CITATION: Robinson v. Connolly, 2018 ONSC 6010
DIVISIONAL COURT FILE NO.: DC-1063/17
DATE: 20181011
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
ARRELL, R.S.J., MULLIGAN, and MATHESON JJ.
BETWEEN:
ANDREW GEORGE ROBINSON
Applicant (Respondent in Appeal)
– and –
JULIE ANN MARGARET CONNOLLY
Respondent (Appellant in Appeal)
Christopher D. McInnis, for the Applicant (Respondent in Appeal)
Rejean Parise, for the Respondent (Appellant in Appeal)
HEARD: October 9, 2018
THE COURT
[1] This is an appeal from the order of Gauthier J. dated May 1, 2017, regarding the interpretation of a separation agreement.
Brief background:
[2] The appellant mother and the respondent father separated in 2009 after being married for about 6 years. They are both medical doctors and high income earners.
[3] The parties have three children. From the time of separation, the residence of the children was shared equally between them, alternating one week with each parent.
[4] After a lengthy negotiation, and with representation by lawyers, the parties entered into a separation agreement in May 2011 (the “Agreement”).
[5] The Agreement provided for child support. In the Agreement, both parents acknowledged their obligation to pay support pursuant to the shared custody provisions of the Child Support Guidelines. The Agreement provided that based on the appellant’s income of $200,000 and the respondent’s income of $350,000, and based on shared custody, the parties agreed that the respondent would pay child support of $2,500 a month commencing at the time of separation in 2009. The parties further acknowledged that this support was consistent with the Child Support Guidelines and that the husband had made all payments to the date of the Agreement and owed “no arrears of child support as of the date this agreement was signed.”
[6] Under the Agreement, the appellant owed an equalization payment of $97,000 to her husband. However, the Agreement provided for the set-off of that amount. More specifically, the Agreement provided that where the respondent owed child support in excess of $2,500 (excluding s. 7 expenses) then the excess amount “shall be set off against the equalization payment until the credit of $97,000 is exhausted”. The Agreement further provided that when the child support obligation ceased, any balance owing on the equalization payment “shall be forgiven”.
[7] The parties were divorced in September 2011.
[8] The parties continued with the week on week off sharing approach regarding the residence of their children until September 2013, when the respondent relocated to Kingston. After that time, the children’s primary residence was with the applicant.
[9] In advance of his relocation, the respondent commenced an application seeking custody and other orders arising from his planned relocation. In response, the appellant sought certain relief as well.
[10] On consent, an interim order was made in January 2014 requiring that the respondent pay $5,500 in child support pending further order of the court and suspending the set off provision until further order of the court. That order also required mandatory income disclosure annually.
[11] There is no issue that the $5,500 monthly payments have been made. The respondent has paid those amounts in full.
[12] By the time of the trial that gives rise to the decision appealed from, there was only one issue between the parties. Issues regarding custody, access and ongoing support had been resolved. The remaining issue related to the interpretation of the Agreement and its provisions regarding child support and set off. At issue was the period from separation in 2009 to the date of the Agreement in 2011. The specific issue was whether the husband should have been paying Guideline support from 2009 rather than from 2011. The appellant submitted that the income information in the Agreement was incorrect. She submitted that her own income, as set out in the Agreement, was too high and her husband’s income was too low, and the $2,500 was therefore less than the Guideline amount. At trial, the appellant conceded that she understood the Agreement before she signed it, but she implied that the fault lay with her counsel, who she said did not provide her with clarity about the impact of the Agreement.
[13] The application judge noted that there was no request before her to set aside any provision in the Agreement or to vary the Agreement, nor was there a claim for child support before her. The issue was a matter of contract interpretation, not bound by or guided by the Divorce Act. The application judge applied interpretative principles applicable to domestic contracts, including those set out by the Ontario Court of Appeal in MacDougall v. MacDougall, 2005 44676. Before us, the appellant’s counsel accepts that the proper approach is as set out in MacDougall.
[14] The application judge considered the surrounding circumstances in accordance with Sattva v Creston, 2014 SCC 53, noting that the parties were attempting to settle, with the assistance of counsel, all the issues arising from their separation. The application judge found that it was clearly reflected in the Agreement and that the parties objectively intended to deal with the issues of equalization and child support and develop a formula that did not necessitate any cash outlay on the part of the appellant. The application judge noted a number of provisions in the Agreement including the child support provisions, the set off provisions and the enforcement provisions, among others. In addition, the application judge noted that in the Agreement, the parties had expressly acknowledged that they had each made full and complete financial disclosure, had independent legal advice and had read and understood the Agreement and understood its consequences.
[15] The application judge found that the sum of $2,500 per month was agreed as the appropriate amount on the date of the separation onward to the date of the Agreement. She further found that the Agreement was clear, in its para. 11, where it stated the incomes attributed to the parties without any qualifier suggesting that they were estimates, that the parties acknowledged in the Agreement that the $2,500 was consistent with the Guidelines and that there were “no arrears of child support” as of the date of the Agreement.
[16] The application judge further found as a fact that the income tax and other information required to calculate the child support under the Guidelines was available when the Agreement was negotiated and signed. There was no suggestion that the respondent had failed to disclose his income information or otherwise misrepresented his income.
[17] The application judge found that under the Agreement, the parties had agreed to $2,500 for support for the period prior to entering into the Agreement. Applying the principles applicable to domestic contracts, the application judge concluded that the set off provisions in the Agreement began as of the date of the Agreement, not at the time of separation.
Jurisdiction:
[18] The parties agree, as do we, that this court has jurisdiction to decide this appeal as it is framed which is as an issue regarding periodic payments of less than $50,000.00 in a 12 month period pursuant to s. 19(1.2)(b) of the Courts of Justice Act. See also McGrath v. Woodrow (2001), 2001 24163 (ON CA), 52 O.R. (3d) 732 (C.A.) at para. 16.
Standard of Review:
[19] The respondent submitted that the issue before this court is one of mixed law and fact. The appellant agreed with that characterization of the issue in her counsel’s oral submissions.
[20] Questions of mixed law and fact involve applying a legal standard to a set of facts, and is subject to a standard of palpable and overriding error, unless it is clear that the application judge made some extricable error of law. See Housen v. Nikolaisen 2002 SCC 33, [2002] 2 S.C.R. 235 at para. 17; MacDougall v. MacDougal, 2005 44676 (ON CA), [2005] O.J. No. 5171 C.A. at para. 8; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633 at para. 18.
[21] Sattva, supra para. 19 gives examples of an extricable error in law made in the course of contractual interpretation which included the application of an incorrect principle, failure to consider a required element of a legal test, or the failure to consider a relevant factor. That court went on to indicate that courts should be cautious in identifying extricable questions of law in disputes over contract interpretation because the goal of contractual interpretation is to ascertain the objective intentions of the parties, which is inherently fact specific.
Position of the Parties:
[22] The appellant does not want the Agreement set aside. Instead she argues that the Agreement had a commencement date specified for the child support within para. 11(b) being July 1, 2009. As such she feels that the commencement date of the table amount for child support should be the date of separation and not the date of signing of the Agreement as found by the application judge. She further submits that the application judge erred in not considering the Divorce Act in interpreting the Agreement.
[23] The respondent argues that the application judge correctly identified the legal principles of interpreting a domestic contract and considered all of the necessary elements. He further argues that the application judge read para. 6(i)(ii) in light of the whole domestic contract, the plain language wording was considered, and the factual matrix was examined in determining the objective intention of the parties and therefore made no error.
Issue:
[24] The issue before the application judge as agreed to by counsel was for a determination as to whether the equalization payment set-off of $97,000.00 should be based solely on the applicant’s child support obligations and the Child Support Guidelines from the time of the signing of the Separation Agreement (May 27, 2011) or from the date of the separation being May 2009.
[25] In other words the application judge was tasked with interpreting the Agreement and the objective intention of the parties at the time of signing it.
[26] The issue before this court was quite simple as to whether the application judge committed a reversible error in her interpretation of the party’s domestic contract as stated in her reasons 2017 ONSC 2454.
Analysis:
[27] The Appellant’s main argument was that it was an error of law not to consider the Divorce Act.
[28] In oral argument, counsel for the applicant father made reference to s. 9 of the Federal Child Support Guidelines. He submitted that, in shared parenting situations, the Court should take a holistic approach deviating from a strict Guidelines application. Section 9 of the Guidelines provides as follows:
Where a spouse exercises a right of access to, or has physical custody 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 spouses;
b. The increased costs of shared custody arrangements; and,
c. The conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought.
[29] In the case at bar, in their separation agreement the parents negotiated a figure for support from father to mother in the amount of $2,500. The Agreement indicated that the father’s income was $350,000 and the mother’s income was $200,000. In fact, the father’s income was considerably higher; but as Justice Gauthier found as a fact in her Judgment at paragraph 69:
…the information that the wife now says establishes that the husband was not discharging his obligation to pay child support in accordance with the Guidelines and in accordance with his income “ought to have been known to both parties” at the time of entering into the agreement.
[30] Justice Gauthier also noted that the information required to calculate child support under the Guidelines was available when the Agreement was negotiated and signed. She found that $2200 might have been reasonable in the circumstances.
[31] There is no dispute that the children were living equally with each parent in a week about arrangement. Both parents had incomes over $150,000, with the father’s income being considerably more.
[32] The mother now seeks to obtain a credit based on the father’s underpayment for the years in question on a strict mathematical interpretation of s. 11 of the Guidelines by way of set-off.
[33] But s. 9 of the Guidelines and the cases interpreting it suggest that a set-off is a mere starting point in shared parenting arrangements.
[34] Professor Rollie Thompson, in his commentary on the leading Supreme Court of Canada case, Contino v. Contino, 2005 SCC 63, 2005 S.C.C. 63, summarized the step by step method outlined by Bastarache J. as follows:
Determine the simple set-off amount.
Review the child expense budgets.
Consider the ability of each parent to bear the increased costs of shared custody and the standards of living for the children in each household.
[35] As Bastarache J. stated at paragraph 49, “Hence the simple set-off serves as a starting point.”
[36] As to the issue of discretion surrounding s. 9, the Court stated at paragraph 51,
The Court retains the discretion to modify the set off amount where, considering the financial realities of the parents, it would lead to a significant variation in the standard of living experienced by the children as they move from one household to another, something which Parliament did not intend.
[37] As Gauthier J. noted in her decision, the parties, assisted by family law lawyers, negotiated a separation agreement over a period of a year-and-a-half before it was executed. The Agreement recognized that each party was entitled to full disclosure of assets, debts and liabilities. The parties agreed on $2,500 as an off-set during the time while they were sharing parenting. The payment was increased to $5,500 shortly after the father relocated and was no longer co-parenting. He has made all payments required by the Agreement or order.
[38] As Gauthier J. framed the issue at paragraph 21, “Should the husband have been paying Guideline support based on his higher income from July 1, 2009 forward?” In our view, he should not. Gauthier J. made no reviewable error in making that finding. The following points assist in this determination:
• The parties were sharing equally the parenting of their children;
• Section 9 of the Guidelines provides discretion to vary a strict mathematical formula;
• The parties, with the advice of their lawyers, were aware of each other’s expenses by way of disclosure;
• The parties were no doubt aware of the living arrangements and attendant costs at each other’s household and therefore the standard of living of the children at each location; and,
• Nothing in the record before us indicates that the children suffered a decline in their standard of living while in their mother’s care during this week about arrangement.
[39] The application judge considered the possible role of the Divorce Act in her reasons and concluded it did not apply in these circumstances. We see no reviewable error in her decision.
Conclusion:
[40] We see no reviewable error in the interpretation of the Agreement as set forth by the application judge. The appeal is dismissed. Costs have been agreed by counsel and are fixed at $6500 plus H.S.T. payable by the Appellant to the Respondent.
Regional Senior Justice H. S. Arrell
Mr. Justice G. M. Mulligan
Madam Justice W. M. Matheson
Released: October 11, 2018
CITATION: Robinson v. Connolly, 2018 ONSC 6010
DIVISIONAL COURT FILE NO.: DC-1063/17
DATE: 20181011
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
ARRELL, R.S.J., MULLIGAN, and MATHESON JJ.
BETWEEN:
ANDREW GEORGE ROBINSON
Applicant (Respondent in Appeal)
– and –
JULIE ANN MARGARET CONNOLLY
Respondent (Appellant in Appeal)
REASONS FOR JUDGMENT
Released: October 11, 2018