Dobbin v Dobbin, 2012 ABQB 711

Court of Queen ’ s Bench of Alberta Citation: Dobbin v Dobbin, 2012 ABQB 711 Date: 20121120 Docket: 4801 139209 Registry: Calgary Between: Katherine Nicole Dobbin Plaintiff - and - Paul Andrew Patrick Dobbin Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice C. M. Jones _______________________________________________________ 1. Introduction

[ 1 ] After Ms. Dobbin ("KND") and Mr. Dobbin ("PAPD") separated, they entered into a Settlement Agreement ("Agreement") whereby KND proposed to waive spousal support, and PAPD proposed to assume responsibility for all of the parties' joint debt. KND alleges that PAPD has, through his failure to fulfill his obligations under the Agreement, repudiated the Agreement, and now seeks spousal support. PAPD disputes her claim, and asserts that he has not repudiated the Agreement and that KND's waiver of spousal support still stands. [ 2 ] KND's counsel prepared and submitted materials in support of KND's application.

PAPD did not prepare and submit materials in support of his position and represented himself at the application. 2. Background Facts [ 3 ] The parties married on May 22, 2002, and separated on January 1, 2008. They have two children, aged 10 and eight, who reside with KND. [ 4 ] During the marriage, PAPD became certified as an aircraft mechanical engineer. The parties moved to Alberta where PAPD's certification would be recognized and his employment prospects enhanced. [ 5 ] After moving to Alberta, the parties' oldest daughter was struck by cancer.

KND devoted her full time and attention to caring for her daughter during her daughter's active treatment period. It appears that, during this period, PAPD's employment required a great deal of travel. Their daughter's cancer currently appears to be in remission. [ 6 ] The parties entered into the Agreement on June 18, 2009. The parties each received independent legal advice in connection with the Agreement. [ 7 ] For purposes of the application before me, the relevant clauses of the Agreement are as follows: 15. WAIVER OF SPOUSAL MAINTENANCE (

a) Waiver - It is further agreed between the parties that each is self-supporting and each hereby waives and releases the other from any and all claims for alimony or maintenance that he or she may have. Neither party shall commence or prosecute any action or other proceedings of any kind whatsoever for alimony or maintenance, notwithstanding any subsequent change in the means, needs or circumstances of either party. (

b) No Further Claims - The parties realize that their respective financial circumstances may change in the future by reason of their health, cost of living, employment or otherwise.

No such change will give either party the right to claim support pursuant to the Divorce Act or any other legislation, whether provincial or federal, currently proclaimed or to come into force hereafter regardless of any change, no matter how catastrophic in the condition, means, needs or other circumstances of either or both parties, or for any reason whatsoever, whether such change arises from the marriage or the breakdown of the marriage and whether such change was foreseeable or not.

It is understood by each party that this Agreement represents a final disposition of all spousal support issues between them and, without limiting the generality of the foregoing, the parties specifically agree that none of the following events will give rise to any claim for interim or permanent support or variation of any term of this Agreement with regard to spousal support by commencement of any action arising out of the Agreement herein (other than to enforce this Agreement), namely:

i) temporary or permanent illness or disability, mental or physical of either party; ii) temporary or permanent loss of employment of either party; iii) increase or decrease of financial obligations of any nature and kind;

iv) inflation;

v) economic depression; vi) increase or decrease in income of either party; vii) assignment, bankruptcy or insolvency of either party; viii) windfall or inheritance of either party; ix) remarriage, cohabitation or separation to, with or from any third party; and

x) subsequent separation or divorce. (

c) Considerations - Divorce Act , S. 15 -The parties hereto in agreeing to the provisions herein as to spousal maintenance have had, prior to agreeing hereto, independent legal advice and full and complete disclosure as to all financial matters one party to the other.

In arriving at the within Agreement as to spousal maintenance the parties have considered and recognized that provisions as to support of spouses must recognize economic advantages or disadvantages to the spouses arising from the marriage or its breakdown and apportion between them any financial consequences arising from the care of any children of the marriage over and above obligations apportioned between the spouses pertaining specifically to section 15(8) of the Divorce Act , 1985.

The parties have further considered that support of a spouse should relieve any economic hardship of the spouses arising from the breakdown of the marriage and so far as is practicable promote economic self-sufficiency of each spouse within a reasonable period of time. In so considering they have reviewed the provisions of section 15(7) of the Divorce Act , 1985, and are satisfied in light thereof to enter into the within Agreement. (

d) Considerations - Divorce Act s. 17 -The parties have also considered the provisions of the Divorce Act , 1985, and section 17(7) .

The parties have considered that any variation order varying a support order that provides for the support of a former spouse should as well recognize economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown, apportioned between them any financial consequences arising from the care of any child of the marriage over and above the obligation apportioned between the former spouses pursuant to section 17(8) of the Divorce Act , 1985, and should further relieve any economic hardship of the former spouses arising from the breakdown of the marriage as well insofar as practicable promote the economic self-sufficiency of each former spouse within a reasonable period of time.

The parties have agreed in light thereof that neither will apply hereafter to vary the within Agreement as to spousal maintenance. (

e) Finality and Conjunction with Property - The parties covenant and agree that the within Agreement as to spousal maintenance is intended to be complete and final by both parties. Both parties believe, covenant and agree that the within provisions as to spousal maintenance well and fully recognize that in conjunction with the Agreement herein in its entirety there are no disproportionate advantages or disadvantages to either spouse arising from the marriage or its breakdown.

Both parties hereto agree that there has been a full and adequate and satisfactory apportionment between the spouses of any financial consequence arising from the care of the children of the marriage over and above specific obligations apportioned under the heading "Child Maintenance and Support." The parties further believe, covenant and agree that there is no economic hardship for either spouse arising from the breakdown of the marriage as a result of the consideration of the entirety of the within Agreement.

Both parties covenant and agree finally that the within Agreement satisfactorily promotes economic self-sufficiency of each spouse within reasonable time periods. (

f) Non-Variation Acknowledgement Pursuant to Miglin - The parties have each been advised by her or his respective solicitors as to the current law with respect [to the] enforcement of spousal support waivers between married couples in agreements and are aware of the Supreme Court of Canada decision in Miglin v. Miglin (2003), S.C.I. No. 21. In full appreciation of the law in this area, the parties unequivocally intend that his or her spousal support waiver is to be fully honoured and be enforceable notwithstanding any future change in the law or if any proceedings are commenced by either party to have their respective waivers set aside in the future. (

g) Family Law Act Waiver -The parties acknowledge that sections 56, 57, 58 and 60 of the Family Law Act , S.A. 2003, c.7 -4.5 may allow the court to make an Order for spousal support under certain circumstances. The parties acknowledge and agree that they are entering into waivers of spousal support pursuant to

section 62 of the Family Law Act and it is their intention that the terms of this Contract shall prevail over the provisions of sections 56, 57, 57 and 60 of the Family Law Act . . . .

22. DEBTS (

a) The Husband assumes responsibility for and will pay all of the parties' joint debt, including but not limited to the following accounts: (

i) Royal Bank Visa; (ii) Scotiabank Visa; (iii) Scotiabank line of credit; (iv) Grand Cherokee loan; and (

v) Travel trailer loan. (

b) The Husband shall indemnify the Wife for any liability incurred as a result of these joint debts. 3. Issues [ 8 ] The issues to be determined are: 1. Is Clause 15 of the Agreement, regarding the waiver of spousal support, valid? 2. If so, does KND have a cause of action against PAPD concerning the Agreement? a. Did PAPD commit the tort of deceit and/or make a fraudulent misrepresentation? b. Did PAPD repudiate the Agreement? 4. Analysis 1.

Validity of Spousal Support Waiver [ 9 ] Before considering if PAPD's conduct amounts to repudiation of the Agreement, it is necessary to determine if the provisions of Clause 15 dealing with the waiver of spousal support are valid. If, for whatever reason, they are invalid, it may not be necessary to consider PAPD's actions for the purposes of KND's application for spousal support. (

i) Law [ 10 ] Spousal support orders are addressed in the Divorce Act , RSC 1985, c 3 (2nd Supp) [“Divorce Act”] as follows: 15.2 (1)A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.

(2)Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1). [ 11 ] The objectives of the Divorce Act in this regard are set out at

section 15.2(6) as follows: (6)An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 12 ] In Miglin v Miglin , 2003 SCC 24 at paras 79-91 , [2003] 1 SCR 303, the Supreme Court of Canada set out a two-stage approach for courts to take when considering spousal support applications inconsistent with a pre-existing separation agreement. At the first stage, the court must find that the negotiation of the agreement between the parties was unimpeachable and that the agreement was in substantial compliance with the general objectives of the Divorce Act .

At the second stage, the court should assess the extent to which enforcement of the agreement still reflects the original intention of the parties and the extent to which it remains in substantial compliance with these objectives. (ii) Analysis [ 13 ] KND did not assert that Clause 15 is invalid. [ 14 ] Materials submitted by KND's counsel did cite Miglin . However, those submissions did not mention its relevance to this situation, did not refer to the two-stage approach, and did not suggest that the Agreement failed to meet those requirements for continued validity.

Accordingly, I believe it is appropriate for the purposes of my decision to accept the presumptive validity of Clause 15, and to proceed to analyze other bases upon which KND properly may argue that the Agreement should be set aside. 2. Cause of Action (

i) KND's Evidence and Argument [ 15 ] In KND's Affidavit of September 23, 2011, she swears, inter alia , as follows: 1. PAPD earned approximately $110,000 per annum as an aircraft engineer; 2. After the parties separated, she opened a day home in her home to obtain extra income and also did part time photography. Her income in 2009 was $1,200;

3. After the parties separated and sold their home, they still owed approximately $50,000 in consumer debt and loans on a Grand Cherokee and travel trailer; 4. Two lines of credit were outstanding with Scotiabank and one with the Royal Bank. One of the Scotiabank accounts and the Royal Bank account were VISA accounts; 5. KND was pursued by the parties' creditors in connection with these debts. Unable to pay these debts, she filed for bankruptcy on September 22, 2011; 6. Her income in 2010 was $1,736; and 7.

She has secured employment and was expecting to earn approximately $19,720 in 2011. [ 16 ] She further deposes, in her Affidavit of July 5, 2012, as follows: 1. Her bankruptcy filing, which she asserts was precipitated by PAPD's failure to discharge the parties' joint debts, cost her $2,000 in filing fees; and 2. She is currently employed by Manulife and expects to earn $29,000 in 2012. [ 17 ] It has been necessary for KND to seek assistance from this Court to compel PAPD to make financial disclosure. On March 15, 2012, Mr. Justice W.A.

Tilleman imputed income of $143,401.20 to PAPD for child support purposes. [ 18 ] PAPD's counsel swore an Affidavit dated March 14, 2012, attached to which was an undated letter from ArmstrongAero Inc. That letter advised as follows: This is to confirm that Mr. Paul Dobbin has been contracted by ArmstrongAero Inc. to carry out the duties of Aircraft Maintenance Engineer since 23 May 2011. The contract is month-to-month and may be terminated at any time by the supplier with one month's notice. Mr.

Dobbin is paid a day rate of $342.88 for each of seven (7) days per week, and is paid per diem at the rate of $50/day for each of seven (7) days per week. Mr. Dobbin's lodging is provided for him, and he is reimbursed his expenses incurred for a rental car and fuel for the rental car. [ 19 ] In argument, KND's counsel asserted that PAPD's failure to discharge his covenant to pay off joint debt amounts to repudiation of the Agreement. (ii) PAPD's Evidence and Argument [ 20 ] PAPD, in an Affidavit filed on March 20, 2011, deposes as follows:

1. His 2011 income is in the range of $110,000; 2. He believes his 2012 income will be approximately $110,000; 3. In recognition of his obligations under the Agreement, he took over matrimonial debt of approximately $120,000; 4. He has paid this debt down to approximately $40,000. [ 21 ] He notes in his Affidavit that the Agreement does not require him to pay off these debts within a certain period of time.

He further notes that bankruptcy does not trigger a party's right to seek spousal support. [ 22 ] He asserts that nothing in the Agreement supports the assertion by KND that her waiver of spousal support was subject to conditions. (iii) Discussion of the Evidence [ 23 ] There was some contradiction in the evidence placed before me. PAPD asserted during the application that he had paid down as much of the debt as had been possible. He asserted that he had paid down approximately $12,000 on debt relating to the Grand Cherokee, $5,000 on debt relating the travel trailer, and that he continues to make payments.

He advised that he had sought, but had not been able to secure, a consolidation loan which would have allowed him to make a single payment each month in respect of his consolidated debt. [ 24 ] KND's counsel argued that some of what PAPD claims to have paid off was paid off as part of an earlier series of transactions directed at sale of the matrimonial home and use of sale proceeds to pay down debt which the parties mutually agreed should be discharged from those proceeds.

Specifically, the $14,000 line of credit secured against the house was paid off when the house was sold. [ 25 ] While KND acknowledges that PAPD continues to pay down the loan on the Grand Cherokee, even though her client is in possession of that vehicle. She asserts, however, that her client does not have access to the travel trailer which she is supposed to have received. Apparently, PAPD continues to make payments on the trailer loan and he explained during the application why, in his opinion, KND has not been denied access to that trailer.

KND's counsel was unable to explain why KND had not been contacted in connection with arrears on the loan relating to the Grand Cherokee, given that she is in possession of the vehicle. [ 26 ] KND's counsel advanced the argument, without offering any evidence in support, that amounts which PAPD had paid down were on loans in his name alone, and not in respect of joint debts.

She observed that KND's bankruptcy likely eliminated KND's liability in respect of any of the joint debts. [ 27 ] It is not clear to me why KND chose to declare bankruptcy, rather than seek injunctive relief compelling PAPD to perform his obligations regarding the joint debts. It may be that KND considered bankruptcy to be a more expeditious and less expensive method of addressing her continued exposure to these debts than pursuing PAPD in Court.

Conversely, she may have felt that the absence of any reference in the Agreement to specific dates by which PAPD was supposed to have paid their debts would make an action for specific performance difficult to maintain. [ 28 ] KND's counsel suggested that PAPD should indemnify KND for KND's $2,000 bankruptcy filing fee. I have difficulty with the notion that PAPD should be required to indemnify KND in respect of that filing fee in the absence of evidence that she took steps to compel specific performance of the Agreement.

(

a) Tort of Deceit and Fraudulent Misrepresentation [29] During the application, I raised with KND's counsel the possible relevance of the tort of deceit and the contract action offraudulent misrepresentation. I sought to understand whether KND's claim for relief was more appropriately founded on these grounds. (

i) Law [30] The tort of deceit is a basis for damages. The elements of the tort are: (

a) a false representation of fact; (

b) knowledge of itsfalsity; (

c) an intent to deceive; (

d) which materially induced the plaintiff to act; (

e) resulting in damage: Kelemen v El-Homeira (1999),1999 ABCA 315 , 250 AR 67 (CA) at para 7, leave to appeal to SCC refused, 261 NR 399. [31] In Kelemen at para 5, the Alberta Court of Appeal drew a distinction between the tort of deceit and fraudulentmisrepresentation: There are two bases upon which liability could be founded in this case, namely, on the tort of deceit or on the contract action offraudulent misrepresentation inducing a contract. The causes of action are discrete, although they share some common features and, asthe learned author Fleming says, one action tends to colour the other: J.G.

Fleming, The Law of Torts, 9th ed. (New South Wales: LBCInformation Services, 1998) at 695. The tort action is founded in law whereas the contract action is based in equity. The differenceaffects the remedies and defences. Either can be the basis for a claim for damages but it is only the contract action that allows rescission.The duty to mitigate is relevant to both. [32] However, courts have not always drawn such a sharp distinction between the two concepts: Lozinik v Sutherland, 2012 ABQB440 at para 24.

Many courts use the terms fraudulent misrepresentation, fraud, and the tort of deceit indistinguishably: Lozinik at para26. This Court has held that the tort of deceit is based on a fraudulent misrepresentation: Dechant v Law Society (Alberta), 2010 ABQB656 at para 1137; Lozinik at para 28. (ii) Analysis [33] Neither party made submissions regarding these causes of action. In any event, KND has not established that PAPDcommitted the tort of deceit because she has not proven that the required element of fraud was present at the time the Agreement wasnegotiated.

As noted in HSBC Bank Canada v Lourenco, 2012 ABQB 380 at para 14, 64 Alta LR (5th) 1, fraudulent misrepresentationrequires a false representation to have been given knowingly. Therefore, if KND cannot establish the tort of deceit, it seems unlikely thatshe can succeed in establishing fraudulent misrepresentation, allowing the Court to grant the equitable relief of rescission. (

b) Repudiation of Agreement [34] KND claims that PAPD's failure to pay down the parties' joint debt is a repudiation of the Agreement. KND is not seeking aremedy for any liability incurred as a result of these joint debts. (

i) Law [35] Non-performance of any contract, to any degree, constitutes a breach. Different breaches have different effects. Breaches ofsome terms of a contract may justify terminating a contract, while others will not. [36] If the nature or consequence of the defaulting party's breach is so serious or fundamental as to go to the root of the contract

and substantially deprives the innocent party of what he or she bargained for, or where the defaulting party's words or conductunjustifiably exhibits a clear and unmistakable intention to no longer be bound by his or her contractual undertaking, amounting to aserious breach of such undertaking, then the defaulting party will be considered to have repudiated the contract: Bayer AG v Apotex Inc(1998), (ON CA), 113 OAC 1 at para 34, leave to appeal to SCC refused, 239 NR 200; Burntwood Holdings Ltd vSalt, (1988), (AB KB), 93 AR 161 (QB) at para 37. [37] The court should consider five factors when determining whether there has been a breach of a serious or fundamental nature:(1) the ratio of the party's obligations not performed to that party's obligations as a whole; (2) the seriousness of the breach to theinnocent party; (3) the likelihood of repetition of the breach; (4) the seriousness of the consequences of the breach; and (5) therelationship of the part of the obligation not performed to the whole obligation: Canadian Western Bank v 702348 Alberta Ltd., 2010ABCA 227, 487 AR 340 at para 17. [38] Timing can be one concern in the performance of the contract.

The rule of equity presumes that time was not of the essenceunless the parties had expressly made it of the essence or the nature of the property or circumstances allow for such a presumption: SailLabrador Ltd v Navimar Corp, (SCC), [1999] 1 SCR 265 at para 53; Judicature Act, RSA 2000, c J-2, s 21. (ii) Analysis [39] Has KND established that PAPD has totally rejected the Agreement or that he does not intend to perform his obligationsunder the contract? He appears to have made no payments on the two Scotiabank lines of credit or on the RBC line of credit during theperiod July 2010 to June 2011.

He advised the Court that his income for 2011 was $83,826.55. [40] I do not believe that PAPD has totally rejected the Agreement. He has apparently discharged his child support obligations andthere was no suggestion that he is in breach of the many other covenants he gave under the Agreement. [41] Clause 22 does not state that time is of the essence, nor are there words indicating that repayment requires immediate action. [42] During the application, I raised the issue of whether Clause 22 may be void for uncertainty because of the lack of a datecertain.

KND's counsel submited that the parties did not intend to set a date certain for repayment of the parties' joint debt. Rather,KND's counsel claimed that, under Clause 22, the parties intended for PAPD to take responsibility for ongoing payments. [43] I cannot hold that PAPD has committed a fundamental breach of the Agreement by delaying repayment of the parties' jointdebts if the contract does not hold PAPD to some sort of timeline. PAPD has repaid some of the joint debt.

KND has control over herfinances and it was not a term of the Agreement that PAPD repay the joint debt in a time and manner to prevent KND from enteringbankruptcy.

Also, as mentioned earlier, it is not clear to me why KND chose to declare bankruptcy, as opposed to attempting compelPAPD to perform his obligations. [44] Consequently, I must dismiss KND's application to have the Agreement set aside and for an award of spousal support basedon entitlement which, but for the Agreement, she might otherwise have had. [45] Despite the fact that I have dismissed KND's application, I consider it inappropriate to award costs in any amount to PAPD fortwo reasons. First, he represented himself.

Secondly, his inability to address more expeditiously his obligations under the Agreementwith respect to joint debts has already affected KND adversely. Heard on the 25th day of July, 2012.

Dated at the City of Calgary, Alberta this 20th day of November, 2012. C. M. Jones J.C.Q.B.A. Appearances: Lesley Cooney-Burk for the Plaintiff Paul Andrew Dobbin Self-represented