CITATION: Czerlau v. Czerlau, 2015 ONSC 855
COURT FILE NO.: 9155/14
DATE: 2015/02/05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Terry Czerlau
Brent K. Harasym, for the Appellant
Applicant
(Appellant)
- and -
Rita Czerlau
James Stengel, for the Respondent
Respondent
(Respondent in Appeal)
HEARD at Welland, Ontario:
January 27, 2015
The Honourable Justice T. Maddalena
DECISION ON APPEAL
The Appeal
[1] The appellant, Terry Czerlau, appeals the order of Justice Martin dated April 3, 2014.
[2] The appellant submits that Justice Martin made a “palpable and overriding error” when she ruled that the spousal support overpayment for 2011 and 2012 was to be calculated and repaid over a 24-month period.
Background
[3] The appellant and the respondent entered into a separation agreement dated January 16, 2009.
[4] The separation agreement provided for spousal support to be paid by the appellant to the respondent and further provided as follows in paragraphs 6(a) and 6(e):
6(a) The parties agree that commencing January 1, 2009, Terry shall pay Rita the sum of $2,650 per month for her support for a total of $31,800 per year. Rita agrees that payments may be made in biweekly installments to coincide with Terry’s pay periods.
(e) The parties agree that to encourage Rita’s efforts at self sufficiency the first $20,000.00 per year earned from employment shall have no effect on the amount of support that Terry pays. As and when Rita’s gross annual income from employment combined with spousal support exceeds $52,000.00, the amount of spousal support shall be reduced by 50% for each additional dollar she earns. As and when Rita’s gross annual income from employment combined with spousal support exceeds $60,000.00, the amount of support shall be reduced by 100% for each additional dollar she earns.
[5] The agreement was prepared with both parties having legal representation.
[6] As required by the agreement, the respondent provided her 2009 income tax return to the appellant.
[7] Her 2009 line 150 combined employment income and spousal support was $54,130.
[8] According to the agreement, this was $2,130 over the first threshold of $52,000, thus in accordance with paragraph 6(e) of the separation agreement, the spousal support was adjusted in 2010 by $1,065 (being 50% of $2,130). The parties adjusted this on their own in equal installments over the 12 months of the year 2010.
[9] Further, at the end of the year 2010, and as well in the spring of 2011, the respondent further provided to the appellant her 2010 line 150 income. Her combined employment income and spousal support received for 2010 was $64,379. The parties agreed this was $8,379 over the combined threshold as outlined in paragraphs 6(e) of the separation agreement. This overpayment was adjusted in the 12 months in the year 2011.
[10] For the 2011 tax year the respondent’s line 150 total income from employment and spousal support was $64,518. The appellant and the respondent agreed that this was $8,518 over the combined thresholds contemplated in paragraph 6(e) of the separation agreement.
[11] For the year 2012 the respondent’s combined line 150 income from employment and spousal support was $72,181. The parties again agreed that this was $16,181 above the thresholds contemplated in paragraph 6(e) of the separation agreement.
[12] The parties agreed therefore that overpayments for 2011 and 2012 were $18,680.
[13] It is acknowledged between the appellant and the respondent that the respondent made a without prejudice payment to the appellant in the amount of $6,019 to be applied to the overpayment for 2011 and 2012.
[14] It was also agreed between the appellant and the respondent that the overpayment for 2013 was $11,876.36. Accordingly, it was agreed between the appellant and the respondent that for 2011, 2012, and 2013 the total overpayment was $30,556.
[15] Further, the parties agreed that there was to be no adjustment for the years 2009 and 2010.
[16] The separation agreement provided a mechanism for the calculation of any overpayment, but no mechanism for repayment of same.
[17] The parties, historically, in 2009 and 2010 adjusted any overpayment of the prior year over the 12 months of the subsequent year.
[18] However, a dispute arose as to the manner of the overpayment for 2011 and 2012.
The Position of the Appellant
[19] The appellant brought a motion to change in July 2012. The respondent subsequently filed the separation agreement for enforcement through Family Responsibility Office (“FRO”) pursuant to s.35 of the Family Law Act.
[20] The appellant submits in this appeal that for 2011 and 2012 the entire credit was to be applied in a 12-month period such that no support was to be paid by him until the overpayment was extinguished.
[21] The appellant submits that by allowing for an adjustment period other than over a 12-month period, Justice Martin misinterpreted the separation agreement and misapprehended the evidence.
[22] In doing so, the appellant submits, Justice Martin made a “palpable and overriding error”, as her conclusion was not supported by the evidence.
The Position of the Respondent
[23] The agreement does not address a specific mechanism to deal with any overpayment.
[24] The court has the discretion to order payment for two years (i.e. 2011 and 2012) over a 24-month period, and there was no error made by the trial judge.
[25] The respondent submits that the appeal ought to be dismissed.
The Standard of Review
[26] In the case of Housen v. Nikolaisen, 2002 SCC 33, [2002] S.C.J. No. 31, the court held at page 3 that “the standard of review for findings of fact is such that they cannot be reversed unless the trial judge has made a ‘palpable and overriding error’.”
[27] The court further stated at page 3 as follows:
The standard of review for inferences of fact is not to verify that the inference can reasonably be supported by the findings of fact of the trial judge, but whether the trial judge made a palpable and overriding error in coming to a factual conclusion based on accepted facts, a stricter standard. Making a factual conclusion of any kind is inextricably linked with assigning weight to evidence, and thus attracts a deferential standard of review. If there is no palpable and overriding error with respect to the underlying facts that the trial judge relies on to draw the inference, then it is only where the inference-drawing process itself is palpably in error that an appellate court can interfere with the factual conclusion.
[28] Further in the case of Waxman v. Waxman, 2004 ONCA 39040, [2004] O.J. No. 1765, the court held at paras. 296 and 297 as follows:
296 The “palpable and overriding” standard addresses both the nature of the factual error and its impact on the result. A “palpable” error is one that is obvious, plain to see or clear: Housen at 246. Examples of “palpable” factual errors include findings made in the complete absence of evidence, findings made in conflict with accepted evidence, findings based on a misapprehension of evidence and findings of fact drawn from primary facts that are the result of speculation rather than inference.
297 An “overriding” error is an error that is sufficiently significant to vitiate the challenged finding of fact. Where the challenged finding of fact is based on a constellation of findings, the conclusion that one or more of those findings is founded on a “palpable” error does not automatically mean that the error is also “overriding”. The appellant must demonstrate that the error goes to the root of the challenged finding of fact such that the fact cannot safely stand in the face of that error: Schwartz v. Canada, 1996 SCC 217, [1996] 1 S.C.R. 254 at 281.
[29] Further in the case of Enbridge Gas Distribution Inc. v. Froese, 2012 ONSC 6437, the court held at para. 41 as follows:
[41] The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a “palpable and overriding error”. However, where the trial judge’s findings are not supported by the evidence, the required standard is correctness and deference is not appropriate.
[30] In this case before the court, the standard of review is whether there has been a “palpable and overriding error”.
Analysis
[31] No mechanism in the separation agreement provides for the repayment of any established overpayment of spousal support.
[32] Historically, the parties decided on their own, for the years 2009 and 2010, to adjust the prior year’s overpayment equally over the ensuing 12 months of the following year.
[33] However, in 2012 the appellant unilaterally changed this and reduced the amount of support that the respondent received. As a consequence the agreement was then filed with FRO by the respondent.
[34] Recognizing that an overpayment was continuing to accrue, the respondent then agreed to a stay of enforcement by FRO, and she further provided the appellant with a $6,000 cheque (rounded) to be credited to the overpayment.
[35] She continued to provide the required disclosure to the appellant.
[36] Despite the fact that the appellant had commenced his motion to change in July 2012, he did not disclose his 2012 income tax return until August 2013 and also did not file his financial statement until August 2013.
[37] Upon these filings, both the court and the respondent discovered that the appellant’s earnings had increased from $80,000 per annum when the agreement was executed to $112,000 per annum at the time of the filings.
[38] This was the likely reason for the appellant not providing disclosure as initially required.
[39] For 2009 and 2010, the court concluded correctly that these parties had adjusted any overpayment arising in a given year in the immediate subsequent year in 12 equal installments.
[40] The practical problem facing the court was that by the time the motion was heard by Justice Martin in December 2013, some 18 months had elapsed since the original motion of July 2012. Thus, the court found itself having to deal with three years of overpayments - that is 2011, 2012 and 2013 - all at once.
[41] This was clearly not provided for in the separation agreement nor contemplated by the parties. It is clear the parties had only historically adjusted one year in the ensuing 12 months but had not been confronted with a three-year adjustment.
[42] For 2013, the court ordered the overpayment equally over the 12 months in 2014. This was in keeping with what the parties had themselves done in 2009 and 2010.
[43] With respect to 2011 and 2012, the court ordered the two years overpayment to be made within the following two-year period. This was in opposition to the appellant’s request to reduce spousal support to zero until the overpayment had been fully completed and to permit the full overpayment for 2011 and 2012 to be repaid in a 12-month period. The appellant’s position here was a unilateral amendment to what the parties had agreed upon for 2009 and 2010.
[44] The approach taken by the court was consistent with what the parties themselves had done and also consistent with permitting a 12-month overpayment to be paid over a 12-month period and a 24-month overpayment to be paid over a 24-month period.
[45] The court had full discretion to make such an order and it clearly cannot be said that the court failed to consider evidence or draw conclusions that were not properly founded in the evidence.
[46] The Ontario Court of Justice has jurisdiction to interpret the agreement now file pursuant to s.35 of the FLA and order repayment of support. The jurisdiction of the Ontario court to deal with enforcement of a support order lies in the provisions of the Family Responsibility and Support Arrears Enforcement Act (FRSAEA), 1996 as amended. Sections 8.4(4) and (5) of the FRSAEA legislation state as follows:
(4) A court that finds that a support obligation has terminated may order repayment in whole or in part from a person who received support after the obligation was terminated if the court is of the opinion that the person ought to have notified the Director that the support obligation had terminated.
(5) In determining whether to make an order under subsection (4), the court shall consider the circumstances of each of the parties to the support order. [Emphasis added]
[47] Section 27 of the FRSAEA legislation provides a mechanism to deal with disputes by the payor. Further s.27(5) provides as follows:
(5) The court shall determine the issue in a motion under subsection (1) or (2) in a summary manner and make such an order as it considers appropriate in the circumstances. [Emphasis added]
[48] Thus, the court is permitted to look at the circumstances of each of the parties to any dispute and the court can order repayment “in whole or in part” from the person who received the overpayment. In doing so, the court is permitted to consider all circumstances.
[49] Having considered all of the circumstances of the parties, and the discretion afforded to the court by the legislation, I conclude that it was eminently reasonable under these circumstances for the court to order 24 months for the overpayment for 2011 and 2012. There were no findings made by Justice Martin in the complete absence of evidence, no findings in conflict with accepted evidence, and no findings based on any misapprehension of evidence.
[50] The decision is clearly and reasonably founded on the evidence before the court, particularly given that the length of the litigation was not dealt with before by the parties, nor contemplated in the agreement.
[51] It should also be noted that while the court provided some relief to the respondent, the respondent was required to claim the full sums of support for the year 2014 and 2015, with the appellant receiving the full credit for same. This was one of many of the overall circumstances considered by the court.
Order Made
[52] I conclude that there has been no “palpable or overriding error”. The Ontario Court of Justice had the full discretion to make the order of April 3, 2014. Accordingly, the appeal is hereby dismissed.
Costs
[53] Unless otherwise agreed, costs submissions may be made in writing limited to two pages, plus a bill of costs. The respondent’s submissions are due by February 16, 2015. The appellant’s submissions are due by February 27, 2015. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.
Maddalena J.
Released: February 5, 2015
CITATION: Czerlau v. Czerlau, 2015 ONSC 855
COURT FILE NO.: 9155/14
DATE: 2015/02/05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Terry Czerlau
Applicant
(Appellant)
- and –
Rita Czerlau
Respondent (Respondent in Appeal)
DECISION ON APPEAL
Maddalena J.
Released: February 5, 2015