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April 28, 2001

Divorce deals never final: court

1994 settlement reopened: 'It means a lot of litigation in the family law arena'

Cristin Schmitz
Southam News
National Post

TORONTO - Tens of thousands of people who believed they had agreed to a "final" divorce settlement could face more financial demands from former spouses following a new legal ruling.

The Ontario Court of Appeal says courts may override final divorce settlements if a former spouse's financial circumstances change "materially" after divorce.

Family law lawyers predict a surge of legal attacks on separation agreements and marriage contracts as a result of the ruling.

The court ordered Eric Miglin, 51, of Toronto, to pay his former wife, Linda Miglin, $4,400 per month indefinitely -- despite Ms. Miglin, 49, permanently waiving spousal support in a final separation agreement in 1994.

The unanimous judgment holds that a former spouse who wants to reopen a "final" settlement on spousal support can do so if he or she can prove a "material change in circumstances" has taken place since the time of the agreement or divorce order "which if known at the time, would likely have resulted in a different order."

"It will give new hope to many people who have signed off on spousal support," said Charles Mark, Mr. Miglin's lawyer. He said his client is considering whether to ask the Supreme Court of Canada for permission to appeal.

If the appeal court's decision is correct, there are no "final" settlements on spousal support, Mr. Mark said.

Philip Epstein, Ms. Miglin's lawyer, agreed the decision makes it difficult, if not impossible, for people to settle their own affairs via agreements with full confidence that they have permanently severed their financial ties with their former partners.

"It means a lot of litigation in the family law arena, and it ultimately means that the most common way of settling a family law dispute doesn't mean that it's settled," Mr. Epstein said.

The appeal court did stipulate that a spousal support agreement should be given "significant weight."

Mr. Epstein said: "This is a clear message to mostly husbands, and their lawyers, that too good a deal will come back to haunt them. I think for some women who signed agreements at a time when the courts put a huge emphasis on their self-reliance, the doors are potentially re-opened. And for men who made very beneficial agreements, it may turn out that they made too good a deal."

James McLeod , a University of Western Ontario family law professor, said: "My impression is ... if you gouge too much, they will override it. Fair agreements that properly take into account the statutory objectives are likely to be upheld, but agreements that weren't fair are at real risk."

Mr. McLeod said the issue deserves reconsideration by the Supreme Court of Canada. "This is a substantial shift."

Since a 1987 trilogy of landmark spousal support decisions by the Supreme Court of Canada under the old 1968 Divorce Act, courts have been loath to interfere with final spousal support agreements.

The court emphasized at the time that "a deal is a deal" and courts should respect people's expectations of finality and their right to determine their own financial affairs.

The court also ruled judges could override final support agreements only if the former spouse seeking to revisit the deal was able to demonstrate their need for support -- or diminished ability to pay support -- was the result of "a radical, unforeseen change in circumstances" that was caused by the marriage.

If that test wasn't met, even if the former spouse was in dire financial need, it was the duty of the state, and not a former spouse, to provide support.

However, the question of financial need arose in the 1999 case of Bracklow v. Bracklow and was dealt with then.

In that case the Supreme Court of Canada ruled that because the ex-wife was unable to support herself and had emotional problems, it was proper to impose a financial obligation on the former husband even after a divorce settlement.

The former needed compensation because she was destitute and unable to work, it said.

Now the Ontario Court of Appeal has ruled that the "almost inaccessible" test for overriding agreements set by the Supreme Court in 1987 no longer applies, since the spousal support provisions in the current Divorce Act, which was passed in 1985, are "substantially" different from the 1968 law.

The current law explicitly states that separation agreements are only one of several factors to consider in awarding support.

The Court of Appeal ruled Ms. Miglin is entitled to spousal support, notwithstanding that she had abandoned all her claims in 1994. Contrary to the Miglins' agreement to share responsibility for their children, ages 10 to 15, Ms. Miglin ended up shouldering most of the post-divorce responsibility for child care, the judgment says. Mr. Miglin, owner of the Killarney Lodge in Northern Ontario, had also ceased paying his former wife the $15,000 in annual consulting fees from his business that been contemplated by their separation agreement.

"These factors represent a material change which, if known at the time [the separation agreement was signed], would likely have resulted in ongoing spousal support," Justice Rosalie Abella wrote.

"Ms. Miglin has remained, as she had during the marriage, the primary caregiver for the children, and has therefore remained economically dependent on her former husband's support, based on the distribution of roles and responsibilities arising during and since the marriage."

Mr. Epstein said the federal government should revisit the issue of spousal support during its ongoing examination of the child custody and access provisions of the Divorce Act.

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