



COURT OF APPEAL FOR ONTARIO

CITATION: Smith v. Smith, 2017 ONCA 759

DATE: 20171002

DOCKET: C62021

MacFarland, Watt and Benotto JJ.A.

BETWEEN

Johnny Smith

Respondent (Applicant)

and

Denise Boyda Smith

Appellant (Respondent)

P. D. Marshall, for the appellant

S. Klotz and J. Klotz, for the respondent

Heard: September 25, 2017

On appeal from the order of Justice Antonio Skarica of
    the Superior of Justice, dated March 21, 2016.

REASONS FOR DECISION

[1]

The parties are husband and wife. Before their marriage, they signed a
    cohabitation agreement whereby the wife released her claims to spousal support.
    Upon separation, the wife sought to claim spousal support. The trial judge upheld
    the cohabitation agreement, dismissed her claim to support and determined the
    parties income for child support. She appeals the dismissal of spousal support
    and the determination of income.

[2]

The parties began their cohabitation on March 1, 1997. The husband had
    experienced an acrimonious separation of a prior relationship and wanted to
    avoid a repetition. Before continuing a relationship with the wife, and before
    purchasing a home, he wanted the security of a cohabitation agreement. The
    agreement was drafted and presented to the wife. Although given the opportunity
    to do so, she did not obtain independent legal advice. The agreement was signed
    on October 7, 1997.

[3]

Paragraph 8 of the agreement provides as follows:

NO CLAIM FOR SPOUSAL SUPPORT AND MAINTENANCE

a)

Each party
    releases the other from all claims that each may have against the other for the
    payment of interim or permanent support or maintenance whether periodic or lump
    sum under the laws of any jurisdiction, and in particular under the provisions
    of the Act, or any successors thereto;

b)

Should either
    party hereafter make a claim against the other for support or maintenance, the
    provisions of this paragraph may be pleaded as and shall be a full and complete
    defence to any such claim;

c)

Each party acknowledges
    that he or she is self-supporting or fully capable of being self-supporting and
    requires no financial assistance from the other;

d)

Each party
    acknowledges that each may suffer or enjoy drastic changes in health, income,
    assets and debts, or changes in fortune by reason of unforeseen factors, but
    nevertheless agree that under no circumstances, however catastrophic or
    unconscionable, will any change, direct or indirect, or unforeseen, give either
    the right to claim any support or maintenance from the other.

[4]

The parties had two children. The first was born in 2001 and the second
    in 2003. They married on June 6, 2003. They separated in September 2013 and
    proceeded to trial with respect to financial issues including spousal and child
    support.

[5]

The trial judge upheld the cohabitation agreement and dismissed the
    wifes claim for spousal support. In determining the parties income, he
    imputed income to the wife and reduced the husbands income because of his
    health issues.

[6]

The wife alleges that the trial judge erred in upholding the
    cohabitation agreement because the release of support does not meet the
    provisions of the
Divorce Act
, R.S.C., 1985, c. 3 (2nd Supp.) She also
    submits that he erred in calculating income for child support.

[7]

In
Miglin v. Miglin
, 2003 SCC 24, [2003] 1 S.C.R. 303, the
    Supreme Court of Canada set out a two-stage analysis to be applied in dealing
    with initial applications for spousal support in the face of a release. The
    first stage considers the circumstances at the time the agreement was created.
    This stage of the analysis is subdivided into two parts:

(1) A consideration of the circumstances surrounding
    negotiation and execution of the agreement to determine whether there is any
    reason to discount it.

(2) A consideration of the substance of the agreement to
    determine whether it was in substantial compliance with the general objectives
    of the
Divorce Act
at the time of its formation.

[8]

The second stage of
Miglin
requires the court to consider, at
    the time of the application for spousal support, whether the applicant has
    established that the agreement no longer reflects the original intention of the
    parties, and whether the agreement is still in substantial compliance with the
    objectives of the
Divorce Act
.

[9]

The objectives of the
Divorce Act
include certainty, finality
    and autonomy:
Miglin
at para. 4. Subsection 15.2(6) of the
Divorce
    Act
states that a spousal support order should:

(a)
Recognize
    any economic advantages or disadvantages to the spouses arising from the
    marriage or its breakdown;

(b) Apportion between the
    spouses any financial consequences arising from the care of any child of the
    marriage over and above any obligation for the support of any child of the
    marriage;

(c) Relieve any economic hardship of the spouses
    arising from the breakdown of the marriage; and

(d) In so far as practicable, promote the economic
    self-sufficiency of each spouse within a reasonable period of time.

[10]

The wife submits that the trial judge did not consider important facts
    when he applied the
Miglin
test.  She says, there was a power
    imbalance between her and the husband, she had not discussed spousal support
    with the husband, the financial disclosure was incomplete, the trial judge misconstrued
    the evidence when he said that her income at the date of  the agreement was
    $70,000,  and she did not have independent legal advice. She acknowledges that
    she was not coerced. She also submits that the agreement does not align with
    the overall objectives of the
Divorce Act
,
at the time of signing or now, because the parties had an
    18-year relationship, she bore the primary responsibility for the children, and
    his income exceeds hers.

[11]

We do not accept the wifes submissions. She has shown no error of law
    or misapprehension of fact on the part of the trial judge. If the trial judge
    misstated the wifes income at the date of the agreement, the error was not
    material. There is no suggestion that the income of the parties at the date of
    the agreement impacted her decision to sign the agreement. The trial judge
    carefully reviewed the
Miglin
test, s. 56(4) of
the Family Law Act
, R.S.O. 1990, c. F.3,
and
LeVan v.
    LeVan
,
2008 ONCA 388, 90
    OR (3d) 1.  He made the following findings of fact:

a)

The wife was aware of the husbands desire to have a cohabitation
    agreement.

b)

The parties had discussed the cohabitation agreement before the wife
    received it.

c)

The wife was aware of all of the husbands sources of income and assets
    and did not pursue further disclosure.

d)

The wife skimmed over the cohabitation agreement and read some parts of
    it and not others.

e)

There was no fraud, coercion, or duress.

f)

Although given the opportunity, the wife did not seek independent legal
    advice even though  on her evidence  she had six weeks to do so.

g)

At the time of signing the agreement, the wife thought it was fair and
    that it fairly outlined the parties discussions regarding the purchase of a
    house.

h)

The agreement is in substantial compliance with the Divorce Act.  Both parties
    suffered economic disadvantages arising from the marriage, and more
    importantly, even if the cohabitation agreement did not exist, the wife would
    not be entitled to spousal support.

[12]

The wife further submits that the trial judge erred in attributing
    $40,000 to her and $73,000 to the husband for purposes of child support.

[13]

She submits that her income is $18,204 as disclosed on her financial
    statement. However, the trial judge found that by working part-time she was
    deliberately underemployed. He concluded, based on her evidence, that she could
    earn $30,000 per year and would receive child tax benefits bringing her income
    to $40,000. She submits that it was an error on the part of the trial judge to
    add the child tax benefits to her income for support purposes. She argues that
    tax benefits are included in the financial statement to determine the budget
    one needs to meet expenses. On this basis alone, the trial judge was entitled
    to consider it income.

[14]

With respect to the husbands income, the trial judge accepted the
    evidence that his income would be reduced to $73,000 per year due to his health.

[15]

The findings and conclusions of the trial judge were open to him on the the
    evidence and are entitled to deference from this court.

[16]

Accordingly, the appeal is dismissed with costs payable to the husband
    in the amount of $12,000 inclusive of disbursements and HST. This does not
    include the outstanding costs award currently owed by the wife.

J. MacFarland J.A.

David Watt J.A.

M.L. Benotto J.A.


