In Turpin v Clark the BC Court of Appeal partially allowed a husband’s appeal from a BC spousal support judgment allowing the wife’s upward quantum variation to comply with the Spousal Support Advisory Guidelines of a Consent step down BC spousal support Order. The Court of Appeal set aside the Trial Judge’s Order to increase and extend support and remove clawback clauses for employment income earned by the wife but did extend support for 3 more years beyond the minimum time it was to be paid. The case points out that Consent Orders are really just the embodiment of an agreement between two spouses. The two part MIGLIN test for varying separation agreements applies equally to Consent Orders which requires the Court:
a) first determining whether the agreement was fairly negotiated and fair at the time it was signed; and
b) second, even if this test is met, the court determining whether the agreement remains fair at the time of the variation application- which may be years after the original agreement or Order was signed – and whether it continues to comply with the principles of the Canadian Divorce Act including taking into account advantages and disadvantages to each spouse from the marriage or its breakdown and the need to promote self sufficiency among other factors and objectives.
The Court of Appeal pointed out that factors the parties considered as forseen or expected at the time they made their deal should be listed to assist the court viewing the consent order in the future to assess how fairly the agreement continues to reflect the original intentions of the parties. The Court also commented on the blight of non-disclosure in family law cases and the problems it causes.
TEST FOR SPOUSAL SUPPORT VARIATION
2. Did the chambers judge err in his application of the Miglin test by varying the order for spousal support to a greater extent than justified in the circumstances?
[54] Miglin involved an initial application by the wife for spousal support under s. 15.2 of the Divorce Act, four years after she had waived her right to spousal support in a separation agreement. The Supreme Court of Canada concluded that her application should have been dismissed, and allowed an appeal by the husband from an order that required him to pay spousal support. The Court held that a reasonable and fairly negotiated final support agreement should not be displaced unless the applicant is able to establish that his or her current circumstances amounted to a significant departure from the range of outcomes that could reasonably be found to have been within the contemplation of the parties when they executed the agreement.
[55] On the change that is required to override an agreement, the Court stated:
[89] We stress that a certain degree of change is foreseeable most of the time. The prospective nature of these agreements cannot be lost on the parties and they must be presumed to be aware that the future is, to a greater or lesser extent, uncertain. It will be unconvincing, for example, to tell a judge that an agreement never contemplated that the job market might change, or that parenting responsibilities under an agreement might be somewhat more onerous than imagined, or that a transition into the workforce might be challenging. Negotiating parties should know that each person’s health cannot be guaranteed as a constant. An agreement must also contemplate, for example, that the relative values of assets in a property division will not necessarily remain the same. Housing prices may rise or fall. A business may take a downturn or become more profitable. Moreover, some changes may be caused or provoked by the parties themselves. A party may remarry or decide not to work. Where the parties have demonstrated their intention to release one another from all claims to spousal support, changes of this nature are unlikely to be considered sufficient to justify dispensing with that declared intention. That said, we repeat that a judge is not bound by the strict Pelech standard to intervene only once a change is shown to be radical‚Äù. Likewise, it is unnecessary for the party seeking court-ordered support to demonstrate that the circumstances rendering enforcement of the agreement inappropriate are causally connected to the marriage or its breakdown. The test here is not strict foreseeablity; a thorough review of case law leaves virtually no change entirely unforeseeable. The question, rather, is the extent to which the unimpeachably negotiated agreement can be said to have contemplated the situation before the court at the time of the application. [Emphasis added.]
[56] As to the degree of intervention if the threshold change is established, the Court noted:
[90] The court’s focus should be on the agreement’s continued correspondence to the parties‚Äô original intentions as to their relative positions and the overall objectives of the Act, not on whether a change occurred per se. That is to say, we do not consider change‚Äù of any particular nature to be a threshold requirement which, once established, entitles the court to jettison the agreement entirely. Rather, the court should be persuaded that both the intervention and the degree of intervention are warranted. That is, at this stage, even if unbending enforcement of the agreement is inappropriate, that agreement may still indicate to a trial judge the parties‚Äô understanding of their relationship and their intentions. Even an agreement that is not determinative as a result of the parties‚Äô circumstances at the time of the application warrants compulsory consideration under s. 15.2(4). [Emphasis added.]
[57] A variation application under the Divorce Act is not a hearing de novo but proceeds on the basis that the court is to take the amount of maintenance originally ordered as the correct amount at the time the order was made and then to consider to what extent the circumstances of the parties have altered or changed since the decree nisi was granted‚Äù: Oakley v. Oakley, [1985] B.C.J. No. 2464 (C.A.) at para. 16, 48 R.F.L. (2d) 307. The Miglin test further limits the scope of the court’s jurisdiction to vary that order if it is based on a final support agreement.
[58] Stage two of the Miglin inquiry examines the range of outcomes that could reasonably have been within the contemplation of the parties when the agreement was executed. The onus is on the party seeking to set aside the agreement to show that the new or changed circumstances were a significant departure from the range of reasonable outcomes anticipated when the parties executed the agreement, and that the agreement at the time of the application was at odds with the objectives of the Divorce Act”. If those conditions are met, Miglin requires that the agreement be reconsidered.
[59] Deference to an agreement should give way where the integrity of an agreement is successfully challenged or where it is patently unfair in the context of the objectives of the Divorce Act at the time of execution (stage one), or where an agreement becomes patently unfair as a result of changed and unanticipated circumstances (stage two).
[60] In this case, the Minutes reflected a support agreement that was subsequently incorporated into the divorce order by consent. The plain and ordinary meaning of the words in the preamble and concluding provisions of the Minutes clearly reflected an intention by the parties that the spousal support provisions of the divorce order would be final. It is also noteworthy that the Minutes did not include a variation or review clause for the spousal support. In light of the finality of the agreement, Ms. Clark had to meet the higher threshold for variation of the agreement, as established by Miglin.
[61] The circumstances of this case differed from Miglin in that they involve a variation rather than an initial application for spousal support. On an initial application, stage one is important as it focuses on the validity and reasonableness of the agreement when it was made. The difficulty for Ms. Clark is that stage one of the Miglin analysis was not in issue in her application because the chambers judge reasonably inferred that the judge who had acceded to the parties‚Äô request to incorporate the Minutes into the divorce order was satisfied that the agreement was fairly negotiated and substantially complied with the objectives of the Divorce Act. In hindsight, Ms. Clark may believe that she could have done better with court-awarded spousal support in accordance with the SSAG. However, the standard of substantial compliance with the factors and objectives of the Divorce Act is a subjective test of the parties‚Äô views, not the court’s, on the equitable sharing of the economic consequences of the breakdown of their marriage. The chambers judge’s finding that stage one of the Miglin inquiry had been met was not challenged on appeal and by inference rejects Ms. Clark’s claims of duress and unfairness of the agreement.
[62] At stage two of the Miglin inquiry the chambers judge had to determine the extent to which enforcement of the agreement still reflect[ed] the original intention of the parties and the extent to which it [was] still in substantial compliance with the objectives of the Act‚Äù (Miglin at para. 87). Mr. Turpin’s increased income was a foreseeable and anticipated circumstance. It did not fall outside the contemplation of the parties when they executed the Minutes. The Minutes also provided for the payment of spousal support in decreasing amounts that would terminate by 2012 or when Mr. Turpin retired from salaried employment, whichever event occurred last. Clearly, Mr. Turpin’s retirement was a circumstance that was anticipated by the parties, as was Ms. Clark’s retirement, by the provision that [e]ach party acknowledges that the division of assets herein has provided adequately for his or her retirement.‚Äù In my view, it could also be reasonably inferred that the parties anticipated Ms. Clark would earn a level of annual income over $25,000 as there were provisions that allowed for a reduction in support the month following the month that she earned more than $2,083. Further, the Minutes required Ms. Clark to deduct only reasonable business expenses directly attributable to her work‚Äù in calculating her business income. Again, suggesting that the parties anticipated she would enjoy a level of business income that would require an application of this provision.
[63] The new circumstances which the chambers judge found were unanticipated included Ms. Clark’s complications from her surgeries and her inability to earn income despite her reasonable attempts to do so. Both circumstances, he found, caused a delay in the reasonable time in which the parties anticipated Ms. Clark would become self-sufficient. It was these circumstances that provided the evidentiary basis for the material change of circumstances test in s. 17(4.1) and the higher threshold for variation of a final support agreement at the second stage of the Miglin test. In my view, it was open to the chambers judge, on the evidence before him, to find that both tests had been met by Ms. Clark. While the parties anticipated Ms. Clark’s pending surgeries, they did not anticipate the complications she in fact experienced from them. Nor did they anticipate the resulting impact on her ability to earn income approaching or surpassing the $25,000 contemplated by the agreement.
[64] I do not find any error in the chambers judge’s finding that the parties‚Äô agreement no longer complied with the objectives of the Divorce Act. The parties had cohabited for 20 years. Ms. Clark was the primary caregiver to the parties‚Äô two children which enabled Mr. Turpin to pursue his academic career. Ms. Clark supported her husband’s frequent career moves at the expense of her own career development. Her claim for compensatory support on the breakdown of their marriage was substantial. Under the SSAG, that claim would have fallen at least within the level of her first year of spousal support under the Minutes and have continued for an indefinite duration. The cumulative effect of the complications from her operations, which clearly impeded her ability to become self-sufficient, made the parties‚Äô agreement patently unfair at the time of her application.
[65] The central issue, in my view, is whether the degree of intervention imposed by the variation order was appropriate in the circumstances. The final version of the SSAG confirms that:
…if a spousal support agreement is set aside or overridden on the basis of Miglin or other applicable legal doctrines, the Advisory Guidelines may be relied upon in determining the amount and duration of support. See K.A.M v. P.K. M., 2008 CarswellBC 135, 2008 BCSC 93 andGammon v. Gammon, [2008] O.J. No. 603. However, as recognized in Miglin, the parties‚Äô intentions, as reflected in their agreement, may still continue to influence the appropriate spousal support outcome and lead the courts to an outcome different from that suggested by the Advisory Guidelines. See Santoro v. Santoro, [2006] B.C.J. No. 453, 2006 BCSC 331.
[66] This Court in Beninger cautioned about use of the SSAG on variation applications and said they should be considered on a case-by-case basis only. The Court relied on the SSAG to determine the appropriate quantum of spousal support in circumstances where the initial award was substantially below the SSAG ranges and the wife continued to experience the economic disadvantages of the marriage breakdown as well as health problems that limited her ability to find work. The parties in Beninger, however, had not negotiated a final support agreement, a factor that weighs heavily in consideration of the degree of intervention that should be exercised by a court on a subsequent variation application.
[67] In this case, the Minutes, in the clearest of terms, provided that under no circumstances‚Äù would spousal support be increased. They also described the spousal support provisions as fair and adequate under all foreseeable circumstances including any increase in the Plaintiff’s income‚Äù. Therefore, the parties intended and contemplated that there would be an absolute prohibition on any increase in spousal support in the future. The Minutes provided a less rigid standard on the duration of support, which did not terminate absolutely‚Äù until the later of September 1, 2012, or Mr. Turpin’s retirement from salaried employment. The Minutes also acknowledged Ms. Clark’s obligation to become financially self-sufficient insofar as was practicable, within a reasonable period of time. Thus, although the duration of the support was specified, it was also described in the more general term as within a reasonable time‚Äù. What is reasonable in duration can change with new and unanticipated circumstances.
[68] The chambers judge held that while the cumulative effect of Ms. Clark’s post-agreement surgeries and inability to earn income had delayed her ability to progress toward economic self-sufficiency, with retraining and time she would eventually reach that goal (para. 105). He also acknowledged that an award of indefinite support would amount to a degree of intervention that was unwarranted (para. 108), in part because of the parties‚Äô acknowledgement in the Minutes that the equal division of assets adequately provided for each of their retirement.
[69] In my view, the chambers judge erred in law by intervening to the extent that he did in varying the spousal support provisions of the divorce order. Applying the deferential standard required by Miglin, I would not interfere with the step-down provisions of the divorce order. However, due to the delay in Ms. Clark’s progress toward economic self-sufficiency, which is the result of her unanticipated health complications and inability to earn income, I would extend the duration of the final amount of the award ($4,000) for an additional three years until 2015 or when Mr. Turpin retires, whichever event occurs later.
TEST FOR CHILD SUPPORT VARIATION
3. Did the chambers judge err in increasing s. 7 Guidelines support for the parties‚Äô adult child in the absence of disclosure by Ms. Clark of the adult child’s ability to contribute to her own support, as required by the divorce order?
[70] A variation application of a consent order that incorporates an agreement on child support is subject to the s. 17(4) Divorce Act jurisdictional test of a material change in circumstances. It is not subject to the higher threshold established in Miglin for the variation of an agreement. There are no limitations on a court overriding or varying a child support agreement that is incorporated into a court order where the provisions of the agreement are found to be unreasonable. In Willick, Sopinka J., for the majority, stated that [t]he reasoning which supports the restrictions with respect to interspousal support [from a complicated separation agreement] does not apply to child support” (para. 16).
[71] In this case, Mr. Turpin was obliged to pay support for C.T. under s. 7 of the Guidelines. Her entitlement to support was not in issue. The initial child support order under s. 15.1 of the Divorce Act was based on Mr. Turpin’s Guidelines income of $340,000. The chambers judge found that Mr. Turpin’s employment income for 2005, 2006 and 2007, as reported at line 101 on his T1 General Tax Returns for those years, was $384,528.02, $378,576.93 and $393,183.36, respectively. He found the difference between Mr. Turpin’s line 101 income and his line 150 income for each year was primarily attributable to losses he claimed on rental property (para. 8).
[72] The difference in Mr. Turpin’s Guidelines income as set out in the Minutes, from his employment income in the subsequent three years, by itself, amounted to a material change in circumstances. That was sufficient to give the court jurisdiction to vary the child support provisions of the divorce order in accordance with the Guidelines.
[73] A term of C.T.’s support under the divorce order permitted Mr. Turpin to review her support upon her turning 19, taking into account her educational costs and her contributions to them.‚Äù While it may have been easier and less costly to undertake such a review by way of mediation, after Ms. Clark refused to participate in such a forum Mr. Turpin should have set down a review hearing. At that hearing, issues concerning Ms. Clark’s level of income, her reasonable business expenses, and C.T.’s income and ability to contribute to her own support could be obtained. Orders for disclosure could be made.
[74] The failure to disclose material information is an unfortunate blight of family law litigation. Unfortunately, we see many instances in these courts where mandatory disclosure requirements are ignored and applications must be brought to ensure their compliance. Here, Ms. Clark had agreed to provide material information, presumably to obviate the need to engage in future litigation, and that information was not forthcoming. Ultimately, however, Mr. Turpin had a remedy for Ms. Clark’s failure to comply with her obligation under the divorce order, which was to schedule a review hearing before the court. In those circumstances, the expense incurred by a party of having to make such an application can be addressed, at least in part, by an award of costs. I would also note that C.T.’s continued and voluntary estrangement from her father, and the impact of such conduct on Mr. Turpin’s continuing financial obligation to her, is also a factor that could be addressed at a review hearing.
[75] There is no evidence at this time that C.T. has the ability to contribute to her own support while she is in full-time attendance at university. In the absence of such evidence Mr. Turpin cannot, in my view, claim that C.T. is not entitled to an increase in s. 7 Guidelinessupport by reason of the increase in his Guidelines income which would otherwise entitle her to increased child support. However, if upon a review there is evidence that some contribution could have been made by C.T. or that Ms. Clark’s Guidelines income was found or was imputed to be higher than $2,000, Mr. Turpin, in my view, would be entitled to a retroactive variation of his proportionate share of C.T.’s s. 7 Guidelines support.
[76] In the result, I would not accede to this ground of appeal.
E. Conclusion
[77] Mr. Turpin’s appeal from the support provisions of the variation order is allowed to the extent that the provisions are varied to permit for the continuation of spousal support for a further three years from the date of the variation order until 2015, or whenever he retires, which ever event occurs last, at the step-down amounts provided for in the divorce order.
[78] Mr. Turpin’s appeal from the child support provisions of the variation order for C.T. is dismissed, with liberty to apply to retroactively vary those provisions in the event that further evidence is obtained of C.T.’s ability to contribute to her own support and Ms. Clark’s increased earning capacity.
[79] Based on each party’s success in the appeal, I would award Ms. Clark 75% of her costs.
