This case dealt with a number of issues, many of which will come up in a family law dispute involving a very wealthy spouse. The case dealt with interim spousal support, whether or not the court would order the sale…
Walts v Walts addresses the effect of voluntary early retirement on spousal support.
The parties were married on May 12, 1979 and separated April 20, 2007. The parties were married for nearly 28 years and had three children together. The parties entered into a separation agreement in which Mr. Walts waived his right to interest in wife’s pension and indicated that he was satisfied with financial disclosure. Furthermore, Mr. Walts agreed to pay spousal support in the amount of $1,584 per month. Mr. Walts, however, desired to retire at age 55 and brought a motion to change based on a material change in circumstances. Mr. Walts was seeking this change six years after the date of separation and there was no evidence that he was unable to work or was forced to retire.
Setting Aside the Separation Agreement
Mr. Walts sought to set aside the separation agreement by relying on section 56(4)(a) of the Family Law Act, namely:
56(4) A Court may…set aside a domestic contract or a provision in it…
(a) If a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made.
The Court held that Mr. Walts entered into the agreement without seeking further disclosure from Ms. Walts. Furthermore, Mr. Walt had knowledge of his wife’s pension as it was disclosed to him prior to agreeing on an equalization payment. The Court stated that Mr. Walts cannot “resile from the consequences of such a decision unless he demonstrates that Ms. Walts’ financial disclosure in this regard was inaccurate, misleading or false” (para 32).
Material Change in Circumstances
Due to the fact that the parties were married, the motion to change spousal support was governed by the Divorce Act. According to section 17 of the Act, the onus is on the person seeking a variation of spousal support to satisfy the court that a “change in condition, means, needs or other circumstances of either spouse has occurred since the making of the spousal support order”.
It has been well established that the change must be material (Willick v Willick (1994), 6 RFL (4th) 161 (SCC), para 21). The material change test focuses upon the impact of the event as opposed to the event itself. Further, case law has established that the material change cannot be reasonably foreseeable.
When applying the material change test to the facts of this case, the question becomes whether Mr. Walt’s personal choice to retire early should be viewed as a material change in circumstances for the purposes of spousal support. In Bullock v Bullock (2004), 48 RFL (5th) 253 (Ont. SCJ), the court stated that voluntary retirement at the age of 62 is not a basis for finding a material change in circumstances. A similar decision was reached in Boston v Boston (2001), 17 RFL (5th) 4 (SCC) and Hesketh v Brooker,  OJ No 735 (Ont. SCJ).
Mr. Walts had decided to voluntary retire at the age of 55. Thus, he would be 7 years younger than payors in the aforementioned cases. The Court held that there was a lack of evidence establishing that Mr. Walts was unable to work or forced to retire. In so holding, the Court dismissed Mr. Walt’s motion to change.