Spousal Support and Family Law (Part III): Spousal Support and Separation Agreement

By Jeff Jiehui Li

Family Law Lawyer based in Toronto, Ontario

If spouses entered into a separation agreement, or an order was issued on the parties’ consent, can a party change the terms of spousal support later? The answer is positive. In so doing, however, the court needs to strike a fine balance between the presumed finality of the separation agreement or consent order on the one hand, and equitable sharing of the economic consequence of the relationship breakdown on the other.

In Miglin v. Miglin, the Supreme Court of Canada laid out the framework in dealing with this type of application. In this 7-2 judgment, the majority held that the key in deciding the issue is not the existence of material change after the agreement or consent order was made, but whether, “at the time of the application, all the circumstances render continued reliance on the pre‑existing agreement unacceptable.”

To determine this, a two-stage investigation is required. At the first stage, the court “should look at the circumstances in which the agreement was negotiated and executed to determine whether there is any reason to discount it, including any circumstances of oppression, pressure or other vulnerabilities.” While circumstances less than “unconscionability” in the commercial law context may be relevant, “a court should not presume an imbalance of power.” The imbalance of power between the parties may further be overcome by the professional assistance received by the parties. If this test is passed, the court must “consider the substance of the agreement to determine whether it is in substantial compliance with the Act.” Even if an agreement does not comply substantially with the Divorce Act, it does not mean that the entire agreement must be set aside, as an agreement not fully enforceable may still reflect the original intentions of the parties and understanding of their marriage.

At the second stage, the court must assess “whether the agreement still reflects the original intentions of the parties and the extent to which it is still in substantial compliance with the objectives of the Divorce Act”. Therefore, to successfully challenge or set aside a separation agreement or consent order, a party will need to show that the “new circumstances were not reasonably anticipated by the parties, and have led to a situation that cannot be condoned.” The court further explained that some degree of change is always foreseeable, and the court will only give the agreement little weight only if the “current circumstances represent a significant departure from the range of reasonable outcomes anticipated by the parties, in a manner that puts them at odds with the objectives of the Act”.

Thus, a reasonably negotiated and duly executed separation agreement will be given substantial weight in subsequent applications for spousal support, and the bar is quite high for a party to challenge the agreement later on.

In contrast, the court may give less weight to other types of domestic contracts, namely marriage contracts, pre-nuptial or cohabitation agreements. One reason for this is that when the parties negotiate a separation agreement, they already know the roles they played in their relationship and their situations at the end of it. But in the case of a marriage contract, the parties’ roles in the relationship may be different from what was contemplated in the contract. However, marriage contracts and cohabitation agreements do carry weight in subsequent spousal support applications, especially those with a provision that it will automatically become a separation agreement upon the breakdown of relationship. Miglin thus still applies to these types of domestic contracts, albeit with necessary modification. Among other things, the court must consider the circumstances under which these agreements were signed, even if they were before the separation, or even before the beginning of the parties’ substantial relationship.

Related Articles

Spousal Support and Family Law (I): Statutory Provisions and Case Law

Spousal Support and Family Law (II): Overarching Principle and the Advisory Guideline

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