DATE: 20021015 DOCKET: C37521

COURT OF APPEAL FOR ONTARIO

RE: ARTHUR EAGER (Appellant) –and– ROSEMARY GRAVES (Respondent)

BEFORE: DOHERTY, LASKIN and GOUDGE J.A.

COUNSEL: Gregory A. Ste. Marie, for the appellant

Rosemary Ellen Graves, the respondent in person

HEARD: October 8, 2002

On appeal from the judgment of Justice Lynn D. Ratushny of the Superior Court of Justice, sitting without a jury, dated December 6, 2001.

E N D O R S E M E N T

[1] [1] The appellant Arthur Eager appeals on three main grounds: 1) the trial judge erred in ordering him to pay 12 years of arrears under the separation agreement; 2) alternatively, the trial judge erred in calculating his income for the purpose of determining the amount of arrears; and 3) the trial judge erred in failing to apply the Child Support Guidelines for the period November 1, 1999 to June 30, 2001.

(1) (1) The arrears

[2] [2] The appellant’s main point is that the trial judge erred in enforcing the terms of the separation agreement. Alternatively, he submits that the Limitations Act or the delay in asserting the claim for arrears should preclude any order for arrears before February 1995. We do not agree with these submissions.

[3] [3] The trial judge found at para. 27 of her reasons that the respondent did not ever agree to vary the terms of the separation agreement. She said:

With respect to the respondent’s claim that he and the applicant agreed to various variations of the Separation Agreement over the years and that he complied with those agreed variations, I find that is a stretching of the truth. He did agree that the applicant was always saying he was underpaying his share of the boys’ expenses. I do not find that the applicant ever agreed to fixed or different amounts in respect of these expenses so as to operate as a variation of the Separation Agreement term that each party was to share the “costs of the children” proportionate to their incomes. I accept the applicant took what she could get from the respondent, under constant protest that he was not fulfilling the terms of the Separation Agreement and under the promise that he would even things up later, when he was in a better financial position and in any event, he would pay for their university education.

[4] [4] She then concluded in similar terms at para. 34:

I find the Separation Agreement remains in effect as an enforceable agreement between the parties containing an enforceable child support provision that has not been varied over the last twelve years by verbal agreements. The applicant never agreed to relieve the respondent of his obligation to pay for the boys’ costs in accordance with the Separation Agreement. She simply took what she could get with minimum disruption to her and the boys’ lives with the promise that the respondent would make it all up later.

[5] [5] In our view, the trial judge’s finding and her conclusion that the separation agreement remained an enforceable agreement were amply supported by the respondent’s evidence and were buttressed by the adverse finding of credibility against the appellant.

[6] [6] In holding that the Limitations Act did not bar the claim – which was first asserted by the respondent in 2001 – the trial judge found that “her cause of action only arose in 1999 … when the applicant understood that the respondent would never be fulfilling his promises to pay in accordance with the Separation Agreement …”

[7] [7] Again, that finding is supported by the respondent’s evidence, which the trial judge accepted. In substance, the trial judge found that the appellant had promised to live up to the terms of the agreement and that the respondent had notionally financed his ongoing failure to calculate his proportionate share of expenses under the agreement in reliance on this promise to pay when he was financially able to do so. In enforcing the arrears going back 12 years, the trial judge was simply giving effect to the appellant’s promise, which he had repeated to the respondent, at least on her evidence, on many occasions. Neither the Limitations Act nor the alleged delay in making the claim for arrears bar the order made by the trial judge.

(2) (2) The calculation of income

[8] [8] The appellant’s sole submission here is that in calculating his annual income, the trial judge erred in attributing 70 percent of the gross rental income on the properties in which he had an interest. We accept this submission.

[9] [9] The trial judge gave no reasons for why she chose 70 percent, which on its face seems unusually high. Moreover, the uncontradicted documentary evidence filed by the appellant shows that the payment of mortgage interest, property taxes and insurance – so‑called “hard costs” – would reduce the 70 percent figure to 40 percent of gross rental income. We agree with the appellant that 40 percent is the proper percentage to attribute to his gross rental income.

(3) The Child Support Guidelines

[10] [10] The appellant claims that he is entitled to the table amount of child support under the Guidelines for the two children for the period November 1, 1999 to June 30, 2001 because the two boys were living with him during that period. He also claims that under s. 7 of the Guidelines, extraordinary expenses for post-secondary education for the children should be divided in accordance with the parties’ respective incomes instead of equally as provided for in the separation agreement.

[11] [11] The respondent does not contest the order sought by the appellant under s. 7 of the Guidelines and we therefore make that order.

[12] [12] We do not, however, accept the appellant’s submission on child support under ss. 3 and 9 of the Guidelines. The trial judge’s reasons are sparse on this issue, but having regard to her overall finding of credibility, she seems to have concluded that apart from the period October 11, 2000 to June 21, 2001, the appellant did not have the requisite physical custody of the children to trigger the application of the Guidelines.

[13] [13] For the period October 11, 2000 to June 25, 2001, the appellant did have physical custody of one of the children. In our view, however, the trial judge had a narrow discretion, founded on s. 3(2) of the Guidelines, to refuse to apply them and instead to apply the terms of the separation agreement. The child was over the age of majority and the period in question was very brief. Thus, we are not persuaded that the trial judge erred in refusing to apply the Guidelines for any part of the period contended for by the appellant.

Conclusion and costs

[14] [14] The appeal is allowed by varying the trial judgment on the percentage of gross rental income to be attributed to the appellant’s overall annual income, and by providing for post-secondary education expenses to be allocated in accordance with s. 7 of the Guidelines. Otherwise, the appeal is dismissed. Because success on the appeal has been divided, we make no order for costs.

Signed: “Doherty J.A.”

“John Laskin J.A.”

“S. T. Goudge J.A.”

Released: October 15, 2002