Spousal Support Advisory Guidelines: The Revised User's Guide

13 Variation and Review (SSAG Chapter 14)

(a) The general framework of variation and review

The SSAG do nothing to change the general structure of the law pertaining to variation and review.

Some important points to remember about the basic law of variation and review include:

the distinction between a review and a variation:

A variation involves the threshold requirement of a material change in circumstances whereas a review is more like an initial application; courts often mistakenly confuse the tests. For recent decisions requiring appellate correction see Marche v. Marche, 2014 NLCA 2; Morck v. Morck, 2013 BCCA 186; and Domirti v. Domirti, 2010 BCCA 472.

A review is often described as a hearing de novo, but this is somewhat misleading because, following Leskun v. Leskun, 2006 SCC 25, the issues to be reviewed may, and indeed should be, delineated by the terms of the review: see Westergard v. Buttress, 2012 BCCA 38 (review only re self-sufficiency, not de novo assessment) and MacCarthy v. MacCarthy, 2015 BCCA 496 (order permitting review properly interpreted to apply only to quantum and not entitlement; not allowing for re-litigation of entitlement one year after trial).

the test for material change -- “known or taken into account”, not “foreseeable”:

The test for a “material change”, as confirmed by the Supreme Court of Canada in L.M.P. v. L.S.,2011 SCC 64, is a change that is substantial, continuing and that “if known at the time, would likely have resulted in a different order”. L.M.P. is now the leading case on the threshold test for variation. The test is not whether the change was or was not “foreseeable” by the parties at the time of the previous order. The language of “foreseeability” is mistakenly transposed by lawyers and judges from the case law dealing with spousal support agreements—first Pelech and now Miglin. Some prefer to restate the “material change” test as a change that was not “foreseen” in the initial order, but even this often leads to confusion. The better approach is to focus on what was “contemplated” or “taken into account” in the initial order.

There is a growing body of higher level court decisions providing clearer thinking on the test for “material change”. Before L.M.P., Lambert J.A. provided an insightful explanation of the test in Stones v. Stones, 2004 BCCA 99:

[15] In my opinion, the question of what is a material change of circumstance may vary from one case to another. That is particularly so in relation to foreseeability. There are a group of cases which decide that retirement from employment, even at the retirement age set by the employer, or by collective agreement, can be a material change of circumstances, although clearly it would be foreseeable.
[16] I suppose that the question should really be asked in each case of whether the circumstance in question was one which the parties must have had in contemplation and built into the framing of their agreement. Perhaps it is a change that the parties were prepared to leave out of contemplation in the agreement because of complexity or some other reason, so that when it occurs it is a material change of circumstances, even though the parties knew it must be going to happen at some time or another. [emphasis added]

More recently, good discussions of the proper application of the material change test can be found in the decision of Justice Kasirer in Droit de la famille – 141364, 2014 QCCA 1144, leave to SCC refused [2014] S.C.C.A. No. 459 and in Dedes v. Dedes, 2015 BCCA 194. In Dedes, the court stated, in the context of an application for variation of a custody order to permit the mother’s relocation:

[25] As articulated in L.M.P., the test for material change is based not on what one party knew or reasonably foresaw, but rather on what the parties actually contemplated at the time the order was entered by agreement. A function of the material change threshold is to prevent parties from re-litigating issues that were already considered and rejected; in such cases an application to vary would amount to an appeal of the original order. [emphasis in original]

In Goodkey v. Goodkey, 2015 ABCA 394, the Alberta Court of Appeal very sensibly concluded that a chambers judge erred in refusing to find that the cessation of child support was a material change in circumstances. His ruling that the change must have been in the contemplation of the parties at the time of the prior consent order was quickly dealt with by the Court of Appeal: “while it could be said that it was reasonably anticipated by the parties that child support would terminate at some point, the specific timing of that termination remained unknown.”

However, even at the higher court levels, the test for “material change” continues to be misunderstood and conflated with concepts of foreseeability. In Morigeau v Moorey, 2015 BCCA 160, the wife’s repartnering was found not to be a material change because it was “foreseeable” at the time of the initial order that she might cohabit with her current partner, who she was seeing at the time, or if not with him, then with someone else. In Hickey v. Princ, 2015 ONSC 5596, the Ontario Divisional Court found that the husband’s early retirement was either “foreseeable” or “foreseen” because his pension was valued on that basis and therefore his retirement could not be a material change. The results in these two decisions—i.e. no variation—may well be defensible (in Morigeau the wife had a strong compensatory claim and in Hickey the wife was disabled). But the problematic analysis of “material change” complicates the resolution of variation cases for lawyers and judges.

on a variation, the court must limit itself in its order to whatever variation is justified by the material change in circumstances:
As the S.C.C. made clear in L.M.P., above, at para 47, a variation is neither an appeal nor a hearing de novo. Judges making variation orders under s. 17 are required to limit themselves to making the appropriate variation and should not weigh all the factors to make a fresh order unrelated to the existing one.
consent orders are now governed by the test for variation from L.M.P. rather than by Miglin:

As a result of the SCC’s ruling in L.M.P., above, the threshold test for variation of consent orders is the same as for orders that do not incorporate an agreement, that of a “material change” in circumstances since the making of the order. A spousal support agreement does not alter the statutory “material change” threshold of s. 17. The Miglin test is thus not applicable in the variation context. However, the more specific the terms of the agreement, the greater the impact the agreement will have in “shaping” the “material change” analysis, as the terms will indicate the intentions of the parties and what they did or did not take into account in arriving at the spousal support agreement. Not all “finality” clauses will be given weight on the variation analysis. The majority distinguishes between “general” and “specific” finality clauses, with the former having less effect than the latter.

The other way to challenge a consent order is to seek rescission of the order because of the invalidity of the agreement on which the consent order is based; see comments by Bastarache and Arbour JJ. in Miglin (at para 16) cited in L.M.P. at para 47.

For an overview and analysis of the law of variation and review see Rollie Thompson, “To Vary, To Review, Perchance to Change: Changing Spousal Support” (2012), 31 Canadian Family Law Quarterly 355.

(b) Applicability of the SSAG on variation and review

We hope we are now at the stage where the once pervasive “myth” that the Advisory Guidelines “do not apply” on variation and review has finally been dispelled. The SSAG do apply on variation and review, but there may be added complexities and entitlement issues arising in some cases that limit the use of the Guidelines. In many variation and review cases, however, the Advisory Guidelines can be readily applied.

The British Columbia Court of Appeal began to sort through this issue in Beninger v. Beninger, 2007 BCCA 619, where Justice Prowse warned that “the SSAG should be approached with considerable caution on variation applications”, as more complex issues of entitlement can arise, but nonetheless recognized that“[i]n certain circumstances, the SSAG can be used on a variation application, albeit with care”. After that warning, the Court of Appeal proceeded to apply the SSAG to determine amount and duration in that case.

Some of the on-going confusion on this issue comes from Justice Lang’s unfortunate and often-repeated statement in her otherwise excellent general discussion of the Advisory Guidelinesin Fisher v. Fisher, 2008 ONCA 11: “they [the SSAG] only apply to initial orders for support and not to variation orders” (para 96). In practice, however, Ontario courts have regularly applied the Advisory Guidelines in both variation and review decisions, and properly so, despite the comment in Fisher. In its recent decision in Gray v. Gray, 2014 ONCA 659, the Ontario Court of Appeal has explicitly distanced itself from the statement in Fisher (noting at para 43 that Fisher was not a variation case and that it was decided before the release of the Final Version of the SSAG) and confirmed that the SSAG do apply on variation, although in some cases there will be “complicating factors that must be considered before a court applies the SSAG wholesale” (para 45).

What variation situations require more “caution” because they raise “complicating factors”?

Most other situations do not pose a problem, e.g. where the payor’s income is reduced or the recipient’s income is increased or where child support is terminated.

Even more surprising has been the argument that the SSAG do not apply on a review hearing. A review hearing is much more like an initial application for support. Entitlement issues like those listed above come up much less frequently on review than on variation. Again, with some of the same cautionary language, the B.C. Court of Appeal has stated that the SSAG do apply on review in its 2010 Domirti decision, and rightly so: Domirti v. Domirti, 2010 BCCA 472 at paras 40‐41 per Smith J.A.

(c) Variation of pre-SSAG orders or non-SSAG consent orders

Variation and review of orders or consent orders that were not based on the SSAG raise special issues. These issues arise predominantly with respect to older, pre-SSAG orders, but can also arise with SSAG-era agreements that depart from the SSAG and have been incorporated into consent orders. Payors may attempt to use the SSAG on a variation application to reduce the amount of support being paid or to terminate the obligation. Alternatively, recipients may attempt to use the SSAG to increase the amount of support being paid or to at least preclude a further reduction in support.

The mere fact that the SSAG would provide a different outcome based on current incomes and circumstances is not a basis for variation. A material change must be established. And even if there has been a change, the SSAG will not automatically be applied to determine the appropriate outcome. The court may be guided by the prior order/consent order rather than the SSAG. For example, in two cases involving pre-SSAG orders where the amounts under the existing order were below the SSAG ranges, payor requests for a downward variation based upon a reduction in their incomes were allowed—the SSAG were not applied and spousal support was adjusted in accordance with the percentage reduction in the payor’s income: see Allaire v. Lavergne, 2014 ONSC 3653 and Thompson v. Thompson, 2013 ONSC 7561.

And the same approach has been applied in cases where the existing support order is more generous than the SSAG; see Krause v. Zadow, 2014 ONCJ 475 (separation agreement with material change clause, amount higher than SSAG, SSAG not applied, spousal support adjusted in response to husband’s reduced income by applying same percentage distribution of NDI as in agreement to husband’s current income) and Pustai v. Pustai, 2014 ONCA 422 (trial judge erring in terminating support consistent with durational limits in SSAG and ignoring terms of consent order providing for variation in case of material change but no termination of spousal support).

However, in several cases, in contrast to the approach adopted in Allaire and Thompson, courts have used the SSAG to find that the spousal support under the existing order was low (at low end of the SSAG range or below), and have therefore refused to grant a payor’s application for a variation seeking a reduction or termination, often finding no material change; see Bhandhal v. Bhandhal, 2015 ONSC 1152; Dunn v. Dunn, 2014 ONSC 7277; Rozen v. Rozen, 2014 BCSC 3164; Cossette v. Cossette, 2015 ONSC 2678 (Div. Ct.); Berger v. Brayley, 2014 ONSC 1597; and Gennoe v. Gennoe 2014 ONSC 2256.

If a pre-SSAG order is understood to have been roughly consistent with the SSAG, the SSAG may be used to determine the new order on variation; see Misztal v. Karpynczyk, 2012 ONSC 6474 (23-year marriage; 2003 consent order; husband’s income up, wife’s down; material change, new order low end of SSAG range).