Burden v. Burden, 2013 NSCA 30

NOVA SCOTIA COURT OF APPEAL Citation: Burden v. Burden , 2013 NSCA 30 Date: 20130304 Docket: CA 406453 Registry: Halifax Between: George Manuel Burden Appellant v. Krista Lynne Burden Respondent Judge: The Honourable Justice David P.S. Farrar Appeal Heard: January 17, 2013 Subject: Family Law. Co-Habitation Agreement. Enforceability on Interim Applications.

Interpretation of Income.

Summary: The appellant appeals alleging that the motions judge erred in failing to give effect to a co-habitation agreement executed by the parties, in which the parties waived the right to seek spousal support, including interim support. He also argued the motions judge failed to conduct a proper analysis in determining whether the respondent had a need for spousal support. Issue: Did the motions judge err as alleged by the appellant? Held: Appeal dismissed with costs to the respondent of $2,000.00.

The motions judge properly took into consideration the Cohabitation Agreement in awarding interim spousal support to the respondent. He also properly considered the respondent’s need for spousal support. He found that the respondent had a reasonable chance of setting aside the waiver of support on the trial of the matter. He then considered the respondent’s basic needs in awarding spousal support. In doing so he did not err.

This information sheet does not form part of the court
s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 13 pages. NOVA SCOTIA COURT OF APPEAL Citation: Burden v. Burden , 2013 NSCA 30 Date: 20130304 Docket: CA 406453 Registry: Halifax Between: George Manuel Burden Appellant v. Krista Lynne Burden Respondent Judges: Hamilton, Fichaud and Farrar, JJ.A. Appeal Heard: January 17, 2013, in Halifax, Nova Scotia Held: Appeal dismissed per reasons for judgment of Farrar,J.A.; Hamilton and Fichaud, JJ.A. concurring. Counsel: Matthew A. Conrad, Jessica D.

Chapman and Geoffrey L. Franklin (Articled Clerk), for the appellant Janice E. Beaton, Q.C. and Daniel S. Walker, for the respondent

Reasons for Judgment: Introduction [ 1 ] The appellant, Dr. George Burden, seeks leave to appeal and, if granted, appeals from the Interim Order of Nova Scotia Supreme Court Justice Michael J. Wood issued on August 20, 2012. Justice Wood ordered the appellant to pay interim spousal support in the amount of $3,000 per month retroactive to November 1 st , 2011. The appellant argues that the motions judge erred in failing to give effect to a Cohabitation Agreement executed by the parties on July 9, 1997, in which both parties waived the right to seek spousal support, including interim support.

He also argues the motions judge failed to conduct a proper analysis in determining whether the respondent had a need for spousal support. [ 2 ] For the reasons that follow, I would grant leave to appeal but dismiss the appeal with costs to Ms. Burden in the amount of $2,000. Background [ 3 ] The parties began cohabitating in October, 1996. On July 9, 1997, the parties executed a Cohabitation Agreement.

At the time of entering into the Cohabitation Agreement, both parties had independent legal advice and a Certificate of Independent Legal Advice was provided. [ 4 ] Paragraph 8 of the Cohabitation Agreement provides as follows: SPOUSAL SUPPORT 8. (

a) Each of the parties: (

i) is financially independent; (ii) does not require financial assistance from the other; (iii) releases the other party from all obligations to provide support, interim support, alimony or maintenance pursuant to any or all legislation referred to in the recitals of this Agreement, or that may in any way touch upon spousal support; (iv) waives any and all rights to claim or obtain support, interim support, alimony or maintenance pursuant to any or all legislation referred to in the recitals of this Agreement, or that may in any way touch upon spousal support ; (

b) The parties realize that their respective financial circumstances may change in the future by reason of their health, the cost of living, their employment, and otherwise. No such change will give either party the right to claim support, interim support, alimony or maintenance pursuant to any or all legislation referred to in the recitals of this Agreement . (

c) This clause is intended to be in full and final settlement of all claims by Bailey against Burden for financial contribution by way of alimony, maintentance, support or other financial contribution and is not subject to variation by any court , Burden agrees mutatis mutandis with Bailey; (My emphasis) [ 5 ] At the time of execution of the Cohabitation Agreement, the appellant was a self-employed physician earning an annual income of approximately $100,000. Ms. Burden was employed as a real estate office administrator earning $26,000 per year. The parties did not have any children but Ms.

Burden had two children from a previous marriage. [ 6 ] The parties were married on April 9, 1999. In the spring of 2000 Ms. Burden left her employment as a real estate office administrator following which she worked as a bookkeeper in her husband’s medical practice and taught music part-time. As a bookkeeper working for her husband, Ms. Burden earned a salary of $15,000 per year plus dividends of $4,000 to $5,000 per month. Later her salary increased to $20,000 per year and her dividend income continued. [ 7 ] The parties’ daughter was born on June 20, 2001 and has resided with Ms.

Burden in the matrimonial home since the parties separated on October 21, 2010. [ 8 ] After separation Ms. Burden started her own business as a child care provider earning approximately $15,800 per year. [ 9 ] After separation Dr. Burden was paying third party payments for his wife’s benefit (taxes, property insurance, oil, electricity, water, cable, phone and motor vehicle). He also paid $1,000 per month to Ms. Burden for interim spousal support until August, 2011. He paid child support for the child including expenses as required, including the child’s riding expenses. [ 10 ] In August, 2011, Dr.

Burden stopped making spousal support payments but continued paying the utilities, child support and expenses for their daughter’s activities. [ 11 ] In September, 2011, Dr. Burden advised Ms. Burden that he would no longer pay the utilities after November, 2011, but later extended payment of those amounts into the new year. [ 12 ] In February, 2012, Ms. Burden petitioned for divorce and made an interim application for spousal support, child support and costs. At the time of making the application for interim spousal support, Dr.

Burden had stopped paying spousal support and was no longer paying the utilities for the matrimonial home. He continued to pay child support and half the property insurance. [ 13 ] In March, 2012, Ms. Burden closed her day care business and returned to school. [ 14 ] On June 6, 2012, the Interim Hearing took place to address interim child and spousal support. The motion judge rendered his

decision orally that same day granting Ms. Burden spousal support in the amount of $3,000 per month retroactive to November 1, 2011. He also awarded child support in the amount of $1,980 per month, based on Dr. Burden’s income of $250,000 per year, retroactive to January 1, 2012. Child support is not in issue on this appeal. Issues [ 15 ] In the Notice of Appeal the appellant outlines nine grounds of appeal. For the purpose of his written arguments, the issues were narrowed to seven. I would further narrow the issues as follows: 1.

Did the motions judge err in failing to give effect to the Cohabitation Agreement by awarding interim spousal support to the respondent? and 2. Did the motions judge err in failing to conduct a proper analysis in determining whether Ms. Burden had a need for interim support? Standard of Review [ 16 ] The standard of review on an appeal from an interlocutory ruling for interim support is well known. The Court will not intervene and overturn an interlocutory ruling unless a judge has applied a wrong principle of law or if a patent injustice would result from the decision under appeal. ( S.S. v.

D.S. , 2010 NSCA 74 , ¶4) Analysis 1. Did the motions judge err in failing to give effect to the Cohabitation Agreement by awarding interim spousal support to the respondent? [ 17 ]

Section 15.2 of the Divorce Act , R.S.C. 1985, c. 3 (2 nd Supp.) authorizes a court to order interim spousal support: Spousal support order 15.2

(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. Interim order

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1). [ 18 ]

Section 15.2(4) of the Divorce Act lists the factors the court must consider when making an order under subsection (2): Factors

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse . (Emphasis mine) [ 19 ] The objectives of a support order are set forth in s. 15.2(6): Objectives of spousal support order

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

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

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

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 20 ] Miglin v. Miglin , 2003 SCC 24 , was referred to by both parties. In Miglin , the Supreme Court of Canada set out a two-stage analysis for considering the effect and weight to be given to a spousal support release in a separation agreement on an application for spousal support. The existence of an agreement does not oust the jurisdiction of a court to make a support order but rather, it is only one factor among others that a court must look at in determining spousal support: Miglin, supra , ¶48, ¶77.

[ 21 ] Stage 1 of the Miglin analysis contains two steps. The first step concerns the circumstances of the parties at the time of execution. The Court must look at the conditions of the parties, including whether there were any circumstances of oppression, pressure or other vulnerabilities, and the conditions under which the negotiations were held. Miglin , supra , ¶81. [ 22 ] The second step concerns the substance of the agreement.

The Court looks at the extent to which the agreement takes into account the factors and objectives listed in the Divorce Act , thereby reflecting an equitable sharing of the economic consequences of the marriage and its breakdown. “Only a significant departure from the general objectives of the Act will warrant the court’s intervention ... it must look at the agreement or arrangement in its totality, bearing in mind that all aspects of the agreement are inextricably linked and that the parties have a large discretion in establishing priorities for themselves.” ( Miglin, supra , ¶84). [ 23 ] If the negotiation of the agreement is not impugned at the first step, the Court should defer to the wishes of the parties and afford the agreement great weight. ( Miglin, ¶87) [ 24 ] At stage 2, the court should assess the extent to which the agreement still reflects the original intention of the parties and the extent to which it is still in substantial compliance with the objectives of the Divorce Act : Miglin, supra , ¶87. [ 25 ] The appellant says that the motions judge fell into error in failing to engage in the Miglin analysis.

In his factum he says this: 44. With respect to the waiver of spousal support (s. 15.2(1)), the Husband submits that at the interim hearing the Wife must establish that there is a reasonable prospect that that provision in the Agreement will be set aside at the final trial as set out above in Evashenko , supra . In order for the Court to make that finding, it must engage in the Miglin , supra analysis. [ 26 ] The case referred to by the appellant is Evashenko v. Evashenko , 2011 SKCA 22 , a decision of the Saskatchewan Court of Appeal.

In Evashenko , the parties had executed an Inter-spousal Agreement approximately a year and a half after the parties separated. In that Agreement, the wife waived any right to spousal support. The Chambers judge in that case held that the Agreement would be presumptively dispositive of the spousal support until the applicant (the wife) was able to tender evidence required to temper or neutralize its effect. [ 27 ] The Saskatchewan Court of Appeal overturned the Chambers judge and said: ...

On an interim basis, for the purpose of a Miglin analysis, an applicant need not necessarily tender evidence to neutralize the effect of the Agreement. The quality and cogency of the evidence on an interim application may not definitively neutralize the Agreement, and given the threshold that an applicant must meet on an interim basis, the evidence need not be as extensive as would be required at trial.

As further explained below, it is enough if the evidence tempers the agreement to the extent that the burden of challenging the presumption on an interim basis has been met. (¶48) [ 28 ] The court continued: 61 Although at one part of her decision, the Chambers judge, echoing Palmer , described the burden as a "triable issue", at para. 22 of her decision, the Chambers judge sets the bar at clear need and clear evidence pointing to a likelihood of success at trial. In my view, this puts the matter at too high a standard at the interim stage.

Ultimately, the applicant must neutralize the effect of the Agreement to be successful at trial, but need not show at the interim stage she is more likely than not to be successful. The Chambers judge, at para. 41 in reference to the case of Hierath v. Hierath , 2000 SKQB 459 , 200 Sask. R. 269, describes the burden as a "reasonable prospect of success". This is closer to the mark regarding the threshold an applicant must cross on a Miglin analysis.

In my view, the appropriate threshold is whether there is a reasonable prospect of success that the Agreement can be impeached at trial and therefore is entitled to little weight or deference . (Emphasis mine) [ 29 ] The appellant says that the motions judge ought to have followed the approach in Evanshenko and made a determination as to whether Ms. Burden had a reasonable prospect of success of impeaching the Cohabitation Agreement at trial.

To put it another way, whether she had a reasonable chance of setting aside the waiver of spousal support on a full trial of the matter. [ 30 ] In my view, the trial judge undertook such an analysis and determined that Ms. Burden had a reasonable chance of success that the waiver of spousal support in the Cohabitation Agreement would be set aside. Although he did not state it in those terms, a reading of his oral decision in context leads me to this conclusion.

Let me explain further. [ 31 ] It is evident from reviewing the motions judge’s decision that he was alive to the issue of the waiver of interim spousal support in the Cohabitation Agreement. He said: The primary issue in dealing with spousal support is the effect to be given the co-habitation agreement which was negotiated with legal counsel and includes a waiver of spousal support. [ 32 ] He recognized that s. 15.2 of the Divorce Act required him to consider the Cohabitation Agreement:

Section 15.2 of the Divorce Act directs me to consider a range of factors including any agreements between the parties. I should not simply ignore the existence of the agreement and award spousal support on that basis. [ 33 ] The motions judge then went on to conclude: I will not engage in the Miglin analysis except to consider whether there was at least a prima facie case made out for entitlement by Ms. Burden. Her affidavit set out circumstances which could if accepted by the trial Judge lead to the conclusion that the cohabitation agreement does not meet the overall objectives of the Divorce Act .

Whether she is entitled to establish this would be decided by the trial Judge after a full hearing on the evidence. [ 34 ] The motions judge’s wording could have been more precise. However, having regard to the submissions which were made to

him by counsel, what he had to decide and the passages I have quoted above, I take him to be saying that having reviewed the affidavit of Ms. Burden and the circumstances which are set out therein, he was satisfied she had a reasonable chance of success in setting aside the waiver of spousal support in the Cohabitation Agreement as not being in substantial compliance with the Divorce Act . [ 35 ] The motions judge used the term “ prima facie ” case. I am able to take from the context of the decision that when he referred to a “ prima facie case”, he meant a reasonable chance of success.

What the motions judge said after determining that he would award interim support is also instructive and, in my view, supports this

interpretation of his decision. He said: Having concluded that Ms. Burden has established a prima facie case for entitlement I must still exercise my discretion and give consideration to the agreement. In this case I think some weight has to be given to the fact that the parties, with legal counsel, negotiated a comprehensive agreement dealing with many issues including spousal support. This has caused me to limit any award of spousal award to a minimum required in order to provide for the basic needs of Ms.

Burden . (My emphasis) [ 36 ] It can be gleaned from this that he found that the Agreement did not provide for the basic needs of Ms. Burden. In my view, there is a reasonable chance that an agreement which does not provide for the basic needs of one of the parties does not substantially comply with the Divorce Act and is a significant departure from the provisions of s. 15.2(4) and (6) of the Divorce Act . I say this without the advantage of further evidence which might be tendered at trial.

Nothing in this decision should be taken as a constraint of the trial judge’s discretion on the issue. [ 37 ] At the oral hearing of the appeal, counsel for the appellant provided us with a recently decided case of the Ontario Superior Court of Justice: McCain v. McCain , 2012 ONSC 7344 . In that case, the application judge did a Miglin analysis on an interim application for spousal support and determined that the waiver of spousal support contained in a marriage contract was invalid. Without commenting on whether I agree with the approach taken by the trial judge in McCain , I would distinguish it.

In that case the application judge found that the volumes of documents in evidence before him were sufficient for him to determine the issue (¶71). The motions judge in this case made no such determination and it is clear from a review of the record and his decision that he was not satisfied that he had sufficient information to make such a determination even if he was inclined to do so. [ 38 ] In

summary, on an interim application for support, where there is a waiver of spousal support, it is necessary for the motions judge to look at all of the circumstances, recognizing that it is an interim motion, and determine whether the party seeking interim support has a reasonable chance of setting aside the waiver at trial. In my view, that is what the motions judge did in this case. Having made that determination, it was open to him to then go on to award interim spousal support. [ 39 ] I would dismiss this ground of appeal. 1.

Did the motions judge err in failing to conduct a proper analysis in determining if Ms. Burden had a need for interim support? [ 40 ] The appellant points to the trial judge’s failure to consider that Ms. Burden had: 1. no mortgage payments; 2. no car payments; 3. approximate net equity of over $130,000 inclusive of post-separation debts unrelated to the breakdown of the marriage; and 4. the ability to earn more income. [ 41 ] The appellant says that the motions judge failed to take these into consideration and further failed to impute income to Ms. Burden as he ought to have done.

He says that if the motions judge had done the proper analysis it would have resulted in no shortfall or a significantly lower shortfall than what was found. [ 42 ] In support of the position that the motions judge ought to have imputed income they rely on Saunders v. Saunders , 2011 NSCA 81 where this Court concluded that the trial judge erred in failing to impute income after he found that Ms. Saunders was under- employed. Saunders , supra is distinguishable for two reasons: it was an appeal from a final order, not an interim order; and, the trial judge in that case made a clear finding of fact that Ms.

Saunders had chosen to be under-employed. [ 43 ] Having concluded that Ms. Burden was entitled to spousal support, the motions judge looked at a number of factors including the Cohabitation Agreement, the basic needs of Ms. Burden, Ms. Burden’s decision to leave the workforce and Dr. Burden’s ability to pay and concluded: In this case I think some weight has to be given to the fact that the parties, with legal counsel, negotiated a comprehensive agreement dealing with many issues including spousal support.

This has caused me to limit any award of spousal support to the minimum required in order to provide for the basic needs of Ms. Burden. I’m also influenced by Ms. Burden’s decision to leave the workforce and pursue education in the face of the agreement and the pending support motion. It could be perceived that this was somewhat hasty given her other sparse evidence of her investigation of other employment options. [ 44 ] The motions judge emphasized that this was an interim application and recognized the issues that would have to be resolved by the trial judge eventually hearing the matter.

He was careful not to delve into those matters, including the enforceability of the Cohabitation Agreement and the potential imputation of income to Ms. Burden, which would be decided at trial. This led him to limit his award to what he considered to be the “basic needs” of Ms. Burden. [ 45 ] In providing for the basic needs of Ms. Burden, taking into account Dr. Burden’s ability to pay, he did not err in principle nor does a patent injustice result from his decision.

[ 46 ] I would dismiss this ground of appeal. Conclusion [ 47 ] The appeal is dismissed. I would award costs to the respondent in the amount of $2,000.00 inclusive of disbursements. Farrar, J.A. Concurred in: Hamilton, J.A. Fichaud, J.A.