Motion to Change a Recently Executed Separation Agreement

Hanniman v Hanniman

In this judgment of the Ontario Superior Court of Justice, Justice McNamara explores the test for “material change” in the context of a Motion to Change brought just eight months after the Separation Agreement was filed with the court as a domestic contract.

Factual Background

At the outset of the hearing of the Application for Divorce on November 28, 2011, the parties advised Justice McNamara that they had reached a settlement.  The details of that settlement were then put on the record and endorsed by the court. Regarding spousal support, the transcript specifically read as follows:

For ongoing spousal support the parties agree to an order for ten years of spousal support commencing January 1, 2011 terminating December 1, 2020 in the amount of $3,500.00 a month.

On November 11, 2011, the parties executed a Separation Agreement, which was subsequently filed with the court on October 1, 2012. Shortly thereafter, on June 25, 2012, the Respondent, Mr. Hanniman, filed two motions with the court seeking to vary the amount of spousal support on the basis that there had been a material change in circumstances, specifically, his retirement effective July 6, 2012.

Court’s Analysis

At the motion, Mr. Hanniman took the position that he had had a long career and was entitled to retire; relying on Boston v Boston, he further asserted that those facts represented a material change in circumstances “that provide the court with jurisdiction to vary the spousal support order,” as per the parties’ Agreement.  Since retiring, Mr. Hanniman’s income had dropped from a pre-retirement level of $138,273.00 to $92,000.00 post retirement. He further argued that Ms. Hanniman was aware that he would be retiring when the parties signed the Agreement.

In contrast, Ms. Hanniman argued that:

the law is clear that where there is a separation agreement as there [was in this case], while the court is not bound by its terms, the Agreement does operate as strong evidence that at the time each accepted its terms, those terms were reflective of the intentions of the parties.

Ms. Hanniman further argued that there had not been a change in circumstances that was reasonably unforeseeable at the time of the formation of the Separation Agreement. Finally, she disputed Mr. Hanniman’s contention that the parties had discussed his retirement in their settlement negotiations.  Ms. Hanniman advised that she had made concessions by foregoing indefinite support, knowing that Mr. Hanniman was 65 at the time of the signing of the Agreement, and accepting support for a fixed term of ten years at the low range of the SSAG, based on Mr. Hanniman’s income when the Agreement was executed.

Justice McNamara began his analysis by examining the provisions of the parties’ Agreement and finding that “either party’s retirement “may” represent a material change, but it does not automatically amount to such change.”

In the end, Justice McNamara was of the view that the evidence before him did not represent a material change in circumstances that was reasonably unforeseeable at the time the Agreement was reached.

I am satisfied that at the time the settlement was reached and the subsequent Agreement entered into, it could not reasonably have been within the contemplation of the parties when they agreed to a ten-year period of spousal support at a figure towards the low end of the range, that that agreement, despite its specific wording, was only in place for six or seven months.

Interestingly, Justice McNamara was persuaded by the fact that Ms. Hanniman had rejected an offer to settle that guaranteed support until November 2014 just a few days prior to the trial.  He concluded that someone who would have rejected such an offer would not have then “agreed to a ten-year period subject to the caveat that after six or seven months [Mr. Hanniman] was free to retire and that would automatically constitute a material change in circumstances.”

Justice McNamara noted, however, that when the pension transfer occurs and income begins to flow to Ms. Hanniman, that such a change may constitute a material change in circumstances.

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