ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: FC-09-2922
DATE: 2013/09/05
BETWEEN:
Sandra Louise Hanniman
Applicant
– and –
Wayne Louise Hanniman
Respondent
Pascale G. Turcotte, for the Applicant
Wayne Hanniman, self-represented
HEARD: August 9, 2013
REASONS FOR DECISION ON MOTIONS
McNamara J.
Background
[1] This application for divorce was to proceed before me on November 28, 2011. At the outset of the hearing counsel for the applicant Ms. Hanniman and the respondent, Mr. Hanniman, who was self-represented, indicated on the record they had reached a settlement. The details of that settlement were then put on the record, and with relation to one of the key issues, ongoing spousal support, the transcript reads as follows:
For ongoing spousal support the parties agree to an order for ten years of spousal support commencing January 1, 2011 terminating December 1, 2020 in the amount of $3,500 a month.
[2] I endorsed the Continuing Record: “Matter is resolved on a final basis. Details of the agreement put on the record and agreed to by the parties on the record. Final order will be provided to me for signature.”
[3] The materials disclose that shortly after their court appearance, and specifically by document dated November 30, 2011, the parties executed a comprehensive Separation Agreement. That Agreement was filed with the court as a domestic contract on October 1, 2012.
[4] The evidence on the motions also discloses that the parties were unable to agree on the wording of the final order called for in my original endorsement, despite a re-attendance before myself on May 18, 2012.
[5] On June 25, 2012 the respondent filed two motions with the court. Central to both motions is an application to vary the amount of spousal support on the basis that there has been a material change in circumstances, specifically his retirement from his employment effective July 6, 2012.
[6] As a housekeeping matter at the outset of today’s motions, I addressed with the parties the question of the draft final order. At my invitation the parties took a few moments, with a copy of the transcript from the proceedings of November 28, 2011 in hand, and met to go over a draft order that had been prepared by Ms. Turcotte, counsel for the applicant. In short order they were able to agree on the wording of that order, and on consent I signed the order. The respondent’s motions then proceeded as motions to vary under s. 17 of the Divorce Act.
Position of the Parties
[7] The respondent Mr. Hanniman argues that after a long career with the Royal Canadian Mounted Police he was entitled to retire with full pension benefits, has done so as of July 6, 2012, and on the authority of cases such as Boston v. Boston, 2001 SCC 43, [2001] 2 S.C.R. 413 those facts represent a material change in circumstances that provide the court with jurisdiction to vary the spousal support order as his income has dropped from a pre-retirement annual level of $138,273 to approximately $92,000 post-retirement. He also argues that when the settlement was negotiated and the Separation Agreement entered into, it was made very clear to the applicant and her counsel that he would be retiring in 2012.
[8] On behalf of the applicant, Ms. Turcotte argues that the law is clear that where there is a Separation Agreement as there is here, while the court is not bound by its terms the Agreement does operate as strong evidence that at the time each accepted its terms, those terms were reflective of the intentions of the parties. She argues further that when the motions were brought in June of 2012 the Separation Agreement was still reflective of that intention, and there had been no change in circumstance that was reasonably unforeseeable at the time of the formation of the agreement between the parties. Further she categorically disputes there was any discussion about retirement within the next number of months subsequent to their court appearance and the execution of the agreement that followed, and to the contrary argues that the give and take on this issue was that the applicant was prepared to forgo indeterminate support in exchange for a fixed term of ten years because at the time of the agreement she was fifty and the respondent was fifty-five, and ten years got her to age sixty and him to age sixty-five. She also points out that a further concession made by the applicant in negotiating the spousal support issue was agreeing to a monthly amount closer to the low end figure based on the Spousal Support Advisory Guidelines.
Analysis
[9] While what was put on the record on November 28, 2011 does not provide a specific mechanism for varying spousal support, the Separation Agreement does. At para. 6(g) the Agreement reads:
Spousal support may be changed if there is a material change in circumstances. The change may be:
(iii) either party’s retirement. [Emphasis added]
[10] In consequence, then, either party’s retirement “may” represent a material change, but it does not automatically amount to such change. That issue must be examined contextually.
[11] On a review of all of the materials and the submissions made by the parties, I am satisfied that at the time the settlement was reached and the subsequent Agreement entered into, it could not reasonably have been within the contemplation of the parties when they agreed to a ten-year period of spousal support at a figure towards the low end of the range, that that agreement, despite its specific wording, was only in place for six or seven months. My view in this regard is reinforced by several pieces of correspondence from Mr. Hanniman in the days leading up to the trial date. There is no doubt from that material that the whole issue of spousal support and the date of his retirement was extensively discussed. In an e-mail dated November 23, 2011, five days prior to the attendance before myself, Mr. Hanniman made an offer to settle wherein, on the subject of spousal support, he offered as follows:
I will forgo retiring in April of 2012 for a period of three years until November, 2014 when all of our children will have completed their post-secondary schooling and found meaningful, self-supporting employment.
I will pay Sandra $3,500 a month spousal support for that three-year period until November, 2014.
[12] Mr. Hanniman admitted during his submissions that that offer was rejected. It is illogical in my view that Ms. Hanniman would have rejected a guaranteed support period through to November of 2014 a few days prior to trial, but then would have agreed to a ten-year period subject to the caveat that after six or seven months the respondent was free to retire and that would automatically constitute a material change in circumstances. While retirement, pursuant to the agreement, does open the door for either side to apply to vary support, the court is still required to look at all the circumstances in determining what the parties intended in coming to the agreement they reached. As previously indicated, in all the circumstances of this matter, the intention could not have been that all Mr. Hanniman had to do was retire within the next number of months and that would automatically translate into a material change sufficient to vary what had been agreed to, after extensive negotiations, some six months prior to his motions being filed.
[13] The facts in this case are very different from those of the Boston decision which Mr. Hanniman relied on heavily.
[14] First and foremost the application to vary in Boston was brought more than three years after the order was made. Further, in Boston, the responding party had made no attempt to find work while in our case Ms. Hanniman does work, earns approximately $20,000 per annum, and that was taken into account in calculating quantum. There is no persuasive evidence before me that she is underemployed. Next, unlike the situation in Boston, there has been no pension transfer to date as called for both in the proceedings before me on November 28, 2011, and in the Separation Agreement. In consequence, Ms. Hanniman’s line 150 taxable income on her 2012 tax return is $49,738.54 (inclusive of spousal support), while Mr. Hanniman’s line 150 taxable income was $206,861.00, although he points out that is misleading as some of that income was from regular employment pre-retirement and $79,000.00 was severance pay. He indicates that in 2013 his income will be in the area of $92,500 and he handed up pay stubs supportive of that submission. That is still a significantly higher income level than that of the applicant, and of course the support payments he makes to Ms. Hanniman are tax-deductible.
[15] When the pension transfer does in fact take place and income begins to flow to Ms. Hanniman from that, that may change the landscape of this matter. That has not occurred and is not before me.
[16] In summary, I am not satisfied on the evidence before me that there has been a material change in circumstances that was reasonably unforeseeable at the time of the Agreement reached between the parties, and in my view the order still reflects the intentions of the parties. The motions are dismissed.
[17] If the parties are unable to agree on the question of costs, they may make brief (two pages) written submissions.
The Hon. Mr. Justice James McNamara
Released: September 5, 2013
COURT FILE NO.: FC-09-2922
DATE: 2013/09/05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Sandra Louise Hanniman
Applicant
– and –
Wayne Louise Hanniman
Respondent
REASONS FOR DECISION ON MOTIONS
McNamara J.
Released: September 5, 2013