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| Georgialee Lang |
The starting point for an application to reduce or terminate spousal support and cancel arrears is an examination of the original order or agreement, to allow the court to determine whether the support paid satisfies the objectives of support identified in the Family Law Act and/or the Divorce Act, and whether a proven material change in circumstances mandates a change in the support order.
The case of Piaggio v. Piaggio [2023] B.C.J. No. 902 is illustrative of an agreement between separated spouses so bewilderingly vague that the court was unable to ascertain whether the agreement was fair or in accordance with legal principles governing division of property and debt and spousal support.
The parties were married for 10 years and concluded Minutes of Settlement, with the assistance of counsel, in December 2009. They had one child, a daughter named Naomi, who had severe disabilities including cerebral palsy, scoliosis, a seizure disorder, impaired vision and many other conditions. She required around-the-clock care which was provided by the wife before and after the separation.
Under the settlement agreement, the mother retained the family home in exchange for a payment to her husband of $80,000. She assumed the mortgage and arrears of taxes and utilities. The agreement did not record the value of the home or the mortgage and no evidence of value was presented at the spousal support variation application brought by the husband.
Each of the parties retained the RRSPs and non-registered savings in their name, but the agreement provided no values. They also each kept their own vehicle, again no values were included.
The husband was responsible for the family debt, except for the mortgage, but no amount was specified in the agreement. One paragraph of the agreement suggested that the division of property favoured the wife, as it provided that she would be solely responsible for Naomi’s special and extraordinary expenses in consideration of the financial and property division provisions of the agreement. However, the agreement was silent with respect to the alleged financial advantages afforded the wife.
The agreement also failed to identify the husband’s income, although the amounts of child and spousal support of $1,263 and $4,000 at the mid-range, provided some indication of his income, although the numbers were confusing.
The court determined that the lack of evidence of the parties’ financial circumstances at the time the agreement was signed made it impossible to assess whether a material change in circumstances had taken place, apart from the sad fact that Naomi had died in 2020, at the age of 17 and child support was no longer being paid.
While the husband mostly paid child and spousal support in accordance with the terms of the agreement (with arrears owing), he apparently ignored the requirement that financial information be provided to the wife each year. He also never invoked the review of spousal support term of the agreement, which was to occur in March 2014.
The husband advised the court that he had moved between jobs over the past 12 years and for a period of time was not employed, but said that he continued to make the required payments by using his capital assets and credit facilities. In other years, his employment compensation exceeded the amount he earned at the time the agreement was signed.
In August 2020, after being underemployed for a year or more due to the termination of his previous position, he secured a job that paid him $130,000 a year but failed to abide by the agreement, paying only nominal amounts of spousal support. As of September 2022, he owed the wife $104,000 in arrears of spousal support.
While the husband’s income outstripped his former wife’s, as she had not worked during the marriage or since, due to the full-time care required by Naomi, the court noted that his current asset base amounted to less than $20,000, a figure that was uncertain due to his lack of disclosure. The wife, who had retained the family home, now had equity of $1.2 million, but no income.
The husband argued that the time had come for spousal support to be over, since he had paid support for almost 13 years, three years longer than the parties’ marriage. However, the court found that the extraordinary circumstances related to Naomi and the wife’s personal sacrifice to care for Naomi 24/7 precluded her from employment, job security, retirement benefits and the like.
The court referred to Moge v. Moge [1992] 3 S.C.R. 813 and concluded that the wife had substantial entitlement to compensatory support at the date the agreement was signed, likely undervalued at the time, and her compensatory claims grew during the years she continued to care for Naomi. The court found that a more compelling case for compensatory support would be difficult to find and that at age 60 she had few viable prospects for self-sufficiency.
The court found that the husband had not met his burden of proof to persuade the court to reduce his spousal support payments. The court also rejected his claim to cancel the arrears of spousal support, finding that the legal test in Luney v. Luney[2007] B.C.J. No. 2483 had not been satisfied, that he had not made reasonable efforts to pay support since the arrears began to accumulate in 2020 and had not proven that he would be unable to pay the arrears in the future. Further, the court noted that his lack of disclosure provided an incomplete picture of his net worth.
The court also rejected his argument that he suffered from depression, which impaired his capacity to bring on an application earlier. The evidence in support of his medical claim was a letter from a “friend” who claimed to be familiar with the signs of depression from his own experience and acknowledged seeing those same symptoms in the husband. No doctor’s letter was provided.
**This article was first published by Law360, a publication of LexisNexis Canada
Georgialee Lang is a lawyer and arbitrator in Vancouver and Kelowna, B.C. Lang has practised family law for 35 years, recently focusing primarily on arbitration and appellate litigation. Lang is a writer, speaker and media commentator whose publications range from the Huffington Post to the National Post and Law360 Canada. For fun she pens a blog (lawdiva.wordpress.com). Connect with her at georgialeelang.com or on Twitter.
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