2013 QCCA 1504, 2013 QCCA 1504

Unofficial English Translation Droit de la famille — 132380 2013 QCCA 1504 COURT OF APPEAL CANADA PROVINCE OF QUÉBEC MONTRÉAL REGISTRY No. 500-09-023238-132 (550-12-026786-078) DATE: September 10, 2013 CORAM: THE HONOURABLE FRANÇOIS DOYON, J.A. NICHOLAS KASIRER, J.A. CLÉMENT GASCON, J.A. G. P. APPELLANT – Applicant v. M. M.. RESPONDENT – Defendant JUDGMENT [ 1 ] G. P. appeals from a judgment of the Superior Court, District of Hull (the Honourable Mr. Justice Pierre Isabelle) rendered on November 15, 2012, that allowed in part the amended motion of the respondent, M.

M. seeking the cancellation as of January 19, 2010, of a spousal support order. [ 2 ] For the reasons of Kasirer J.A., with which Doyon and Gascon JJ.A. agree, THE COURT : [ 3 ] ALLOWS the appeal, without costs given the nature of the case; [ 4 ] DISMISSES the [ translation ] “amended motion of the defendant to vary corollary and interim relief” dated February 15, 2012; [ 5 ] QUASHES the judgment rendered by the Superior Court on November 15, 2012, with the exception of paragraphs 98 and 99 concerning the child Y; [ 6 ] REINSTATES the judgment rendered by the Superior Court on December 20, 2010, with the exception of paragraphs 7 to 11 of the homologated agreement dealing with custody and child support, and ORDERS the parties to abide by it.

FRANÇOIS DOYON J.A. NICHOLAS KASIRER J.A. CLÉMENT GASCON J.A. Mtre Denise Boivin Poirier & Boivin For the appellant Mtre Amélie Samson Mtre Amélie Samson, avocate For the respondent Date of hearing: June 6, 2013

REASONS OF KASIRER, J.A. [ 7 ] This appeal, which concerns the cancellation of a spousal support order, raises the thorny problem of how separation agreements under

section 17 of the Divorce Act should be treated. [1] [ 8 ] More specifically, the issue here is how to measure a “material change” in the parties’ financial circumstances that would justify a support variation order when the spouses themselves, in an agreement confirmed by the competent court, seek to set parameters for future variations, rather than “oust” [2] the power to order any such variation. * * * I The facts [ 9 ] From the date of the marriage of G. P. and M. M. until the judgment terminating support for the former, the facts relevant to the motion for a variation order can be divided into five periods.

I.1 From the marriage to the separation of the couple in 2007 [ 10 ] After several years living together, Ms. P. and Mr. M. were married in 1986, in City A, under the regime of partnership of acquests. Their children X and Y were born in 1988 and 1991, respectively. [ 11 ] Ms. P. first worked in the branches of various financial institutions. Upon X’s birth, she remained at home—according to what Mr. M. refers to as a [ translation ] “mutual agreement” between the spouses—to attend more fully to the children’s needs. [ 12 ] Mr.

M. had a successful business career as a consultant and speaker in the field of real estate investment. After the birth of the children, he earned most of the couple’s income. In the latter years of the marriage, he generated a gross annual income of $300,000 or more. [ 13 ] Around 2005, he created [Company A] to organize his consulting activities and his few personal investments. [Company A] enabled him to deduct expenses and report gains and losses in an optimal manner for tax purposes. [ 14 ] At first, the spouses were co-shareholders of [Company A].

Having seen to the couple’s accounting for a number of years, Ms. P. also took on the payment of the company’s bills as of 2005. She received a salary [from Company A] equal at the time to what her husband received from the company as a personal salary. As Mr. M. candidly explained, this was a technique for splitting his own income [ translation ] “according to the tax rates, retirement savings benefits, and things like that”. (Mr.

M. would also practise this income-splitting technique with his new spouse after the parties’ divorce). [ 15 ] After more than twenty years of marriage, the spouses separated in February 2007. I.2 From the separation until the granting of the divorce on August 30, 2007 [ 16 ] In 2007, the spouses had recourse to a mediator to settle the consequences of a separation that appeared to be final. On August 21, 2007, Ms. P. and Mr.

M. signed an initial agreement that was confirmed by a judgment of divorce rendered shortly thereafter, on August 30, 2007, by the same judge who, in 2012, would render the judgment a quo. [ 17 ] The agreement confirmed in 2007 was vast in scope: as its

preamble indicates, it sought to settle [ translation ] “amicably … all the rights and obligations arising from the marriage”. [ 18 ] In it, the parties affirmed that [ translation ] “Mr. M. ’s gross annual income for 2007 will be approximately $350,000, while Ms. P. will have no income”. [ 19 ] The agreement provided that Ms. P. would have custody of X and Y. Mr. M. agreed to pay total support of $2,500 a month to Ms.

P. for the two children, payable in accordance with certain terms, until the end of their undergraduate university studies. [ 20 ] The patrimonial effects of the dissolution of the matrimonial regime and the partition of the family patrimony were set by the agreement. The value of the property subject to the partition of the family patrimony and the acquests totalled $940,000. Mr. M. agreed to pay Ms. P. $470,000. He would keep the family residence, assessed at $560,000, and undertook to finance the purchase of a residence for her. He would also transfer $53,000 to Ms. P. ’s RRSP account. Mr.

M. would pay the balance of $122,500 on the division of property over a period of five years, with interest. Each party would be responsible for his or her own debts incurred after February 1, 2007. [ 21 ] In addition, the parties [ translation ] “irrevocably” renounced seeking any compensatory allowance. [ 22 ] Clauses 20 to 27 dealt with the support payable to Ms. P. for herself, which totalled $400,000, spread over ten years. The parties acknowledged that Ms. P. was not [ translation ] “currently” financially self-sufficient, since she had no income. Mr.

M. agreed to pay her support of $4,167 a month ($50,000 a year) for five years as of June 1, 2007, and thereafter, monthly support of $2,500 ($30,000 a year) for the five years ending in 2017. All support for Ms. P. [ translation ] “will definitively end” after ten years. Two clauses dealt with the right to vary support: [ translation ]

[23] The parties also agree that the support payable by Mr. M. to Ms. P. will not be reduced in the event that Ms. P. works and obtains additional income. . . . [27] The parties also agree that any support payable to Ms. P. for herself and/or the children may be varied in the event of a significant change in Mr. M. ’s income that is beyond his control. [ 23 ] Subject to the rights and obligations recognized in the confirmed agreement, the parties [ translation ] “give one another mutual, full and final release for any claim that either party has or may have against the other party . . .”.

They acknowledged that the agreement constituted a transaction within the meaning of the Civil Code of Québec . The parties also agreed that the clauses of the agreement were independent of each other and that [ translation ] “the amendment of one will not affect the validity of the others”. I.3 From the divorce to the signing of a second agreement on June 12, 2009 [ 24 ] During the period following the granting of the divorce, Ms. P. decided to return to school in addition to her responsibilities toward the children. She obtained a degree in office technology in 2008.

At first, she found temporary jobs, including one in the federal public service. [ 25 ] In 2009, Mr. M. ’s income decreased because of the general slowdown in the real estate sector. He predicted that he would earn a gross income of approximately $260,000 that year. Ms. P. ’s gross annual income was estimated at $10,000. [ 26 ] On the basis of clause 27, reproduced above, Mr. M. sought to vary the financial arrangements made at the time of the divorce in 2007. The parties returned to mediation and, on June 12, 2009, a new agreement was signed. [ 27 ] The

preamble stipulated the following: [ translation ] “WHEREAS, since this judgment [the one granting the divorce of August 30, 2007], significant changes have occurred in the circumstances of the parties and the children”. [ 28 ] Support for X—who had reached full age and was financially self-sufficient—was eliminated. Ms. P. retained custody of Y and the support that Mr. M. paid for their daughter did not change. [ 29 ] Ms. P. agreed to a reduction in the balance to be paid by Mr. M. regarding the division of property under the first agreement.

The balance was reduced from $63,000 to $40,000, payable according to certain terms. [ 30 ] The mutual waiver of the right to seek a compensatory allowance was repeated in the new agreement. [ 31 ] The parties also agreed to make changes in the support set for Ms. P. , who was described as [ translation ] “not yet financially self-sufficient”. Mr. M. would pay her support of $2,500 a month ($30,000 a year) as of April 1, 2009, for 36 months.

After the three years, the support would be reduced to $1,250 a month ($15, 000 a year) for 36 additional months. [ 32 ] Thus, support would henceforth total $135,000, rather than $400,000, minus the amounts already paid under the 2007 agreement. Now spread over a period ending on March 31, 2015, the monthly payments were substantially reduced.

The 2009 agreement put an end to the support [ translation ] “definitively” after six years, as the 2007 agreement did after ten years. [ 33 ] In clauses 16 and 20, the parties foresaw circumstances relevant to the variation of support: [ translation ] [16] The parties also agree that the support payable to Ms. P. will not be reduced in the case where she works and receives additional income, regardless of the amount. . . . [20] The parties also agree that any support payable to Ms. P. for herself and/or the children may be varied only in the event of a significant change in Mr.

M. ’s income occurs that is beyond his control. [ 34 ] Like the 2007 agreement, the new arrangement provided for a possible variation of the pension if a [ translation ] “significant change” occurred in Mr. M. ’s income that was beyond his control. The parties included a qualification in clause 20 that was not in the former clause 27, adding that the variation would occur [ translation ] “only” in that particular case. [ 35 ] The 2009 agreement again specified that Ms. P. ’s income would have no impact on the support. In that regard, clause 16 of the 2009 agreement indicates that Ms.

P. ’s support would not be reduced [ translation ] “regardless of the amount” of her income. [ 36 ] Furthermore, the parties again acknowledged that the agreement constituted a transaction within the meaning of the Civil Code of Québec and that they were both authorized to have it confirmed at any time. The clauses were again stipulated to be independent of

each other and the amendment of one clause would not affect the validity of the others. [ 37 ] As of the signing of the new agreement, and even before it was confirmed by a judge, the former spouses implemented it. Mr. M. reduced the amounts he paid in support in accordance with the terms of the new agreement. I.4 From the second agreement to the judgment of December 20, 2010 [ 38 ] The events following the second agreement are at the heart of the dispute concerning the change invoked as justification for the motion to rescind support. [ 39 ] On October 27, 2009, a televised report featuring Mr.

M. denounced the company he worked for because of its business practices. The company blamed him and, on January 19, 2010, he was dismissed. The loss of that contract reduced the income of [Company A] and the salary that the respondent derived from it. Although the amount is contested, he states that he received a gross salary of approximately $34,000 in 2010. [ 40 ] Despite the loss of his contract, Mr. M. continued to pay his former spouse support in accordance with the second agreement until April 2010. When he stopped the payments, Mr. M. said he had paid about $17,000 for 2010. [ 41 ] In November 2010, Mr.

M. obtained a consulting contract from [Company B], a business specializing in real estate investments. As a self-employed worker, he received gross remuneration of $10,000 a month, but he did not resume payment of the support to his former spouse. [ 42 ] On December 1, 2010, Mr. M. served a motion to vary corollary and interim relief at the Superior Court. In it, he explained that he had lost his job in January 2010 and his income had therefore decreased.

According to the motion, this was a significant change justifying a new variation in the support paid for his daughter and his former spouse: [ translation ] “[t]he defendant submits that he is currently in a difficult financial situation, since he lost his job ten (10) months ago”. Besides the change in his own financial situation, Mr. M. contended that Ms. P. held a government job and was financially self-sufficient. Referring to the 2009 agreement, Mr.

M. sought, inter alia , the complete termination of support for his former spouse as of the date of his dismissal, i.e ., January 19, 2010, as well as the cancellation of the arrears owed. [ 43 ] Shortly after he submitted his motion, Mr. M. asked the Superior Court to confirm the 2009 agreement.

The motion to homologate, which was not contested, was granted; the 2009 agreement was incorporated, without change, into the judgment rendered by a clerk of the Superior Court on December 20, 2010. 1.5 From the variation order of December 20, 2010, to the judgment a quo of November 15, 2012 [ 44 ] Thanks to his new contract with [Company B], Mr. M. experienced a better end of year 2010 and his financial situation improved the following year. He estimates that his gross income in 2011 was about $110,000, or $65,000 net. [ 45 ] On September 30, 2012, Mr. M. lost his contract with [Company B].

For that year, he earned a gross income of about $90,000, or $60,000 net. [ 46 ] As for Ms. P. , she has held a permanent position in the public service since 2011. She says that she had a gross annual income of about $50,000 in 2011 and a little more than that in 2012, which included income from a real estate investment made with her share of the divided property. [ 47 ] On February 21, 2012, Mr. M. amended his motion to vary to seek a refund of the amounts paid to Ms. P. in 2010, which he considered excessive.

The amended motion reiterated the allegations concerning the significant change in the parties’ financial circumstances that, according to him, justified terminating support to Ms. P . The amendments to the motion, however, did not mention either the fact that the second agreement had been confirmed in December 2010 or that Mr. M.’s financial situation had improved in 2011 because of his contract with [Company B]. [ 48 ] Two hearings were held before the Superior Court, punctuated by periods of unsuccessful negotiation between the parties. During the first hearing in March 2012, Mr.

M. was still under contract to [Company B]. At the time of the hearing of October 2012, he had been unemployed for a little over two weeks. II The Superior Court judgment [ 49 ] The judge reviewed the facts, focusing on the details of the 2007 and 2009 agreements, and discussed the financial situation of each of the former spouses in turn. [ 50 ] He began his analysis by pointing out that the parties declared that they had settled their dispute regarding child support (paras. 61 and 62 of his reasons). The judge decided that no amount was to be refunded to Mr. M. for the child support paid.

These conclusions were not contested on appeal. [ 51 ] Subsequently, the judge examined in detail the motion to terminate support Mr. M. for his former spouse. [ 52 ] The judge defined the framework for the analysis of a motion to vary pursuant to

section 17 of the Act. He explained the case law applicable to situations where parties sign an agreement to settle definitively their respective support obligations (paras. 64 et seq. ). [ 53 ] Citing Miglin , [3] L.M.P . [4] and R.P. , [5] among other cases, the judge noted that he [ translation ] “must first ask himself whether a material change occurred in the resources, needs or general circumstances of either spouse since the order for support for one spouse was issued”. Once a material change is established, he wrote, the Court must then reassess the case, taking into consideration the criteria in

section 17 of the Act. [ translation ] “It must be demonstrated”, he continued, “that the situation is significantly different from

that envisioned by the parties at the time the agreement was signed” (at para. 69). [ 54 ] The judge reiterated the facts in light of the applicable law and concluded that that a material change had occurred that allowed him to review the support: [ translation ] [78] There is no doubt that a significant change has occurred in the defendant’s circumstances since the second agreement was signed.

The income considered at the time of the 2009 agreement was less than that considered at the time of the 2007 agreement, such that the defendant finds himself in a difficult financial situation. . . . [82] The applicant’s income has stabilized and, taking into consideration the strides made since the judgment of divorce, it is easy to see that she has become financially self-sufficient. Her assets have increased in value and her indebtedness is minimal.

She is in a more advantageous financial situation than the defendant at this stage in their lives. [83] The Court therefore notes the existence of a significant change in the parties’ financial situation, justifying a review of the judgment of December 20, 2010. [ 55 ] The judge went on to reconsider the situation of the former spouses in light of the objective stated in subsection 17(7) of the Act. [ 56 ] He noted that the support owed to Ms.

P. under the two agreements was [ translation ] “compensatory” in nature because, when the agreements were signed, the parties were seeking to acknowledge the economic consequences of the marriage and its breakdown on the financial situation of Ms. P. (at para. 88). The judge was of the opinion, however, that the compensatory nature [ translation ] “does not justify a complete departure from the parties’ obligation to achieve their financial independence within a reasonable time” (para. 90).

He added that [ translation ] “the support obligation between spouses does not exist to punish the debtor” (para. 92). [ 57 ] For the judge, it was Mr. M. ’s difficult situation and what he called Ms. P. ’s [ translation ] “economic health” that justified the complete termination of support as of January 10, 2010, the date on which Mr. M. lost his first contract as a consultant and speaker: [ translation ] [91] In this case, the parties’ financial situations for the year 2010 argue in favour of terminating the defendant’s support obligation toward the applicant.

His income of $34,171 [in 2010] simply did not allow him to pay support to the applicant, who was earning $52,614.96 at the time. [ 58 ] But the judge chose not to order Ms. P. to repay the support received in 2010, determining that it would have been [ translation ] “an unfair consequence of this decision” (para. 94). He was of the opinion that Mr. M. unduly delayed instituting his action to vary support when he had known for several months that his financial capacity was reduced. This conclusion was not challenged by Mr. M. on appeal. III Arguments of the parties [ 59 ] Ms.

P. does not contest that there was a change in the financial circumstances of her former spouse in 2010 because he lost his job. Nor does she deny that her own financial circumstances have improved since the date of the second agreement between the parties entered into in 2009. In her opinion, however, these changes do not constitute a “material change” within the meaning of this expression in the case law, such that the judge therefore could not intervene to vary the support, much less terminate it. [ 60 ] Ms.

P. alleges that the judge committed three errors of law, in addition to numerous palpable and overriding errors in his assessment of the evidence. [ 61 ] Firstly, citing L.M.P. in particular, Ms. P. contends that the judge erred by disregarding part of the agreement between the parties in his assessment of the change within the meaning of subsection 17(4.1) of the Act. She states that she accepted that a term be imposed on her support, provided that her income was not taken into account in an eventual motion to vary.

The judge erred in law by omitting this clause at the “threshold for variation” stage. [ 62 ] Secondly, Ms. P. submits that the judge could not terminate the support retroactively to January 19, 2010, since that date was prior to the judgment of December 20, 2010, confirming the 2009 agreement. [ 63 ] Thirdly, Ms. P. argues that the judge was mistaken when he failed to ascertain whether the material change had [ translation ] “some degree of continuity”, to use the expression in the case law. [ 64 ] Lastly, Ms. P. criticizes the judge’s assessment of the evidence of Mr. M. ’s income.

The respondent’s presentation of his

financial situation is implausible: The net income he reports is unreliable since it is not corroborated by accounting documents, such as the financial statements of [Company A]. [ 65 ] As for Mr. M. , he contends that the judge directed himself correctly in law in regard to the material change test under

section 17, since his job losses in January of 2010 and September of 2012 were unforeseen and not the result of wrongful conduct. The change has been permanent in nature, given his difficulty in finding a job in the wake of the negative publicity about him. [ 66 ] He argues that the judge was not mistaken about the relevance of the 2009 agreement. It provided expressly for the possibility for Mr. M. to seek a variation of the support if his income decreased and the reduction was beyond his control. The judge was correct in noting that Ms.

P. had assets of several hundred thousand dollars and a stable income, all of which is relevant to her right to support. Given a significant change, the judge could and should have terminated the support. [ 67 ] As for the supposed factual errors, Mr. M. points out the deference owed by appellate court towards a trial judge’s findings, and he alleges that Ms. P. does not identify a palpable and overriding error that, alone, would justify the Court’s intervention. IV Analysis [ 68 ] It is appropriate to outline analytical framework for this appeal, taking into particular consideration the

interpretation that the majority [6] of the Supreme Court gave

section 17 of the Divorce Act in L.M.P . and R.P . [ 69 ] First, the specific context of the analysis must be defined. [ 70 ] After the breakdown of this traditional, long-term marriage, the initial support order—presumed to have been issued in accordance with

section 15.2 of the Divorce Act and the factors and objectives stated therein by Parliament—provided for the extinguishment of support for Ms. P. upon expiry of a term of ten years. The definitive nature of the order was expressly mitigated by the parties, who foresaw the possibility that Mr. M. would seek its variation, which he did in 2009, while specifying the basis on which such a request could be made. [ 71 ] Negotiations led to an agreement on the variation of support, signed in June of 2009. This agreement was confirmed only on December 20, 2010, however, at the request of Mr. M .

Although the order was issued summarily by a clerk of the Superior Court and merely reiterated the terms proposed by the parties, that judgment contains a “variation order” within the meaning of

section 17 of the Act. Despite the clause indicating that the support would end [ translation ] “definitively” at the end of the term—which was reduced to six years—the order also stipulated that it was subject to variation. [ 72 ] The order that Mr. M. wanted suspended in first instance is therefore not a “final” order in the full sense of the term, since the parties provided for the possibility of varying it, under certain conditions, before its expiry in 2015. [ 73 ] In L.M.P. , the majority of the Court noted that, when an agreement is incorporated into a support order, as in this case, the analytical framework adopted must be specific to

section 17 and differs from that proposed in Miglin [7] for the initial order under

article 15.2 . [8] The Miglin framework is also inappropriate here since Miglin is meant to deal with definitive settlements. [9] [ 74 ] The Supreme Court outlined a two-step approach to deciding a motion under

section 17 of the Act. [ 75 ] First, the “threshold for variation” set out in subsection 17(4.1) must be met. A single factor—a change in circumstances of either of the former spouses—allows such a variation. 17

(4.1) 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 last variation order made in respect of that order, and, in making the variation order, the court shall take that change into consideration. 17

(4.1) Avant de rendre une ordonnance modificative de l'ordonnance alimentaire au profit d'un époux, le tribunal s'assure qu'il est survenu un changement dans les ressources, les besoins ou, d'une façon générale, la situation de l'un ou l'autre des ex-époux depuis que cette ordonnance ou la dernière ordonnance modificative de celle-ci a été rendue et tient compte du changement en rendant l'ordonnance modificative. [ 76 ] The test for determining what constitutes such a change is explained in L.M.P. Basing themselves on Willick v . Willick [10] and G. (L.) v .

B. (G.) [11] in particular, Abella and Rothstein JJ. required that a “material” change be demonstrated: [32] That “change of circumstances”, the majority of the Court concluded in Willick , had to be a “material” one, meaning a change that, “if known at the time, would likely have resulted in different terms” (p. 688).

G. (L.) confirmed that this threshold also applied to spousal support variations. [ 77 ] More than twenty years ago, Proudfoot J.A. of the Court of Appeal for British Columbia formulated a concise definition of a material change: “a change that is substantial, unforeseen and of a continuing nature”. [12] [ 78 ] The material change must have existed since the making of the order [13] — in this case, the order of December 20, 2010—and, in addition, the court must not consider the correctness of the order or depart from it lightly. [14] [ 79 ] The Supreme Court underscored that the threshold for variation remains the same whether or not an agreement is incorporated into the order, but it indicated that “[t] his does not mean that the incorporated agreement is irrelevant ”. [15]

[ 80 ] Once the threshold for variation is met, the court decides on the variation to be made to the order in view of the change. The determination is made on the basis of the objectives relevant to a variation order under subsection 17(7) of the Act: 17

(7) A variation order varying a spousal support order should (

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

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

d) in so far as practicable, promote the economic self-sufficiency of each former spouse within a reasonable period of time. 17

(7) L'ordonnance modificative de l'ordonnance alimentaire au profit d'un époux vise:

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

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. [ 81 ] It is not an appeal from the support order in effect or a de novo trial. On this point, in L.M.P. , [16] the Supreme Court was adamant: “A court should limit itself to making the variation which is appropriate in light of the change.

The task should not be approached as if it were an initial application for support under s. 15.2 of the Divorce Act ”. [ 82 ] In first instance, the onus of establishing the existence of a “material change” and justifying the variation sought is on the former spouse seeking the variation. [17] In this case, Mr. M. bears that burden. [ 83 ] We know that a court of appeal must not disturb a decision in first instance in a support matter “unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong” . [18] That onus on appeal rests with Ms.

P . [ 84 ] I shall now review the two stages in the analysis of the motion under

section 17 of the Act, as identified by the Supreme Court.

IV.1 The threshold for variation of the order of December 20, 2010 [ 85 ] It should be recalled that, according to the judge, there was a [ translation ] “significant change” in the parties’ circumstances that enabled him to vary the judgment of December 20, 2010. [ 86 ] With respect, it is my view that the judge erred in law in his analysis of that threshold, according to the standards governing the Court’s intervention as laid down by the Supreme Court in L.M.P. and R.P. [ 87 ] The judge adopted the analytical framework developed in Miglin and formally rejected in L.M.P. , [19] which is difficult to apply to a non-definitive support settlement.

In doing so, the judge, in my humble opinion, neglected three essential elements of the subsection 17(4.1) test: the foreseeable nature of the change, the date as of which the analysis must be conducted, and the requirement that the change continue over time in order to be “material”. Given as well the inaccuracies in the assessment of the evidence in the record, it cannot be said that Mr. M. established a change justifying the termination of support. [ 88 ] Each of these points must be analyzed in turn. IV.1.A.

The failure to consider clauses 16 and 20 of the confirmed agreement when assessing the “material change” [ 89 ] We have seen that, in clauses 16 and 20 of the agreement confirmed in 2010, the parties provided a list of considerations that would or would not constitute a material change giving rise to a variation of support in the future. [ 90 ] Clause 20 reiterates a similar commitment made in 2007 allowing Mr. M. to seek a variation because of a significant change in his income beyond his control.

Given the stipulation that [ translation ] “only” this type of change could justify a variation, any other change appears to have been ruled out by the parties, contrary to what is stated in subsection 17(4.1) of the Act. [ 91 ] The former spouses reiterate the 2007 stipulation that support would not be reduced in the case where Ms.

P. worked and earned income in addition to the $10,000 reported, even if such income is significant (specifying [ translation ] “regardless of the amount” in clause 16). [ 92 ] Although he referred to it in his description of the facts, [20] the judge did not take into account the exclusion in clause 16 and

did not note the caveat [ translation ] “only” in clause 20. On the contrary, he considered that the increase in income and the [ translation ] “financial self-sufficiency” of Ms. P. were relevant to the finding of a change. He concluded that the former spouse’s favourable circumstances and Mr. M. ’s difficult circumstances since January of 2010 together constituted a significant change that justified varying the support (at paras. 82 and 83). [ 93 ] With respect, I am of the opinion that the judge was mistaken in failing to consider clauses 16 and 20 of the agreement confirmed in 2010. The increase in Ms.

P. ’s income was perfectly foreseeable because it was anticipated by the parties in the confirmed agreement. This was an error in law that allows the Court to review the judge’s assessment of the material change under subsection 17(4.1). [ 94 ] Confirmed twice by the courts, clauses 16 and 20 constitute guidelines, both specific and foreseen by the parties, concerning a fact—Ms. P. ’s income—that would not result in variation of the support.

According to the rules set forth in L.M.P. governing the relevance of agreements incorporated into the assessment of a change under subsection 17(4.1), these clauses should have been considered in the determination of whether or not there had been a material change giving rise to a variation of support, without regard to Ms. P. ’s income. [ 95 ] In L.M.P. , the majority of the Court explained (at para. 38) that, under subsection 17(4.1) of the Act, the parties may provide expressly that a future event will or will not constitute a material change.

That is what the parties did in this case. [ 96 ] Deciding that an incorporated agreement may stipulate that a given future event will or will not constitute a material change within the meaning of subsection 17(4.1), the majority of the Court explained in L.M.P. how a court should give effect to a guideline in an agreement that concerns the right to seek a variation order: [39] Parties may either contemplate that a specific type of change will or will not give rise to variation.

When a given change is specified in the agreement incorporated into the order as giving rise to, or not giving rise to, variation (either expressly or by necessary implication), the answer to the Willick question may well be found in the terms of the order itself. That is, the parties, through their agreement, which has already received prior judicial approval, have provided the answer to the Willick inquiry required to determine if a material change has occurred under s. 17(4.1).

Even significant changes may not be material for the purposes of s. 17(4.1) if they were actually contemplated by the parties by the terms of the order at the time of the order . The degree of specificity with which the terms of the order provide for a particular change is evidence of whether the parties or court contemplated the situation raised on an application for variation, and whether the order was intended to capture the particular changed circumstances.

Courts should give effect to these intentions , bearing in mind that the agreement was incorporated into a court order, and that the terms can therefore be presumed, as of that time, to have been in compliance with the objectives of the Divorce Act when the order was made. [Emphasis added.] [ 97 ] In clauses 16 and 20, the parties provided, with the high degree of precision discussed by Abella and Rothstein JJ., that Ms. P. ’s income would not be relevant to a possible motion for variation and that only a material change in Mr.

M. ’s income could give rise to such an order. [ 98 ] The scheme of the 2009 agreement as a whole and the context in which it was negotiated and approved suggest clearly that the parties foresaw that Ms. P. ’s income should not have an impact on the assessment of the change giving rise to a possible variation of her support. [ 99 ] Clause 16 and the reworking of clause 20 are part of the same consideration provided by Mr. M. for the concessions that Ms.

P. made by signing the agreement that comprehensively settled the rights and obligations of the marriage. [ 100 ] She made a major concession to her former spouse by accepting that a term be imposed on the support.

In the context of a traditional, 21-year marriage with children, the case law [21] and commentary [22] are unanimous: it is unusual to see a term imposed on support after a long marriage during which the creditor withdrew from the labour market to take care of the children. [ 101 ] Even though she had a very solid basis in the circumstances to claim support without a term, the foundation of which is compensatory within the meaning of Moge , [23] Ms. P. waived this benefit by agreeing, at the time of the divorce, to limit the duration of the payments, although the initial term was generous.

The concession became broader when, in 2009, she agreed to shorten the term and significantly reduce the amount of the support payments. [ 102 ] The purpose of the amount to be paid during the term was to make up for the shortfall sustained by Ms. P. because of her economic hardship stemming from the traditional marriage and its breakdown. [24] Of course, to the extent possible, the support order also was intended to foster her economic independence within a reasonable period of time. The parties agreed specifically, however, that Ms.

P. would be entitled to a six-year period of what may be described as financial catching-up from the time lost during her working life. [ 103 ] In light of the agreement as a whole, the concession that Mr. M. made in clause 16 appears to me to be both understandable and reasonable. [ 104 ] By agreeing to a term for her support as of 2007, Ms. P. negotiated a total amount of $400,000, payable in instalments, rather than regular income with an unlimited time frame. She did the same in 2009, when she evaluated the total amount remaining to be paid at $135,000. This also seemed to be the conception that Mr.

M. had about the amounts payable, which he referred to in his testimony as the [ translation ] “total envelope”. Mindful of the tax benefits of periodic support payments, Mr. M. no doubt saw the interest in adding a clause stipulating that the amounts to be paid were not a lump sum (clause 28 of the 2007 agreement). But the concession he made—not to raise the income earned by Ms. P. during the term—also gave rise to consideration from Ms. P., who was prepared to wait to receive the contents of this total envelope. [ 105 ] Furthermore, in the 2009 agreement, Ms.

P. agreed to reduce the balance payable on the division of the property. This was a

concession she was in no way obliged to make: the clause concerning the variation of support did not formally apply to the other amounts owed. [ 106 ] In addition, in 2009, Ms. P. agreed to renew her waiver of the right to seek a compensatory allowance. That was another concession: she contributed to the growth [of Company A] during the union and, although the Court will not decide whether this allowed Mr. M.’ s enrichment at her expense, in the absence of this clause she would have had arguments to support the granting of an allowance under

article 427 of the Civil Code of Québec . [ 107 ] The consideration that Ms. P. obtained in clause 16 is part of the comprehensive settlement. [25] As part of a transaction in which the two parties are supposed to make concessions to one another, it was reasonable that Mr. M. agreed not to invoke Ms. P. ’s additional income as justification for a variation order. This transaction is “ indivisible as to its object”/”indivisible quant à son objet”, as the second paragraph of

article 2631 of the Civil Code of Québec provides, in order to protect the mutual intent it contains. [26] [ 108 ] In short, taken in its original context, the commitment that the support would not be reduced should Ms. P. earn income is entirely logical. In my opinion, it is sufficiently precise and foreseeable for the Court, in keeping with the teachings of L.M.P. , to give effect to the intent manifested by the parties in the agreement confirmed in the order. [ 109 ] Of course, the parties cannot completely pre-empt the court’s power to vary an order under

section 17 of the Act. As Abella and Rothstein JJ. wrote in paragraph 41 of L.M.P ., “ even where an agreement incorporated into an order includes a term providing that it is final, the court’s jurisdiction under s. 17 cannot be ousted. A provision indicating that the order is final merely states the obvious: the order of the court is final, subject to s. 17 of the Divorce Act ”. [27] [ 110 ] Thus, in the case before us, the parties did not sign a final order seeking to oust the judicial power to vary the agreement.

Rather, they set a guideline for the exercise of this power by providing, explicitly and precisely, that an increase in Ms. P. ’s income— [ translation ] “regardless of the amount”—would not be considered at the time of a motion to vary support. [ 111 ] I would add a last word concerning the teachings of L.M.P. and R.P. in this regard. Clause 16 recalls one of the clauses debated in R.P. whereby the husband waived his right to invoke a change in his former spouse’s circumstances as a basis for a motion to vary.

The majority of the Supreme Court noted first that the clause expressed the parties’ wishes regarding the scale of a change. It is therefore relevant to the measurement of the change under subsection 17(4.1), although it does not preclude the court’s power under

section 17 : [27] However, as we explained at para. 41 of L.M.P. , parties cannot oust the jurisdiction of the court to make a variation under s. 17 of the Divorce Act . As a result, a general term stating that no change in the circumstances of either or both parties is to be considered material cannot, by itself, be viewed as binding on the court . [28] [ 112 ] The warning in paragraph 27 of R.P. does not apply to this case. As we have seen, it cannot be said that the support agreement between Ms. P. and Mr. M. ousts the court’s power under

section 17 . It also cannot be said that clause 16 is a “general term”; rather, it is specific, and it was included by the parties deliberately because of the compensatory foundation of the support awarded Ms. P. and as consideration for the various concessions she made to her former spouse. [ 113 ] In the end, I believe that disregarding the concession made by Mr. M. makes the agreement unintelligible, to the point that it cannot be said to still reflect true mutual intent. I would go even further. Selectively choosing to implement certain clauses in the 2010 agreement that benefited only Mr.

M. [29] while refusing to allow Ms. P. to invoke clause 16 is not consistent with contractual justice nor is it consistent, under the regime of

section 17 where the contract is not the only law between the parties, with justice in general. [ 114 ] In paragraph 39 of L.M.P ., the Supreme Court took pains to say that where the parties have contemplated the situation raised in the motion to vary and the order is supposed to target that change, a court should give effect to the intention expressed. I see this as a judicial practice in keeping with the legislative policy, underscored in subsection 9(2) of the Divorce Act , that encourages using negotiation as a dispute resolution technique in divorce cases.

It is also in keeping with a social policy that seeks to facilitate access to justice in family matters through the “de-judicialization” of conflicts and the promotion of settlements through agreements. [30] Although there are limits to this policy—for example, a court’s variation power cannot be ousted—it is used to prevent conflict and instil a feeling of trust in litigants who have taken

part in a consensual settlement, as two authors have noted. [31] By allowing former spouses like Ms. P. and Mr. M. to set out guidelines in an agreement for the exercise of the judicial power to vary support, without going so far as to oust that power, L.M.P . advocates what one scholar calls a balance between “private will and public policy in the law of support”. [32] Indeed, the Supreme Court was careful to stress, besides the importance of abiding by the courts’ power to intervene under

section 17 , “sound policy reasons” [33] to encourage the spouses to set the terms of their separation themselves. In the circumstances, such a balance requires that the intention expressed in clauses 16 and 20 of the agreement be given effect. [ 115 ] With respect, the judge was wrong to disregard this, and the error undermines his conclusion that the threshold for variation was met in the circumstances. IV.1.B. The error in identifying the date on which the material change must be assessed [ 116 ] Ms.

P. submits that the judge was mistaken as to the choice of the date as of which the material change alleged by Mr. M. was to be assessed for the purposes of subsection 17(4.1) of the Act. She states that the judge was obliged to abide by the date of the support order of December 20, 2010, confirming the 2009 agreement, rather than the date of the agreement itself. In Ms. P. ’s opinion, this was an error of law requiring the Court’s intervention. [ 117 ] With respect for the judge, I believe that Ms.

P. is right on that point. [ 118 ] In the facts of the case, which are somewhat singular, there is a lapse of time between June 30, 2009, the date of the signing of the second agreement dealing with Ms. P. ’s support, among other things, and December 20, 2010, the date of the Superior Court’s variation order.

[ 119 ] In a motion to vary, the usual rule is that the court takes into consideration only the change in circumstances of the spouses that occurred after the date of the order—in this case, December 20, 2010—not events that occurred between the date of the agreement and the date of the order confirming it. [34] [ 120 ] Subsection 17(4.1) is clear on the issue of dates: before the court makes an order to vary support, it ensures that a change has occurred in the circumstances of the spouses “since the making of the spousal support order or the last variation order made in respect of that order ...”/“depuis que cette ordonnance ou la dernière ordonnance modificative de celle-ci a été rendue ...”.

This is simply the corollary of the fact that

section 17 contemplates variations of support orders. Indeed, through his amended motion decided by the judgment a quo, Mr.

M. could not seek an order to vary an agreement —this is not what Parliament intended [35] —but only a support order , including an order confirming an agreement, even if the agreement is in the nature of a transaction. [36] [ 121 ] In L.M.P. , the Supreme Court confirmed that the relevant date on which to assess the parties’ circumstances for the variation of an order is the date of the order: [31] Willick described the proper analysis as requiring a court to “determine first, whether the conditions for variation exist and if they do exist what variation of the existing order ought to be made in light of the change in circumstances” (p. 688).

In determining whether the conditions for variation exist, the court must be satisfied that there has been a change of circumstance since the making of the prior order or variation . The onus is on the party seeking a variation to establish such a change. [37] [Emphasis added.] [ 122 ] I see no reason to set aside the usual rule in this case.

The question of the dates is certainly unusual here, but there was no reason for the judge not to assess the change as of the date of the support order of December 20, 2010, as the Act requires. [ 123 ] The application of this rule is, in the present case, a consequence of what seems to be the procedural strategy adopted by Mr. M . [ 124 ] Shortly before the judgment of December 20, 2010, Mr. M. filed a motion for a new variation order concerning the support owed under the 2009 agreement, a motion he amended on February 15, 2012.

The motion alleged (at para. 8) that a material change had occurred since the signing of the agreement, which was attributable to the financial self-sufficiency that Ms. P. had acquired and the financial difficulties that Mr. M. had faced since January 2010 (at paras. 16 and 18). Even amended, the motion makes no mention of the homologation of the agreement in December 2010. [ 125 ] But the last order issued at the time the initial motion was filed in November of 2010 was the motion ancillary to the judgment of divorce in 2007. If Mr.

M. did not have the 2009 agreement homologated, his motion for variation would necessarily concern the last order in effect, i.e . that of 2007. [ 126 ] As we have seen, the 2009 agreement gave Mr. M. numerous benefits compared with the 2007 agreement incorporated into the judgment of divorce. Besides a reduction in the amount to be paid for the division of the property, Mr. M. obtained a significant reduction in the term of the support and a decrease in the amounts to be paid each month. By seeking the homologation of the 2009 agreement, Mr.

M. wanted to consolidate what he had achieved, even though he believed at the time that, on the whole, the 2009 agreement no longer suited his circumstances. When he sought the homologation, he was not even abiding by the agreement. Nevertheless, he wanted to take advantage of the benefits of the 2009 agreement while seeking other concessions from Ms.

P., including the retroactive suspension of the amounts to be paid according to that agreement. [ 127 ] In short, he wanted to have his cake and eat it too, and he seems to have designed his strategy before the Superior Court accordingly. [ 128 ] The judge chose the date on which the second support agreement was signed, i.e . June 12, 2009, to ascertain whether, in the circumstances, there had been a change within the meaning of subsection 17(4.1) of the Act. That enabled him to take into consideration the decrease in Mr.

M. ’s income as of the loss of his job in January 2010. [38] But the judge’s conclusions concerned the variation of the order of December of 2010 confirming the 2009 agreement. [ 129 ] The judge should have measured the change as of the date of the 2010 order. The mistake is even more overriding because of the importance the judge attributed to the decrease in Mr. M. ’s income during 2010—a period prior to the December order— in his decision to suspend the support. [39] [ 130 ] Having sought and obtained the homologation of the 2009 agreement, Mr.

M. now has to live with the consequences of this choice, including the fact that December 20, 2010, the date of the support order, is the proper date for assessment of the material change related to his new motion for variation. [ 131 ] In his statement of the facts on appeal, Mr. M. criticizes Ms. P. for not presenting the argument concerning the date of assessment in first instance, arguing that she cannot raise it for the first time on appeal. [ 132 ] This argument should be rejected.

Under subsection 17(4.1) of the Act, the judge should have assessed the material change on the basis of the date of the order, not the date of the agreement. [ 133 ] In short, the material change should have been assessed as of the date of the order of December 20, 2010. The judge was wrong to consider the decrease in Mr. M. ’s income between January 19 and December 19, 2010, in his conclusion that the test in subsection 17(4.1) was met. IV.1.C. The error with respect to the “continuity” of the change required under subsection 17(4.1) of the Act [ 134 ] According to Ms. P. , the change in Mr.

M. ’s financial situation was only temporary. She noted that the judge did not discuss Mr. M. ’s anticipated income in 2013, 2014 or 2015—the remainder of the term for support under the agreement—when he decided to

suspend it. [135] Ms. P. sees this as an error of law since, she argues, the definition given the notion of “material change” in the case law dealingwith subsection 17(4.1) insists on a degree of continuity. [136] Subject to the following comments, I believe that Ms. P. is right on this point. [137] Before terminating the support, the judge should have ascertained whether the change in circumstances continued over time,including the anticipated income period ending in 2015. Nothing in the judge’s reasons explains how the evidence showed that thedecrease in Mr.

M.’s income would continue. [138] The majority of the Court in L.M.P. explained that a setback in the financial circumstances of a spouse must have a degree ofcontinuity to meet the threshold for varying an order: [35] In general, a material change must have some degree of continuity, and not merely be a temporary set of circumstances(see Marinangeli v. Marinangeli (2003), (ON CA), 66 O.R. (3d) 40, at para. 49)... .[40] [139] It is true that Mr. M.’s income decreased in 2010, but as we have seen, this setback occurred prior to the date of the December2010 order. Inasmuch as the effects of the media report on Mr.

M.’s reputation continued to prevent him from properly earning a livingafter December 20, 2010, these events are relevant. The reduction in income for that year, however, is not. [140] What about 2011 and 2012? [141] At the time of the order he sought to vary, Mr. M. had a $10,000-a-month contract with [Company B], which was less lucrativethan his employment in 2009.

The judge was aware of this fact: in paragraph 80 of his reasons, he noted a gross income of $110,000 anda net income of $65,000 for 2011, and a gross income of $90,000 and a net income of $60,000 for January to September of 2012. [142] When he filed his amended motion to vary an order in February of 2012 and during the first hearing before the Court in thiscase, he was still under contract with [Company B]. It was only on September 30, 2012—two weeks before the second and last hearingbefore the Superior Court—that Mr.

M. lost his contract. [143] His income for the years 2011 and 2012 therefore decreased compared with the lucrative years in the real estate sector. Thereduction seems to have been less dramatic when consideration is given to his own statements of his net income before personalexpenses: $90,000 for 2009, $65,000 for 2011 and $60,000 for 2012. That said, there is evidence that his net income before personalexpenses decreased between 2010 and 2012.[41] As I discuss in more detail in the

section containing my reasons referring to theevidence, however, it was certainly not convincingly demonstrated that a change of this kind in Mr. M.’s income for 2011 and 2012 wasso material that it prevented him from paying Ms. P support that was, after all, reduced at the time. [144] Furthermore, when the judge terminated support, nothing in the evidence indicated that Mr. M. did not have the capacity to earnincome for the years 2013, 2014 and 2015.

He was 55 years old and, at the hearing, he expressed his intention to return to the labourmarket, saying he was prepared to move to Toronto, where there would be more opportunities for him.

He deplored the impact that thereport has had on his reputation, but he seems to have a certain professional flexibility—his work for [Company B] was in the area ofwine-making—that suggests that he will find another position in the employment market, as he himself said in response to a question bythe judge, referring to an anticipated income of $80,000 to $120,000. [145] His circumstances clearly implied no state of affairs that by their very nature would necessarily extend into the future: he wasnot disabled, he had not retired, he had no outside constraint preventing him from working.

In short, the judge could not assume that,during the years 2013, 2014 and 2015, his financial situation would prevent him from paying Ms. P. support. [146] The judge failed to ascertain whether the alleged change had the quality of continuity beyond 2012 that would justify thetermination that Mr. M. sought. [147] I hasten to add that the requirement of continuity can only be a general rule, as Abella and Rothstein JJ. wrote in paragraph 35 ofL.M.P., cited earlier. Since paragraph 17(1)(

a) of the Act provides that the court may suspend support in a variation order, it can beassumed that there are changes that are sufficient under subsection 17(4.1) that nevertheless do not have the quality of permanence.

Theidea of a “degree of continuity” invoked by the Supreme Court should not preclude the statutory power of a court to order the suspensionof a support order when the other criteria relating to the scale of the change are otherwise met. [148] Of note is the fact that the possibility of suspending support was discussed at the hearing in Superior Court, but in the end, theparties rejected this option and the judge did not examine this alternative in any further detail. In both his proceedings and his argumentsbefore the judge, Mr.

M. insisted that the alleged material change justified the complete cancellation of the support—which had been setto terminate on March 31, 2015—as of January 2010. [149] It is clear that, in the framework of a motion for cancellation of support, the change had to be ascertained over time to meet thethreshold in subsection 17(4.1), but this was not done. IV.1.D. The errors in the factual assessment of Mr.

M.’s resources [150] The three errors of law detected in the judge’s reasons all had an impact on the assessment of the material change ofcircumstances, which is the threshold for any variation of the order of December 20, 2010. They justify the Court’s intervention todetermine whether the change exists and whether or not the judge erred in his ultimate conclusion to terminate support as of January 19,2010, the date on which Mr. M. lost his job. [151] Absent the judge’s errors of law, did a material change occur within the meaning of Willick? Considering [translation] “only” the

decrease in Mr. M. ’s income, as indicated in clause 20 of the agreement, was there a material change within the meaning of subsection 17(4.1)? [ 152 ] It should first be noted that the judge never indicated in his reasons that, taken in isolation, the decrease in Mr. M. ’s income constituted a material change justifying a variation of support. [ 153 ] Ms. P. does not deny that her former spouse sustained financial setbacks since declaring in the agreement confirmed in 2010 that he earned an annual gross income of $260,000. But she does contest the judge’s factual finding with respect to Mr.

M. ’s income and expenses in 2011 and 2012. She also contests the assessment of the testimony of her former spouse, arguing that his version of the facts concerning the date of his resignation from [Company B] was not reliable and that his statement that he was almost bankrupt did not reflect the facts. [ 154 ] Without commenting on the assessment of Mr. M. ’s testimony, I respectfully find that the judge erred by failing to analyze the expenses cited by Mr. M . [ 155 ] Mr. M. was entitled to deduct his personal expenses when calculating his income available for the support owed to his former spouse.

The appeal book contains a Form III (“Statement of Income and Expenditures and Balance Sheet”) signed by Mr. M. on October 16, 2012, replacing a Form III that was unsigned and filed at the hearing of March 1, 2012. There is another Form III for 2010, but nothing in the appeal book for 2011. [ 156 ] The judge noted that [ translation ] “The Form III filed by the defendant on October 16 shows that he had monthly expenses of $15,108” (at para. 47). He noted that the picture of Mr.

M. ’s finances in October was worse than that according to Form III from March, which set his expenses at $12,739.67. [ 157 ] On the very face of Form III, we note that either Mr. M. made gross errors in the statement of his personal expenses or he filed an unrealistic balance sheet. [ 158 ] For example, in the Form III for October, Mr.

M. indicated that he had expenses of $1,000 a month for glasses, $150 a month for furniture repairs and $200 a month for motor vehicle licences, all errors that inflate his personal expenses to an exaggerated level. [42] [ 159 ] The same form also indicates $263.33 a month for [ translation ] “outings and entertainment”, [ translation ] “sports activities” and [ translation ] “sports, recreational or other equipment”; $200 a month for [ translation ] “tobacco and alcoholic beverages”; and $200 a month for “vacations”. All of his expenses are prioritized before his support. [ 160 ] Lastly, all Mr.

M. ’s debts—$6,275.00 a month—also come before the support owed his former spouse. [ 161 ] I am of the opinion that the judge’s failure to analyze these expenses is a palpable error that had an overriding impact on the conclusion that Mr. M. did not have the income to pay support. [ 162 ] My conclusion is further supported by the poor quality of the evidence that Mr. M. presented to convince the judge of his financial difficulties, which the judge himself criticized on a number of occasions. For example, Mr. M. ’s business expenses, especially those of [Company A], are presented in a wholly amateur manner. Mr.

M. explained the absence of audited financial statements of [Company A] as follows in his appeal statement: [ translation ] “... bear in mind that it is a [ translation ] ‘home’ business with the RESPONDENT as the only official employee”. [ 163 ] Although audited financial statements are not formally necessary in all cases, the absence of adequate documentation here meant that the judge did not take into consideration a major accounting event that would make it possible, as Mr.

M. himself said at the trial, to post the losses of a bad real estate investment in Detroit to future income and thereby significantly reduce the tax payable. [43] [ 164 ] Furthermore, the presentation of his assets and liabilities was chaotic. In paragraph 48, the judge noted that his net worth on assets of $825,000, including the former family residence where he no longer lived, was $49,500. But Mr. M. himself explained, in a colourful manner, that he had between $100,000 and $140,000 [ translation ] “to spare”.

I see this as a capacity to pay support that was not analyzed by the judge. [ 165 ] In short, I find that a material change was not demonstrated, the burden of doing so resting on Mr. M . Even assuming that the reduction in income between 2010 and 2012 was unforeseeable, I find that Mr. M. did not establish the substantial and continuing nature of the change in his circumstances. I cannot say that, if not for the errors of law committed by the judge, the evidence would justify finding that such a change existed. IV.2 The appropriate variation as regards the change [ 166 ] Since Mr.

M. has not demonstrated the existence of a material change justifying his motion to cancel the support order, this motion should be dismissed. Only a change that has been established can justify a variation order. [44] The decision to terminate support for the former spouse should therefore be quashed. And, since no material change has been demonstrated, any other variation order is ruled out, including a reduction short of termination. [ 167 ] I shall refrain from deciding whether a reduction in income, continuing but not permanent, sustained by Mr.

M. between December 20, 2010, and the date of the judgment a quo could have justified a variation order suspending support for a relatively long period of time. [ 168 ] Mr. M. did not seek suspension of the support, even in the alternative, and he certainly did not adduce evidence that would enable the Court to issue such an order in the stead of the court of first instance, even assuming it had the power to do so. [ 169 ] I would therefore allow the appeal, without costs given the nature of the case, reinstate the judgment of December 20, 2010,

except as it concerns the children, and order the parties to abide by it. _____________________ NICHOLAS KASIRER, J.A.