CITATION: Taillefer v. Taillefer, 2013 ONSC 6105
COURT FILE NO.: 12-DV-1819
DATE: 2013/10/18
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Linhares de Sousa, Lafrance-Cardinal and Kane JJ.
B E T W E E N :
MARGUERITE TAILLEFER
Applicant (Respondent on Appeal)
– and –
RICHARD TAILLEFER
Respondent (Appellant)
E. Jane Murray, for the Applicant (Respondent on Appeal)
Yanik S. Guilbault, for the Respondent (Appellant)
HEARD AT OTTAWA: June 21, 2013
REASONS ON APPEAL
M. LINHARES DE SOUSA J.
INTRODUCTION
[1] The Appellant, Richard Taillefer, appeals the decision of Mr. Justice Annis, dated February 14, 2012, in which he refused Mr. Taillefer’s motion to terminate his obligation to pay spousal support to his former spouse, the Respondent on Appeal, Marguerite Taillefer. The Appellant seeks to set aside the decision of the motion judge, to have this Court order the termination of his obligation to pay spousal support to the Respondent on Appeal or, alternatively, to grant any other order that this Court deems just.
[2] The Appellant also seeks his costs of the appeal.
POSITION OF THE PARTIES
[3] The Appellant bases his appeal on a number of grounds and argues that the motion judge committed errors of both fact and law. With respect to errors of fact alleged, the Appellant submits that the motion judge erred in his apprehension of the evidence in that he reached erroneous conclusions about the Appellant’s annual income ($12,000 per annum as opposed to $7,000 per annum); he failed to recognize certain facts on the evidence such as the abandonment by the Respondent on Appeal to a trust claim in the Appellant’s family Corporation, Taillefer Estates Inc. when the parties negotiated and finalized their family law litigation in 2007; and, he came to a conclusion about the current day value of the Appellant’s family corporation, Taillefer Estates Inc. without any evidence.
[4] With respect to errors of law alleged, the Appellant submits that the motion judge erred in law in not finding that there had been a material change in the Appellant’s circumstances since the consent Divorce order of Mr. Justice Smith, dated December 5, 2007, and in finding that the Appellant was financially able to continue paying the quantum of spousal support ordered under that consent Divorce order.
[5] The Appellant further submits that the motion judge erred in law in concluding that the dividends which the Appellant received in 2010 from Taillefer Estates Inc., in the total gross amount of approximately $600,000, were to be treated as income to the Appellant instead of a redistribution of capital to the Appellant from the family corporation against which the Respondent on Appeal had abandoned her trust claim at the time of the divorce.
[6] The Appellant argues that the $600,000 in dividends received by him from Taillefer Estates Inc. was a one-time, non-recurring event. Given the source of the dividend payment, namely, by way of a sale of a major asset of the company, as the company is being wound up, it was a return of capital to him and should not have been considered by the motion judge as income to him.
[7] The Appellant also submits that the motion judge erred in coming to his conclusion without reading all of the affidavits filed on the motion before him.
[8] Finally, the Appellant submits that the motion judge, by way of making certain comments in the course of the argued motion, such as comparing the situation of the Appellant to a “wall street business man,” demonstrated a bias against the Appellant.
[9] The Respondent on Appeal contests the appeal and submits that the motion judge committed no error in fact or in law. The Respondent on Appeal submits that while the circumstances of the Appellant were shown to have changed since the granting of the divorce order in 2007, he continued to have the means to pay the existing spousal support of $3,000 per month in the face of the ongoing need by the Respondent on Appeal.
[10] The Respondent on Appeal submits that the motion judge did not err in stating that he had not read all of the affidavit material filed on the motion. All of the facts were thoroughly presented during the course of the argument of counsel and referred to by the motion judge in his reasons. His reasons demonstrate no factual mistakes.
[11] The Respondent on Appeal further submits that the motion judge did not demonstrate a bias towards the Appellant. Rather, his references to a “wall street business man” were just his way of recognizing the different tax treatment of dividend income in comparison to the tax treatment of other income, such as employment income.
[12] The Respondent on Appeal seeks an order dismissing the appeal with costs payable by the Appellant to her on a full indemnity basis.
STANDARD OF REVIEW
[13] The standard of review is not contested. Briefly stated, on a pure question of law, the standard of review is that of correctness.
[14] With respect to findings of fact or inferences of fact from the evidence, then the standard of review is that such findings of a trial or motion judge are not to be reversed unless it can be established that the judge made an obvious error on the evidence or misapprehended the evidence. (See Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235) and Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190).
[15] The decision of Hickey v. Hickey, 1999 691 (SCC), [1999] 2 S.C.R. 518, [1999] S.C.J. No. 9 (S.C.C), paras. 10-12, is also important to the consideration of the standard of review in this matter. In that case the Supreme Court discussed the deference owed to a trial judge in relation to support orders:
A. The Approach by a Court of Appeal to the Review of Support Orders
10 When family law legislation gives judges the power to decide on support obligations based on certain objectives, values, factors, and criteria, determining whether support will be awarded or varied, and if so, the amount of the order, involves the exercise of considerable discretion by trial judges. They must balance the objectives and factors set out in the Divorce Act or in provincial support statutes with an appreciation of the particular facts of the case. It is a difficult but important determination, which is critical to the lives of the parties and to their children. Because of its fact-based and discretionary nature, trial judges must be given considerable deference by appellate courts when such decisions are reviewed.
11 Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong. These principles [page526] were stated by Morden J.A. of the Ontario Court of Appeal in Harrington v. Harrington (1981), 1981 1762 (ON CA), 33 O.R. (2d) 150, at p. 154, and approved by the majority of this Court in Pelech v. Pelech, 1987 57 (SCC), [1987] 1 S.C.R. 801, per Wilson J.; in Moge v. Moge, 1992 25 (SCC), [1992] 3 S.C.R. 813, per L'Heureux-Dubé J.; and in Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670, at p. 691, per Sopinka J., and at pp. 743-44, per L'Heureux-Dubé J.
12 There are strong reasons for the significant deference that must be given to trial judges in relation to support orders. This standard of appellate review recognizes that the discretion involved in making a support order is best exercised by the judge who has heard the parties directly. It avoids giving parties an incentive to appeal judgments and incur added expenses in the hope that the appeal court will have a different appreciation of the relevant factors and evidence. This approach promotes finality in family law litigation and recognizes the importance of the appreciation of the facts by the trial judge. Though an appeal court must intervene when there is a material error, a serious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply because it would have made a different decision or balanced the factors differently.
[16] This direction from the Supreme Court necessarily applies to motions concerning a request for the change of an existing spousal support order under section 17 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) as am., as was the case before Mr. Justice Annis. The statutory provisions being considered and applied by Mr. Justice Annis sets out the considerations to be made and discretion to be exercised by a motion’s judge on a motion to change an existing spousal support order as follows:
Order for variation, rescission or suspension
- (1) A court of competent jurisdiction may make an order varying, rescinding or suspending, prospectively or retroactively,
(a) a support order or any provision thereof on application by either or both former spouses; …
Factors for spousal support order
(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.
Objectives of variation order varying spousal support order
(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] With respect to the allegation of bias on the part of the motion judge, no standard of review was advanced by the Appellant in his Factum nor raised by the Respondent on Appeal. It is clear from the jurisprudence that in determining whether or not there is a reasonable apprehension of bias, the court must take into consideration the context and particular circumstances in which the impugned behaviour (in this case the impugned comments) was alleged to have arisen. (See Wewaykum Indian Band v. Canada, 2003 SCC 45, [2003] 2 S.C.R. 259, at para. 77; Stetler v. Ontario Flue-Cured Tobacco Growers’ Marketing Board (2005), 2005 24217 (ON CA), 76 O.R. (3d) 321 (C.A.) at para. 96.).
[18] Furthermore, the legal test for an apprehension of bias appears to be one of “reasonableness” as stated by the Supreme Court of Canada:
[The] apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information… [T]hat test is “what would an informed person, viewing the matter realistically and practically – and having thought the matter through—concluded. (See R. v. S. (R.D.), 1997 324 (SCC), [1997] 3 S.C.R. 484, at paras. 31 and 111; and Committee for Justice and Liberty v. National Energy Board, 1976 2 (SCC), [1978] 1 S.C.R. 369).
FACTUAL BACKGROUND OF THE APPEAL
[19] For the most part, the parties did not dispute the factual background of the appeal. The parties were married for 36 years and had three children who are all now independent. The parties separated in 2000, when the Appellant was 61 years old and the Respondent on Appeal was 60 years old. The parties commenced legal proceedings to deal with the family law issues between them. A Divorce trial commenced in December of 2007. During the course of the trial settlement discussions took place between the parties and their counsel and the parties reached a final agreement. As a result, a consent Divorce order was granted by Mr. Justice Smith on December 5, 2007, on the basis of the parties’ agreement.
[20] As can be seen from that Divorce order (Appeal Book, Tab 4), a divorce order was granted to the parties, the Appellant was ordered to pay the Respondent on Appeal spousal support in the amount of $3,000 per month with provision for annual indexation. The Appellant also waived the receipt of an equalization payment from the Respondent on Appeal of $16,000. According to the Affidavit of the Appellant dated February 6, 2012, this was in full and final resolution of all of the family property issues between the parties, including any trust claim the Respondent on Appeal may have had to his shares in Taillefer Estates Inc. (see Affidavit of Appellant dated February 6, 2012, Appeal Book, Tab 14).
[21] Taillefer Estates Inc. was a family company created in 1985 for the purpose of property development, starting with property owned by the Appellant’s parents. The shareholders included the Appellant and his eight brothers. According to the Appellant he has always played a passive role in the family corporation which was always managed by one of his brothers.
[22] There were also included in the Divorce order of 2007some notice obligations on the part of the Appellant regarding changes to his holding of shares in the family corporation, Taillefer Estates Inc.
[23] The parties agree that at the time of the Divorce order in 2007, the Appellant was employed and earned approximately $81,000 per annum. It was also not disputed between the parties in their arguments before the motion judge that the Appellant’s income in 2007 was made of an employment salary of approximately $57,000 and the balance from dividends received from Taillefer Estates Inc. which he had been receiving since 2006. Apart from the spousal support payments agreed to by the parties in 2007, the only income the Respondent on Appeal received in 2007 was minimal, at approximately $10,000.
[24] In 2008 and 2009 the Appellant’s income increased somewhat (2008, $111,816 and 2009, $108,375) (see Appellant’s income tax returns for those years). These incomes have continued to be made up of employment salary and dividends received from the family corporation. The spousal support payments paid by the Appellant to the Respondent on Appeal were adjusted for cost of living in 2008. The independent income for the Respondent on Appeal did not change significantly during those two years. Apart from her spousal support payments, her current sole source of income continues to be her CPP and OAS in the approximate amount of $1,382 per month or $16,584 per annum (see Financial Statement sworn July 13, 2011, Appeal Book, Tab 11). The continuing need of the Respondent on Appeal for spousal support is not contested.
[25] In 2010, the parties were engaged in litigation commenced by the Respondent on Appeal regarding a claim for insurance coverage of her medical and dental expenses as provided for in the divorce order of Mr. Justice Smith dated December 5, 2007. In that same year the Appellant informed the Respondent on Appeal that he intended to retire from employment effective February, 2011, which he proceeded to do. At that time he stopped paying spousal support to the Respondent on Appeal. In June, 2011, the Appellant commenced his motion to change which came before Mr. Justice Annis on February 14, 2012.
[26] The Appellant retired from his employment in the construction business at the age of 69. The Appellant is now 71 years old and the Respondent on Appeal is 70 years old. It is conceded that the Appellant’s retirement from employment in 2011 is a change in the Appellant’s circumstances. Given the Appellant’s age, there is no expectation put on him to continue working.
[27] Since 2007, the Appellant has continued to receive dividends from his family corporation Taillefer Estates Inc. It was the evidence of the Appellant that at the time of the separation of the couple in 2000, the family Taillefer Estates Inc. had no value, having previously experienced some business setbacks. The corporation, however, did continue to hold three properties. In 2005, according to the evidence of the Appellant, the company sold one of its properties (Woodward St.) at a loss. In 2006, the family company began to pay the shareholders, including the Appellant, dividends. The dividends made up part of the Appellant’s income at the time of the divorce agreement.
[28] In August of 2010, Taillefer Estates Inc. sold another one of the properties held by the company, La Place Centrum, and as a result all of the family shareholders, including the Appellant, received in 2010 approximately, $600,000 in the form of dividends. It is for this reason that the Appellant’s notice of assessment from Revenue Canada for the tax year 2010 shows a line 150 income of $716,640. The family corporation continues to own one property.
[29] It was not disputed between the parties that the evidence before the motion’s judge showed that with the receipt of these dividends in 2010, the Appellant used the funds received by him in the following way:
(1) the payment of taxes on the dividends received in the amount of $155,680;
(2) the payment of the outstanding mortgage on his home in the amount of $130,000;
(3) the purchase of a new car in the amount of $26,000; and
(4) the payment of some sundry expense.
[30] By the end of November, 2010, the Appellant had some $230,000 left of these funds from which he could expect to earn approximately $8,000 in interest income. According to the Affidavit of the Appellant sworn February 6, 2012, by early 2012 he had approximately $180,000 of these funds left. According to the Appellant he has had to live on these funds and has also used these funds to pay his ongoing spousal support obligations to the Respondent on Appeal (see Affidavit dated February 6, 2012, Appeal Book, Tab 14).
DECISION OF THE MOTION JUDGE
[31] The motion judge commenced his decision by providing a summary of the facts of the case as he understood them from the submissions of counsel and the material before the court. At page 69 of the transcripts of the hearing, the motion judge stated the two issues before him in the following way: Firstly, has there been a material change in the circumstances of the Appellant since the Divorce order of December 5, 2007? Secondly, if yes how ought the divorce order of December 5, 2007, be changed? The motion judge went on to examine all of the relevant subsections of section 17 of the Divorce Act that governed the matter before him. The motion judge also examined the jurisprudence under these subsections and made reference to the principles enunciated in cases such as Moge v. Moge (1993), 1992 25 (SCC), 43 R.F.L. (3d) 345 (S.C.C.) at para. 35 and Linton v. Linton (1990), 1990 2597 (ON CA), 1 O.R. (3d) 1 at p. 27, whereby spouses to long marriages ought to enjoy comparable life styles (“niveau de vie”) upon divorce.
[32] In examining the evidence before him the motion judge concluded that there were two changes of note in the circumstances of the Appellant which he identified as the following. Firstly, the sale of a property owned by the family corporation in 2010, the year before he retired, had resulted in a substantial dividend being paid to the Appellant so as to raise his income in that year to approximately $710,000. Secondly, the Appellant’s retirement had replaced his employment income with a much smaller amount provided by his pension incomes in the amount of $12,000 per year.
[33] The motion’s judge recognized on the evidence how the Appellant had made use of his dividend payments in 2010 as described above.
[34] The motion judge also examined the circumstances of the Respondent on Appeal in comparison to those of the Appellant. He noted that her financial circumstances had not changed substantially since the divorce order in 2007. He also recognized on the evidence, which was not disputed, that as a result of not receiving her spousal support, the Respondent on Appeal was evicted from her residence. The motion judge found the financial circumstances of the Respondent on Appeal to be precarious and far from comparable to that of the Appellant even with his retirement, given the fact that the marriage had lasted some 36 years.
[35] The motion judge refused the Appellant’s argument that the 2010 dividends received by him should not be considered income to him but merely a capital sum owned by him and acquired after the divorce order. The motion judge found that the payment was made to him by the family company in the form of dividends for income tax purposes, at an acknowledged lower rate of tax. The motion judge concluded that, as dividend income, he could treat the dividend payment to the Appellant in that year as income for purposes of spousal support as had been done in 2007. The motion judge also expressed some question of whether the court had received a complete picture of the value of Appellant’s asset holdings, including his ongoing share holding in the family corporation for purposes of comparison. Consequently, the motion judge concluded that in considering the “overall financial situation” of the parties, their “condition, means, needs or other circumstances”, as he was required to do under the statute and according to the jurisprudence, (Willick v. Willick, 1994 28 (SCC), [1994] 3 S.C.R. 670) he was not persuaded that the Appellant’s motion ought to succeed and he refused to terminate or change the order for spousal support.
ANALYSIS
[36] The Appellant submits that the motion judge erred in his findings of fact and inferences of fact. After examining the affidavits filed by the parties and the transcript of the proceedings before the motion judge the Court cannot find any errors of fact or misapprehension of the evidence.
[37] Counsel for the Appellant submits that the motion judge erred in finding that the Appellant’s pension income after retirement was $12,000 instead of $7,000. With respect to the motion judge concluding that the Appellant’s pension income was $12,000 per annum as opposed to $7,000 per annum, an examination of all of the evidence before the motion’s judge indicates that he could reasonably have come to that conclusion on the evidence.
[38] Counsel for the Appellant submits in his Factum that the Appellant’s regular sources of income after retirement are made up solely of this CPP and Old Age Pension which totals $817.47 per month (approximately $9,809.64 per annum).
[39] Based on his submissions alone, the evidence before the motion’s judge did not support a finding that the Appellant’s retirement income from his pensions was $7,000 per annum. As pointed out by counsel for the Respondent on Appeal, the Financial Statement, sworn by the Appellant on July 4, 2011, in support of his motion to change declared an income of $11,609.64 (made of pension income and minimal amount of interest and investment income). The Appellant’s sworn Financial Statement dated February 6, 2012, inclusive of the amount garnished by the Family Responsibility declares an income of approximately $12,000 per year. (See also his Affidavit dated February 6, 2012 at Tab 14 of the Appeal Book). Based on all of this evidence the Court finds no error in fact in the conclusion of the motion judge that the Appellant’s retirement income from his pensions was $12,000 per annum.
[40] With respect to the submission of counsel for the Appellant that the motion judge failed to recognize that the Respondent on Appeal had abandoned, in the course of the family law litigation, her trust claim to the Appellant’s shares in the family corporation, it is evident that the motion judge did not specifically mention this fact in his reasons. Nonetheless, as the transcript of the proceedings will show, counsel made the motion judge aware of this fact a number of times. The motion judge was aware that the Respondent on Appeal had made a trust claim to the Appellant’s shares in Taillefer Estates Inc. and that such a claim or its resolution in favour of the Respondent on Appeal did not feature as part of the divorce order, which was a final order regarding the parties’ family law issues.
[41] The motion judge was aware, based on the submissions of the Appellant’s counsel as well as those of counsel for the Respondent on Appeal, that it had been accepted that at the time of the separation Taillefer Estates Inc. had no value and that the Respondent on Appeal had not received a share of her husband’s interest in that family corporation as part of the family law settlement between the parties. Consequently, taking account of the receipt in 2010 of the Appellant’s dividends in comparing the “conditions, means and needs” of the parties was not a case of sharing of assets twice or “double dipping” as understood in the case of Boston v. Boston, 2001 SCC 43, [2001] 2 S.C.R. 413 (S.C.C.). The Court accepts all of the jurisprudence referred to by counsel for the Appellant that it would be incorrect to effect a division of assets in the guise of a support order.
[42] It is also clear in his reasons on the motion that the motion judge was fully aware that there had not been an equalization payment made between the parties. In fact, when the motion judge at first incorrectly stated that the Appellant had paid an equalization payment to the Respondent of $16,000, he immediately recognized his mistake, confirmed by counsel for the Appellant, and corrected himself recognizing that it was the Appellant who was owed the equalization payment and that he had waived that payment in the overall agreement reached by the parties.
[43] The motion judge indicated to counsel that he had not read all of the affidavit material filed on the motion. Nonetheless, a reading of the transcript and the affidavit material found in the Appeal Record, leads us to conclude that the motion judge was made aware of all of the relevant facts to his decision from both the affidavit material before him which he read and by the oral submissions of counsel which complemented this. The Court finds no error here.
[44] The Court cannot find that the motion judge came to a conclusion about the current day value of the Appellant’s shares in the family corporation and the value of Taillefer Estates Inc. without any evidence. The motion judge was made aware by the submissions of counsel that the company continued to hold one last property about which the Appellant had been questioned in preparation for the argument of the motion. The motion judge came to no conclusion about the value of the family corporation. In fact, in his reasons, the motion’s judge commented on the lack of complete evidence concerning the asset holdings and worth of the Appellant for the purpose of comparing the “conditions, means and needs” of the parties.
[45] The Appellant submits that the motion judge made an error of law in concluding that the dividends which the Appellant received in 2010 from Taillefer Estates Inc. should be treated as income to the Appellant instead of a return of capital. It is acknowledged that the payment of the dividends in question was as a result of a sale of a property owned by the corporation. It was the evidence of the Appellant that the company is beginning to wind down and wishes to return any remaining capital in the business to the family shareholders.
[46] Certainly, with respect to that specific asset belonging to the company it was a non-recurring event. From an accounting and corporate perspective the payment of dividends may indeed be a tool for a return of capital to its shareholders. From an income tax perspective the receipt of dividends from a Canadian company is treated as income, albeit taxed at a lower rate than other income, even if it is a return of capital from an accounting and corporate perspective.
[47] Did the motion’s judge err in finding that the dividends were “income” to the Appellant? It is understood that we are not here dealing with child support but the consideration of this question can be informed by how “income” is defined, determined and calculated under the Federal Child Support Guidelines, S.O.R./97-175, as am. [“Guidelines”]. The relevant sections to consider are the following:
Determination of annual income
- (1) Subject to subsection (2), a spouse’s annual income is determined by the court in accordance with sections 16 to 20.
Calculation of annual income
- Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.
Marginal note: Pattern of income
- (1) If the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.
Marginal note: Non-recurring losses
(2) Where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.
[48] The Appellant’s 2010 dividend receipts were declared as a part of his “total income” in the relevant income tax General form issued by the Canada Revenue Agency. Hence, under sections 15(1) and 16, they would be considered “income” under that Act.
[49] Section 17 provides the court with the discretion to treat the receipt of non-recurring amounts of income in a way so as to arrive at a “fair determination” of income. Presumably under this section, a non-recurring dividend payment could be considered as “income”.
[50] There was no jurisprudence provided by counsel which dealt with this very issue. This may be a novel point. In Austin v. Austin, 2007 CarswellOnt 7130, Mr. Justice Smith examined in detail how dividend income differs materially from ordinary income from a tax point of view and from the important perspective of available funds for both child support and spousal support purposes. Nonetheless, the presumption throughout his reasons, however, was that dividend receipts from a corporation was “income” like any other ordinary income for support purposes. (See also Riel v. Holland, 2003 3433 (ON CA), 2003 CarswellOnt 3828; and, Lahanky v. Lahanky, 2011 CarswellNB 421).
[51] One other fact which is relevant to this discussion is the following. It was not disputed that when the parties reached their agreement in 2007 for spousal support, a substantial portion of the Appellant’s then income which was used to determine the quantum of support agreed to by the parties in the divorce settlement was made up of the dividends received by the Appellant from his family corporation. If those dividends were at that time considered part of his “income” why would they not be considered part of his “income” now? The only difference, of course, is the magnitude of the amount of dividends received by the Appellant. How does quantum alone change the characterization of such funds as “income” to the Appellant for support purposes? It is not logical that it should.
[52] For all of these reasons the Court is not convinced that the motion judge was incorrect in law in finding that the dividends received by the Appellant in 2010 should be considered income to him for the purpose of determining the Appellant’s continuing obligation to pay spousal support.
[53] Furthermore, the Court concludes that even if such dividend payments were not to be considered income for support purposes, which we do not accept, the receipt of the total amount of the dividend’s was correctly considered by the motion judge in determining whether to terminate or reduce the existing spousal support order at that time. Pursuant to 17(4.1), as the motion judge stated a number of times throughout the argument of counsel and in his reasons, on the facts of this case one cannot simply compare the parties’ pension incomes and the fact of the Appellant’s retirement from employment in isolation. Rather, whatever change of circumstances has taken place must be examined in light of the whole of the “condition, means, needs or other circumstances” of the spouses. To put it more graphically and comparatively, at the same time that the Appellant lost his employment income, acquired a much smaller pension income, he received a dividend payment from Taillefer Estates Inc. in the amount of almost six times the amount of his last yearly income. As a result, the Appellant has a mortgage free house, a new car, paid some sundry bills and has some $200,000 to invest so as to supplement his pension income by approximately $8,000 per year. By comparison the Respondent on Appeal is reduced to living simply on her pension and is evicted from her accommodation because she could not meet her accommodation expense.
[54] In light of the above the Court finds no error in the conclusions of the motion judge that while there was a change in the Appellant’s circumstances as a result of his retirement from employment, in all of the circumstances of the case, including the dividend income received by him in 2010, that change did not justify the termination of the spousal support at this time and that the Appellant was financially able to continue to pay the quantum of spousal support ordered under the Divorce order until further order of the Court.
Question of Bias
[55] The Court has considered the arguments of counsel concerning the allegation of a reasonable apprehension of bias on the part of the motion judge by his reference to “Occupy Wall Street”. According to the Appellant, by his comments the motion’s judge was comparing the Appellant to a wall street business man with substantial financial success and hence showed a bias towards him in coming to his conclusions.
[56] The reference in question can be found at pages 33 and 34 of the transcript of the hearing:
Me Doyle: Juste pour indiquer que, en effet, le revenu total de Monsieur qui apparaît à la ligne 150 de son Avis de cotisation c’est le plein montant de 716.
La Cour : Parce que, moi, je pense aussi que on ajoute la pension, on ajoute toutes sortes de revenus, des sources et il me semble que c’est -- on a déjà des problèmes avec « Occupy Wall Street » que le monde qui reçoit l’argent en dividendes sont pas taxés au même rythme que les autres.
Donc, il me semble que c’est -- ce serait un double -- un double coup pour dire, bien, en plus, ils sont pas taxés au même rythme que ceux qui gagnent un revenu d’emploi et, en plus, c’est pas comptabilisé dans le montant qu’on utilise pour le soutien.
Il me semble que c’est un peu exagéré. Ils ont déjà beaucoup d’avantages donc ceux qui reçoivent de l’argent par dividendes.
Me Doyle : Alors ---
La Cour : Ça c’est toute -- je parle aux États-Unis actuellement. On comprend bien ça.
Ceux qui -- les billionnaires qui reçoivent leur argent par dividendes au lieu de revenus d’emploi comme le reste le reste de nous.
Me Doyle : Alors, Votre Honneur, si -- si je peux qualifier le montant comme revenu, la première question puis l’imposition la plus simpliste c’est que : Pourquoi que nous sommes ici? Parce que Monsieur Taillefer, en 2010, a fait -- l’ordonnance était basée sur un revenu de 80,000$ -- 81,200$ par année. En 2010, Monsieur Taillefer fait l’équivalent de plusieurs années de ce revenu ---
[57] Here too, the Court finds the Appellant’s argument to be without merit. While perhaps a little colourful, the comments made by the motion judge can only be understood in the context of his trying to point out the different tax treatment between dividend income and other income which he wanted counsel to address. Later on in the transcript at page 56 the motion judge illustrated the mathematical difference to which he was referring. It was correct and logical for him to consider that difference when comparing the “condition, means, need and circumstances” of the parties as he was directed to do under section 17 of the Divorce Act as well as by the jurisprudence (see Austin v. Austin, supra).
[58] In this factual and legal context, the Court is not persuaded that the motion judge demonstrated a bias to the Appellant. Keeping in mind the legal test for reasonable apprehension of bias, as enunciated in Committee for Justice and Liberty v. National Energy Board, supra and R. v. S. (R. D.), supra, the Court is not convinced that a “reasonable and right–minded person, applying themselves to the question and obtaining thereon the required information” would have concluded from the comments made by the motion judge that there was any bias on his part.
[59] For all of these reasons the appeal is dismissed and the decision of the motion judge is upheld.
[60] With respect to the question of the costs of this appeal, counsel have agreed while they do not agree who should be awarded the costs, that a reasonable quantum for the costs of the appeal should be $7,000, an amount which the Court finds reasonable. The Respondent on Appeal has been successful on this appeal and is therefore awarded her costs fixed in the amount of $7,000.
M. Linhares de Sousa J.
I agree J. Lafrance-Cardinal J.
I agree P. Kane J.
Released: October 18, 2013
CITATION: Taillefer v. Taillefer, 2013 ONSC 6105
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Linhares de Sousa, Lafrance-Cardinal and Kane JJ.
BETWEEN :
MARGUERITE TAILLEFER
Applicant (Respondent on Appeal)
– and –
RICHARD TAILLEFER
Respondent (Appellant)
REASONS ON APPEAL
M. Linhares de Sousa J.
J. Lafrance-Cardinal
P. Kane
Released: October 18, 2013