2010 QCCA 2374, 2010 QCCA 2374

Droit de la famille — 103502 2010 QCCA 2374 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-020481-107 (500-12-287385-060) DATE: December 21, 2010 CORAM: THE HONOURABLE LOUIS ROCHETTE, J.A. MARIE-FRANCE BICH, J.A. LISE CÔTÉ, J.A. D. G. APPELLANT – Plaintiff v. L. S.

RESPONDENT – Defendant JUDGMENT [ 1 ] THE COURT ; - On appeal from a judgment rendered on February 9, 2010, by the Superior Court, District of Montreal (the Honourable Madam Justice Danielle Grenier), declaring the divorce of the parties and, in particular, confirming the alternating custody of the parties' minor son, establishing monthly child support payments of $3,000 to be paid by the appellant to the respondent, and ordering the appellant to pay the respondent the sum of two million five hundred thousand dollars ($2,500,000) as a compensatory allowance, within ninety (90) days of the judgment. [ 2 ] After having examined the file, heard the parties, and on the whole deliberated; [ 3 ] ALLOWS the appeal in part, each party to pay their own costs given the nature of the dispute; [ 4 ] As regards the child support payments, for the reasons of Rochetteand Côté JJ.A., Bich J.A. in agreement: [ 5 ] REPLACES the fifth paragraph of the reasons of that judgment with the following: ORDERS the plaintiff to pay the defendant support payments for the minor child X in the amount of $2,312 per month; [ 6 ] As regards the compensatory allowance, for the reasons of Côté J.A., with which Bich J.A. agrees: [ 7 ] REDUCES the compensatory allowance to one million dollars ($1,000,000) with interest and the additional indemnity as of the date of the trial judgment; [ 8 ] For his part, and for his reasons, Rochette J.A. would have established the compensatory allowance at two million dollars ($2,000,000) with interest and the additional indemnity as of the date of the judgment.

LOUIS ROCHETTE, J.A. MARIE-FRANCE BICH, J.A. LISE CÔTÉ, J.A. Mtre Suzanne H. Pringle and Mtre François Poirier Suzanne H. Pringle, attorneys For the appellant Mtre Miriam Grassby and Mtre Sylvie Leduc Grassby & Associates For the respondent

Date of hearing: September 23, 2010 REASONS OF ROCHETTE, J.A. [ 9 ] At issue in this appeal is the award and the amount of a compensatory allowance payable by the appellant to the respondent, as well as the amount awarded in support payments for the parties' minor son, X, born on ... 1995. The parties have focused practically all their energy on the grounds concerning the compensatory allowance.

We will address this issue in more depth after having summarily stated the facts. * * * [ 10 ] The trial judge painted the backdrop of this case as follows: [translation] [2] The parties were married on August 30, 1986, under the regime of separation of property. [3] At the time of their marriage, the two parties were teachers with modest incomes. In addition, the applicant was registered at the École des Hautes Études Commerciales (HEC), where he was completing a Bachelor of Administration.

He also worked part-time at his father-in-law’s company, radio station A. [4] After earning a Bachelor of Administration in 1987, the applicant began working on a Master’s of Administration at HEC. At the same time, he received a job offer from [Company B] and opted for that alternative. He worked for that organization until 1989. [5] In 1989, the applicant became a director [of Company C] and remained in that position until he became an employee and minority shareholder of [Company D]. [6] The applicant was then earning an annual salary of about $40 000.

He worked at [Company D] until September 1995, when the company’s shareholders decided to buy the applicant’s shares under the terms of the shareholders agreement he signed when he was hired. He then received the amount of $259,000, which eventually allowed him to launch his own business. [7] As for the respondent, she gave up her teaching career in 1985 to work at [radio station A]. She worked there full time until the birth of Y on …,1987. [8] After a one-year maternity leave, the respondent returned to work part time at [radio station A] until the birth of X, in 1995. [9] The respondent’s family is wealthy.

The respondent’s father purchased the couple’s principal residence as well as a secondary residence [in region A]. In addition, between 1987 and 1997, the respondent received large amounts of money, about $4.7 million, from her father. [10] Thus, thanks to the respondent’s father, the family’s financial resources were above average. The parties lived without any particular financial arrangement.

The respondent assumed almost all of the family’s expenses while the applicant looked after his own personal expenses as well as the family’s food expenses from time to time. [11] After his experience [with Company D], the applicant thought about starting his own company. He partnered with two other individuals and spent 1995 formulating a business plan that led him and his partners to found [Company E] in December 1995. [12] The founding of this company required a basic investment of $250,000. The applicant’s partners had no money, so the applicant discussed the issue with the cousin of his father-in-law, S.

S., his business sponsor. [13] It was agreed that the three founding partners would have the same number of shares and that the investors would be the applicant ($75,000), the respondent ($75,000), and S. S. ($75,000). The respondent’s investment served two purposes. It was used to buy shares and to advance loans to the applicant’s two partners, who did not have the necessary funds to invest in the company. The two partners thus received shares thanks to the respondent’s investment. [14] The shares were allocated as follows: P. B. 22½ % Pi. D. 22½ % D. G. 22½ % S. S. 22½ % L.

S. 10 % [15] [Company E] began operations in December 1996. Very quickly, outside investments and the hard work of the applicant and everyone around him made [Company E] profitable. In 1999, [Company E] was expanding rapidly. By 2000, it was listed on the stock exchange and had amassed $20 million in its coffers. It has partners all over the world.

[16] The applicant thus became a rich and influential man. He travelled extensively and neglected his family. The respondent asked him to spend more time with his family and to sell his shares. To the applicant, this request seemed unrealistic and unreasonable, given his professional obligations. He was then president and CEO of a publicly held corporation. He refused. Slowly, the parties began to drift apart from each other, and they separated in January 2006. THE COMPENSATORY ALLOWANCE [ 11 ]

Article 427 of the Civil Code of Québec is an equity provision that confers a "remedial" and discretionary power on the trial judge: [1] 427.

The court, in declaring separation from bed and board, divorce or nullity of marriage, may order either spouse to pay to the other, as compensation for the latter's contribution, in property or services, to the enrichment of the patrimony of the former , an allowance payable in cash or by instalments, taking into account, in particular, the advantages of the matrimonial regime and of the marriage contract. ... [Emphasis added] [ 12 ] Spouses contribute to the expenses of the marriage in proportion to their respective means; each may acquit themselves of this contribution by their activities within the home. [2] Failure to do so may give rise to a compensatory allowance.

This measure of justice and equity is based on the principles of unjust enrichment. [3] Its purpose is to mitigate the injustices created by the realization of a freely chosen matrimonial regime. [4] That being said, the compensatory allowance is not supposed to restore a balance between the patrimonies of the former spouses. [5] [ 13 ] The following criteria must be considered when deciding whether to award a compensatory allowance: The contribution, the enrichment of the spouse's patrimony, the causal link between the two, the proportion in which the contribution enabled the enrichment, the concomitant impoverishment, and the lack of justification for the enrichment. [6] A flexible and liberal approach must be taken when assessing these elements. [7] [ 14 ] With regard to the intervention of an appellate court in these matters, the Supreme Court adds: The awarding of a compensatory allowance or lump sum rests upon a decision that depends to a large extent on the trial judge's ability to assess the facts .

In performing this difficult judicial exercise, there are many factors which the trial judge may legitimately consider as, in relation to both compensatory allowances and lump sums, the legislator has recognized the need for broad discretion by adopting enabling provisions which have an essentially open texture. In such a context, the function of an appellate court is to correct errors of law made at trial in exercising the discretion conferred by law .

It goes without saying that assessing the facts is the prerogative of the trial judge and that, unless it can identify such an egregious error in this regard that it indicates an error of legal principle, the Court of Appeal is not justified in intervening. [8] [Emphasis added] [ 15 ] Let us now consider each of these elements as they relate to the approach adopted by the trial judge and by the parties in their arguments.

The respondent's contribution [ 16 ] The respondent targeted the period between 1996 and 2006 and did not argue, therefore, that her contributions to the expenses of the marriage between 1986 and 1995, which were made possible by the generosity of her father, should be considered in her request for a compensatory allowance.

For the first ten years of marriage, she acknowledges that the appellant was a good father, adding [translation] "It's [E Company] that ruined it all". [ 17 ] But the appellant maintains that in light of this precision, given by the respondent at the hearing, she has waived any claim stemming from a $111,000 loan [9] granted to the appellant in 1992, which allowed him to become a minority shareholder in [D Company].

Indeed, it was the sale of these shares for $259,000, completed in September of 1995, that provided the appellant with the wherewithal to start up [E Company], though once again with the respondent's financial support as she invested $75,000 in the business. [ 18 ] I do not agree with this submission. [ 19 ] The waiving of a right must be unequivocal, whether expressly or impliedly expressed, and the intent to waive must be established. [10] That was not the case here, which the trial judge understood. [11] [ 20 ] It should be noted that, since October of 2007, in support of the request for a compensatory allowance, the respondent's defence and counterclaim allege that the loan the respondent invested in [D Company] had fructified over the years and yielded the initial investment for [E Company].

The existence of the non-interest-bearing loan was acknowledged by the appellant at the hearing, and no documentary evidence established its reimbursement. The appellant argues that he reimbursed the loan, which is denied by the respondent.

In light of the rules regarding the burden of proof, [12] it must follow that the reimbursement of the loan cannot be accepted as fact. [ 21 ] In addition to the [D Company] chapter, with regard to the respondent's contribution, the judge also accepted that the respondent left her job following the birth of X, in ... 1995, when the parties' daughter Y (born on ..., 1987) was training for gymnastics

on a daily basis, and became solely responsible for taking care of the family. She supported the appellant, who devoted himself entirely to starting up [E Company] in which the respondent's investment was significant. [ 22 ] This financial venture would make the appellant's fortune and yield fairly significant benefits for the respondent. The trial judge determined the appellant's yearly income between 1996 and 2008, the amounts paid by the respondent into the parties' joint account between 2002 and 2006, and the payments made into this account by the appellant between 2001 and 2006.

She also estimated the respondent's contribution to the expenses of the marriage between 1996 and 2001. [13] The judge summarized: [translation] [79] The evidence shows that the applicant benefited throughout his marriage from significant contributions of money and unpaid labour from the respondent. [80] Between 1996 and 2001, the respondent spent $968,479.65 on her immediate family in addition to making large support payments to her mother (document A-1). [81] The respondent described herself as her husband’s “bank”. She had expected the favour to be returned.

In addition to being his economic lever, she made his life easier by handling all of the family expenses. [82] Beginning in 1999, the respondent knew that her husband was wealthy, but she did not know how much he was earning. When he left the family home in 2006, the applicant left behind certain documents, including his income tax returns. That is when the respondent learned that her husband was a millionaire. [83] The respondent waited until June 2001 to ask the applicant to contribute to the marriage expenses. Very naively, she believed that her husband’s income was about $150,000 per year.

So she did not ask him to contribute to the family expenses in accordance with his income and continued to contribute to the common expenses as if her own income was equivalent to that of her husband [Citations omitted.] [ 23 ] The appellant faults the judge for having performed a piecemeal analysis of the spouses' contributions. He points out that, for the period between 1996 and 1999 , his income was modest compared to that of the respondent, who received almost $4 million from her father between 1997 and 1999.

Moreover, he disputes the amount of the contribution to the expenses of the marriage submitted by the respondent for 1999 and argues that he contributed in proportion to his means. He adds that the respondent's contribution was natural because of the modus vivendi the parties had chosen. With regard to the period between 1996 and 1999, the appellant concludes that there was no evidence of an imbalance in the parties' contributions, considering the respondent's higher income. [ 24 ] According to the appellant, the judge also erred regarding the respondent's contribution for the period between 2000 and 2006.

The respondent's contribution for 2000 was over-estimated. Moreover, from 2001 on, the appellant maintains that he always paid into the joint account the amount requested by the respondent, who managed it. He added that the respondent could have easily found out about the growth of his income.

Finally, he points out that he assumed his personal expenses, the cost of family vacations, restaurant outings for the family, extended family and friends, the cost of outings and entertainment, as well as various expenses for the house and upkeep for the cars. [ 25 ] He finally notes that he paid for almost all the property making up the family patrimony, that is, the two cars, and the RRSPs. [ 26 ] The trial judge's finding that the respondent made an exceptional contribution in both services and money for the duration of the marriage deserves a more detailed consideration. [ 27 ] The $111,000 loan given to the appellant in 1992 so he could invest in [D Company] represented, at the time, a material financial contribution that allowed him to make a name for himself in the business world and to come through the venture with a considerable amount of cash in 1995.

It is how the appellant was able to invest $75,000 in 1995 to set up the [E Company]. Moreover, the respondent herself invested $75,000 in [E Company], $50,000 of which was loaned to two key players [14] P. B. and Pi. D., whom the appellant had absolute need of for the business to succeed [15] and who did not have any cash at the time.

In exchange, she was awarded 10% of the shares in the business. [ 28 ] The respondent eventually recuperated her investment, but the fact remains that the appellant was able to carve out a place for himself in a new investment sector, start up his business, and achieve the success we know of thanks to her contributions,. [ 29 ] The appellant answers that he could have financed the start up of [E Company] by approaching a well-known financial institution. We have to wonder then, if it was indeed that simple, why he did not proceed this way. The answer is obvious.

The future was rather uncertain and the venture was undoubtedly risky, even if the respondent had confidence in the appellant's abilities. The participation of solid investors like the respondent and one of her father's cousins simplified matters greatly and obtaining cash, interest free, was presumably integral to the short term survival of the business. [ 30 ] Also, the respondent's decision, following the birth of X, to leave her job and to devote herself to the needs of the family, allowed the appellant to completely and resolutely devote his efforts to making [E Company] a success.

The respondent's contribution can be characterized as considerable. [16] [ 31 ] On the other hand, it is clear that the appellant's income only started to markedly increase in 1999. During the three preceding years, he could not have contributed any more that he did; the trial judge seems to acknowledge in the last segment of her judgment, [17] but there remains some uncertainty on this matter, which I will revisit.

[ 32 ] Between 1999 and 2006, however, the appellant profited from significant cash inflow but did not tell the respondent about his level of wealth and chose not to contribute to the expenses of the marriage in proportion to his financial means. He waited for the respondent to suggest opening a joint account in 2001 to contribute to the extent she suggested.

The trial judge saw in this a wait-and-see attitude that served the appellant well and prolonged a situation of detrimental and unfair contribution for the respondent. [ 33 ] It is difficult to see in this a finding that is not based in the evidence or that could be characterized as patently wrong, at least for 1999 and 2000. At that time, the appellant's contribution, though appreciable, was not proportionate to his means. [ 34 ] The appellant, however, never hid his true financial situation from the respondent. In his factum, he points out the following: [translation] 16.

On the other hand, from 2000 on, the appellant's income was disclosed in the annual prospectus sent to all the shareholders of [E Company] and also appeared in the respondent's tax returns, though she testifies to not having any knowledge of this. In addition to the ready availability of this information, the evidence reveals that she never asked him what his income was. [ 35 ] In her testimony, the respondent acknowledges that the appellant's business was prosperous but explained the realization she made toward the end of their union: [translation] A. ...

So I thought he had the salary of a senior manager, around maybe two hundred (200), two hundred and fifty thousand (250,000). And then, when I started to see tax returns, and then, I started to show an interest in, when I started to be interested in knowing how much money he had earned, and I realized that I had, that I had not, I had not paid proportionately.

I actually paid for fifty per cent (50%) of the expenses when he was making much more money than I was. [ 36 ] I am somewhat uncomfortable with a method that resembles a posteriori accounting, which the trial judge validated by affirming that, starting in 2000, the appellant should have given the respondent her due . [18] With respect, this way of seeing things is wrong in law.

The figures accepted by the judge show that from 2002, at least, the appellant's contributions to the joint account were, excepting in 2003, noticeably higher than those of the respondent. [ 37 ] But the assessment that the appellant's contribution was insufficient and that the respondent's was too high and unfair between 1999 and 2006 remains and is not, for all that, vitiated by a palpable and overriding error.

It will nonetheless be necessary to take into account the whole picture when assessing the amount of the compensatory allowance. [ 38 ] Finally, it is true that the respondent's financial contributions for a number of years had to be estimated by the trial judge because of insufficient data. [19] The appellant has not convinced us that the accepted amounts are obviously wrong or without value.

We must not forget that the collaborating spouse may prove his or her contribution to the enrichment of his or her spouse's patrimony by all means. [20] The appellant's enrichment and the causal link [ 39 ] The issue of when to assess the enrichment was considered in Lacroix v. Valois . [21] For the Supreme Court, Gonthier J. said the following on the issue: The traditionally accepted rules governing the doctrine of unjust enrichment are instructive in this regard.

The de in rem verso action has always been limited to the measure of the actual enrichment, and the courts have determined the time of evaluation to be that of the bringing of the action. If the defendant's enrichment no longer exists when the action is brought , the latter must be dismissed without further consideration (see Jean-Louis Baudouin, op. cit., at pp. 323 et seq.). François Goré explains this condition as follows in L'enrichissement aux dépens d'autrui (1949), at p. 64: [TRANSLATION] The enrichment which must be considered is that enjoyed by an individual when the action is brought.

The function of the theory of unjust enrichment is to restore the equilibrium between two patrimonies which has been unfairly disrupted. For this function to be performed, the disequilibrium must exist at the time the action is brought . [22] [Emphasis added] [ 40 ] At the time the divorce proceedings were brought by the appellant in December of 2006, the calculable value of his patrimony neared the 20 million dollar mark.

The enrichment of the appellant's patrimony during the marriage stems from the financial success of [E Company]. [ 41 ] The trial judge concluded that the respondent's contribution in both property and services enriched the patrimony of the appellant and made this success possible. This finding of fact is not affected by any palpable and overriding error. It is appropriate to note the flexibility that must be used when assessing the causal link: In general, therefore, analysis of the factual and legal aspects of a compensatory allowance situation calls for special flexibility.

I think it is quite understandable that it should differ somewhat from that applicable to other areas such as civil liability, where the requirement of a causal link, for example, is relatively strict. It is worth noting in this regard that the traditional concept of causality is not applied in

cases of unjust enrichment: Banque canadienne nationale v. St-Germain, [1942] Que. K.B. 496. The plaintiff must certainly show acause-and-effect relationship between the impoverishing act or the impoverishment on the one hand and the enrichment on the other, butthe requirement of this relationship is much less strict than the standards evoked by the notions of causa causans, causa sine qua non orcausa proxima: Jean-Louis Baudouin, Les Obligations (3rd ed. 1989), No. 553, at p. 332. In Cie Immobilière Viger Ltée v.

LauréatGiguère Inc., (SCC), [1977] 2 S.C.R. 67, stating the conditions on which the de in rem verso action is available, thisCourt laid down the requirement for a simple "correlation" between the impoverishment and the enrichment. Flexibility is essential andthe analysis highly empirical. The very close relationship between the action for unjust enrichment and the action for a compensatoryallowance does not have to be restated, and I think that on this point the approach taken for the first generation should apply for thesecond.[23] [Emphasis added] [42] This, naturally, brings us to the impoverishment.

On this issue, the judge noted: [translation] [94] It is also false to claim that the defendant was not impoverished. While she was dipping into her capital, the plaintiff was gettingricher at her expense. If the defendant's contribution had been less, and if from 2001 on her contribution had reflected her income, shecould have gotten a higher return by investing the money in question in her investment account ... . [43] With respect, I would address the issue from a slightly different angle and with less censure. [44] It is difficult to conceive of enrichment without corresponding impoverishment.

That said, the respondent certainlyimpoverished herself by lending $111,000 to the appellant in 1992. This amount represented a significant portion of her cash at the timeand the evidence does not indicate whether it was reimbursed.

The $75,000 investment that occurred a few years later in [E Company] isalso crucial.[24] In the following years, the respondent did receive the $50,000 that she had loaned without interest to the appellant'spartners, but she had taken the same financial risk as the appellant and her father's cousin, while receiving only 10% of the shareownership. [45] The appellant replied that the distribution of the share ownership, which he defended, took into account the actualinvolvement of the main partners and the involvement of the respondent, which was limited to financing.

In reality, several scenariosmight have been considered. Should the two partners, whose cash flow was nonexistent and who, when all was said and done, weretaking only a very limited risk, necessarily have benefited from 22,5% of the share ownership? Did the important role of silent partnerthat the respondent had accepted to play not merit more than 10% of the shares in [E Company]?

The appellant acknowledges, forexample, that the respondent's father's cousin did not have an "active role" in the business. [46] One thing is certain, any premium on the consideration in shares received by the respondent because of her loan/investment of$75,000 would have represented, as a result of the success of the business, a considerably accrued capital gain. Each 5% slice of sharesrepresented, at the time of the action, approximately $3,5 million. [47] The respondent acknowledges, moreover, that her investment in [E Company] enriched her, a fact that was not ignored by thetrial judge.

But in the end, the judge found that at the end of the parties' marriage, [translation] "injustices were created when a freelychosen matrimonial regime was executed"[25] and that it was appropriate to allow a spouse who had enriched her spouse's patrimonythrough her own contributions in property or services to be compensated. [48] For example, and as indicated above, the financial contribution to the expenses of the marriage made by the appellant between1999 and 2006 was insufficient and can have had no other result than to impoverish the respondent to a degree.

It must be reiterated thatthe respondent gave up all outside work from 1995 on to take care of the family unit, which allowed the appellant to pour all his energyinto [E Company].

One might speak of a [translation] "marked and constant disproportion between the contributions of each to theexpenses of the marriage."[26] The lack of justification [49] The trial judge dismissed the justification submitted by the appellant according to which the respondent consented to givingher family a lifestyle similar to what hers had been before the marriage while benefiting from this arrangement.[27] She added: [translation] [97] From 1999 on, however, the plaintiff’s financial means rapidly increased without his contribution to the expenses of the marriageincreasing to the same extent.

Therein lies the problem. From the moment he began earning a good living, the defendant should haveshouldered all the family's financial burden, or at least, have contributed in proportion to his means.

He did not do so, and must nowcompensate the defendant thanks to whom he led a charmed life marked by luxury, trips around the world, refined entertainment, high-end automobiles, and so on, without any justification whatsoever. [50] The appellant fights back, blaming the judge for ignoring the agreements the parties tacitly entered into during the marriage.He attributes a constant donative intent to the respondent and adds that from 2001 on, the respondent devised an equal-parts sharingformula with which he complied, deferring to her demands. [51] Subject to previously discussed nuances, this ground must fail.

[ 52 ] One cannot attribute a donative intent to a person who is mistaken about the true financial situation of the person to whom she is giving. In this case, the respondent was not fully aware of the extent of the appellant's financial ease, a subject that was not usually discussed between the spouses. She did not realize in good time the discrepancy between the appellant's contribution and his actual financial means, and the appellant, it would seem, did not believe that it was necessary to set the record straight.

This is no justification for the enrichment. [ 53 ] Also, the "agreement" raised by the appellant is unrelated to the loans granted by the respondent in 1992 and in 1995. The judge noted, in the end, that the success of [E Company] cannot be attributed solely to the work and talent of the appellant. [28] The proportion to which the contribution enabled the appellant's enrichment and the quantum of the allowance [ 54 ] The respondent had claimed a compensatory allowance of 5 million dollars. The trial judge split the difference.

She had the following to say on the subject: [translation] [100] How can we then assess the proportion between the defendant's contribution and the plaintiff's enrichment. It is a difficult task. We must consider that the amounts spent by the defendant for the family's needs could have yielded a profit had they been invested.

We must also not forget that the defendant had been counselled for several years by competent brokers who had helped to grow her portfolio. [101] Taking into account all the circumstances of the marriage and proceeding with an overall assessment of the situation, the Court is of the view that the defendant is entitled to claim a compensatory allowance in the amount of $2.5 million.

Overall, the following elements are accepted : • Between 1996 and 1999, the defendant spent $1 million on her immediate family. • From 1999 on, the plaintiff's contribution to the expenses of the marriage was inadequate. • To maintain the lifestyle that her family was used to, the defendant had to dip into her capital. • It is thanks to the $110,000 loan from the defendant that the plaintiff was able to set himself up in business. • It is also thanks in part to a second investment by the defendant, in the amount of $75,000, $50,000 of which was loaned to the plaintiff's future partners, that [E Company] was set up. • The defendant was the plaintiff's bank, his financial lever. • From 2001 on, the defendant continued to contribute to the family’s expenses as if her income was equal to that of the plaintiff. • The plaintiff assumed responsibility for all the domestic tasks. • The defendant gave up her career in order to support her husband and allow him to succeed in his project [E Company]. ... [ 55 ] The appellant argues that the "proportion" could not be established because there was [translation] "simply no causal link between the contributions accepted by her [the trial judge] and the appellant's enrichment".

He also criticizes the judge for giving insufficient reasons to support this portion of her judgment and for referring to tables that were not in the evidence. [ 56 ] The appellant refers to the financial situation of the parties on the date the proceedings were brought, arguing that, as there was at the time neither imbalance nor unfairness to correct, there is no impoverishment. He also argues that did not benefit from any enrichment prior to 1999.

Finally, he states that the date of the judgment should be used as a starting point to compute the interest on the compensatory allowance, if any. [ 57 ] I find that a correlation has been established between the respondent's contribution and the appellant's enrichment and that, consequently, the respondent was necessarily impoverished. That said, the judgement a quo is adequately reasoned and based on the evidence adduced as a whole. Also, the appellant is wrong to maintain that the worth of the parties' patrimonies are comparable as of the institution of the proceedings.

The appellant's assets total close to $20 million at the time of the action, while those of the respondent total just over $13 million. [ 58 ] On the other hand, the appellant justly points out that the first "element" put forward by the trial judge to justify the amount of the compensatory allowance is not probative.

Even if the respondent contributed generously to the expenses of the marriage between 1996 and 1999, it was established that from 1996 to 1998 inclusively the appellant's average income was $52,000, and the judge accepted that until 1999, the appellant's contribution to the expenses of the marriage was adequate.

The respondent agrees, in practice, not to claim a compensatory allowance from the appellant for the period during which he was not able to help financially [29] and the judge accepted that there was, at the time, a voluntary agreement and justification for the enrichment: [translation] [95] The plaintiff argues that the defendant voluntarily agreed to provide a lifestyle for her family that was similar to the one she had prior to the marriage and that she benefited from this arrangement. [96] The plaintiff might have been right to argue voluntary agreement for the period from 1986 to 1996.

During this period, the plaintiff

did not have the means to provide such a lifestyle for his family. His enrichment was justified at that time. [ 59 ] In this context, the respondent's financial contribution to the everyday expenses of the marriage for the period between 1996 and 1998 could not have been considered any more than it was and there is in this an error of fact and of law.

We reiterate that the respondent was claiming $200,000 per year from 1996 to 2000, in addition to the performance losses on her capital to be compensated for the amounts that the appellant [translation] "should have disbursed for the family expenses". [30] [ 60 ] Additionally, it was wrong to require from the appellant, from 2000 on, that he [translation] "assume all the expenses of the family and give the respondent her due" [31] since until 1998, recovery could not have been argued in this respect.

Finally, though the appellant's contribution was found to be insufficient compared to the respondent's between 1999 and 2006, the amount of $532,000 claimed on this head by the respondent [32] is unreasonable. [ 61 ] On the whole, I find that the errors committed touch upon the applicable principles of law and that there is cause to intervene and reduce the compensatory allowance to $2 million . The interest and additional indemnity must be granted from the date of the judgment a quo.

SUPPORT FOR THE MINOR CHILD [ 62 ] Custody of X was awarded to his parents, alternating on a weekly basis. [ 63 ] After attributing to the parties the respective incomes of $196,692.43 (for the respondent) and $637,000 (for the appellant), [33] the trial judge disposed of the specific expenses. This

part is no longer in dispute. [ 64 ] Considering the basic support amount, child support payments in the amount of $3,000 per month were ordered.

After noting that at the time of the hearing, the appellant was paying the respondent child support payments of $6,000 per month for the upkeep of both children, [34] the judge did not accept the amount that would result from the application of the determination table annexed to the Regulation respecting the determination of child support payments [Regulation]. [35] She wrote: [translation] [50] The Court is of the view that even by accepting the amount of $637,000 suggested by the defendant as representative of the plaintiff's actual income for 2009-2010, the monthly amount of $805.70 for child support payments, as determined by the table provided at

annexe II of the Guidelines applicable in Quebec, is clearly insufficient in light of the real needs of X, of the financial resources available to the plaintiff and of the lifestyle the parents have thus far provided for their son. ... [53] The Court assesses X's needs at $3,000 per month. The income accepted to calculate the support payments for X is $637,184 for the plaintiff and $196,692 for the defendant.

According to the percentage of distribution of income, the plaintiff must assume 77.07% of X's needs, which corresponds to an amount of $2,312.00. [ 65 ] The appellant argues that the judge should not have deviated from the scale of the Regulation to determine the basic support payments, presumed valid, and that the respondent did not meet her burden to reverse this presumption. He adds that the amount accepted is unreasonable as he has been without a job since the month of December of 2008 and adds that at the interim stage, he had accepted to pay support payments of $1,500 for two children.

Finally, the judge made a calculation error by setting the support payments at $3,000 per month rather then $2,312 per month, the amount on which she settled in paragraph 53 of her judgment. [ 66 ] Indeed, the trial judge made a calculation error and should have established the support payments due by the appellant at $2,312 per month .

On the other hand, this amount is quite reasonable when we consider the needs of the child, the lifestyle he has been used to and the parents' ability to pay, which is not seriously disputed. [ 67 ] Additionally, this amount is, within a few dollars, what the appellant should have paid pursuant to the Regulation. Indeed, when the available income of the parents is over $200,000, basic child support payments are $14,310 per year, plus 3.5% of the overage. The parents' income totals $833,876. According to the Regulation, the contribution should therefore be $14,310 + $22,186 ($633,876 * 3.5%) or $36,496 per year.

The appellant's portion is 77.07%, which represents $28,127 per year, or $2,344 per month. [ 68 ] There is cause to intervene and set the support payments at $2,312 per month.

CONCLUSION [ 69 ] On the whole, I would allow the appeal, each party paying their own costs given the nature of the dispute, set aside the trial judgment in part and replace the fifth and the second-last paragraphs of the reasons of that judgment with the following: ORDERS the plaintiff to pay the defendant support payments for the minor child X in the amount of $2,312 per month; ORDERS the plaintiff to pay the defendant the amount of two million dollars ($2,000,000) as compensatory allowance, with interest and the additional indemnity as of the date of this judgment.

LOUIS ROCHETTE, J.A. REASONS OF CÔTÉ, J.A. [ 70 ] With respect, I do not share the conclusion of my colleague Rochette J.A., who proposes to reduce the amount awarded by the court below as compensatory allowance from $2.5 million to $2 million.

For my part, I find that a compensatory allowance of $1 million would suffice to compensate the respondent for her contribution to the appellant’s enrichment. [ 71 ] I will refer to the statement of facts provided by my colleague, while adding certain details in the course of my analysis. [ 72 ] I agree with him when he states that: • the trial judge erred by taking into account the period between 1996 and 1999 when awarding the compensatory allowance since the respondent had agreed to contribute more to the household expenses for this period during which the appellant had less income. • she also erred by finding that from 2000 on, the appellant should have shouldered all the expenses of the family. [ 73 ] I do not agree with him, however, as to the significance that should be attributed to the fact that the respondent stopped working in 1995 and that she was disadvantaged by participating in the investment in [E Company] when the shares in the business were distributed.

I also do not agree with his opinion that the $111,000 loan the respondent gave the appellant to purchase shares in [D Company] was not reimbursed. [ 74 ] Let me explain. [ 75 ] The respondent's father, since deceased, had significant financial means with which he provided for his three children by creating a management company for the funds from the sale of a radio station he owned at the time.

Right after her wedding, if we take into account the family home he gave her in 1987 and the condominium in City A (valued at $230,000), of which she was the sole proprietor, the respondent received in excess of $5 million from her father. At the time of the trial, the investment company created for the benefit of the children had $1.5 million in assets. [ 76 ] The parties married in August of 1986 under the regime of separation as to property. Both were teachers and had incomes between $30,000 and $40,000 until 1992 when the appellant became a shareholder in the company [D Company].

To do so, the respondent lent him the amount of $111,000 that my colleague considers to be a contribution when determining the compensatory allowance. In his view, the evidence does not reveal that this loan was reimbursed by the appellant (para. 36). [ 77 ] First, the evidence was contradictory on this aspect. The respondent, who believed at the start of the proceedings that she had lent $50,000 to the appellant, acknowledged in her testimony that it was during his examination on discovery that she realized that the amount lent was more significant.

She asserts, however, that this amount was not reimbursed. [ 78 ] For his part, the appellant explained that in 1992, he bought a first series of existing shares in [D Company] at a cost of $55,500 (P-26) and, subsequently, additional shares issued by the company at the same price, which amount he borrowed from his wife. In September of 1995, his business partners bought back his shares for $259,000. He stated that he then reimbursed the amount of $111,000 to the respondent. Bank statements for this period are no longer available (P-31).

As the appellant maintained at trial, however, it would have been [translation] "unthinkable not to reimburse L. and that I would later also ask her for an additional seventy-five thousand dollars ($75,000), and that, at that point, she would not even ask me to reimburse the initial loan or that she wouldn't ask any questions about it". [ 79 ] Faced with this contradictory evidence, the trial judge did not decide this aspect, though when she awarded the compensatory allowance, she did accept that [translation] "it is thanks to the $110,000 loan from the defendant that the plaintiff was able to set himself up in business".

In my opinion, the evidence militates in favour of the appellant. The material clue confirming the reimbursement is that he had to borrow from the respondent again in 1996 to start up the [E Company]. Indeed, had he not reimbursed the respondent, he would have had the funds required to start up his electronics business company without having to borrow $75,000. Specifically, the appellant's share in [E Company] being established at $100,000 ($75,000+$25,000), he would still have had the $159,000 balance from the sale of his shares in [D Company].

No need to borrow from his wife. [ 80 ] I am of the view that the evidence shows instead that the loan given to purchase [D Company] was paid back to the respondent. [ 81 ] In February of 1996, the appellant set up [E Company] with three partners. It was an electronics business that required the expertise of a partner (M.B.) who was up-to-date on the technical questions related to Internet use. A former collaborator of the appellant's, M.D., who was a senior manager with [F Company], offered to leave his job to join the project. These partners, however, did not have any money to invest.

The appellant discussed the project with his father-in-law's cousin, whom he characterized as his "mentor". The latter was interested in the project and even proposed that he participate financially by contributing $75,000 of the total amount required to start the business up, i.e., $250,000. As the appellant could only put up $100,000, he asked the respondent if she would advance the missing $75,000, of which he would reimburse $50,000 as soon as the business started generating income, which happened in a very short time.

The respondent received 10% of the capital stock whereas the other partners, including her father's cousin, each received 22.5%.

[82] My colleague criticizes the appellant for this unfair distribution of the shares and characterizes it as enrichment. In his view,the role of silent partner in the business merited more than 10% of the shares. The trial judge also attributed great importance to thisfinancial contribution by the respondent. She wrote that the [translation] "defendant was the plaintiff's bank, his economic lever". [83] In my view, these considerations do not emerge from the evidence. On the one hand, the respondent states in her testimonythat she knows nothing about business.

It is therefore natural that her financial contribution does not require the same number of sharesgiven to other shareholders. On the other hand, she stated at trial that she never had any doubts as to the business's success: [translation] ... It's that, as a couple, I knew what was going on, and that my husband wanted to start a project, and he asked me, if he started theproject, if I was ready to invest seventy-five thousand dollars ($75,000).

I have to say that my spouse, he's a hardworking man, he's anintelligent man, and I knew that he would succeed. [84] Also, she was reassured by the fact that her father's cousin, S. S., had decided to invest in the project: [translation] ... as I said earlier, I never had any doubts as to the ability to work, management abilities, well not management, because, the tools tosucceed, and the will to succeed. His capabilities, he's a very, very ambitious person. And, I knew that it would work, especially since Iknew that my father's cousin supported him, that he was the family's mentor. ...

Then, I told myself that, if S., S., he, when he decided to invest, it reassured me, because I told myself: Well I wasn't, I am not abusinesswoman, I don't know anything about business. ... [85] It was a business opportunity, therefore, in which the respondent knowingly chose to participate and in which she also saw anopportunity to increase her assets. The appellant explained the distribution of the capital stock as follows: [translation] ...

So, as I stated, there was an agreement between the original shareholders that we would hold the same number, the same percentage ofstock, because the basic principle of our partnership was participation in the business, and it was a means for me, for the family in fact,to obtain a greater percentage of stock while allocating shares to L.

Everyone knew that L. would not have much to contribute to [ECompany]'s development. ... as we were the three (3) founding partners and that it was really, the success of that business was going to depend on our commonareas of expertise and on the intense work we would put into that business, it would be good for the three (3) original shareholders,despite their differing financial contributions, to have the same number of shares.

So, we agreed, I agreed to it, except that on the side, Ispoke about, my partners had met S. as well and S., at that time, we thought that S., even if he wasn't actively involved in the business,that if S., through a direct or indirect investment, that he could make a significant contribution because of his experience and his contacts....

So, the support of S., the eventual contacts that he could offer us, as well as his basic advice in starting up our business, we agreed thatfor, if S. invested in the business he could also have a number of shares that might one day be equal to our own. [Emphasis added.] [86] It should be pointed out that S. S. is an experienced businessman who, incidentally, recruited collaborators to the company’sboard of directors.

His experience and his knowledge of the financial world were not a non-negligible aspect of his contribution. [87] A compensatory allowance is a remedy that is supposed to correct an imbalance that might result from the matrimonialrelationship of the the parties: P.(S.) v. R.(M.), (SCC), [1996] 2 S.C.R. 842 at para. 19.

When the parties agree on aproject, which neither finds unconscionable for one or the other, their choice and freedom contract must be respected. [88] The respondent's $75,000 contribution to [E Company] received its consideration in shares, namely, 10% of the ownership.The respondent acknowledges having later received $50,000 from the partners in reimbursement of her loan. Furthermore, thisinvestment was greatly profitable: the value of the shares allowed her to set up an investment company [G Company] when [ECompany] went public in 2000.

This investment company, whose income stems exclusively from the sale of the respondent's shares in [ECompany], were worth $6.3 million at the time of the parties' separation in February of 2006. The respondent's portion has considerablyincreased since the investment and it is worth pointing out that she may dispose of this asset as she pleases. [89] Certainly, the appellant's portion is larger since he held 22.5% of the share ownership. The appellant's hard work in thebusiness must be taken into account, a fact that the respondent does not deny.

In my opinion, the respondent knowingly took a businessrisk that proved to be profitable, since her $25,000 investment was worth several million dollars at the time of the trial. [90] While remaining mindful of the restrictions the Supreme Court places on the intervention by an appellate court in mattersinvolving compensatory allowances, I do not believe that it can be concluded that the respondent was impoverished or that the appellantwas enriched as a result of the respondent’s contribution to [E Company].

The analysis performed must certainly be broad and flexible,,but a compensatory allowance should not be used to divide the spouses' respective assets without regard for the agreements andarrangements they entered into. [91] I also do not share the opinion of my colleague, who accepts that the respondent left her job to take care of the children. [92] On this issue, a brief review of the facts is required. [93] At the beginning of the parties' relationship, the respondent was working part-time as a teacher. She had to travel ... from City

B to go to her work when she lived in City C. She taught in three schools, without any hope of obtaining a permanent position. Therefore,she left her teaching job to take over the accounting for the radio station that her father owned. After her daughter's birth in 1987, shereturned to this job, working only three or four days a week. Subsequently she worked as the record librarian until her son's birth in 1995.After her maternity leave, she decided to stop working. First, the station had been sold to [G Company] and the respondent had fewerprivileges as to her work schedule.

Second, positions had been eliminated and [G Company] planned to eliminate more. Out of sheerkindness, she decided to leave so that another employee would not lose their job.

She stated the following: [translation] So when, with my spouse, I made the decision that I would leave, I suggested that it be me so that there wouldn't be somebody else that, Ididn't want to keep the job, and afterwards say that I was leaving because, I told them that, in the end, if they had to lay anybody off, itwould be me that they would have to lay off. [94] This is not a wife giving up her career solely to see to the well-being of her husband and children.

Nonetheless, it must benoted that the respondent took on all the domestic responsibilities, the appellant being very busy as far back as 1996 ensuring the successof his business. Indeed, it is precisely for this domestic contribution that I find that the respondent should receive a compensatoryallowance. This contribution, which is hard to quantify, indirectly contributed to the appellant's success in his business. Without thepresence of the respondent in the home to see to the children's education and needs, the appellant could not have gone abroad on businesstrips.

The respondent's contribution allowed him to pour all his energy into his work to achieve success for his company. A spouse'scontribution to the expenses of the marriage through domestic services can enrich the patrimony of the other spouse, as Gonthier J.points out in M.(M.E.) v.. L.(P.), (SCC), [1992] 1 S.C.R. 183, at 198: Further, failure to look at the "contributions towards the expenses of the marriage" and assess them may lead to unfair results in acompensatory allowance situation.

Since the wife's contribution to the home is more fluid, less capable of being strictly proved, it is easyto regard it in its entirety as a contribution to the marriage and exclude it from the analysis. It is less easy to exclude the husband'scontribution, as it is often monetary and lends itself to allocation depending on his employment. ...

The wife's contribution in servicesdoes not really lend itself to such allocation, because that contribution is not quantifiable and can only be assessed in terms of its qualityand the often indirect benefit received by the husband. [95] These comments, which reiterate that awarding a compensatory allowance is a measure of fairness and justice, could betransposed verbatim to this case.

Beyond the usual contribution to the expenses of a marriage, there is the consequent enrichment of thepatrimony of the other spouse. [96] Applying these principles, I find that the compensatory allowance should be established at one million dollars with interestand the additional indemnity as of the date of the trial judgment. [97] In conclusion, my colleague correctly concludes that the trial judge was wrong to require that the appellant shoulder all thefamily expenses from 2000 on because of his significant income.

In my opinion, the trial judge ignored several aspects of the evidence inthis respect. [98] Starting in 2000, when the business went public, the appellant's income increased dramatically and, at the respondent'ssuggestion, a joint account was opened to pay for the family's expenses.

According to the respondent, since the appellant had a salaryand she wasn't working, he should have shouldered all the family's expenses and she wants to be compensated for her financialcontributions to the joint accountbetween 2001 and 2006. [99] The respondent suggests an accounting exercise that does not correspond to the parties' situation or reflect their respectivecontributions. First, between 2001 and 2006, the appellant contributed to the joint account more than the respondent did.

The trial judgeaccepted that the appellant deposited $613,655.16 into the account, whereas the respondent contributed $424,000 in the space of thosefive years. To this, we must add that all the family trips and holidays were mainly, if not entirely, paid for by the appellant, as were thecars, the outings, and the restaurant meals for this period. In her testimony, the respondent related how she chose the Mercedes vehicle ather disposal, for which the appellant paid $180,000 in 2004. She admits, in fact, that he paid for the family holidays and trips in the fouror five last years of their relationship.

In short, not only did the appellant contribute to the common expenses more than the respondentdid, but he paid for expenses related to the family from his personal account. [100] Undeniably, the parties now have significant financial means at their disposal, the vast majority of which is the result of [ECompany]'s success. The appellant's portfolio at the time of the trial in 2009 was valued at $11 million, an amount that was accepted bythe trial judge.

The respondent had a portfolio valued at $7.5 million, if we accept from her testimony that in November of 2009, she had$3.8 million from the shares of [E Company], $1.2 million with the Financière de la Banque Nationale and $2.5 million with the Diezbrokerage firm (D-46a). To this is added the $800,000 withdrawal made in 2006 from her account with [G Company] to buy acondominium downtown.

It is useful to note that, between the end of the relationship and the beginning of the trial, the value of theparties' assets fluctuated essentially due to variations in the value of the shares of [E Company] on the stock market. [101]

Article 396 C.C.Q. provides that spouses must contribute to the expenses of the marriage in proportion to their respectivemeans. Therefore, when dividing up the contributions, we must take into account the assets of the spouses and not only the appellant'ssalary, as the respondent submits. [102] Indeed, in matters involving contributions to the expenses of the family, there is no reward system comparable to a contributionto the family patrimony. As Dalphond J.A. noted in B.(M.) c.

L.(L.), (QC CA), [2003] R.D.F. 539: [translation] [39] Consequently, I am of the opinion that the objective of an action in unjust enrichment must not be the redistribution of the assets orthe division of the patrimonies that each party accumulated in the course of a relationship, but merely the compensation of a party for acontribution, in goods or services, that allowed the other to find themselves in a better position that they would have been if not for the

relationship, or in other words, to be enriched . [103] The approach that should be followed when considering the criteria to award compensation for unjust enrichment is identical tothat developed in matters involving compensatory allowances: Lacroix v.

Valois, (SCC), [1990] 2 S.C.R. 1259 at 1278. [104] The award of a compensatory allowance does not consist of merely a comparison of the patrimony of one spouse with theother’s and the grant of an allowance to the spouse with fewer assets. [105] For these reasons, I would allow the appeal in part and reduce the compensatory allowance to $1 million dollars with interestand the additional indemnity as of the date of the trial judgment and correct the computation error in the support payments payable forthe minor child as suggested by my colleague, each party paying their own costs. LISE CÔTÉ, J.A.