2015 QCCA 1738, 2015 QCCA 1738

Droit de la famille — 152697 2015 QCCA 1738 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-025062-159 (500-12-304856-101) DATE: October 21, 2015 CORAM: THE HONOURABLE FRANÇOIS DOYON, J.A. MANON SAVARD, J.A. ÉTIENNE PARENT, J.A. T. M. APPELLANT - plaintiff v. R. D. RESPONDENT - defendant JUDGMENT [ 1 ] On September 16, 2010, the Superior Court pronounced the divorce of the parties and ratified their consent to judgment on corollary relief signed in July 2010. The parties agreed, inter alia , that the respondent should have sole custody of their six children.

The appellant, self-employed in the painting and renovation business, declared a “gross yearly income of approximately $60,000“. The respondent, also self-employed, declared a “gross yearly income of approximately $10,495“. The appellant undertook to pay the respondent $400 in spousal support and $402.96 in child support on a weekly basis. Although the parties’ consent to judgment referred to their “gross yearly income“, the parties declared these amounts as their respective “ net income from self employment“ in the child support determination form (Schedule 1, line 202).

The initial child support order was therefore based accordingly. [ 2 ] In February 2011, the appellant filed a motion for variation of corollary relief and requested, among other things, that child support be reduced given that he had “not made the projected income of $60,000” and, in fact, never had done so [1] . Following the filing of the motion, various interim orders were rendered maintaining the initial quantum of child support.

In May 2014, the quantum was reduced on an interim basis to $1,000 per month. [ 3 ] The parties finally proceeded on the appellant’s motion (which had since been amended in January 2013) before the motion judge on November 13 and 14, 2014. At that time, given that the appellant had made only sporadic and partial payments of child support since his motion in 2011, his arrears totalled more than $46,600. [ 4 ] The motion judge concluded that no material change had occurred in the appellant’s financial situation since the judgment on corollary relief and therefore dismissed the motion [2] .

Based on her review of the evidence, the judge found that the income declared by the appellant in the consent to judgment on corollary relief reflected the reality at that time. She disregarded his income tax returns from 2009 to 2013 which she considered unreliable, and decided that the appellant was still able to generate the income he had declared in 2010.

Finally, she granted in part the respondent’s oral motion (presented at the hearing) for a provision for costs for the amount of $5,000. * * [ 5 ] In his inscription in appeal, the appellant alleges that the judge committed errors of fact by concluding that there had been no material change in his financial situation.

He reiterates his position advanced before the judge that he never earned the income on which child support was initially calculated and argues that the judge unjustly disregarded changes in his situation since the divorce. * * [ 6 ] Section 17(4) of the Divorce Act [3] authorizes a court to vary, rescind or suspend prior orders in respect of child support if “a change of circumstances” has occurred:

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

a) une ordonnance alimentaire ou telle de sesdispositions, sur demande des ex-époux ou del’un d’eux;

b) une ordonnance de garde ou telle de sesdispositions, sur demande des ex-époux ou del’un d’eux ou de toute autre personne. (2) […]

(4) Avant de rendre une ordonnancemodificatrice de l’ordonnance alimentaire auprofit d’un enfant, le tribunal s’assure qu’il estsurvenu un changement de situation, selon leslignes directrices applicables, depuis que cetteordonnance ou la dernière ordonnancemodificative de celle-ci a été rendue. (4.1) […] 17.

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

a) a support order or any provision thereof onapplication by either or both former spouses; or (

b) a custody order or any provision thereof onapplication by either or both former spouses orby any other person. (2) […]

(4) Before the court makes a variation order inrespect of a child support order, the court shallsatisfy itself that a change of circumstances asprovided for in the applicable guidelines hasoccurred since the making of the child supportorder or the last variation order made in respectof that order. (4.1) […] [7] The existence and characterisation of “a change of circumstances” under section 17(4) of the Divorce Act is a question of fact(Droit de la famille – 14574, 2014 QCCA 575, para. 49). What amounts to a material change will depend on the actual circumstances ofthe parties at the time of the order (L.M.P. v.

L.S., 2011 SCC 64, para. 34) and may include a change in the condition, means, needs, orother circumstances of either spouse or of any child of the marriage (Hickey v. Hickey, (SCC), [1999] 2 S.C.R. 518,para. 14). [8] It is a well-established principle that a court of appeal owes considerable deference to findings made by a trial judge withrespect to support orders. In Hickey v.

Hickey, supra, L’Heureux-Dubé, J., on behalf of the Court, wrote: 10 When family law legislation gives judges the power to decide on support obligations based on certain objectives, values, factors,and criteria, determining whether support will be awarded or varied, and if so, the amount of the order, involves the exercise ofconsiderable discretion by trial judges. They must balance the objectives and factors set out in the Divorce Act or in provincial supportstatutes with an appreciation of the particular facts of the case.

It is a difficult but important determination, which is critical to the lives ofthe parties and to their children. Because of its fact-based and discretionary nature, trial judges must be given considerable deference byappellate courts when such decisions are reviewed. 11 Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an errorin principle, a significant misapprehension of the evidence, or unless the award is clearly wrong. These principles were stated by MordenJ.A. of the Ontario Court of Appeal in Harrington v.

Harrington (1981), (ON CA), 33 O.R. (2d) 150, at p. 154, andapproved by the majority of this Court in Pelech v. Pelech, (SCC), [1987] 1 S.C.R. 801, per Wilson J.; in Moge v. Moge, (SCC), [1992] 3 S.C.R. 813, per L’Heureux-Dubé J.; and in Willick v. Willick, (SCC), [1994] 3 S.C.R.670, at p. 691, per Sopinka J., and at pp. 743-44, per L’Heureux-Dubé J. [9] As mentioned previously, the judge initially concluded that the income declared by the appellant in the consent to judgment oncorollary relief reflected the reality at that time.

She wrote: [39] D’abord, monsieur n’a fourni aucune preuve probante à l’effet que lorsqu’il signe le consentement, il ne connaît pas ou n’est pasen mesure de connaître le revenu brut que son travail génère. En conséquence le Tribunal en infère que le revenu qu’il y déclare reflète àcet égard la réalité. [10] Secondly, given the fact that the appellant was operating his own business, the judge rightly examined his “real income”relevant for determining child support for the years 2011 to 2014, noting that this could be different than his taxable income or netrevenue declared (M.M. v.

P.-G.H., J.E. 2001-1954 (C.A.)). She emphasized the difficulties of such an exercise in the present case sincethe appellant was partly paid by his clients in cash and did not have any bank accounts during a certain number of years. After a detailedanalysis of the evidence, the judge disregarded the appellant’s declared income for the years 2010 to 2013. She concluded that theappellant’s income tax returns did not represent a clear and honest portrayal of his “real income” given the payments he made duringthese years to the respondent for child support and to his spouse in fact, Ms De., for his own needs.

The judge explained her reasoning asfollows: [55] En 2011, il a payé 19 439 $ de pension alimentaire et déposé une somme de 14 986 $ au compte conjoint avec Mme De..., alorsqu’il déclare un revenu annuel brut de 38 974 $ et un revenu net de 11 322 $. [56] En 2012, il déclare un revenu net de 5 411 $ mais il paie 14 265 $ à Mme De... à

titre de contribution aux dépenses et 3 726 $ depension alimentaire. [57] Les relevés bancaires de Details, dont monsieur est actionnaire unique, indiquent au mois de novembre 2014, un montant total dedépôts de 48 626 $; ceci représente 4 420,55 $ par mois, soit, réparti sur l’année, un montant de 53 046,55 $. [58] À ce montant s’ajoutent, en toute vraisemblance, des sommes payées au comptant à Mme De... pour les dépenses courantes.

[59] La preuve a établi l’existence de transferts inexpliqués au compte de banque de Mme De..., mais cette preuve n’est pas suffisamment probante pour les relier à monsieur. [60] Bref, les Déclarations de revenu de Monsieur n’apparaissent pas fiables. [ 11 ] Contrary to what the appellant argues, the judge did not “disregard” the evidence; she simply did not believe him. The judge’s conclusion that the appellant’s declared income does not reflect his real income is well supported by the evidence and the appellant has failed to demonstrate a reviewable error with respect to this issue.

It is not the role of the Court to re-evaluate the evidence, especially in a situation where the parties have not filed in the record all the exhibits produced at the hearing necessary for such an exercise. [ 12 ] That being said, the appellant is right to say that even if the Court accepts the judge’s conclusion that his income tax returns did not reflect his real income, the judge erred by not distinguishing between the business income and the appellant’s annual income in her analysis. [ 13 ] Indeed, a distinction must be made between business income and personal income.

The business’s gross income is comprised of its revenues. However, business’ expenses as well as GST and QST collected are to be deducted to determine the net income from the operation of a business or from self-employment. The business net income becomes the personal annual income of the applicant to be used for the purpose of determining child support. Pursuant to

section 9 of the Regulation respecting the determination of child support payments (R.R.Q., c. C-25, r.6), “annual income” for the purpose of determining child support is defined as the “[…] net income from the operation of a business or from self-employment“ (emphasis added). [ 14 ] A close reading of the judgment reveals that the judge based her conclusion on the business’ gross income instead of the appellant’s annual income. [ 15 ] In paragraphs 57 and 58 of the judgment, reproduced above, the judge estimated that the appellant’s gross business revenues totalled $53,047 in 2014 [4] .

She also noted that the appellant’s revenues should be increased, albeit by an unspecified amount, to reflect cash payments made to his spouse in fact. Given her conclusion dismissing the motion, one can conclude that she estimated the cash payments to be approximately $7,000 [5] and therefore that his total business gross revenues for 2014 was approximately $60,000 (i.e. the “gross projected income” referred to by the appellant in the consent to judgment on corollary relief).

She arrived at the same conclusion for the previous years allowing for slight variations given the nature of the business. [ 16 ] Therefore, from his business gross revenues of $60,000, the judge should have deducted the reasonable expenses incurred for his business evaluated by the judge at 6% of the revenues ($3,600) and, from the $53,047 [6] , she should have also deducted the taxes (GST and QST) collected from the appellant’s clients (according to the contracts produced) and to be paid to the government ($6,909). [ 17 ] Had the judge undertaken this exercise, she would have concluded that the business’s net income for the years 2011 to 2014 representing the appellant’s annual income was approximately $49,491 (i.e $60,000 – $3,600 – $6,909). [ 18 ] Therefore, given the difference between the appellant’s annual income used to determine child support at the time of the divorce judgment in 2010 ($60,000) and what should have been her findings regarding his annual income from 2011 to 2014 ($49,491), the judge should have concluded, in view of the circumstances in the case at hand, that a change of circumstances sufficient to justify varying the order had occurred. [ 19 ] As for the appellant’s argument that the judge erred in not attributing income to the respondent for the purpose of determining child support, it must be rejected.

The appellant only raised this issue during his pleadings, without having made a formal written or oral request. This may well explain why the judge did not discuss this question in her judgment. Furthermore, as mentioned previously, in the initial consent to judgment on corollary relief, the respondent declared an annual gross income of $10,495. The appellant now argues that the respondent earned more than $20,000 during the marriage. This argument should have been raised in 2010.

More importantly, should the appellant have wished the judge to attribute a higher income to the respondent than the one declared in 2010, he failed to provide sufficient evidence to support his request.

His testimony alone, in the case at hand, does not suffice to conclude that a “change of circumstances” to justify modifying the order has occurred. [ 20 ] Therefore, in conclusion, the child support owed by the appellant, based on the parties’ respective annual income as described above, should have been, as of February 11, 2011 (date of the appellant’s motion) $1,466.13 per month, indexed annually, in accordance with

article 590 C.C.Q. * * [ 21 ] Finally, the judge properly exercised her discretion in awarding a provisional sum to cover the costs of the proceedings. Her conclusion is based on the appellant’s near complete refusal to pay child support since 2012, his lack of transparency with regard to his financial situation, and the fact that the respondent was acting essentially on behalf of the parties’ children. Here too, the appellant failed to point to a reviewable error.

FOR THESE REASONS, THE COURT : [ 22 ] ALLOWS the appeal in part; [ 23 ] ADDS the followings paragraphs to the order: [91(a)] MODIFIE les mesures accessoires au jugement de divorce prononcé le 16 septembre 2010 conformément à ce qui suit; [91(b)] ANNULE la pension alimentaire que T... M... devait payer à R... D... pour les enfants selon le jugement de divorce prononcé le 16 septembre 2010 à compter du 11 février 2011;

[91(c)] ORDONNE à T... M... de verser à R… D... pour les enfants une pension alimentaire de 1,466.13 $ par mois, à compter du 11 février 2011; [91(d)] ORDONNE que la pension alimentaire soit indexée le 1er janvier de chaque année suivant l’

article 590 C.c.Q. ; [ 24 ] WITHOUT COSTS , given the nature of the appeal. FRANÇOIS DOYON, J.A. MANON SAVARD, J.A. ÉTIENNE PARENT, J.A. Me Nathalie McKenzie For the Appellant - petitioner Me Daniel Cooper Marcil & Cooper For the Respondent - defendant Date of hearing: October 1 st , 2015