COURT OF APPEAL FOR ONTARIO

CITATION: Holman v. Holman, 2015 ONCA 552

DATE: 20150728

DOCKET: C58098

Hoy A.C.J.O., Simmons and Tulloch JJ.A.

BETWEEN

Carol Dianne Holman

Respondent (Appellant)

and

Bruce Holman

Applicant (Respondent)

Frances M. Wood and Marvin Kurz, for the appellant

Evelyn Huber and Joost K. Heersche, for the respondent

Heard: December 19, 2014

On appeal from the order of Justice Irving W. André of the Superior Court of Justice, dated November 22, 2013.

Tulloch J.A.:

A. OVERVIEW

[1] Following a 19-year marriage, Carol Holman and Bruce Holman divorced. They had two children of the marriage, both now adults. After the marriage ended, Mr. Holman paid child and spousal support and, when the time came, contributed to the girls’ post-secondary education.

[2] In 2012, Mr. Holman brought a motion to change his support obligations, seeking a termination of child and spousal support. In response, Ms. Holman sought an increase in child and spousal support based on increases to Mr. Holman’s income since the most recent order.

[3] The motion judge terminated child support and found that Mr. Holman had overpaid child support. He terminated spousal support as of November 15, 2013 but found that Mr. Holman had underpaid spousal support. He calculated that the net amount owed by Ms. Holman to Mr. Holman was $40,287.

[4] Ms. Holman appeals. She argues the motion judge made a number of calculation errors with respect to child support, should have increased spousal support after terminating child support, and erred in terminating spousal support. I agree that the motion judge erred in his child support calculations. I also agree that for the period post-child-support that he ordered spousal support, the motion judge should have increased that support based on the without child formula in the Spousal Support Advisory Guidelines (the “SSAGs”) that now applied. On my calculations, Ms. Holman should pay Mr. Holman $36,646 on account of child support which Mr. Holman overpaid. Mr. Holman should pay Ms. Holman $11,204 on account of spousal support which he underpaid. However, while I agree that the motion judge would ideally have explained his decision to terminate spousal support in the context of the durational range set out in the SSAGs, I do not find that he committed a reversible error in terminating spousal support.[^1]

B. Facts

[5] The Holmans married in 1983 and separated in 2002. They have twin girls, K. and P., who are now adults. Both Mr. and Ms. Holman are now over sixty years old.

[6] After the parties married, Ms. Holman gave up her job so that the couple could move to Halifax where Mr. Holman accepted a higher paying job. During their two years in Nova Scotia, Ms. Holman cashed in her pension and maintained the couple’s home. Mr. Holman was promoted once again when they returned to Ontario, but Ms. Holman did not regain her job. She worked in a local hospital until she gave birth to the twins. She stayed home to care for the twins from 1989 to 1998-1999, when she returned to work.

[7] The couple separated in 2002.

[8] In 2003, Mr. Holman obtained a real estate licence, and his income dropped from a six-figure salary to approximately $14,000. Between 2004 and 2012, Mr. Holman’s income increased from $45,594 to $129,000. In 2011, Mr. Holman purchased a home jointly with his new spouse for $385,000, with a mortgage of about $337,247 and a $19,000 loan from one of his siblings.

[9] Ms. Holman started a full-time position in 2003 with a company partly owned by her brother. Her income increased from $21,000 in 2003 to $50,360 in 2012. In 2010, she inherited approximately $300,000 from her mother, which she used to purchase her mother’s home. She spent approximately $135,000 to renovate the home, which was mostly financed on her line of credit. She also has approximately $100,000 in savings.

[10] Both K. and P. have resided with their mother since the separation. Neither one pays room nor board. Both young women graduated from university in May 2011. P. earned $23,135 in 2012. In 2013, K. completed a two-year veterinary technician diploma. She currently earns $25,000 per year.

[11] The parties divorced in 2004 and, at that time, consented to orders for spousal and child support that were based on Mr. Holman having an imputed income of $98,612. Mr. Holman was to pay two-thirds of the children’s s. 7 expenses under the Federal Child Support Guidelines, S.O.R./97-175 (the “CSGs”), which was less than his income would have required. The terms of the 2004 support orders were varied on consent by orders made in March 2009 and February 2010 (“the 2009 and 2010 orders”).

[12] Although premised on Mr. Holman's income at the time, the 2009 and 2010 orders were a departure from s. 7 of the CSGs in that they limited Mr. Holman’s contribution to the children’s post-secondary education to $5,000 per year per child. These orders also relieved Mr. Holman of the obligation to pay child support for K. for six months of the year (assuming she would be away at school during that period). The orders required that the parties exchange financial information by May 15 of each year and contained a mechanism for adjusting both child and spousal support based on fluctuations in income.

[13] In 2012, Mr. Holman brought a motion seeking an order terminating child support as of the date each child had completed her first degree, and seeking an order terminating spousal support as of May 1, 2011. In response, Ms. Holman sought an increase in the spousal support payable and outstanding additional child support based on increases in Mr. Holman’s income.

C. Decision Below

[14] On November 22, 2013, the motion judge changed the prior orders by terminating the child support payable by Mr. Holman effective as of the date each child had completed her education and attained a level of self-sufficiency (end of December 2011 for P. and May 1, 2013 for K.). He rejected Mr. Holman’s position that his child support obligations ceased as soon as the children completed their first post-secondary degree.

[15] The motion judge then calculated the amount by which Mr. Holman had overpaid child support. He did not take into account the increased child support owing under the existing orders due to Mr. Holman’s increased income. He found that K. was able to contribute $12,000 to her education and living expenses in 2011 and 2012, and deducted that amount from the amount of child support owing by Mr. Holman. When dealing with the period in which child support had terminated for P. but remained owing for K., the motion judge divided in half the amount Mr. Holman had paid for two children to determine what he owed for one child.

[16] With respect to spousal support, the motion judge found that because Ms. Holman was disadvantaged economically on account of her marriage and Mr. Holman had the means to pay, spousal support should not be terminated as of May of 2011. However, he also found that Ms. Holman had become financially self-sufficient. He terminated spousal support as of November 15, 2013. He adjusted the quantum of spousal support that had been payable up to November 15, 2013 based on increases in Mr. Holman’s income subsequent to the February 2010 order, and calculated the amount by which Mr. Holman had underpaid spousal support.

[17] Taking into account the adjustments he made to child and spousal support, and the child support paid after the date on which he had found that child support should have terminated, the motion judge ordered Ms. Holman to reimburse Mr. Holman in the amount of $40,287.

D. Arguments on Appeal

[18] Ms. Holman makes several arguments on appeal.

[19] Mr. Holman challenges the motion judge’s order for termination of spousal support effective November 15, 2013, arguing that the motion judge failed to find a material change justifying a variation in the indefinite order of spousal support originally made. Ms. Holman argues that the motion judge failed to consider what the SSAGs say about the duration of support in long-term marriages, and overemphasized the goal of self-sufficiency while underemphasizing the compensatory nature of her claim to support. In addition, she claims that the motion judge erred in failing to consider the without child formula under the SSAGs, which applies in so-called “crossover cases” in which the child support obligation has ended.

[20] Second, with respect to child support, Ms. Holman does not dispute the termination of child support ordered by the motion judge, other than to submit that child support for K. should have been terminated on June 1, 2013, rather than May 1, 2013. However, she contends that the motion judge erred in calculating the child support reimbursement to which Mr. Holman was entitled by: (a) failing to increase child support based on Mr. Holman’s increased income as required by the 2009 and 2010 orders; (b) finding that child support for one child is 50 percent of the amount for two children, which is contrary to the CSGs; (c) refunding $12,000 to Mr. Holman for what K. should have contributed to her s. 7 expenses; and (d) double-counting a portion of the child support overpayment by deducting it from the spousal support underpayment.

[21] Mr. Holman submits that the motion judge did not err in calculating the child support reimbursement, but concedes that the motion judge overstated by $1,731 the child support payments actually made. Mr. Holman argues that the motion judge was entitled to depart from the CSGs on a motion to change, and did not err in doing so. He submits that the motion judge correctly terminated spousal support on the basis of Ms. Holman’s self-sufficiency as well as the relative capital positions of the parties.

E. Analysis

(1) Spousal Support

(a) Standard of Review

[22] On appellate review of a trial (or motion) judge’s spousal support decision, deference applies. Absent an error in principle a significant misapprehension of the evidence, or unless the award is clearly wrong, an appellate court should not interfere. This court is not entitled to overturn a support order simply because it would have made a different decision or balanced the factors differently: Hickey v. Hickey, 1999 CanLII 691 (SCC), [1999] 2 S.C.R. 518, at paras. 11and 12.

(b) Material Change in Circumstances

[23] The threshold question on a motion to change a spousal support order is contained in s. 17(4.1) of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.):

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. [Emphasis added.]

[24] The change referred to in s. 17(4.1) must be “material”: L.M.P. v. L.S., 2011 SCC 64, [2011] 3 S.C.R. 775, at para. 32. A material change is one which “‘would likely have resulted in different terms’ to the order”: L.M.P., at para. 33. The court “should limit itself to making only the variation justified by that change”: L.M.P., at para. 47.

[25] It would have been preferable for the motion judge to explicitly address the threshold question of material change in the circumstances before considering the request to terminate the existing indefinite spousal support order. However, his failure to do so does not, in my view, rise to the level of reversible error.

[26] The motion judge considered the effect of Ms. Holman’s inheritance of approximately $300,000 and emphasized its significance in terms of her overall need and self-sufficiency. It can be inferred that this inheritance constituted for the motion judge a material change in circumstances: a finding that is not unreasonable in the overall circumstances of these parties.

(c) Duration of Spousal Support

[27] Once the threshold of material change has been met, s.17(7) of the Divorce Act sets out the objectives of any spousal support variation order:

(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.

The motion judge explicitly referred to and considered these objectives. He was alive to and considered the compensatory nature of Ms. Holman’s claim. He was aware of the economic disadvantages she suffered as a result of the family decision to have her stay home and care for the children. He was aware that corresponding economic advantages were conferred on Mr. Holman. He discussed these at length. At the same time, the motion judge concluded that at about 11.5 years following separation, Ms. Holman had achieved self-sufficiency. He observed that her inheritance increased her means and allowed her to purchase a home relatively free from debt. And, having considered all of the necessary factors, he made a discretionary decision about the appropriate duration of support. In my view, this decision was open to him on the evidence and was not clearly wrong or an error in principle. Accordingly, his decision is entitled to deference from this court.

[28] The motion judge concluded that the date for termination requested by Mr. Holman, namely May 2011 was too soon to terminate spousal support, but that spousal support would terminate on November 15, 2013.

[29] Ms. Holman argues that the motion judged erred by terminating spousal support 11.5 years after separation. While I am sympathetic to Ms. Holman’s argument, in my view, the alleged overemphasis on the goal of self-sufficiency while underemphasizing the compensatory nature of her claim amounts to a criticism of the motion judge’s balancing of factors rather than to an error in principle.

[30] Further, I agree that it would have been preferable for the motion judge to explicitly refer to the durational range recommended in the SSAGs and explain his choice of duration towards the lower end of the 9.5 to 19 year range specified by the SSAG length-of-marriage test.

[31] At the same time, the duration ordered does fall within the SSAG range. Since spousal support in long marriages has both compensatory and non-compensatory features, the motion judge’s finding of self-sufficiency was not irrelevant. And since there remains discretion to select a duration within the range set out by the SSAGs, I am not persuaded that the motion judge’s decision to terminate support on November 15, 2013 constitutes reversible error.

(d) Spousal Support post child-support

[32] Having found that spousal support was still payable post child-support obligations, I would, however, agree with Ms. Holman that the motion judge erred in principle in failing to increase spousal support after May 1, 2013. The SSAGs specify at ss. 8.11 and 14.5 that a so-called “crossover” to the without child formula is appropriate after child support obligations cease. According to the without child formula, and based on their 2012 incomes of $129,616 and $50,360 respectively, Mr. Holman’s spousal support obligation between May 1, 2013 and November 15, 2013 should have been between $1,882/month and $2,510/month for 6.5 months.

[33] Given that Ms. Holman’s spousal support was ordered to be terminated at 11.5 years, which is on the low end of the durational range set by the SSAGs for a 19-year marriage with a strong compensatory element, and given the interrelation of duration and amount[^2], I would award Ms. Holman an amount at the high end of the range for this period: namely, $2,510 /month for those 6.5 months.

(2) Child Support

(a) Standard of Review

[34] The Federal CSGs constitute a complete code for determining child support with a presumptive entitlement to table support plus any amount determined pursuant to s.7: s.3(1). There is a residual discretion to deviate from the amounts set out in the applicable tables but only under the circumstances outlined in the CSGs themselves.

(b) Calculation of Child Support

[35] For the reasons that follow, I agree that the motion judge made a number of errors in principle in calculating the child support adjustments and amount of overpayment. As such, I would allow the appeal on this ground.

(i) The failure to adjust for Mr. Holman’s increased income

[36] I accept Ms. Holman’s submission that in calculating Mr. Holman’s “overpayment” of support, the motion judge erred by failing to adjust the required child support payments in accordance with the 2009 and 2010 orders to reflect Mr. Holman’s increased income each year, beginning June 1, 2010. The 2009 and 2010 orders provide that the parties were to exchange financial information by May 15 of each year and adjust support payments effective June 1, if necessary. The motion judge gave no reasons for failing to adjust child support as provided for in these orders and should, in calculating any overpayment, have respected the terms agreed to by the parties.

(ii) The $12,000 credit for K.’s education and living expenses

[37] The motion judge credited $12,000 to Mr. Holman based on a finding that K. should have contributed that amount to her 2011 and 2012 education and living expenses. The parties had agreed in the 2009 and 2010 orders that Mr. Holman would pay $10,000 per year towards the children’s annual university costs as long as the children were enrolled in a post-secondary program.

[38] I agree with Ms. Holman that Mr. Holman is not entitled to the full $12,000 credit. Any contribution by K. should reduce the portion of her expenses paid by both parents. As pointed out by Ms. Holman, Mr. Holman was responsible for paying only $5,000 per year towards each child’s post-secondary education, totaling $10,000 for K. for 2011 and 2012. To the extent that this credit related to K.’s education expenses, Mr. Holman cannot receive a $12,000 refund for a payment of $10,000.

[39] I see no basis to interfere with the motion judge’s determination that Mr. Holman should be credited something for what K. should have contributed. Section 7(2) of the CSGs requires the court to consider whether a child of majority age is able to make a contribution to his or her post-secondary education expenses and sets out the guiding principle that these expenses are to be shared by the spouses in proportion to their respective incomes. In the parties’ 2004 consent divorce judgment, it was agreed that s. 7 expenses would be shared with Mr. Holman paying two-thirds of these expenses, and Ms. Holman paying one-third. I would adopt the agreement of the parties in this respect, and credit two-thirds of the $12,000, namely $8,000, to Mr. Holman.

(iii) The child support reimbursement for P.

[40] Ms. Holman was required to reimburse Mr. Holman for child support paid for P. after January 1, 2012 and for K. after May 1, 2013. For the period in which Mr. Holman was required to pay support for only one child (January 1, 2012 - April 30, 2013), the motion judge calculated that Mr. Holman was entitled to a reimbursement of 50 percent of the total amount of child support paid during this period.

[41] I agree with Ms. Holman that this was an error in principle. The CSGs are clear that the amount of child support for one child is not equal to half the amount of child support for two children.

[42] Mr. Holman argues that the motion judge was entitled to deviate from the CSGs by virtue of s. 3(2)(b) of the CSGs. This section provides that if the court considers the table amount of support to be inappropriate for a child over the age of majority, the court may order the amount of support “that it considers appropriate, having regard to the condition, means, needs and other circumstances of the child and the financial ability of each spouse to contribute to the support of the child.”

[43] I would reject Mr. Holman’s argument. When making these adjustments, the motion judge did not advert to s. 3(2)(b), nor did he provide any rationale for such a departure. The only reference by the motion judge to a departure from the CSGs was on the separate issue of whether Mr. Holman was required to pay child support following his children’s first degrees.

[44] Further, the parties had agreed at the time of the 2009 and 2010 orders that support was to be determined pursuant to the CSGs. As such, absent some reason to depart from this agreement, the motion judge ought to have calculated the child support reimbursement for the period of January 2012 through April 2013 based on the one child table under the CSGs.

(iv) The unwarranted deduction from spousal support underpayment

[45] The motion judge deducted $3,630 in child support overpayments from the $5,620 that Mr. Holman underpaid in spousal support. I agree with Ms. Holman’s submission that this deduction was unwarranted and amounted to double-counting in Mr. Holman’s favour, as the motion judge had already fully accounted for child support overpayments.

(c) Termination of Child Support

[46] Ms. Holman argues that the motion judge erred in terminating child support for K. effective May 1, 2013 rather than June 1, 2013. She submits that K. completed her education in May 2013. I reject this ground of appeal. Ms. Holman brought no evidence to the attention of the court about the date K. completed her studies. It is not apparent that the parties had agreed that support would terminate effective June 1, 2013. I would not interfere with the motion judge’s decision to terminate child support for K. effective May 1, 2013.

(d) Recalculation of child support overpayment and spousal support underpayment

[47] In the interests of expediency and following the logic of Lang J.A. in Cassidy v. McNeil 2010 ONCA 218 at para. 39, in my view “the record is sufficient to permit this court to arrive at an appropriate result without the need to order a new trial with its resulting costs and delay.”

[48] Given my conclusions above, and based on a 2009 income of $105,331, 2010 income of $121,791 and a 2011 income of $120,075[^3], Mr. Holman’s table child support obligations, as modified by the 2010 order, from June 1, 2010 to May 1, 2013 should have been:

Based on 2009 income of $105,331:

• June 1, 2010 to Aug. 31, 2010 (3 months): $1481/month (2 children) = $4443
• Sept. 1, 2010 to Feb. 28, 2011 (6 months): $922/month (1 child, P.; K. away) = $5532
• March 1, 2011 to May 31, 2011 (3 months): $1481/month (2 children) = $4443

Based on 2010 income of $121,791:

• June 1, 2011 to Aug. 31, 2011 (3 months): $1682/month (2 children) = $5046
• Sept. 1, 2011 to Dec. 31, 2011 (4 months): $1052/month (1 child, P.; K. away[^4]) = $4208
• Jan. 1, 2012 to Feb. 28, 2012 (2 months): $0/month (K away and support for P ended Dec. 31, 2011)
• March 1, 2012 to May 21, 2012 (3 months): $1052/month (1 child, K.) = $3156

Based on 2011 income of $120,075:

• June 1, 2012 to Aug. 31, 2012 (3 months): $1038/month (1 child, K.) = $3114
• Sept. 1, 2012 to Feb. 28, 2013 (6 months): $0/month (K. away)
• March 1, 2013 to May 1, 2013: (2 months): $1038/month (1 child, K.) = $2076

Adding all of the above equals a total table support sum for the months between June 1, 2010 and May 1, 2013 (35 months) of $32,018.

[49] In terms of s.7 expense payments, the 2010 consent order required Mr. Holman to pay $833/month for both children. This means that from June 1, 2010 to Dec. 31, 2011 (19 months) when he was required to pay support for both children, he should have paid $833 x 19 months = $15,827. Once his support obligation for P. ended, I conclude that the motion judge appropriately reduced the $833/month in s.7 expenses by half to $416.50/month. For Jan, 1, 2012 to May 1, 2013 (16 months) this amounts to $416.50/month x 16 months = $6,664, for a total of $15,827 + $6,664 = $22,491. Taking into account the $8,000 credited to Mr. Holman for K’s contribution to her own s.7 expenses above, this reduces the s.7 payment amount to $22,491 - $8,000 = $14,491.

[50] This brings the total table and s.7 child support amount that Mr. Holman should have paid under the 2010 consent order from June 1, 2010 to May 1, 2013 to $32,018 in table support plus $14,491 in s.7 expenses = $46,509.

[51] Mr. Holman concedes that he paid only $45,415 in total child support from Jan. 1, 2012 to Nov. 15, 2013. I will assume that from June 1, 2010 until Dec. 31, 2011 (19 months), he paid the unadjusted amounts set out in the 2010 consent order[^5]:

• June 1, 2010 until Aug. 31, 2010 (3 months, both children)): ($1437 + $833) x 3 = $2270 x 3 = $6810
• Sept. 1, 2010 to Feb. 28, 2011 (6 months, K. away): ($898 + $833) x 6 = $1731 x 6 = $10,386
• March 1, to 2011 to Aug. 31, 2011 (6 months, both children): ($1437 + $833) x 6 = $2270 x 6 = $13,620
• Sept. 1, 2011 to Dec. 31, 2011 (4 months, K. away): ($898 +$833) x 4 = $1731 x 4 = $6,924

Total: $37,740

[52] This means that from June 1, 2010 to Nov. 15, 2013, Mr. Holman receives credit for a total of $37,740 + $45,415 = $83,155.

[53] This amounts to a child support overpayment of $83,155 - $46,509= $36,646.

[54] As for the spousal support underpayment, based on Mr. Holman’s increased income, the motion judge awarded an extra $1,404 from June 1, 2011 to May 31, 2012 and $2,728 from June 1, 2012 to May 1, 2013. Adding to this the extra $1,088 per month ($2,510-$1,422/month) that I would award for the 6.5 months from May 1, 2013 to November 15, 2012 amounts to a total underpayment of spousal support of $1,404 + 2,728 + ($1,088 x 6.5) = $11,204.

F. Result

[55] I would allow the appeal in part. I would delete paragraph 4 of the November 22, 2013 order and replace it with the following: Ms. Holman shall pay Mr. Holman $36,646 on account of child support which Mr. Holman overpaid. Mr. Holman shall pay Ms. Holman $11,204 on account of spousal support which he underpaid.

[56] Counsel may make written submissions to this court if they believe there is a significant miscalculation and the parties cannot agree on a correction.

G. Costs

[57] I would make no order as to the costs of the appeal. If the parties are unable to agree concerning costs of the proceeding below, Ms. Holman may make brief written submissions within 15 days of the release of this judgment and Mr. Holman may respond within 15 days thereafter.

Released: “AH” July 28, 2015

“M. Tulloch J.A.”

“I agree. Alexandra Hoy A.C.J.O.”

“I agree. J. Simmons J.A.”

[^1]: Under Rule 25(19)(b) of the Family Law Rules, O. Reg. 114/99, the court below, in this case the Superior Court of Justice, has jurisdiction to change an order that “contains a mistake”. Ms. Holman should have raised the issue of calculation errors there. We entertained the issue because the spousal support appeal was properly before us and because no objection was raised. [^2]: Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 S.C.R. 420 explicitly recognizes the interrelationship of amount and duration: The two [amount and duration] interrelate: a modest support order of indefinite duration could be collapsed into a more substantial lump-sum payment: para. 54. [^3]: The income figures in this section are based on Mr. Holman’s financial statement. [^4]: The 2010 order was premised on K. being away at university. At this point, K. was completing a two-year Veterinary Technician Diploma. The motion judge accepted that the terms of the 2010 order remained in effect. [^5]: The amount actually required to be paid under the 2010 consent order from Jan.1, 2012 to Nov. 15, 2013 is somewhat more than $45,415. No issue was raised on appeal concerning any underpayment prior to that period.