DATE: 2003-09-03
DOCKET: C38041

COURT OF APPEAL FOR ONTARIO

BORINS, CRONK and ARMSTRONG JJ.A.

BETWEEN:

TERRENCE ARTHUR ECCLES

Applicant (Appellant)

• and -

MARIA EDUARDA ECCLES

Respondent (Respondent)

Paul D. Amey, for the applicant (appellant)

Carole Curtis, for the respondent (respondent)

Heard: January 20, 2003

On appeal from the judgment of Justice C. Raymond Harris of the Superior Court of Justice dated March 8, 2002.

ARMSTRONG J.A.:

[1] Terrence and Maria (Mary) Eccles were married in 1979. They separated in 1989 and were divorced in 1999. There are two children of the marriage: Laura and Paul who, at the time of separation, were aged 4 years and 6 months respectively.

[2] The divorce judgment, granted by Festeryga J. on March 16, 1999, ordered Mr. Eccles to pay spousal support to Mrs. Eccles in the amount of $3,500 per month, subject to review by either party after February 1, 2002.

[3] Mr. Eccles moved to terminate or, in the alternative, to reduce his obligation to pay spousal support. He also moved for an order rescinding outstanding arrears in respect to spousal support. In addition, he sought an order for child support in respect of the children who were in his custody as a result of the divorce judgment.

[4] The motion to vary was heard by Harris J. (the motions judge) who ordered inter alia: (i) spousal support for Mrs. Eccles in the amount of $3,500 to continue and maintenance of extended health benefits for Mrs. Eccles; (ii) payment to Mrs. Eccles of 10% of any employment bonus received by Mr. Eccles; (iii) payment of the arrears of spousal support to Mrs. Eccles; (iv) payment to Mrs. Eccles of a lump sum of $10,000; and (v) payment by Mrs. Eccles to Mr. Eccles of $350 per month for child support.

[5] Mr. Eccles appeals the order of the motions judge in respect of: (i) the continuation of spousal support in the amount of $3,500 per month; (ii) the failure to rescind the outstanding arrears; (iii) the payment of a lump sum in the amount of $10,000; and (iv) the payment of 10% of any bonus received by Mr. Eccles.

The Background

[6] The parties first met when they were students at Humber College in Toronto. Mrs. Eccles has a Grade 12 education and completed one year of a two-year legal secretarial programme at Humber College prior to the marriage. After their marriage, they resided in Toronto where Mr. Eccles became a funeral director. Mrs. Eccles was employed as a secretary.

[7] Prior to the marriage, Mrs. Eccles had told her husband that she did not want to move away from Toronto. However, within two years of their marriage, Mr. Eccles sought employment in Hamilton. The motions judge found that Mr. Eccles did so without consulting his wife. Mrs. Eccles found it difficult to find suitable employment in Hamilton. Having obtained employment as a secretary in a real estate office, she was requested by her manager to work weekends. Mr. Eccles did not want his wife working on weekends and, as a result, she terminated her employment.

[8] Mrs. Eccles then attended the Mohawk College of Nursing, but because she had difficulty with certain chemistry courses, she left and at the suggestion of her husband they began to have a family. Their daughter, Laura, was born in 1984. From that time on, Mrs. Eccles became what the motions judge described as a "homemaker in all the traditional ways".

[9] Mrs. Eccles stayed at home and looked after the children although she did some minor income-producing work from home, such as babysitting, sewing and making rag dolls. Mr. Eccles pursued his career in the funeral business with considerable success. He was promoted to regional director, responsible for 14 funeral homes in southwestern Ontario.

[10] The parties separated in 1989. The children continued to live with their mother. Mr. Eccles began a serious relationship with another woman in 1992, whom he married after the parties divorced in 1999. Mr. Eccles was awarded custody of the children in the divorce proceedings.

[11] After separation, it was apparent that the husband's standard of living improved significantly while the standard of living of Mrs. Eccles went into decline.

[12] At the time of the hearing before the motions judge, Mr. Eccles agreed that he and his children and new wife were enjoying "a pretty comfortable lifestyle". They live in a four-bedroom home adjacent to a park. Mr. Eccles was at that time driving a brand new Mercedes Benz automobile provided by his employer. He had a family membership in the Southern Pines Golf Club where the annual fees were $1,800. Mr. Eccles estimated that he spent $2,400 a year for vacations.

[13] The evidence established that Mr. Eccles' income for the years 1998 through 2001 was as follows:

1998 $129,000
1999 $162,000
2000 $106,000
2001 $122,400

The above figures included performance bonuses in some years. They also included a generous car allowance and a clothing allowance of $2,500 each year.

[14] Mrs. Eccles, on the other hand, could not be said to approach the standard of living of her former husband. She lived in a small three-bedroom bungalow and continued to drive a 1989 Ford Tempo car with a gas tank that leaked when more than one-half full. Her attempts to find meaningful and financially secure employment were not successful. At the hearing, she filed a 70 page brief of job applications made between 1999 and 2001. The motions judge concluded that she had made 350 attempts to find employment over the previous three years. The week before the hearing in this matter, Mrs. Eccles had accepted a job working in a warehouse as an order-taker for a nutritional food supplier at a rate of pay of $9 per hour and with no benefits whatsoever. Her new job pays her $18,720.00 gross annually.

[15] For the years 1998 through 2001, Mrs. Eccles earned employment income as follows:

1998 $ 1,900.00
1999 $ 3,900.00
2000 $ 3,800.00
2001 $10,000.00

[16] It is clear that the aftermath of the separation and in particular, the loss of custody of the children, had a devastating effect on Mrs. Eccles. The divorce trial and the loss of her children caused her to revisit her own youth and as found by the motions judge "awakened the trauma of her childhood abuse" at the hands of her father. The motions judge concluded:

The consequence of this was that she became depressed to the point that she could not get out of bed. Ultimately, she needed and received counselling which is continuing. This unexpected turn of events in her life was debilitating and among other things, delayed her ability to become self sustaining in the job market.

In addition, there is also a causal connection between her underlying emotional difficulties which for some time impaired her ability to be self sufficient. This was a trauma and a frailty that she disclosed to the applicant prior to marriage and he accepted that as part of his marriage. Subsequently, as a result of the breakdown of the marriage, and in particular the loss of custody of her children, she was, for a period disabled from employment.

The Findings of the Motions Judge

[17] The motions judge accepted the evidence of Mrs. Eccles without qualification. He found her to be open and sincere.

[18] The motions judge was not similarly impressed with Mr. Eccles as a witness. He noted that at the divorce trial, there had not been full disclosure by Mr. Eccles until his cross-examination of a $60,000 bonus paid in respect of the 1999 fiscal year. The motions judge concluded:

There were parts of the applicant's testimony in this trial that left me uncomfortable with his credibility. He testified in- chief that his credit line indebtedness of $9,987.00 at the bank was for "basic things", however, on cross-examination he conceded that $5,700.00 of that amount was used to obtain wedding jewellery for his recent marriage. Not a lot turned on this amount, however, his initial evidence was misleading to his benefit. This added to my general feeling that his evidence on material matters was not reliable.

The applicant's financial statements in this proceeding are uncomfortably over-stated on his expenses and did not stand up well under scrutiny.

[19] The motions judge found that Mrs. Eccles devoted her time and energies over the course of 20 years to the role of homemaker to the detriment of any other career for herself. He characterized her situation as follows:

There is a wide and meaningful chasm between the employment abilities of the applicant and those of the respondent and this disparity flows directly from the marriage. The respondent's financial dependence on the marriage was complete.

The times that the respondent did attempt employment or training during her marriage those initiatives were, for the most part, either thwarted or discouraged by the applicant husband.

The economic impact of the divorce on the respondent's life has been profoundly demoralizing and all the while the applicant has a significantly better life style than the respondent.

In addition to her stark economic hardship, the respondent had always counted on the mutual enjoyment of her husband's pension at the close of his career. The applicant husband continues to be the beneficiary of that pension, the respondent does not.

Analysis

(i) Standard of Review

[20] The appellant must meet a high threshold to set aside the support order. He must show that the motions judge misapprehended the evidence of the appellant's income, or the award was so perverse as to exceed the generous ambit within which reasonable disagreement is possible. See Silver v. Silver (1985), 54 O.R. (2d) 591 (C.A.); Andrews v. Andrews (1999), 45 O.R. (3d) 577 (C.A.).

(ii) Spousal Support

[21] Counsel for Mr. Eccles submitted that the motions judge misapprehended his client's current income as $122,000 yearly, including a $20,000 bonus. He argued that Mr. Eccles' income was $105,500 per year. He further argued that a spousal support award of $42,000 per year constituted a "rough and ready" equalization of incomes, which was unreasonable as it fails to take into consideration Mr. Eccles' financial responsibility for the two children. He also submitted that the motions judge erred in including the clothing allowance of $2,500 and the car allowance of $10,000 in the calculation of income available to pay spousal support.

[22] Counsel for Mr. Eccles submitted that the combination of the increase in Mrs. Eccles' employment income and the decrease in Mr. Eccles' income should have resulted in a reduction in spousal support. He relied on a number of judgments from other courts in support of his argument that an award of $3,500 per month is outside the range of similarly situated spouses. He suggested that the appropriate range was $1,000 to $2,000 a month. See Thorndycraft v. Thorndycraft, [1996] M.J. No. 427 (C.A.); Wallace v. Wallace, [1999] O.J. No. 4513 (S.C.J.); Petrocco v. Petrocco, [1996] O.J. No. 1451 (Gen. Div.); Chalmers v. Chalmers, [1997] A.J. No. 433 (Q.B.); Petrocco v. Von Michalofski, [1998] O.J. No. 200 (Gen. Div.); Farrus v. Farrus, [2000] A.J. No. 680 (Q.B.); Doty v. Doty, [2001] A.J. No. 573 (Q.B.); Armstrong v. Ternan, [1996] M.J. No. 310 (Q.B.).

[23] The motions judge concluded that the combined income of Mr. Eccles and his present wife approximated $155,000 per year including a bonus and other benefits. Although the motions judge did not set out the details of his calculation, it appears he arrived at the approximate figure of $155,000 as follows:

Base salary of Mr. Eccles $ 93,000.00
Clothing allowance $ 2,500.00
Car allowance $ 10,000.00
Annual bonus (average over 7 years) $ 17,000.00
Total $122,500.00
Income of present wife $ 34,000.00
Grand Total $156,500.00

[24] A real problem for the motions judge was how to treat the bonus. It was Mr. Eccles' position that since he had not received a bonus every year, no credit should be given to it at all. I have read Mr. Eccles' evidence and it was not helpful on this point. After a number of questions from both the judge and counsel, it emerged that over a seven-year period prior to the hearing, Mr. Eccles received $120,000 in bonuses which produced an average of about $17,000 per year.

[25] I find no fault in the approach taken by the motions judge in attributing a bonus of $17,000 to Mr. Eccles. Similarly, I am unable to find any error on the part of the motions judge in considering the total package of employment benefits for Mr. Eccles, including his clothing allowance and generous car allowance that gave him a very comfortable standard of living. In regard to his new wife's income, the motions judge found that she made a contribution to the household of about $10,000 a year.

[26] In my view, all of the above demonstrates that Mr. Eccles was in a position to pay his former wife spousal support in the amount fixed by the motions judge of $3,500 per month. Moreover, I am satisfied that the amount fixed by the motions judge was appropriate for Mrs. Eccles, given her present circumstances and the great disparity that exists between the standard of living enjoyed by her and her former husband. In this respect, I rely on the judgment of L'Heureux-Dubé J. in Moge v. Moge (1992), 99 D.L.R. (4th) 456 at 494 (S.C.C.):

Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement. Furthermore, great disparities in the standard of living enjoyed by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution.

[27] The cases relied upon by the appellant as to the appropriate range for spousal support are not particularly helpful in that they are distinguishable on their facts.

[28] In concluding the spousal support issue, I cannot come to the view that the motions judge misapprehended the evidence of the husband's income or that the award was so perverse as to exceed the generous ambit within which reasonable disagreement is possible.

(iii) The Failure to Rescind the Outstanding Arrears

[29] A review of Mr. Eccles' evidence provides no explanation from him as to why he did not meet his obligation to pay his former wife's spousal support. He simply admitted that he was in arrears. I find nothing in the record and nothing in the findings of the motions judge which would suggest that the motions judge erred in failing to rescind the arrears in spousal support.

(iv) The Lump Sum Payment of $10,000

[30] The motions judge gave no reasons for his award of a lump sum of $10,000. In Mannarino v. Mannarino (1992), 43 R.F.L. (3d) 309, this court held:

The law is clear that lump sum maintenance should be awarded only in very unusual circumstances, where there is a real risk that periodic payments would not be made. Such awards should not constitute a redistribution of family assets in the guise of support.

[31] In this case, the motions judge did not say that there was a real risk that periodic payments would not be made. Arguably he found the opposite, in that he both ordered monthly payments to continue and the arrears to be paid. The judgment of the motions judge clearly proceeds on the assumption that Mr. Eccles will pay both the arrears and the continuing support payments. The motions judge does not provide an explanation as to why a lump sum is necessary in addition to the monthly payments. In the absence of any explanation, I am unable to find any unusual circumstances which would suggest that a lump sum payment is appropriate in this case.

(v) The Payment of 10% of any Bonus Received by Mr. Eccles

[32] It is apparent that in the calculation of the annual income of Mr. Eccles, the likelihood of Mr. Eccles to earn a bonus was taken into account and valued at $17,000 per year. This was a factor in setting the spousal support award at $3,500. It would therefore appear that there is an element of double-counting if Mrs. Eccles were to receive 10% of any future bonus, in addition to her spousal support of $3,500.

Conclusion

[33] In the result, I would dismiss the appeal with respect to spousal support in the amount of $3,500 per month and with respect to the failure to rescind the outstanding arrears of spousal support. I would allow the appeal in respect of the payment of the lump sum of $10,000 and the payment of 10% of any future bonus received by Mr. Eccles.

Costs

[34] The parties should make their submissions in writing as to the costs of this appeal within 10 days of the release of this judgment. The parties may reply to each other's submissions on costs within 10 days of receiving each other's submissions.

RELEASED: "SEP -3 2003" "SB"

"Robert P. Armstrong J.A."
"I agree S. Borins J.A."
"I agree E.A. Cronk J.A."