C.A. No. 127917
NOVA SCOTIA COURT OF APPEAL
Cite as: Shotton v. Roberts, 1997 NSCA 197
Freeman, Bateman and Flinn, JJ.A.
BETWEEN:
ROSS SHOTTON ) B. Lynn Reierson / Valerie MacKenzie
) for the Appellant
Appellant )
)
)
- and - )
)
) Michael F. LeBlanc / Sean O'Leary
) for the Respondent
LAUREL DIANE ROBERTS )
)
Respondent )
)
) Appeal Heard:
) November 28,1996
)
) Judgment Delivered:
) January 8, 1997
)
)
)
THE COURT: The appeal is allowed, the cross-appeal is dismissed, the order of the trial judge is set aside, with costs going to the appellant, per reasons of Bateman, J.A., Freeman and Flinn, JJ.A. concurring.
Bateman, J.A.:
This is an appeal and a cross-appeal from the division of assets and order fixing spousal support ancillary to a divorce.
FACTS:
This history of the parties is captured in the trial judge's decision:
The petitioner wife met the respondent husband at Halifax on April 3, 1992. She moved in with him on July 16. She terminated her employment at the end of August. They were married on September 8, and moved to Rome on October 3. She returned to Halifax on September 5, 1993. There is some difference of opinion as to the exact date on which co‑habitation ceased but, since little turns on it, I accept that they separated on the date of her return.
At the time of marriage, the wife was 40 years old. She had been previously married in 1974. Before that first marriage, she had completed a Journalism program and a Bachelor of Arts degree. She was divorced in June, 1992. The divorce left her with few assets and she worked as a waitress. She was working at the Cellar Bar & Grill when she met the respondent husband.
At the time of marriage, the husband was 46 years old. He was born in New Zealand, and has been a Canadian citizen since approximately 1975. He holds a PhD. degree in Oceanography from Dalhousie University. He has extensive experience at sea, in the fishing industry, and in fisheries research. He was employed by the Government of Canada from 1974 to 1992. Before he met and married the petitioner wife, he had accepted a position in Rome with the Food & Agriculture Organization (FAO) of the United Nations. He resigned from his job with the Canadian Government in September, 1992, and prepared to move to Rome where he expected to spend at least the following three years.
The marriage was of brief duration; it lasted 12 months. It can be described as a traditional marriage; the wife did not work and remained at home as a homemaker, while the husband went to work every day and earned the family income.
The wife is once again a waitress for her previous employer. She is now 43 years old. The husband has extended the term of his contract with the FAO in Rome.
THE DECISION:
The assets at the time of separation, as found by the trial judge, were (values in Canadian funds): Cherry Street Apartment Building ($268,000.00); Furniture ($8,000.00); Credit Union Atlantic account ($24,826.00); Midland Walwyn margin account ($136,580.16); Midland Walwyn RRSP account ($46,284.67); proceeds from car insurance ($4,000.00); U.N. Pension contribution ($8,302.53); Rome Lira account ($1,400.00); Rome U.S. Dollar account ($30,700.00); Offshore Interests ($48,063.00).
The husband had brought all assets into the marriage excepting the Rome U.S. dollar account, the U.N. pension contribution and the Rome Lira account which assets accumulated from the husband's salary during the marriage.
The parties had agreed before trial that the furniture, car insurance proceeds, U.N. pension contribution, and the Rome Lira account were matrimonial assets (total value $21,702.53). They also agreed that the 19-day contribution made by the husband to his Canadian Government Pension Plan, during the marriage, was insignificant. This
left in contention, for classification and division, the apartment building, Credit Union Atlantic account, Midland Walwyn margin account, Midland Walwyn RRSP account, Rome U.S. dollar account and the so-called Offshore Interests (consisting of shares in an Australian company and a term deposit).
The trial judge concluded that the Rome U.S. dollar account, the U.N. pension contribution, the Rome lira account, the Midland Walwyn margin and RRSP accounts and the share portion of the Offshore Interests were matrimonial assets (the term deposit portion of the Offshore Interests was held not to be a matrimonial asset, as it derived from inherited property (s.4(1)(a) Matrimonial Property Act)). He held that the apartment building and the related Credit Union Atlantic account were business assets. The trial judge calculated, therefore, that Mr. Shotten held matrimonial assets totalling $301,801 and business assets totalling $272,355. Ms. Roberts held matrimonial assets valued at $2000.
The trial judge found that it would be unfair or unconscionable to divide the matrimonial assets equally, and awarded a one third share to Ms. Roberts, together with the sum of $2000 as compensation for her contribution to a business asset. This resulted in an award to Ms. Roberts of in excess of $100,000.
In addition the judge ordered that she receive spousal support of $900 per month for a period of five years, retroactive to the date of separation.
Grounds of Appeal:
There are numerous grounds of appeal and cross-appeal. Summarizing, Mr. Shotten says that the trial judge erred in classifying the Midland Walwyn margin and RRSP accounts and the share portion of the Offshore investment as matrimonial assets. He submits, as well, that the trial judge erred in awarding Ms. Roberts a one third interest in the matrimonial assets and that he erred in the award of spousal support. Ms. Roberts submits that the trial judge erred in his classification of the apartment building, the Credit Union Atlantic account and the term deposit portion of the Offshore Interests, and in not awarding her a full one half interest in the matrimonial assets or, alternatively, in not awarding her a significant share of the business assets. She says, as well, that the judge erred in not including in the accounting, as a matrimonial debt, her $5400 student loan, an obligation incurred long before marriage.
Standard of Review:
In Moge v. Moge (1992), 43 R.F.L. (3d) 345 (S.C.C.) L'Heureux-Dubé, J., at p. 359, accepted the following statement of Morden J.A. in Harrington v. Harrington (1981), 33 O.R. (2d) 150, at p. 154:
As far as the applicable standard of appellate review is concerned I am of the view that we should not interfere with the trial Judge's decision unless we are persuaded that his reasons disclose material error and this would include a significant misapprehension of the evidence, of course, and, to use familiar language, the trial Judge's having 'gone wrong in principle or (his) final award (being) otherwise clearly wrong': Attwood v. Attwood, [1968] P. 591 at p. 596. In other words, in the absence of material error, I do not think that this Court has an 'independent discretion' to decide afresh the question of maintenance and I say this with due respect for decisions to the contrary . . .
Chipman, J. A. wrote, for the court, in Edwards v. Edwards (1995), 133 N.S.R. (2d) 8 (N.S.C.A.) at p. 20:
Having regard to all the evidence and particularly the respective incomes of the parties, I cannot say that the trial judge erred in his assessment. This court is not a fact finding tribunal. That is the role of the trial judge. Ours, as has been said many times, is a more limited role. We are charged with the duty of reviewing the reasons of the trier of fact with a view of correcting errors of law and manifest errors of fact. The degree of deference accorded to the trial judge with respect to factual findings is probably no higher anywhere than it is in matters relating to family law. Hart, J.A. put it well when he said on behalf of this court in Corkum v. Corkum (1989), 20 R.F.L. (3d) 197 at 198:
In domestic matters the trial judge always has a great advantage over an appellate court. He sees and hears the witnesses and can assess the emotional aspects of their testimony in a way that is denied to us. Unless there has been a glaring misconception of the facts before him or some manifest error in the application of the law, we would be unwise to interfere.
A similar standard is applicable to appeals from a division of assets made pursuant to the Matrimonial Property Act, R.S.N.S. 1989 c. 275.
Analysis:
Over the last twenty years, across Canada, provincial matrimonial property legislation was enacted. It was required to compensate for the inability of the equitable and the common law remedies to adequately recognize the contribution of the homemaker to the acquisition, maintenance and improvement of family assets. The broad intent of the legislation is to provide a fair distribution of assets upon dissolution of the marriage. The Matrimonial Property Act S.N.S. 1980, c.9, s.1 is no exception.
The recitals to the Matrimonial Property Act set out its purpose:
WHEREAS it is desirable to encourage and strengthen the role of the family in society;
AND WHEREAS for that purpose it is necessary to recognize the contribution made to a marriage by each spouse;
AND WHEREAS in support of such recognition it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the termination of a marriage relationship;
AND WHEREAS it is necessary to provide for mutual obligations in family relationships including the responsibility of parents for their children;
AND WHEREAS it is desirable to recognize that childcare, household management and financial support are the joint responsibilities of the spouses and that there is a joint contribution by the spouses, financial and otherwise; that entitles each spouse equally to the matrimonial assets.
The Act was not, however, implemented as a tool to arbitrarily redistribute or equalize wealth between married persons. I agree with the comment of Davison, J. in Zimmer v. Zimmer (1989), 90 N.S.R. (2d) 243 (N.S.S.C.T.D.) at p.253:
The legislature did not intend for the Matrimonial Property Act to be used as a vehicle for one party to profit by entering into a short marital relationship and departing with a profit by reason of the contribution made to the marriage by his or her spouse . . .
And that of Baker, J. in Jensen v. Jensen, [1994] B.C.J. 2603 (B.C.S.C.) at p.29:
In my view, the authorities establish that the division of assets, following the breakdown of a marriage of very short duration between two mature adults, should not result in a considerable financial windfall to one of the parties. Marriage is not a legal institution created for the redistribution of wealth.
The decision of the trial judge must be reviewed in the context of the purpose of the legislation.
(a) The division of assets:
In my view, the evidence fully supports the judge's classification of the apartment building, Credit Union Atlantic account and the term deposit portion of the Offshore Interests.
I have grave concerns, however, in the unique factual circumstances of this case, about the process followed by the trial judge in his classification of the Midland Walwyn margin account, the RRSP account and the share portion of the Offshore Interests as matrimonial assets.
It is clear from a reading of the decision that the trial judge felt he lacked discretion in classifying these assets, irrespective of the facts. I refer, for example, to the following passage where he considers the classification of the Midland Walwyn margin account:
This account was established by the respondent husband in 1978, for investment purposes. In reality, it consists of two accounts containing securities and proceeds from dividends and sales of securities. The respondent husband is the sole signing authority; only he had access to the account, and knowledge of its purpose and use. During the period of the marriage, no withdrawals were made from the account, which showed a loss during that time.
The securities and money in this account are personal property primarily used in connection with investment and, therefore, appear to be business assets as defined by s.2(a) of the Act. As interpreted by the Supreme Court of Canada, an investment portfolio is not a business asset notwithstanding its purpose to earn income. Therefore, the money in this account is a matrimonial asset. (emphasis added)
While the judge does not cite the precise authority upon which he relies for his conclusion that an investment portfolio could not be a business asset, it is fair to surmise that he is referring to the following passage from Tibbetts v. Tibbetts (1992), 119 N.S.R. (2d) 26 (N.S.C.A.), at p.33, per Hallett, J.A.:
Notwithstanding the broad scope of the words used in the definition of business assets in the Act and the decision of Mr. Justice Hart in Lawrence v. Lawrence, supra, generally speaking, an investment portfolio of stocks, bonds, GICs, mutual funds or the like does not involve the employment of capital for the purpose of generating income in an "entrepreneurial sense". An entrepreneur is defined in the Concise Oxford Dictionary as a "person in effective control of commercial undertaking"; one who "undertakes a business or enterprise, with chance of profit or loss". Holding a stock portfolio does not normally equate with operating a business.
The earlier decisions in this Province, such as Lawrence v. Lawrence, supra, must be read in light of this binding statement of the Supreme Court of Canada in Clarke v. Clarke, supra, with respect to the interpretation of the term "business assets" as defined in the Act. Considering that the definition of matrimonial assets includes all property of the spouses, unless exempted from the definition, the term "business assets" has been fairly confined by the Supreme Court of Canada to assets that are truly of a business character. An investment portfolio is not a business asset in the true sense of that word as interpreted by the Supreme Court of Canada notwithstanding its purpose is to earn income. The husband's investment portfolio was accumulated from earnings surplus to his family's needs and although one of the purposes of investing was to earn money, the primary purpose was to secure a reasonable level of retirement income for the family therefore these funds were properly classified as matrimonial assets by the trial judge; he applied the decision of the Supreme Court of Canada in Clarke v. Clarke, supra. (emphasis added)
The above passage is not authority for the trial judge's apparent conclusion that, even in appropriate factual circumstances, an investment portfolio cannot be classified as a business asset. The cases reveal that the philosophy underlying the classification of relatively passive investments, such as an investment portfolio, as "matrimonial" as opposed to "business" assets derives from the presumption that, generally, savings by a family consist of monies diverted from income which would otherwise be available to the family for current use. It would therefore be inequitable not to include such an asset as part of those to be divided. Indeed, a similar general rationale was articulated by Hallett, J.A. in Tibbetts, supra, when considering the classification of an asset which had been inherited, and was thus possibly exempt under s. 4(1)(a). The asset had been maintained and improved through the contribution of family monies. He said at p. 35:
Applying . . . the concept that money earned by the working spouse in a traditional marriage is family money there is no equity in allowing the income earner, using that money, to enhance an asset owned by him that is excepted from the definition of matrimonial assets.
As with any legislation, the impact of the Matrimonial Property Act has been defined and refined over the years by the case law. In an effort to promote certainty, provide guidance and reduce the expense and acrimony of litigation on marriage breakdown, certain general rules have developed. Judges have striven for consistency in the application of these principles.
Where the marriage is of reasonable duration, certain presumptions prevail: it is presumed that a spouse's non-monetary contribution to a marriage, through the assumption of child care and homemaking responsibilities is deserving of recognition; that in a marriage, parties generally operate as a team, pooling resources and making decisions in reliance on their joint means; that the disadvantage occasioned to a non-income earning spouse on marriage breakdown, should be alleviated to the extent appropriate through a fair distribution of the assets; that in most marriages it is unfair, undesirable and unnecessary to embark upon a tracing of the assets brought into the marriage by each party; that where one party assumes primary responsibility for the organization of the marital assets, that spouse should not be permitted to arrange the assets in a way that disadvantages the other spouse on dissolution of the marriage. This is far from an exhaustive list.
When, however, a marriage, falls outside the norm for which the general guidelines have been developed, it is necessary to carefully scrutinize the circumstances and determine whether a different approach is required to achieve a fair result. Adherence to the general rules is not to be at the expense of equity. A judge is not precluded from deviating from the usual classification of an asset where the facts so dictate. This is one such marriage.
In dividing the matrimonial assets the trial judge said:
I find no unreasonable impoverishment of the matrimonial assets by either spouse. Neither spouse has declared substantial debts or liabilities. There does not exist any marriage contract or separation agreement. The spouses cohabited with each other for only one year during their marriage; they also cohabited for a few months before marriage. All matrimonial assets were acquired by the husband before marriage. The wife did not assume any noteworthy housekeeping, child care or other domestic responsibilities which had any effect on the ability of the husband to acquire, manage, maintain, operate or improve business assets. The husband could have, but did not, contribute to the education or contribute (sic) potential of the wife. There are no children of the marriage. As best can be ascertained from the evidence, each spouse contributed to the marriage in a usual manner. There is no evidence that the value of the assets substantially appreciated during the marriage, although one can infer that the total assets appreciated to some extent. There is evidence that certain specific assets depreciated during the marriage. I find no evidence of the proceeds of an insurance policy or award of damages in tort. There is no evidence that the wife lost the chance of acquiring a pension or other benefit by reason of the termination of the marriage. There is no evidence as to the taxation consequences of the division of matrimonial assets.
In light of those factors, and especially the brief duration of the marriage and the fact that all matrimonial assets were acquired by the husband before marriage, I consider that it would be unfair or unconscionable to divide the matrimonial assets in equal shares. Before deciding the manner in which those matrimonial assets should be divided unequally, I consider it desirable to first decide whether any division should include non‑matrimonial assets, that is, business assets.
. . .
The evidence discloses that the only business asset to which the spouse contributed work in respect of its maintenance or operation is the apartment building on Cherry Street. The amount of her contribution was minuscule. While the husband acquired it and then managed, maintained, operated and improved it over a period of approximately 15 years, her contribution was limited to carrying out relatively minor maintenance and renovations during the few months the parties resided together in Halifax. Her contribution was so small that I am inclined not to make any order in respect of it. However, since s.18 is mandatory, an order will go forth directing the husband to pay the sum of $2,000 to the wife to compensate her for the work that she contributed during that brief period of time.
In light of the foregoing facts, especially the brief duration of the marriage and the small contribution of the wife to the enhancement of the business assets, all of which were acquired, paid for and nurtured by the husband prior to marriage, the Court awards to the wife an amount equal to 331/3% of the value of the matrimonial assets and none of the business assets except for the amount of $2,000 previously referred to.
Mr. Shotten submits that the judge's decision to award Ms. Roberts a one third share of the matrimonial assets amounts to an excessive award in the circumstances. He submits that it arose from the judge's misinterpretation of Mr. Shotten's position at trial. In this regard the judge said:
The respondent husband . . . submits that, because of the brevity of the marriage and the minuscule contribution that the wife made to the family or the marital assets, the Court should award an unequal division of the matrimonial assets in his favour, and the portion attributed to the wife should not exceed 30%.
This was not Mr. Shotten's submission at trial. It was not a position put forward by him or his counsel at any time during the proceedings.
The assignment of the percentage for division involves an exercise of discretion. That discretion must be exercised judicially. As Lord Denning said in Ward v. James, [1965] 1 All E.R. 563 at p. 570:
This brings me to the question: in what circumstances will the Court of Appeal interfere with the discretion of the judge? At one time it was said that it would interfere only if he had gone wrong in principle; but since Evans v. Bartlam, that idea has been exploded. The true proposition was stated by Lord Wright in Charles Osenton & Co. v. Johnston. This court can, and will, interfere if it is satisfied that the judge was wrong. Thus it will interfere if it can see that the judge has given no weight (or no sufficient weight) to those considerations which ought to have weighed with him. (emphasis added)
In Grimshaw v. Dunbar, [1953] 1 All E.R. 351 (H.L.), at p.353, Jenkins, L.R. said:
. . . did the judge here exercise his discretion on wrong considerations or wrong grounds, or did he ignore some of the right considerations? If so, then he decided on wrong principles, his error was a matter of law, and this court can interfere. . .
. . . In my view, although no reasons are given by a judge exercising, or refusing to exercise, a discretionary jurisdiction, it may nevertheless, be possible, on looking at the facts, to say that, if the judge has taken all the relevant circumstances into consideration and had excluded from consideration all irrelevant circumstances, he could not possibly have arrived at the conclusion to which he came, because on those facts that conclusion involves a palpable miscarriage of justice . . . (emphasis added)
In Heinemann v. Heinemann (1989), 91 N.S.R. (2d) 136 Hart, J.A. at p. 162, approved the following remarks of Estey, J. in Elsom v. Elsom (1989), 96 N.R. 165 (S.C.C.) at p. 24:
If a judge proceeds on principle properly applicable to the facts of a case and makes a decision judicially, in the exercise of his discretion, this Court will not interfere. But, if it appears that a judge has misdirected himself, or that his decision is so clearly wrong as to amount to an injustice, the court can and should review the facts upon which the judgment ought to be given. (Re Hull Estate per Laidlaw J.A., [[1943] O.R. 778 (C.A.)] at p. 785.)
In my view, whatever prompted the judge to choose the one third division, he clearly placed inadequate weight upon the combined effect of the two applicable s.13 factors - the date and manner of acquisition of the assets and the length of cohabitation during the marriage. I agree with Mr. Shotten's submission that the one third share, applied uniformly to the assets found by the trial judge to be matrimonial, results in an inequity.
In most circumstances equitable division is achieved by applying a percentage to the total package of matrimonial assets, as the trial judge did here. On the facts of this case, however, where there was an exceedingly short marriage with virtually all of the assets contributed by one spouse and principally acquired prior to the marriage, equity can best be achieved through an individual assessment of the appropriate division of each asset.
It is unnecessary, in these circumstances, to re-examine the classification of the Midland Walwyn margin and RRSP accounts and the share portion of the Offshore Interests, because, whatever their classification, Ms. Roberts is not entitled to a share. They were clearly accumulated by Mr. Shotten prior to the marriage. Ms. Roberts provided no contribution to their maintenance or improvement. They were not assets, to use the words of Hallett, J.A. in Tibbetts, supra, derived from "earnings surplus to the family's needs". Even if found to be matrimonial assets, the application of s. 13(d) and (e) of the Matrimonial Property Act leads, overwhelmingly, to the conclusion that, in these circumstances, it would be unfair or unconscionable to award Ms. Roberts any share.
The assets remaining to be considered for division are the furniture ($8,000.00); proceeds from car insurance ($4,000.00); U.N. Pension contribution ($8,302.53); Rome Lira account ($1,400.00); Rome U.S.Dollar account ($30,700.00) - a total value rounded to $52,400. I would award her none of the proceeds of the car insurance, which related to a vehicle brought into the marriage by Mr. Shotten. In my view, the remaining assets, having been substantially accumulated during the marriage, though admittedly from Mr. Shotten's income, should be divided equally. Ms. Roberts is therefore entitled to one half of the value of the furniture; the U.N. pension contribution; the Lira account and the U.S. dollar account. This results in an award to Ms. Roberts of $24,200. As she presently has furniture at an agreed value of $2,000, Mr. Shotten would owe her the net sum of $22,200.
There is simply no merit in the submission by Ms. Roberts that her longstanding student loan should have been treated as a sharable debt.
(b) Spousal Support:
Section 15 of the Divorce Act authorizes the Court to order reasonable spousal support. The relevant portions provide:
s. 15 (4) The Court may make an order under this section for a definite or indefinite period or until the happening of a specified event and may impose such other terms, conditions or restrictions in connection therewith as it thinks fit and just.
(5) In making an order under this section, the Court shall take into consideration the condition, means, needs and other circumstances of each spouse . . . including:
(a) the length of time the spouses cohabited;
(b) the functions performed by the spouse during cohabitation; . . .
. . .
(7) An order made under this section that provides for the support of a spouse should:
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
. . .
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) insofar as practicable, promote the economic self‑sufficiency of each spouse within a reasonable period of time.
L'Heureux-Dubé, J. wrote in Moge v. Moge (1992), 43 R.F.L. 345 (S.C.C.) at p. 373:
The second observation I wish to make is that, in determining spousal support it is important not to lose sight of the fact that the support provisions of the Act are intended to deal with the economic consequences, for both parties, of the marriage or its breakdown. Marriage may unquestionably be a source of benefit to both parties that is not easily quantified in economic terms. . . .
. . . marriage and the family often require the sacrifice of personal priorities by both parties in the interests of shared goals. All of these elements are of undeniable importance in shaping the overall character of a marriage. Spousal support in the context of divorce, however, is not about the emotional and social benefits of marriage. Rather, the purpose of spousal support is to relieve economic hardship that results from "marriage or its breakdown". Whatever the respective advantages to the parties of a marriage in other areas, the focus of the inquiry when assessing spousal support after the marriage has ended must be the effect of the marriage in either impairing or improving each party's economic prospects. (emphasis added)
In awarding support the judge said:
Prior to marriage, the wife was a senior waitress at a small restaurant in Halifax. She was friendly with the couple who owned the business, with whom she was discussing the possibility of starting a new catering business in association with the existing restaurant. She says that she lost that business opportunity because of her marriage and her husband's need to move to Rome to take up new employment. She did not work during the time they lived in Rome. She says that the marriage and its breakdown resulted in a loss of approximately 3 years of her life. The breakdown of the marriage forces her to face the difficulty of re‑establishing herself. The previous business opportunity is gone and there are no other such opportunities on the horizon. She is, once again, a waitress in the same restaurant she was before marriage, although now she has no seniority.
. . .
I find that the business opportunity which she claims existed, was far from concrete and, therefore, was merely potential and speculative. Her claim that she lost approximately 3 years of her life at a time when she, as a middle aged woman, was investing in her own career, is essentially true although the period is somewhat exaggerated. There is no evidence that she lost more of her life or suffered more than many others who find themselves in similar circumstances.
Marriage per se does not automatically entitle a spouse to support. But here the wife has clearly suffered economic disadvantage. While the husband continues to nourish his investments and to earn at the same level, the wife has had difficulty re‑establishing herself and, from the evidence disclosed at trial, I infer that such difficulty is likely to continue for several years to come. The husband has an accumulation of assets which, even after taking into consideration that there will be a division of those assets between husband and wife, will still be substantial. His assets and high level of earnings make his financial condition such that he has more than sufficient means to pay for his needs over the years. Even with some of his assets transferred to her, the wife will have difficulty earning at a level satisfactory to pay for her normal living expenses which, at present, are stated to result in a monthly deficit of $729 and, as proposed in her budget, will result in a monthly deficit of $1,207. I consider that this situation would likely last for several years. Whatever order is made for spousal maintenance, the duration of the order should be for a specified period in order to yield a result which is fit and just for these particular persons in their particular circumstances. I set that period at five years. That should be a sufficient period to enable her to become reasonably self‑sufficient. (emphasis added)
While, in awarding support, the trial judge appears to have focused upon the economic consequences of the marriage breakdown, the evidence simply does not support his inference that Ms. Roberts' difficultly in re-establishing herself would last for some time. At the time of the marriage she was employed, full time, as a senior waitress at the Cellar Bar and Grill. She had worked there for several years. At the time of trial she was again working at that restaurant. The trial judge found that Ms. Roberts' employment was part time. In this regard he was in error. The evidence was that she generally worked four shifts per week, occasionally five. When asked how many weekly shifts she had worked prior to the marriage, her answer was "That varied, four or five."
In response to questions on cross-examination Ms. Roberts acknowledged that prior to marriage she was able to meet her expenses out of income. She further testified that "My income from the time when I met Ross to the time right now is, in the two years since I've been home, close to the same level." She was no longer the senior waitress at the restaurant, as she had been prior to marriage, however, there was no clear evidence that that position carried with it any tangible benefits.
Given the exceedingly short duration of this marriage it was not open to Ms. Roberts to argue that, by reason of the marriage, Mr. Shotten is required to maintain her in lifestyle exceeding that which she had enjoyed prior to the marriage. L'Heureux-Dubé, J. wrote in Moge, supra, at p. 390:
Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement (see Mullin v. Mullin (1991), supra, and Linton v. Linton, supra). Furthermore, great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution (see Rogerson, "Judicial Interpretation of the Spousal and Child Support Provisions of the Divorce Act, 1985 (Part I)", supra, at pp. 174‑75). (emphasis added)
Hart, J.A. recognized in Heinemann v. Heinemann, supra, that short term marriages do not entitle a spouse to an equalization of living standards upon divorce. He wrote, for this court, at p. 160:
Since judges realize that people entering marriage unions today are familiar with the changing roles and the facility with which marriages can be dissolved, it will be expected as has been demonstrated in the cases referred to above dealing with short‑term marriages that the greatest emphasis will be placed upon the complete separation of the parties and the acquisition of self‑sufficient economic status for each. This will be done by making arrangements for retraining and re‑entry into the workforce of those whose skills have been neglected and by placing limits on the time required to attain self‑sufficiency. In my opinion, the tendency will be to return the spouses to the position in life they would have attained had they not diverted their talents to the development of a family. The standard of living to which they will be entitled will be that of a reasonable standard under all of the circumstances and not tied to that of the spouse from whom they have been separated. An equalization of wealth must be left to property settlements under provincial statutes. Maintenance payments should not, in my opinion, be utilized to equalize the standard of living of the former spouses at the termination of a modern marriage but should be directed towards the re‑establishment of both parties to positions of reasonable economic self‑sufficiency and then be allowed to cease.
In my view the comments of L'Heureux-Dubé, J., in Moge, supra, at p. 383 are particularly apt:
After divorce, spouses would still have an obligation to contribute to their own support in a manner commensurate with their abilities. (Rogerson, "Judicial Interpretation of the Spousal and Child Support Provisions of the Divorce Act, 1985 (Part I)", supra, at p. 171). In cases where relatively few advantages have been conferred or disadvantages incurred, transitional support allowing for full and unimpaired reintegration back into the labour force might be all that is required to afford sufficient compensation. (emphasis added)
It was Ms. Roberts' evidence that, prior to leaving her job to marry, she had an opportunity to join her employers in starting a catering operation. The loss of this opportunity was, in her view, an economic disadvantage attributable to the marriage. There was, as well, evidence from her employer, Ms. Levangie, that, in conjunction with that catering position, Ms. Levangie would have liked to have Ms. Roberts take a more active role in the management part of the restaurant business, in which case she would have earned more money. That opportunity was no longer available. The judge, however, dismissed Ms. Roberts' contention that, by reason of the marriage, she had lost a business opportunity. In this regard he said:
I find that the business opportunity which she claims existed, was far from concrete and, therefore, was merely potential and speculative. Her claim that she lost approximately 3 years of her life at a time when she, as a middle aged woman, was investing in her own career, is essentially true although the period is somewhat exaggerated.
. . .
Marriage per se does not automatically entitle a spouse to support. But here the wife has clearly suffered economic disadvantage. While the husband continues to nourish his investments and to earn at the same level, the wife has had difficulty re‑establishing herself and, from the evidence disclosed at trial, I infer that such difficulty is likely to continue for several years to come.
Having found that the business opportunity was merely speculative, the judge's finding that "the wife has clearly suffered economic disadvantage" is unsupported by the evidence. The absence of such evidence, and the subsequent language used by the trial judge, leads me to conclude that the award of support was substantially influenced by the disparity in the parties' incomes. In this regard, I refer to the following comments:
From the evidence, it is clear that the wife has needs which are not being met, and the husband has more than sufficient means to meet his own needs. His ability to pay is not in issue. He can well afford to pay her a reasonable level of maintenance according to her position in life as his former wife. His statement of financial information discloses a monthly surplus of approximately $3,000 per month.
She claims maintenance of $900 per month. The evidence discloses the claim to be reasonable to meet her needs. The evidence also discloses that he can easily afford to pay that amount.
The Court orders the husband to pay maintenance of $900 per month as and from the date of separation, crediting to him all amounts (but excluding the $10,000 to enable the wife to re‑establish herself) which he paid to her after the date of separation for maintenance or support. The Court further orders the husband to pay that amount monthly for a period of five years from the date of separation, after which payments shall cease.
In a marriage such as this, it is not enough to find that one party has a need and the other an ability to pay. The need must be an economic consequence flowing from the breakdown of the marriage. The evidence was that Ms. Roberts had been meeting her financial requirements from her income prior to marriage. At the time of trial she was earning her pre-marriage income. There was no explanation for the shortfall in her monthly budget. Ms. Roberts "need" flows, not from the breakdown of this short marriage, but from the fact that the career path she chose to follow, prior to the marriage, and has resumed since, does not yield a substantial income. Ms. Roberts, in view of the short duration of this marriage to Mr. Shotten, was not entitled to support simply because the marriage had ended and she could no longer enjoy the benefit of the lifestyle which he could provide.
This is to be contrasted to the entitlement upon dissolution of a more traditional marriage where the parties, in reliance on the marital relationship, forego career choices. There, a compensable economic dependency results. As Hart, J.A. continued in Heinemann, supra, at p. 160:
As I mentioned earlier, not all marriages are or will be of this modern kind and there will be those of the traditional type in which one partner, usually the wife, sacrifices her personal economic advancement for that of her husband and both parties choose that she should devote herself to the raising of the children and the advancement of the family unit. If this type of marriage lasts for a long period of time, the cases referred to above recognize that the economic disadvantages incurred by the wife should be redressed upon dissolution of the marriage. If, as a direct result of the marriage, she is left with no or limited marketable employment skills the courts seem to think that she is entitled to a reasonable standard of living to the extent to which her spouse is able to pay. It seems to me that this standard should approximate that to which she would have been able to meet had she chosen to follow her own career goals rather than the marriage, but should not be wholly unrelated to that which she enjoyed prior to the dissolution of the marriage. (emphasis added)
L'Heureux-Dubé, J. recognized in Moge, supra, at p. 375, that the emphasis has shifted away from maintenance based only upon the disparity in incomes:
The most significant change in the new Act when compared to the 1970 Divorce Act may be the shift away from the "means and needs" test as the exclusive criterion for support to a more encompassing set of factors and objectives which requires courts to accommodate a much wider spectrum of considerations. This change, of course, does not signify that "means and needs" are to be ignored. Section 15(5) of the Act specifically states that "the court shall take into consideration the condition, means, needs and other circumstances of each spouse".
In short, taking into account the duration of the marriage Ms. Roberts' was not entitled to periodic support in the amount nor for the duration ordered by the trial judge.
The parties separated in September of 1993. The petition for divorce was filed in September of 1994. Mr. Shotten provided to Ms. Roberts a voluntary payment of $10,000 on August 28, 1993, prior to her return to Canada and a total of $1850 in the early winter/spring of 1994. She had returned to her employment in December of 1993, although initially on a part-time basis. Ms. Roberts' application for interim support, initiated in January of 1995, was heard on February 15. Mr. Shotten was ordered to pay interim support of $330 monthly for a period of six months and suit costs of $1500. Mr. Shotten complied with the interim order and, upon its expiry, paid a further $660 on the basis that it would be "set against" any award received from the court.
The interim amounts provided by Mr. Shotten were used by Ms. Roberts in re-establishing and supporting herself prior to trial. (Mr. Shotten takes the position that the trial judge, in dividing the assets or in fixing support, should have given him credit for the $10,000 interim payment.)
The periodic support was ordered by the trial judge to be retroactive to the date of separation. In making a retroactive award of support, the trial judge may have been influenced by his mistaken understanding that Mr. Shotten had not complied with the interim support order. The parties agree that Mr. Shotten had complied with the interim order of Glube, C.J.
It is unnecessary, here, to consider whether a trial judge has jurisdiction, pursuant to s. 15 of the Divorce Act, 1985, to make a retroactive support order, particularly where interim relief under the statute has been ordered. In my view, on the evidence, an award of retroactive support is not warranted. The interim amounts paid were adequate.
Having found that the trial judge erred in his assessment of the maintenance obligation, it remains to determine the appropriate quantum and duration of support, if any. As a consequence of the division of assets Ms. Roberts will have a capital sum of $24,200 (including the $2,000 awarded by the trial judge on account of her contribution to a business asset) and furniture agreed to be worth $2000. She entered the marriage with $2000, an offsetting debt in the same amount and furniture valued at $2000.
I am satisfied that all amounts paid by Mr. Shotten over the course of the separation were required by Ms. Roberts for her interim support and should not be charged against the division of assets. This amounted to approximately $14,000 in support from September of 1993 until the trial in April of 1996, a period of about two and one half years. It was, presumably, received by Ms. Roberts largely tax free. I accept that this was a period of some turmoil for Ms. Roberts and that it did take time for her to fully resume her employment. Ms. Roberts has now, however, essentially re-established herself to her former economic position, and is actually in an improved capital situation. The five year period for support, ordered by the trial judge is excessive.
Out of an abundance of caution and in order to enable Ms. Roberts to fully adjust to her post marital situation I would order that she be entitled to a final lump sum payment of spousal support in the amount of $5,000 less the gross amount of periodic spousal support, if any, paid by Mr. Shotten during the period subsequent to trial and prior to the rendering of this decision.
Disposition:
Accordingly, I would allow the appeal, dismiss the cross-appeal, set aside the order of the trial judge and order that Mr. Shotten pay to Ms. Roberts the total sum of $24,200 ($22,200 and $2,000) to effect a division of the assets, with each party retaining the assets presently in his or her possession. There shall be no further award of spousal support, save the provision for the $5,000 lump sum, on the terms set out above.
As Mr. Shotten has been substantially successful on both the appeal and cross-appeal, he shall have costs, which I would fix at $1500 inclusive of disbursements.
Bateman, J.A.
Concurred in:
Freeman, J.A.
Flinn, J.A.
C.A. No. 127917
NOVA SCOTIA COURT OF APPEAL
BETWEEN:
)
ROSS SHOTTON )
Appellant )
)
)
- and - ) REASONS FOR
) JUDGMENT BY:
)
) Bateman, J.A.
LAUREL DIANE ROBERTS )
Respondent )
)
)
)
)