DATE: 20050429
DOCKET: C42645
COURT OF APPEAL FOR ONTARIO
GOUDGE, MACPHERSON AND MACFARLAND JJ.A.
B E T W E E N:
BRENT CHERTOW
Susan T. McGrath for the appellant
Applicant
(Respondent in appeal)
- and -
PATRICIA CHERTOW
Roy M. Respicio for the respondent
Respondent
(Appellant)
Heard: April 8, 2005
On appeal from the order of Justice David Nadeau of the Superior Court of Justice dated October 18, 2004.
GOUDGE J.A.:
[1] The issue on this appeal is whether the Minutes of Settlement between the parties (made August 28, 2001 and incorporated into a consent court order on September 14, 2001) requires the recalculation of the child support paid in 2003 by the respondent husband, once his income tax return and related financial information for 2003 were disclosed to the appellant wife on June 30, 2004, as required by the consent order.
[2] The appellant says yes. The respondent says no. At first instance, the motion judge agreed with the respondent, saying only that there should be no recalculation because he was not satisfied on the basis of the history of the litigation between the parties, including the previous orders made, that there should be any retroactive child support.
[3] For the reasons that follow, I conclude that the motion judge erred and that the consent order requires the recalculation urged by the appellant. I would therefore allow the appeal.
[4] The parties were married on October 21, 1978. They separated on December 3, 1998. There are three children of the marriage, two of whom were financially dependent on the parties at the time of the motion.
[5] The consent order of September 14, 2001, incorporating the Minutes of Settlement between the parties, provides inter alia for the payment of child support by the respondent husband in a fixed amount based on his average annual income over the previous five years.
[6] The order also provides for the exchange of income tax returns and related financial information by June 30 each year at which time an adjustment is to be made in the child support payable to reflect the actual income during the preceding year.
[7] The critical provision in the order is paragraph 2(c) which reads as follows:
THIS COURT FURTHER ORDERS that any adjustment payments required to be made as a result of the recalculations herein shall be paid forthwith and the support for the current year shall also be adjusted from July 1 of that year.
[8] Paragraph 14 of the order provides that there shall be no further retroactive child support payable by the respondent to the appellant. However the parties both agree that what the appellant is seeking is not retroactive child support but the recalculation of child support pursuant to the terms of the consent order. I agree. There is therefore no need to consider either paragraph 14 or the principles found in cases such as Horner v. Horner (2004), 2004 34381 (ON CA), 245 D.L.R. (4th) 410 (Ont. C.A.) and Walsh v. Walsh (2004), 2004 36110 (ON CA), 69 O.R. (3d) 577 (C.A.). Rather this case requires an interpretation of the consent order, particularly paragraph 2(c).
[9] The respondent says that the adjustment required by the order is prospective only. It takes effect on July 1 each year, based on the taxable income information for the previous year which the respondent must provide by June 30. The respondent argues that anything else would be impractical, and would leave the parties with a degree of financial uncertainty that they could not have intended in their Minutes of Settlement. The respondent says that the trial judge was correct to rely on the history of the relationship between the parties, namely that there has never been a request for recalculation of child support for the previous year based on the financial disclosure made on June 30.
[10] The appellant, on the other hand, argues that the clear language of paragraph 2(c) requires two changes: a recalculation of the child support paid in the previous year based on the financial information disclosed on June 30 and, based on the same information, a change in child support paid in the current year. The first results in an "adjustment payment" to be paid "forthwith". The second commences on July 1 and runs prospectively, for the remainder of the current year. Counsel also candidly acknowledges that the first of these, the recalculation requirement, creates a two-way street. The recalculation and resulting adjustment payment could result in a payment owed by the appellant to the respondent if the latter's income for the previous year as revealed on June 30 has decreased from the year before. The opposite is true if, as here, the respondent's income has risen.
[11] In my view, the appellant's interpretation of the consent order, particularly paragraph 2(c), is correct. Only if the first provision in the paragraph is ignored can it provide just for a prospective change in the current child support as urged by the respondent. The first provision clearly requires a recalculation and a consequent adjustment payment to be made immediately. The second provision requires that the child support for the current year "also" be adjusted from July 1 onward. Both changes are required.
[12] The absence of prior motions or orders for recalculation is easily explained by the respondent's income history. The consent order was made on September 14, 2001. The financial information disclosed by the respondent on June 30, 2002 and June 30, 2003 showed an income less than the prior year in each case. This gave the appellant no economic incentive to seek an order requiring a recalculation. The respondent did not do so presumably because of his interpretation of paragraph 2(c). However, when the respondent's income for 2003 as revealed on June 30, 2004, rose very considerably compared to 2002, the appellant sought the present relief. The absence of any prior request for recalculation cannot be said to reflect a shared understanding that the consent order is prospective only.
[13] In the end I conclude that, whether it is impractical or not, the agreement between the parties embodied in the consent order is clear. The appeal must be allowed. Paragraph 4 of the order appealed from is set aside and an order is substituted requiring a recalculation and adjustment payment consistent with these reasons.
[14] The appellant says that the amount to be paid by the respondent as a result is $37,193.23. If there is a dispute about this amount that issue is remitted to the motion judge for determination.
[15] I would not propose to change the costs order made by the motion judge in favour of the appellant. Costs of the appeal to the appellant fixed at $5,000.
RELEASED: April 29, 2005 "S.T. Goudge J.A."
"I agree J.C. MacPherson J.A."
"I agree J. MacFarland J.A."