2013 NBCA 22, 2013 NBCA 22

COURT OF APPEAL OF NEW BRUNSWICK 47-12-CA ULRIC LeBLANC APPELLANT ULRIC LeBLANC APPELANT - and - - et - MURIEL LeBLANC RESPONDENT MURIEL LeBLANC INTIMÉE LeBlanc v. LeBlanc, 2013 NBCA 22 LeBlanc c.

LeBlanc, 2013 NBCA 22 CORAM: The Honourable Justice Larlee The Honourable Justice Richard The Honourable Justice Quigg CORAM : L’honorable juge Larlee L’honorable juge Richard L’honorable juge Quigg Appeal from a decision of the Court of Queen’s Bench: April 2, 2012 Appel d’une décision de la Cour du Banc de la Reine : Le 2 avril 2012 History of Case: Historique de la cause : Decision under appeal: 2012 NBQB 113 Décision frappée d’appel : 2012 NBBR 113 Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : S.O.

Appeal heard: October 24, 2012 Appel entendu : Le 24 octobre 2012 Judgment rendered: March 14, 2013 Jugement rendu : Le 14 mars 2013

Reasons for judgment by: The Honourable Justice Larlee Motifs de jugement : L’honorable juge Larlee Concurred in by: The Honourable Justice Richard The Honourable Justice Quigg Souscrivent aux motifs : L’honorable juge Richard L’honorable juge Quigg Counsel at hearing: For the appellant: Shaaron A. Gionet For the respondent: Renée L. Blanchard Avocats à l’audience : Pour l’appelant : Shaaron A. Gionet Pour l’intimée : Renée L. Blanchard THE COURT The appeal is dismissed with costs. LA COUR L’appel est rejeté avec dépens.

English version of the judgment of the Court delivered by LARLEE, J.A. [ 1 ] The appellant, Ulric LeBlanc, challenges the variation of the spousal support order in favour of his ex-wife, Muriel LeBlanc, made by a judge of the Court of Queen’s Bench pursuant to s. 17 of the Divorce Act , R.S.C. 1985, c. 3 (2nd Supp.). He submits that the order should have terminated the support payments. The decision of the motion judge is reported at 2012 NBQB 113 , 387 N.B.R. (2d) 288 . I. Background [ 2 ] The parties married on August 12, 1977, and separated in February 1995.

This was a long- term marriage (approximately eighteen years). The parties have a son who is 34 years old. In November 1980, Mr. and Ms. LeBlanc were both injured in a car accident. Shortly after the accident, Mr. LeBlanc returned to work, but Ms. LeBlanc was not able to return to the labour market for a few years. Between 1991 and 1997, she worked at the Université de Moncton on an occasional basis because of her health problems. In 2000, Ms. LeBlanc applied for Canada Pension Plan disability benefits. The application was denied. On appeal, the Office of the Commissioner of Review Tribunals found that Ms.

LeBlanc had a serious disability. As a result, the Canada Pension Plan awarded her disability benefits until the age of 65 years as well as retroactive payments to the time of her application. [ 3 ] On April 18, 1997, Mr. and Ms. LeBlanc signed a consent order whereby Mr. LeBlanc agreed to make support payments in the amount of $2,000 per month beginning April 1, 1997. On June 28, 2003, this order was varied, reducing the amount of the support payments to $1,700 per month.

[4] In November 2009, Ms. LeBlanc inherited $90,000 from her mother. This money was spentquickly, mainly because Ms. LeBlanc gave $42,000 to her son and paid off some debts. Mr. LeBlanc, for his part, remarried in 2005. Hisnew spouse’s income tax return for 2010 showed that she had an annual income of $35,845. In December 2010, at the age of 54, Mr.LeBlanc retired and sold his business for approximately $600,000. [5] Mr. LeBlanc is now 56 years old and Ms. LeBlanc is 55. Mr. LeBlanc is co-owner of a housewith an estimated value of $250,000.

According to a financial statement dated October 17, 2011, the value of his RRSPs is $313,790 andhis investments are valued at $613,416. Mr. LeBlanc’s income was $107,985 in 2008, $107,273 in 2009, and $105,324 in 2010. As forthe following years, his annual income was amortized to allow him to receive $35,000 per year until the end of his life. Ms. LeBlanc, forher part, had an annual income of $31,499 in 2010, including $11,099 in disability benefits and $20,400 in support payments.

At the timeof the hearing, she was receiving monthly disability payments in the amount of $940.64, the equivalent of $11,300 per year. Her monthlyexpenses were approximately $2,600, including such expenses as rent, food, medications and car expenses. [6] After his retirement, Mr. LeBlanc filed an application for a second variation of the supportorder, this time based on an annual income of $35,000. The motion judge determined that the support payments should be calculated onthe basis of an income of $50,000.

Pursuant to the Divorce Act, the judge varied the order made in 2003, reducing the amount of thesupport payments to $1,000 per month. Mr. LeBlanc is appealing that decision. [7] Mr. LeBlanc raised ten grounds of appeal. However, for the purposes of this analysis I am ofthe opinion that the issues can be summarized as follows: 1. Did the trial judge err in law in her application of s. 17(7) of the Divorce Act? 2. Did the trial judge err in law in her assessment of the inheritance received by the respondent? 3. Did the trial judge err in law in imputing income to the appellant? II.

Standard of Review [8] In Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the Supreme Court of Canadaoutlined the deference which must be shown by appellate courts to the decisions of trial judges. Iacobucci and Major JJ. made thefollowing statements: The role of the appellate court was aptly defined in Underwood v.

Ocean City Realty Ltd. (1987), (BC CA),12 B.C.L.R. (2d) 199 (C.A.), p. 204, where it was stated: The appellate court must not retry a case and must not substitute its views for the views of the trial judge according to what the appellatecourt thinks the evidence establishes on its view of the balance of probabilities. [Para. 3] [9] In family law matters, this Court takes the view that it must show considerable deference to thedecisions of trial judges. In MacDonald v.

MacDonald, 2011 NBCA 25, 372 N.B.R. (2d) 179, leave to appeal refused, [2011] S.C.C.A.No. 237 (QL), the Court stated the following: 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 of principle, asignificant misapprehension of the evidence or if it is clearly wrong […]. [Para. 7] This principle has been restated often in our decisions, among them P.R.H. v.

M.E.L., 2009 NBCA 18, 343 N.B.R. (2d) 100, at paras. 8and 9, Smith v. Smith, 2011 NBCA 66, 375 N.B.R. (2d) 208, at para. 10, Doiron v. Wilcox, 2012 NBCA 70, 393 N.B.R. (2d) 183, atparas. 9 to 11, and C.M.H. v. J.R.H., 2012 NBCA 71, 393 N.B.R. (2d) 154, at para. 8.

[10] In MacLean v.

MacLean, 2004 NBCA 75, 274 N.B.R (2d) 90, this Court further held that thesame standard of review must be applied when reviewing support orders: Despite the ostensibly wide powers conferred upon appellate courts by s. 21(5) [of the Divorce Act], the proper approach to appellatereview of spousal support orders requires that an appellant court give considerable deference to the decision of the trial judge. […] Thus,appellate courts are instructed that they “should not overturn support orders unless the reasons disclose an error in principle, a significantmisapprehension of the evidence, or unless the award is clearly wrong”: see Hickey at para. 11. [Para.18] [11] In his reasons for decision, Justice Richard then quoted from Hickey v.

Hickey, (SCC), [1999] 2 S.C.R. 518, [1999] S.C.J. No. 9 (QL), in which the Supreme Court of Canada states that an appellate court cannot“overturn a support order simply because it would have made a different decision or balanced the factors differently” (para. 12). Thesame approach was taken by this Court in subsequent cases such as J.E.J. v. S.L.M., 2007 NBCA 33, 318 N.B.R. (2d) 119, at para. 35;Milton v. Milton, 2008 NBCA 87, 338 N.B.R. (2d) 300, at para. 14; Scott v. Scott, 2011 NBCA 7, 368 N.B.R. (2d) 281, at paras. 15 and16; Smith v. Smith, at para.11; C.M.H. v. J.R.H., at para.11; and Grant v.

Grant, 2012 NBCA 101, at paras. 4 and 5. III. Analysis and Decision A. Section 17(7) of the Divorce Act [12] Section 17(7) of the Divorce Act reads:

(7) A variation order varying a spousalsupport order should (

a) recognize any economic advantages ordisadvantages to the former spouses arising from the marriage or its breakdown; (

b) apportion between the former spouses anyfinancial consequences arising from the careof any child of the marriage over and aboveany obligation for the support of any child ofthe marriage; (

c) relieve any economic hardship of theformer spouses arising from the breakdownof the marriage; and (

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

(7) L’ordonnance modificative del’ordonnance alimentaire au profit d’un épouxvise :

a) à prendre en compte les avantages ouinconvénients économiques qui découlentpour les ex-époux du mariage ou de sonéchec;

b) à répartir entre eux les conséquenceséconomiques qui découlent du soin de toutenfant à charge, en sus de toute obligationalimentaire relative à tout enfant à charge;

c) à remédier à toute difficulté économiqueque l’échec du mariage leur cause;

d) à favoriser, dans la mesure du possible,l’indépendance économique de chacun d’euxdans un délai raisonnable. [13] It is true that, in her reasons, the motion judge did not make a detailed assessment of each of theobjectives set out in s. 17(7). However, she was not obligated to do so. In this regard, Van de Perre v. Edwards, 2001 SCC 60, [2001] 2

S.C.R. 1014, a custody case, is very relevant.

Justice Bastarache wrote the following: In preparing reasons in custody cases, a trial judge is expected to consider each of these factors in light of the evidence adduced at trial;however, this is not to say that he or she is obligated to discuss every piece of evidence in detail, or at all, when explaining his or herreasons for awarding custody to one person over another. [Para. 10] [14] In Housen, a negligence case, Iacobucci and Major JJ. confirmed this principle: [T]he failure to discuss a relevant factor in depth, or even at all, is not itself a sufficient basis for an appellate court to reconsider theevidence.

This was made clear by the recent decision of Van de Perre […]. [Para. 39] They also recognized that when a judge states the correct legal test at the beginning of his or her analysis, he or she is presumed to haveapplied it throughout the analysis unless it is proved otherwise: The fact that the conduct of the ordinary motorist was in the mind of the trial judge from the outset is clear from the fact that she beganher standard of care discussion by stating the correct test, quoting from Partridge, supra.

Absent some clear sign that she subsequentlyvaried her approach, this initial acknowledgement of the correct legal standard is a strong indication that this was the standard sheapplied. [Para. 40] [15] In this case, the judge quoted s. 17(7) at the beginning of her analysis. She then referred to apassage in Bracklow v. Bracklow, (SCC), [1999] 1 S.C.R. 420, [1999] S.C.J.

No. 14 (QL), in which Justice McLachlin(as she then was) reminded us of the “method to be followed in determining a support dispute” and noted that “[t]he starting point is theobjectives which the Divorce Act stipulates the support order should serve”. Justice McLachlin then enumerated the objectives set out ins. 15.2(6), which are the same as those stated in s. 17(7). [16] Although the motion judge, when applying the law to the facts of the case, did not deal at lengthwith each of the objectives of the variation order, nothing in her reasons for decision clearly shows that she disregarded any of theseobjectives.

I must assume that she had these objectives in mind during her analysis. This ground of appeal must therefore be dismissed. B. The inheritance [17] As explained in the statement of facts, Ms. LeBlanc received $90,000 from her mother’s estatein 2009. Mr. LeBlanc claims the motion judge erred in law by not giving sufficient weight to the inheritance. He goes so far as to arguethe judge [TRANSLATION] “completely ignored the respondent’s inheritance”. He notes that, since Mills v.

Mills, 2010 NBCA 20, 356N.B.R. (2d) 351, a judge may consider amounts received in inheritance when deciding on the amount of support payments. He is correcton this point. This approach was also confirmed in Scott v. Scott. However, I cannot conclude that the judge disregarded the inheritance.She mentioned the inheritance in her presentation of the facts, she then mentioned it five more times, and her finding regarding thechange in circumstances relies in part on the fact that the respondent had received this inheritance. I cannot but conclude that the judgetook the inheritance into account. [18] According to Mr.

LeBlanc, if the judge had given sufficient weight to the inheritance, herdecision would have been different. To support his argument that the respondent is no longer entitled to support, Mr. LeBlanc referred toScott v. Scott. In that case, the judge acknowledged the wife had health problems, but because she had inherited more than $400,000, thejudge found she was in a position to receive substantial yearly dividends. The judge also indicated she was free to encroach on thecapital, and that this would provide her with a reasonable income.

In addition, the wife was entitled to monthly benefits from the CanadaPension Plan, and therefore, the judge was of the opinion she was “economically self-sufficient” and no longer entitled to spousalsupport. [19] The situation in which Ms. LeBlanc finds herself is clearly different. First, she has suffered froma serious disability since December 1997 and is entitled to disability benefits until the age of 65. Second, the amount of $90,000 whichMs. LeBlanc received as an inheritance no longer exists. She gave her son $42,000 to build a garage and then used the balance to buy

furniture, pay for her car, and pay off certain debts. After weighing the evidence that was provided to her, including the amount received in inheritance, the motion judge came to the conclusion that Ms. LeBlanc was still economically dependent and that she still required support payments. [ 20 ] The judge found as follows: [TRANSLATION] In this matter, I recognize that Mr. LeBlanc has paid spousal support for sixteen years. I also believe that Ms. LeBlanc had an obligation to become self-sufficient following the couple’s separation. During the marriage, Ms. LeBlanc mainly took care of their child and the home.

She did have a job for a few years. She was financially dependent on Mr. LeBlanc during the time they lived together. At the time of the hearing, Ms. LeBlanc’s health no longer made it possible to work. Even if she inherited $90,000 from her mother, by the time the trial took place, none of this money remained. On the other hand, at the time of the hearing, Mr. LeBlanc held the profits of the sale of his business and his RRSP contributions, valued at $900,000. Given her financial situation, I am of the opinion that Ms. LeBlanc has a need for spousal support and that Mr. LeBlanc has the means to pay it.

Therefore, I find that Ms. LeBlanc is entitled to receive spousal support. [Paras. 48 to 52] As a result, the judge was of the opinion that, in spite of the inheritance, Ms. LeBlanc had a continuing need for spousal support. However, she reduced the amount of the support from $1,700 to $1,000 in order to reflect the change in the parties’ circumstances. C. The imputation of income [ 21 ] Since she found that Mr. LeBlanc was under-employed within the meaning of s. 19(1) (

a) of the Federal Child Support Guidelines , the motion judge decided to impute a higher annual income to him than that which he had declared. The relevant provision reads: 19.

(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

a) the spouse is intentionally under- employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse[.] 19.

(1) Le tribunal peut attribuer à l’époux le montant de revenu qu’il juge indiqué, notamment dans les cas suivants :

a) l’époux a choisi de ne pas travailler ou d’être sous-employé, sauf s’il a fait un tel choix lorsque l’exigent les besoins d’un enfant à charge ou de tout autre enfant mineur ou des circonstances raisonnables liées à sa santé ou la poursuite d’études par lui[.] [ 22 ] In support of her findings, the judge referred to Donovan v. Donovan , 2000 MBCA 80 , [2000] M.J. No. 407 (QL) , in which Justice Steel found that a parent was underemployed within the meaning of s. 19(1) (

a) of the Federal Child

Support Guidelines if that parent chose to earn less than what he or she was capable of earning. Justice Steel also ruled that, whendetermining whether income should be imputed to a spouse by reason of his or her choice to be underemployed, the Court must considerwhat is reasonable in the circumstances, and particularly “[t]he age, education, experience, skills and health” of this individual. [23] In this case, the judge noted that Mr. LeBlanc was 54 years old, that he was well-educated andin good health, and that he had an impressive work history.

She therefore found that it was reasonable to impute an annual income of$50,000 to him instead of the $35,000 which he had proposed. [24] Mr. LeBlanc claims the motion judge erred in law in imputing this income to him. In hisopinion, the judge should have used the amount of annual income established by a financial planner on the basis of his investments andlife expectancy. [25] In D.L.M. v. J.A.M., 2008 NBCA 2, 326 N.B.R. (2d) 111, the Court dealt with the issue ofimputation of income to an underemployed spouse.

Here is one of our comments on this subject: Section 19(1) of the Federal Child Support Guidelines provides that the court may impute such amount of income to a spouse “as itconsiders appropriate in the circumstances,” which circumstances include nine defined situations. The defined situations are not anexhausive list and the

section gives the court a significant amount of discretion in imputing income […]. [Para.30] We then referred to Donovan, thus endorsing the principle that when determining whether an income can be imputed to a spouse, thecourts must consider the context as well as such factors as the age, education, experience, skills and health of the underemployed spouse. [26] Subsequently, this Court provided the following explanation: […] In Verwey v. Verwey, [2007] M.J.

No. 309 (QL), 2007 MBCA 102, the Court found that inadequate financial disclosure was anappropriate basis for the judge’s decision to impute additional income, since the father had “failed to meet the prescribed minimumsrequired by the legislation.” The amount a court may impute, however, is subject to some constraint, as the Ontario Court of Appealstated at para. 44 of Drygala v. Pauli (2002), (ON CA), 61 O.R. (3d) 711 (C.A.), [2002] O.J. No. 3731 (QL):

Section 19 of the Guidelines is not an invitation to the court to arbitrarily select an amount as imputed income. There must be a rationalbasis underlying the selection of any such figure. The amount selected as an exercise of the court’s discretion must be grounded in theevidence. [Para. 40] [27] In the case of The Beaverbrook Canadian Foundation v.

The Beaverbrook Art Gallery, 2006NBCA 75, 302 N.B.R. (2d) 161, Drapeau, C.J.N.B. described the standard of review to be applied to decisions arising from the exerciseof the court’s discretion in the following manner: Like any other discretionary judicial decision, it may be interfered with on appeal only if it is founded upon an error of law, an error inthe application of the governing principles or a palpable and overriding error in the assessment of the evidence […] or if it isunreasonable, in the sense that nothing in the record can justify it […]. [Para. 4] [28] Since we have pointed out in D.L.M. that the Court has, pursuant to s. 19(1) of the FederalGuidelines, a significant amount of discretion when imputing income to an underemployed spouse, the judge’s decision in this mattermust be given considerable deference.

In any case, according to the legislation and the case law that we have just reviewed, it wouldappear that the judge applied the correct principles of law when she chose to impute an income to Mr. LeBlanc. [29] Mr. LeBlanc also argues that the amount chosen by the judge as an annual income was imputedarbitrarily. It is true that the judge did not explain how she arrived at the amount of $50,000; however, the evidence showed that Mr.LeBlanc had an annual income of a little over $100,000 in the three years which preceded his retirement. As the Court stated in D.L.M.:

[C]ourts are given a significant degree of discretion when imputing income, and there does not appear to be a specific formula employed in this exercise. The court must consider the payor spouse’s financial capacity in applying the provisions of the Federal Child Support Guidelines . [Para. 34] [ 30 ] In this matter, the judge exercised her discretion in order to impute an income to Mr. LeBlanc. The judge found that the annual income of $35,000 that Mr. LeBlanc had suggested was clearly arbitrary. Many reasons could explain why the judge arrived at this conclusion. The document appended to Mr.

LeBlanc’s financial statement, which suggests an annual income of $35,000, was not admitted into evidence because it was neither dated nor signed, and because the individual who had prepared the statement was not identified. As far as Mr. LeBlanc is concerned, his testimony regarding this amount was particularly vague. [ 31 ] The motion judge then examined Mr. LeBlanc’s situation, taking into consideration his age, education, work experience and health, and found that he was underemployed. This finding allowed her to impute an income to Mr. LeBlanc.

She did not explain how she arrived at an annual income of $50,000, but she deemed this amount to be reasonable given his previous income. Furthermore, she did not have to use a specific formula to arrive at this amount. Given that the judge was exercising her discretion, her decision regarding the amount cannot be interfered with unless it is unreasonable or is found to be based on an error of law or a palpable and overriding error of fact. [ 32 ] If the payor spouse has an annual salary of $50,000, the Spousal Support Advisory Guidelines suggest support payments in the range of $822 to $1,096 per month.

As a result, the judge reduced the amount of the support payment from $1,700 per month to $1,000 per month. [ 33 ] I agree with the reasons given by the judge of the Court of Queen’s Bench. In my opinion, she did not make any palpable and overriding error concerning her findings of fact. Absent such error, an appellate court must treat the trial judge’s findings of fact with great deference. To better understand the applicable standard of review, see MacLean v. MacLean (paras. 18 and 19 ) and MacDonald v.

MacDonald (p ara. 7 ). [ 34 ] This deference also applies to (1) the judge’s assessment of the evidence and the conclusions to be drawn from it; (2) her assessment of the credibility of the witnesses; (3) her decision to not make a time-limited support order; (4) the income she imputed to Mr. LeBlanc. [ 35 ] Moreover, the motion judge did not commit any reversible error in her application of the law. In regard to the matter of maintaining support payments, the judge based herself, correctly, on Bracklow v. Bracklow and on Leskun v.

Leskun , 2006 SCC 25 , [2006] 1 S.C.R. 920 , as well as on the factors and objectives set out in s. 17(4) and 17(7) of the Divorce Act . [ 36 ] Lastly, in my opinion, the judge did not make any palpable and overriding error of fact when exercising her discretion with regard to costs ( see Flieger v. Adams , 2012 NBCA 39 , 387 N.B.R. (2d) 322 , at paras. 21 to 24 ). IV. Disposition [ 37 ] For the above reasons, I would dismiss the appeal and order the appellant to pay costs in the amount of $1,500. ____________________________________ M.E.L. Larlee, j.c.a. NOUS SOUSCRIVONS À L’AVIS

____________________________________ J.C. Marc Richard, j.c.a _____________________________________ Kathleen A. Quigg, J.C.A.