2015 QCCA 1618, 2015 QCCA 1618

Droit de la famille — 152477 2015 QCCA 1618 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-024497-141 (500-12-309650-111) MINUTES OF THE HEARING DATE: October 2, 2015 CORAM: THE HONOURABLE NICHOLAS KASIRER , J.A. DOMINIQUE BÉLANGER , J.A. MARK SCHRAGER , J.A. APPELLANT / INCIDENTAL RESPONDENT COUNSEL E. K. Mtre MARC CHARLAND (absent) ( Charland Avocats Inc. ) RESPONDENT / INCIDENTAL APPELLANT COUNSEL S. S. Mtre ARISHMA D. GOKHOOL (absente) On appeal from a judgment rendered on May 13, 2014, by the Honourable Justice Thomas M. Davis, of the Superior Court, District of Montreal.

NATURE OF THE APPEAL : Family patrimony – partnership of acquests – spousal support – provision for costs. Clerk: Marcelle Desmarais Courtroom: Antonio-Lamer HEARING 9 h 35 Continuation of the hearing October 1, 2015. Judgment – see page 3. Marcelle Desmarais Clerk BY THE COURT JUDGMENT [ 1 ] E. K. has appealed a judgment of the Superior Court, District of Montreal (the Honourable Thomas M. Davis presiding), rendered on May 13, 2014, which pronounced the divorce of the parties and, inter alia , ordered him to pay spousal support and a provision for costs to respondent S.

S. as well as an amount in respect of the partition of the partnership of acquests [1] . The judge also determined the responsibility, as between the parties, for certain debts incurred in the year following the separation. Ms S. has filed a cross-appeal. *** [ 2 ] In his reasons for judgment, the judge set forth a detailed account of the facts which, in the main, are not in dispute. Briefly, it may be recalled that husband and wife, both 50 years of age at the time of divorce, were married in 1987 without a marriage contract.

They have three children, two of whom are now independent; the third, a student, lives with the respondent. At the time of marriage, the appellant worked as a police officer and the respondent was a legal secretary. In 1995, soon after the birth of their second child, the parties agreed that the respondent should leave the workforce to devote herself full-time to the care of the children and of the household. The appellant was employed throughout the marriage, save for a period of illness. On several occasions, he was absent from home for periods of up to nine months for work.

[ 3 ] On or about June 12, 2010, the parties separated; the respondent left the family residence with two of the children. At the time of the break-up, the appellant earned about $91,000 annually while the respondent had some modest part-time income of about $2,000. For just over a year following their separation, the parties agreed that the respondent would pay expenses necessary for her support and that of the children by drawing on a bank account formerly used for household expenses. While the account was held in the appellant’s name, the respondent retained a debit card after separation.

She also would use credit cards that were billed to the appellant. On July 4, 2011, the respondent filed for divorce and, one month later, Picard, J. of the Superior Court fixed interim measures, including support for the respondent and the children, and ordered that the major portion of the proceeds from the sale of the family residence be divided between the parties. From that point on, the respondent no longer had access to the bank account, nor did she have use of the credit cards.

On May 23, 2012, Lalonde, J. of the Superior Court ordered provisional measures, including spousal support and orders relating to liability for certain accumulated debts. [ 4 ] During the period following the separation, the respondent attended some university courses in psychology before enrolling in a medical secretary course in 2013. She decided later that she was ill-suited to that work and, at the time of the trial, she was studying to become a paralegal.

That course of study finishes in 2016. *** [ 5 ] The trial judge pronounced the divorce and decided matters relating to the custody and upkeep of the children. He also ordered the partition of the family patrimony, and fixed pension and RRSP amounts due. These issues are not in dispute. [ 6 ] The judge ordered the appellant to pay spousal support in the amount of $1,600 per month, retroactively to July 1, 2011, as well as a provision for costs in the amount of $5,000. He declared the partnership of acquests to be dissolved and ordered the appellant to pay the respondent $11,267.53.

He also ordered the respondent to pay the appellant the sum of $10,502.93 as her share of the common debts. *** [ 7 ] Mr K. raises several grounds of appeal that may be summarized as follows: (

i) the judge erred in his consideration of objectives and factors relevant to determining spousal support; (ii) the judge erred in ordering that spousal support be payable retroactively to the date of the institution of proceedings; (iii) the judge erred in awarding the respondent a provision for costs; (iv) the judge erred in omitting to include an amount of $10,000 paid by the appellant among the common debts; (

v) the judge erred in evaluating that the evidence relating to the payment of certain amounts of interest; and (vi) the judge erred in calculating the amount owed by the appellant in respect of the partition of the partnership of acquests. The respondent has filed a cross-appeal in respect of this latter issue; she claims that the judge wrongly characterized an amount claimed by the appellant as private property originating in a gift made to him by will.

Each of these issues shall be treated in turn. *** [ 8 ] Before addressing the arguments on appeal and cross-appeal, it is useful to recall the standards for appellate review at this stage for matters relating to spousal support and the division of assets and liabilities at divorce. [ 9 ] Appellate courts owe deference to trial judges' inherently discretionary decisions in respect of support matters.

On this point, L’Heureux-Dubé, J. wrote in the Supreme Court case of Hickey v Hickey : [2] “Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong”. [ 10 ] The decided cases have indicated that a similarly strict standard of review is applicable in matters relating to the division of matrimonial property.

Our colleague Bich, J.A. summarized this standard and alluded it its justification most usefully for the Court in Droit de la famille —123636 : [3] [2] In family cases, trial judges' decisions are to be given considerable deference. As stated by Gonthier, J. for the Supreme Court of Canada in M.(M.E.) v. L.(P.) : Before going on to analyze the circumstances of this case, I feel it is worth emphasizing the deference that must be accorded to the discretionary power of the trial judge under art. 559 C.C.Q .

Clearly this principle is general in application, but it assumes even greater importance in family law for two reasons. The situation arising where a family is in the process of dissolving is unique. First, financial matters must be dealt with quickly so as to avoid exhausting the parties' resources and allow them to start their lives anew. Second, this is an area where the parties have generally not kept documents that would provide evidence of each one's contribution. Oral evidence is thus of first importance, and assessing the credibility of witnesses is very much the function of the trial judge.

In a proceeding involving a compensatory allowance, a trial judge's error must be obvious for an appellate court to intervene. [3] The same rule applies to matters of child or spousal support (for instance, see: Hickey v. Hickey ), custody and rights of access (for instance, see: Van de Perre v. Edwards ), compensatory allowance (for instance, see: P.(S.) v.

R.(M.) ), or partition of the family patrimony or matrimonial regime, all of which are at stake here. [4] The standard of appellate review is thus stringent and a court of appeal will not reverse or modify a judgment unless it is vitiated by an error of law which, by its nature, affected the issue of the dispute or by a palpable and overriding error of fact (i.e. a substantial and manifest error in the evaluation of the evidence, including the credibility of the witnesses).

The appellant bears the burden of demonstrating the existence of such errors and cannot simply ask the Court to reassess the evidence and substitute its own opinion for that of the trial judge. [ 11 ] With this standard in mind, the Court turns to a consideration of each of the issues on dispute. (

i) Spousal support

[ 12 ] The appellant submits that the judge misapplied the factors and objectives enumerated by Parliament at

section 15.2 of the Divorce Act [4] in setting spousal support at $1,600 per month. [ 13 ] Four main arguments are advanced here: that the judge misapplied the principles of compensatory spousal support to the facts; that the respondent’s efforts at achieving financial independence have been insufficient to warrant support at the level fixed by the judge; that the judge misconstrued the parties’ respective needs and means; and that he erred in not imposing a term as a way of encouraging the respondent to become self-sufficient. [ 14 ] Firstly , did the judge misapply the principles relating to compensatory support? [ 15 ] The judge made no mistake in deciding that the respondent is deserving of what the Supreme Court of Canada characterized as “compensatory” spousal support in Moge v.

Moge . [5] Contrary to what the appellant asserts, the judge did not mistakenly characterize the marriage as a traditional one. As has often been said, “traditional marriages” as alluded to in Moge do not fit a single mould. This is especially true in view of the fact that marriage, as a joint economic endeavour, is increasingly characterized by circumstances in which both spouses undertake paid work outside the home and both spouses contribute to running the household and the upkeep of children.

That said, in this case, between 1995 to separation in 2010, the parties agreed that respondent would take principal charge of the household and children and that the appellant would work outside the home. During this period, the respondent was out of the paid workforce and, for this reason, suffered lost opportunities for professional advancement that are deserving of compensatory support.

In like circumstances, a compensatory support order properly takes account of the stay-at-home spouse’s lost earning capacity as an economic disadvantage arising from the marriage or its breakdown. [6] [ 16 ] Moreover, the appellant’s argument that the respondent has been sufficiently “compensated” through her share of the family patrimony and the partnership of acquests is based on a misunderstanding of the compensatory character of alimentary support.

The family patrimony and acquest property in matrimonial property law recognize a past contribution, as a property entitlement, to acquired wealth by each of the spouses, whether or not they worked outside the home. Conversely, compensatory support under

section 15.2 of the Divorce Act recognizes the future value, in the form of aliment, of lost earning power of the creditor spouse. [7] Entitlements under matrimonial property law may have relevance to the quantum of alimentary need – the very organization of the judge’s reasons suggest he took this into account – but do not disqualify a spouse from claiming “compensatory” support. No reviewable error has been shown on this point. [ 17 ] Secondly , did the judge misapply the statutory objective that both spouses become self-sufficient? [ 18 ] We are of the view that no such mistake was made.

The appellant has failed to convince us that the judge underestimated the importance of the objective, stated by Parliament in

section 15.2(6) (

d) of the Divorce Act , that a support order should “in so far as practicable, promote the economic sufficiency of each spouse within a reasonable period / à favoriser, dans la mesure du possible, l’indépendance économique de chacun d’eux dans un délai raisonnable”.

The appellant’s connected argument that the respondent’s needs are a reflection of her choice not to return immediately to work as a legal secretary should also be dismissed. [ 19 ] In point of fact, the judge explicitly noted that the respondent “immediately realized that she needed to return to work” following the breakdown of the marriage; he observed that she tried another field before settling on a paralegal course of study which he characterized as a “logical progression, given her work as a legal secretary at the outset of the marriage” (para. [94]).

In this regard, the judge recognized that the respondent had been outside the paid workforce for many years because of the role she played in the household. He was of the view that because “[…] she was required to remove herself from the labour market for a significant period of time, one cannot expect that she will find a suitable job immediately” (para. [97]). The evidence before him confirmed that the respondent’s professional skills needed updating given the changed labour market since 1995.

It was certainly fair to assume that employers cannot be relied upon to see a long period of work in the home as relevant experience for a return to the workforce as a legal secretary. [8] In short, the judge rightly observed that self-sufficiency was one, but not the only, objective to be considered in fixing support. The appellant has shown no reviewable error made by the judge in weighing its importance against other factors and objectives. [ 20 ] A further observation is in order.

The judge referred to the outcome of respondent’s “job search following the completion of her studies” as a consideration that might affect an eventual request for a variation order in this case (para. [104]). This was by no means mistaken, but we would add that the respondent is not excused from taking immediate measures to help bring about self-sufficiency, in so far as practicable, apart from completing her studies. In her testimony, she suggested that she had not yet sought out part-time or summer work “because I didn’t know how it would affect my alimony”.

With due respect, this attitude is not in keeping with her duty to seek out self-sufficiency within a reasonable time.

One could well imagine that her career and her financial independence would be advanced, even prior to completing her studies, by seeking out some relevant part-time or summer experience when she is not in school. [ 21 ] Thirdly , none of the arguments advanced by the appellant suggesting that the judge erred in measuring the needs and means of the parties provides a basis to disturb the support order. [ 22 ] The judge considered at length the resources of both parties prior to fixing the amount of alimentary support.

It is true, as the appellant notes, that the respondent received a substantial capital amount resulting from the sale of the family residence. But the judge rightly considered that the amount would be reduced given her share of responsibility for the common debts. Moreover, the judge explicitly took into account the net portion of the respondent’s RRSP and the amount to be transferred to the appellant.

In keeping with the applicable jurisprudence, the judge was entitled to allow the respondent to conserve a reasonable amount of capital rather than deplete those assets to meet her needs. [9] No reviewable error has been shown on this point. [ 23 ] In the same vein, the appellant argues that the judge erred by discounting the importance of the financial assistance that the respondent received from a person described by the judge as her boyfriend.

Specifically, the appellant says the respondent’s rent is paid for and a car is provided by the boyfriend and, as a result, the judge misconstrued her needs. [ 24 ] The appellant is mistaken. [ 25 ] The judge was well aware of the arrangement according to which rent and some other expenses were paid for by the boyfriend,

but he noted that the respondent would pay rent when she could afford to do so and remained responsible for food and other necessities (see paras. [28], [29] and [99]). Nothing suggests that the judge failed to consider these factors in determining the amount of spousal support. Moreover, care should be taken not to take the presence of a new partner, even a generous one, as an excuse to discharge an alimentary debtor.

This is especially the case when considering support due after a long marriage with children where the creditor has established a basis for a compensatory alimentary claim. [10] No error has been shown in respect of the exercise of the judge’s discretion here. [ 26 ] Fourthly , the appellant argues that the judge erred in declining to limit support by the imposition of a term.

In the appellant’s view, a term would encourage the respondent to undertake more meaningful efforts to find employment. [ 27 ] The Court disagrees. [ 28 ] The judge specifically addressed the issue of the appropriateness of a term and, after reiterating his view that the respondent was taking active measures to ensure her return to the labour force, he decided a term would be an imprudent and unnecessary option (paras. [102] and [103]). His choice was a reasonable one.

Nothing in the evidence suggests that this is an instance in which the alimentary creditor is indolent or disinclined to seek out financial independence. [11] Moreover, this Court has consistently said that in the case of a marriage in which support is ordered to compensate a spouse for lost earning power, the imposition of a term is the exception and not the rule. [12] [ 29 ] All the arguments relating to the quantum of spousal support are thus unfounded. (ii) Retroactivity of spousal support [ 30 ] The appellant argues that the judge erred in ordering that spousal support of $1,600 per month be made payable from the date at which proceedings were instituted on July 1, 2011.

That amount is higher than the amount of $1,000 per month ordered as an interim measure on August 3, 2011 and that of $1,000 per month, indexed for 2012, ordered as a provisional measure on May 24, 2012. [ 31 ] The judge applied the generally applicable rule for retroactivity according to which support is ordered from the date of the institution of proceedings. [ 32 ] The appellant argues that he does not have the means to pay that amount and, further, that the judge failed to consider that the respondent did not pay certain major expenses, including rent, following separation. [ 33 ] The respondent has indeed admitted that she did not pay rent from the time of separation until the time of the judgment, based on an arrangement she had with her boyfriend.

She testified that once her finances were in order, she would pay rent. The judge noted this at para. [28] of his reasons.

In anticipation of paying rent, she recorded an amount of $900 per month in her statement of income and expenditures of March 14, 2014, as well as amounts (not paid) of $1,600 and $1,375 per month for 2011 and 2012 respectively. [ 34 ] By awarding the respondent an amount of $1,600 per month retroactively to the date of the institution of proceedings, the judge provided the respondent with an amount of support that is the same for the period during which she will pay rent ( i.e . after the judgment) and for the period she paid no rent ( i.e. from the date of institution of proceedings to the date of judgment).

In other words, because of the retroactivity order, she will receive a notional amount for rent prior to the date of judgment that she did not pay.

This was, in our respectful view, a palpable and overriding error in the evaluation of the respondent’s actual expenditures during this period. [ 35 ] For this reason, the order for retroactive spousal support must be set aside. (iii) Provision for costs [ 36 ] The appellant contends that the $5,000 order as provision for costs in favour of the respondent is unjustified. [ 37 ] The Court disagrees. [ 38 ] Like other alimentary orders, a provision for costs is understood to be discretionary in character. [13] Considerations relevant to this kind of award include the creditor’s needs and the debtor’s means, the nature and complexity of the dispute, whether children’s interests are in play, and the conduct of the parties. [14] As is often said, the weighing of these factors by a trial judge deserves deference on appeal.

In this case, the appellant has failed to convince us that the judge exercised his discretion in an inappropriate manner. [ 39 ] The judge observed, quite correctly, that the appellant’s salary compared to the respondent’s income meant that their means are disproportionate (para. [127]). The arrangement whereby the bank account and credit cards were temporarily available to the respondent, because it related to living and household expenses for herself and the children, did not preclude a provision for costs. The children’s alimentary claim was at issue in first instance.

As for the conduct of the parties, the judge did note that the approach to the dispute by the respondent was “somewhat unreasonable” (para. [126]) and the tenor of his reasons suggests that this was a factor he took into account here. Finally, it is true that the respondent qualified for legal aid and that, as a rule, this is a consideration in awarding a provision for costs. But it is not a bar thereto, as the judge himself noted (para. [125]), and the respondent did, eventually, avail herself of this service.

The respondent asked for $9,572.91 as a provision for costs, an amount which the judge reduced significantly. The fact that the amount was so reduced suggests the judge considered the factors, both favourable and unfavourable to the respondent’s claim. No reviewable error has been shown. (iv) Common debts [ 40 ] The appellant contends that the judge erred in omitting to include an amount of $10,000 paid by the appellant among the common debts.

He says the evidence before the judge showed that he had borrowed $10,000, with the knowledge of the respondent, to cover the needs of the parties after separation and certain sums due following the sale of the family residence.

[ 41 ] In paragraph [88] of his reasons, the judge wrote that “[t]he proof does not permit the Court to determine whether this amount was in fact used for common debts of the parties or by the husband for his own purposes”. He thus excluded the $10,000 from the amount of the respondent’s contribution to common debts. [ 42 ] It is true that the respondent had agreed to pay her share of certain household expenses, but the appellant failed to demonstrate before the judge that the $10,000 was used to that end.

The documentary evidence in the record on appeal indeed shows that the loan was contracted, but does not specify how it was spent. On this question of fact, no palpable and overriding error has been shown. (

v) Proof of interest amounts due on common debts [ 43 ] The appellant argues that the judge erred in concluding that the evidence relating to the payment of interest due on common debts was lacking. At trial, he produced a document entitled “Ventilation dettes payées par E.” which recorded, he says, amounts of interest paid by him on credit card debts and on a line of credit, all of which should have been included in the common debts.

The respondent objected to the filing of this document in evidence, but the judge allowed it into the record subject to the information it contained being confirmed by the appropriate supporting documents. [ 44 ] This appellant’s argument that the judge erred in respect of the liability for interest due is unfounded. [ 45 ] In his judgment on provisional measures on May 23, 2012, Lalonde, J. disposed on the question of payment of the debts on the credit cards, as the trial judge rightly noted at paragraph [92].

As for the amount due on the line of credit, the transcripts of the hearing before the trial judge make plain that the matter was discussed. Counsel for the appellant told the judge that he would produce documents fully attesting to the amounts due later in the proceedings. In his reasons, the judge observed that these records were not produced.

The appellant plainly failed to satisfy his burden of proof at trial and it is no answer to say that, through judicial notice or by a duty to fill a supposed gap in the evidence, the judge should have alleviated him from that burden. (vi) Partition of the partnership of acquests [ 46 ] The appellant argues that the judge erred in calculating the amount owed by him in respect of the partition of the partnership of acquests. The respondent has filed a cross-appeal, claiming that the judge wrongly characterized an amount of $76,875.88 as the appellant’s private property originating in a gift made to him by will.

She says that amount should have been divided between them as acquest property. The appeal and cross-appeal may be conveniently treated together. [ 47 ] Firstly, the appellant says that the judge was mistaken in calculating the partition of the matrimonial regime from the date the parties ceased living together. In so doing, the judge is said to have ignored the post-separation arrangement whereby expenses continued to be shared through the joint account and the appellant’s credit cards.

In substance, the appellant says the judge failed to consider the post-separation debts when he decided to order that the effects of the dissolution of the partnership of acquests be made retroactive to separation. [ 48 ] The appellant is mistaken. The judge did not exonerate the respondent from paying her share of post-separation debts, which he fixed at $10,502.93, and specifically addressed the issue now raised by the appellant at paragraph [82] of his reasons.

No error has been shown on this point. [ 49 ] The parties both argue that the judge erred in his calculation of the amount of inherited property – and thus private property for the purposes of partition of the regime – that belonged to the appellant. [ 50 ] The appellant contends that the judge erred by characterizing an amount of $13,000 in his savings account as acquest property when, he says, it originated in an inheritance from his father. The respondent denies this and argues further, in her cross appeal, that the judge erred in failing to require a writing to prove the inheritance.

The judge, she claims, was mistaken in characterizing those amounts as private to the appellant on this basis. [ 51 ] The Court is of the view that neither party has shown the judge to have made a reviewable error in his characterization of the disputed funds as acquests or private property, as the case may be. [ 52 ] Firstly, the cross-appeal is plainly unfounded. The judge made no mistake in considering testimony as a means of proving whether the funds held in various bank accounts in the appellant’s name originated from his inheritance.

There was no requirement that the will be proved by actually adducing the document in evidence as it was not a juridical act between the parties that was in dispute (art. 2862 C.C.Q. ). Indeed the status of the appellant as heir and the amount of his inheritance were not the object of the disagreement between the parties. As the judge explained in paragraph [79] of his reasons, the appellant’s testimony, along with financial documents, explained the amounts in the account from the inheritance.

There is evidence in the record on appeal to support the judge’s finding on this point, in particular an evidence of bank transfers, in the precise amount of $76,875.88, from the investment account in which the appellant held the inheritance funds to his savings account. The cross-appeal is thus dismissed. [ 53 ] The appellant’s argument that a further $13,000 in his savings account should be characterized as private property is also without merit. [ 54 ] It is true that an amount of $13,000 was transferred from the appellant’s investment account, via the household bank account, to his savings account.

But the investment account contained funds from sources other than the inheritance. No specific evidence was pointed to that would allow this Court to conclude that the judge was mistaken when he decided, at paragraph [77], that it had not been demonstrated that the funds were from the inheritance. Indeed, it would be fair to infer that the presumption of acquests in

article 459 C.C.Q. was not overturned in the circumstances. The judge’s characterization should not be disturbed. FOR THE AFOREMENTIONED REASONS , the Court: [ 55 ] ALLOWS the appeal for the sole purpose of striking paragraph [136] of the judgment of the Superior Court and replacing it

with the following: [136] ORDERS the husband to pay spousal support to the wife of $1,600 per month from the date of the present judgment. [ 56 ] DISMISSES the cross-appeal; [ 57 ] THE WHOLE , without costs given the divided outcome and the nature of the dispute. NICHOLAS KASIRER, J.A. DOMINIQUE BÉLANGER, J.A. MARK SCHRAGER, J.A.