OTTAWA - Ontario's top court has cancelled more than half a million dollars in spousal support that was awarded retroactively to an impoverished woman who saw her former husband's fortunes soar after their divorce.

A three-judge panel of the Ontario Court of Appeal ruled unanimously yesterday that a lower court judge was wrong in 2003 to override the 1995 divorce deal Laura Murray and Guy Murray of Toronto signed when they split up after 16 years of marriage and three children.   At the time the wife, a full-time homemaker, signed a separation agreement waiving any future spousal support claims she might have against her self-employed husband. He estimated in 1995 his annual income was $25,000; it later proved to be $63,000.

In exchange for giving up her right to support, the wife became entitled to three annual $21,600 payments from her former husband's companies. In lieu of ongoing child support for their three young daughters, she also received his stake in the family's home. His half-share of the house was worth $84,000.   After the divorce, the husband "prospered" in his business, while his income "increased by a huge amount," Justice Robert Armstrong wrote in the court's judgment. By contrast, the wife's fortunes declined dramatically. In 2003, she had just $100 left in the bank and was close to being on welfare. A vocational expert testified her skills restricted her to low-paying jobs.

The trial judge who awarded her $274,591 in spousal support retroactive to 1995, plus interest and legal costs, ruled there was an implied obligation in the separation agreement that required the husband to disclose to her his rising income. That would have allowed the wife to sue him in court for increased child support. The trial judge said because he failed to disclose his income, the waiver of spousal support in the contract could be ignored.   

But the Court of Appeal disagreed that the husband had a duty to disclose his income, given the wording of the separation agreement and its failure to specifically require disclosure. The court suggested it was open to the wife to attack the spousal support waiver on the alternate basis that it is unfair and fails to reflect the pair's original intentions when they signed the deal.