Miglin Analysis Essay

2014 Annual Joint Family Law Program
ChequeMate: The Challenges of Spousal Support

Overriding Agreements:
The World Since Miglin

Jennifer A. Cooper, Q.C.*
Cooper Family Law
February 28, 2014

* I was assisted with this paper by the able research of Mr. Matthew Jerome. I acknowledge and thank him for his contribution.

A. Introduction

In October 2003 the Supreme Court of Canada decided the case of Miglin v. Miglin[1]on the issue of the circumstances in which a court ought to interfere with an agreement between parties pertaining to spousal support.  In that case the parties had executed a separation agreement containing a full and final spousal support release clause.  Notwithstanding this, Mrs. Miglin applied for spousal support approximately four years later and the Ontario Court of Appeal awarded indefinite, periodic support. Mr. Miglin appealed and the whole country was watching (well family lawyers and judges were anyway), to see what the Supreme Court would do.

While Mrs. Miglin ultimately failed – her husband’s appeal was allowed and she was held to her agreement to release spousal support – the Supreme Court “opened the door” to judicial override of agreements.  It was clear that family law contracts would not be treated the same way as ordinary commercial contracts.  Parties, and lawyers, would be held to a higher standard in their negotiations and with regard to substantive fairness.

Lawyers rushed to amend precedents to try and ensure that release clauses would be binding.  Claims were filed to override agreements not only related to spousal support, but also to property and even pre-nuptial agreements[2].  Clients were cautioned not to try to secure a substantively unfair deal, even from a willing spouse, in case it came back later to haunt them.  The courts meanwhile, wrestled with this new “Miglin test” and its scope and effect.

Now we are about a decade later.  Are we more clear about when exactly a court will override or disregard a support agreement?  Do we know what arguments can be used to protect (or attack) such an agreement?  What about severance clauses: are they a help or a hindrance? And does the Manitoba practice of accompanying a spousal support release with a consent order dismissing support actually make the release more binding?

In 2006 I did a paper for the National Judicial Institute on Miglin[3] which reviewed the case law in the first three years out.  In 2012 Professor Carol Rogerson did a thorough review and analysis of the first nine years of case law on Miglin[4] which was of great assistance in the preparation of this paper. It contains an exhaustive list of cases by province which is a handy reference for counsel. That same year Professor Rollie Thompson also did an excellent paper[5] on the issue of varying spousal support which was of assistance in clarifying the effect of reducing an agreement to a consent order.  In general, I have assumed that the interest of this audience is primarily regarding case law and practice in Manitoba.

I commend the organizing committee of this year’s Joint Family Law Program on choosing this topic.  Miglin poses challenges for counsel both in terms of negotiating agreements and in reviewing agreements sought to be overridden or disregarded.  And it poses challenges for our family judges who must balance many factors in dealing with the effect of prior agreements on determinations of spousal support under the Divorce Act.

B. The Miglin Test

Before I set out the test, just a note of clarification about the case itself.  Miglin is not about setting aside or varying agreements.  Mrs. Miglin was making an original application for spousal support under section 15 of the Divorce Act.  That section obliges the court to consider any prior support agreements when determining spousal support:

Spousal support order

15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

Factors

(4)  In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(cany order, agreement or arrangement relating to support of either spouse.

(my emphasis)

Mr. and Mrs. Miglin did have a prior support agreement, specifically one in which Mrs. Miglin had released all her rights to seek spousal support.  The issue before the court was what weight to give to the Miglin’s support agreement, and such agreements in general.

The Supreme Court held that an application for spousal support which is inconsistent with a pre-existing agreement will require a two-stage investigation into all the circumstances surrounding the agreement, both at the time of its execution, and at the time of the application.

The first stage involves two steps.  Firstly the court must consider the circumstances in which the agreement was negotiated and executed to determine whether there is a reason to discount it.  While the Supreme Court declined to provide a definitive list of factors for consideration, it directed that the court should examine the conditions of the parties, which might include circumstances of oppression, pressure or other vulnerabilities, and the conditions under which the negotiations were held, such as the duration and whether there was proper financial disclosure and professional assistance such as legal and financial advice.

Secondly, the court must turn its attention to the substance of the agreement, and consider whether the agreement is consistent with the factors and objectives listed in the Divorce Act.  Here a court must decide if there is substantial compliance with the spousal support considerations in section 15.2 of the Divorce Act in light of the factors of finality, certainty and the desirability for the parties to determine their own affairs.  In determining substantial compliance, the court looks at the circumstances as they existed at the time the agreement was made.

However, even if an agreement was negotiated fairly and was consistent with the Act at the time of execution, the court must then turn its attention to the second stage in the Miglin analysis.  In that stage a court is required to consider whether the agreement should be disregarded or given little weight because of changes in the circumstances of the parties since the signing of the agreement.  Here, the court should assess the extent to which the agreement still reflects the original intention of the parties, and the extent to which it is still in substantial compliance with the objectives of the Act.  The Court emphasized that, “It is only where 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, that the court may be persuaded to give the agreement little weight”[6].

The test is not easy to summarize and not easy to apply, given as how it requires a contextual balancing of multiple factors including considerations of fairness, respect for agreements, and the desire for finality.  We turn now to an examination of cases which have applied the test, and their outcomes.

C. Attacking an Agreement using Miglin

1. Lack of Financial Disclosure

When reviewing an agreement to consider whether a Miglin challenge would be effective, or when entering into an agreement that you wish to protect from such a challenge, one of the first things to consider is financial disclosure.

The Supreme Court of Canada released its decision in Rick v. Brandsema[7] in 2009 and drew on ideas from the Miglin stage one analysis.  It found that there was a duty of full and honest disclosure in the negotiation of separation agreements.  In that case the husband’s failure to satisfy this duty, combined with his wife’s’ mental instability, resulted in the court finding the agreement to be invalid.

Two years later in the case of Evashenko[8], the Saskatchewan Court of Appeal disregarded a separation agreement because of the lack of financial disclosure.  The court reiterated comments from Miglin, namely, that the negotiations of these agreements are made in emotional and vulnerable circumstances which differentiates them from the negotiation of a standard commercial contract.  The court held that full and honest disclosure of all financial information is required in order to protect the integrity of the results of these negotiations and that the deliberate failure to do so may result in judicial intervention when the agreement is substantially at variance with legislative objectives.

What lessons are there for counsel in these decisions?

Firstly, full financial disclosure is essential.  Over the three decades I have been practicing family law, financial disclosure has become increasingly more thorough.  Counsel expects to have it.  Parties expect to provide it, and more often do so voluntarily.  Courts order it more readily.   The area where we are perhaps not as vigilant as we could is when the client says they are quite satisfied without proper disclosure, and especially when giving independent legal advice.  This is a risk not only for you as counsel in terms of a negligence claim; it is a risk for the parties themselves, particularly if the agreement is in any way “substantively unfair”.  It takes confidence to insist on a sworn financial statement and supporting documents when the client insists they don’t need it.

Secondly, counsel should be vigilant that the words in the agreement reflect the actual process.  Counsel often insert in agreements a clause pertaining to financial disclosure.  It can contain three possible formats: waiving disclosure, acknowledging partial disclosure but confirming that such was satisfactory, and confirming full disclosure.  Be clear about the clause that you are agreeing to have inserted and that it matches what was actually done on that file.  And recognize that a clause waiving full or proper financial disclosure isn’t necessarily going to improve the vulnerability of the agreement to a Miglin application to have it disregarded.

2. Lack of Independent Legal Advice

Another early consideration when evaluating agreements in terms of Miglin is the presence or absence of independent legal advice.  My experience in recent years is that clients have far less respect for lawyers and the law and if they are not making up their own agreements by pulling precedents off the internet, they are insisting that one lawyer is more than enough.  It takes confidence to insist that the other spouse obtain independent legal advice.

In Simpkins v. Simpkins the Ontario Court of Appeal stated that, “Most agreements entered into with the benefit of competent legal advice will be upheld, especially where the party seeking to avoid the settlement proposed the terms”.[9]

But do not harbour any illusions that such independent advice will be sufficient to protect any manner of agreement.  In the Evashenko case[10], the Saskatchewan Court of Appeal found that the mere presence of professional assistance did not automatically neutralize the vulnerabilities of the negotiating party.

And the absence of independent legal advice does not necessarily doom an agreement. In Lang v. Lang[11], the Manitoba Court of Appeal considered the effect of the absence of counsel at the time that a separation agreement was executed.  While holding that the absence of counsel is a factor relevant in determining the weight to be afforded to an agreement, the court emphasized that it was not prepared to conclude that when a party is not represented by counsel throughout the process, there must be a finding of vulnerability.

3. Vulnerability of one of the parties

The vulnerability of one of the parties is another reason why an agreement might be disregarded.  The New Brunswick Court of Appeal recently considered an agreement[12] where the wife had been extremely vulnerable at the time of its negotiation.  She had been subjected to emotional and psychological abuse in the relationship.  The agreement was drafted by the husband’s lawyer.  The husband chose and paid another lawyer to provide advice on the agreement to the wife.  That lawyer told the wife not to sign the agreement, but she did anyway.  Her financial condition deteriorated to the level of social assistance.  The court found the trial judge should have disregarded the agreement under stage 1 of Miglin, on the basis that the wife was economically and emotionally vulnerable when she negotiated it.

Sometimes emotional vulnerability will be compounded with a failure to make proper financial disclosure.  In Simpkins v. Simpkins[13], Minutes of Settlement terminating the wife’s right to claim support in return for a lump sum payment were set aside on the ground that, at the time of their execution, the wife was in a vulnerable position due to her mental health.  She suffered from severe depression and had been suicidal in the past, and the court found that the husband had taken advantage of her vulnerability by failing to disclose material facts relating to his income.  The husband had confirmed to the wife that he had lost his job, but failed to inform her of the details of his lump sum severance payment of $150,000, or the fact that after his termination, he was earning $95,000 on short-term contracts.  The court, in setting aside the agreement, held[14] that the settlement was vitiated by the fact that the husband’s conduct led the wife to believe that he was unemployed and in financial difficulty, and that he failed to reveal the full extent of his income.  The Court held that the wife’s unstable mental health rendered her vulnerable and the terms of the settlement could not be regarded as a genuine expression of the parties’ intentions.

A further Manitoba case is worth citing to show how a combination of factors can cause a court to overturn an agreement based upon a stage 1 Miglin analysis.  In the Hardt case[15] decided by Madam Justice Goldberg, the court found that there had been inadequate financial disclosure, ineffective legal advice, emotional pressure and vulnerability, and furthermore, the agreement was not in substantial compliance with the general objectives of the Divorce Act.    Query whether the somewhat extreme facts of this case would have satisfied even the old common law test of duress.

4. Non-Compliance with the Objectives of the Divorce Act

Another reason that an agreement might be disregarded is that it is not in compliance with the objectives of the Divorce Act.  In Lang v. Lang[16], the Manitoba Court of Appeal considered such an agreement.  According to the terms of the parties’ separation agreement, the wife, who had been a stay-at-home mother throughout the marriage, was obligated to become self-sufficient within five years of execution of the agreement.  The Court found that the five-year limit disregarded the “conditions, means, needs and other circumstances” of the wife; it disregarded the objective of “apportioning between the spouses any financial consequences arising from the care of any child of the marriage”; and finally, it disregarded the objective that a spousal support order should, in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

The Court found that based on the role the wife had played throughout the marriage; it was impracticable and unreasonable for the wife to be obligated to become self-sufficient within five years of execution of the Agreement.  The Court therefore found that the parties’ agreement was not in substantial compliance with the objectives of the Divorce Act at the time of execution.  As such, they held that the weight to be accorded to the agreement should be discounted substantially.  In the result, the court upheld the quantum of support provided in the agreement, but disregarded the five-year time limit.

A further Manitoba case which illustrates this requirement is the Jenkins case[17] decided by Mr. Justice Thomson.  There was a single issue brought to the court for adjudication: whether the wife was entitled to an order of spousal support in light of the pre-nuptial agreement which she had executed releasing support.  The court found that the wife had obtained independent legal advice and adequate financial disclosure before signing the agreement and that it was reasonably negotiated and in compliance with the Act at the time of its execution.  However, Justice Thomson found that when the parties released each other from support obligations they assumed that each would be self-sufficient if and when the relationship ended or at least capable of achieving self-sufficiency within a reasonably short time thereafter with sufficient resources in the interim to support themselves.  This was no longer the case with the wife who was by the time of the application pretty much unemployable by reason of her age and health, and at risk of becoming a public charge.  The court found that the agreement was no longer in substantial compliance with the objectives of the Act.

The Jenkins case illustrates the important point that an agreement must be in compliance with the objectives of the Divorce Act not only at the time of its execution, but also at the time of the application.  Both points in time must be considered.

D. Protecting An Agreement From a Miglin Challenge

Apart from persuading a court that an agreement was impeccably negotiated, with full financial disclosure, lots of opportunity for professional advice, and that it complies with the objectives of the Act, there are some specific arguments which may be used to defend a Miglin challenge.

1. Change reasonably Foreseeable

If the change in circumstances could have been reasonably foreseen at the time of the signing of the agreement, the court may hold the parties to it.  Generally courts have been reluctant to find that a change could not have been reasonably foreseen at the time the agreement was signed.

In the Manitoba Shachtay case[18], a husband suffering from multiple sclerosis renounced his right to claim spousal support.  At the time of the agreement he was still working full-time but his health became progressively worse and he eventually became incapable of supporting himself and went on disability.  His application for support in the face of a full spousal support release was summarily dismissed by Senior Master Lee who noted that the decline in his health due to his MS was a reasonable outcome that he could have anticipated at the time he signed the support release.  The case was appealed to a Queen’s Bench judge, who allowed the appeal, and then further to the Manitoba Court of Appeal[19] who dismissed the further appeal thereby permitting the husband’s application for support. However, the way in which the Senior Master applied the Miglin test was not in dispute; rather the higher court found that the claim should not have been dismissed summarily.

In Spencer v. Spencer[20], the court found that that the husband’s loss of employment was reasonably foreseeable and held him to his bargain to pay a fixed amount of support for a fixed period of time, support that he could no longer afford.  Justice Wilson stated that:

The change in circumstances relied on by the husband is the loss of his employment.  If the husband did not consider this possibility, as he deposes, he should have.  A job loss could reasonably have been anticipated as a possible future event.  Job markets change and no employment position is 100% secure.[21]

In Mark v. McTaggart[22], the husband applied for a variation of spousal support on the basis that, following the execution of the separation agreement, his new wife’s sister had died, leaving behind two boys who were physically and mentally challenged. The husband had moved to Saskatchewan to care for the children and his income had declined. The court held the husband to his bargain and dismissed his application on the basis that there was no change that was not foreseeable at the time the separation agreement was executed.

In G.D. v. M.S.[23], the Quebec Court of Appeal found that the fact that the wife’s pension income had increased did not constitute a material change in circumstances to justify setting aside the spousal support Order.

In Marks v. Tokarewicz[24], the parties entered into a separation agreement which provided the wife with spousal support while she obtained her degree in medicine in the Dominican Republic, but released any claims to further support.  When the wife was subsequently unable to qualify to practice medicine in Canada, she brought an application for spousal support.  The trial judge, concluded that further spousal support should not be ordered, because the agreement still reflected the parties’ original intentions, and continued to be in substantial compliance with the objectives of the Divorce Act.  The Ontario Court of Appeal, finding that trial judge’s reasoning was consistent with the Miglin decision, upheld the trial judge’s decision.

2. Agreement is not Final

If the agreement includes a variation clause or a review clause, then a Miglin analysis is neither necessary nor appropriate.  The Shachtay case above is actually a good example of this point.  The triable issue that the Manitoba Court of Appeal identified was whether the variation clause in the agreement applied to the husband’s spousal support release, or just to the wife’s.  The Senior Master concluded that it did not apply to the husband’s release.  The higher courts concluded that it was ambiguous.  If the variation clause is available to the husband, then he need only show that a material change of circumstances had occurred, which was certainly true.  His claim would not fail on the stricter Miglin test where he had to prove that the change was not one of a range of reasonable outcomes that he could have anticipated.  On that test he would fail.

Another example is the Manitoba Court of Appeal case of Kehler v. Kehler[25].  In that case the wife appealed a variation order which, inter alia, eliminated spousal support. The court held:

Having found that Miglin could apply to the facts of this case, I am, however, satisfied that the evidentiary basis has not been set for it to apply nor have the parties requested the opportunity of providing that basis, if it in fact does exist.  Significantly as well, the separation agreement the parties entered into contemplates applications to court in the event of a material change in their respective economic circumstances. (my emphasis)

In that case the parties had made an agreement, which was reduced to a consent court order, that the husband pay periodic payments of spousal support.  It contained a variation clause allowing for a change to support if there was a material change in the economic circumstances of either party.  The husband suffered business reversals and the court agreed that this was s material change justifying the termination of support.

The lesson here is to carefully review the terms of an agreement to determine whether it is even necessary to argue that it need be disregarded under a Miglin analysis.

E. Use of Severability Clauses

The common law would traditionally refuse to enforce contracts which were expressly or impliedly forbidden by statute or common law.  Sometimes parties would not wish an entire agreement to fail if only one portion was bad, so they began to use severability clauses in agreements.  A typical clause is as follows:

SEVERABILITY

In the event that any clause in this Agreement is unenforceable then the same shall be severed from this Agreement without affecting the validity of the remaining clauses.

While courts did begin to take a more flexible approach and permit the severance of an illegal provision in a contract while enforcing the remainder of the agreement,[26] in some situations parties wished to ensure this outcome and continued to utilize these clauses.

At some point the severability clause made its way into domestic contracts as a kind of “boiler plate” that was included with other “standard” clauses, and perhaps not given much thought.  I was of the view that this was a poor idea in most domestic contracts, and certainly now needs careful thought in light of Miglin.

Generally domestic agreements contain numerous contracts.  The typical ones involve three areas of agreement: property, support, and custody.  Within each of these there may be sub-agreements.  For example, in the support area there may be promises made about child and spousal support, about extended health benefits and special expenses, and about life insurance proceeds.  Often one particular promise may be supported by several elements of consideration.

So for example, a spousal support release may be given in exchange for the payment of a lump sum of money, the transfer of a capital property, the continuation of extended health benefits, and the right to receive life insurance proceeds at the time of the death of the other spouse.  If any one element of this consideration is problematic, then generally you would want the entire agreement to fail.

There is common law that an illegal portion of a contract will only be severed and expunged if the balance represents a sensible and reasonable agreement to which the parties would have unquestionably assented without varying the other terms of the bargain.[27]  However, if the parties have included a severance clause, then a court might conclude that the parties intended that illegal portions could be severed and the rest of the agreement stand.

In my experience, this is rarely the case in a domestic contract.  Spousal support and property provisions are often interconnected.  Even child custody can be interconnected with financial matters.  We have all had clients who were more generous on the financial side in order to secure more time with the children, or who were prepared to be less insistent about certain financial entitlements in order to maintain primary care of children. This is the nature of the work that we do.

Of course generally the inclusion of these severance clauses haven’t caused much harm because it is a relatively rare event for portions of a contract to be declared illegal.  I would suggest that concern has changed since Miglin.  Domestic contracts are now at more risk of having some portion disregarded as unconscionable or not in compliance with the Act.  This is of course notably as to the spousal support provisions, but also as to other areas as a court’s willingness to set aside agreements on the basis of Miglin has expanded into property, child custody, and even pre-nuptial agreements.

I leave you then with a caution about the use of severability clauses in your agreements.  At least ask yourself before you include them as boilerplate: is this really what the parties intend?

F. Use of Consent Orders Incorporating Agreements

After Miglin it became the practice in Manitoba to incorporate the terms of a final agreement as to spousal support into a court order. By “final agreement”, I am referring to one in which there is a lump sum of support or time-limited support, or a full release of spousal support, and no variation or review clause. In the case of a full release, the claim for spousal support is typically noted in the order to be dismissed or even “dismissed on the merits” which counsel believe has an even stronger meaning.

The 2005 Tierney-Hynes[28] case from the Ontario Court of Appeal should have given us pause in terms of this practice.  In that case there was an unopposed order terminating spousal support when the doctor husband began a residency in psychiatry.  Once he had completed his training and his income was about $250,000 per year, the wife moved to vary the order and secure spousal support.  Her application was initially dismissed on the basis that the only spousal support orders capable of variation were positive orders, orders silent on spousal support, or orders for a nominal amount.  The Court of Appeal disagreed.

After conducting a detailed analysis of the 1997 modifications to the 1985 and 1970 Divorce Acts, the court concluded that Parliament clearly intended to allow a variation of an earlier dismissal of spousal support.  The court noted, “There can be no material distinction between not making an order, dismissing a claim, deleting an earlier order, or terminating support.”[29]  As such, the court overturned the summary dismissal of the wife’s claim for support based upon a material change in circumstances since the order had been made dismissing support.

At this point we should have recognized that although it might not hurt the strength of a spousal support release, the reducing of a final agreement of spousal support into a consent order was not particularly helping either.  In the event of a material change in circumstances, at least the Ontario Court of Appeal believed that the court still had the jurisdiction to entertain a new application for support[30].

More recently, the Supreme Court of Canada has decided a case which should give counsel pause when seeking to secure the strongest possible release.  The Quebec case of Droit de la famille – 091889[31] overturned a variation court who had engaged in a de novo review of the disabled wife’s ability to work when expert evidence showed no change in her condition since the original order.  The court concluded there had been no material change since the making of the order.  The order was based upon a consent agreement reached between the parties.

On its facts, this case does not raise Miglin issues. However, the majority made clear that once a spousal support agreement has been incorporated into a court order, as was the case here, the test for variation is simply the material change test of section 17 of the Divorce Act guides the variation and not the Miglin two step analysis.  This is bad news for a party who wishes to hold the other party to their bargain because Miglin is a more demanding test.  Instead of proving that a change was unforeseen, an applicant must prove that the change is “…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.”[32]

A good example is a reduction in income as a result of retirement.  This generally qualifies as a material change of circumstances unless it was actually taken into account in the order, for example by providing for support to be reduced or terminated at retirement.  So an applicant seeking to reduce support at retirement will almost always succeed in having the order changed.  By contrast, if the applicant is seeking a court order at first instance and has to rely upon a Miglin analysis, a court would almost always find that the retirement was in the range of reasonable outcomes that the parties could have anticipated.  In such a case, a court would decline to interfere with the agreement.

Professor Thompson in his recent paper on variation of spousal support[33] suggests that Droit de la Famille091889 may become an incentive for parties wishing to hold the other spouse to their agreement not to incorporate their final spousal support terms in an initial court order, so that the more demanding Miglin test will apply to any subsequent request for spousal support.  He notes that in certain parts of Canada, like Quebec, incorporation is the norm and this would be a hard practice to change.  That is unquestionably the case in Manitoba.

No court in Manitoba has at yet been asked to apply Droit de le famille[34].  The closest that I can find that any case has come to this issue is the Ballegeer case[35], decided last year by Justice Little.  The case involved a confirmation hearing for a provisional order that had become a procedural nightmare which Justice Little handled with his usual aplomb.

The parties had signed an agreement with time limited spousal support, fixed as to quantum.  As responsible Manitoba counsel, the wife’s lawyer had the terms of the agreement reduced to a consent order.  After the order was pronounced, the husband’s financial circumstances declined and he sought to vary the order and reduce his obligations.

The court was asked to set aside or vary the agreement based upon a material change of circumstances and/or based upon a Miglin analysis.  Justice Little was alive to the issue of this dual argument and neatly sidestepped the issue of whether a Miglin analysis applied in the circumstances.  He concluded that no material change of circumstances had been proven under section 17 of the Divorce Act and refused to vary the agreement.

A recent case of the New Brunswick Court of Appeal[36] concluded firmly that Miglin had no application because the support agreement had been reduced to a consent final order.  The court stated at paragraph 8:

In my opinion Miglin has no application in the present case.  There is a substantial difference between a domestic contract or separation agreement on the one hand, and an order issued by a judge of the Court of Queen’s Bench, Family Division, on the other. 

The court made no mention about the Droit de la Famille091889 case.

So what is a humble family law practitioner to do?  In chatting about this issue, Professor Thompson urged that lawyers in Manitoba should avoid incorporating agreements into orders and he noted that the best form of protection for any form of agreement, is to ensure that it falls within (or perhaps a bit below) the federal Spousal Support Advisory Guidelines.

If you take this advice, one further question remains.  Since all heads of relief that are pleaded in an originating process must be dealt with in a final order, what do you do with an already existing claim for spousal support if the terms of agreement are not to be included in the Final Order?  In years past you could have ignored the problem, but judges, and registry, are getting a little more careful about making sure that a Final Order really does complete the file.  So you have essentially 4 options: withdraw, adjourn, dismiss or grant the relief plead.  If you are not dismissing, and not granting the relief, then your only remaining options are to either withdraw or adjourn the relief sought.  Both could work.  I will leave for another day as to whether there is a substantive distinction between the two or if we are really dancing here on the head of a pin.

G. Conclusion

Post Miglin, there appears not to have been quite the rash of judgments overturning prior agreements that some commentators might have initially feared.  The courts have proceeded quite carefully in their analysis of whether a particular change was reasonably foreseeable or not, and whether an agreement was and is sufficiently in compliance with The Divorce Act, bearing in mind the importance of finality between litigants and the right of individuals to determine their own affairs.

In her exhaustive survey of dozens of post-Miglin cases[37], Professor Rogerson concluded that there were “shifting norms of fair bargaining”.   The courts were setting higher standards of procedural fairness such that they are more apt to override agreements that have not been fairly negotiated.  At the same time she concludes that there is a “relatively high threshold for intervention on the basis of substantive unfairness” in that courts are not easily overriding spousal agreements simply because a spouse might have done better had he or she gone to court.

At the same time courts have moved to extend the use of the Miglin analysis.  It is being applied to agreements created in respect of other statutory schemes such as property legislation, and lower courts have seen fit to extend its application to custody and access issues as well as mobility and the division of family property.  The Miglin analysis is also being applied not only in the context of separation agreements and consent orders, but also in the context of pre-nuptial and marriage contracts.

It will remain a challenge for counsel to confidently advise clients as to whether an agreement would survive a Miglin challenge, particularly stage two of the Miglin analysis, namely, whether a particular change was reasonably foreseeable or not.  This is an area of wide discretion, and largely factual in nature.  Similarly, whether agreements are found to be in substantial compliance with the objectives of the particular legislation will continue to be an interesting and important determination.


Footnotes

[1]Miglin v. Miglin 2003 SCC 24 (CanLII), [2003] 1 S.C.R. 303. (herein “Miglin”)
[2] See the Supreme Court of Canada decision in Hartshorne v. Hartshorne released a year after Miglin where the court applied Miglin principles to override a property agreement: 2004 SCC 22, CarswellBC 603.
[3]Miglin Revisited, Jennifer A. Cooper, Q.C., July 1, 2006.
[4]Spousal Support Agreements and the Legacy of Miglin, Canadian Family Law Quarterly, Volume 31, 2012, by Carol Rogerson.
[5]To Vary, To Review, Perchance To Change: Changing Spousal Support, Canadian Family Law Quarterly, Volume 31, 2012, by Rollie Thompson.
[6]Supra note 1 at paragraph 91.
[7]Rick v. Brandsema, 2009 SCC 10, 2009 CarswellBC 342.
[8]Evashenko v. Evashenko, [2011] W.D.F.L. 2240 (Sask. C.A.). (herein “Evashenko”)
[9]Simpkins v. Simpkins 2004 CanLII 28909, Ont. C.A., at paragraph 19.
[10]Evashenko, supra note 8.
[11]Lang v. Lang 2003 MBCA 158 (CanLII), (2003), 234 D.L.R.(4th) 525. (herein “Lang”)
[12]H.(C.M.) v. H.(J.R.), [2012] W.D.F.L. 5330 (N.B.C.A.)
[13]Simpkins, supra note 9.
[14] Ibid, at paragraph 23.
[15]Hardt v. Hardt, 2010 CarswellMan 59 (Man Q.B.).
[16]Lang, supra note 11.
[17]Jenkins v. Jenkins, 2008 CarswellMan688 (Man Q.B.).
[18]Shachtay v. Shachtay 2010 CarswellMan 747 (Man Q.B.).
[19]Shachtay v. Shachtay, 2013 CarswellMan 54 (Man. C.A.).
[20]Spencer v. Spencer 2005 SKQB 116 (CanLII).
[21] Ibid, at paragraph 14.
[22]Mark v. McTaggart [2005] S.J. No. 216.
[23]G.D. v. M.S. [2005} J.Q. No. 14230 (Que.C.A.).
[24]Marks v. Tokarewicz 2004 CanLII 19767, (2004), 1 R.F.L. (6th) 282. (Ont. C.A.).
[25]Kehler v. Kehler 2003 MBCA 88 (CanLII), 39 R.F.L. (5th) 299.
[26] See the Supreme Court of Canada case Transport North America Express Inc. v. New Solutions Financial Corp. (2004), 2004 CarswellOnt 512 (S.C.C.)
[27] See for example Canadian American Financial Corp (Canada) v. King (1989), 1989 CarswellBC 75 (B.C.C.A.).
[28]Tierney-Hynes v. Hynes, 2005 Can LII 35770 (ON CA)
[29]Ibid, at paragraph 54.
[30] The Tierney case has not yet been considered in Manitoba.
[31]Droit de la famille – 091889, [2011], 3 S.C.R. (S.C.C.).
[32]Miglin, supra note 1 at paragraph 91.
[33]Supra note 5, at page 6.
[34] See McKenzie v. McKenzie , 2012 CarswellMan 185 (Man. Q.B.) where Justice Johnson noted in passing (at paragraph 53)  that it had been cited by the petitioner to interpret legal onus and change of circumstances under the Divorce Act.
[35]Ballegeer v. Ballegeer 2013 CarswellMan 332 (Man Q.B.).
[36]L.(R.S.) v. L.(S.I.), 2013 CarswellNB 140 (N.B.C.A.)
[37]Supra note 4, at page 7.

weberation 2016-05-02T21:55:01-08:00

Tessema v. Hagos 2017 ONSC 2438

This case reviewed some of the themes in Miglin v. Miglin in order to determine whether a separation agreement can or ought to be set aside. Ultimately it followed the tests and analyses set out therein.

Background

The parties separated after 19 years of marriage and two children, with the children moving in with their father after the separation. The spouses entered into a separation agreement which stated that he would waive any entitlement he had to the mother’s property in Ethiopia, and disentitled her to spousal support or any share in his pension. The mother would not have to pay child support.

The mother then sought to have the agreement set aside, seeking equalization and spousal support. The setting aside of a separation agreement invokes an analysis set out in Miglin v Miglin. The trial judge found that while there was no reason to hold the contract invalid on its face, he would not uphold her waiver of support. He cited a lack of compliance with the objectives of the Divorce Act. He therefore ordered that the mother pay child support, and that the father pay her spousal support. The two amounts would offset each other for a net amount payable by the father of $787 per month. The father appealed.

Analysis

The judge allowed the father’s appeal in this instance because the trial judge was required to determine whether the separation agreement as a whole was in substantial compliance with objectives of the Divorce Act. By focusing on the terms surrounding spousal support and whether they complied with the spousal support guidelines, the judge failed to take into account several factors that give context to the agreement. Such factors include other terms of the contract, her means at the time that the agreement was formed and whether or not there had been a change in circumstances since then.

In spite of waiving support, the mother was not in financial ruin, given that she was receiving benefit from two rental properties in Ethiopia and did not have to pay child support. Therefore, the way that the separation agreement was structured overall did appear to comply with the objectives of the Act. The appeal court found that the trial judge erred firstly in awarding spousal support in light of the mother’s contractual waiver of spousal support, and secondly in the implementation of child support payments that the father did not request.

Miglin v. Miglin

Andrew Feldstein

The Feldstein Family Law Group (FFLG) is one the largest family law firms that practices Family Law exclusively in Greater Toronto, with ten lawyers and counting. The boutique law firm has won the Top Choice Award for Family Law™ in Toronto for the past twelve years (2007 to 2018 inclusive).

Managing Partner Andrew Feldstein has been practicing family law for more than 20 years and frequently comments on Family Law issues through the media. The Feldstein Family Law Group offers vast written, video, and media resources on its website to those who find that they need to end their relationship.

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