, there is ample support in the case‑law for the proposition that remarriage or cohabitation are relevant factors to be considered on a motion to vary or terminate maintenance. Some courts have expressed the view that remarriage or cohabitation does not necessarily mean that a decrease in maintenance should be ordered: it is necessary to look at the actual arrangements of the parties to see whether the needs of the recipient of the maintenance have in fact decreased‑‑Lowe v. Lowe (1975), 1975 CanLII 1941 (BC SC), 20 R.F.L. 216 (B.C.S.C.) Other courts have taken the view that such an arrangement inevitably decreases the wife's needs and therefore may justify a decrease in her maintenance:

The result to the wife of the re‑marriage is that she is saved the expense of maintaining a separate establishment of her own, and therefore to some extent, she saves on rent and food and household expenses.

(Perkins v. Perkins, [1938] P. 210, at p. 217, cited with approval in MacDonald v. Lee (1970), 1970 CanLII 1571 (NS CA), 2 R.F.L. 360 (N.S.C.A.))

Still other courts have found that the fact of remarriage or cohabitation per se justifies the court in terminating maintenance on grounds of principle: Barnard v. Barnard (1982), 1982 CanLII 3330 (ON CA), 30 R.F.L. (2d) 337 (Ont. C.A.) (cohabitation); Neal v. Neal (1972), 1972 CanLII 1107 (BC SC), 8 R.F.L. 194 (B.C.S.C.) The court in Barnard puts forward the following justification at p. 341:

Just as the law will not permit her to have two husbands, it is difficult to accept the proposition that she should be entitled to the support of two men. It must be conceded, of course, that sexual "immorality" or even remarriage is no longer a bar to a spouse's support: see Richards v. Richards, 1972 CanLII 431 (ON CA), [1972] O.R. 596, 7 R.F.L. 101, 26 D.L.R. (3d) 264 (C.A.); but where a woman‑‑or, of course, a man‑‑has remarried or entered into an equivalent arrangement, it defies one's sense of fitness that she or he should remain fully entitled to the support of the former spouse.

This is not an original thought. The same sentiment has been expressed by Tyrwhitt‑Drake L.J.S.C. in Neal v. Neal (1972), 1972 CanLII 1107 (BC SC), 8 R.F.L. 194 at 195, 29 D.L.R. (3d) 254 (B.C.S.C.), where he stated that the court should consider the propriety of "(saddling) a man with the responsibility of maintaining his former wife after she has contracted another marriage"; by Macnab Co. Ct. J. in Wiebe v. Wiebe (1980), 1980 CanLII 3797 (ON SC), 16 R.F.L. (2d) 286 at 287 (Ont. Co. Ct.), "I think under the circumstances (cohabitation) she must be taken to forfeit any valid claim for support against (her husband). This has, I think, the force of natural law."; and by the same judge in Nielson v. Nielson (1980), 1980 CanLII 3723 (ON SC), 16 R.F.L. (2d) 203 (Ont. Co. Ct.). In two cases in Newfoundland, Chaffey v. Chaffey (1976), 1976 CanLII 1954 (NL SC), 13 Nfld. & P.E.I.R. 150, 3 R.F.L. (2d) 69, 29 A.P.R. 150 (Nfld. T.D.), and Carter v. Carter (1978), 1978 CanLII 3111 (NL SC), 19 Nfld. & P.E.I.R. 411, 3 R.F.L. (2d) 355, 50 A.P.R. 411 (Nfld. T.D.), Goodrich J. clearly disapproved of granting periodic support to a spouse who had entered into a common law relationship.

16. These cases give some indication of the direction in which the law is moving absent any express provision in a separation agreement dealing with the effect of remarriage or cohabitation on a spouse's right to maintenance. They are obviously somewhat less than helpful to the appellant in her submission that paragraph 3 should be held invalid as contrary to public policy.

17. The more difficult issue raised by paragraph 7 is, I believe, whether, accepting that paragraph 3 of the agreement is a valid and enforceable provision and was therefore properly included in the decree, the court can nevertheless vary the appellant's maintenance under the power conferred on it in paragraph 7. The respondent's position is that it cannot, that the parties specifically contemplated the event which occurred and agreed as to the consequences of it. That, he submits, precludes the court from negating the effect of the paragraph by exercising its discretion in favour of an order of maintenance for the appellant.

18. The contrary argument must, I believe, rest on the opening words of paragraph 7. I repeat the paragraph in full for convenience:

Notwithstanding the terms of the preceding paragraphs, in the event that the circumstances of the Husband or the Wife shall change after the making of this agreement having regard to the ability of the Husband to make payments as aforesaid and/or to the needs of the Wife to be maintained by the Husband, then the quantum of monthly payments by the Husband to the Wife for the benefit of the children and the Wife may be varied by mutual consent or by reference to a court of competent jurisdiction. [Emphasis added.]

19. There are two significant things about the provision. The first is that it contemplates variation by the court notwithstanding the preceding clauses which, of course, include paragraph 3. The second is, as already mentioned, that it contemplates variation on a simple change of circumstances bearing on the needs of the wife. Is it open to the appellant to say: "My circumstances have changed since the date of the separation agreement and the decree nisi and I am now in need" despite the fact that paragraph 3 has operated in the interval? Or is the court's power to vary under paragraph 7 premised on the continued entitlement of the appellant to maintenance from her husband in some amount?

20. In this connection it is noted that, after reference to the conditions required for a variation by the court, the paragraph says "...then the quantum of monthly payments by the Husband to the Wife ... may be varied" (emphasis added). Prima facie, this suggests that the power to vary is limited to a power to vary quantum and does not extend to a power of reinstatement where the right to maintenance has been forfeited. It may be, however, that the clause could be stretched to cover the situation where payments had previously been discontinued for lack of need on the part of the wife or lack of means on the part of the husband. But query whether it can be construed to cover a case such as this, where the disentitlement has arisen from a cause unrelated to the means or needs of the parties and a cause, moreover, expressly addressed in the agreement?

21. I have concluded that on its wording the clause cannot be so extended and paragraph 15 would seem to support this view. In that paragraph each party accepts the provisions of the agreement in satisfaction of his or her claims under the Divorce Act and under the matrimonial property legislation of the province and then goes on to agree that each is free to bring proceedings against the other to enforce any of the terms of the agreement. I think the appellant must be taken to have been aware of the significance of the latter provision in the context of her agreement in paragraph 3 that cohabitation for a period in excess of 90 days would disentitle her to maintenance. She must have envisaged that if she cohabited for the prescribed period of time with another man, she was putting her right to maintenance from her husband in jeopardy. It is my view, therefore, that the court does not have the power under paragraph 7 to reinstate the appellant's maintenance in the face of paragraph 3.

(b) Variation Under s. 11(2) of the Divorce Act

22. As already mentioned, the court's power to vary maintenance in a divorce decree is very limited where the provisions in the decree are the result of a negotiated settlement freely entered into by the parties on the advice of independent legal counsel. The approach of the courts is to respect such settlements wherever possible and to exercise their power of intervention under the Divorce Act only in the case of a radical change in circumstances related to a pattern of economic dependency of one party on the other generated by the marriage relationship: see Pelech, supra.

23. We have no evidence in this case of such a change in circumstances. Indeed, the courts below found no change apart from the fact that the respondent had discontinued maintenance pursuant to paragraph 3 of the minutes of settlement, which they found he was entitled to do, and that the appellant was receiving social assistance at the time of the application. We know nothing about the appellant's work pattern either prior to or during the marriage; what marketable skills she has; the level of health she enjoys; the availability of jobs for which she might be suited; the efforts she has made to find employment. We know that she is 41 years of age and looks after an 11 year old daughter who is presumably attending school. I do not believe that the evidence of change in the appellant's circumstances meets the stringent test set out in Pelech. I would conclude therefore that this is not an appropriate case for the Court's exercise of its power under s. 11(2) of the Divorce Act.

4. Conclusions

24. (a) Paragraph 3 of the separation agreement is a valid and enforceable provision and was properly invoked by the respondent.

25. (b) The non obstante language in paragraph 7 does not empower the court to reinstate maintenance for the former wife where it has been validly discontinued under paragraph 3.

26. (c) The court should not reinstate maintenance for the wife under its power to vary maintenance in the Divorce Act where to do so would deny any effect to a valid and enforceable agreement (which is not unconscionable in the substantive law sense) entered into by the parties freely and on the advice of independent legal counsel.

27. (d) The appellant was unable to satisfy the trial judge or the Court of Appeal on the evidence that there had been any change of circumstances other than the change arising from the husband's enforcement of paragraph 3 as contemplated by the parties in the agreement. Still less was she able to establish a change which would satisfy the test in Pelech. This Court should not interfere with the lower courts' findings.

5. Disposition

28. I would dismiss the appeal with costs.

The following are the reasons delivered by

29. La Forest J.‑‑I have had the advantage of reading the judgment of my colleague Wilson J. I fully agree with her interpretation of the settlement agreement, and I also agree that the appellant has failed to discharge the onus that lies upon her to support a variation under s. 11(2) of the Divorce Act of the maintenance order incorporating that agreement. I would, therefore, dispose of this appeal in the manner proposed by Wilson J.

Appeal dismissed with costs.

Solicitors for the appellant: Cable, Veale & Morris, Whitehorse.

Solicitors for the respondent: O'Brien & Smith, Whitehorse.