Date: 19970815 Docket: 30594/95 Registry: Prince George IN THE SUPREME COURT OF BRITISH COLUMBIA BETWEEN: SHANEEN KNECHTEL PETITIONER AND: MARK EDWARD KNECHTEL, also known as MARK E. KNECHTEL RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE MR. JUSTICE PARRETT Counsel for the Petitioner: R. J. Heather, Q.C. Counsel for the Respondent: D. McGaughey Place and Date of Hearing: Prince George, B.C. November 7 and December 5, 1996 INTRODUCTION [1] The respondent seeks in the present application to vary an order pronounced on July 31, 1995 and entered on August 1, 1995. The variation sought is that 13 paragraphs of the order be rescinded. In addition the respondent wishes a variation changing the primary residence of Bryce Edward Knechtel and to fix child support with respect to that child. [2] The parties were both born in the United States of America, the petitioner at Renton, Washington on March 3, 1951, and the respondent at Seattle, Washington on June 26, 1951. They married in Seattle on September 17, 1977 and separated on June 10, 1992 after a marriage of nearly 15 years. [3] The parties met in November 1976 when the petitioner was employed as a dental assistant at the dental school of the University of Washington where the respondent was a student. The respondent graduated in June 1977 and shortly thereafter the couple moved to Prince George, British Columbia where the respondent took up the practice of dentistry. [4] The petitioner worked with the respondent as a dental assistant in his practice, and continued to do so as well as fulfilling a role in the management of his office until after their separation. [5] There were two children of the marriage, Bryan Steven Knechtel, born September 6, 1975 (Bryan was a child of the petitioner by a previous marriage who was adopted by the respondent), and Bryce Edward Knechtel, who was born on November 15, 1978. [6] After their separation the present litigation was commenced. On April 13, 1995 the parties entered into a comprehensive separation agreement and on July 31, 1995 a consent order incorporating that agreement was pronounced. This separation agreement and consent order are the background to the present application which seeks to vary their terms. [7] The respondent in his affidavit filed August 6, 1996 testifies in paragraph 3 "That I was unrepresented by counsel at the time the Separation Agreement dated April 13, 1995, was signed and at the time the July 31, 1995 Order was pronounced." [8] Attached to the end of the separation agreement is the following acknowledgment by the respondent: I, MARK EDWARD KNECHTEL, of the City of Prince George, in the Province of British Columbia, MAKE OATH AND SAY AS FOLLOWS: 1. I am the person named as the Husband in the attached Separation Agreement and, as such have personal knowledge of the matters herein. 2. I have been advised that it is in my best interest to seek independent legal advice as to the meaning of the Separation Agreement and its present and future legal effect on me by ANNABELLE G. OLIVER DUNBAR, the Solicitor for SHANEEN KNECHTEL, prior to the signing Separation Agreement. 3. I do not wish to obtain legal advice. 4. I have not received any legal advice from ANNABELLE G. OLIVER DUNBAR, Solicitor for SHANEEN KNECHTEL. 5. I have signed the Separation Agreement willingly and with sufficient understanding after having read it in its entirety. 6. I have signed the Separation Agreement without any undue stress, fear, duress, improper understanding, undue influence, or false inducement and, in fact, did so because I felt it was fair and in my best interests to do so. DATED at the City of Prince George, in the Province of British Columbia, this 13th day of April 1995. (Signed) MARK EDWARD KNECHTEL [9] In her affidavit filed October 11, 1996 the petitioner outlines in some detail the communications between her solicitor and Dr. Knechtel. Her affidavit reveals conversations with the respondent in which he described seeking advice from a senior and experienced counsel who practises in the area of family law. She goes on to describe the respondent retaining solicitors to effect certain land transfers required by the terms of the separation agreement. None of these portions of the petitioner's affidavit are addressed in the respondent's subsequent affidavit. [10] On May 11, 1996 the petitioner married Claude LeBlanc, an engineer employed at Northwood Pulp and Paper, where he earns an annual salary of approximately $70,000. [11] In the fall of 1995 the petitioner enrolled in the Social Work Programme at the University of Northern British Columbia. She obtained credit for courses she had already completed (12 credits) and was carrying half of a full course load while maintaining part-time employment in a home based computer training business. Her intention is to pursue and obtain her degree in Social Work. [12] The respondent seeks an order that the parties share joint custody of Bryce Edward Knechtel with primary residence with the respondent. [13] The material portions of the order of July 31, 1995 include the following: (1) THIS COURT FURTHER ORDERS THAT the Petitioner and the Respondent have joint custody of the child of the marriage, namely: Bryce Edward Knechtel, born November 15th, 1978; with primary residence to be determined by the child and the party with whom the child is not primarily residence shall have reasonable access to the child upon reasonable notice and upon taking into consideration the child's wishes. THIS COURT FURTHER ORDERS THAT the Petitioner and the Respondent have joint guardianship of the person and estate of the child of the marriage. .... (2) THIS COURT FURTHER ORDERS THAT the Respondent pay all post secondary education expenses for each of the following children, regardless of whether such child falls within the definition of "child of the marriage" as defined by the Divorce Act, 1985: Bryan Steven Knechtel, born September 6, 1975; and Bryce Edward Knechtel, born November 15th, 1978. .... THIS COURT FURTHER ORDERS THAT in the event either Bryan or Bryce Knechtel pursue post secondary education through University or a duly certified post secondary school or vocational institute, all and any child maintenance payments payable at that time be suspended and the Respondent pay that child's living, sports and school related expenses on an "on-needs" basis, upon taking into consideration the following: (1) The Respondent's income position based upon his personal and corporate income tax returns and current wage statements/benefits together with the income tax return of any individual with whom the Respondent may be resident; (2) The living, sports and school related expenses of the child, pursuing post secondary education; (3) Any income earned by such child to assist with his ongoing expenses. THIS COURT FURTHER ORDERS THAT in the event of any dispute concerning the Respondent's financial contribution towards the living, sports and school related expenses of the child pursuing post secondary education, either party be at liberty to apply to a Court of competent jurisdiction to determine such financial contribution. .... (3) THIS COURT FURTHER ORDERS THAT the Respondent continue to make all payments to an existing Scholarship plan in reference to the post secondary education expenses of Bryce Edward Knechtel until either the child pursues post secondary education or until the plan is liquidated, whichever first occurs. THIS COURT FURTHER ORDERS THAT in the event Bryce Edward Knechtel does not avail himself of the plan, all proceeds be equally split between the parties. .... (4) THIS COURT FURTHER ORDERS THAT the Respondent maintain medical insurance coverage for the Petitioner for a period of two (2) years commencing from the parties' date of entry into their Separation Agreement on April 13th, 1995. THIS COURT FURTHER ORDERS THAT the Respondent be solely responsible for the payment of dental expenses for Bryce Edward Knechtel until he is no longer a child of the marriage as defined by the Divorce Act, 1985. THIS COURT FURTHER ORDERS THAT in the event that the Respondent be responsible for payment of the Petitioner's dental expenses to a maximum limit of $1,000 annually, for a period of two (2) years commending from the date of the parties' entry into their Separation Agreement on April 13, 1995. THIS COURT FURTHER ORDERS THAT in the event the Petitioner or either of the two (2) children require any health care services which are not offered and/or covered by the British Columbia Medical Services Plan, the Respondent, at the request of the Petitioner, forthwith advance the Petitioner an interest free loan to pay for all such health care services. .... (5) THIS COURT FURTHER ORDERS THAT the Respondent pay spousal support to the Petitioner in the sum of $2,400.00 per month for her maintenance to be paid on the 1st day of each and every month thereafter, until further Order of this Honourable Court. THIS COURT FURTHER ORDERS THAT in the event the Petitioner begins attending school, the Respondent continue to pay spousal support of not more than $2,400.00 per month regardless of the Petitioner's condition, means, or circumstances including her student classification status. .... (6) THIS COURT FURTHER ORDERS THAT for so long as the Respondent is obliged to pay either child or spousal maintenance, the Respondent at all times maintain life insurance coverage on his life in the fact amount of not less than $250,000.00 with the Petitioner designated as sole owner and sole irrevocable beneficiary under the said policy. .... [14] The respondent submits that as a result of the entry of the order the petitioner chose not to rely on the separation agreement and that, as a result, by virtue of merger and election the Court may make the appropriate orders under s. 17 of the Divorce Act. [15] The petitioner submits that where there is a final order based on an antecedent separation agreement the test is not that ordinarily utilized under s. 17 but rather requires a finding at the outset that there has been a radical and unforeseen change of circumstances. [16] These arguments were the thrust of the entire submissions on the present application. On behalf of the respondent the submission is essentially that the petitioner has remarried, she has greater assets and through the remarriage she has replaced the income. As a result he submits there is no remaining economic disadvantage, and the powers to vary and rescind under s. 17 should be utilized. [17] The vast majority of time occupied by the present application was focused on the provisions of the agreement and order dealing with spousal support, and specifically that portion of the order dealing with spousal support in the event the petitioner "begins attending school . . .". THE AGREEMENT [18] The separation agreement entered into by the parties on April 13, 1995 was 31 pages in length not counting the attached schedules. Paragraph M. of the recitals reads: M. The spouses wish to make a complete and effective settlement of all: (1) Their respective rights, interests and claims in and to the property of each other and to any property held by them jointly; (2) Outstanding debts and liabilities owed by them; and (3) Claims to spousal support subject to the provisions of this Agreement. [19] The agreement is, as this recital suggests, comprehensive, dealing with the children, custody, guardianship, access, payment for the children's post secondary education, medical and dental coverage, extra-ordinary health care expenses, spousal maintenance, and a host of issues related to the division of the family assets. [20] It is obvious from the comprehensive nature of the agreement taken together with the handwritten additions and deletions that the parties specifically directed their attention to each specific issue contained within the agreement. [21] There has been no suggestion that the agreement was, at the time, harsh, unconscionable, or unfair to either party but rather the submission is that as a result of the petitioner's remarriage there is no remaining economic disadvantage. The question posed is, as it was in Pousette v. Pousette (1993) 46 R.F.L. (3d) 152 at p. 161, whether - . . . because it is a domestic contract, the law entitles the payor to have the agreement rewritten on the basis that the payee now enjoys economic self- sufficiency. [22] An additional question emerges in the present case whether or not the incorporation of the terms of the agreement into the order of July 31, 1995 changes the situation with respect to the effect to be given to the agreement itself. The July 31, 1995 order, save and except for the divorce order itself was consented to by both parties. [23] The starting point for the present analysis must be the trilogy of decisions handed down by the Supreme Court of Canada in 1987. These decisions: Richardson v. Richardson [1987] 1 S.C.R. 857, Pelech v. Pelech [1987] 1 S.C.R. 801 and Caron v. Caron [1987] 1 S.C.R. 892 were all proceedings taken under the 1970 Divorce Act. In each case a court order had incorporated spousal maintenance provision from an antecedent agreement. In each of the three decisions the terms of the agreement were upheld and the claims for additional maintenance failed. [24] More recently in Moge v. Moge [1993] 1 W.W.R. 481 the majority of the Supreme Court of Canada drew a clear distinction between cases which involved financial settlement agreements and those cases which, like Moge, do not involve consensual agreements but rather the variation or termination of spousal support orders made under the appropriate legislation. L'Heureaux-Dube, J. at p. 494-495 after referring to the view expressed by some commentators that the trilogy applied to cases beyond situations involving final agreements, she wrote: With respect, I cannot agree. A careful reading of the trilogy in general and Pelech in particular indicates that the court has not espoused a new model of support under the Act. Rather, the court has shown respect for the wishes of persons who, in the presence of the statutory safeguards, decided to forego litigation and settled their affairs by agreement under the 1970 Divorce Act. In other words, the court is paying deference to the freedom of individuals to contract. I quote from the reasons of Wilson J. at pp.849-53 those portions which make the point clearly: ". . . I believe that every encouragement should be given to ex-spouses to settle their financial affairs in a final way so that they can put their mistakes behind them and get on with their lives. I would, with all due respect, reject the Manitoba Court of Appeal's broad and unrestricted interpretation of the court's jurisdiction in maintenance matters. It seems to me that it goes against the main stream of recent authority, both legislative and judicial, which emphasizes mediation, conciliation and negotiation as the appropriate means of settling the affairs of the spouses when the marriage relationship dissolves. However, as I stated at the outset, the Hyman principle that parties cannot by contract oust the jurisdiction of the court in matters of spousal maintenance is an established tenet of Canadian law. The question thus becomes the nature and extent of the constraint imposed on the court by the presence of an agreement which was intended by the parties to settle their affairs in a final and conclusive manner... It seems to me that where the parties have negotiated their own agreement, freely and on the advice of independent legal counsel, as to how their financial affairs should e settled on the breakdown of their marriage, and the agreement is not unconscionable in the substantive law sense, it should be respected. People should be encouraged to take responsibility for their own lives and their own decisions. This should be the overriding policy consideration . . . Absent some causal connection between the changed circumstances and the marriage, it seems to me that parties who have declared their relationship at an end should be taken at their word. They made the decision to marry and they made the decision to terminate their marriage. They should thereafter be free to make new lives for themselves without an ongoing contingent liability for future misfortunes which may befall the other. It is only, in my view, where the future misfortune has its genesis in the fact of the marriage that the court should be able to override the settlement of their affairs made by the parties themselves. . . Where parties, instead of resorting to litigation, have acted in a mature and responsible fashion to settle their financial affairs in a final way and their settlement is not vulnerable to attack on any other basis, it should not, in my view, be undermined by courts concluding with the benefit of hindsight that they should have done it differently." (emphasis added) [25] It can be seen that in Moge the court reaffirmed the reasoning in the trilogy particularly that expressed in Pelech. In particular they affirmed the respect to be given to the spousal support provisions of an agreement freely entered into by the parties with the intention of finally settling the economic aspect of the dissolution of their marriage. [26] Most cases of this kind, particularly those which seek to reopen a final settlement originate in circumstances where the applicant spouse alleges that changed circumstances have resulted in economic hardship. The present case is one of those relatively rare occasions where neither spouse claims present economic hardship. As previously noted, the respondent here submits that the petitioner through her remarriage has replaced her lost income and as a result there is no remaining economic disadvantage. [27] In Pousette v. Pousette, supra, Lysyk, J. had occasion to consider such a situation. He considered two additional decisions Ritchie v. Ritchie (1988) 16 R.F.L. (3d) 163 and Carter v. Carter (1991) 34 R.F.L. (3d) 1. These two decisions both conclude that proof of causal connection need not be shown. This despite the Pelech test which requires a "radical change" in circumstances which must have been unforeseen and causally connected to the marriage. In Ritchie, Mrs. Ritchie had found full time employment and was earning $50,000 to $60,000 a year. In Carter the spouse had received an inheritance in an amount she had not disclosed and the husband had retired. In Pousette the wife had achieved economic self sufficiency by means of employment earnings which averaged $196,000 over her last three income tax returns. In Ritchie and in Pousette variations were ordered in part on the basis that the receiving former spouse had achieved economic self sufficiency. In Carter, Proudfoot, J.A. delivered the judgment of the Court of Appeal. In ordering a new hearing she stated at p. 10 that to justify variation "there should be a change of circumstances that is substantial, unforseen, and of a continuing nature." [28] Since 1993, however, three more decisions of the Supreme Court of Canada have touched on this area of the law. In Masters v. Masters [1994] 1 S.C.R. 883 the court gave very short reasons which, in effect, held that since the husband had not proven a radical and unforseen change in circumstances there was no need to decide whether the causal connection requirement set out in the trilogy was still the law. [29] Later that same year in Willick v. Willick [1994] 3 S.C.R. 670 the court distinguished between an application to override the terms of a final settlement agreement as it related to child support and spousal support. In the case of child support all that is required is proof of a material change in circumstance to justify intervention as the parties are not free to bargain away the child's right to support. By inference the standard of radical unforseen change continues to apply where the application is to override spousal support agreements. [30] Finally in B. (G.) v. G. (L.) [1995] 3 S.C.R. 367 the validity of the trilogy test was raised again. The majority decision acknowledged that the application of the trilogy would have to be reviewed at some time in the future but found that since the husband had not proven a material change in circumstances, it was unnecessary to go on and address the issue of whether he must also meet the standard of radical unforseen change. [31] L'Heureaux-Dube, J. writing for the minority restructured the threshold test for judicial intervention concluding that a settlement which is reasonable when executed and remains so at the time of hearing will be upheld, while a settlement which does not reflect the reality of the case and the statutory objectives of a support award is unlikely to be upheld. [32] In the present case I conclude that it is necessary for the respondent to demonstrate a radical and unforseen change in circumstances. Mr. Knechtel has failed to do so. I am unable to accede to the submission that the remarriage of one of the spouses was not in the contemplation of both as they negotiated a final settlement of their own marriage. [33] Equally, this is not a case such as Ritchie or Pousette where the former spouse had achieved economic self sufficiency through her own employment but rather one where her current spouse has a significant income. While that is a factor to be considered, as the present proceedings and many like it demonstrate, marriages do not necessarily represent life long security. [34] This change is neither radical nor unforseen in my view and lacks the element of being income on which the petitioner may rely as a matter arising from her own capacity. [35] Looked at in a different way the matter becomes, at least in my view, much clearer. [36] The petitioner had worked for much of their marriage in the respondent's dental practice. Both parties continue to reside in Prince George. The dental community is a rather small group within Prince George, and, from the material, has expressed some reluctance to employ the petitioner in that field because of her relationship to the respondent. [37] With this background the settlement agreement between the parties must be viewed as a considered agreement to provide the petitioner with a course of retraining to permit her to enter a different field. It is a term of a comprehensive agreement designed to settle all issues between the parties. A court should, in my view, be very reluctant to isolate individual terms of a comprehensive agreement where those terms are often interrelated. [38] The petitioner in her affidavit filed October 11, 1996 at paragraph 37 testifies that she would never have relinquished her claim to the respondent's dental practice, if it were not for the portion of the agreement by which he agreed to continue the payments to allow her to pursue a university education. [39] In my view, this particular term can and should be viewed as part of the settlement package which divided between the parties their capital assets. The respondent as a part of that division agreed to provide the petitioner with an university education and to pay for it in a particular way. This retraining and education falls squarely within the statutory objectives of a spousal support award, as a means of providing the spouse with a new career. [40] Both the agreement and the order contain within their terms provisions which specifically contemplate further applications to the court. The language of this portion of the order is clear and unequivocal and stands in stark contrast to these other provisions. It reads: THIS COURT FURTHER ORDERS THAT in the event the Petitioner begins attending school, the Respondent continue to pay spousal support of not more than $2,400.00 per month regardless of the Petitioner's condition, means, or circumstances including her student classification status. (emphasis added) [41] This paragraph does not contain legal terms of art or complex and difficult language. It's terms are in my view completely comprehensible to a man of the respondent's intelligence and education. [42] It is equally significant in my view that this paragraph follows immediately after this paragraph: THIS COURT FURTHER ORDERS THAT the Respondent pay spousal support to the Petitioner in the sum of $2,400.00 per month for her maintenance to be paid on the 1st day of each month commencing the first day of May, 1995 and continuing on the 1st day of each and every month thereafter, until further Order of this Honourable Court. (emphasis added) [43] In my view, the intention of the parties emerges clearly and unequivocally and it should not in the circumstances of this case be interfered with. [44] The respondent's application in this respect fails. [45] Turning to the other issues raised, I must say at the outset that these matters occupied virtually none of the time spent in addressing the present application. (a) Bryce's Primary Residence After reviewing the terms of the present order any change int he language is both unnecessary and inadvisable. (b) Payment of Post Secondary Education Expenses I see no compelling reason to change the existing provision which appears to be comprehensive in nature. (c) Scholarship Fund for Children This provision of the order appears to have fulfilled its function and there appeared to be no opposition to its deletion and the order will be varied accordingly. (d) Dental Coverage and Medical Coverage Some portions of this aspect of the order are time limited and their effect would appear to have been spent. The submissions such as they were are insufficient to persuade me that these provisions should be deleted. (e) Life Insurance As I have rejected the respondent's application to terminate spousal support, I can see no basis for rescinding the respondent's obligation with respect to life insurance. [46] The petitioner has been successful, she is entitled to her costs on Scale 3. "Parrett, J."