COURT FILE NO.: 06-DV-1249
DATE: 2007/04/12
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: LAURIE JEAN FORAN (Appellant) and RONALD PETER FORAN (Respondent)
BEFORE: LEITCH, R.S.J., LANE and HAMBLY JJ.
COUNSEL: Lorna M. Yates and Mary Ellen Symons, for the Appellant
Phyllis Brodkin and Michael Stangarone for the Respondent
E N D O R S E M E N T
[1] The Appellant wife appeals from the final order of the Honourable Justice Pedlar dated August 3, 2006 ordering that the spousal support payments to her be reduced from $2,700.00 per month to $1,350.00 per month terminating September 2010. This order was made on a review of the final order agreed to by the parties on September 2, 2003 respecting spousal support arrangements.
[2] The Appellant wife seeks an order that the Respondent husband’s spousal support obligation of $2,700.00 per month pursuant to the consent judgment dated September 2, 2003 remain in force.
[3] The following three issues were raised by the appellant wife on this appeal:
(i) Did the reviewing judge err in concluding an “expected” reduction in work load and income justified a reduction in spousal support?
(ii) Did the reviewing judge err in concluding that there is a concept of “double-dipping” in relation to an equalization payment based in part on ownership of a family business that justifies a reduction in support payable from income from that business?
(iii) Did the reviewing judge err in time limiting the respondent husband’s spousal support obligations in the face of a long-term marriage and the circumstances of the recipient spouse presented on this review?
[4] The Supreme Court in Hickey v. Hickey, [1999] 2 S.C.R. 518, at paragraphs 10 and 11 stated the following with respect to appeals from support orders:
When family law legislation gives judges the power to decide on support obligations based on certain objectives, values, factors, and criteria, determining whether support will be awarded or varied, and if so, the amount of the order, involves the exercise of considerable discretion by trial judges…Because of its fact-based and discretionary nature, trial judges must be given considerable deference by appellate courts when such decisions are reviewed.
Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong…
[5] This standard of review was reaffirmed by the Supreme Court of Canada in T.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Haiemstra v. Haiemstra, 2006 SCC 37, [2006] S.C.J. No. 37.
[6] As more fully set out below, we have concluded that the reasons of the learned trial judge disclose an error in principle with respect to the time limit of the respondent husband’s support obligation and having reached that conclusion on one of the issues on this appeal it is necessary to set aside the reviewing order that is the subject of this appeal.
[7] The parties were married for 25 years and have 2 adult children. The respondent husband owns 75 percent of a business known as Foran’s Roofing and Sheet Metal.
[8] The judgment of Justice Kiteley on September 2, 2003 reflected the terms of a final separation agreement made by the parties. Ongoing monthly spousal support of $2700.00 was one of the provisions agreed to. The parties also agreed to an automatic review of spousal support after 24 months at either party’s request. There was no issue that the respondent husband had the right to request the review before Justice Pedlar.
[9] On December 21, 2005 the respondent husband filed a notice of motion for an order that an automatic review of spousal support be conducted and he requested that spousal support be terminated entirely and retroactively to September 2005 asserting that his financial circumstances had changed since the date of the judgment and that he had been forced to reduce his work load as a result of health problems
[10] Pursuant to their agreement, the respondent husband was required to make an equalization payment of $190,471.00 to the appellant wife. Their agreement provided him with the opportunity to pay that amount in installments. However, he could also elect to accelerate the payment and he in fact did so. To effect that early payment the respondent husband incurred a loan from his business, which he asserts he is unable to pay from his income. There was correspondence from the controller of the respondent husband’s business in the motion record before the reviewing judge indicating that dividends would be declared to repay this loan, and that this would affect retained earnings and could adversely effect the business over time.
[11] In hearing the motion for review, Justice Pedlar considered evidence that the respondent husband’s income from 2001 to 2005 had increased from $73,201.00 to $101,190.00 and that he had a projected income of $105,000.00 for 2006.
[12] He was also presented with evidence that the appellant wife had received a total equalization payment of $347,166.00 and that she owned a home, which she valued at $208,000.00 subject to a $60,000.00 mortgage and a cottage, which she valued at $172,000.00 subject to a mortgage of $109,000.00. Her financial statements indicated she had liquid assets and bank deposits and investments of approximately $179,500.00. Justice Pedlar also considered evidence that the appellant wife worked at a Sears call centre and that between 2001 and 2005 her income had ranged between $11,807.00 and $27,053.00 and that her projected income for 2006 was $25,000.00. At the time of their settlement the parties had agreed to impute income to the appellant wife of $30,000.
[13] The respondent husband’s motion materials included a letter from a medical doctor dated April 10, 2006 stating that the respondent husband had triple coronary bypass surgery in early 2005 and had been diagnosed with peripheral vascular disease and 45% artery blockage in his left leg. It was noted in the letter that “although his coronary artery disease is relatively stable at the moment, he is under a lot of stress both at work and with other personal matters. He is still at increased risk of sudden cardiac death because of risk factors”.
[14] In his affidavit filed on the notice of motion the respondent husband deposed that he believed a termination of spousal support is necessary and appropriate; that he was aware the applicant spouse was working; that he suspected that she had been successful in achieving financial self sufficiency, although he was unaware of the particulars of her employment or annual income; that he was aware she had been leading a luxurious lifestyle citing as an example her recent purchase of a cottage and the installation of a hot tub; that he had been forced to reduce his workload including the time, energy and effort he previously allotted to his work due to ongoing health issues; and that his income will “inevitably decrease in the imminent future” due to health issues.
[15] In her responding affidavit, the appellant wife asserted that she definitely did not lead a luxurious lifestyle; that from her equalization payment she had purchased a modest home and a small cottage with some land; that she had invested the remainder; that the hot tub had been purchased by her mother; that she had done what she could to have regular employment; and that she had carefully invested everything she received as a result of the separation and equalization payment.
[16] In his reply affidavit the respondent husband questioned the wisdom of the appellant wife’s real estate purchases and the modesty of her home. He deposed that he “must cut back on [his] duties and responsibilities at work by at least 25% in the immediate future”. He also deposed that his business had been valued based on the future income from the business and that this value had been shared with the appellant as part of the equalization process. He alleged the appellant was trying to again share in that future income by seeking ongoing support and was thus “double dipping”.
[17] The reviewing judge reduced the ongoing spousal support by 25% based on an expected reduction in the respondent husband’s income and by a further 25% to reflect the element of “double dipping” which he found had some application. He held that the equalization payment together with the appellant wife’s ongoing capacity to earn income provided her with a reasonable level of financial stability and a growing level of independence from further financial support from the respondent husband. In view of the long term nature of the marriage and the disparity of income and taking into account the impact of the equalization payment on both parties he ordered the respondent husband continue to pay the reduced quantum of support for a further 4 years following which no support would be payable.
[18] The appellant wife argues that the principle that has emerged from Moge v. Moge, [1992] 3 S.C.R. 813, is that time limited support will only be awarded in unusual circumstances. The Appellant points out that time unlimited spousal support has been ordered following long term marriages in cases similar to the present where the economic consequences of the marriage have permanently reduced a spouse’s income or are such that there is a wide income disparity between the former spouses, or where the support recipient has limited career skills.
[19] The respondent husband submits that the issue of termination of support was a discretionary determination made by the reviewing judge on evidence, which included evidence of the financial situation of both parties and should not be disturbed.
[20] The reasons of the reviewing judge do not reflect an analysis of whether the objectives in s. 15.2(6) of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.) are met. For example, there is no analysis as to whether by 2010 the appellant wife would be adequately compensated for the disadvantages of the marriage and its breakdown.
[21] Further, it is not clear from the record below that there was sufficient evidence to ground a conclusion that these are circumstances justifying time limited support. The law is summarized by Himel J. in Schmuck v. Reynolds-Schmuck (1999), 50 R.F.L. (4th) 429 (O.S.J.) as follows:
The principle that has emerged since Moge v. Moge is that time limited support will only be awarded in unusual circumstances. Professor J. McLeod in his annotation to the case of Kent v. Frolick, supra, note 9, wrote as follows:
As long as a spouse will make reasonable efforts to achieve self-sufficiency, a court should not impose a limited term on support unless it is satisfied that the dependent will succeed during the limited time. The fact that a person may obtain employment does not mean that he or she is self-sufficient. A spouse is entitled to support until he or she has been fully compensated for the economic consequences of the marriage or its breakdown. If the marriage has impaired a dependant's ability to be self-sufficient, support should continue until that person is fully self-sufficient in the sense of having made up for any career dislocation.
[22] We are of the view that the reasons of the reviewing judge disclose an error in principle as to time-limited support. The issues of the amount of support and the length of support are intertwined and accordingly the entire review order cannot stand. As a result we have not dealt with the other issues raised on the appeal.
[23] Therefore the order of September 2, 2003 is reinstated effective on the date of release of these reasons. In our view the review provisions of the September 2, 2003 order are not spent and it is open to anyone of the parties to seek a review of the 2003 order.
[24] With respect to the issue of costs we are of the view that the appellant wife as the successful party is entitled to her costs. Considering the issues on appeal, the materials prepared and the time required for hearing a reasonable amount the unsuccessful party would expect to pay is in our view considerably less than the amount counsel agreed the successful party should be awarded. We have taken note of the travel expenses the appellant wife’s counsel has had to incur. In our view an appropriate award of costs (including disbursements and GST) payable by the respondent husband to the appellant wife is $5000.
Leitch, R.S.J.
Lane J.
Hambly J.
DATE: 2007/04/12
COURT FILE NO.: 06-DV-1249
DATE: 2007/04/12
SUPERIOR COURT OF JUSTICE - ONTARIO
DIVISIONAL COURT
RE: LAURIE JEAN FORAN (Appellant) and RONALD PETER FORAN (Respondent)
BEFORE: LEITCH, R.S.J., LANE and HAMBLY JJ.
COUNSEL: Lorna M. Yates and Mary Ellen Symons, for the Appellant
Phyllis Brodkin and Michael Stangarone, for the Respondent
ENDORSEMENT
DATE: 2007/04/12