COURT OF APPEAL FOR ONTARIO

CITATION: Ballanger v. Ballanger, 2020 ONCA 626

DATE: 20201006

DOCKET: C66137

Juriansz, Hourigan and Thorburn JJ.A.

BETWEEN

Colleen Debra Ballanger

Applicant (Appellant)

and

Michael John Ballanger

Respondent (Respondent)

and

Kelly Hearnden

Respondent

Shannon Beddoe and Jonathan Robinson, for the appellant, Colleen Ballanger

Gary S. Joseph and Aaron M. Mastervick, for the respondent, Michael Ballanger

Joseph J. Neal, for the respondent, Kelly Hearnden

Heard: September 29, 2020 in writing

On appeal from the order of Justice Emile Kruzick of the Superior Court of Justice, dated October 9, 2018, with reasons reported at 2018 ONSC 4256.

REASONS FOR DECISION

i. OVERVIEW

[1] This is an appeal by Ms. Ballanger from the trial judge’s orders on spousal support, retroactive spousal support, and retroactive child support. She also appeals from the trial judge’s award of costs to her in the amount of $15,000.

[2] Ms. Ballanger claims the trial judge made palpable and overriding errors in granting insufficient spousal support, failing to order retroactive spousal and child support, and in awarding costs.

[3] For the reasons that follow, the appeal is dismissed.

ii. THE EVIDENCE AND FINDINGS OF THE TRIAL JUDGE

Background Evidence

[4] Ms. and Mr. Ballanger began living together in 1979, married in 1985, and separated in 2004. They had three children. At the time of trial, Ms. Ballanger was 62 years old and Mr. Ballanger was 65 years old.

[5] During the marriage, Ms. Ballanger remained at home to look after the children and manage the household.

[6] At the time of trial, Mr. Ballanger was a financial advisor, and had formerly been a stock broker. His income fluctuated, sometimes greatly, from year to year. Ms. Ballanger had upgraded her skills since separation but was not gainfully employed.

[7] In 2006, Ms. and Mr. Ballanger agreed that Mr. Ballanger would pay Ms. Ballanger $1,500 in child support and $2,500 in spousal support. As part of this agreement, Ms. Ballanger received the net proceeds of sale of the matrimonial home and cottage (which the trial judge calculated to be approximately $134,000 for the home and $350,000 for the cottage).

[8] In 2008, after Ms. Ballanger had applied for an increase in support based on an increase in Mr. Ballanger’s income a temporary order was made that Mr. Ballanger pay $2,734 in child support for the youngest child and $8,500 in spousal support based on an income of $350,000. Mr. Ballanger was also ordered to pay Ms. Ballanger $101,276 in retroactive support.

The Positions of the Parties at Trial

[9] At trial, both parties agreed to divorce.

[10] Ms. Ballanger sought spousal and child support, both retroactive and prospective. She also asked for an order that Mr. Ballanger procure life insurance to secure her claims, and for costs of the trial. Ms. Ballanger claimed Mr. Ballanger’s support obligations should be based on an imputed income of $400,000 per annum.

[11] Mr. Ballanger sought to reduce the amount of support payable from the amount set out in the 2008 order, relying on line 150 of his tax return on which his stated income was $136,000. He also claimed he had paid over $200,000 more than he should have in spousal support since 2008 as reflected in his last ten years’ tax returns. He sought to impute income to Ms. Ballanger in the amount of at least $30,000 per annum.

[12] He claimed he had met his child support obligations and he relied on the order of Horkins J. dated November 1, 2017, that no further sums are owed for child support.

[13] The trial took eight days.

Spousal Support

[14] The trial judge ordered Mr. Ballanger to pay spousal support in the amount of $6,500 per month based on an imputed annual income of $225,000. He imputed income of $25,000 to Ms. Ballanger.

[15] In so doing, the trial judge held that relying on Mr. Ballanger’s line 150 income tax return for 2017 would not result in the most accurate determination of his income given that his income had fluctuated greatly over the last many years. The trial judge noted that for the period between 2008 and 2017, Mr. Ballanger earned a total of $2.8 million resulting in an annual average of $280,000 per year during that period. He concluded that given the fluctuations, averaging the income resulted in a more accurate result. The trial judge’s assessment was based on all of the evidence before him on Mr. Ballanger’s income, including but not restricted to his tax returns over the period.

[16] The trial judge noted that Ms. Ballanger had upgraded her skills by taking a four year course in interior design after separation in 2004, and there was no satisfactory explanation for why she had not secured employment.

[17] As for Ms. Ballanger’s claim for retroactive spousal support, there were some years in which, based on his actual income, Mr. Ballanger should have paid more in support than he did. Mr. Ballanger had also engaged in blameworthy conduct – a relevant factor in awarding retroactive spousal support - by failing to disclose his income every six months as ordered by Gordon J.

[18] Despite this, the trial judge concluded that a retroactive spousal support award would not be appropriate or fair. This was because Ms. Ballanger had failed to pay any income tax on the taxable spousal support she received, had declared bankruptcy in 2013, and had been relieved of the tax debt. The trial judge pointed out “[t]he result of the wife’s bankruptcy exceeded the amount she claims in spousal support arrears.” As such, she had received all of her spousal support tax-free and a net support benefit higher than the amount she claimed Mr. Ballanger should have paid. The trial judge therefore concluded that, “If there were hardship, the bankruptcy relieved her of the hardship for which she now claims retroactive support.” Moreover, he held that an award of retroactive spousal support would create financial hardship for Mr. Ballanger.

Child Support

[19] The trial judge dismissed both Ms. Ballanger’s claim for retroactive child support and Mr. Ballanger’s claim that he had paid too much in child support and s. 7 expenses.

[20] He held that Mr. Ballanger had not produced his income information as ordered, but that this was mitigated by the fact that Mr. Ballanger later assumed most of the children's post-secondary education expenses, which expenses exceeded his statutory child support obligation.

[21] The trial judge also noted that Mr. Ballanger “diligently paid his child support obligations pursuant to the temporary order of February 28, 2008” (para. 195). The trial judge held that Mr. Ballanger was not responsible for Ms. Ballanger’s financial circumstances leading to her bankruptcy and that Mr. Ballanger consistently abided by the terms of the 2008 order such that Ms. Ballanger received the support as per the court order.

iii. ANALYSIS AND CONCLUSIONS

[22] The Supreme Court of Canada has instructed courts of appeal to accord significant deference to the decisions of trial judges relating to support orders. The discretion involved in making a support order is best exercised by the judge who has heard the parties directly. The deferential standard of review avoids giving parties an incentive to appeal judgments to attempt to persuade the appeal court that the result should be different. This approach promotes finality in family law litigation and recognizes the importance of the appreciation of the facts by the trial judge.

[23] An appeal court can therefore only interfere with the trial judge’s decision if there is a material error such as a serious misapprehension of the evidence, or an error in law. It is not entitled to overturn a support order simply because it would have made a different decision or balanced the factors differently: see Hickey v. Hickey, 1999 CanLII 691 (SCC), [1999] 2 S.C.R. 518, at paras. 11-12.

[24] In making a spousal support order, the Court may impute such income to a spouse as it considers appropriate in the circumstances, including where it appears that income has been diverted that would affect the level of child support, where the spouse has failed to provide income information when under a legal obligation to do so, and/or where the spouse unreasonably deducts expenses from income: Spousal Support Advisory Guidelines, Section 19(1) (d), (f), (g).

[25] In so doing, the amount selected must be grounded in the evidence. When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances: Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711 (Ont. C.A.), Tab 5, paras 44 and 45.

[26] The Supreme Court confirmed that the court retains jurisdiction to retroactively vary a child support order after the child no longer qualifies as a “child of the marriage”: Michel v. Graydon, 2020 SCC 24.

[27] In this case, the trial judge heard evidence over eight days. In his thoughtful and comprehensive reasons, he considered all of the relevant factors and arrived at reasonable conclusions.

[28] We, of course, agree with Ms. Ballanger that,

[i]t would be erroneous and unjust for support payors to flout their court-ordered obligations, allow support recipients to fall into bankruptcy and then rely on the bankruptcy to evade their legal obligations. Such a result undermines both the critical role that ongoing financial disclosure plays in family law, and the policy objectives of child and spousal support orders more generally.

[29] However, that principle does not apply here, as Mr. Ballanger neither caused nor contributed to Ms. Ballanger’s bankruptcy. Instead, the trial judge found as follows at para. 198: “While I do not blame the wife for the circumstances she found herself in, the husband acted consistently abiding by the terms of the February 28, 2008 court order so that there was an ongoing pattern and certainty governing their financial affairs.”

[30] The trial judge found that Mr. Ballanger paid the full amount of 2008 court‑ordered spousal and child support until trial, based on an imputed income of $350,000. This was significant support of $2,500 for child and $8,500 for spousal support, totalling $132,000 annually. And while his income was higher than $350,000 in a few of the intervening years (a fact he should have disclosed as part of the court-ordered disclosure), the husband's income was considerably lower than the imputed amount upon which he paid support in at least as many years. This is reflected in the historic income chart set out at para.114 of the trial judge’s reasons.

[31] The trial judge held that Ms. Ballanger's bankruptcy resulted from a tax debt that arose from her failure to pay any income tax on the taxable spousal support she received from 2006 to 2013, when she declared bankruptcy (para.184).

[32] Moreover, the trial judge found that both parties failed to provide adequate disclosure and noted that Ms. Ballanger’s budget included $2000 per month in income tax, tax she had not in fact been paying because she had declared bankruptcy. As for security for the support, the trial judge considered the issue of insurance coverage in Mr. Ballanger’s situation. After considering that Mr. Ballanger already had life insurance in the amount of $150,000 which the trial judge held was adequate security for the support payments, his income and his ability to pay, he imputed income of $225,000 to Mr. Ballanger. His decision was reasonable and we see no cause to interfere.

[33] Lastly, Ms. Ballanger provides no basis for her assertion that the trial judge erred in awarding her only $15,000 in trial costs and should have awarded her more. We see no reason to interfere with that decision either.

[34] In short, we see no basis that would allow us to interfere with the trial judge’s decision. The appeal is dismissed.

[35] If the parties are unable to agree on costs of this appeal, brief written submissions of no more than three pages may be submitted by no later than October 8, 2020.

“R.G. Juriansz J.A.”

“C.W. Hourigan J.A.”

“J.A. Thorburn J.A.”