2012 NBCA 101, 2012 NBCA 101

COURT OF APPEAL OF NEW BRUNSWICK 117-11-CA LORNE BISHOP GRANT APPELLANT LORNE BISHOP GRANT APPELANT - and - - et - GINA LYNN GRANT RESPONDENT GINA LYNN GRANT INTIMÉE Grant v. Grant, 2012 NBCA 101 Grant c.

Grant, 2012 NBCA 101 CORAM: The Honourable Justice Larlee The Honourable Justice Quigg The Honourable Justice Green CORAM : L’honorable juge Larlee L’honorable juge Quigg L’honorable juge Green Appeal from a decision of the Court of Queen's Bench: August 16, 2011 Appel d’une décision de la Cour du Banc de la Reine : Le 16 août 2011 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : Inédite Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard: September 27, 2012 Appel entendu : Le 27 septembre 2012 Judgment rendered: December 6, 2012 Jugement rendu : Le 6 décembre 2012

Reasons for judgment by: The Honourable Justice Larlee Motifs de jugement : L’honorable juge Larlee Concurred in by: The Honourable Justice Quigg The Honourable Justice Green Souscrivent aux motifs : L’honorable juge Quigg L’honorable juge Green Counsel at hearing: For the appellant: Scott N. Larson For the respondent: Mary Ann G. Holland Avocats à l’audience : Pour l’appelant : Scott N. Larson Pour l’intimée : Mary Ann G. Holland THE COURT The appeal is allowed. The matter is remitted to the Court of Queen’s Bench. The cost award below is set aside and there shall be no order for costs on appeal.

LA COUR Accueille l’appel et renvoie l’affaire à la Cour du Banc de la Reine. L’ordonnance de dépens rendue par le tribunal de juridiction inférieure est annulée, et les parties ne sont condamnées ni l’une ni l’autre aux dépens en appel. The judgment of the Court was delivered by LARLEE, J.A. [ 1 ] The appellant, Lorne Bishop Grant, contests orders in favour of his ex-wife, Gina Lynn Grant, for division of marital property made pursuant to s. 9 of the Marital Property Act , S.N.B. 1980, c. M-1.1, and spousal support pursuant to s. 15 of the Divorce Act , R.S.C. 1985, c. 3 (2nd Supp.). I.

Background [ 2 ] The parties married in 1988 and separated in 2006. At the time of separation, the parties consented to a spousal support payment of $600 per month, of which $428 would be paid by Mr. Grant on the debt for Ms. Grant’s car, a Chevrolet Impala. On November 3, 2008, Tuck J. made an Interim Order including an order of spousal support of $500 a month, commencing September 1, 2008. After the Interim Order was issued, Mr. Grant faced significant financial problems and declared bankruptcy. In order to assist him, Ms.

Grant continued to accept $600 per month in cash as spousal support, and rebated $428 of it to Mr. Grant to pay the car loan. However, the payments on the car were not made and it was repossessed. Mr. Grant denied this happened, and stated the car was repossessed because Ms. Grant did not complete the necessary paperwork to transfer the debt obligation. Ms.

Grant sought to recover the money she paid on the assumption the car payments were being made, and was successful. The trial judgefound there were no records to support Mr. Grant’s version of events, and found him liable for $3,000 in arrears. He further ordered$2,000 in costs against Mr. Grant because his unsubstantiated allegations made a simple issue significantly more complex. [3] Mr.

Grant relies on three grounds of appeal; the trial judge: (1) made a palpable and overriding error of fact by holding the Interim Order dated November 3, 2008, burdened him with theresponsibility for the loan associated with the Chevrolet Impala; (2) erred in law and in fact by failing to review the spousal support obligations included in the Interim Order; (3) erred in law and in fact by awarding $2,000 in costs to the respondent. II. Standard of Review [4] In a recent decision, MacDonald v.

MacDonald, 2011 NBCA 25, 372 N.B.R. (2d) 179, theCourt reiterated the standard of review the Supreme Court of Canada states must be applied in these cases: The standard of review that applies to family matters generally is that the judge's decision must be given considerable deference. Anappellate court is empowered to set aside or vary a decision or order where it is the product of an error of law, an error in principle, asignificant misapprehension of the evidence or if it is clearly wrong (see Hickey v. Hickey, (SCC), [1999] 2 S.C.R.518, [1999] S.C.J. No. 9 (QL) para. 11; Van de Perre v.

Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014; Savoie v. Levesque, 2009 NBCA47, [2009] N.B.J. No. 282 (QL); Ms. P.H. v. Mr. P.H., 2008 NBCA 17, [2008] N.B.J. No. 52 (QL); Milton v. Milton, 2008 NBCA 87,338 N.B.R. (2d) 300, para. 14.; J.E.J. v. S.L.M., 2007 NBCA 33, [2007] N.B.J. No. 249 (QL), para. 35; S.H. v. V.B., 2007 NBCA 69,321 N.B.R. (2d) 314, para. 2). [para. 7] [5] The standard of review depends on the nature of the issue.

If the issue on appeal involves theapplication of an extricable legal principle such as the application of an incorrect standard or a failure to consider a required element ofthe legal test, the standard of review is correctness. If the issue on appeal involves the

interpretation of the evidence of the whole, thestandard of review is palpable and overriding error. (Housen v. Nickolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, para. 36). In H.L. v.Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, Fish J. explains: “Palpable and overriding error” is at once an elegant and expressive description of the entrenched and generally applicable standard ofappellate review of the findings of fact at trial. But it should not be thought to displace alternative formulations of the governingstandard.

In Housen, for example, the majority (at para. 22) and the minority (at para. 103) agreed that inferences of fact at trial may beset aside on appeal if they are “clearly wrong”. Both expressions encapsulate the same principle: an appellate court will not interferewith the trial judge's findings of fact unless it can plainly identify the imputed error, and that error is shown to have affected the result.[para. 55] See, as well, Doiron v. Haché, 2005 NBCA 75, 290 N.B.R. (2d) 79, at para. 70, per Richard J.A. III. Analysis and Decision [6] The first two issues on appeal deal with alleged errors of fact.

In the context of these issues, theappellant argues legal

interpretation is required to determine the question of what the Interim Order required with respect to theresponsibility for the car loan and the length of the parties’ separation during the course of their marriage. On both grounds, Mr. Grantmust demonstrate there has been a misapprehension of the evidence or show that the order is clearly wrong.

[7] However, the error in this case is one of law and the two subsequent alleged errors of fact flowfrom it. In this case, the trial judge on a final divorce hearing mistakenly decided he was bound by the Interim Order of Tuck J. Thatmistake prevented him from making the inquiry he was required to undertake with respect to marital property and spousal support. [8]

Section 15.2 of the Divorce Act gives judicial authority to make an interim order for spousalsupport. In this case, Tuck J.’s Interim Order included the following provision: The respondent will pay spousal support in the amount of $500.00 per month, commencing September 1, 2008 until further order of theCourt. A payment order will be issued to his employer, the City of Saint John for weekly payments in the amount of $115.38commencing September 1, 2008. Spousal support will be reviewable five years from the date of this order. [9] In addition, Tuck J. made an Interim Order affecting marital property.

Paragraph 5 of theInterim Order read as follows: The respondent will transfer the 2004 Impala in his name to the petitioner. The respondent will undertake the necessary paperwork toeffect same. There is currently a loan with respect to said vehicle. The petitioner will be responsible for the extinguishment of said loan.

Paragraph 8 relates to insurance: The respondent will provide health and dental insurance for the petitioner and his children for as long as it is available to him through hiswork pursuant to s.6 of the Child Support Guidelines. [10] The question to be determined is whether these interim orders bind a judge on a subsequent finalhearing. Clearly, the answer must be answered in the negative. This Court has adopted the explanation of the life of an interim order inSypher v. Sypher, (ON CA), [1986] O.J.

No. 536 (C.A.) (QL): At the outset, it is appropriate to observe that interim orders are intended to cover a short period of time between the making of the orderand trial. I further observe that interim orders are more susceptible of error than orders made later; but the purpose of the interim order issimply to provide a reasonably acceptable solution to a difficult problem until trial. At trial after a full investigation of the facts a trial judge may well come to the conclusion that a substantially different order should bemade.

I gather that there is a fear that the interim order may acquire such an aura of propriety that there will be a tendency to repeat theterms after trial. This is not so. The trial judge's discretion is unfettered and his judgment will be rendered on a full investigation of thefacts. Having those principles in mind then, an appellate court should not interfere with an interim order unless it is demonstrated that theinterim order is clearly wrong and exceeds the wide ambit of reasonable solutions that are available on a

summary interim proceeding. Sypher has been applied in Stewart-Croll v. Croll, (MB CA), [1996] M.J. No. 426 (C.A.) (QL) and Pumphrey v.Pumphrey, [1997] N.J. No. 60 (C.A.) (QL); C.M.H. v. J.R.H., 2012 NBCA 71, [2012] N.B.J. No. 314 (QL); D.A. v. J.R., 2012 NBCA 38,387 N.B.R. (2d) 203; D.L.J. v. D.J.L., 2009 PECA 6, [2009] P.E.I.J. No. 9 (C.A.) (QL). IV. Spousal Support [11]

Section 15.2 of the Divorce Act gives a judge authority to make an order for spousal support:

15.2(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. 15.2(1) Sur demande des époux ou de l’un d’eux, le tribunal compétent peut rendre une ordonnance enjoignant à un époux de garantir ou de verser, ou de garantir et de verser, la prestation, sous forme de capital, de pension ou des deux, qu’il estime raisonnable pour les aliments de l’autre époux. [ 12 ] Whether the order is interim or made at the conclusion of a divorce hearing the factors and objectives to be considered, found in s. 15.2(4)-(6) of the Act , are the same: Factors

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse. Spousal misconduct

(5) In making an order under subsection (1) or an interim order under subsection (2), the court shall not take into consideration any misconduct of a spouse in relation to the marriage. Objectives of spousal support order

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

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

(4) En rendant une ordonnance ou une ordonnance provisoire au

titre du présent article, le tribunal tient compte des ressources, des besoins et, d’une façon générale, de la situation de chaque époux, y compris :

a) la durée de la cohabitation des époux;

b) les fonctions qu’ils ont remplies au cours de celle-ci;

c) toute ordonnance, toute entente ou tout arrangement alimentaire au profit de l’un ou l’autre des époux. Fautes du conjoint

(5) En rendant une ordonnance ou une ordonnance provisoire au

titre du présent article, le tribunal ne tient pas compte des fautes commises par l’un ou l’autre des époux relativement au mariage. Objectifs de l’ordonnance alimentaire au profit d’un époux

(6) L’ordonnance ou l’ordonnance provisoire rendue pour les aliments d’un époux au

titre du présent

article vise :

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

(

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

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

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. [ 13 ] In his reasons for decision, the trial judge stated “the issue of spousal support must flow from the order of Justice Tuck […] Justice Tuck fixed the amount of spousal support for a five-year period and required it to be reviewed at that time.

I must accept that the spousal support payments are fixed until after August of 2013” . ( para. 45) [ 14 ] It is clear from this paragraph the trial judge mistakenly believed he was bound by the Interim Order and, therefore, was unable to make a final determination regarding spousal support in accordance with the Act . This is an error of law. Tuck J. had authority to make an order with a review date because he did not know the life of the Interim Order. However, the trial judge at the divorce hearing was required to undertake an inquiry in accordance with the factors and objectives set out in s.15.2 of the Act .

He was not bound by the amount or the duration of the Interim Order; nor was he bound by any suggested review date. [ 15 ] At the final hearing, Ms. Grant argued and attempted to rely on the Spousal Support Guidelines and the trial judge made no comment with respect to them. He is not mandated to rely on them, but once they are put into play, a party is entitled to know why the trial judge has deviated from them. See the discussion in Smith v. Smith , 2011 NBCA 66 , 375 N.B.R. (2d) 208 , paras. 34-46 , Quigg J.A. summarizes: […] findings of fact by a trial judge are to be given deference by an appellate court.

Such findings are not to be overturned, unless palpable and overriding error is clearly present. Such an error must be plainly discernable. The Guidelines are not law, and this Court should not be quick to limit a judge's discretionary powers as provided for by the Divorce Act . However, in order to avoid the appearance of arbitrary decision-making, a trial judge should give reasons for spousal support awards above or below the Guideline amounts. Failing to give reasons or giving reasons based on erroneous fact-finding subjects trial decisions to appellate review […]. [para. 49] [ 16 ] Mr.

Grant’s new partner was present at the hearing but details as to her income and expenses were not received in evidence even though they may be relevant to Mr. Grant’s ability to pay. This Court stated in Chamberlain v. Chamberlain , 2003 NBCA 34 , 259 N.B.R. (2d) 309, and reiterated in Flieger v. Adams , 2012 NBCA 39 , 387 N.B.R. (2d) 322, that the presence of a new partner, and the new partner's income, are relevant factors to consider in determining the ability to pay.

Since we do not have sufficient evidence before us to make a spousal support award, in my view, the appropriate remedy is to remit this issue to the Court of Queen’s Bench for determination. [ 17 ] I would also leave the thorny issue of arrears to be determined by the Court of Queen’s Bench after spousal support, if any, is established since it may be retroactive. Both of the two questions that Mr.

Grant raises regarding arrears of $6,906 (which he argues should be $3,906 had the trial judge not misapprehended the Interim Order), and an additional amount of $1,290.96 to be paid as arrears of spousal support because they are “an unnecessary rebate of spousal support payments to pay a debt that was Mr. Grant's to pay”, will have to be addressed. In addition, the trial judge should have made a fresh inquiry as to the status of the health and dental insurance before making an order (see Milton v. Milton 2008 NBCA 87 , 338 N.B.R. (2d) 300, at para. 36 ).

This question should also be remitted to the Court of Queen’s Bench.

V. Marital Property [ 18 ] It is unclear what the trial judge was attempting to do with the car. Tuck J.’s order was that the 2004 Impala was to be transferred to Ms. Grant and that she would assume responsibility for the loan against it. However, at paragraph 46, in the

section of his reasons for decision entitled Spousal Support, the trial judge states, “Justice Tuck also made a specific ruling Ms. Grant was to receive the Chevrolet Impala and Mr. Grant was to be responsible for the entire debt thereon”. This statement does not reflect Tuck J.'s order, as the paragraph gave responsibility for the entire loan to Ms. Grant. The trial judge makes no reference to any other specific ruling made by Justice Tuck with reference to the car and the loan associated with it.

There is nothing in the evidence which would lead a reasonable person to believe that Tuck J. imposed responsibility for the car loan on Mr. Grant. The trial judge iterates his mistake in paragraph 52 of his reasons for decision, where he states, in relation to car payments which he found were made by Ms. Grant following the order of Tuck J., that the payments were made “to pay a debt that was Mr. Grant's to pay”. [ 19 ] The trial judge reiterates this mistaken understanding of the Interim Order in paragraph 59 of his reasons for decision, in the

section entitled Marital Property, where he states, “Under Justice Tuck’s order, Ms. Grant was entitled to receive the Chevrolet Impala and Mr. Grant was to pay for it”. As a consequence of the trial judge’s misapprehension of the Interim Order he made a finding of fact in relation to responsibility for the car loan, which was clearly wrong. However, this misapprehension was compounded by events that took place after the making of the November 3, 2008 Interim Order. Mr. Grant declared bankruptcy. By the time the divorce hearing was held before the trial judge, the car had been sold. It came about in this way.

There was conflicting evidence at the hearing about whether the registration was transferred and when. The trial judge found title to the vehicle and the outstanding loan were in Mr. Grant’s name. The payments of the loan for the car were in default. The Bank had the car repossessed. It was sold at auction and Mr. Grant’s new partner bought it. The Recovery Assignment sheet, which was an exhibit at the hearing, shows the debtor as Mr. Grant, the co-signor as Ms. Grant, the outstanding balance at $8,107.23 with arrears of $1,290.96. [ 20 ] The trial judge found Ms.

Grant had lost the benefit of an “$8,500” asset, which he ordered Mr. Grant to pay to her. He states: Under Justice Tuck’s order, Ms. Grant was entitled to receive the Chevrolet Impala and Mr. Grant was to pay for it. At a time when the outstanding loan amount for the car was slightly over $8,000 (Exhibit p-5-Recovery assignment; and p. 7 of Exhibit P-6 approximate loan amount outstanding) Mr. Grant's failure to pay the monthly loan payment took away that possession from Ms. Grant. I cannot return the car to Ms. Grant. It is not possible for me to calculate the value of the car at the time of the repossession.

Instead, I am exercising my authority to determine Mr. Grant benefitted from the transactions and Ms. Grant lost there-from in an amount equivalent to $8,500. Mr. Grant shall pay this amount together with interest at 7.0% per annum to Ms. Grant in equal monthly installments of $170 for 60 months, the first payment due and payable on May 15, 2011. [paras. 59-60] [ 21 ] The trial judge acknowledges the car was marital property. But, by the time he heard the case, the car was no longer a marital asset because it no longer belonged to either party. There was no marital asset to be divided.

There was, however, a marital debt associated with the car. It appears the trial judge may have arrived at the amount of $8,500 plus 7% interest in an arbitrary fashion. The inquiry he had to make concerned the amount of the outstanding debt at the time of the divorce; credits, if any, towards the debt by either party, and then through his authority under s. 9 of the Marital Property Act , to which he did not refer, how the marital debt should be divided. In my view this question must be remitted to the Court of Queen’s Bench for determination. VI. Dates of Separation [ 22 ] Since the division of Mr.

Grant's pension is determined by reference to payments made during the time the parties were cohabiting, the exact dates of cohabitation are important. The only evidence on the record concerning the dates of separation was from Mr. Grant's evidence that the parties were separated for three years from July 1994, until August 1997. Paragraph 7 of the trial judge's order directs a division of Mr. Grant's pension excluding the years 1995 and 1996. Since the only evidence on this matter comes from Mr. Grant, the order stating only two years is clearly wrong.

In paragraph 3 of his reasons for decision, the trial judge appears to accept Mr. Grant’s evidence on point since he stated the parties “lived separate and apart for a period between 1994 and 1997”. Any finding or order that the parties lived separate and apart for a period other than that time between July of 1994 and August of 1997 reflects a misapprehension of the evidence and is clearly wrong. This issue should be remitted to the Court of Queen’s Bench for specific calendar dates since there is no agreement between the parties.

VII. Costs [ 23 ] In Flieger v. Adams , at paras. 21-24 , this Court stated it was within the judge's discretion to interpret the result on the motion as one favourable to the respondent and, therefore, to award her costs. In this case, Ms. Grant’s favourable outcome at trial was based on an error in principle. These parties have been before the Court of Appeal twice. The first time was on a failed motion by Ms. Grant who resisted the filing of a notice of appeal on the ground that it was out of time. The parties do not appear to have many resources.

Under the circumstances, I would set aside the order of costs below and order no costs on the appeal. VIII. Disposition [ 24 ] I would allow the appeal and order that the parties bear their own costs. ____________________________________ M.E.L. LARLEE, J.A. WE CONCUR: ___________________________________ KATHLEEN A. QUIGG, J.A. ____________________________________ BRADLEY V. GREEN, J.A.