2017 NLCA 2, 2017 NLCA 2

Donald Broaders (applicant/appellant) v. Mary Boland Broaders (respondent) (16/73) Indexed As: Broaders v. Boland Broaders 2017 NLCA 2 1 C.A.N.L.R. 404 Court of Appeal of Newfoundland and Labrador Welsh, White and Harrington JJ.A. January 18, 2017

Summary: In a decision granting the parties’ divorce, a judge of the Supreme Court Trial Division determined that Ms. Broaders was entitled to spousal support on a non-compensatory basis, basing his order on Mr. Broaders’ annual income, subject to variation and review on application by either party. Mr. Broaders’ employment was subsequently terminated for cause. He filed an application to terminate or vary the spousal support order based on a change of circumstances.

Pending the hearing, he also applied for an interim order suspending support, which was granted by consent, given the sudden reduction of his income. At a subsequent hearing for a further extension of the interim order, the amount of spousal support payable was reduced, but the suspension was lifted. Mr. Broaders appealed. Held: Appeal allowed, order of the court below varied.

Welsh J.A. (White and Harrington JJ.A. concurring): A court of appeal should not interfere with the trial judge’s decision respecting support unless the reasons disclose material error in principle, a significant misapprehension of the evidence or an award which is clearly wrong. A variation in an order for spousal support, such as this order, is authorized by section 17(4.1) of the Divorce Act , RSC 1985, c. 3 (2nd Supp .), where there has been a change in circumstances. In this case, that change is the reduction of Mr. Broaders’ income.

On an interim application for variation of spousal support, the factual information establishing all the relevant circumstances will generally not be available. As a result, where, as here, the circumstances are such that variation or termination of support is likely, is it appropriate to suspend the payment of support or reduce the quantum pending a final disposition on the facts. There is distinction between suspending the payment of support and suspending enforcement of an order for support.

Section 14 of the Support Orders Enforcement Act, 2006 , SNL 2006, c. S-31.1 , deals with enforcement of an order made by a court. A court may order the suspension of enforcement proceedings taken by the director with respect to an order requiring support payments only if the payor party establishes his or her inability to make the payment required under the order. By contrast, if the order itself is varied by suspending the amount payable, the effect is that there is no payment to be enforced by proceedings taken by the director.

Section 14 is not engaged. One of the two critical factors in assessing spousal support under the Guidelines is the gross income difference between the parties. Support may be terminated where the basis for the entitlement disappears. Factors related to the parties’ conditions, means, needs and circumstances may also be factored into the assessment.

Mr. Broaders’ income has been significantly reduced while it is clear that the judge made a significant factual error regarding Ms.Broaders’ income when she assessed the income differential. In the circumstances, the applications judge erred in principle and exercisedher discretion unreasonably. Because this appeal relates to an interim order, it is appropriate to defer possible adjustment regardingspousal support payments ordered by the applications judge until final determination of Mr. Broaders’ obligation.

No further spousalsupport was ordered payable as of the beginning of the month in which the appeal was heard and determined. Cases cited: White v. White (1999), (NL CA), 172 Nfld. & P.E.I.R. 233 (C.A.) Counsel: Jean V. Dawe Q.C., for the applicant/appellant; Appearing on her own behalf, the respondent. This application was heard on January 12, 2017 before Welsh, White and Harrington JJ.A. The following judgment was delivered on January 18, 2017 by Welsh J.A. for the Court. ______________________________________________________________ Welsh J.A.: [1] This is an appeal of an interim spousal support order.

Leave to appeal, required under rule 57.02 of the Rules of the SupremeCourt, 1986, was granted on September 6, 2016 (2016 NLCA 44). [2] The parties were married on August 25, 1989, separated on October 25, 2009, and were subsequently divorced. Their one childis independent and no longer a child of the marriage under the Divorce Act. In his decision dated June 10, 2014, Fowler J. determinedthat Ms. Broaders was entitled to spousal support on a non-compensatory basis. Using the Spousal Support Advisory Guidelines, hecalculated the quantum of support payable by Mr.

Broaders, based on an annual income of $153,374 for Mr. Broaders and $45,658 for Ms. Broaders. He ordered Mr. Broaders,commencing on July 1, 2014, to pay spousal support “of $3,142 per month for an indefinite (not permanent) period subject to variationand review on application by either party” (2014 NLTD(F) 13, at paragraph 109). [3] On November 19, 2015, Mr. Broaders’ employment was terminated for cause. He received no severance or pay in lieu ofnotice, and did not believe he would be entitled to employment insurance benefits.

Accordingly, in December 2015, he filed anapplication to terminate or vary the spousal support order. In April 2016, he disclosed that his application for employment insurance hadbeen approved and he received retroactive payments. [4] The judge accepted that the interim application would be determined based on an annual income of $30,000 for Mr. Broaders. While Ms. Broaders alleged that Mr. Broaders’ income was, in fact, more than this, there was no evidence to support her contention. The judge indicated that this was an issue to be determined and, if necessary, adjusted at the trial finally disposing of Mr.

Broaders’application to vary or terminate the payment of spousal support, which is set to be heard early in June 2017. [5] For purposes of comparing the parties’ incomes under the Guidelines, the judge indicated that she had used Ms. Broaders’annual income at the time of Fowler J.’s decision, that is, $45,000, while Ms. Broaders conceded at the hearing that her annual income,without overtime, was approximately $56,000. [6] In light of Mr. Broaders’ sudden reduction in income, there was an interim consent order suspending the enforcement of spousalsupport: 1. [Mr.

Broaders’] spousal support payments are suspended from collection for a period of three (3) months pursuant to s. 14(1) of theSupport Orders Enforcement Act, 2006. The Director of Support Enforcement for the Province of Newfoundland and Labrador isdirected to take no steps whatsoever to collect ongoing support payments from [Mr. Broaders] nor to take any enforcement actionsagainst [Mr. Broaders] for a period of three (3) months commencing February 29, 2016. [7] This was followed by an interim order of the Court extending the suspension in the consent order to July 13, 2016.

At the July7, 2016 hearing, the judge made an interim order varying the amount of spousal support by reducing the payments to $400 per monthcommencing July 1, 2016. The order provides, in relevant parts:

The Order [of Fowler J.] is varied as follows, pending the final determination of [Mr. Broaders’] Originating Application for Variation ofthe said Order: 1. No spousal support shall be payable between November 19th, 2015 and June 30th, 2016 at this time pending a final determination ofthis matter. 2. Commencing July 1, 2016 [Mr. Broaders] shall pay spousal support to [Ms. Broaders] in the amount of Four Hundred Dollars ($400.00) per month payable in two installments of $200.00 on the 1st and 15th days of each month, until further varied by an Order of aCourt of competent jurisdiction or by consent of the Parties.

This is the order that is under appeal. [8] A variation in an order for spousal support, such as this order, is authorized by section 17(4.1) of the Divorce Act, R.S.C. 1985,c. 3 (2nd Supp.): Before the court makes a variation order in respect of a spousal support order, the court shall satisfy itself that a change in the condition,means, needs or other circumstances of either former spouse has occurred since the making of the spousal support order or the lastvariation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. [9] In this case, the change in circumstances on which the order under appeal was sought is the significant reduction in Mr.Broaders’ annual income.

On appeal, Mr. Broaders submits that, in light of the current financial circumstances of the parties, the judgeerred in ordering him to continue paying any amount of spousal support. [10] The role of this Court in considering Mr. Broaders’ appeal is succinctly stated in White v. White (1999), (NLCA), 172 Nfld. & P.E.I.R. 233: There are numerous cases which have considered the role of a court of appeal in family matters.

In brief, a court of appeal should notinterfere with the trial judge’s decision respecting support unless the reasons disclose material error in principle, a significantmisapprehension of the evidence or an award which is clearly wrong. See: Hunt v. Hunt (1997), (NL CA), 155 Nfld.& P.E.I.R. 212; 481 A.P.R. 212 (Nfld. C.A.). [11] In making the order for payment of $400 per month, the judge began with the proposition that entitlement to non-compensatoryspousal support had been determined by Fowler J.

At the hearing, she went on to say: … I’d certainly be prepared to do a reduction today and probably a big reduction. I probably wouldn’t be prepared to go to zero becauseof the entitlement issue which has already been litigated in front of Judge Fowler. … [12] Mr. Broaders pointed out that he had been paying $3,142 per month since the parties separated in October 2009 until hisemployment was terminated.

While there was a significant difference in their incomes, both parties had been employed throughout theirmarriage. [13] Both Fowler J. and the applications judge here employed the Spousal Support Advisory Guidelines when determining Mr.Broaders’ obligation. Where there are no children involved, the Guidelines, which are advisory as distinct from directory, focus on the“gross income difference” between the parties and the length of the marriage or cohabitation.

Support may be terminated if the basis forentitlement disappears (Guidelines, at paragraph 7.5.2). [14] On an interim application for variation of spousal support, the factual information establishing all the relevant circumstances willgenerally not be available.

As a result, where, as here, the circumstances are such that variation or termination of support is likely, is itappropriate to suspend the payment of support or reduce the quantum pending a final disposition on the facts. [15] I emphasize here that I would draw a distinction between suspending the payment of support and suspending enforcement of anorder for support.

Section 14 of the Support Orders Enforcement Act, 2006, SNL 2006, c. S-31.1, deals with enforcement of an ordermade by a court.

Section 14 provides:

(1) Where a support order is registered with the director, the debtor may apply to a court for an order suspending any proceeding takenby the director on any condition the court considers appropriate for a period specified in the order not to exceed the period referred to insubsection (4) or (5). …

(2) An order under subsection (1) may only be made where the court is satisfied that the debtor is unable for valid reasons to make thepayments required under the support order. (Emphasis added.) [16]

Section 14 must be read as a whole. Subsection (2) makes it clear that the purpose of

section 14 relates to enforcement of anorder that is in effect. That is, reading subsections (1) and (2) together, a court may order the suspension of enforcement proceedingstaken by the director with respect to an order requiring support payments only if the payor party establishes his or her inability to makethe payment required under the order. [17] By contrast, if the order itself is varied by suspending the amount payable, the effect is that there is no payment to be enforcedby proceedings taken by the director.

Section 14 is not engaged. [18] On appeal, Mr. Broaders submits that the judge made an error in principle by ordering him, when he had significantly less

income than Ms. Broaders, to continue to pay spousal support pending determination of the parties’ responsibilities at the final hearing. In addition, Mr. Broaders submits, the judge made her calculations based on an income for Ms. Broaders that was substantially undervalued. [ 19 ] As discussed above, one of the two critical factors in assessing spousal support under the Guidelines is the “gross income difference” between the parties, the purpose being to equalize the effect of the marriage break down by having the higher income earner make payments to the other party.

The Guidelines also recognize that support may be terminated where the basis for the entitlement disappears, one factor being the change in incomes of the parties. Factors related to the parties’ conditions, means, needs and circumstances may also be factored into the assessment ( Divorce Act ,

section 15.2(4)). [ 20 ] In this case, since Fowler J.’s order, Mr. Broaders’ income has been significantly reduced to an amount well below Ms. Broaders’ income while Ms. Broaders has benefitted from an increase in her income. Further, it is clear that the judge made a significant factual error regarding Ms. Broaders’ income when she assessed the income differential. For purposes of the interim application, no factual basis was identified by the judge for concluding that the conditions, means, needs and circumstances of Ms. Broaders are such as to mandate the payment of support regardless of Mr.

Broaders’ current income. [ 21 ] In the circumstances, I am satisfied that the applications judge erred in principle and exercised her discretion unreasonably in ordering Mr. Broaders to pay spousal support of $400 per month pending final determination of his application to vary or terminate his obligation. Because this appeal relates to an interim order, it is appropriate to defer possible adjustment regarding the $400 payments ordered by Fitzpatrick J. until final determination of Mr.

Broaders’ obligation. [ 22 ] Accordingly, I would allow the appeal, and vary Fitzpatrick J.’s order as follows: The order of Fitzpatrick J. of July 7, 2016 is varied as follows, pending the final determination of Donald Broaders’ originating application for variation or termination of the order of Fowler J. (2014 NLTD(F) 13): Pending a final determination of this matter, which shall include a review and, if appropriate, an adjustment to the following interim orders,

(1) No spousal support shall be payable between November 19, 2015 and June 30, 2016;

(2) Between July 1, 2016, and December 31, 2016, Donald Broaders shall pay spousal support to Mary Boland Broaders in the amount of Four Hundred Dollars ($400.00) per month payable in two installments of $200.00 on the 1 st and 15 th days of each month;

(3) Commencing January 1, 2017, no spousal support shall be payable by Donald Broaders to Mary Boland Broaders, unless further varied by an order of a court of competent jurisdiction or by consent of the parties. The hearing of Donald Broaders’ application set for June 2017 shall not be postponed except by an order of the court. [ 23 ] Costs of this appeal shall be costs in the cause of the final determination of Mr. Broaders’ application to vary or terminate his obligation to pay spousal support. Appeal allowed .