Separation and divorce can be a lengthy, emotional, and complicated process. Making these processes more complex can be issues relating to property division, parenting arrangements, and support obligations. However, these issues must be addressed to ensure the parties understand their rights and adhere to their obligations to the other party and their children moving forward.
Regardless of whether these issues are agreed upon by the parties in private or are determined by a court, the agreements must be fair to the parties and adhere to certain legal principles. As circumstances change, a party may apply to vary an existing agreement or court order to reflect their current situation. To convince a court to amend an agreement, the party seeking the change must prove to the court that there has been a material change in circumstances, which can be challenging to establish. A recent decision from the Supreme Court of Justice for British Columbia exemplifies how the courts may address an application to vary a vague written agreement, particularly when financial disclosure is an issue.
Varying an order for spousal support in British Columbia
Before a court will allow a party to vary or terminate their support obligations or cancel their support arrears, the court will begin by reviewing the existing agreement or order and determine whether the paid support satisfies the objectives as set out in British Columbia’s Family Law Act and the federal Divorce Act (if applicable).
Further, the court will consider whether the applicant has established that they have experienced a material change in circumstances justifying a change to the existing agreement.
Husband seeks to cancel support arrears and terminate ongoing obligations
In the case of Piaggo v. Piaggo, the parties were married for 10 years but separated on September 7, 2007. The parties had one daughter together, to whom the wife provided constant care due to her disabilities. The parties’ daughter, unfortunately, passed away in 2020. The parties concluded the Minutes of Settlement (the “Settlement”) on December 31, 2009, with the help of their respective counsel, which addressed the outstanding issues after their separation and divorce.
The claimant husband now brought an application, pursuant to section 164 of the Family Law Act, to terminate or reduce his spousal support obligations immediately and retroactively. He also sought orders cancelling or reducing his support arrears pursuant to section 174 of the Family Law Act.
Minutes of Settlement lack financial evidence
According to the Settlement, the respondent wife obtained sole ownership of the family home and assumed the associated costs after paying the husband $80,000. However, the Settlement did not provide the value of the family home or mortgage balance. As a result, the Supreme Court of British Columbia could not determine whether the Settlement provided for an equal division of the home. In his application to vary his spousal support obligations, the husband did not provide evidence in relation to these values.
The parties retained their own RRSPs, non-registered savings accounts in their names, and their respective vehicles despite the agreement being silent on values. The Settlement also provided that each party would be responsible for the debt in their own names, and the husband would be responsible for the family debt, aside from the mortgage payments. However, the amounts owing were not specified.
Court unable to determine whether a material change in circumstances has occurred
In support of his application before the Court to terminate or reduce his spousal support obligations, the husband argued that the Settlement favoured the wife, including for property division. However, without evidence supporting such claims, the Court decided it could not reach this conclusion.
Further, the Settlement failed to identify the husband’s income. The amounts provided for spousal and child support were approximately mid-range. However, the lack of evidence of the parties’ respective financial circumstances when the agreement was signed made it difficult for the Court to determine whether a material change in circumstances had occurred, aside from the fact that the parties’ child had passed away and the husband was no longer paying child support.
Husband fails to adhere to terms of Settlement regarding support payments and disclosure obligations
Upon further review, the Court found the husband generally paid his support obligations in accordance with the terms of the Settlement despite arrears owing. However, he failed to provide the wife with financial disclosure each year. Further, he did not invoke a review of spousal support, which was intended to occur in March 2014 per the Settlement.
The husband told the Court that he had changed jobs over the last 12 years and had even been unemployed for a period of time. However, he stated that he continued to fulfill his support obligations. Despite subsequently obtaining a job with an annual salary of $130,000, he only paid the wife nominal amounts of spousal support and failed to adhere to the terms of the Settlement. The husband claimed he was in “financial dire straits”; however, his banking statements showed that he had taken trips to the Sunshine Coast and Ucluelet and made substantial purchases from Okanagan wineries.
Court finds evidence supporting compensatory spousal support
As of September 2022, the husband’s support arrears amounted to $104,562.11. Although his income was significantly more than the wife’s due to her providing full-time care to their daughter, the Court noted that his assets amounted to less than $20,000 (although this amount was uncertain due to his lack of disclosure). On the other hand, because the wife took possession of the family home, she had equity of approximately $1.2 million but no income.
The husband argued that his spousal support obligations should cease as he had paid support to the wife for over 13 years, which was longer than the parties’ marriage. However, the Court acknowledged that extraordinary circumstances required the wife to sacrifice her employment and retirement benefits to provide full-time care for their daughter during her lifetime. Referring to the case of Moge v. Moge, the Court found that the wife was entitled to compensatory support when the Settlement was signed, and this claim grew during the years she continued to care for their daughter.
Husband failed to meet the burden of proof; Court dismisses application
Conversely, the Court found that the husband had not established the necessary burden of proof to convince the Court to reduce his spousal support payments. Further, the Court declined his request to terminate outstanding arrears and noted that his exact net worth could not be determined due to lack of disclosure. Based on the test in Luney v. Luney, the Court found the husband had failed to make reasonable efforts to pay support when arrears began to accumulate in 2020 and did not prove that he could not pay the arrears in the future.
When explaining why he could not bring an application to the Court sooner, the husband argued that he had suffered from depression, which impaired his capacity to commence proceedings. Despite this claim, the husband did not provide supporting medical evidence from a doctor. Instead, he provided a letter from a friend which stated that he had seen the symptoms of depression that he had experienced in the husband. The Court disregarded this letter as hearsay evidence.
The Court declined to terminate the husband’s spousal support obligations and rejected his request to cancel his spousal support arrears. The Court dismissed his application and awarded costs to the wife.
Contact the Family Lawyers at Meridian Law Group in Vancouver for Advice on Family Law Disputes
The compassionate family lawyers at Meridian Law Group guide and advise clients on a variety of family law issues stemming from divorce and separation, including support payments. Family law disputes can be complex, costly, and emotionally fueled, which is why our lawyers help clients understand what laws apply to their circumstances and their options for dispute resolution. Call us at 604-687-2277 or contact us online to learn how we can help you.