2019 NLCA 61, 2019 NLCA 61

Barry Gerard Hynes (applicant/appellant) v. Sharon Ann Snook (respondent) (19/69) Indexed As: Hynes v. Snook 2019 NLCA 61 5 C.A.N.L.R. 68 Court of Appeal of Newfoundland and Labrador Goodridge J.A. September 20, 2019

Summary: This application was in relation to separation proceedings between Barry Hynes and Sharon Snook. Mr. Hynes appealed orders of thetrial judge regarding the division of assets and the payment of partner support. Mr. Hynes subsequently filed an application for a staypending the appeal, arguing that there was a risk of not being able to recover money paid to Ms. Snook if the trial judgment was variedon appeal. Held: Application allowed, in part.

Goodridge J.A.: There are serious issues to be argued on appeal, regarding, for example, the quantum and duration of spousal/partnersupport (first stage of the three-stage test for granting a stay pending appeal) (paragraphs 6-10). Given Ms. Snook’s financial situation, it is unlikely that Mr. Hynes could recover payments made to her should he be successful in hisappeal (stage two of the test) (paragraphs 11-14). With respect to the third stage of the test, the balance of convenience favours granting a partial stay given the risk that any success byMr.

Hynes on the appeal would be meaningless due to his inability to recover from Ms. Snook (paragraphs 15-20). Mr. Hynes was ordered to make a payment of $200,000 to Ms. Snook in partial payment of the trial judge’s order regardingspousal/partner support arrears. Ms. Snook was ordered to preserve the equity in the residential property located in St. John’s (paragraph22). Cases cited: E.(R.) v. G.(N.), 2010 NLCA 60, 301 Nfld. & P.E.I.R. 240 RJR-MacDonald Inc. v. Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311 (S.C.C.) Hynes v. Snook, 2016 NLCA 4 Rees v.

Royal Canadian Mounted Police, 2005 NLCA 4, 244 Nfld. & P.E.I.R. 72 Statutes considered: Family Law Act, RSNL 1990, c. F-2,

section 39 Counsel: Jean Dawn Q.C., for the applicant/appellant;

Nick Avis Q.C., for the respondent. The application was heard on September 10, 2019 before Goodridge J.A. The following judgment was filed on September 20, 2019 by Goodridge J.A. ______________________________________________________________ Goodridge J.A.: [1] Barry Hynes applies pursuant to rule 42(2) of the Court of Appeal Rules, for a stay pending appeal of the May 24, 2019 orders ofMacDonald J. (Supreme Court of Newfoundland and Labrador, Family Division). The orders under appeal required Mr. Hynes to payMs.

Snook retroactive partner support of $414,250, ongoing partner support of $8,285 per month, and compensation for asset division at$185,222. The orders also required the transfer of two motor vehicles. Mr. Hynes maintains that his appeal has merit and that there is areal risk of not being able to recover money paid if the trial judgment is varied on appeal. [2] In E. (R.) v. G. (N.), 2010 NLCA 60, Harrington J.A. stated at paragraph 14 that “[t]he general law on the granting of a stay,pending appeal, was set out by the Supreme Court of Canada in RJR-MacDonald Inc. v.

Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311 (S.C.C.)”. In Hynes v. Snook, 2016 NLCA 4, White J.A., rejecting an earlier related application by Mr.Hynes for a stay, also relied upon RJR-MacDonald Inc. for the general law on the granting of a stay. [3] At paragraph 48 (page 334) of RJR-MacDonald Inc. the Supreme Court of Canada set out a three-stage test for courts to applywhen considering an application for a stay: First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried.

Secondly, itmust be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must bemade as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. [4] This Court applied that three-stage test in Rees v. Royal Canadian Mounted Police, 2005 NLCA 4, in the context of whether astay should be granted where there is a real risk of not being able to recover money paid if the trial judgment is varied on appeal. [5] I will apply this three-stage test, in a manner consistent with Rees.

Stage one - Is there a serious issue to be argued on appeal [6] The threshold at stage one is low. As stated by Sopinka and Cory JJ. in RJR-MacDonald, at paragraph 55 (pages 337-338):“Once satisfied that the [appeal] is neither vexatious nor frivolous, the motions judge should proceed to consider the second and thirdtests … A prolonged examination of the merits is generally neither necessary nor desirable.” [7] Counsel for Ms. Snook argues that all grounds of appeal allege errors of fact, and, because the finding of fact are supported bythe evidence, there is no serious issue to be argued on appeal.

I do not agree with that argument. The appeal is not restricted to errors offact. A preliminary examination of the grounds of appeal reveals that there are serious issues to be argued on appeal. The grounds ofappeal are not vexatious nor frivolous. Counsel for Ms. Snook acknowledges in his brief that quantum and duration of spousalsupport are arguable points on appeal, and accordingly, are not frivolous.

In my view, this ground and several of the othergrounds contained in the Notice of Appeal, easily pass the stage one threshold, and could not be characterized as vexatious norfrivolous. [8] These other grounds of appeal include, inter alia, error in determining the parties’ separation date for calculatingcommencement of the limitation period, error by failing to apply the legal test for determining the existence of a “conjugal relationship”,error in concluding entitlement to support on a non-compensatory basis solely because of a difference of income, error in failing toconsider the mandatory provisions set out in section 39(9) of the Family Law Act, RSNL1990, c.

F-2, error in relying on the formula setout in the Spousal Support Advisory Guidelines without considering the provision for incomes over $350,000, error in imputing incomein the absence of any of the circumstances set out in section 19(1) of the Child Support Guidelines, error in finding a ‘gift’ of vehicles,error in ordering transfer of assets not owned by Mr. Hynes, and error in failing to exercise discretion judicially regarding costs. [9] Determining the date of separation (for addressing the limitation period issue) can be a complex issue that engages mixed factand law.

The trial judge reviewed several court decisions touching on this issue. Entitlement to partner support can be a complex issue,and in this particular factual scenario, could not be labelled as a frivolous or vexatious issue. Determining the legal existence andtermination of a “conjugal relationship” can be a complex issue that engages mixed fact and law.

The trial judge noted in his reasons thatthe legal definition of “conjugal relationship” is complex. [10] I will not go into further detail on the various grounds, except to say that I am satisfied that the appeal raises issues that areneither vexatious nor frivolous. Mr. Hynes has satisfied the first stage of the three-stage test. Stage two – Will there be irreparable harm [11] It was recognized by Wells C.J.N.L. in Rees at paragraph 60 – adopting related comments of Sopinka and Cory JJ. found at

paragraph 84 (page 348) of RJR-MacDonald – that a quantifiable financial loss may be considered irreparable harm so long as it is unclear that such a loss could be recovered at the time of a decision on the merits. The affidavit evidence of Ms. Snook is that she resides in Ontario, she has no employment income, her assets include an RRSP on deposit with BMO (Barrie, Ontario office) valued at $82,695 and equity in a residential property (52 Pearce Avenue, St. John’s, NL) valued at $245,000. The RRSP is non-exigible; it cannot be seized or garnished . [ 12 ] In his affidavit Mr.

Hynes says that he is familiar with Ms. Snook’s financial situation, and is convinced that any payments made now could not be recovered at the time of a decision on the merits: Based on my knowledge of the Respondent’s present financial circumstances, which are set forth in the Court pleadings and to which she testified at the Trial, I am convinced that I have no chance of recovering from the Respondent any money I pay her pursuant to the decision. … [ 13 ] I am satisfied, based on these affidavits, that it would be difficult and unlikely for Mr.

Hynes to recover more than $245,000, in the event that the appeal succeeded. The property at 52 Pearce Avenue is the only exigible asset held by Ms. Snook and she has no employment income. In is unlikely that Mr. Hynes would recover any payments beyond $245,000 at the time of a decision on the merits. [ 14 ] Mr. Hynes has satisfied the second stage of the three-stage test, at least with respect to payments beyond $245,000.

Third stage - Balance of inconvenience [ 15 ] This third stage involves determining which of the two parties will suffer the greater harm from the granting or refusing of a stay, pending a decision on the merits. A court should not, as a general rule, attempt to ascertain whether actual harm would result, but rather should attempt to ascertain the potential for harm to each party. [ 16 ] The potential for harm to Ms. Snook relates to her limited income pending the outcome of the appeal, and the risk that Mr.

Hynes will not be able to pay the judgment of the trial judge, if it is affirmed on appeal. [ 17 ] The appeal will be perfected within the next six weeks, and the parties may reasonably expect a hearing date within two months of request. Accordingly, the delay to hearing date is not significant. A partial payment to Ms. Snook, in conjunction with a partial stay, can eliminate the potential for harm arising from her limited income during that delay. The other potential for harm, relating to Mr. Hynes eventual ability to pay the judgment of the trial judge, if it is affirmed on appeal, is minimal. Mr.

Hynes has significant personal and business assets in this jurisdiction, and an annual income that has been consistently above $350,000 in recent years. He holds 100% of the shares of Sea-Force Diving Limited, a company that the trial judge described as “a successful multi-million dollar business”. He is the beneficial owner of residential property in Portugal Cove-St. Phillips with value (net of mortgage) at $744,000. I say beneficial owner because the title to the property remains jointly with both Mr. Hynes and Ms.

Snook until payment of a sum (part of the asset division) contemplated under one of the May 24, 2019 court orders. The existence of this equity in the property at Portugal Cove-St. Phillips, on its own, establishes that the potential for harm to Ms. Snook, relating to Mr. Hynes eventual ability to pay the judgment of the trial judge, is minimal. [ 18 ] The potential for harm to Mr. Hynes relates mostly to the risk that any success on the appeal will be meaningless because of his inability to recover from Ms. Snook money paid under judgment, and resulting orders, of the trial judge.

As noted above, it would be unlikely for Mr. Hynes to recover more than the equity in Ms. Snook’s 52 Pearce Avenue property. I conclude that the greater potential for harm lies with Mr. Hynes. [ 19 ] I can protect the lesser potential for harm to Ms. Snook by ordering a partial payment. [ 20 ] In the circumstances, the balance of convenience favours the granting of a partial stay. [ 21 ] Counsel for Mr. Hynes indicated during the hearing that she could have her factum filed within a few weeks. Counsel for Ms. Snook indicated Ms.

Snook’s consent to a court order prohibiting further encumbrance or lien on 52 Pearce Avenue property pending disposition of the appeal. [ 22 ] Therefore, pending the disposition of this appeal or a further order of this Court, the orders of MacDonald J. dated May 24, 2019 are partially stayed on the following terms: • Mr. Hynes shall, within 10 days, make a payment of $200,000 to Ms. Snook in partial payment of the order relating to spousal support arrears; • Ms.

Snook shall preserve the equity in the property at 52 Pearce Avenue by payment of taxes and mortgage, and shall not allow any further encumbrance (beyond the current balance on the existing mortgage) to affect the property; and • Mr. Hynes shall file the transcript, appeal book, and appellant’s factum by October 15, 2019. [ 23 ] The costs of this application shall be included in the costs of the appeal. [ 24 ] I am grateful to both counsel for their helpful submissions. Application allowed, in part.