J.P., Re, (2008) 266 N.S.R.(2d) 314 (CA)

• Judge: Roscoe, Saunders and Oland, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: June 12, 2008
• Jurisdiction: Nova Scotia
• Citations: (2008), 266 N.S.R.(2d) 314 (CA);2008 NSCA 61

J.P., Re (2008), 266 N.S.R.(2d) 314 (CA);

    851 A.P.R. 314

MLB headnote and full text

Temp. Cite: [2008] N.S.R.(2d) TBEd. JL.007

L.K.S. (appellant/respondent by cross appeal) v. D.M.C.T. (respondent/appellant by cross appeal)

(CA 288398; 2008 NSCA 61)

Indexed As: J.P., Re

Nova Scotia Court of Appeal

Roscoe, Saunders and Oland, JJ.A.

July 3, 2008.

Summary:

A mother applied under s. 11 of the Family Maintenance Act for child support for the parties' one year old child. The father, who had a net worth of over $17,000,000, voluntarily paid $1,800 child support per month. The mother sought $3,600 per month, which would allow her to stay at home until the child reached school age. The father claimed that the mother was obliged to work to contribute to the support of the child.

The Nova Scotia Family Court, in a decision reported at 144 N.S.R.(2d) 138; 416 A.P.R. 138, held that the mother's decision to stay home was a reasonable one which should benefit the child. The decision was "reasonably suitable" having regard to the means, needs and circumstances of the child and his parents. The court awarded $3,600 per month child support. The father appealed the support order. The mother cross-appealed the cost award.

The Nova Scotia Supreme Court, in a decision reported at 154 N.S.R.(2d) 309; 452 A.P.R. 309, dismissed the appeal and cross-appeal. In 1998, without any financial disclosure, the parties renegotiated child support, increasing it to $5,000 monthly and making it tax-free to the mother. In August 2005, the mother requested a revision of child support. The father refused. In 2006, the mother applied for a variation of child support under the Maintenance and Custody Act. The father's net worth was now approximately $27,500,000. The mother was not employed and treated raising the child as a full-time occupation.

The Nova Scotia Family Court, in a decision reported at 257 N.S.R.(2d) 69; 820 A.P.R. 69, imputed an additional $836,160 income to the father beyond that which he expected to draw from his investment portfolio, for a total annual income for Guideline purposes of $1,111,160 per year. The court held that the "table" amount of $8,125.35 per month was appropriate and ordered the father to pay that amount. The court ordered that the parties equally share the son's school tuition costs and that the mother be responsible for any additional, related costs. The court followed the "general rule" and ordered payments retroactive to August 2005, the date of "effective notice". The mother sought costs.

The Nova Scotia Family Court, in a decision reported at 257 N.S.R.(2d) 334; 820 A.P.R. 334, held that the mother was entitled to be reimbursed for all of her reasonable, actual costs for legal fees and disbursements, with some exceptions. The mother's lawyer claimed $149,747.27.

The Nova Scotia Family Court, in a decision reported at 258 N.S.R.(2d) 334; 824 A.P.R. 334, ordered the father to forthwith pay the mother's counsel $109,054.06 total costs for fees, HST and disbursements.

The parties brought an appeal and a cross-appeal under s. 44 of the Maintenance and Custody Act. The father appealed from the costs order. The mother cross-appealed the child support order, questioning the quantum of the table amount, the amount ordered for s. 7 expenses and the effective date of the order. She also appealed the costs award, seeking full indemnification of her legal fees. Additionally, she sought the admission of fresh evidence on the appeal, being her affidavit, to which was attached the father's 2007 income tax returns and his company's financial statements.

The Nova Scotia Court of Appeal dismissed the appeal.

Editor's Note: Certain names in the following case have been initialized or the case otherwise edited to prevent the disclosure of identities where required by law, publication ban, Maritime Law Book's editorial policy or otherwise.

Family Law - Topic 2353

Maintenance of wives and children - Maintenance of children - Retroactive maintenance - The parties were parents who had never married or cohabited - In August 2005, the mother requested a revision of child support - The father refused - In March 2006, the mother applied for a variation - The trial judge determined the father's total annual income to be $1,111,160 per year for Guidelines purposes and awarded the table amount of support ($8,125.35 per month) - The court followed the "general rule" and ordered payments retroactive to August 2005, the date of "effective notice" - The Nova Scotia Court of Appeal upheld the decision - The father had been paying $5,000 monthly under an agreement made by the parties which was not registered under the Child Maintenance Act - Therefore, the requirements of s. 25(1) of the Child Maintenance Guidelines to file financial information upon request did not apply - The amount paid by agreement did not purport to be based on the Guidelines or the father's income - Therefore there was no obligation of the father to advise the mother of any change in his financial position before March 2006 when she filed her court application - The child support order was made retroactive to August 2005 - If the father unreasonably delayed disclosure after the court application was filed, that was a matter that could be dealt with by a costs order, not a child support order commencing even earlier than the mother's request for review in August 2005 - See paragraphs 35 to 39.

Family Law - Topic 2416

Maintenance of wives and children - Practice - Costs (incl. suit money) - A father reported a net worth of approximately $27,500,000 - The mother was not employed - The mother obtained an increase in child maintenance from $5,000 per month for the parties' one child to $8,125.35 per month and $71,883.05 in retroactive maintenance - "Section 7" expenses were divided - The trial judge held that the mother was to be reimbursed for all of her reasonable, actual costs for legal fees and disbursements, with some exceptions - The father did what he could to ensure that the case was dragged out as much as possible - He was not forthcoming with financial information - He unnecessarily complicated and lengthened the case - The matter was important and urgent to the mother and there was also a legitimate public interest that appropriate child support be paid - The father simply resisted her efforts - He could afford to do so, and he could just as easily afford the consequences of his oppressive strategy - His conduct was the very antithesis of what one would want to find or encourage in family litigation and he should bear the consequences for his course of action - The Nova Scotia Court of Appeal dismissed the father's appeal - See paragraphs 40 to 47.

Family Law - Topic 2416

Maintenance of wives and children - Practice - Costs (incl. suit money) - A mother obtained an increase in ongoing child support and a substantial retroactive award - A subsequent costs decision held that with the exception of certain aspects of the case where the parties should bear their own costs, the mother should be awarded an amount to approximate her actual costs, so long as the figure was reasonable - The mother's lawyer claimed $149,747.27 - The court awarded $109,054.06 total costs for fees, HST and disbursements - The mother appealed, submitting that the trial judge erred in not awarding costs on a full indemnity basis for legal expenses incurred: (i) in order to respond to the father's application to have the child returned to Yarmouth (she had moved him to Wolfville to attend a private school unilaterally, to which the father objected, but ultimately agreed); (ii) in order to respond to the father's appeal on suit costs; and (iii) for s. 7 expenses - The Nova Scotia Court of Appeal upheld the costs decision - See paragraphs 48 to 50.

Family Law - Topic 4045.4

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Special or extraordinary expenses - A father reported a net worth of approximately $27,500,000 - The mother was not employed - The parties had never married or cohabited - Their child, aged 12, attended a private school in Wolfville but lived at home with his mother - The trial judge determined that the father had a total annual income for Guideline purposes of $1,111,160 per year - The court awarded the mother the table amount of child support ($8,125.35 per month) - The mother sought as s. 7 expenses the private school tuition and additional school related costs, the costs of a drum kit, snowboard and computer, a contribution to her monthly travel expenses related to transporting the child to and from school, the cost of new snow tires for her car, her relocation expenses in moving from Yarmouth to Wolfville, the costs of maintaining two residences (one in Yarmouth and one in Wolfville) and the cost of an annual vacation to Louisbourg with the child - The total s. 7 claim was approximately $35,000 - The trial judge held that the tuition expenses (over $12,000 per year) were a legitimate s. 7 expense that the parties should share equally and the mother should be responsible for any additional, related costs - The Nova Scotia Court of Appeal upheld the decision respecting s. 7 expenses - See paragraphs 20 to 34.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Calculation or attribution of income - A father reported a net worth of approximately $27,500,000 - The trial judge imputed an additional $836,160 income to him beyond that which he expected to draw from his investment portfolio for a total annual income for Guideline purposes of $1,111,160 per year - This equated to a return of 4.27% on $26,000,000 - The mother submitted that: the trial judge erred in determining the father's income because he did not include the capital gains that accrued upon the transfer of his personal portfolio to his holding company in 2005 and 2006; an additional $3.3 million representing accrued unrealized capital gains in the company should also be included in his income; and the trial judge erred in calculating imputed income by discounting by 20% the amount that the father could earn on government bonds and by using $26 million as the asset base rather than $27.5 million - The Nova Scotia Court of Appeal held that the trial judge neither committed a material error nor misapprehended the evidence - No authority was cited to support the submission that unrealized capital gains should be included in income - The gains accrued upon the rollover to the holding company, although calculated and identified on paper for future income tax consideration, had not yet materialized and might never be realized in actuality - See paragraphs 12 to 19.

Family Law - Topic 4045.17

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Evidence and proof - A father reported a net worth of approximately $27,500,000 - The trial judge imputed an additional $836,160 income to the father beyond what he expected to draw from his investment portfolio, for a total annual income for Guideline purposes of $1,111,160 per year - On appeal, the mother sought the admission of fresh evidence, being her affidavit, with the father's 2007 income tax returns and his company's financial statements attached - The financial statements indicated net earnings of $2,142,730 - The tax return indicated line 150 income of $403,351.70 - The mother submitted that the Court of Appeal should admit the new evidence and determine the appropriate amount of child support and s. 7 expenses using $2.5 million as the father's annual income to save the parties from a variation application based on a change of income - The Nova Scotia Court of Appeal dismissed the application - The issue before the trial judge was the appropriate level of child support for 2007, and possibly two or three years before 2007, based on the father's income for the previous years - The new evidence, which did not come into existence until 2008, could not possibly have affected the result - See paragraphs 8 to 11.

Practice - Topic 7453

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Delaying tactics and unduly prolonging proceedings - [See first Family Law - Topic 2416 ].

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Improper, irresponsible or unconscionable conduct - [See first Family Law - Topic 2416 ].

Practice - Topic 9031

Appeals - Evidence on appeal - Admission of "new evidence" - [See Family Law - Topic 4045.17 ].

Cases Noticed:

D.B.S. v. S.R.G., [2006] 2 S.C.R. 231; 351 N.R. 201; 391 A.R. 297; 377 W.A.C. 297; 2006 SCC 37, folld. [para. 6].

Hickey v. Hickey, [1999] 2 S.C.R. 518; 240 N.R. 312; 138 Man.R.(2d) 40; 202 W.A.C. 40; 46 R.F.L.(4th) 1, refd to. [para. 6].

Binder v. Royal Bank of Canada et al. (2005), 234 N.S.R.(2d) 109; 745 A.P.R. 109; 2005 NSCA 94, folld. [para. 7].

Murphy v. Wulkowicz (2005), 238 N.S.R.(2d) 304; 757 A.P.R. 304; 2005 NSCA 147, refd to. [para. 9].

LeBlanc v. LeBlanc (1993), 85 Man.R.(2d) 278; 41 W.A.C. 278 (C.A.), refd to. [para. 10].

Francis v. Baker, [1999] 3 S.C.R. 250; 246 N.R. 45; 125 O.A.C. 201, refd to. [para. 14].

Correia v. Correia (2002), 165 Man.R.(2d) 134; 2002 MBQB 172 (Fam. Div.), refd to. [para. 26].

Chambers v. Chambers (2004), 188 Man.R.(2d) 283; 2004 MBQB 239 (Fam. Div.), refd to. [para. 26].

Fong v. Charbonneau (2005), 194 Man.R.(2d) 45; 2005 MBQB 92, refd to. [para. 26].

Simpson v. Trowsdale (2007), 264 Nfld. & P.E.I.R. 1; 801 A.P.R. 1; 2007 PESCTD 3, refd to. [para. 26].

Authors and Works Noticed:

Thompson, D.A. Rollie, The Chemistry of Support: The Interaction of Child and Spousal Support (2006), 25 C.F.L.Q. 251, generally [para. 25].

Counsel:

William L. Ryan, Q.C., and Sara Scott, for the appellant (respondent by cross-appeal);

Blaine G. Schumacher, for the respondent (appellant by cross-appeal).

This appeal was heard in Halifax, N.S., on June 12, 2008, by Roscoe, Saunders and Oland, JJ.A., of the Nova Scotia Court of Appeal. Roscoe, J.A., delivered the following reasons for judgment for the court on July 3, 2008.