Graham v. Graham, 2013 MBCA 66

Citation: Graham v. Graham, 2013 MBCA 66 Date: 20130709 Docket: AF 12-30-07770 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Michel A. Monnin Madam Justice Freda M. Steel Madam Justice Diana M. Cameron BETWEEN : ) J. A. King and JAMES STEPHEN GRAHAM ) A. J. Wheeler ) for the Appellant (Petitioner) Appellant ) ) L. R.

Fishman - and - ) for the Respondent ) ) Appeal heard: MARINA FRANCOISE GRAHAM ) June 6, 2013 ) (Respondent) Respondent ) Judgment delivered: ) July 9, 2013 MONNIN J.A. [ 1 ] This is an appeal from an award of child and spousal support that also provided for the retroactive adjustment of those awards as well as an appeal of the costs awarded, following a trial. [ 2 ] The parties were married on March 2, 1997, and separated on January 2, 2006.

The parties were divorced at the time of trial and the appellant husband had remarried. [ 3 ] At the time of the marriage, the respondent wife had one child from a prior relationship and for whom the husband stood in loco parentis at the time of separation. There are also two other children of the marriage. [ 4 ] At the time of separation, the wife had care and control of the three children.

By the time of trial, the parties had shared custody of the two children of the marriage, and the wife had sole custody of her own child whose relationship with the husband was terminated by the husband himself, beginning in 2007. [ 5 ] An interim order with child and spousal support provisions was pronounced on August 9, 2006. [ 6 ] Another interim order was made in November 2008, when the parties were divorced.

The order was made with the consent of the parties. [ 7 ] A further consent interim order was made in February 2010, when a scheduled trial was adjourned. [ 8 ] The trial judge ordered that the husband pay the full amount payable pursuant to the Manitoba tables of the Child Support Guidelines Regulations , Man. Reg. 58/98 , for all three children and also ordered that spousal support be paid in an amount close to the higher range of the Spousal Support Advisory Guidelines . She then further ordered that the amounts to be paid should be adjusted to cover the period dating back to the time of separation.

This resulted in a retroactive child support award of $17,907.77, and a retroactive spousal support award of $48,900.77. [ 9 ] The husband was also assessed costs in the sum of $25,800, plus applicable taxes and disbursements.

[10] Other issues addressed by the trial judge are not subject to this appeal, nor is the child support order for the child fromthe wife’s previous union as the husband advised that he was no longer pursuing that matter. [11] With respect to the support awards, the husband raises three grounds of appeal: 1) that the trial judge erred in awardingfull table support for the two children whose custody was being shared equally; 2) that the trial judge erred in making all of the supportawards retroactive in the face of prior interim orders, of which the latter two were made with the consent of the parties; and 3) that inmaking all of the awards the trial judge failed to consider the cumulative effect and hardship on the husband. [12] As to the order of costs the husband argues that, considering the support orders, it was too onerous. [13] The standard of review of a support order by an appellate tribunal was clearly set out by the Supreme Court in Hickey v.Hickey, (SCC), [1999] 2 S.C.R. 518 (at para. 11): Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error inprinciple, a significant misapprehension of the evidence, or unless the award is clearly wrong. …. [14] Although not a common occurrence, there exists ample authority to justify making final orders retroactive even in theface of prior consent interim orders.

This court has stated many times that the bringing of appeals of interim orders is to be discouraged. That being so, if those interim orders do not properly reflect the state of things when all of the evidence has been adduced in a trial, itthen stands to reason that corrections can be made. That is exactly what the trial judge did in this instance. [15] In Grandbois v. Grandbois (1998), (MB CA), 131 Man.R. (2d) 110 (C.A.), Huband J.A. wrote (atparas. 6-7): .... Once a dependent spouse has asserted a claim to support, it is within a judge’s discretion to back date the order to the date of theclaim.

Otherwise a supporting spouse could delay the enforcement of his or her obligation by stalling. The parties would be well-advised to proceed expeditiously to trial, as they should have done some time ago. The trial judge will not bebound by the interim award and, if necessary, can make adjustments to the permanent order, if one is made, to allow for anyoverpayment or underpayment involved in the interim award. [16] This issue was again canvassed by this court in Dickson v. Dickson, 2011 MBCA 26, 262 Man.R. (2d) 247.

HamiltonJ.A. wrote (at paras. 15-17): In D.B.S. [2006 SCC 37, [2006] 2 S.C.R. 231], Bastarache, J., concluded that neither the Divorce Act nor the Alberta legislationrestricted the court from ordering retroactive child support (at para. 81): “Jurisdiction to award retroactive child support in this circumstance is found in s. 15.1 of the Divorce Act and s. 16 of the Parentageand Maintenance Act [R.S.A. 2000, c. P-1]. In the Alberta statute, the legislature simply decrees that an order may be made forpayments for the maintenance of the child.

Similarly, in the Divorce Act, Parliament allows a court to make ‘an order requiring aspouse to pay for the support of any or all children of the marriage’: s. 15.1(1).

There is therefore no restriction in either statute as to thedate from which the court may order that the award take effect.” (Emphasis added) After being satisfied that the provincial legislation permitted the retroactive order awarded by the trial judge in Kerr [(2011), 2011 SCC10 , 300 B.C.A.C. 1], Cromwell, J., then concluded that the considerations articulated in D.B.S. with respect to awardingretroactive child support are applicable to an application for retroactive spousal support.

It is in this context that he explained thefundamental difference between child support and spousal support (at paras. 207-208): “While D.B.S. was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similar considerations tothose set out in the context of child support are also relevant to deciding the suitability of a ‘retroactive’ award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and anyhardship the retroactive award may occasion on the payor spouse.

However, in spousal support cases, these factors must be consideredand weighed in light of the different legal principles and objectives that underpin spousal as compared with child support. I will mentionsome of those differences briefly, although certainly not exhaustively.

“ Spousal support has a different legal foundation than child support. A parent-child relationship is a fiduciary relationship of presumed dependency and the obligation of both parents to support the child arises at birth. [In] that sense, the entitlement to child support is ‘automatic’ and both parents must put their child’s interests ahead of their own in negotiating and litigating child support.

Child support is the right of the child, not of the parent seeking support on the child’s behalf, and the basic amount of child support under the Divorce Act , R.S.C. 1985, c. 3 (2nd Supp.), (as well as many provincial child support statutes) now depends on the income of the payor and not on a highly discretionary balancing of means and needs. These aspects of child support reduce somewhat the strength of concerns about lack of notice and lack of diligence in seeking child support.

With respect to notice, the payor parent is or should be aware of the obligation to provide support commensurate with his or her income. As for delay, the right to support is the child’s and therefore it is the child’s, not the other parent’s position that is prejudiced by lack of diligence on the part of the parent seeking child support: see D.B.S. , at paras. 36- 39, 47-48, 59, 80 and 100-104 . In contrast, there is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not under any legal obligation to look out for the separated spouse’s legal interests.

Thus, concerns about notice, delay and misconduct generally carry more weight in relation to claims for spousal support : see, for example, M.L. Gordon, Blame Over: Retroactive Child and Spousal Support in the Post-Guideline Era (2004-2005), 23 C.F.L.Q. 243, at pp. 281 and 291-292.” (Emphasis added) In commenting further about the applicability of the D.B.S. factors to retroactive spousal support applications, Cromwell, J., stressed the need for flexibility and a holistic approach by the court (at para. 212): “...

Consideration of the circumstances of the spouse seeking support, by analogy to the D.B.S. analysis, will relate to the needs of the spouse both at the time the support should have been paid and at present. The comments of Bastarache, J., at para. 113 of D.B.S. may be easily adapted to the situation of the spouse seeking support : ‘A [spouse] who underwent hardship in the past may be compensated for this unfortunate circumstance through a retroactive award.

On the other hand, the argument for retroactive [spousal] support will be less convincing where the [spouse] already enjoyed all the advantages (s)he would have received [from that support]’. As for hardship, there is the risk that a retroactive award will not be fashioned having regard to what the payor can currently afford and may disrupt the payor’s ability to manage his or her finances.

However, it is also critical to note that this court in D.B.S. emphasized the need for flexibility and a holistic view of each matter on its own merits; the same flexibility is appropriate when dealing with ‘retroactive’ spousal support .” (Emphasis added) [ 17 ] Based on the above and being cognizant of the standard of review expressed in Hickey , I have not been persuaded that the trial judge erred when she made both the child and spousal support orders retroactive. She made no error in principle, she did not misapprehend the evidence and her award of support is not clearly wrong.

The trial judge applied her discretion to the facts that were before her and she was entitled to reach the conclusions that she did. There is no basis in law to interfere with the exercise of that discretion and I would accordingly dismiss that ground of appeal. [ 18 ] The order of full table support for the two children, whose custody was being shared, was made pursuant to s. 9 of the Guidelines. That

section provides: Shared custody 9 Where each parent exercises a right of access to, or has physical custody or care and control of a child for not less than 40 per cent of the time over the course of a year, the amount of the child support order must be determined by taking into account (

a) the amounts set out in the applicable tables for each of the parents; (

b) the increased costs of shared custody arrangements; and (

c) the conditions, means, needs and other circumstances of each parent and of any child for whom support is sought. [ 19 ] In dealing with this issue, the trial judge said ( 2011 MBQB 177 at para. 58 ): The evidence does not support a determination that the parties have extra costs as a result of their shared parenting arrangement, but neither does it support the fact that the Respondent has reduced costs as a result of the shared parenting arrangement. Indeed the Respondent’s testimony was that her expenses had not decreased. I find that the parties do not have increased or decreased costs for Y. and Z. as a result of the shared custody arrangement.

[ 20 ] Thereafter, following a long and detailed analysis of the husband’s household income, including his wife’s income, the husband’s circumstances, the husband’s interest in the family-held corporations, and the wife and children’s circumstances, she came to the following conclusion (at paras. 98-101): The Petitioner’s household income, including his wife’s income and the tax-free advances provided by his father, is some nine times greater than the Respondent’s income, excluding spousal and child support.

There is no comparison between the standards of living that the children enjoy in their father’s home and their mother’s home. I agree with the argument advanced by counsel for the Respondent that shared custody should not deprive children of similar lifestyles in both of their homes. Indeed, this principle has been endorsed by the Supreme Court of Canada in the Contino , supra, decision where Justice Bastarache indicated at paragraph 51: “... As I said in Francis v. Baker , one of the overall objectives of the Guidelines is, to the extent possible, to avoid great disparities between households.

It is also necessary to compare the situation of the parents while living under one roof with the situation that avails for each of them when the order pursuant to s. 9 is sought.

As far as possible, the child should not suffer a noticeable decline in his or her standard of living ...” Given the gross disparity in the circumstances of each parent’s household, I agree with the Respondent’s position and order that the Petitioner pay full Table child support for the three children of the marriage from June 2006 and prospectively. [ 21 ] A close reading of the whole of the trial judge’s reasons makes it abundantly clear that she did not accept the husband’s evidence and argument that he has limited cash flow and assets.

Instead, she found that historically and presently, the husband was heavily subsidized by his father with no indication of any change into the future. It is also clear from the evidence that the husband is a major shareholder in a very profitable company which will eventually become his on his father’s death.

Clearly the husband is asset rich and the trial judge took that fact into consideration when she came to the conclusion that she did. [ 22 ] As I stated in dealing with the issue of retroactivity, based on the above findings and being cognizant of the standard of review expressed in Hickey , I have not been persuaded that the trial judge erred when she awarded the full table award for the two children whose custody is being shared by the parties.

Accordingly, I would dismiss this ground of appeal. [ 23 ] The husband’s last ground of appeal is one that, as far as I can ascertain, has no foundation in law and appears to be more in the nature of an end-around attack on the support orders made by the trial judge. I would also dismiss it. The trial judge provided detailed and thorough reasons justifying her findings of fact and the orders that she made. Underpinning her support orders is her findings that the husband has access to funds to discharge his obligations. She simply did not accept that he is as impecunious as he attempted to make out.

There is no basis to even consider interfering with those findings. [ 24 ] I deal finally with the issue of costs. [ 25 ] The husband’s basic argument, as stated earlier, is that, considering the amount he was ordered to pay in retroactive support awards, the order for costs is onerous. [ 26 ] Costs are discretionary and normally follow the event. The trial judge’s cost reasons are clearly indicative of what her views were with respect to the manner in which the husband conducted his case and are explanatory of her final conclusion.

She states (at para. 9): The [husband] did, as argued by the [wife], take a hard line on the matters at issue in the trial. It was only at the commencement of the trial that the [husband] acknowledged that “for purposes of the law” he stood in the place of a parent to the child, N. In his opening statement, counsel for the [husband] contested the [wife’s] entitlement to spousal support. Significant portions of examinations and cross-examinations related to the issue of entitlement yet there was very little argument at the conclusion of the trial that the [wife] was not entitled to spousal support.

The [husband] argued that support should be based upon his employment income and there should be no retroactive adjustment of support. [ 27 ] I have not been persuaded that the trial judge’s exercise of her discretion was in error. There is no basis to interfere with that award. [ 28 ] Therefore, and in

summary, the husband’s appeal is dismissed with costs. J.A.

I agree: J.A. I agree: J.A.