DATE: 20040108
DOCKET: C39248

COURT OF APPEAL FOR ONTARIO

LASKIN, ARMSTRONG and BLAIR JJ.A.

On appeal from the judgment of Justice Maria T. Linhares de Sousa of the Superior Court of Justice dated December 4, 2002.

LASKIN J.A.:

[1] In this family law appeal there are two principal issues. First, should the court even entertain Mr. Brophy's appeal in the light of his default in paying spousal support of $8,000 per month ordered by the trial judge? Second, is the amount of spousal support excessive?

A. Background

[2] Mr. and Mrs. Brophy separated in 1998, after a twenty-three year marriage. At the time of separation he was fifty-two and she was fifty-seven years old. They have three adult sons who all have special needs. The oldest son suffers from depression; the middle son has Down syndrome and, though he lives at a home for developmentally delayed children, he is frequently cared for by his parents, especially his mother; the youngest son has a drug addiction problem.

[3] The parties live in Ottawa. Mr. Brophy operates his own business there, Brophy Financial Planning Insurance Agency Ltd., and earns a substantial income from it. Mrs. Brophy holds a teaching certificate but has not taught full time since her first child was born. Until they separated, Mrs. Brophy worked part time in her husband's business. After separation she had a brief part time teaching job in London, Ontario. At the time of trial she was not working.

[4] The trial judge granted the divorce, ordered Mr. Brophy to make an equalization payment of approximately $113,000, to pay spousal support of $8,000 per month, and to pay costs of $18,490 inclusive of disbursements.

[5] Mr. Brophy appeals the amount of spousal support and advances three submissions why it should be reduced. First, the trial judge erroneously inflated his annual income; second, the trial judge failed to impute income to Mrs. Brophy; third, $8,000 per month exceeds the bounds of reasonableness. Mr. Brophy also appeals the costs award.

[6] About two weeks before this appeal was to be argued Mrs. Brophy brought a motion to dismiss the appeal on the ground that Mr. Brophy wilfully defaulted in paying spousal support and was now over $50,000 in arrears. The court heard the motion, reserved its decision on it, and then heard the appeal on the merits.

B. Discussion

First Issue: Should the court entertain Mr. Brophy's appeal?

[7] The trial judge's judgment ordering spousal support was issued on September 20, 2002. From that date through March 2003, Mr. Brophy voluntarily paid support, initially $3,500 per month (the amount he was paying before trial) and latterly the amount ordered by the trial judge.

[8] Under our Rules of Civil Procedure an order for spousal support is not automatically stayed on the filing of a notice of appeal. In February 2003 Mr. Brophy sought a stay of the order for support pending his appeal. Labrosse J.A. dismissed his motion. Beginning in April 2003 Mr. Brophy stopped paying support voluntarily. Mrs. Brophy managed to collect some support through garnishment carried out by the Family Responsibility Office. When the appeal was argued on December 4, 2003, Mr. Brophy owed Mrs. Brophy a substantial amount of support, totalling $52,348.19.

[9] A threshold question on Mrs. Brophy's motion is whether Mr. Brophy's default is wilful or reflects an inability to pay. Mrs. Brophy's motion can only succeed if his default is wilful.

[10] On the record before this court, I conclude that Mr. Brophy's default is indeed wilful. He filed no evidence to substantiate his assertion that he is unable to pay $8,000 per month. At trial he admitted to an income of at least $200,000 annually. Since separation he has enjoyed a rather lavish lifestyle with his new companion, which has included buying and renovating a farmhouse, purchasing Belgian horses and taking numerous trips out of the country. Moreover, the timing of his stopping voluntary payment strikes me as quite deliberate, roughly coinciding with the dismissal of his motion for a stay.

[11] Faced with an appellant's wilful refusal to honour a spousal support obligation, the court has several options. One option is to dismiss the appeal for non-compliance with the trial court's order. That is the practice of the British Columbia Court of Appeal. The following passage from the reasons of Lambert J.A. in Elensky v. Elenskaya (1993), 50 R.F.L. (3d) 230 makes good sense:

In effect, Mr. Elensky is in breach of the order of Madam Justice Gill. He is in breach because of his own determination of what he is going to pay based on his own assessment of his needs.

In those circumstances, it has been the practice of this Court not to hear appeals unless a convincing explanation is given of the impossibility of compliance with the court order. No such convincing explanation has been given in this case. If Mr. Elensky is going to make his own decisions about what to pay without regard to the court order then there is no purpose in this Court striving to achieve the best balancing of the interests of justice for the parties only to find that Mr. Elensky substitutes his views of that balancing for any view we may reach.

In those circumstances, I would dismiss this appeal.

In Young v. Young (1976), 17 N.S.R. (2d) 375 the Nova Scotia Supreme Court - Appeal Division adopted the same practice.

[12] Another option for the court is to adjourn the appeal until the appellant either pays the arrears or demonstrates that he cannot pay them. Our court resorted to this option in Parkinson v. Parkinson (1973), 3 O.R. 293, where Gale C.J.O. said:

The Court has come to the conclusion that it ought not to entertain the appellant's appeal until either the arrears owing by him are paid or we are satisfied that he cannot pay them. Accordingly, the appeal will be adjourned sine die to permit the appellant to fulfil one or the other of those conditions.

[13] In the present appeal, however, Mr. Brophy did not seek an adjournment to explain his default or to pay up the arrears.

[14] A third option for the court is to hear the appeal on its merits, despite the appellant's wilful default. The court will be more likely to do this where the amount of arrears is small. See Ott v. Ott (1982), 39 O.R. (2d) 260 (C.A.).

[15] Here the amount of arrears is not small, Mr. Brophy has not undertaken or made arrangements to pay them, and he has not convinced me that he is unable to pay them. These considerations would ordinarily justify granting Mrs. Brophy's motion and dismissing the appeal. However, I need not do so because of my view of the merits of Mr. Brophy's appeal, to which I now turn.

Second Issue: Is the amount of spousal support excessive?

[16] Mr. Brophy concedes that Mrs. Brophy is entitled to spousal support. That is a realistic concession. Mrs. Brophy is entitled to compensatory support for the obvious economic disadvantage she has suffered on the breakdown of the marriage. What Mr. Brophy disputes is the amount of support. He contends that the amount awarded by the trial judge - $8,000 per month - should be reduced to $4,000 per month. I will examine his three submissions in support of that contention.

i) Mr. Brophy's income

[17] For the purpose of ordering support, the trial judge fixed Mr. Brophy's income at $242,000 annually. Mr. Brophy submits that the appropriate figure is $202,000.

[18] Determining Mr. Brophy's annual income was an important issue at trial. Mr. Brophy runs his own business. Because of that, Mrs. Brophy asserted that his reported income on his tax returns was not a reliable measure of his real income. Each party retained an expert. Each expert took a five year average of Mr. Brophy's income between 1997 and 2001. Mr. Brophy's expert relied solely on his client's tax returns, which produced an average annual income of $202,738. This is the amount Mr. Brophy contends should be used to fix his support obligation. Mrs. Brophy's expert made two calculations: one used Mr. Brophy's tax returns but added various adjustments, which yielded an annual income of $242,000; the other calculation added in corporate profits from Mr. Brophy's business, which yielded an annual income of $308,000.

[19] After a careful examination of the case law the trial judge rejected Mrs. Brophy's submission that the pre-tax corporate profits of Brophy Financial should be used to determine Mr. Brophy's income. But she relied on the other calculation made by Mrs. Brophy's expert, which included adjustments to his reported income, and fixed Mr. Brophy's annual income at $242,000.

[20] I see no error in the trial judge's determination. She was entitled to rely on the evidence of Mrs. Brophy's expert and reject that of Mr. Brophy's expert. In this court, Mr. Brophy has not demonstrated that any of the adjustments made by Mrs. Brophy's expert were misconceived. His submission amounts to nothing more than that the trial judge should have preferred the opinion of his expert over that of Mrs. Brophy's. In an appellate court that submission has no merit. I would, therefore, not alter the income figure used by the trial judge.

ii) Imputing income to Mrs. Brophy

[21] At trial, Mr. Brophy argued that Mrs. Brophy should be working part time and that, therefore, the court should impute to her part time employment income. The trial judge rejected this argument, but did recognize that Mrs. Brophy would be expected to return to the workforce in the future "once the demands of her family have diminished".

[22] Mr. Brophy submits that the trial judge erred in failing to find that Mrs. Brophy is capable of working now. He points out that their son with Down syndrome lives mainly in a home for the developmentally delayed and that their son with depression lives mainly abroad. He also points out that Mrs. Brophy is a qualified teacher, capable of at least supply teaching. I do not accept Mr. Brophy's submission.

[23] The trial judge considered the points raised by Mr. Brophy but accepted Mrs. Brophy's evidence that her ongoing family responsibilities precluded her from maintaining even part time employment. The trial judge's findings are unassailable. She dealt with the demands of Mrs. Brophy's children in these words:

After separation, Ms. Brophy made herself available to deal with her eldest son's depression. In addition, Geordie's problems have continued to require her time, as well as that of Mr. Brophy, by way of court appearances and meetings with probation officers. She has also provided a home for Geordie for periods of time when he has been released from custody. She continues to make herself available, "on call", for her son Geoffrey when his residency at L'Arche is not possible. An example of this is a shortly anticipated period of convalescence after eye surgery that Geoffrey requires. Mr. Brophy questioned whether such surgery was necessary, but did not question the need for his son's residency away from L'Arche with one of his parents in the event of such surgery.

[24] I add this to the trial judge's findings. The demands of the parties' three children were not just stressful. They produced one crisis after another. Although Mr. and Mrs. Brophy are both devoted parents, he conceded at trial that she primarily deals with these crises. At the time of trial the demands of the children had left Mrs. Brophy exhausted.

[25] The trial judge then observed that Mrs. Brophy's attempt to teach part time at Fanshaw College in London had proved unworkable:

Ms. Brophy testified that in September of 2000, she attempted employment with Fanshaw College that required her to live out of the city. She returned to Ottawa every two weeks. However, problems developed with her son Geordie, who was living in her house at the time, which left her unable to trust his being in the home alone. She did not renew her employment with Fanshaw College. Ms. Brophy does not agree that she is able to maintain even part time employment given her ongoing family responsibilities, both historical and current.

[26] The trial judge also found that the flexible arrangement Mrs. Brophy enjoyed while employed at Brophy Financial - employment Mr. Brophy terminated after separation - was not available anywhere else in Ottawa.

There is no evidence that work of the nature she performed at Brophy Financial might be available to her elsewhere than at Brophy Financial, once she was prevented from continuing that work by Mr. Brophy. Her employment there was clearly tailor-made allowing her the luxury of leaving whenever her family needed her. There is no evidence to indicate that the employment marketplace would permit her such flexibility.

[27] For these reasons the trial judge concluded that she would not impute income to Mrs. Brophy:

After considering all of the evidence, I am persuaded by Ms. Brophy's evidence that no income at this time should be imputed to her. I find that her ongoing family responsibilities, given the role she has played in the past, prevent her from undertaking any remunerative teaching employment at this time... Ms. Brophy's judgment to make herself available to deal with her children's needs, particularly those of Geoffrey, were not questioned by Mr. Brophy in the past. I find that those needs, despite the age of the children, are ongoing.

On the facts, therefore, I cannot impute an employment income to her at this time.

[28] The trial judge did, however, acknowledge that a time will come when Mrs. Brophy will be expected to work part time. When that time comes Mr. Brophy can apply to vary spousal support:

The promotion of self-sufficiency is "in so far as practicable" an objective of spousal support. It is questionable whether Ms. Brophy will ever be completely self-sufficient in relation to the lifestyle she enjoyed during the marriage, particularly during the last few years of the cohabitation as Brophy Financial began to command a substantial income. Part time employment for Ms. Brophy in the future, once the demands of her family have diminished, is indeed expected of her. The matter can always be reviewed by the court at that time. Needless to say, if there is ever a material change in either of the parties' circumstances, a motion to change may be brought.

[29] The trial judge's findings are reasonable and fully supported by the evidence at trial. The trial judge was correct in not imputing any income to Mrs. Brophy.

iii) The amount of support

[30] Even accepting that his income is $242,000 annually and that no income should be imputed to Mrs. Brophy, Mr. Brophy still submits that spousal support of $8,000 per month is excessive and should be cut in half. I do not agree.

[31] I would not interfere with the trial judge's order for two reasons. First, in making her order she applied the principles approved of by this court in Linton v. Linton (1990), 1 O.R. (3d) 1 and Allaire v. Allaire (2003), 170 O.A.C. 72. She recognized that this was a marriage of long duration and that Mrs. Brophy had been out of the workforce for many years while caring for the children and managing the household. She also took into account Mrs. Brophy's imputed investment income of $8,000 to $10,000 annually. The amount the trial judge ordered properly reflected a relatively equal sharing of the decline in the parties' lifestyles.

[32] Second, though perhaps generous, $8,000 per month does not exceed a range of reasonableness. It amounts to about 40 percent of Mr. Brophy's gross income. This amount, therefore, commands deference on appeal. I am not persuaded that we should interfere with it. See Andrews v. Andrews (1999), 45 O.R. (3d) 577 (C.A.) and Hickey v. Hickey, [1999] 2 S.C.R. 518.

[33] For these reasons I would not give effect to this ground of appeal.

Third Issue: The costs order at trial

[34] The trial judge awarded Mrs. Brophy $18,490 in costs, consisting of $10,000 for legal fees and $8,490 for disbursements, including some of the costs for her experts. In making her costs order the trial judge recognized that success was divided and took into account the parties' offers to settle. Mr. Brophy does not suggest that the award reflects any error in principle. I see no justification for interfering with it.

C. Conclusion

[35] The trial judge did not err in awarding spousal support of $8,000 per month, nor did she err in her costs award. Accordingly, I would dismiss the appeal. Mrs. Brophy is entitled to her costs of the appeal and the motion on a partial indemnity basis, which I fix in the amount of $12,000 inclusive of disbursements and GST.

RELEASED: Jan. 8, 2004 "JL"

"John Laskin J.A."
"I agree Robert P. Armstrong J.A."
"I agree R. A. Blair J.A."