2011 QCCA 293, 2011 QCCA 293

Unofficial English Translation Droit de la famille — 11275 2011 QCCA 293 COURT OF APPEAL CANADA PROVINCE OF QUEBEC MONTREAL REGISTRY No.: 500-09-020555-108 (500-12-286099-068) DATE: February 10, 2011 CORAM: THE HONOURABLE MARC BEAUREGARD, J.A. MARIE-FRANCE BICH, J.A. NICOLE DUVAL HESLER, J.A. C.B. APPELLANT / INCIDENTAL RESPONDENT – Plaintiff v. H. P. RESPONDENT / INCIDENTAL APPELLANT – Defendant JUDGMENT [ 1 ] THE COURT ; - On appeal from a judgment of the Superior Court, District of Montreal (the Honourable Mr.

Justice Martin Castonguay), rendered on March 3, 2010, which dismissed the appellant's application for provisional measures; condemned him to pay to the respondent the sum of $280,000 within thirty (30) days following the date of judgment; ordered him to pay to the respondent support for the three children in the amount of $628.09 per month; ordered that certain special child expenses be shared, with the appellant to pay 66% of these expenses and the respondent, 33%; condemned the appellant to pay to the respondent a provision for costs of $35,000 within thirty (30) days following the date of judgment; [ 2 ] Having examined the file, heard the parties, and on the whole deliberated; [ 3 ] For the reasons of Duval Hesler, J.A., with which Bich, J.A. agrees; [ 4 ] DISMISSES the appeal with costs; [ 5 ] ALLOWS the incidental appeal, in part; [ 6 ] ORDER S the appellant to pay to the respondent support for the parties’ three (3) children in the amount of $730 per month, with statutory indexing; [ 7 ] ORDERS that the special child expenses be shared, with the appellant to pay 78% of these expenses and the respondent, 22%; [ 8 ] ORDERS the appellant to pay to the respondent a sum of $7,800, representing arrears of child support resulting from the appellant’s unilateral reduction of this child support, with interest from February 20, 2009 (the date of service of proceedings on the respondent); [ 9 ] ALL the other conclusions of the trial judgment remain unchanged; [ 10 ] WITH costs against the appellant on incidental appeal; [ 11 ] For his part, Beauregard, J.A., would have allowed the appeal for certain purposes only, without costs, allowed the incidental appeal, with costs, allowed the incidental action in part, with costs, concurred with the aforementioned three orders, declared that the respondent would be, at the date of filing of the judgment, sole owner of the immovable that was the parties' family residence before the separation, condemned the incidental respondent to pay $50,000 to the incidental appellant within forty-five days of the filing of the judgment and, lastly, ordered the incidental respondent to pay to the incidental appellant support of $1,250 per month, payable in

advance on the first day of each month, with statutory indexing. MARC BEAUREGARD, J.A. MARIE-FRANCE BICH, J.A. NICOLE DUVAL HESLER, J.A. Mtre Dominic Desjarlais Lamarre Linteau & Montcalm For the appellant Mtre Pierre-Gilles Laframboise Laframboise Gutkin For the respondent Hearing date: October 21, 2011 REASONS OF DUVAL HESLER, J.A. [ 12 ] First, the appellant argues that the trial judge should not have considered the respondent's needs in retirement when calculating the lump sum payable to her. In support of this argument, he wrongly cites S. (L.) v.

C. (A.) . [1] In this case, the economic arrangement during the marriage is what determines the respondent's future needs. [ 13 ] Said judgment also states that the Divorce Act seeks to re-establish as much as possible, insofar as the economic circumstances of the parties permit, the situation that existed before the breakdown of the marriage.

The following excerpt, taken from paragraph 63, is relevant here: [ translation ] Although the principles governing support based on equitable sharing do not guarantee each party the standard of living they had during the marriage, this standard is not immaterial to the right to support (see Mullin v. Mullin (1991), and Linton v. Linton , supra ). In addition, the significant standard-of-living disparities that would exist between spouses without support are often a revealing indicator of the economic burden inherent in the role assumed by one of them.

As marriage must be considered a joint enterprise, the longer the duration of the relationship and the closer the economic union between the parties, the stronger the presumption of an equal standard of living between the spouses after its breakdown. [See Rogerson, Carol J. "Judicial

Interpretation of the Spousal and Child Support Provisions of the Divorce Act , 1985 (Part I)" (1990-91), 7 C.F.L.Q . 155, at 174-175]. [ 14 ] Under

section 15.2 of the Divorce Act , support may be established not only on the basis of needs, but also on the basis of the advantages and disadvantages arising from the marriage.

This compensatory aspect is recognized in Supreme Court case law, in Bracklow , stating, “ In cases where the extent of the economic loss can be determined, compensatory factors may be paramount”. [2] [ 15 ] It is clear that the trial judge, who, incidentally, cited this judgment more than once, implicitly took this factor into account. [ 16 ] It should be borne in mind that the Court’s role is not to substitute its assessment of the evidence for that of the trial judge. [ 17 ] In the present case, the appellant does not convince me that in exercising his discretion in awarding the respondent a lump sum of $280,000, the judge committed an error that warrants the Court's intervention. [ 18 ] The other arguments raised in the appeal cannot succeed either. [ 19 ] On the incidental appeal, the respondent convinces me that the judge inadvertently failed to award arrears of $7,800, which he took as proved since he mentioned to the respondent's counsel that he did not have to argue this point.

The judgment is totally silent on the question of arrears resulting from the appellant's unilateral reduction of the support.

It is acknowledged, however, that the appellant unilaterally reduced the agreed-upon support by said amount. [ 20 ] Also on the incidental appeal, the trial judge’s decision to establish the appellant's annual income at $175,000, rather than $300,000 as the respondent wanted, does not qualify as a palpable error, since the right to career reorientation, undertaken in good faith, is recognized [3] and since the judge did not find that the appellant acted in bad faith. [ 21 ] There are grounds, however, for correcting an error in the calculation of the child support payable, based on the respondent's

proved net income at the time of the hearing, which was $53,000, not $57,000. On this basis, the parties agreed before the Court to child support of $730 per month and to the sharing of special expenses, with the appellant to pay 78% of these expenses and the respondent, 22%. [ 22 ] Lastly, the incidental appellant wants the lump-sum payment awarded to her to be increased to $414,000. This was one of the amounts proposed to the trial judge in the actuary’s report, according to the table reproduced in paragraph 114 of the judgment.

Her counsel conceded at the hearing, however, that the amount of $321,000 in the same table, could also be acceptable. It seems that the judge accepted the assumption in the first column, and presumed that the respondent could, in retirement, live on $39,000 per year, since that is approximately her net after-tax income according to her 2008 tax return. In the absence of a palpable and overriding error on this question, this incidental claim must be dismissed. [ 23 ] For these reasons, I would dismiss the appeal and allow the incidental appeal in part. NICOLE DUVAL HESLER, J.A.

REASONS OF BEAUREGARD, J.A. [ 24 ] I have read the reasons of my colleague Duval Hesler, J.A. [ 25 ] I share her opinion that the Superior Court judge correctly concluded that, pursuant to

section 15.2 of the Divorce Act , [4] the appellant must pay support to the respondent. [ 26 ] I deplore the fact that, during the hearing, the appellant took the position that he had no responsibility in this regard, whereas he was much more reasonable at the outset and had offered to give the respondent his undivided half interest in the family residence, a sum of $50,000 and also support of $1,000 per month for one year and $500 per month for a second year. [ 27 ] I also deplore the fact that being separate as to property from the appellant and having waived her rights in the family patrimony, the respondent does not really want to accept that the purpose of the support to which she is entitled is not to correct the inequity resulting from her choice of matrimonial regime and her renunciation of her family patrimony rights. [ 28 ] The judge admirably summarized the facts and legal principles at issue.

In her proceeding, the respondent sought not support, but a lump sum. During the hearing, the judge explained the difficulty in determining the size of the lump sum, given the uncertain parameters. He ultimately chose the method suggested by the respondent's actuary, but changed the parameters used by the actuary.

The actuary had assumed that in retirement, the respondent would need $49,000 per year to maintain approximately the same standard of living as at the time of separation, but the judge did not accept that when she retired (he assumed it would be in 2030), the respondent could have a more comfortable standard of living than that afforded her by her net income in 2008, i.e. , $39,000. [ 29 ] With respect, I do not believe that the actuary and the judge are speaking about the same thing.

As I just mentioned, the actuary based his calculations not on the respondent's means in 2008, but on her expected needs in 2030, whereas the judge based his conclusion not on her expected needs in 2030, but on her net income in 2008.

And even on this basis, the judge did not take into account that the respondent needed $45,000 to live in 2008, a fact that even the appellant admitted. [ 30 ] I would add that in concluding that the respondent could live on a net income of only $39,000 per year, the judge seemed to disregard the fact that since the separation of the parties, the respondent had free use of the appellant's undivided half interest in the family residence. [ 31 ] In short, if the judge wanted to translate the respondent's right to support into a lump sum, and if he wanted to use the method suggested by the respondent's actuary, he should have accepted that in 2030, the respondent would need $49,000 net to live and that, according to the actuary, this required a lump-sum payment of $414,000 in 2008 or, at the very least, as the respondent's counsel conceded at the hearing, of $321,000. [ 32 ] With respect, I do not believe this is a case where it is suitable to order that support be paid entirely in the form of a lump sum; there are too many imponderables that would ultimately make the amount unfair for one of the parties.

It seems that the actuary deliberately failed to take into account inflation, which will certainly occur by 2030. Moreover, awarding a lump sum of $280,000 assumes that the family residence will be sold and that the respondent will have to live elsewhere and live there one week out of two with the three children. This goes against the wishes of the appellant himself, who finds it convenient that the children's two residences not be far from each other.

In fact, during the hearing, the appellant even suggested that he was willing to offer the respondent free right of habitation until the youngest child reached the age of majority. The judge did not accept this. [ 33 ] I am of the opinion that the appellant’s offer to the respondent to give her his undivided half interest in the family residence and to pay her $50,000 to repair and renovate the house was reasonable.

The appellant recognized that the respondent had to a certain extent made sacrifices for him and that it was fair to indemnify her for the breakdown of the marriage because the respondent had done her utmost to make the marriage succeed and had held out the hope that the couple's standard of living would eventually be better than it was during the time they were together and he was accumulating assets. [ 34 ] I have already mentioned that the appellant’s offer included support of $18,000 payable over twenty-four months.

In my opinion, there was no reason to terminate this support. [ 35 ] With approximately $3 million to his name, the appellant decided to quit a job that was paying him $175,000 per year to continue his education with a view to eventually teaching youngsters, which he had always wanted to do. The judge did not question the

appellant's testimony in this regard but, going by the appellant's assets rather than his actual annual income, he ascribed to the appellant a theoretical income of $175,000. [ 36 ] The appellant has not shown that the judge erred in this regard, nor in concluding that the respondent can earn $53,000 per year. [ 37 ] Suppose that, after giving up his undivided half interest in the family residence and after paying $50,000 to the respondent, the appellant pays her support of $15,000 per year.

We would end up with approximately the following financial situation: APPELLANT Gross income: $175,000 Support paid to the respondent: $15,000 _______________________ Balance: $160,000 Taxes: $67,500 _______________________ Balance: $92,500 Child support: $8,760 ___________________________ Balance: $83,740 Special child expenses: $7,800 Net balance: $75,940 RESPONDENT Gross income: $53,000 Support: $15,000 ___________________ Gross total: $68,000 Taxes: $19,500 ________________ Balance: $48,500 Theoretical child support: $2,470 ___________________________________ Balance: $46,030 Special expenses: $2,200 Net balance: $43,830 TOTAL INCOME OF THE APPELLANT AND THE RESPONDENT

$75,940 $43,830 Total: $119,770 [38] We can see that the appellant has a theoretical net income to live on, with the three children spending one week out of two withhim, of approximately 63.50% of the parties’ total income, whereas for the same purposes, the respondent has 36.50% of this totalincome. [39] Given the appellant’s assignment of his undivided half interest in the family residence and the lump-sum payment of $50,000, Ibelieve that support of $15,000 per year is sufficient for the respondent and not excessive for the appellant. [40] According to the wishes of the parties, the children may continue to live in the house where they have always lived.

Therespondent may repair and renovate the house as she pleases. In addition, the annual support of $15,000 will enable her to continue toinvest for her retirement. [41] As for the respondent’s claim that the support for the years 2006, 2007 and 2008 be increased retroactively, I share the judge'sopinion that there are no grounds for granting this, because it must be taken into account that during those years, the appellant's incomewas $175,000 per year.

On that basis, what he paid, including the special expenses, fulfilled the appellant's legal obligations. [42] The appellant has not shown grounds for the Court's intervention concerning the amount that the judge awarded to therespondent for expert fees and her lawyer’s fees. [43] For these reasons, I would have allowed the appeal for certain purposes only, without costs, allowed the incidental appeal, withcosts, concurred with the three orders that appear at the end of my colleague Duval Hesler’s reasons, declared that the respondent be, atthe date of filing of the judgment, sole owner of the immovable that was the parties' family residence before their separation, ordered theincidental respondent to pay $50,000 to the incidental appellant within 45 days following the filing of the judgment, and ordered theincidental respondent to pay to the incidental appellant support of $1,250 per month, payable in advance on the first day of each month,with statutory indexing.

MARC BEAUREGARD, J.A. [1] [2006] R.J.Q. 1574 (C.A.), 2006 QCCA 888. [2] Bracklow c. Bracklow , (SCC), [1999] 1 S.C.R. 420 at 440 [3] C.S. v. M.G., [2005] R.D.F. 538 (C.A.), 2005 QCCA 702. [4] R.S.C. 1985, c. 3 (2nd Supp.).