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Family Law - DOMESTIC CONTRACTS AND SEPARATION AGREEMENTS - Types - Separation agreements - Formation - Capacity - Practice and procedure - Appeals and judicial review

Thursday, December 15, 2016 @ 7:00 PM  

Appeal by the husband from a judgment partially upholding the spousal support provisions of a separation agreement. The parties married in 1984 and separated in 2006. Their children were born in 1985 and 1988. The husband experienced mental health difficulties in his 20s, requiring hospitalization on two occasions due to depression. His condition caused problems with impulsiveness, short-term memory and disorganization. The wife developed chronic pain from injuries suffered in two pre-marriage automobile accidents. The couple’s health problems continued throughout their marriage, causing unhappiness and financial pressures throughout the 1990s. The husband’s condition improved after 2001 due to a new combination of medication. He took full-time work as a transit driver. The wife worked part-time as a pharmacy technician, moving to full-time work in 2010. However, by 2006, it had become apparent to the couple that their marriage was ending. They sold their home and a separation agreement was drafted by a lawyer retained by the wife. Counsel arranged independent legal advice for the husband. The agreement contemplated spousal support of approximately $1,320 per month, subject to a formula to calculate increases, payable for 22 years. The husband executed the agreement, believing he had no choice. The husband’s gross annual income in the years prior to trial ranged between $55,000 and $81,500. The wife’s annual income in the same period ranged between $32,000 and $49,000. The husband sought to set aside the support provisions of the agreement with termination of his spousal support obligations. The trial judge found that it was not established that the husband’s mental health challenges deprived him of capacity to enter the separation agreement and appreciate its consequences. He received complete and adequate independent legal advice prior to execution. He was not unduly influenced by the wife, as he had actively participated in the negotiation process for two months. Although the quantum of support was reasonable, the 22-year duration was contrary to the requirement of the wife to become economically self-sufficient. The provisions tied to duration were set aside. The husband was required to pay ongoing support, subject to review at the end of 2016. The husband appealed, seeking termination of his support obligation.

HELD: Appeal allowed in part. The trial judge correctly determined that the husband had both the mental and emotional capacity to enter the separation agreement. Although the trial judge misapprehended the importance of evidence that described a vulnerability short of emotional or mental incapacity, there was no basis for interfering with the conclusion that the wife did not take advantage of that vulnerability, and that any vulnerability was sufficiently compensated for by the professional assistance received by the husband. The trial judge erred in concluding that the agreement substantially complied with Divorce Act objectives through a failure to consider the whole of the agreement. The agreement imposed an immutable future for a vulnerable spouse with mental health issues, failed to achieve an equitable sharing of the economic consequences of the marriage, and did not encourage the wife to become self-sufficient. The trial judge did not err in concluding the wife remained entitled to ongoing spousal support. However, the failure to draw an adverse inference from the absence of evidence regarding the wife’s inability to work resulted in a failure to impute her a full-time income. Based on the husband’s estimated income of $57,587 and the wife’s imputed income of $32,002, ongoing spousal support at the midrange of $821 was appropriate on an indefinite basis.