Beauchamp v Beauchamp: "material change" in variation proceedings
The matter of Beauchamp v Beauchamp dealt with the very limited issue of what constitutes a "material change" for the purpose of changing a spousal support order.
In his judgment, released January 12, 2012, Justice Kershman discussed whether, given all the circumstances, a material change had occurred to warrant a change in the former spouses' separation agreement.
The Applicant, Mr. Beauchamp, and Respondent, Ms. Beauchamp, were married in 1968 and separated on December 21, 1982. Shortly thereafter, the parties entered into a separation agreement which stipulated, among other things, that the Applicant pay the Respondent $1,168.56 per month in spousal support including adjustment for the cost of living as defined in the agreement. Paragraph 8 of the Agreement provided that the agreement may be changed if a "material change in circumstances" occurred.
In 1992, the Applicant remarried and proceeded to have five children, ranging in age at the time of trial from 18 to 12.
In support of his variation application, Mr. Beauchamp made the case that the following had occurred warranting a finding of "material change":
- the Applicant's remarriage;
- the birth of his five children between 1993 and 1999;
- the Applicant's retirement on July 1, 2011 from his position as Executive Vice-President and CEO of the Canadian Real Estate Association;
- the fact that his eldest daughter had been admitted to university and he would be paying the cost of post-secondary education for her and for the other children in the near future;
- the increasing cost of sports, educational and extracurricular activities as the Applicant's children age; and
- the significant income reduction experienced by the Applicant resulting from his retirement (from an income of $400,000 annually to a retirement income of between $72,000-$84,000 annually).
Finally, Mr. Beauchamp contended that it was unfair that he had been paying support for the past 29 years given the fact that, had the original agreement been made under the Spousal Support Advisory Guidelines (SSAG), he would have been able to stop paying support long ago.
Under the SSAG, used by courts today to determine the amoung and duration of spousal support, only cohabitational relationships lasting 20 years or longer warrant an indefinite support order (unless the "rule of 65" applies). Otherwise, support orders range between 0.5-1 for each year of cohabitation.
The Applicant's final argument is an interesting one that warrants further discussion. Looked at more closely, the Applicant's argument seems to ignore the fact that the agreement by Applicant and Respondent was made privately, without court interference, many years prior to the introduction of the SSAG.
Hindsight being 20/20, it is easy to see why Mr. Beauchamp wanted his award to be consistent with the SSAG. However, the introduction of the SSAG does not, in and of itself, create a material change.
On the other side, the Respondent urged that there had not been a material change. She asserted that the Applicant's retirement was not a material change and that he was not feeling any financial hardship from meeting his spousal support obligation based on his current income and assets. At the time of trial, support from the Applicant formed approximately 25% of the Respondent's yearly income.
Justice Kershman's analysis focussed on whether, all things considered, the Applicant had demonstrated that a material change in circumstances had occurred since the original agreement was entered into almost 30 years earlier. The court noted that while the changes asserted by the Applicant
...looked at individually may not be considered a material change in circumstance, when looked at as a whole, including the fact that there are five dependent children who either are or will be going to some form of post-secondary education and the fact that the Applicant is retired with a reduced income...[in combination, produced] a material change.
In the end, the court ordered that the material change required a reduction in the amount of spousal support leading to a total elimination of spousal support in the future.
The court concluded that the Applicant should continue to pay the current amount of support (as articulated in the Separation Agreement) until December 1, 2012. Following that period, Justice Kershman ordered that support be reduced to $650.00 per month for the year of 2013, $325.00 per month for the year of 2014, after which spousal support would cease.
Although unmentioned in Justice Kershman's judgment, he seems focused on how the original agreement strays from the SSAG and seems to use them, regardless of the fact that the SSAG didn't come into effect until more than 25 years after the separation agreement was made, as a basis for determining fairness.
Interestingly, in dealing with the order for costs, Justice Kershman deemed the Respondent "more successful" than the Applicant and awarded the Respondent costs on a partial indemnity basis in the amount of $2,250.00. This was probably more likely due to the financial need of the Respondent than to any real "win" over the Applicant.