Court File and Parties

COURT FILE NO.: FC 09-2678-2 DATE: 2016/09/19 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Gerald Stobo, Applicant AND Susan Stobo, Respondent

BEFORE: Justice A. Doyle

COUNSEL: H. Hunter Phillips, for the Applicant Wade L. Smith, for the Respondent

HEARD: September 8, 2016

Endorsement

Overview

[1] This is a motion by the Applicant to vary spousal support pursuant to an amending separation agreement signed by the parties on August 13, 2014.

[2] The Applicant submits that since the agreement was registered pursuant to s. 35(2) of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), the agreement becomes an order of the Court capable of varying pursuant to s.17 of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.). He submits that there has been a material change of circumstances as he has had a 19 per cent involuntary income reduction. The Court should therefore reduce his current spousal support by 19%. There should not be a hearing de novo.

[3] The Respondent opposes the motion and states that this matter should be treated as an initial application for support under the Divorce Act, section 15.2. She argues that since the original divorce order only dealt with the divorce and was silent on corollary relief, the application is a corollary relief application under the Divorce Act. Hence, it should be heard as an application de novo and the court must consider the factors set in section 15.2 including considering the agreement signed by the parties.

[4] The Respondent submits that a simple registration of an agreement does not result in the agreement becoming a Court order under the Divorce Act.

[5] The Respondent requests spousal support in accordance with the Spousal Support Advisory Guidelines (SSAGs). Alternatively, the Respondent wishes a continuation of support as agreed in the amending separation agreement.

Decision

[6] The preliminary issue the court must determine before it deals with the merits of the matter is: Should the applicant’s claim be considered under section 15.2 or section 17 of the Divorce Act?

[7] For the reasons set out below, the Court finds that s. 17 of the Divorce Act does not apply, as there is no order under the Divorce Act to vary. The Court cannot entertain an application under s. 15.2 for corollary relief under the Divorce Act as there is no corollary relief application pursuant to the Divorce Act before the Court.

[8] The Respondent in her response to change forms simply asked for a dismissal of the motion to change. She did not commence an application for corollary relief under the Divorce Act. The only documents for the Court’s consideration are the motion to change and response to change documents filed pursuant to Rule 15 of the Family Law Rules, O. Reg. 114/99 (“The Rules”).

[9] Rule 2 of the Family Law Rules directs the Court to deal with cases justly and fairly. In this matter, both parties did not utilize the proper process to deal with the substantive issues.

[10] Therefore, the Court dismisses this motion with the following provision. If the parties wish to preserve this litigation, the Court is prepared to accommodate counsel to determine the next step, including whether pleadings will be amended on consent. If the parties wish to address the Court, a date must be set within 30 days from the release of this decision, failing which, the motion to change is dismissed.

Background

[11] The parties were married on July 8, 1978. They separated on January 15, 2002. The parties were divorced on February 15, 2010. The divorce did not provide for any corollary relief.

[12] They have three children who are all independent at this time. Prior to the marriage, the Respondent was a qualified teacher in Calgary. She went to England with the Applicant where he attended law school and obtained his degree. She worked to support the family while in England. They returned to Ontario where the Applicant worked in a law practice. She worked part-time as an English as a Second Language (ESL) teacher. The Respondent suffered economic loss due to her role in the marriage as a full-time caregiver and foregoing work as a teacher. She also contributed to his succor and assisted in his office.

[13] In 1981, the applicant left his law practice to work in the government to allow him more time with the children. He worked with the public service until 2001, a year before the separation, when he entered private practice in international trade.

[14] When the parties separated in January 2002, the Applicant’s income in his law practice was $150,000 per annum.

[15] At the time of separation, the Respondent, who has a B. Ed degree, was teaching English as a second language part-time.

[16] The parties signed a comprehensive separation agreement dated October 23, 2006. The separation agreement provided for a final property settlement and spousal and child support. The Applicant agreed to pay the Respondent $6500 per month as spousal support with an annual cost-of-living increase.

[17] As a result of an increase in the Applicant’s income in September 2008, the parties signed an amending separation agreement, which increased the amount of spousal support to be paid by the Applicant to $7000 per month.

[18] By August 2014, further increases to the Applicant’s income led to another amending separation agreement, which increased the amount of spousal support to $8615 per month retroactive to January 1, 2013. The parties considered the SSAGs but did not apply them. There was no provision in the agreement that stated that the parties may vary the support upon a material change of circumstances.

[19] The agreements were not incorporated into the divorce order or any other order.

[20] The Applicant has had an involuntary reduction of his income as a result of the change in the points that were allotted to the Applicant in his law firm. This reduced his income from his law practice to $424,000 per year.

[21] Immediately upon receiving notice of the reduction of his income on April 23, 2015, he advised the Respondent of this reduction and asked for his decrease of spousal support payments. This reduction of income continues in 2016.

Legal Principles

[22] The Applicant filed the agreement pursuant to section 35 of the Family Law Act (FLA).

[23] Pursuant to FLA section 35(2):

A provision for support or maintenance contained in a contract that is filed in this manner,

(a) may be enforced;

(b) may be varied under section 37;

(c) except in the case of a provision for the support of a child, may be increased under section 38; and

(d) in the case of a provision for the support of a child, may be recalculated under section 39.1.

[24] Therefore, pursuant to section 35(2) (b), an application for variation can apply to an agreement of the spouses as if it was an order of the Court.

[25] “Spouses” are defined under section 29 of the FLA as a dependent whom an obligation to provide support under this part or spouse who has is married or has cohabited for not less than three years. The parties agree that their variation or change of the agreement is not to take place under the FLA as they are not “spouses” as defined in that Act.

[26] The Applicant contends that for the purposes of an agreement filed with the Court, it becomes a support order and therefore section 17 of the Divorce Act is engaged.

[27] The relevant provisions of section 17 of the Divorce Act are set out below:

(1) A Court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,

(a) a support order or any provision thereof on application by either or both former spouses; or

(3) The Court may include in a variation order any provision that under this Act could have been included in the order in respect of which the variation order is sought.

(4.1) Before the Court makes a variation order in respect of a spousal support order, the Court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the Court shall take that change into consideration.

(6) In making a variation order, the Court shall not take into consideration any conduct that under this Act could not have been considered in making the order in respect of which the variation order is sought.

(7) A variation order varying a spousal support order should

(a) recognize any economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown;

(b) apportion between the former spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the former spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.

[28] The Respondent contends that this matter should be treated as an initial application under section 15.2 of the Divorce Act and that the Court should consider the factors set out therein. Section 15.2 is reproduced below.

15.2 (1) A Court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the Court thinks reasonable for the support of the other spouse.

(2) Where an application is made under subsection (1), the Court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the Court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).

(3) The Court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.

(4) In making an order under subsection (1) or an interim order under subsection (2), the Court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c) any order, agreement or arrangement relating to support of either spouse.

(5) In making an order under subsection (1) or an interim order under subsection (2), the Court shall not take into consideration any misconduct of a spouse in relation to the marriage.

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[29] In L.M.P. v. L.S., 2011 SCC 64, the Supreme Court of Canada dealt with a matter where the parties at separation in 2002 entered a comprehensive agreement that was incorporated into a Court order in 2003. Under its terms, the wife was to receive spousal support of $3,688 per month, indexed. The order did not specify a termination date for spousal support. The Court stated that once a material change of circumstances was found, the Court would vary pursuant to s. 17 of the Divorce Act. A material change constitutes a substantial change, which is not transitory and would have resulted in a different order or agreement had the parties been aware of this change.

[30] The Court confirmed that a motion to change an order is neither an appeal of the order nor a hearing de novo. Rather the Court should consider the change since the original agreement/order and whether one is justified.

[31] These statutory principles have been applied, including in Walts v. Walts, 2016 ONSC 4777, where Justice Mackinnon stated at paragraph 11 when referring to L.M.L.P. v. L.S., that the change must be substantial, continuing and that “if known at the time, would likely have resulted in a different order.” She confirmed that the Court must limit itself to whatever variation is justified by the material change of circumstances.

[32] Justice Mackinnnon was dealing with a separation agreement, which was incorporated into a divorce order. The ex-husband was moving to reduce his spousal support payment on the basis that the ex-wife now had access to retirement savings.

[33] In Gobeil v. Gobeil, 2007 MBCA 4, the Manitoba Court of Appeal at paras. 25-6 held:

Before making an order varying child support, the Court must be satisfied that “a change of circumstances as provided for in the applicable guidelines has occurred since the making of the child support order” (s. 17(4) of the Act). Before making an order varying spousal support, the Court must be satisfied that “a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order” (s. 17(4.1) of the Act). These requirements do not apply to original applications for support.

As is evident from its wording, s. 17(1) only applies when the support obligations are contained in a Court order. Obligations to pay support under a separation agreement cannot be varied under s. 17(1), even though the parties contemplate a variation by the Court in their agreement. The judge correctly treated the husband’s application as one under s. 15.1(1) and s. 15.2(1). As such, this was an original application concerning both spousal support and child support. See Miglin, Fung-Sunter v. Fabian, 1999 BCCA 346, [1999] 10 W.W.R. 592, Nielsen v. Nielsen, 2006 BCCA 436, [2006] B.C.J. No. 2629 (QL) and Epp v. Robertson, 2000 SKQB 97, [2000] S.J. No. 164 (QL).

[34] As in the case at bar, in Gobeil, the agreement was not incorporated into the divorce order. The parties commenced an application requesting relief under the guidelines and Divorce Act. By doing so, the Court was, pursuant to s. 15 of the Divorce Act, entitled to consider the spousal support agreement.

[35] In Droit de la famille 132380, G.P. v. M.M., 2013 QCCA 1504, 2013 CarswellQue 14061, the Court was dealing with an agreement which was incorporated into a Court order.

[36] It refers to the two-step approach set out in L.M.P., under s. 17 of the Divorce Act. Firstly, the Court must determine whether the threshold for variation has been met. Once the threshold for variation is met, the Court may adjust the order to reflect the change. It is not a hearing de novo. The analysis under Miglin v Miglin, 2003 SCC 24, [2003] 1 S.C.R., 303 is not imported into the analysis under section 17.

Analysis

[37] The parties in L.M.P. and Walts, and G.P. v M.M. cases incorporated their agreements into Court orders. This case is more similar to the Gobeil case, where the agreement was not incorporated into the final divorce order. There, the Court proceeded under a s. 15.2 application pursuant to the Divorce Act.

[38] An agreement registered pursuant to the FLA does not become an order under the Divorce Act.

[39] It has the effect of being enforceable or capable of being varied pursuant to the FLA, which permits the Court to order spousal support for spouses as defined in s. 29. Clearly, the parties do not fit the definition of “spouses” under that Act and cannot pursue remedies under this Act. Both counsel agree that support cannot be ordered under the FLA.

[40] No jurisprudence or authority was provided by the Applicant, which supports the notion that the Court can consider an agreement registered with the FLA as an order under the Divorce Act capable of variation under s. 17.

[41] The mere fact that the FLA allows a registered agreement to be considered an order does not transpose it into a support order for the purposes of the federal legislation.

[42] Therefore, for corollary relief, the parties must proceed under s. 15.2 of the Divorce Act to determine the quantum of the Applicant’s obligation to pay spousal support.

[43] The Applicant brought a motion to change the agreement. He did not apply under s. 15.2 of the Divorce Act.

[44] The Respondent filed a response to the motion to change requesting a dismissal of the motion. She did not bring an application under s. 15.2 of the Divorce Act.

[45] There is no application under s. 15.2 of the Divorce Act before me to determine.

[46] The Court is mandated to deal with cases justly and fairly. Rule 2(3), states that the Court must deal with cases justly with fairness to all parties:

Dealing with a case justly includes,

(a) ensuring that the procedure is fair to all parties;

(b) saving expense and time;

(c) dealing with the case in ways that are appropriate to its importance and complexity; and

(d) giving appropriate Court resources to the case while taking account of the need to give resources to other cases.

[47] In order to ensure that the parties save time and expense, the Court will delay the final disposition in this matter. As stated, the parties may address me as to how they wish to proceed within by setting a date before me within 30 days, failing which the motion to change is dismissed.

[48] If the parties cannot agree on costs, the Respondent may file her two page submissions along with any offers to settle and bill of costs by September 30, 2016 and the Applicant may file his two page submissions with any offers to settle and bill of costs by October 14, 2016.

Madam Justice A. Doyle Date: September 19, 2016