Elgner v. Elgner
99 O.R. (3d) 687
Ontario Superior Court of Justice,
Divisional Court,
Sachs J.
March 17, 2010
Family law -- Appeals -- Leave to appeal required for appeal from interim support order under s. 15.2 of Divorce Act -- Leave denied -- Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 15.2.
The respondent sought to appeal an order pursuant to s. 15.2 of the Divorce Act requiring him to pay ongoing and retroactive interim spousal support to the appellant. He submitted that he was entitled to do so as of right, relying on s. 21(1) of the Divorce Act.
Held, leave to appeal should be denied.
The requirement for leave is authorized by s. 21(6) of the Divorce Act and not by provincial rules. Since s. 21(6) provides that appeals are to be "asserted" in accordance with the ordinary rules governing appeals, there is no conflict between the federal legislation and the provincial rules that would require resorting to the doctrine of paramountcy. Leave to appeal was required.
The principles that the motion judge relied upon in arriving at the order were in line with the principles established in the prevailing law relating to interim spousal support where the payor's income exceeds $350,000. There was no good reason to doubt the correctness of the order. The proposed appeal raised no issues that transcended the private interests of the parties. There was no question of law that required resolution by a higher judicial authority.
APPLICATION for leave to appeal.
Cases referred to Kral v. Kral, [1994] O.J. No. 3982, 68 O.A.C. 188, 48 A.C.W.S. (3d) 365 (Div. Ct.), folld Other cases referred to Burke v. Poste, [1996] O.J. No. 2725, 9 O.T.C. 87, 64 A.C.W.S. (3d) 1178 (Gen. Div.); Byerley v. Byerley, 1998 14889 (ON SC), [1998] O.J. No. 3781, 75 O.T.C. 73, 41 R.F.L. (4th) 50, 82 A.C.W.S. (3d) 745 (Gen. Div.); C. (S.R.) v. S. (R.H.), [2009] O.J. No. 1283, 2009 ONCA 273; Colletta v. Colletta (1992), 1992 7658 (ON CA), 10 O.R. (3d) 464, [1992] O.J. No. 1746, 95 D.L.R. (4th) 298, 57 O.A.C. 283, 42 R.F.L. (3d) 227, 35 A.C.W.S. (3d) 329 (C.A.); Denofrio v. Denofrio, 2009 41354 (ON SC), [2009] O.J. No. 3295, 72 R.F.L. (6th) 52 (S.C.J.); Dumas v. Dumas, 1990 12337 (ON CA), [1990] O.J. No. 1668, 30 R.F.L. (3d) 127, 22 A.C.W.S. (3d) 973 (C.A.); Goeldner v. Goeldner, 2005 455 (ON CA), [2005] O.J. No. 86, 194 O.A.C. 129, 15 R.F.L. (6th) 272, 136 A.C.W.S. (3d) 710 (C.A.); Greslik v. Ontario Legal Aid Plan (1988), 65 O.R. (2d) 110, [1998] O.J. No. 525, 30 O.A.C. 53, 28 C.P.C. (2d) 294, 10 A.C.W.S. (3d) 13 (Div. Ct.); [page688] Lakhani v. Lakhani, 2003 2161 (ON SC), [2003] O.J. No. 4041, 43 R.F.L. (5th) 125, 126 A.C.W.S. (3d) 97 (S.C.J.); Lebovic v. Lebovic, 2001 28183 (ON SC), [2001] O.J. No. 1305, 15 R.F.L. (5th) 115, 104 A.C.W.S. (3d) 535 (S.C.J.); Loewen, Ondaatje, McCutcheon & Co. v. Sparling, 1992 38 (SCC), [1992] 3 S.C.R. 235, [1992] S.C.J. No. 88, 97 D.L.R. (4th) 616, 143 N.R. 191, J.E. 92-1625, 51 Q.A.C. 49, 36 A.C.W.S. (3d) 362; MacKinnon v. MacKinnon (2005), 2005 13191 (ON CA), 75 O.R. (3d) 175, [2005] O.J. No. 1552, 256 D.L.R. (4th) 385, 199 O.A.C. 353, 13 R.F.L. (6th) 221, 138 A.C.W.S. (3d) 893 (C.A.); Potts v. Potts (1993), 1993 8510 (ON SC), 13 O.R. (3d) 284, [1993] O.J. No. 866, 63 O.A.C. 175, 47 R.F.L. (3d) 82, 39 A.C.W.S. (3d) 1003 (Div. Ct.); Thompson v. Kirk, [2009] O.J. No. 3222 (S.C.J.); Tout v. Bennett, 2003 1951 (ON SC), [2003] O.J. No. 1674, 38 R.F.L. (5th) 223, A.C.W.S. (3d) 730 (S.C.J.); Turk v. Turk, 2008 3420 (ON SC), [2008] O.J. No. 397, 164 A.C.W.S. (3d) 483, 50 R.F.L. (6th) 211 (S.C.J.) Statutes referred to Canada Business Corporations Act, R.S.C. 1985, c. C-44 [as am.] Code of Civil Procedure, R.S.Q. c. C-25 [as am.] Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1)(b) Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 15.2, 21(1), (2), (3), (6) Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 62.02(4), (a)
Julie K. Hannaford and Harold Niman, for applicant (responding party). Charles E. Beall, for respondent (moving party).
SACHS J.: -- Introduction
[1] On December 2, 2009, Greer J. made an order pursuant to s. 15.2 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) requiring Mr. Elgner to pay ongoing and retroactive interim spousal support to Mrs. Elgner (the "Order"). Mr. Elgner seeks to appeal the Order.
[2] On this motion, Mr. Elgner submitted that he is entitled to appeal the Order without leave. In the alternative, he argued that if leave was required, I should grant leave.
Is Leave Required?
[3] Mr. Elgner submitted that s. 21(1) of the Divorce Act (the "Act"), which is federal legislation, provides for an appeal as of right for all orders made under the Act, whether interim or final. Subsection 21(1) of the Act provides as follows:
21(1) Subject to subsections (2) and (3), an appeal lies to the appellate court from any judgment or order, whether final or interim, rendered or made by a court order under this Act. [page689]
[4] According to Mr. Elgner, since the exceptions provided for in subsections (2) and (3) of the Act have no application in this case, the Act is clear that he has the right to appeal the Order. Pursuant to provincial legislation, specifically s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43, an interlocutory order may only be appealed to the Divisional Court with leave. Mr. Elgner's counsel argued that to the extent that the Ontario legislation conflicts with the Divorce Act, the Ontario legislation is rendered inoperative pursuant to the constitutional principle of paramountcy.
[5] In making this submission, Mr. Elgner's counsel referred to the 1992 decision of the Supreme Court of Canada in Loewen, Ondaatje, McCutcheon & Co. v. Sparling, 1992 38 (SCC), [1992] 3 S.C.R. 235, [1992] S.C.J. No. 88 ("Kelvin Energy"). In Kelvin Energy, the court interpreted a section of the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the "CBCA") that provides that "[a]n appeal lies to the court of appeal from any order made by a court under this Act". On the other hand, the Code of Civil Procedure of Quebec, R.S.Q. c. C-25 states that appeals from interlocutory orders require leave. The Supreme Court held that if an order, whether final or interlocutory, was made under a power expressly conferred by the CBCA, the order was appealable as of right. Similarly, according to Mr. Elgner, since the Order was made pursuant to a power expressly conferred by the Divorce Act, it is appealable as of right.
[6] Not surprisingly, this issue has been litigated in a number of courts across the country, including Ontario. In 1994, after Kelvin Energy, a panel of the Divisional Court issued a decision on point: Kral v. Kral, [1994] O.J. No. 3982, 68 O.A.C. 188 (Div. Ct.). In Kral, the court considered the same argument advanced by Mr. Elgner. The court dismissed the argument in reliance on s. 21(6) of the Divorce Act, which reads as follows:
21(6) Except as otherwise provided by this Act or the rules or regulations, an appeal under this section shall be asserted, heard and decided according to the ordinary procedure governing appeals to the appellate court from the court rendering the judgment or making the order being appealed.
[7] The Divisional Court found that it was s. 21(6) of the federal Divorce Act and "not provincial rules that authorized the requirement for leave" (para. 3). Thus, since the federal legislation itself provided that appeals were to be "asserted" in accordance with the ordinary rules governing appeals, there was no conflict between the federal legislation and the provincial rules that would require resorting to the doctrine of paramountcy.
[8] I consider Kral to be binding upon me. Further, in deciding Kral, the Divisional Court referred to the remarks of Finlayson J.A. [page690] in Colletta v. Colletta (1992), 1992 7658 (ON CA), 10 O.R. (3d) 464, [1992] O.J. No. 1746 (C.A.), at p. 467 O.R., where, after reviewing ss. 21(1) and 21(6) of the Divorce Act, Justice Finlayson said as follows:
In Ontario, this would mean that an appeal solely respecting interim relief would be to the Divisional Court under s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43, with leave as provided by the Rules . . . .
[9] In arriving at its decision, the Divisional Court specifically adopted the reasoning of Carruthers J. in Potts v. Potts (1993), 1993 8510 (ON SC), 13 O.R. (3d) 284, [1993] O.J. No. 866, 47 R.F.L. (3d) 82 (Div. Ct.). In Potts, Carruthers J. reviewed the case law on the issue of whether a party must obtain leave to appeal an interlocutory order in a proceeding commenced under the Divorce Act, including the case law from appellate courts in Quebec, Saskatchewan and British Columbia, in which the judges appear to take an opposite view to the one accepted by Carruthers J. and then by the Divisional Court in Kral.
[10] As a policy matter, our courts have echoed the view that, generally, appeals from interim orders in family law matters are to be discouraged. They cause additional expense and emotional anguish to the parties and delay what is really needed -- resolution through a trial. Interpreting the legislation in question in the way that the Divisional Court did in Kral furthers this very legitimate policy objective.
Should Leave Be Granted?
The test for leave
[11] Rule 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states that leave to appeal an interlocutory order shall not be granted unless
62.02(4) . . . (a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or (b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
Is there another decision that conflicts with the Order?
[12] In order to satisfy the criteria under rule 62.02(4)(a)"conflicting cases must present a difference in principle and not merely in outcome as a result of the exercise of discretion" (Thompson v. Kirk, [2009] O.J. No. 3222 (S.C.J.), at para. 14). [page691]
[13] The principles that Justice Greer relied upon in arriving at the Order are in line with the principles established in the prevailing law, namely: (1) Where the payor spouse has the ability to pay, a dependent whose pattern of dependency developed during the marriage is entitled to maintain the lifestyle that he or she became accustomed to during cohabitation pending trial or resolution. Where the lifestyle during cohabitation was a lavish one, this can result in large interim support awards (Lebovic v. Lebovic, 2001 28183 (ON SC), [2001] O.J. No. 1305, 15 R.F.L. (5th) 115 (S.C.J.); Lakhani v. Lakhani, 2003 2161 (ON SC), [2003] O.J. No. 4041, 43 R.F.L. (5th) 125 (S.C.J.)). (2) Interim orders by their nature are holding orders. The depth of analysis expected at this stage is quite different from that which would be expected at a trial (Turk v. Turk, 2008 3420 (ON SC), [2008] O.J. No. 397, 50 R.F.L. (6th) 211 (S.C.J.)). (3) The Spousal Support Advisory Guidelines (the "Guidelines") do not apply when a payor's annual income exceeds $350,000. This does not mean that the amount provided for when a payor's income is $350,000 is to be considered a "cap" on the amount of spousal support that can be awarded. The Guidelines can and have been used as a starting point for support in cases where the payor's income far exceeds $350,000. They can provide a range of spousal support for the court's consideration, but, in the case of incomes over $350,000 in particular, that range must be subject to an examination of the parties' individual circumstances. These principles were recognized and accepted by DeSousa J. in Denofrio v. Denofrio, 2009 41354 (ON SC), [2009] O.J. No. 3295, 72 R.F.L. (6th) 52 (S.C.J.), at para. 48. However, given the individual circumstances of Denofrio, DeSousa J. decided that it would not be appropriate to "apply the Spousal Support Guidelines beyond the recognized ceiling of annual payor income of $350,000" (para. 49). Justice DeSousa's decision was a proper exercise of her discretion. It does not, as Mr. Elgner's counsel asserts, constitute a conflicting authority within the meaning of rule 62.02(4)(a). The differences between DeSousa J.'s decision and the Order of Greer J. can be explained by the differences in the circumstances of the individual applicants. (4) A dependant spouse is generally not required to deplete his or her capital to support himself or herself (Goeldner v. Goeldner, 2005 455 (ON CA), [2005] O.J. No. 86, 194 O.A.C. 129 (C.A.)). However, there are cases where a dependant spouse has been required to deplete [page692] his or her capital to support himself or herself. For example, in Tout v. Bennett, 2003 1951 (ON SC), [2003] O.J. No. 1674, 38 R.F.L. (5th) 223 (S.C.J.), the wife's application for interim support after a long marriage was denied, which thereby required her to encroach on capital to support herself. However, in Tout, both parties were retired and living off capital. In the case at issue, Mr. Elgner is not retired and he was found to earn approximately $3 million per year. Again, I do not agree with Mr. Elgner's counsel that Tout (supra) constitutes a conflicting authority within the meaning of rule 62.02(4) (a). The facts were different. Hence, the result was different. The same is true of the decision in [ cf2] Byerley v. Byerley, 1998 14889 (ON SC), [1998] O.J. No. 3781, 41 R.F.L. (4th) 50 (Gen. Div.), another case that Mr. Elgner's counsel asserted was a "conflicting decision" within the meaning of the rule. (5) Support payments are often made retroactive to the date of the separation (MacKinnon v. MacKinnon (2005), 2005 13191 (ON CA), 75 O.R. (3d) 175, [2005] O.J. No. 1552, 256 D.L.R. (4th) 385 (C.A.)). Further, an interim order can be made retroactive where the "circumstances of the case justify immediate relief with some retroactive award of support" (Lakhani, supra, at para. 16).
Is there good reason to doubt the correctness of the Order?
[14] In challenging the correctness of the Order, Mr. Elgner argued that the Order bore no relationship to "need"; that the motion judge should not have used the Spousal Support Advisory Guidelines; that the Order should not have been made given Mrs. Elgner's resources; and that retroactive payments should not have been ordered. I dealt with most of these arguments in the preceding section of this decision.
[15] Mr. Elgner also submitted that, in making the Order, Greer J. incorrectly found that Mr. Elgner carried out a series of transactions to effect an estate freeze in 2006, and thereby inferred misconduct on Mr. Elgner's part. In fact, the estate freeze took place much earlier and it was Mr. Elgner's father who carried out the transactions.
[16] A review of the motion judge's reasons makes it clear that the motion judge recited the points about the estate freeze by way of background to the argument that was being made about equalization -- namely, that much of Mr. Elgner's property was "excluded". It cannot be said that the facts around the estate freeze were the basis for the motion judge's findings about the quantum of interim support. Further, to the extent that the assets, excluded or not, belong to Mr. Elgner, they can be considered in assessing his [page693] ability to pay support. Certainly, the motion judge never made any finding of "misconduct" against Mr. Elgner. In fact, to the extent that the motion judge adverted to Mr. Elgner's conduct prior to separation, it was to comment on his generosity.
[17] Mr. Elgner challenged the Order because it was made without giving him the right to question Mrs. Elgner -- a right that he had been granted by another judge at a case conference. At the case conference on September 18, 2009, the case conference judge ordered that questioning should take place at times that could be arranged by counsel and the parties. She also stated that Mrs. Elgner's motion for interim support was to proceed in early October of 2009. She did not make the hearing of the motion conditional on questioning having taken place. At the return of the motion, the motion judge legitimately exercised her discretion to refuse an adjournment, finding that there was a "plethora of financial data available at this point".
[18] Mr. Elgner argued that the motion judge failed to consider the tax implications of the lump sum retroactive spousal support order and that the motion judge erred in "depriving Mr. Elgner" of the ability to claim tax relief for the payments. First, Mr. Elgner never raised this tax issue before the motion judge even though it was clear that his wife was claiming retroactive interim support. Second, there is no evidence before this court that the retroactive spousal support order will not be deductible to Mr. Elgner. Third, the Ontario Court of Appeal has held that where there is a change in circumstances or evidence that is significant and may cause a change in the order, it should be raised by way of an application to the trial court to vary the order rather than on an appeal (Dumas v. Dumas, 1990 12337 (ON CA), [1990] O.J. No. 1668, 30 R.F.L. (3d) 127 (C.A.); C. (S.R.) v. S. (R.H.), [2009] O.J. No. 1283, 2009 ONCA 273).
[19] Mr. Elgner submitted that the motion judge erred in failing to take into account the fact that Mrs. Elgner had received a $775,000 capital dividend in 2008 and that Mrs. Elgner had used her savings to purchase two retirement condominiums post-separation, one of which was for her sister. It is quite clear that the motion judge was aware of and did consider these facts when she decided what quantum of support to award Mrs. Elgner.
[20] Mr. Elgner argued that the motion judge erred in awarding Mrs. Elgner a quantum of spousal support that covered expenses for her sister and expenses in relation to the condominiums she had purchased. First, it is clear that the motion judge did not find that Mr. Elgner had a legal obligation to support Mrs. Elgner's sister. The obligation was Mrs. Elgner's and it was only a moral one. Second, it is at this stage of the argument [page694] that it is important to re-emphasize the fact that the kind of analysis of financial budgets that takes place at a trial is not expected on an interim motion. It is also important to note that an interim order does not in any way limit the discretion of the trial judge on the trial on the issue of support (Burke v. Poste, [1996] O.J. No. 2725, 64 A.C.W.S. (3d) 1178 (Gen. Div.)). A trial judge can, in effect, readjust the amount ordered, either upwards or downwards.
[21] In the end, the parties were married for 33 years before they separated. The wife remained at home after the marriage to raise the parties' three children. The parties enjoyed a very high standard of living during their marriage. They are now in their early 60s. The husband has considerable resources. In 2007, 2008 and 2009, his income ranged between $2,800,000 and $3,900,000. He disclosed an asset base of over $10,000,000, not including the asset that he is claiming is excluded (which is also worth a large amount of money). There is a considerable disparity between the wife's resources and the husband's. The wife is owed an equalization payment, which will be more than sufficient to offset any claims that the husband may make at trial about the payments made under the Order.
Does the proposed appeal involve matters of such importance that leave should be granted?
[22] As the Divisional Court stated in Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110, [1988] O.J. No. 525 (Div. Ct.), at p. 113 O.R."importance" within the meaning of rule 62.02(4) means
. . . matters of general importance, not matters of particular importance relevant only to the litigants. General importance relates to matters of public importance and matters relevant to the development of the law and the administration of justice. . .
[23] The proposed appeal does not reach this threshold. It raises no issues that transcend the private interests of the parties. There is no question of law that requires resolution by a higher judicial authority. Any issues that are raised require resolution by a trial judge who has had a full opportunity to assess the credibility of the parties and the evidence they offer.
Conclusion
[24] For these reasons, the motion for leave to appeal is dismissed. The parties may address me in writing on the question [page695] of costs within two weeks from the release of these reasons. Such submissions are not to exceed five pages in length (including appendices).
Application dismissed.