2011 QCCA 807, 2011 QCCA 807

Unofficial English Translation Droit de la famille — 111200 2011 QCCA 807 COURT OF APPEAL CANADA PROVINCE OF QUEBEC QUEBEC CITY Y R EGISTRY No.: 200-09-007053-108 (200-12-074099-061) DATE: April 29, 2011 CORAM: THE HONOURABLE FRANCE THIBAULT, J.A. PAUL VÉZINA, J.A. NICOLE DUVAL HESLER, J.A. N. G. APPELLANT / CROSS-RESPONDENT – Plaintiff v. M. C.

RESPONDENT/ CROSS-APPELLANT – Defendant JUDGMENT [ 1 ] The appellant appeals from a judgment rendered on April 21, 2010, by the Superior Court, District of Quebec City (the honourable Madam Justice Suzanne Ouellet), which issued an order varying the corollary relief. [ 2 ] For the reasons of Vézina J.A., with which Thibault and Duval Hesler JJ.A. agree: [ 3 ] ALLOWS the appeal, without costs, as is customary in such cases; [ 4 ] STRIKES OUT conclusions [102], [103] and [105] [1] and replaces them with the following:

a) CONDEMNS Mr. C. to pay to Ms. G. for the period of January 1, 2009 to March 4, 2011, as support for their minor child, the sum of $14,570, with interest at the legal rate as from the date of this judgment;

b) DECLARES that Mr. C. is not obliged to pay a parental contribution since March 4, 2011.

c) AUTHORIZES Ms. G. to travel alone with the child without Mr. C.’s authorization;

d) AUTHORIZES Ms. G. to apply alone for a first passport for the child X, born on ... 2004. [ 5 ] UPHOLDS the other conclusions of the judgment; [6] DISMISSES the cross-appeal without costs. FRANCE THIBAULT, J.A. PAUL VÉZINA, J.A. NICOLE DUVAL HESLER, J.A. Mtre Guy Bernard For the appellant / cross-respondent

Mtre Suzy Guylaine Gagnon Armijo & Webster For the respondent / cross-appellant Hearing date: March 23, 2011 REASONS OF VÉZINA, J.A. [7] In 2010, Ms. G. claimed from Mr. C. support for their minor child, for each of the years 2004 to 2010. [8] The Divorce Act allows retroactive orders. The fact that the support was granted for 2009 does not pose any problem. But what about the previous years? [9] Here are the circumstances of the case. [10] From 2004 to 2008, Mr. C. did not have any income; he was incarcerated. He still is. [11] Mr.

C. had a pending claim, however, with the Société d'assurance automobile du Québec (the SAAQ), as a result of a motorcycle accident in 1983. [12] In 2009, he won his case and the SAAQ paid him $78,000 [2] as an “income indemnity” for six years: $9,500 for 2004 $13,000 for 2005 $13,500 for 2006 $13,500 for 2007 $14,500 for 2008 $14,000 for 2009 [13] To establish the amount of support for his child, what was Mr. C.’s income for the year 2009? Was it $14,000 or $78,000? [14] The trial judge decided on $14,000.

With respect for her opinion, I believe it should be $78,000. * * * [15] The Code of Civil Procedure provides, in the “A pplications relating to child support” chapter, that a parent’s contribution is based on the parent’s disposable income: 825.8.

The Government, by regulation, shall establish standards for the determination of the child support payments to be made by a parent, on the basis of the basic parental contribution determined in respect of the child, of the child care expenses, post-secondary education expenses and special expenses relating to the child and of the parents' custodial arrangement in respect of the child.

The Government shall prescribe the use of a form and of a related table determining, on the basis of the parents' disposable income and the number of children, the basic parental contribution, as well as the production of evidentiary documents. [Emphasis added.] [16] Is disposable that [TRANSLATION] “which one can use”, [3] in other words, [TRANSLATION] “to have at one’s disposal, to have the possession, the use of,” “to have in hand”? Mr.

C. had nothing at his disposal, nothing in his possession, nothing in hand from 2004 to 2008. [17] To help “maintain their children” (article 599 C.C.Q .), parents must have the resources, the means, [4] at the time when their children’s needs existed. If at some point parents cannot support themselves and put a roof over their own head, the law does not require that they contribute to their children’s maintenance. If the situation improves and they have an income, then they have an obligation to contribute. [18] This characteristic flows from the very nature of support; it is not retroactive.

One cannot provide support today for last year’s needs. The principle is set forth in the Civil Code :

Article 595. Support may be claimed for needs existing up to one year before the application. The creditor shall prove that he was in fact unable to act sooner, unless he made a demand to the debtor within one year before the application, in which case support is awarded from the date of the demand. [19] In a sense, if the parents have little, the children receive little, but if the father or the mother wins the lottery, everyone sees their lot improve from that time on, but not for the difficult years already elapsed. [20] The principle is subject to exceptions.

The above-cited provision is one, as it mentions needs existing in the year prior to the application. The Divorce Act expressly allows a retroactive order.

[21] The Supreme Court examined this question of retroactivity in Hiemstra , [5] which was in fact cited by the judge. In the four cases then analyzed, it was not a matter of retroactively attributing an income to a parent – as the appellant requests here – but rather of calculating whether the payor parent, according to the parent’s income at the time, would have had to pay a greater amount of support had the application been made at the time.

The following excerpts illustrate this point: [1] The present appeals involve the parental obligation to support one’s children, and the question of whether this obligation compels parents to make child support payments for periods of time when the responsibility to do so was never identified, much less enforced. This question will arise when the parent receiving child support (the “recipient parent”) determines that (s)he should have been paid greater amounts than (s)he actually received, despite the fact that no court order or separation agreement provided for these higher payments.

These appeals do not concern the non-payment of arrears; they concern the enforceability and quantification of support that was neither paid nor claimed when it was supposedly due . ... [4] At the same time, however, the similarities between the four appeals are unmistakable. Each case involves a recipient parent who failed to apply to a court for an increase in child support payments in a timely manner. Most unfortunate, each case involves children who lived prolonged periods without the support they were due.

Whatever the outcome of these individual cases, the ultimate goal must be to ensure that children benefit from the support they are owed at the time when they are owed it . Any incentives for payor parents to be deficient in meeting their obligations should be eliminated. And in the “Summary” we read: [132] In the context of retroactive support, this means that a parent will not have fulfilled his/her obligation to his/her children if (s)he does not increase child support payments when his/her income increases significantly.

Thus, previous enunciations of the payor parent’s obligations may cease to apply as the circumstances that underlay them continue to change. Once parents are in front of a court with jurisdiction over their dispute, that court will generally have the power to order a retroactive award that enforces the unfulfilled obligations that have accrued over time . [Emphasis added.] [22] Our Court echoed this view in S.L. v.

M.B. [6] There again, the support was determined for a previous period, but considering the payor’s actual income at the time. [23] In the few reported cases on the subject, a lump sum payment of wages or of a benefit in respect of previous years is included in the income for the year in which it is received. [24] In 1998, in Droit de la famille – 2873 , our Cour t [7] included in the respondent’s income for the current year the sum of $15,000 [TRANSLATION] “for his sick leave credits accumulated” over many years.

The judgment states: [TRANSLATION] As for the definition of annual income, it is broad, as suggested by the expression “from any source”, followed by a non-limitative list. I find that in the present case, with respect for the contrary opinion expressed by the trial judge, this sum received from the employer in 1997, subject to income tax, is part of the annual income to consider for establishing the amount of support, because of the

interpretation that must be given to “annual income”. With the recent coming into force of provincial child support tables, few judgments have been rendered and few comments made. The parties referred to Trépanier v. Rémillard 4 where, in a bankruptcy situation, the sum accumulated in the [TRANSLATION] “sick bank”, as property of the bankruptcy in the [TRANSLATION] “ salary, wages or remuneration" category, was recognized as a claim of the bankrupt belonging to the bankruptcy.

The judgment cites a decision of the Ontario Supreme Court: Speaking generally, one should experience no difficulty including in the definition of salary, wages and other remuneration virtually all benefits accruing to employees. Unless the context requires a restricted meaning, any reward should normally qualify, if not as “salary, wages”, at least as “remuneration”, whether the reward takes the form of sick pay allowance , bonuses, vacation with pay or pay in lieu of notice.

Closer to us, the decision in Droit de la famille – 2718 (Goodwin J.) excludes from annual income, for the application of child support tables, sums paid by a trust as a result of a pension plan change, considering them [TRANSLATION] “a mandatory early withdrawal of contributions to a retirement savings plan". I am not expressing an opinion on the fate of that sum, which is different in nature from the sum that concerns us here, especially since Goodwin J. wrote in the conditional tense and made it a point to mention that the father’s explanations were not called into question.

Nevertheless, this decision provoked a commentary by Professor Goubau, who would have liked to include the sum, [TRANSLATION] “subject to accepting a readjustment if it is shown that part of the sum was used to pay family debts, which should be possible under the ‘undue hardship’ provision of

article 587.2 CCQ ”. As for the definition of "annual income", Mtre Goubau writes as follows: [TRANSLATION] In addition, it should be pointed out that

section 9 of the regulation mentions income from any source and that this expression is followed by both a non-limitative list ( “in particular”) of inclusions and a limitative list of exclusions. These exclusions concern only government financial support ("government family transfers, benefits granted under the parental wage assistance program and income security benefits"). _______ 4 [1993] RJQ 485 (Sup Ct) .

[25] In P.(S.) v. S.(D.) , [8] the court included an equalization adjustment lump sum payment in the income for the current year. The judge wrote: [TRANSLATION] [15] In addition, on April 7, 2000, the mother received the net sum of $14,560.84 [$21,071.15 gross] as an equalization adjustment.

The inclusion of this sum in the income for the year 2000 is contested. ... [21] The equalization adjustment discussed in this case covers the period from September 18, 1989 to July 28, 1998. ... ... [24] There is no doubt that the retroactive lump sum payment was received by the mother as remuneration. ... [28] The mother received additional income in the year 2000 as a result of an equalization adjustment.

Section 9 of the aforementioned regulation provides that annual income includes income from any source.

There is no reason for the mother not to include in her income the roughly $22,000 gross received. [29] In Droit de la famille – 2873 , supra, the Court of Appeal broadly and liberally interpreted the notion of annual income by including the payment of sick leave credits accumulated by an employee. ... [35] Relying on the documentary evidence and considering the amounts involved, the Court deems it appropriate to include the equalization adjustment amount in the income for the year 2000. [26] In Droit de la famille – 3387, [9] the court came to a similar conclusion with respect to a lump sum payment of retroactive pay: [TRANSLATION] [8] As for Ms.

H., she works as a nurse for the CSST. Her annual income, which is admitted, is $44,270, to which must be added annual interest of $107. However, in the year 2000, she received $24,349.50 in retroactive pay as a result of a wage adjustment for nurses made by her employer, the government of Quebec. This readjustment was made for the period 1990 to 2000. [9] Ms. H. submits that this amount should not be considered for support purposes because it was paid for past years.

She argues that only her income of $44,270 should be taken into account. ... [11] In the Court’s opinion, the amount of retroactive pay received by Ms. H. in the year 2000 must be counted as income for the purposes of determining the amount of support payable for the children. Although this amount was paid for previous years, it was in the year 2000 that Ms. H. benefited from it. The children should in turn benefit from Ms. H.’s additional income for the year 2000. [27] In B.M. v . M.

Me , [10] relying on the Court of Appeal’s decision in Droit de la famille – 2873 , [11] supra , the court included in the husband’s annual income [TRANSLATION] “the employer’s sick leave credit payment of $15,825.62 remitted upon the employee’s departure”. [28] In La notion de revenu , [12] the authors Verdon and Pélissier-Simard cite P.P. v .

A.D. , [13] where the court concluded that [TRANSLATION] “the substantial severance pay received by the husband must be included in his base pay”. [29] The definition of “annual income” in the Regulation respecting the determination of child support payments [14] supports this view: 9.

For the purposes of these Rules, including the related form and table, ... “annual income” means income from any source , in particular wages, salaries and other remuneration, support paid by a third party and received for one's own needs, employment insurance benefits, parental insurance benefits and other benefits granted under a statutory pension or compensation plan , dividends, interest and other investment income, net income from rental activities and net income from the operation of a business or from self-employment; notwithstanding the foregoing, this definition excludes government family transfers, last-resort financial assistance and any sums granted by the Minister of Education and received under a financial assistance program for education expenses; [Emphasis added.] [30] In my opinion, we must therefore include in Mr.

C.’s income for 2009 the lump sum of $78,000 he received during the year and take his total income for the year into account in establishing the amount of support. * * *

[31] In support of her request to spread the $78,000 over the previous years, Ms. G. invokes a clause in the corollary relief agreement, where she sees a commitment by Mr. C. to retroactively pay support for the years 2006 to 2009: [TRANSLATION] 4) As the defendant does not have any income at present, the plaintiff reserves the right to claim support from him for the exclusive maintenance of the minor child; [32] This clause, which is often included in such agreements, constitutes a precaution to avoid any future ambiguity.

It establishes that, if no support is agreed upon, it is because the payor of support has no income and not because there is no need for a parental contribution on his or her part, and even less because the other parent has waived his or her right to support in the future. [33] I cannot see there an undertaking by Mr. C. to pay support for the years 2006 to 2008 from a future and uncertain income. Is such an undertaking even possible? Perhaps.

But it would take more than this usual clause to show it. * * * [34] All that remains is to apply the child support table. [35] To do so, the judge rightly considered that Mr. C.’s income was tax exempt, hence the need to take into account the equivalent pre-tax income. [36] In addition, since Mr. C. is a “guest of the government”, [15] a sum of $9,600 was added for food and board, i.e. an amount equal to the personal tax exemption of $10,100, minus $500. This estimate is convenient and fair. [37] Mr.

C.’s income for 2009 is calculated as follows: - Lump sum.............. ……........................................................................... $77,603 - Interest revised by the SAAQ................................................................. $7,346 - Pension from December 10 to 31.......................................................... $856 - Room and board ...................................................................................... $9,600 Total: $95,405 [38] Except for the interest, this income was tax exempt for Mr. C.

The pre-tax equivalent is $153,281, to which interest is added, for an income of $160,627 for the purposes of applying the child support tables. The support for the year 2009 is therefore $11,380. [39] For the year 2010, the judge was right to exclude the non-recurring income of $78,000 and not to consider the pre-tax equivalent of the pension paid by the SAAQ, which was tax-exempt.

The support for the year 2010 is therefore $2,705. [40] The pension continued until March 2011 inclusively, hence the same monthly support, increased by the annual indexing, for a total at March 4, 2011 of $485. [41] The total for the three years comes to $14,570. [42] Since then, Mr. C. has once again been without income, so his obligation to contribute is reduced to nothing. [43] He has submitted a new application to the SAAQ which could possibly result in another lump sum payment, which would lead to a new contribution, calculated as above if Mr.

C.’s situation is still the same. * * * [44] On another, unrelated question, the judge came to the following conclusion: [TRANSLATION] [105] ALLOWS the plaintiff to travel alone with the child without the defendant’s authorization on the territory of the Province of Quebec only; [45] At the hearing, Mr. C. informed us that he had no objection to Ms. G. traveling outside Quebec with the child and even taking the child on vacation in the South. For this purpose, she can apply for a first passport for the child. The Court takes note of this.

[46] The above conclusion should be replaced by the following: AUTHORIZES Ms. G. to travel alone with the child without Mr. C.’s authorization; AUTHORIZES Ms. G. to apply alone for a first passport for the child X, born on ... 2004. * * * [47] For these reasons, I would allow the appeal in the following terms: ALLOWS the appeal, without costs, as is customary in such cases; STRIKES OUT conclusions [102], [103] and [105] [16] and replaces them with the following:

a) CONDEMNS Mr. C. to pay to Ms. G. for the period January 1, 2009 to March 4, 2011, as support for their minor child, the sum of $14,570, with interest at the legal rate as from the date of this judgment;

b) DECLARES that Mr. C. is not obliged to pay a parental contribution since March 4, 2011.

c) AUTHORIZES Ms. G. to travel alone with the child without Mr. C.’s authorization;

d) AUTHORIZES Ms. G. to apply alone for a first passport for the child X, born on ... 2004. UPHOLDS the other conclusions of the judgment. [48] As for the cross-appeal, it is in fact decided by the outcome of the appeal. It will therefore be dismissed without costs. PAUL VÉZINA, J.A.