2016 QCCA 28, 2016 QCCA 28

Droit de la famille — 1646 2016 QCCA 28 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-025303-157 (500-12-167678-881) MINUTES OF THE HEARING DATE: January 15, 2016 CORAM: THE HONOURABLE yves-marie morissette , J.A. guy gagnon , J.A. martin vauclair , J.A. APPELLANT ATTORNEY C. M. , ès-qualités liquidator of the estate of R. M. Mtre rusmir rasic (Laurendeau, Rasic s.e.n.c.) RESPONDENT ATTORNEY M. MC. Mtre THOMAS-A. LAVIN (Lavin Gosselin Avocats Inc.) On appeal from a judgment rendered on April 27, 2015 by the Honourable Justice David R. Collier of the Superior Court, District of Montréal

DESCRIPTION : Separation agreement – estate's obligation to pay elementary pension Clerk: Mihary Andrianaivo Courtroom: Pierre-Basile Mignault HEARING 9:30 Continuation of the January 14, 2016 hearing. The presence of the parties is not required today. BY THE COURT: Judgment – See page 3. End of the hearing. Mihary Andrianaivo Clerk BY THE COURT JUDGMENT [ 1 ] The Appellant, C. M., acting in her capacity as liquidator of the estate of the late R. M., appeals from a judgment of the Superior Court (the honourable David R.

Collier) rendered on April 27, 2015. [1] This judgment dismissed her action in annulment of a clause contained in an agreement on corollary relief signed on June 28, 1991, and which provides for the payment of a life-time alimentary pension to the Respondent M. Mc.. [2] [ 2 ] The clause in question states: In the event that Petitioner [Mr. M.] pre-deceases Respondent [Ms.

Mc.] then the Estate of Petitioner shall be responsible for payment to Respondent, for her life-time, of the alimentary obligation, if any, of Petitioner at the time of his death. [3] [ 3 ] In the Superior Court, the Appellant raised the following for grounds: - An alimentary obligation is by essence non-transmissible; - A contract has effect only between the contracting parties; it does not affect third persons, except where provided by law; - Paragraph 3 does not create a valid contractual obligation because the obligation referred to in that paragraph was not determined nor certain at the time the Consent to accessory measures was executed; - In addition, the death of the late R.

M. constitutes a change in the condition, means, needs or other circumstances since the making of the Consent. [4] [ 4 ] Only the last of these grounds was raised in this Court, but the Appellant also pressed two additional points. [ 5 ] The trial judge first determined that the words « if any » in the aforementioned clause meant that, if no alimentary support was payable to the Respondent at the time of Mr. M.’s death, the estate would be under no obligation to provide such support to the Respondent. [ 6 ] The judge also held that

section 17 of the Divorce Act [5] remained applicable after the death of the alimentary debtor. The

Appellant does not challenge this conclusion. [ 7 ] Finally, the judge found that there was no evidence of a material change in circumstances in the situation of the parties. He dismissed the Appellant’s argument that the absence of any tax advantage for the estate resulting from the payment of alimentary support to the Respondent amounted to such a change in circumstances.

He took the view, instead, that this factor was a foreseeable consequence of the clause at the time the parties, who were advised by counsel, entered into the corollary relief agreement of 1991. [ 8 ] The judge also took the view that the Respondent’s budgetary surplus, as shown by her statement of income and expenses, could not by itself justify that a varying order be made by the Court. He underscored that the alimentary support had been provided “ for [the] life-time ” of the Respondent.

He also pointed that, in view of the Respondent’s age (she was 79 years old at the time), it was reasonable to anticipate that her condition would require some assistance at home for which she would necessarily incur additional expenses. ——————————- [ 9 ] On appeal, the Appellant argues that the words « if any » in the relevant clause of the agreement mean that the Respondent’s situation had to be re-evaluated at the time of Mr. M.’s death. She adds that the consistent increase in the Respondent’s capital over the years, her close relationship with a friend, Mr.

J., the absence for the estate of any tax advantage related to the payment of alimentary support [6] and finally, the fact that alimentary support is no longer taxable in to the Respondent’s hands are factors which, taken together, amount to a material change of circumstances in the situation of the alimentary creditor. The

Interpretation of the Words « if any » [ 10 ] The position taken by the Appellant on this aspect of the appeal is in reality an invitation to try de novo the Respondent’s situation, and solely because the alimentary debtor is now deceased, in spite of the judgment of the Superior Court of June 28, 1991 which confirmed the validity of the agreement, binding on Mr. M.’s estate and signed by him, and which ordered the parties to abide by it. [7] As Justice Kasirer noted in a recent judgment of this court [8] : “[l’]exercice sous l’

article 17 n’est ni un appel de l’ordonnance alimentaire rendue au moment du divorce ni un nouveau procès sur sa justesse”. [ 11 ] The

interpretation offered by the Appellant also overlooks the terms in which Mr.

M. undertook to provide alimentary support to the Respondent (“ for her life-time ”), words which are devoid of ambiguity and which must have meant in 1991 what they unquestionably mean today. [9] Moreover, that Appellant’s argument implies that the agreement contains an implicit waiver of the rule according to which a varying order must address only the consequences of a material change . [10] This is a question of fact and the Appellant failed to show to the judge’s satisfaction that Mr M.’s death had resulted in a material change in the parties’ situation. [ 12 ] Even if one were to accept for the sake of argument that the terms used in the agreement of 1991 are ambiguous, the Appellant does not demonstrate that the

interpretation favoured by the trial judge somehow disregards the intent of the parties who signed it. [ 13 ] Indeed, when it is considered carefully, the result of the trial judge’s judgment appears fair and reasonable [11] and in no way does it do violence to the wording of the 1991 agreement. Furthermore, nothing in the record before the Court supports an inference that the judge’s reading of this agreement may adversely affect the estate’s capacity to comply with its alimentary obligation towards the Respondent.

In short, the Appellant fails to show that the judge’s findings on this question lead to results which are illogical, incongruous or absurd . [12] [ 14 ] It bears mention also that two judgments of the Superior Court delivered successively on October 18, 1993 [13] and on February 16, 2004 [14] , declined to reopen the agreement of June 1991.

The Material Changes [ 15 ] A judgment which rules on a petition for a variation order is not subject to review on appeal unless it contains “a material error”, words which the official translation of the judgment in the Supreme Court Reports renders as une erreur grave ; [15] in another judgment of the same court, Justice L’Heureux-Dubé states: “Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong.” [16] The substantial restraint which the Court must observe in appeals from judgment of this nature is rooted in the broad discretion that trial judges have in determining whether a change has occurred since the initial support order issued and whether this change qualifies as a material change. [17] [ 16 ] The Appellant’s second ground is that a material change has modified the situation of the Respondent in such a manner as to improve significantly her personal (and financial) situation. [ 17 ] More specifically, she point to the increase in the capital which the Respondent accumulated over the years.

But, in answer to this argument, the trial judge rightly concluded that the Respondent should not be penalized for having prudently managed the alimentary support she had received and he was right also in declining to compel the Respondent to deplete her accumulated capital. The financial stability she thus secured will enable her to overcome unforeseen circumstances which may arise in the future and which may require her to expend financial resources greater than what the alimentary pension settled in 1991 would place at her disposal.

It will ensure to an extent which may be sufficient that the alimentary support she receives will not have to be augmented should her situation deteriorate in the future. [ 18 ] In addition, as noted by the trial judge, it is difficult to imagine that the parties, assisted by their respective counsel, would not have contemplated the possibility that the alimentary support afforded to the Respondent might over several years enable her to set aside and to increase a surplus in capital: Negotiating parties should know that each person's health cannot be guaranteed as a constant.

An agreement must also contemplate, for example, that the relative values of assets in a property division will not necessarily remain the same. [18]

[ 19 ] In the end, the judge’s decision on this question, which is based on his assessment of the evidence, is also consistent with the aims of the Divorce Act , including the preservation, so far as is possible, of the situation and living conditions of the parties as they stood before the separation : It seeks to put the remainder of the family in as close a position as possible to the household before the marriage breakdown . […] The promotion of self-sufficiency remains relevant, but it does not deserve unwarranted pre-eminence.

While spouses would still have an obligation after the marriage breakdown to contribute to their own support in a manner commensurate with their abilities, the ultimate goal is to alleviate the disadvantaged spouse's economic losses as completely as possible, taking into account all the circumstances of the parties, including the advantages conferred on the other spouse during the marriage . [19] [Emphasis added] [ 20 ] The absence for the estate of any tax advantage tied to its alimentary obligation cannot be considered an unforeseeable circumstance. It is a fact of life which could not be overlooked in 1991.

As soon as Mr. M., assisted by his counsel, chose to commit his estate to providing alimentary support for the Respondent in the form of a life-time alimentary pension, he was necessarily prepared to face the tax consequences inherent in his decision including its effects on the situation of the Respondent. [ 21 ] And if it was conceded, again for the sake of argument, that this last factor amounts to a material change of circumstances, it can only be so for the estate alone.

But, as was pointed out before, the Appellant does not contend that the financial situation of the estate is thereby modified to the point that it may be compromised by the situation arising after Mr. M.’s death. [20] [ 22 ] As regards the argument based on the advantages from which the Respondent may benefit on account of her relationship with Mr. J., this is not a matter which was raised in the Superior Court. Moreover, two prior judgments of the Superior Court held that the argument is without merit. [21] [ 23 ] In the final analysis, the record does not support a conclusion that the trial judge erred in his

interpretation of the evidence laid before him, or that his reasons for judgment disclose an error in principle which would warrant reversal by this court. [22] FOR THESE REASONS, THE COURT: [ 24 ] dismisses the appeal . yves-marie morissette, J.A. guy gagnon, J.A. martin vauclair, J.A.