Court File and Parties

Court File No.: FS-10-69786-00
Motion Heard: 20120709
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Philomena Rosa Maria Almeida, Applicant

AND:

Henry Rege Almeida, Respondent

BEFORE: MILLER, J.

COUNSEL:
R. Zaldin, for the Applicant
P. Viater, for the Respondent

HEARD: July 9, 2012

REASONS FOR DECISION

[ 1 ] Henry Almeida seeks leave to appeal to the Divisional Court all of the temporary orders made by Lemon, J. March 7, 2012 and May 31, 2012. Mr. Almeida also seeks a stay of the orders pending appeal.

[ 2 ] The temporary orders made March 7, 2012 require Mr. Almeida to pay child support and spousal support. The order made May 31, 2012 requires Mr. Almeida to pay Mrs. Almeida’s costs of the motion fixed at $20,000 forthwith.

[ 3 ] Child support was fixed at $2,301 per month for Rachelle Almeida born May 19, 1991, Stephanie Almeida born November 6, 1999 and Lucas Almeida born November 6, 1999 commencing April 3, 2010 and on the 3 rd day of each month thereafter, based on an imputed income of $131,238 annually, without prejudice to the trial judge increasing or decreasing the amount retroactively based on evidence at trial.

[ 4 ] Spousal support was fixed at $1,500 per month commencing April 3, 2010 and on the 3 rd day of each month thereafter, based on an imputed income of $131,238 annually, without prejudice to the trial judge increasing or decreasing the amount retroactively based on evidence at trial.

[ 5 ] Mr. Almeida argues that Lemon, J. erred in including in the imputation of income legal fees spent by Mr. Almeida on this litigation. He argues there is good reason to doubt the correctness of this decision which involves matters of importance.

[ 6 ] Mrs. Almeida takes the position that the decision was correct and further confined to the specific facts of this case rather than one of general importance.

Imputation of Income based on Legal Fees Paid

[ 7 ] The motions judge in his decision imputed income to Mr. Almeida of $131,238 annually. He based this decision on Mr. Almeida’s own evidence that he receives $37,308 annually from his father to meet his expenses as he earns no income of his own. The motions judge added to this figure $50,000 spent by Mr. Almeida annually on legal fees and also paid by his father. The combined figure of $87,000 the motions judge “grossed up” to account for the fact that the monies are tax free.

[ 8 ] In his factum for leave to appeal Mr. Almeida only challenges the inclusion of legal fees as income.

[ 9 ] There was no evidence as to what actual amount Mr. Almeida has spent on legal fees. Mr. Almeida refused to disclose this information, claiming privilege, and at paragraph 37 of his decision, the motions judge “conservatively” imputed $50,000, it would appear based on the history of the litigation. There is no dispute that this would indeed be a conservative estimate.

[ 10 ] Mr. Almeida asserts that the amount he has spent on legal fees is privileged. He relies on Maranda v. Richer 2003 SCC 67 , [2003] S.C.J. No. 69 in which the majority found, in the context of the execution of a Criminal Code search warrant, that information relating to lawyer’s fees and disbursements was privileged.

[ 11 ] The crux of Mr. Almeida’s argument, however, is that it was improper for the motions judge to use any quantum, and particularly an imputed quantum, of legal fees paid by someone other than Mr. Almeida, in order to impute income to Mr. Almeida.

[ 12 ] Both counsel on the motion relied on Bak v. Dobell 2007 ONCA 304 , [2007] O.J. No. 1489 at paragraph 75 , setting out the factors a court will consider in determining whether it is appropriate to include receipt of gifts as income:

• the regularity of the gifts; the duration of their receipt;

• whether the gifts were part of the family's income during cohabitation that entrenched a particular lifestyle;

• the circumstances of the gifts that earmark them as exceptional;

• whether the gifts do more than provide a basic standard of living;

• the income generated by the gifts in proportion to the payor's entire income;

• whether they are paid to support an adult child through a crisis or period of disability;

• whether the gifts are likely to continue;

• and the true purpose and nature of the gifts.

[ 13 ] The motions judge applied these factors in finding that $37,308 received annually from Mr. Almeida’s father to pay his living and vehicle expenses should be imputed as income and grossed up to reflect their “tax-free” status. It is not contended on this motion for leave to appeal that he erred in so doing.

[ 14 ] Mr. Almeida argues that the motions judge erred in treating money paid by Mr. Almeida’s father toward his legal fees in the same fashion.

[ 15 ] Mrs. Almeida argues that in the absence of an up to date financial statement before the motions judge, and a myriad of conflicting evidence on Mr. Almeida’s actual ability to pay support it was proper for him to do so.

[ 16 ] Rule 62.02(4) of the Rules of Civil Procedure provides that

Leave to appeal shall not be granted unless,

(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.

[ 17 ] Mr. Almeida’s argument is focussed on on subparagraph (b) in relation to the motions judge’s reliance on legal fees paid to impute income.

[ 18 ] The Divisional Court in Greslik v. Ontario Legal Aid Plan 1988 4842 (ON SCDC) , [1988] O.J. No. 525 defined "such importance" as “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.”

[ 19 ] In Brownhall v. Canada (Minister of National Defence) 2006 7505 (ON SC) , [2006] O.J. No. 672 (S.C.J.) at paragraph 30 , DiTomaso, J. indicated that:

it is not necessary for the moving party to convince the court that the decision it seeks to appeal from is wrong or even probably wrong. It is sufficient for the moving party to show this court that there is good reason to doubt the correctness of the decision. Thus, the court should ask itself whether the correctness of the decision in question is open to "very serious debate" and, if so, is it a decision that warrants resolution by a higher level of judicial authority.

[ 20 ] Applying this guidance I am persuaded that that there is good reason to doubt the correctness of the orders made by the trial judge in relation to the imputation of income based on the inclusion of legal fees paid by a third party.

[ 21 ] I am also persuaded, as it is not uncommon that legal fees of parties in family matters are paid by other people, usually other family members, that the proposed appeal, on this narrow issue, relates to matters of such importance that leave to appeal should be granted.

[ 22 ] Leave to appeal the temporary orders made by Lemon, J. March 7, 2012, in relation to child support and spousal support, is granted. Leave to appeal the costs order made May 31, 2012 is also granted.

Stay Pending Appeal

[ 23 ] Mr. Almeida asks that I stay all of the temporary orders made by Lemon, J. March 7, 2012 and May 31, 2012.

[ 24 ] Mrs. Almeida asks that I consider the history of the litigation and argues that this Court should use its inherent jurisdiction to address what her counsel describes as an abuse of process by requiring that as a condition of being allowed to appeal, Mr. Almeida should be ordered to pay immediately 1) the $15,000 owing in property taxes on the matrimonial home; 2) of the $80,000 in support arrears, ½ to Mrs. Almeida and ½ into court; 3) and on a continuing basis $3,801 monthly in combined child and spousal support; 4) the full $20,000 costs order; and; 5) the outstanding $2,000 in costs ordered by the Court of Appeal.

[ 25 ] Mrs. Almeida relies on the dissenting comments of Goudge, J.A. in Canam Enterprises Inc. v. Coles 2000 8514 (ON CA) , [2000] O.J. No. 4607 at paragraph 55 :

The doctrine of abuse of process engages the inherent power of the Court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel.

[ 26 ] The Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General) 1994 117 (SCC) , [1994] S.C.J. No. 17 approved a three stage test for a stay: 1) whether there is a serious question to be tried; 2) the applicant must convince the court that it will suffer irreparable harm if the relief is not granted. 'Irreparable' refers to the nature of the harm rather than its magnitude; and; 3) the balance of inconvenience - "a determination of which of the two parties will suffer the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits".

[ 27 ] I am not persuaded that I should require Mr. Almeida to make any payments as a condition of being granted leave to appeal.

[ 28 ] Having considered whether there is a serious question to be tried, the prospect of irreparable harm and the balance of convenience I am persuaded there should be a stay pending appeal. I am of the view, however, that any stay of the temporary orders made by Lemon, J. March 7 and May 31, 2012 must relate to the narrow ground on which leave was granted. Only the orders relating to imputation of income, specifically the orders requiring Mr. Almeida to pay child support and spousal support, made March 7, 2012, and the order for costs made May 31, 2012 will be stayed and only on partial basis.

[ 29 ] Leave to appeal was granted in respect of the portion of the income imputed due to payment of Mr. Almeida’s legal fees by his father. The remainder, the $37,308 imputed as a result of money given to Mr. Almeida by his father to meet his living expenses, remains in effect.

[ 30 ] A gross-up of $37,308 to reflect that the money received is tax free would be an additional $11,992 for a total of $49,300. Applying the Federal Child Support Guidelines , the monthly amount payable for three children is $972. On this basis and applying the Spousal Support Advisory Guidelines the mid-range spousal support amount would be $878 monthly.

[ 31 ] The order for child support made March 7, 2012 is partially stayed pending appeal. Mr. Almeida is ordered, pending the appeal, to pay $972 per month in child support for three children commencing April 3, 2010 and on the 3 rd day of each month thereafter.

[ 32 ] The order for spousal support made March 7, 2012 is partially stayed pending appeal Pending the appeal, Mr. Almeida is ordered to pay $878 per month in spousal support commencing April 3, 2010 and on the 3 rd day of each month thereafter.

[ 33 ] The order for costs made May 31, 2012 is partially stayed pending appeal. Mr. Almeida is ordered, pending the appeal, to pay $10,000 in costs to Mrs. Almeida forthwith.

[ 34 ] The parties may exchange and file written submissions as to costs of this motion, if necessary, no later than August 10, 2012.

MILLER J

Date: July 9, 2012