2011 NBCA 7, 2011 NBCA 7

COURT OF APPEAL OF NEW BRUNSWICK 143-09-CA B.S. (Respondent) APPELLANT B.S. (Intimé

e) APPELANTE - and - - et - L.S. (Applicant) RESPONDENT L.S. (Requérant) INTIMÉ B.S. v. L.S., 2011 NBCA 7 B.S. c.

L.S., 2011 NBCA 7 CORAM: The Honourable Justice Larlee The Honourable Justice Richard The Honourable Justice Quigg CORAM : L’honorable juge Larlee L’honorable juge Richard L’honorable juge Quigg Appeal from a decision of the Court of Queen’s Bench: September 30, 2009 Appel d’une décision de la Cour du Banc de la Reine : Le 30 septembre 2009 History of case: Decision under appeal: 2009 NBQB 260 - Unreported Preliminary or incidental proceedings: N /A Historique de la cause : Décision frappée d’appel : 2009 NBBR 260 - Inédite Procédures préliminaires ou accessoires : S.O.

Appeal heard: September 20, 2010 Appel entendu : Le 20 septembre 2010 Judgment rendered: January 27, 2011 Jugement rendu : Le 27 janvier 2011

Counsel at hearing: For the appellant: Carole Sirois-Paquette For the respondent: Tracy Peters Avocats à l’audience : Pour l’appelante : Carole Sirois-Paquette Pour l’intimé : Tracy Peters THE COURT The appeal is dismissed with costs of $1,500 payable by the appellant to the respondent. LA COUR Rejette l’appel avec dépens de 1 500 $ payables à l’intimé par l’appelante. The following is the judgment delivered by THE COURT I. Introduction [ 1 ] When should a spouse no longer be obligated to pay spousal support?

In this case, the appellant challenges a decision of a judge of the Court of Queen’s Bench, Family Division, terminating her spousal support pursuant to s. 17(1) ( a ), (4.1) and (7) of the Divorce Act , R.S.C. 1985, c. 3 (2 nd Supp). II. Background A. Respondent’s circumstances [ 2 ] The parties separated in February 1993, after a 14-year marriage. The parties were divorced January 3, 1996. There are two adult children of the marriage for whom the respondent no longer pays support. At the time of separation, the appellant was 42 years of age and the respondent was 45.

A previous decision of this Court regarding the same parties may be found at B.S. v. L.S. , 2004 NBCA 99 , 278 N.B.R. (2d) 61 . [ 3 ] During the marriage, the respondent was the family’s primary income provider. Prior to the separation, he earned between $40,000 and $50,000 per year. Following the separation, he undertook various sales-related jobs. In November of 1995, the respondent, together with two other investors, founded Harding Medical Supplies (N.B.) Ltd. Over the following years, the business showed substantial profits, and by 2002 the respondent’s annual income was $234,816.

His income in 2003 was $370,000, and in 2004, $224,433. [ 4 ] In late March 2005, the respondent and his holding company, Windy Road Percheron Corp., sold their shares of Harding Medical Supplies (N.B.) Ltd. As a result, he and his holding company received $1,013,511. In 2005, the respondent’s reported income was $385,842. After the sale of the shares, the respondent remained involved with Harding Medical Supplies as an employee, and earned a salary of $75,000 plus a bonus of $7,000 to $20,000 per year. The respondent ended his employment with Harding Medical in June 2008.

[ 5 ] In September 2008, the respondent incorporated 638720 N.B. Ltd., which purchased a sign-making franchise called Sign-a-Rama. The start-up costs for this new enterprise were quite substantial, and were paid for by both the respondent and his holding company. Sign-a-Rama’s balance sheet, dated September 8, 2009, indicates a loan in the amount of $350,510 from Windy Road Percheron Corp., as well as a shareholder’s loan of $63,746 from the respondent. Sign-a-Rama also owes $142,500 to the Business Development Bank of Canada.

As of December 2008, the financial statements of Sign-a-Rama indicate a $130,941 deficit. [ 6 ] With respect to the holding company, the financial statements showed its retained earnings to be $562,053, with assets including portfolio investments of $315,515. The company had given a loan to 638720 N.B. Ltd. in the amount of $212,800. The respondent’s financial statement of September 2009 indicated his annual income as $49,000. The statement further revealed the respondent and his holding company held securities worth $146,003 and the respondent held RRSPs worth $117,536.

The respondent’s liabilities included a mortgage of $193,042 registered against a residence valued at $275,000. His other debts included a line of credit for personal and business use in the amount of $177,300, as well as credit card liabilities of $26,000.The respondent has been residing with his new partner and their seven-year-old son since 2007. In August 2005, the respondent’s mother died and he inherited her home and a guaranteed investment certificate valued at $53,286. The home was sold for approximately $229,000 in September 2006. In

summary, while the respondent has a significant net worth, he is no longer a principal with Harding Medical Supplies and his income has been reduced significantly. B. Appellant’s circumstances [ 7 ] The appellant holds a Bachelor of Nursing degree and, prior to the marriage, she worked in the nursing field. During the marriage, the appellant was not employed outside of the home. She was the children’s primary caregiver and was responsible for the maintenance of the family home.

Following the separation in 1993, the appellant moved with the children from Quispamsis, New Brunswick, to reside in her mother’s home in Bathurst, where she continues to reside. [ 8 ] The appellant’s mother died in 2001, and the appellant inherited approximately $215,000 in shares from her mother’s estate. Her sister inherited the family home. This sister died in November 2007, and the appellant inherited shares worth about $200,000 from her sister’s estate.

The family home was left to the parties’ son, but despite this, the appellant testified that title to the residence will be registered in her name, as well as her son’s. [ 9 ] The appellant suffers from temporomandibular joint dysfunction and, consequently, has required considerable dental work. Between 2004 and 2008, the appellant spent $118,000 in dental fees and travel costs to undergo treatments in Halifax. [ 10 ] The appellant’s latest financial statement, up to the motion hearing, indicated her monthly expenses were $7,198. Her income was shown to be $46,901 per year.

This income was comprised of spousal support, interest, investment income and dividends. The appellant’s account statement, dated July 31, 2009, indicated the fair market value of her shares to be $391,128.43. Most of her holdings consist of bank shares, which regularly pay dividends. [ 11 ] The appellant says she is unable to work. Her family doctor provided a medical report dated May 14, 2007, which states: This is a 59 year old lady who has multiple medical problems both now and in the past. She was diagnosed in 1978 as having crohn’s and she takes Salazopyrin when she gets a flare up of the disease.

In 1987 she had to have an abdominal hysterectomy and then went on hormonal therapy for a time to try and prevent osteoporosis. In 1993 she had a severe bronchial pneumonia with bilateral pleural effusion and she had to be in intensive care for a time. One of her main problems are migrainal headaches. She has migraine headaches and also myofascial type of headaches for which she had extensive dental work done to relieve the discomfort. She now mostly has migraine headaches for which she takes Zomig or Tylenol #4. B.S. also has chronic pain across her shoulders and down into her arms and lower back.

She takes anti-inflammatory medication for this discomfort. She had mild hypertension and takes Hydrodiuril to keep her blood pressure under control and as well decrease the swelling in her lower

extremities. From time to time B.S. gets chest congestion in the form of a bronchitis and she has to have bronchial dilation to relieve her symptoms. […] I feel that this lady is not fit to return to the work force because of her ongoing medical problem of migraine headaches, symptoms offibromyalgia and she also suffers from flare ups of her colitis.

Besides these problems, she is also mentally exhausted because of theproblem with her sister’s poor health and her son’s ongoing problem as well. [para. 20 - trial judge’s decision] [12] The appellant is eligible to receive Canada Pension Plan benefits in the amount of $286 per month; however,she has deferred receipt of these benefits for three years. At age 65, the appellant will receive benefits of $409 per month. [13] After analyzing the evidence, the motion judge determined the appellant’s proposed budget was “grosslyinflated”. The judge held there had been a change in both parties’ circumstances.

As a result, she determined the respondent’s spousalsupport obligation, pursuant to the Court order dated September 22, 2003, should be varied retroactively to $1,000 per month fromJanuary 1, 2009, to May 1, 2009, at which time spousal support would be terminated. III. Issues [14] While the appellant raised eight grounds of appeal, we believe they may be condensed as follows:

(1) The motion judge erred in law in terminating the respondent’s spousal support obligations.

(2) The motion judge erred in law by not according sufficient weight to the criteria established in the Divorce Act.

(3) The motion judge erred in law in failing to consider the appellant’s needs and means.

(4) The motion judge erred in law in not considering the fact that the respondent did not disclose his true income in his swornfinancial statements. IV. Standard of Review [15] In S.C. v. J.C., 2006 NBCA 46, 299 N.B.R. (2d) 334, Larlee J.A. states: Spousal support orders are entitled to deference. In Hickey v.

Hickey, (SCC), [1999] 2 S.C.R. 518, L'Heureux-Dubé, J.stated, at para. 11, that we should not "overturn support orders unless the reasons disclose an error in principle, a significantmisapprehension of the evidence, or unless the award is clearly wrong." The limited role that we can play has been exemplified in thefollowing decisions of this Court: MacLean v. MacLean (2004), 2004 NBCA 75 , 274 N.B.R. (2d) 90 (C.A.) at para. 18;Pollock v. Rioux (2004), 2004 NBCA 98 , 278 N.B.R. (2d) 351 (C.A.) at para. 27; B.S. v. L.S. (2004), 278 N.B.R. (2d) 61(C.A.) at para. 32 and Boudreau v. Brun, 2005 NBCA 106 , [2005] N.B.J.

No. 501 (C.A.)(QL) at para. 5. [para. 4]

[ 16 ] Therefore, considerable deference is to be given to the decisions of trial and motion judges when determining fact-related spousal support issues. V. Analysis A. Statutory Framework [ 17 ] It is the appellant’s submission that the motion judge erred in law in terminating the respondent’s spousal support obligation, and she is seeking a new trial, or, in the alternative, a confirmation of the September 22, 2003, order wherein she was awarded $2,400 per month in spousal support. The award was not time-limited and no review date was set.

The motion was brought by the respondent, pursuant to the Divorce Act for an order rescinding spousal support, or, in the alternative, an order reducing spousal support as awarded in the September, 2003, order. The principles which govern the circumstances for variation of spousal support orders are set out in ss. 17(1) ( a ), (4.1) and (7) of the Divorce Act: Order for variation, rescission or suspension 17.

(1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively, (

a) a support order or any provision thereof on application by either or both former spouses; or […] Factors for spousal support order

(4.1) Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. […] Objectives of variation order varying spousal support order Ordonnance modificative 17.

(1) Le tribunal compétent peut rendre une ordonnance qui modifie, suspend ou annule, rétroactivement ou pour l’avenir :

a) une ordonnance alimentaire ou telle de ses dispositions, sur demande des ex-époux ou de l’un d’eux; […] Facteurs — ordonnance alimentaire au profit d’un époux

(4.1) Avant de rendre une ordonnance modificative de l’ordonnance alimentaire au profit d’un époux, le tribunal s’assure qu’il est survenu un changement dans les ressources, les besoins ou, d’une façon générale, la situation de l’un ou l’autre des ex-époux depuis que cette ordonnance ou la dernière ordonnance modificative de celle-ci a été rendue et tient compte du changement en rendant l’ordonnance modificative. […] Objectifs de l’ordonnance modificative de l’ordonnance alimentaire au profit d’un époux

(7) A variation order varying a spousal support order should (

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

b) apportion between the former 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 former spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time.

(7) L’ordonnance modificative de l’ordonnance alimentaire au profit d’un époux vise :

a) à prendre en compte les avantages ou inconvénients économiques qui découlent pour les ex-époux du mariage ou de son échec;

b) à répartir entre eux les conséquences économiques qui découlent du soin de tout enfant à charge, en sus de toute obligation alimentaire relative à tout enfant à charge;

c) à remédier à toute difficulté économique que l’échec du mariage leur cause;

d) à favoriser, dans la mesure du possible, l’indépendance économique de chacun d’eux dans un délai raisonnable. [ 18 ] Thus, s. 17(4.1) of the Divorce Act instructs the court to “satisfy itself that a change in the condition, means, needs or other circumstances of either former spouse has occurred” when determining whether to rescind an existing order. B. Application of s. 17 of the Divorce Act to the facts of this case [ 19 ] The motion judge determined that at the time of the hearing, the positions of both parties had changed from what they were at the time of the 2003 order.

She found the respondent’s income was substantially reduced, and the appellant’s financial situation had improved: Given the sale of Harding Medical Supplies (NB) Ltd., L.S.’s change in employment, the respective inheritance received by the parties, I am satisfied there has been a change in circumstances since 2003. Referencing the criteria listed at paragraph 17(1) (7) of the Divorce Act and applying same to the facts in this matter, my conclusions are as follows: (

a) As to the economic advantages or disadvantages to the former spouses arising from the marriage or its breakdown, both parties are much better off now than they were following the breakdown of the marriage. Between 1993 and 1994, L.S. was the family’s sole breadwinner earning between $40,000.00 to $50,000.00 per year. Following the separation, he made a lot of money as a result of his involvement with Harding Medical Supplies (NB) Ltd. Both parties have inherited substantial amounts from family members. (

b) Referencing the apportionment between the former spouses of any financial consequences arising from the care of any child of the marriage above any obligation from support, as of the date of this decision the children are both over the age of twenty-five. Johanna holds a Bachelor and Masters Degree in music. She is young, well educated and independent. Anthony has some income and he resides with his mother. Following the breakdown of the parties’ relationship, B.S. had custody and primary care of the children. As for L.S., he paid child support and contributed to Johanna’s university expenses as ordered by the Court.

(

c) With respect to the economic hardship of the former spouses arising from the breakdown of the marriage, following the separation,L.S. took responsibility for most marital debts and B.S. kept the family home. In any event, the breakdown of the marriage happened in1993 and its effects are not very relevant in 2009. (

d) While I recognize that factors to be considered by the Court when varying a support order are of equal weight, in my view, thepromotion of self-sufficiency within a reasonable period of time, is the most important one in this case. Following the separation, L.S.moved on with his life, he worked and earned a substantial income. As for B.S., it is recognized that during the marriage she did notwork outside the home and was primarily responsible for child care and for the maintenance of the household. It is also accepted that shehas some medical issues.

She is well educated, very intelligent, and presents herself very well. Through her inheritances of over$400,000 B.S. earns substantial yearly dividends. She is free to encroach on the capital, which even at 5% per year will give her areasonable income. As well, B.S. is entitled to monthly CPP benefits. I am of the view that B.S. is economically self-sufficient and she isno longer entitled to spousal support.

The previous court order will be varied retroactively to January 2009 such that L.S.’s obligation of spousal support will be reduced to $1,000.00 per month from January 1st, 2009 to May 1st, 2009, at which time his spousal support obligation will be terminated. [paras. 28-30] [20] The judge satisfied herself that there had been a change in the condition, means, and needs of both parties sincethe order of September 2003. She then considered these changes in relation to the factors and criteria enumerated in s. 17 of the DivorceAct.

As a result, the motion judge concluded the appellant is no longer entitled to spousal support. [21] In Bracklow v. Bracklow, (SCC), [1999] 1 S.C.R. 420, [1999] S.C.J. No. 14 (QL), theSupreme Court instructs judges to consider all the factors, and any or all of them may figure in the order, as appropriate in thecircumstances: The Divorce Act and Family Relations Act, through their various provisions, accommodate both models of marriage and marriagebreakdown outlined above.

While the law has evolved to accept compensation as an important basis of support and to encourage the self-sufficiency of each spouse when the marriage ends, where compensation is not indicated and self-sufficiency is not possible, a supportobligation may nonetheless arise from the marriage relationship itself. Turning to the specific provisions, the factors judges mustconsider in resolving support issues reveal the three different conceptual bases for spousal support obligations -- contractual,compensatory, and non-compensatory.

The judge must consider them all, and any or all of them may figure in the ultimate order, as maybe appropriate in the circumstances of the case. [para. 37] [22] In this case, the motion judge discussed, in great detail, the history of the proceedings and the four objectivesof the Divorce Act. She accepted and refers to the medical evidence produced by the appellant, considered the appellant’s increasedmeans to earn dividends from her investments and concluded the appellant’s budget was exaggerated.

She considered the standard ofliving of the parties during their marriage, as well as the significant decrease in the respondent’s income since the last hearing. All ofthis led the motion judge to include self-sufficiency as an important factor in this case. However, we are of the view the judge did notaccord unreasonable weight to the self-sufficiency factor. [23] The two leading cases pertaining to spousal support are Moge v. Moge, (SCC), [1992] 3 S.C.R813, [1992] S.C.J. No. 107 (QL), and Bracklow.

The Moge decision focuses primarily on the compensatory aspects of spousal support,but makes it clear that need continues as an element to be taken into consideration in certain cases. As L’Heureux-Dubé, J. states inMoge: The four objectives set out in the Act can be viewed as an attempt to achieve an equitable sharing of the economic consequences ofmarriage or marriage breakdown.

At the end of the day however, courts have an overriding discretion and the exercise of such discretionwill depend on the particular facts of each case, having regard to the factors and objectives designated in the Act. [para.77] [24] Bracklow, which deals with the disability of a spouse, expands upon the discussion of spousal support anddescribes the law with respect to entitlement as being based on three conceptual grounds:

The lower courts implicitly assumed that, absent a contractual agreement for post-marital assistance, entitlement to support could only be founded on compensatory principles, i.e., reimbursement of the spouse for opportunities foregone or hardships accrued as a result of the marriage. I conclude, however, that the law recognizes three conceptual grounds for entitlement to spousal support: (1) compensatory; (2) contractual; and (3) non-compensatory.

These three bases of support flow from the controlling statutory provisions and the relevant case law, and are more broadly animated by differing philosophies and theories of marriage and marital breakdown. [para. 15] C. Compensatory Support [ 25 ] Compensatory support is intended to recognize, monetarily, the economic advantage or disadvantage arising from the marriage or its breakdown. In other words, the spouse is compensated for having sacrificed his or her own career and financial security by assuming a particular role in the family.

A common example is a spouse remaining at home to care for the children of the marriage, while the other spouse pursues a career. This type of support is intended to compensate for the loss of earning capacity. In Bracklow , McLachlin J. (as she then was) states: The compensatory basis for support finds its source in a number of factors mentioned in the statutes. In the British Columbia Family Relations Act , these include s. 89(1) (

a) and ( d ). "[T]he role of each spouse in their family" embraces the contributions made by the spouses to the family for which compensation may be appropriate on the collapse of the marriage. Similarly, "the ability and capacity of ... either or both spouses to support themselves" permits a court to examine whether spouses have foregone opportunities to develop the ability to support themselves because of the marriage, or have been rendered less able to support themselves by adverse effects of the marriage or the marriage breakdown.

"[C]ustodial obligations respecting a child" ( Family Relations Act , s. 89(1)( c )) may relate to compensation. While spousal support is distinct from child support, the need to care for children has an impact on factors relevant to spousal support.

Under the Divorce Act , compensation arguments can be grounded in the need to consider the "condition" of the spouse; the "means, needs and other circumstances" of the spouse, which may encompass lack of ability to support oneself due to foregoing career opportunities during the marriage; and "the functions performed by each spouse during cohabitation", which may support the same argument.

In sum, these compensatory statutory provisions can be seen to embrace the independent, clean-break model of marriage and marriage breakdown. [para. 39] [ 26 ] The motion judge analysed the first two objectives of the Act and found the appellant was no longer entitled to compensatory support, as she no longer suffered any economic disadvantage arising from the marriage or its breakdown. The motion judge determined that, in fact, both parties are much better off now than they were following the breakdown of the marriage.

The objectives of the Divorce Act state that judges should consider the standard of living enjoyed by the parties prior to separation. During the marriage and at the time of separation in 1993, the parties and their two children were living on the respondent’s income of $40,000 to $50,000 per year. [ 27 ] Based on the testimony of the parties, the respondent’s income did not increase significantly until approximately two years after the breakdown of the marriage. In 2003, a Court order varied the spousal support payable by the respondent, acknowledging the increases in the respondent’s income.

Thus, spousal support was increased substantially, from $500 to $2,400 per month. [ 28 ] It is important to note that, at the time of the 2009 decision, the respondent had been paying spousal support to the appellant since the breakdown of the marriage in 1993. It is the respondent’s position that this amount was more than enough to compensate the appellant for the role she played during their fourteen-year marriage and any economic hardship she may have suffered as a result.

The motion judge stated: “In any event, the breakdown of the marriage happened in 1993 and its effects are not very relevant in 2009”. (para. 29(c)) [ 29 ] After determining the appellant no longer suffered any disadvantage or economic hardship from the marriage and its breakdown, the motion judge concluded the appellant was no longer entitled to compensatory support. We agree. D. Non-compensatory support [ 30 ] Non-compensatory support is based on the needs and means of the parties. In Bracklow , the Supreme Court

recognized non-compensatory support orders based solely on need where the other spouse has the ability to pay. In Bracklow, McLachlinJ. further states:

Section 15.2(6) of the Divorce Act, which sets out the objectives of support orders, also speaks to these non-compensatory factors. Thefirst two objectives -- to recognize the economic consequences of the marriage or its breakdown and to apportion between the spousesfinancial consequences of child care over and above child support payments -- are primarily related to compensation. But the third andfourth objectives are difficult to confine to that goal.

"[E]conomic hardship . . . arising from the breakdown of the marriage" is capable ofencompassing not only health or career disadvantages arising from the marriage breakdown properly the subject of compensation(perhaps more directly covered in s. 15.2(6)(a): see Payne on Divorce, supra, at pp. 251-53), but the mere fact that a person whoformerly enjoyed intra-spousal entitlement to support now finds herself or himself without it. Looking only at compensation, one merelyasks what loss the marriage or marriage breakup caused that would not have been suffered but for the marriage.

But even where loss inthis sense cannot be established, the breakup may cause economic hardship in a larger, non-compensatory sense. Such an

interpretationsupports the independent inclusion of s. 15.2(6)(

c) as a separate consideration from s. 15.2(6)(a). Thus, Rogerson sees s. 15.2(6)(c), "theprinciple of compensation for the economic disadvantages of the marriage breakdown as distinct from the disadvantages of themarriage", as an explicit recognition of "non-compensatory" support ("Spousal Support After Moge", supra, at pp. 371-72 (emphasis inoriginal)). [para. 41] [31] The motion judge took into consideration the condition, needs and means of each party. At para. 29(

d) of herdecision, the motion judge outlined the appellant’s income. She detailed the inheritances received by the appellant, as well as the yearlydividends earned from them. The judge reviewed the monthly Canada Pension Plan amounts available to the appellant. The judgedetermined the appellant is able to earn $28,416 per year without encroaching upon the capital of her investments.

Furthermore, thejudge found the appellant resides in a mortgage-free, rent-free home, and title to the home will be held jointly by the appellant and herson. [32] The appellant states the motion judge erred by terminating support because the appellant’s only source ofincome is her investments, which she will be forced to deplete. We must disagree. The judge considered all pecuniary resources, capitalassets and other sources providing benefits to the appellant, in determining the proper amount to attribute to the appellant as income.

Thejudge found the appellant’s budget to be “extravagant and grossly inflated” (para. 17) and at para. 29(

d) stated: […] “She is free toencroach on the capital, which even at 5% per year will give her a reasonable income. […]”. The motion judge is not compelling theappellant to encroach upon her capital; she is merely suggesting that the appellant is able to do so. [33] In Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, Binnie J. states: There is no support in the case law or in logic for the proposition that the chambers judge was wrong to take into account the appellant'scapital assets acquired after the marital break-up. In Strang v.

Strang, (SCC), [1992] 2 S.C.R. 112, the Court stated thatthe traditional understanding of the word "means" includes, "all pecuniary resources, capital assets, income from employment or earningcapacity, and other sources from which the person receives gains or benefits" (p. 119). J. D. Payne and M. A.

Payne elaborate as follows: The word means includes all pecuniary resources, capital assets, income from employment or earning capacity, and any other sourcefrom which gains or benefits are received, together with, in certain circumstances, money that a person does not have in possession butthat is available to such person. [Emphasis in original.] (Canadian Family Law (2001), at p. 195) [para. 29] [34] Therefore, the parties’ capital may be taken into consideration as “means”. In Mills v. Mills, 2010 NBCA 20,[2010] N.B.J.

No. 83 (QL), this Court upheld a Court of Queen’s Bench, Family Division decision, where a wife’s inheritances weretaken into consideration when support was determined. [35] With respect to the determination of the respondent’s income and ability to pay, his financial situation hadimproved significantly at the time of the 2003 hearing, but declined substantially prior to the 2009 hearing. At that time, the evidencedemonstrated the respondent’s new business had substantial start-up expenses and had incurred a deficit of $130,941.

His holdingcompany invested a large amount of money into the new enterprise, and his personal portfolio and his holding company’s portfolio hadbeen reduced significantly. This is all reflected in the judge’s decision:

In late March of 2005, L.S. sold all the shares of Harding Medical Supplies (NB) Ltd. held by himself and his holding corporation, Windy Road Percheron Corp. All in all, he and his holding company received $1,013,511. That year L.S.’s reported income was $385,842. Following the sale of the shares, L.S. remained involved as an employee of Harding Medical Supplies (N.B.) Ltd. He earned an annual salary of $75,000 plus a bonus of $7,000 to $20,000 per year. By June of 2008, L.S. ceased his involvement with the medical supply outfit.

In September of the same year, L.S. incorporated 638720 NB Inc. which bought a Sign-a-Rama franchise, a business which produces signs. The start up expenses for the next enterprise were substantial with some of the money coming from L.S. personally and from his holding corporation. The balance sheet dated September 8 th , 2009 of Sign-a-Rama shows a loan of $350,510 from Windy Road Percheron Corp. and a shareholder’s loan of $63,746 from L.S.. As well, $142,500 is owed by Sign-a-Rama to the Business Development Bank of Canada.

The financial statements of Sign-a-Rama as of December 31 st , 2008 include a deficit of $130,941. As for L.S.’s holding company, its financial statements as of December 31 st , 2008 show the retained earnings to be $562,053. The assets of this corporation include portfolio investments of $315,515 and a loan to 638720 NB Inc. of $212,800. So far, the latter corporation has not been very successful. [paras. 7-9] [ 36 ] The motion judge took the respondent’s capital assets into consideration when determining his income.

She considered the retained earnings of the holding company and the assets of the corporation, including the portfolio investments. In her decision, she summarized the respondent’s financial situation: L.S.’s financial statement sworn to September 9 th , 2009 indicates that his annual income is $49,000. He and his holding company hold securities worth $146,003. He also holds RRSPs worth $117,536. L.S.’s liabilities include a mortgage of $193,042 registered against his home valued at $275,000. His other debts include a line of credit for personal and business use of $177,300 and credit card liabilities of $26,000.

Since January of 2007, L.S. has been residing with his new partner and their seven year old son. It should be mentioned that in August of 2005, L.S.’s mother died. L.S. inherited his mother’s home in the Bathurst area and a G.I.C. worth about $53,286. In September of 2006, the home was sold for about $229,000.00. [paras. 11-12] [ 37 ] In Boston v.

Boston , 2001 SCC 43 , [2001] 2 S.C.R. 413 , the Court made it clear that, when dealing with a variation application long after separation, support is not to be determined in accordance with the payor’s current standard of living, but the standard of living enjoyed by the parties during the marriage. Generally speaking, support should not be based on a reallocation of income according to the payor’s current ability to pay.

In this case, the standard of living during the marriage was based on income of approximately $50,000. [ 38 ] In reviewing the motion judge’s decision, we do not encounter any errors in principle, a serious misrepresentation of the evidence, or an award which is clearly wrong. In determining this dispute, the motion judge exercised her judgement in balancing the objectives, factors and criteria set out in s. 17 of the Divorce Act , and in applying them to the particular facts of this case.

There has been no error in assessing the parties’ needs and means and the judge made a finding, within her discretion, to terminate the respondent’s payment of spousal support in the circumstances. The motion judge made her decision after a four-day hearing, and was best placed to assess the credibility of the witnesses. In conclusion, we find the motion judge’s decision to be unassailable. VI. Disposition [ 39 ] For the above reasons, the appeal is dismissed. We order the appellant to pay costs on appeal of $1,500. ______________________________

M.E.L. LARLEE, J.A. ______________________________ J. C. MARC RICHARD, J.A. ______________________________ KATHLEEN A. QUIGG, J.A.