Is Retirement a “Material Change” That Can Vary a Spousal Support Order?
The Ontario Court of Appeal recently overturned a decision in which the motion judge reduced a spousal support order to $1 per month after the husband retired, despite an agreement that he would pay his wife $4,000 per month until his death. The husband sought to vary the support amount after he retired and his income went down significantly.
The couple separated in 1985 after a 17-year marriage. They agreed on minutes of settlement in 1991. Their agreement was reflected in a divorce judgment from that same year. That agreement required that the husband pay spousal support in the amount of $4,000 per month “until the [husband] dies.”
The husband had a successful 49-year dentistry practice. When the couple entered into their minutes of settlement and the divorce judgment issued in 1991, the husband was earning between $250,000 and $300,000 per year. As retirement approached, he told the wife that he would eventually seek to have the spousal support terminated. Once he retired, at age 72, his income had dropped to $65,000 per year (not including interest and investment income).
In the fall of 2017, the husband brought a motion to change the 1991 divorce judgement. He asked to be relieved of his spousal support obligations. The wife opposed that motion and, at the same time, sought to have a 2015 order varying the divorce judgment set aside.
The motion judge found that there had been a material change in circumstances and reduced the support from $4,000 to $1 per month.
The motion judge stated that the “most significant material change” was the wife’s decision not to seek employment since the separation. Although the motion judge said that there was no obligation on the wife to become self-sufficient, there was an “obligation on her as a spousal support recipient to make reasonable efforts to contribute to her own support,” which she had not done. The wife had stated that she had stopped working after the birth of their second child and that she was “certain that the settlement would provide enough income for her to structure her post-divorce life as wanted.”
The motion judge concluded that the second material change in circumstances arose from the husband’s retirement and the corresponding substantial decrease in his annual income.
The wife appealed, arguing that there was no basis upon which the agreement, distilled into a court order, could be changed and, therefore, the motion judge erred in varying the support from $4,000 to $1 per month. She contended that, even in the face of a material change in circumstances, an agreement is an agreement and the support obligation cannot be altered.
The Court of Appeal rejected the wife’s argument that the support obligation was not susceptible to change because there had been an agreement.
However, the court found that the motion judge erred in two ways in arriving at the change from $4,000 to $1 per month:
(1) in considering what constitutes a material change in circumstances; and
(2) in failing to give any deference to the original order of support.
First, the court disagreed that the wife’s failure to seek employment since 1991 constituted a material change in circumstances. The court stated:
“The clear wording of the divorce judgment was that spousal support would continue to death. The [wife] was entitled to rely upon that judgment. The [husband] waited far too long to raise the [wife]’s decision not to seek gainful employment until an age when she was effectively precluded from correcting the situation.”
However, the court did agree that the husband’s substantial decrease in annual income met the threshold for variation. It found that while the agreement specified support for life for the wife, it also expressly contemplated a salary level far exceeding what the husband would receive in retirement.
The court also found that the motion judge did not give the original order adequate deference and his decision amounted to a rescission of the support order, not a variation as required by the circumstances. The court stated:
“The variation to spousal support had to be considered against the backdrop of the original order which was arrived upon in the context of a broader agreement. This was not a case that required a rescission of the original support order. Instead, the motion judge should have used the original support order and varied it only to the extent required by the change. The [husband]’s decreased income, combined with the motion judge’s finding that the [wife] does not face economic hardship, were relevant considerations in determining the extent of the variation.”
As a result, the court set aside the order reducing the spousal support to $1 and made a new order reducing the spousal support from $4,000 per month to $850 per month for life.
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaumis able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation.