Sep 15, 2015

BC Court of Appeal Releases Brace of Decisions on Spousal Support Variation

Zacharias v. Zacharias, 2015 BCCA 376 (CanLII)

The Court of Appeal for British Columbia has released two important decisions on spousal support this year, Morigeau v Moorey, published in April, and Zacharias v Zacharias, published a few days ago. Both deal with payors' applications to vary consent orders requiring them to pay spousal support because of the recipient's repartnering.

Background

In Morigeau, the parties had been married for 20 years and had two children before separating in 2007. In 2011 they entered into a final order, by consent, which required the husband to pay $1,800 per month to the wife as spousal support. At the time of the order, the wife had begun to live with someone else. In 2013, the husband applied to cancel or reduce his spousal support obligation on the grounds that:

  1. the wife was living with her partner, who was employed and had a pretty good income;
  2. the wife's income had increased; and,
  3. his income had decreased.

In Zacharias, the the parties had been married for 31 years before separating. They also had two children. Sometime around 2008, the decision isn't clear, they entered into a final consent order requiring the husband to pay $6,000 per month in spousal support. The wife remarried in 2012. In 2014, the husband applied to cancel or reduce his spousal support obligation on the grounds that:

  1. the wife had remarried;
  2. the wife had built a new career for herself and her income had increased;
  3. the combined income of the wife and her new spouse exceeded his; and,
  4. the wife's personal net worth now exceeded his.

The basic facts of each case are fairly similar and are honestly rather typical of the circumstances that usually motivate payors to try to escape, or at least lessen, an obligation to pay spousal support.

The Law on the Variation of Orders for Spousal Support

These cases gave the British Columbia Court of Appeal the opportunity to restate the law on the variation of spousal support orders. The court has been a leader in Canada on the issue of spousal support and has really tried to clarify the law with important, landmark decisions like Chutter v Chutter and Tedham v Tedham. Here's synopsis of the key points made in Morigeau and Zacharias:

1. Spousal support may be ordered because of compensatory factors, because of non-compensatory factors or because the parties have an agreement it will be paid, or because of a combination of these reasons. (Zacharias, paragraphs 26, 27, 28, 38 and 39)

The Supreme Court of Canada in Bracklow v Bracklow said that support can be paid for compensatory or non-compensatory reasons. Compensatory reasons are about compensating a spouse for the economic advantages or disadvantages that were caused by the marriage or its breakdown. The main goal of compensatory spousal support is to fairly share the economic consequences of the marriage.

Non-compensatory reasons are about the financial hardship separation can cause and are aimed at helping the financially dependent spouse become self-sufficient. An award of spousal support for non-compensatory reasons is based on the idea that spouses have a responsibility to care for each other and requires an examination of the needs and mans of the spouses, the nature of the marriage and the length of the marriage.

2. When spousal support is ordered for compensatory reasons, the amount payable can be determined by reference to the parties' standard of living during the marriage. (Zacharias, paragraphs 52, 54 and 56)

The marital standard of living can be used to measure the amount of compensation owing when a party is entitled to spousal support on compensatory grounds, as that standard is the standard fixed by the parties themselves as a result of the sacrifices made and advantages gained during their relationship.

3. Whatever the reason why spousal support is ordered, the order is a single order. (Zacharias, paragraph 39; Morigeau, paragraph 20)

Orders for spousal support under the Divorce Act take into account all of the factors set out in s. 15.2, compensatory, non-compensatory and contractual. While there may be more than one basis for an award of support, there is only one order; the order is not made up of discrete amounts for a compensatory claims and non-compensatory claims.

4. A material change in circumstances is required before an order for spousal support will be changed. (Zacharias, paragraph 29; Morigeau, paragraphs 10, 13 and 26)

Section 17(4.1) of the Divorce Act says that the court must "satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred" since the original order was made before it can change that order. In Willick v Willick, the Supreme Court of Canada held that such a change must be significant and have been unforeseen when the original order was made.

Because the considerations for original orders for spousal support are different than the considerations on applications to vary support, the case law on original orders under s. 15.2 is of little use in applications to vary under s. 17.

5. An application to vary spousal support is not a new hearing on whether someone is entitled to support or, if so, how much should be paid. The application is a hearing about the change in circumstances and the circumstances in which the original order was made. (Zacharias, paragraph 30; Morigeau, paragraph 13)

An application to change a spousal support order is not a fresh hearing of the case as if the recipient's entitlement to support were being decided for the first time; the original order must be accepted as appropriate. As the Supreme Court of Canada held in LMP v LS, the focus of the application should be on the change in circumstances and how that change may or may not effect the payor's obligation to pay support.

6. The fact that the recipient of spousal support is in a new relationship is not in itself a change of circumstances. (Zacharias, paragraph 67; Morigeau, paragraphs 13, 33, 39, 40 and 51)

In G(L) v B(G), the Supreme Court of Canada held that the remarriage or repartnering of a recipient doesn't necessarily mean that the spouse should be presumed to be financially independent, and thus shouldn't be presumed to be a material change in circumstances. If the economic basis for making the original order remains unchanged, there is no basis for variation whether the order was made on compensatory or non-compensatory grounds.

7. In an application to vary spousal support, the court will need to consider the reasons for the the original order. (Zacharias, paragraphs 33, 41, 42, 43, 44, 45 and 50)


The nature of the required material change in circumstances will depend on whether the original order was made on compensatory, non-compensatory or contractual grounds.

The analysis will be easiest where reasons for judgment, a judge's written decision, explain the basis of an order for spousal support. However, if reasons are not available, the court hearing the application to vary may need to determine the bases on which the original award was made.

8. When a change in circumstances is established, the court must then consider whether the change justifies variation of the original spousal support order. (Morigeau, paragraph 26).

In KD v ND, the Court of Appeal held that once a material change is established, the court must then consider whether the change justifies variation of the order considering the factors set out in s. 17(7) of the Divorce Act.

9. When an order for spousal support is made on compensatory grounds, the goal of compensation will be met when the recipient has achieved a standard of living equivalent to that enjoyed during the relationship. (Zacharias, paragraphs 58, 60 and 61; Morigeau, paragraph 37)

When recipient spouse has achieved a standard of living equivalent to that enjoyed during the marriage, the need to compensate will be satisfied. The spouse's standard of living when the application is heard includes the income available from all sources, including that of a new partner, but excluding the income realized from the spousal support order.

Applicability to the British Columbia Family Law Act

In Rathlou v Haylock, the British Columbia Provincial Court held that the provisions of s. 161 of the Family Law Act on entitlement to spousal support are "substantially identical" to those of s. 15.2(6) of the Divorce Act; in Hutchen v Hutchen, the British Columbia Supreme Court held that the provisions of s. 162 on the amount of spousal support are "so close" to that of s. 15.2(4) of the Divorce Act that "any difference is immaterial. Accordingly, in Sinclair v Sinclair, the Supreme Court held that the result of applications for original orders for spousal support should be the same whether brought under the Divorce Act or the Family Law Act.

However, the provisions of the Family Law Act on the variation of orders for spousal support are a bit different, and a bit broader, than those of the Divorce Act. Here's what the Divorce Act says at s. 17:

(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 ...

(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. ...

(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.

Here's what the Family Law Act says at s. 167:

(1) On application, a court may change, suspend or terminate an order respecting spousal support, and may do so prospectively or retroactively.

(2) Before making an order under subsection (1), the court must be satisfied that at least one of the following exists, and take it into consideration:

(a) a change in the condition, means, needs or other circumstances of either spouse has occurred since the order respecting spousal support was made;

(b) evidence of a substantial nature that was not available during the previous hearing has become available;

(c) evidence of a lack of financial disclosure by either spouse was discovered after the order was made.

(3) Despite subsection (2), if an order requires payment of spousal support for a definite period or until a specified event occurs, the court, on an application made after the expiration of that period or occurrence of that event, may not make an order under subsection (1) for the purpose of resuming spousal support unless satisfied that

(a) the order is necessary to relieve economic hardship that

(i) arises from a change described in subsection (2) (a), and

(ii) is related to the relationship between the spouses, and

(b) the changed circumstances, had they existed at the time the order was made, would likely have resulted in a different order.

As you can see, the provisions of the Family Law Act on the variation of orders for spousal support are quite different from those of the Divorce Act. Although Zacharias and Morigeau will apply to interpreting the Family Law Act where there are similarities between s. 17 and s. 167, recipients and payors must remember the additional terms about new evidence and non-disclosure and recipients must be mindful of the criteria for varying fixed-term orders.