In Owen, the court was faced with non-payment of spousal support by a wealthy husband, in contravention of the terms of a separation agreement.  The court found that, in addition to losing the money itself, the wife lost certainty, security, and the ability to budget, invest and control her own financial resource, all of which she had bargained for in the agreement.

Because of this, the court agreed that the Agreement had been repudiated by the husband, and on the basis of the action brought forward, that the wife accepted that reputiation.  The result was stark:  the husband was required to pay back the arrears that had accrued under the terms of the agreement to the date the repudiation was accepted.  Further, the wife was freed from her obligations under the agreement and was able to once again pursue a reapportionment of the very substantial family assets, something that she had given up under the agreed upon terms.  Finally, as the agreement was no longer in effect, the husband was once again required to pay a higher, interim, spousal support sum which had been ordered prior to the Agreement being reached.

The wife, of course, did not have to accept the repudiation, and she could have sought a far more common remedy; namely, that the agreement be enforced.  But the choice was hers, and it serves as a valuable reminder that the person breaching the agreement will rarely receive benefit for that breach from the court.

In Wolfman-Stotland v. Stotland, 2011 BCCA 175, (CanLII) the court grappled with the question of a spouse’s capacity to separate.  In this case, the claimant wife and the respondent husband were  92 and 93 years old respectively, and the wife applied for a  s.57 declaration that there was no reasonable prospect of reconciliation.  In opposing that application, the Husband sought and received an order that a doctor provide an opinion as to the Wife’s capacity to make the  – though the doctor found that the wife had the capacity to instruct counsel regarding the financial aspects of the divorce claimed, she “did not have the capacity to form the intention to live separate and apart from her husband” [at paragraph 14].  The Chambers judge defined the relevant issue as whether the wife had the ability to both manage her affairs and instruct counsel.  The Court found that she did not.

The Court of Appeal disagreed.  Upon re-examination of the issue, the Appeal Court determined there should not have been a dual test.  The ability to manage ones affairs was determined to be a higher capacity than the one needed to instruct counsel and the court overturned the Chambers Judge’s decision.

The Husband’s application to appeal to the Supreme Court of Canada was dismissed, and the test for the capacity necessary to separate therefore remains a very basic one.

Mr. Justice R.D. Wilson stated found that,

[9]             The argument advanced by the Claimant is based on the proposition that the failure to comply with the terms of an order is equivalent to “a change in the condition, means, needs or other circumstances of the child of the marriage…”. To me, that is a novel proposition. No authority was cited in support of it. Absent binding authority, it is not a proposition which commends itself to me.

[10]         Non-compliance with the provisions of an order is not the equivalent of a change in circumstances. The Claimant’s application for a variation order is dismissed because she has failed to establish that there has been a change in the condition, means, needs or other circumstances of the children, or either of them.

Interestingly, neither party seems to have explored the prospect that, while the non-compliance did not in and of itself constitute a change in the children’s circumstances, the care actually received by the children since the pronouncement of the trial decision and their related needs would, in fact, have given rise to a difference.  It remains a question as to how far a determination such as Mr. Justice Wilson’s can reach.  It is common for parties to seek a variation based on the failure by the other to live up to the terms of an order, and it seems logical that the law should both direct the actions of the parties and also accurately reflect those actions when they change.

A company has been formed in California with the sole purpose of financing divorce litigation.  The firm justifies itself by suggesting that spouses of the űber-wealthy (the firm in question specializes in cases with assets valued north of $2 million) require financing to level the playing field.  Its altruism diminishes, however, when it comes to remuneration, treating the parties family problems as an investment.  The company is paid with a percentage of the ‘winnings’ on the completion of trial or on settlement.

In BC, lawyers in divorce cases are prohibited from being paid on contingency; that is, by taking a percentage of money ‘won’.  The parties’ and the children’s interests rather than the potential capital return should be the motivation for the parties’ decisions. The prohibition against contingency billing removes the potential that lawyers will seek to serve their own interests by advocating litigation which that may not be in the interests of those involved.

In regards to the involvement of third parties in the financing of litigation for profit, the common law in British Columbia maintains that this is improper.  Such investment in litigation, or champerty, is discussed more fully in Farley v. Pearlson, 2001 BCSC 1237.

While there is always the potential for abuse within a system, B.C. has dealt specifically with the problem of for-profit litigation financing and it seems unlikely that similar investment schemes will appear any time soon in the province.

1. That he did not willfully or deliberately fail to enter an appearance or file a defence to the plaintiff’s claim;
2. That he made application to set aside the default judgment as soon as reasonably possible after obtaining knowledge of the default judgment, or give an explanation for any delay in the application being brought
3. That he has a meritorious defence or at least a defence worthy of investigation; and,
4. That the foregoing requirements will be established to the satisfaction of the court through affidavit material filed by or on behalf of the defendant.

Until that application comes before the court and unless the order is set aside, it is fully valid.  But an order obtained in a contested application is not subject to this provision.  In the end, it’s probably a wash given that it’s generally a little easier to get an order when no one is opposing you.

But what happens if one of the parties was pursuing an application to cancel or reduce arrears of maintenance?  The court found (at para. 16) that an application to vary or cancel arrears, “… must be made by a spouse or former spouse and those terms do not extend to a corpse, an estate, or a personal representative.”  Because of this, any application to change maintenance owing also abates upon the death of either party.  Which means that if you intend on applying to varying or cancel arrears, it’s best to do it while you’re alive.

Previously, the parties have been separated since 1994. The initial child and spousal support order was made in 1996, and varied in 2004. The 2004 Order specified that, anytime after a year had passed, either party could seek a review hearing on the issue of spousal maintenance. The husband sought that review in 2005, and then again in 2009 when it was alleged the youngest child of the parties was no longer a child of the marriage. The husband sought to terminate spousal support at that point.

At the 2009 application the judge indicated she was relying on Section 17 of the Divorce Act, which relates to the variation of support orders. She concluded the husband ought to keep paying indefinite support to the wife in the amount of $1250.00 per month.

On appeal, the Court of Appeal noted that Section 17 of the Divorce Act is irrelevant in the context of review hearings and should not have been relied on by the judge. Instead, at a review hearing, the judge should have conducted a “reconsideration” of entitlement and quantum of support having an eye to the Spousal Support Advisory Guidelines, which the Court of Appeal concluded would have assisted the husband in terms of the duration of support.

This decision clarifies the test that a party must satisfy when bringing an application for a review of support as opposed to the test that must be met on an application to vary support. Procedurally, this distinction is important to note as the legal test is markedly different.

At first blush, it might be difficult to understand why a critique of  a section 15 report would not be relevant to issues before the court; namely, the best interests of the child involved. , The court ins Hajzlar, however, astutely pointed out that a critique of a Section 15 Report does not add any evidence on the questions of the children’s interests.   In critiquing reports, a psychologist , “(a) … must limit comments to methods and procedures; (b) … must not state any conclusions unless they have done their own individual assessments; and (c) … must restrict themselves to comments as to their sufficiency and accuracy” (at paragraph 11).  A critique which does not include any independent assessment  gives evidence solely as to the validity or lack thereof of the original report.  That validity issue is not before the courts.  The Judge determined that the proper way to call the validity and reliability of  a Section 15 report into question would be to cross-examine the author of that section 15 report.  He reflected that an expert critique might be an invaluable resource in preparing for such a cross examination.

Mr. Justice Burnyeat did leave open the option of a party commissioning a second custody and access report.  If such a report were prepared, it would certainly bear on the issues before the court and we suggest would likely be admissible.