Husband to Pay Spousal Support Despite Waiver

This is a cautionary tale respecting the importance of independent legal advice.

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On January 13, 2017, Mr. Justice Grauer of the BC Supreme Court ordered  a husband to pay his ex-wife  spousal support despite finding that the parties had entered two “agreements”. He found that first the wife  agreed to a reduction from $8,000 to $4,000, and second, she waived her rights to spousal support completely. Neither party had obtained independent legal advice on either agreement.

Background

At the time of Mr. Grauer’s decision, the parties were 70 and 74 years old respectively. They were married in 1973 and separated in 1995. In November 1998, they were divorced by court order of Madam Justice Humphries of the BC Supreme Court. Following the divorce, Justice Humphries awarded the wife $8,000 per month in spousal support. The order required that spousal support would be paid indefinitely, and did not provide for a review.

Between November 1998 and December 2008, the husband paid spousal support of $8,000 per month to the wife g pursuant to the order. Between January 2009 and November 2010, the husband paid only $4,000 per month. The husband said that the wife agreed to this change, which she denied.  Unfortunately nothing was in writing about this first agreement and neither party received independent legal advice. In his reasons, Justice Grauer found that she did agree to the reduction from $8,000 to $4,000.

Beginning November 2010, the husband stopped paying spousal support altogether. Justice Grauer found that the second reduction was pursuant to a second agreement between the parties. Again, there was no financial disclosure and neither party had independent legal advice. This reduction was reflected in a written agreement dated April 30, 2011. As for the reason behind the second reduction, Justice Grauer found that she agreed to the reduction because “she accepted the husband’s explanation that he needed to reduce and then eliminate spousal support to allow him to plan for his eventual retirement” (at paragraph 17).

The husband did not in fact retire. The wife’s evidence was that she first became aware that he was still working in January 2016 when she checked the BC Ministry of Health website “out of curiosity”. It turned out that the husband had, in fact, continued to make similar income to what he earned in November 1998 and the years that followed. She applied for retroactive support going back to January 2009 when spousal support was first reduced to $4,000 on the basis of misrepresentation.

Legal Framework

Justice Grauer does not accept that she had been misled with respect to the two reductions in spousal support. He finds that she agreed to both reductions. He states specifically that the second “agreement” is not a legally binding contract because the husband did not give the wief anything to compensate for her agreement to waive spousal support. He cites Boekhoff v. Boekhoff, 2016 BCCA 33 for this proposition, although he notes:

[20] In Boekoff, the court concluded that the wife’s agreement to reduced support (from $800 to $200 per month) constituted a binding waiver of her rights, which she had withdrawn on reasonable notice. In the result, the court found she was not entitled to arrears, but was entitled to ongoing support of $424 per month based on SSAG.

[21] With respect to the nature of the agreement to reduced support, the court observed:

[39] In some limited circumstances, the law may hold a party to an agreement despite the absence of consideration through doctrines such as promissory estoppel and waiver.  Promissory estoppel occurs where one party, by words or conduct, makes a promise intended to affect the parties’ legal relationship, and in reliance on that promise, the other party acts to his or her detriment: Maracle v Travelers Indemnity Co of Canada, [1991] 2 SCR 50 at 57.  A “waiver” is said to occur where the evidence shows that the party waiving their rights had a full knowledge, and an unequivocal and conscious intention to abandon them: Saskatchewan River Bungalows Ltd et al v Maritime Life Assurance Co, [1994] 2 SCR 490 at 499-500.  The two doctrines are closely related; the principle underlying both is that a party should not be allowed to go back on a choice when it would be unfair to the other party to do so: Saskatchewan River Bungalows at 499.

Decision

Justice Grauer goes on to find that the second agreement, being the reduction of spousal support to $0 was “at best” a waiver of her rights. He states that waiver of rights can be a material change in circumstances that can result in a review of spousal support.

As the years passed after the second “agreement”, Justice Grauer found that the husband had an obligation to disclose to the wife”how his plans to retire were proceeding, and his financial situation, given the basis on which he had obtained her waiver and otherwise unfettered entitlement to support.” He found specifically that he was not entitled to assume that her waiver was a final resolution of spousal support.

However, Mr. Justice Grauer finds that because she was not misled by the husband, she is not entitled to claim spousal support going back to January 2009. In his view, it was only 4 years after the second agreement that the husband was required to disclose his financial situation, and she should only be able to obtain retroactive support back to that point in time, namely January 1, 2015. He finds that this was the time the wife would have revoked her waiver.

The result was that despite her waiver, the wife was entitled to $8,000 per month in spousal support beginning January 2015 until present and on a going-forward basis for at least one year at which point either party may apply for a review of support.

Take Away

This case is an example of why independent legal advice is so important when entering into agreements relating to spousal support. Had the wife received independent legal advice respecting a reduction in her spousal support, she would have been advised to insist on full financial disclosure and to put something in writing with respect to the first agreement.

The husband’s situation was also negatively affected by the failure to obtain legal advice at the time of the first and second agreement. Had he obtained independent legal advice, he might have avoided this fight and the requirement to pay spousal support beginning in January 2015. He could have done so by agreeing to pay a specific amount (i.e. some sort of lump sum) for the wife’s waiver, or agreed to future financial disclosure which would have at least kept the wife apprised of his failure to retire and started the clock running on her claims for spousal support.

If you don’t want to put yourself in a similar position to these two feel free to contact us to discuss what legal options are best for you in your spousal support claim. We offer a free one-hour consultation.

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