[1] The defendant has applied for an order varying a consent order pronounced December 9,1998 by deleting the defendant's obligation to pay spousal support in the sum of $450 monthly. The basis of the defendant's application is that his former wife has remarried and that that constitutes a material change of circumstances. She has also sold the former matrimonial home, and resides with her new husband, and therefore receives interest income on the liquidated value of her former home.

[2] The plaintiff's position is that she agreed to a spousal support payment in lieu of receiving a share of the defendant's employment pension, because the defendant (who was then imminently retiring, and has since retired) was adamant that he did not wish her to receive directly a portion of his pension, notwithstanding their 37 year marriage.

[3] The wife supports her argument with reference to the exchange of "without prejudice" correspondence between counsel which resulted in a settlement agreement and the consent order. The husband opposed the admissibility of this correspondence as privileged. Counsel did not refer to any authorities on that issue, but after reviewing basic principles and some of the authorities in this area I hold that this "without prejudice" correspondence is not protected by privilege from being admissible on this application, because a settlement agreement was achieved and the evidence is probative on the issue that has arisen in respect of the terms and meaning of the agreement. (For a summary of the law on this topic, I refer counsel to J.Sopinka and S.N.Lederman, The Law of Evidence in Civil Cases, Butterworth's, Toronto, 1974, at pp.200-202.)

[4] A review of the correspondence and attachments indicates that Mr. McKay's employment pension is approximately $1223 monthly. By the terms of the settlement and the consent order, his former wife agreed not to apply for a division of that pension. It was further ordered that neither party would apply for a division of their respective Canada Pension Plan Benefits, each party would retain their cash assets, investments and personal property as these were then held, the husband would retain his early retirement and severance package from his employer, and the wife would receive the husband's interest in the former matrimonial home.

[5] The division of property settlement was apparently intended to effect an equal division of family assets. In a letter from the wife's former solicitor at one stage of the negotiations, the solicitor wrote, in rejecting a proposal:

[6] The question as to whether actual equality was achieved is something I cannot decide on the evidence, and something that would not be particularly determinative on this application, but I nevertheless accept the former wife's evidence to the effect that the spousal support ordered was an integral part of an division of family assets agreement, and was intended to compensate her for a presumptive entitlement to a share of the employment pension. As such the spousal support payment is compensatory, and something she would have been entitled to, even if she had been remarried at the time, unless the relevant statutory factors justified a re-apportionment at that time, which does not appear to be the case.

[7] I note that the agreed settlement does not appear to have equitably shared the adverse consequences of the marriage breakdown, or left the parties with equivalent standards of living. With roughly equal capital assets, the respective incomes of the parties following the settlement (and his retirement) were very different. The former wife's income was approximately $6300 per annum, while the former husband's was approximately $36,000 per annum. My interpretation of the PricewaterhouseCoopers Matrimonial Tax Tables is that the after-tax cost to Mr. McKay of the agreed spousal support payment of $450 would have been approximately $270 per month.

[8] The plaintiff was in a dating relationship with her present husband at the time of the settlement, but marriage was not apparently imminent or foreseen at the time. The remarriage has obviously benefited her financially, by enabling her to obtain some income (approximately $8,900 per annum from the agreement for sale of the former matrimonial home), and also to benefit from economies of scale in obtaining the necessities of life. It clearly constitutes a change in her means and needs, but in the particular circumstances of this case, where the agreed spousal support took the place of the apportionment of an employment pension she was presumptively entitled to, and no rationale for reapportionment is supported on the evidence, I hold that reducing or rescinding the agreed spousal support would be unfair, perhaps even unconscionable.

[9] The former husband has cited authority, (Witt v. Witt, [1991] B.C.J. No.772 (B.C.S.C.); Range v. Range, [1995] B.C.J. No.1248 (B.C.S.C.)), to the effect that the burden of persuasion lies upon a spouse who has remarried, or entered into a relationship where he or she is supported by another, to demonstrate a continuing need for support from a former spouse.

[10] Witt was not a variation case, but was an action for a first order of maintenance, which was the only unresolved issue after the parties had consented to orders dealing with property issues. There was no linkage between the property issues and the spousal maintenance, and the former wife, who was being partly supported by a new partner, demonstrated that she had a continuing need for maintenance.

[11] Range was a variation case, and the former husband succeeded in rescinding a spousal support order because the remarried former wife failed to meet the burden of persuasion, because she had negated the pecuniary benefit of remarriage by choosing to maintain two homes. In that case there also was no linkage of the spousal support to the apportionment of property.

[12] My decision does not contradict the authority of those cases, which are distinguishable on their facts as not dealing with variation of consensual spousal support that is an integral compensatory component of a complete settlement agreement. As stated in Range, the Divorce Act does not mandate rescission of a spousal support order on remarriage; it is a change within the meaning of S.17(4) and the court has a discretion to exercise.

[13] The defendant's application is dismissed, with costs.

"I.C Meiklem, J."
The Honourable Mr. Justice I.C. Meiklem