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The Importance of Fully Understanding the Details of an Arbitrated Agreement

The following case involves a husband’s attempt to vary, terminate or reduce his spousal support obligation as a result of his former wife’s cohabitation with another man and subsequent remarriage.

Mr. and Ms. Slater were married in 1970, separated in 1993 and officially divorced in 1999. The same year that the divorce was granted Ms. Slater began cohabiting with Mr. Nathanson, whom she later married. Mr. and Ms. Slater decided to resolve all financial issues stemming from their marriage breakdown via arbitration and incorporated the decisions into an Arbitration Award. One such decision regarded spousal support where Mr. Slater agreed to pay a fixed amount of $10,000.00 a month that could only be varied by reason of a catastrophic and unforeseen change of circumstances of either party.

Pursuant to this provision Mr. Slater brought a motion to vary the amount payable, including Mr. Nathanson as a party on the basis that the cohabitation between him and Ms. Slater constituted a change in circumstances. Mr. Slater further requested an order for contribution or indemnity by Mr. Nathanson claiming that since he and Ms. Slater qualify as spouses under the Family Law Act he also has an obligation to support her.

Mr. Nathanson, on the other hand, brought a motion to be removed as a party or a summary judgment dismissing all claims against him.

Justice Czutrin of the Ontario Superior Court of Justice dismissed all claims against Mr. Nathanson and stated that despite the living arrangements between Mr. Nathanson and Ms. Slater, and the potential financial benefit she may accrue from said arrangement, Mr. Slater had no viable claim against him.

When the agreement was entered into between the two former spouses Ms. Slater and Mr. Nathanson were already living together and Mr. Slater was well aware of their relationship and the possibility that they would marry. Moreover, Ms. Slater and Mr. Nathanson had entered into a cohabitation agreement stating that she would not seek support from him and this arrangement was known by all three individuals when Mr. and Ms. Slater settled. Therefore, he did not satisfy the court that the living arrangement constituted a “catastrophic, foreseen or unforeseen, change in circumstances” as contemplated by the Arbitration Award.

Justice Czutrin also took the opportunity to discuss the potential dangers that would result if, to terminate a spousal support obligation, it would become commonplace to add new spouses as parties. He stated that:

“family litigation will be more adversarial and more costly; it will incur greater delays; and, it will potentially interfere with, and potentially jeopardize, intact relationships. It is one thing to seek disclosure from new partners and investigate the financial relationship between new partners and spouses, it is far different and significant to then seek the relief that is sought here, that is, to transfer all or part of a support obligation from a former spouse to a new spouse by a court declaring that the new spouse has all of part of the obligation.”

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