DATE: 20010515

DOCKET: C34822

COURT OF APPEAL FOR ONTARIO

CHARRON, ROSENBERG and GOUDGE JJ.A.

B E T W E E N :

GRAZIA MARIA MARSON

Petitioner

(Respondent)

• and -

ANTHONY MARSON

Respondent

(Appellant)

Carol A. Bargman, for the appellant

Laurie H. Pawlitza, for the respondent

Heard: April 5, 2001

On appeal from the order of Justice Victor Paisley dated July 13, 2000, and endorsement dated July 18, 2000

CHARRON J.A.:

1. Overview

[1] The appellant, Anthony Marson, appeals from an order dated July 13, 2000 and endorsement dated July 18, 2000 providing for child support in accordance with the Federal Child Support Guidelines, S.O.R./97-175 and costs on a solicitor and client basis, payable forthwith after assessment in any event of the cause. The order also reserved certain related issues for trial, but this part is not in issue on this appeal.

[2] The order was made by Paisley J. on a motion brought by the respondent Grazia Maria Marson within ongoing divorce proceedings. The proceedings were commenced by Mrs. Marson by petition dated April 19, 1996. The parties signed a separation agreement on August 6, 1996 that included provisions for child support. The terms of the separation agreement were never incorporated in a judicial order. On her motion, Mrs. Marson sought a variation of the amount of child support on the basis that there had been a material change in the circumstances of the parties since the signing of the separation agreement. She also sought a variation to accord with the Federal Child Support Guidelines in force since May 1, 1997.

[3] By its terms, the separation agreement provided for cost of living adjustments and a variation of child support in the event of a material change of circumstances. The order under appeal, made in accordance with the guidelines and resulting in an increase of the child support payments, was based on the motions judge’s finding that there had been a material change in the circumstances of the parties since the signing of the separation agreement. The appellant appeals from this finding arguing firstly, that the motions judge exceeded his jurisdiction in making a final determination on an interim motion and secondly, that the finding is not supported by the evidence. The appellant also seeks to introduce fresh evidence on the question of whether there has been a material change in circumstances. Finally, the appellant submits that the costs order was punitive in nature and unjustified in the circumstances.

2. Jurisdiction to hear the appeal

[4] Although Mrs. Marson did not specify in her motion whether the relief sought was interim or final in nature, both counsel agree that, since the motion was brought within ongoing divorce proceedings, it was interim in nature. Hence, given the interlocutory nature of the proceeding, this court has raised the preliminary question of whether it has jurisdiction to hear the appeal.

[5] On this point, both parties agree that, regardless of the nature of the proceedings below, the motion was argued as an originating application and, implicitly, Paisley J. was invited to make a final order. It is only as a result of the motions judge’s decision to reserve certain issues for the trial judge that the interim nature of the order became apparent. Both parties take the position, however, that both the motions judge’s finding that there had been a material change in circumstances, and the making of an order for child support under the Federal Child Support Guidelines, would not be reviewable by the trial judge in the divorce action, and hence were final in nature. The parties therefore submit that this court has jurisdiction to hear the appeal.

[6] It is apparent from the form of the order and from the motions judge’s reasons that he indeed made a final order. In effect, the motions judge carved out the issue of entitlement to child support and made a final order in that regard. He then left the issue of final quantum open for review at trial at the request of either party and further left the issue of retroactive support to be determined by the trial judge in the divorce action.

[7] While it may have been preferable for the motions judge to have explicitly made an interim order under s.15.1(2) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) in circumstances such as these, where he was of the view that a number of related issues had to go to trial, he nonetheless was a court of competent jurisdiction to make a final order under s.15.1(1) of the Divorce Act. These provisions read as follows:

15.1(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to pay for the support of any or all children of the marriage.

(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 pay for the support of any or all children of the marriage, pending the determination of the application under subsection (1).

(3) A court making an order under subsection (1) or an interim order under subsection (2) shall do so in accordance with the applicable guidelines.

[8] In light of the conduct of the proceedings below where the parties in effect sought a determination of the issue of entitlement, I am of the view that it is not open to the appellant to argue for the first time on appeal that the motions judge exceeded his jurisdiction in making a final order on an interim motion. The motion should be considered as an application for child support under s.15.1 of the [Divorce Act][^1] and, to the extent that the order is final in nature, this court has jurisdiction to consider the appeal on its merits.

3. The evidence on the motion

[9] The separation agreement provided for monthly child support payments by the father in the amount of $575 for each child for a total of $1,150 each month for the two children. In addition, Mr. Marson was obligated to pay the sum of $2,500 each year for the children’s activities. The parties expressly agreed that the quantum of child support was based on the father’s financial statement sworn March 4, 1996 that represented his gross income as $52,000 per year. The child support provisions in the agreement were only subject to variation “because of a material change in circumstances.”

[10] Both parties were content to proceed with the motion on the basis that, given the provisions of the separation agreement, it was incumbent upon Mrs. Marson to show a material change in circumstances before an order could be made under the Divorce Act, regardless of the test under s. 15.1.

[11] Mrs. Marson alleged in her material that there had been a material change in circumstances relating to Mr. Marson’s income since the separation agreement was signed. She contended that, although Mr. Marson had failed to provide full financial disclosure as he was obligated to do under the terms of the agreement, there was sufficient financial information to show that his 1997 income exceeded $100,000 and that his 1998 income was approximately $79,000. Mrs. Marson further alleged that the children’s needs had increased and gave particulars.

[12] As I read Mr. Marson’s responding material for the motion, he did not take serious issue with the alleged change in his financial circumstances but essentially took the position that his increased income was an anomaly, and that there had been a corresponding change in Mrs. Marson’s financial circumstances. He alleged that her income and net worth had substantially increased since the signing of the separation agreement.

[13] In a supplementary affidavit, Mrs. Marson indicated that her increased monthly income included rental income that would terminate at the end of June 2000, a gift from her parents and the child support payments. She also explained that there was no true change in her net worth as alleged by her husband. Rather, the difference in her net worth was a function of the different calculations made in the two relevant financial statements.

4. Position of the parties on appeal

[14] The appellant’s main contention is that the motions judge erred in finding a material change in circumstances based on the appellant’s financial circumstances alone, without giving proper consideration to the corresponding change in the respondent’s own circumstances. He also seeks to introduce fresh evidence to show that the respondent’s income, as declared on her 1999 income tax return was higher than the amount revealed in the motion material, and to show that her property is still rented out to tenants, contrary to her stated intention of moving onto the property with her children.

[15] The respondent submits that the evidence amply supports the motions judge’s finding that there was a material change in circumstances justifying the making of the order, given the increase in the appellant’s income and the increased needs of the children. Alternatively, the respondent takes the position that the enactment of the Federal Child Support Guidelines in itself constitutes a change in circumstances that justifies a variation of the quantum of child support. The respondent relies on the decision of this court in Bates v. Bates (2000), 2000 CanLII 14734 (ON CA), 49 O.R. (3d) 1 (C.A.) and on the subsequent amendments to the guidelines on November 1, 2000, which clarified that the coming into force of the guidelines constituted a material change in circumstances warranting a variation from the child support determined under the pre-guidelines regime.

5. Analysis

[16] I am not satisfied that the motions judge erred as contended by the appellant. It is clear from his reasons that he not only considered the appellant’s financial circumstances but also the respondent’s circumstances. The relevant part of his reasons reads as follows:

The applicant’s right to a variation in child support is not automatically triggered by the enactment of the guidelines, but I am satisfied that in all circumstances there has been a material change in circumstances; the husband’s income has subsequently increased: see Willick, 1994, 3 S.C.R. at 691 per Sopinka, J. The child of the marriage is entitled to the benefit of the father’s increased financial situation. While it is argued the wife’s circumstances should also be taken into account, I am not persuaded that the wife’s income and benefits, largely derived from her family, are a good enough reason to deny her the child support in light of the change in her husband’s income.

[17] In my view, the motions judge’s findings were reasonable and entirely supported by the evidence. It was open to him to grant the relief requested based on a material change in the circumstances of the children or of one or both of the parents. It is further my view that the fresh evidence, had it been available on the motion, would not have changed the result.

[18] In light of my conclusion on the motions judge’s factual findings that formed the basis of his order, I do not find it necessary or advisable to consider the respondent’s alternative position on the effect of the enactment of the guidelines. It is not necessary to determine the matter because the motions judge’s decision was supported by the evidence regardless of the effect of the enactment of the guidelines. It is not advisable to deal with the issue because this question, which concerns conflicting decisions from our court, was argued before a five-judge panel of this court on April 11, 2001 in the appeal of Wright v. Zaver (2000), 2000 CanLII 22395 (ON SC), 49 O.R. (3d) 629 (Sup. Ct.) and is presently under consideration.

[19] On the issue of costs, it is apparent from the reasons of the motions judge that the costs were ordered on the higher scale because of the motions judge’s finding that the appellant failed to disclose his income as he was obligated to do. The appellant submits that the motions judge did not fully consider the issue of non-disclosure and his explanation and that, consequently, the order was both unwarranted and premature. The relevant part of the motions judge’s reasons read as follows:

A significant amount of effort has been devoted by the wife since this litigation for increased support was commenced to determine whether the husband has in fact accurately disclosed his income. On April 20, this Court ordered, that “the applicant is entitled to better disclosure of the respondent’s income from all sources.” Notwithstanding that, there were a significant number of refusals to answer questions at the subsequent cross-examinations. While I have not determined on this motion whether all the refusals were or were not justifiable, I am satisfied that the respondent has unjustifiably refused to answer questions regarding his financial position, especially in the light of the above ruling. [Emphasis added.]

[20] The appellant has not satisfied me that the motions judge erred in the exercise of his discretion. Although he may not have considered each and every refusal to provide information, it is clear from his reasons that the motions judge was satisfied that the appellant’s failure to disclose his financial affairs had occasioned the respondent increased costs. In the circumstances, I see no reason to interfere with the costs order.

6. Disposition

[21] I would dismiss the appeal with costs.

(signed) “Louise Charron J.A.”

(signed) “I agree M. Rosenberg J.A.”

(signed) “I agree S. T. Goudge J.A.”

RELEASED: May 15, 2001

“L.C.”

[^1]: Counsel for the appellant took the position that the order was made under s.17 of the Divorce Act that provides for the variation of an existing order. It is my view that s.17 is inapplicable because the terms of the separation agreement were never incorporated in a judicial order.