



COURT OF APPEAL FOR ONTARIO

CITATION: Murphy v. Murphy, 2015 ONCA 69

DATE: 20150130

DOCKET: C59040

MacFarland, Hourigan, Benotto JJ.A.

BETWEEN

Shelley Leigh Murphy

Appellant

and

Timothy Laurent Murphy

Respondent

Edwin A. Flak and Amit S. Dror, for the appellant

Gary S. Joseph and Ryan M. Kniznik, for the respondent

Heard and released orally: January 26, 2015

On appeal from the order of Justice Paul Perell of the Superior
    Court of Justice, dated November 12, 2013.

ENDORSEMENT

[1]

The parties to this appeal have been involved in expensive, acrimonious and
    protracted family law litigation. To their credit, they agreed to refer all
    matters to mediation-arbitration with Malcolm Kronby Q.C.

[2]

After a 23 day hearing Mr. Kronby released an award which divided the
    success.  Consequently, there was an appeal and a cross-appeal to the Superior
    Court of Justice.

[3]

The appeal judge dealt with all the issues. Again success was divided. 
    Predictably, both parties sought leave to appeal to this court. Leave was
    granted to the appellant on one issue only: the arbitrators award of
    retroactive child support which had been overturned by the appeal judge.

[4]

At the conclusion of the appellants argument, her counsel submitted
    that the court should not permit the respondent to make submissions on the
    appeal. Mr. Flak said that the costs that this court had awarded against the
    respondent when his application for leave to appeal was dismissed remained
    unpaid; he had not disclosed his income tax returns from 2009 to the present;
    and he had paid no child support since January 2014.  At the conclusion of the
    appellants submissions, the court retired for the luncheon recess.  On
    resuming, the court asked counsel for the respondent why, in the circumstances,
    his client should be granted an audience.

[5]

Mr. Joseph reported that his client had paid the outstanding costs
    order by presenting a cheque to the appellant just before court resumed. He had
    no reasonable explanation to offer as to why his client had unilaterally
    stopped paying child support. As for his clients failure to produce his income
    tax returns, Mr. Joseph argued that his clients income was complicated,
    composed as it was in some years of proceeds from the cashing in of shares,
    options and so on. Complicated as the calculation of the respondents income
    may have been, it is no excuse whatsoever for his failure to produce copies of
    the income tax returns he had filed for each of those years.  The very fact
    that he had filed these returns was only revealed in court in response to
    questions from the panel.  It was the first that the appellants counsel was
    aware of their existence.

[6]

In these circumstances, the court determined that to hear the
    respondents submissions would be to reward his deliberate and wilful
    misconduct.  The court refused to entertain submissions from the respondent.

[7]

With respect to the merits of the appeal, there was ample and compelling
    evidence before the arbitrator that the respondent had misrepresented his income
    while paying child support. The arbitrator made findings as to the actual
    income of each parent and then established what amount of child support should
    have been paid.  He said:

Considering the objectives as set out in section 1 of the
Guidelines,
the mandate is to establish a fair standard of support for [the child] that
    ensures that [she] benefit from the financial means of the parents.

[8]

Applying these principles, the arbitrator determined that the respondent
    ought to have been paying $8,000 per month for child support, a figure below
    the Guideline amount.  He then calculated that the difference between what the
    respondent did pay and what he ought to have paid was $274,420.00. He ordered this
    amount and used the term retroactive child support to describe it.

[9]

The appeal judge concluded that the arbitrator erred in law because he
    did not conduct an analysis of the retroactive support issue in accordance with
    the criteria established in
D.B. S v. S.R.G
. [2006] S.C.C. 37.  This
    case holds that, in determining retroactive child support, the factors to be
    considered are:

·

the reason that support was not sought earlier;

·

the conduct of the payor; the circumstances of the child; and

·

the hardship to the payor.

[10]

It
    is not clear that, in the circumstances of this case, a
DBS
analysis is
    required. Nor is it clear to what extent its application was argued before the
    arbitrator. It was not expanded upon in the arbitrators reasons, which the appeal
    judge determined were insufficient.

[11]

In
    our view, the appeal judge erred in law in two ways.  First, he applied the
    wrong test to the sufficiency of the arbitrators reasons. He cited criminal
    cases without regard to the goals of efficiency and expediency in the
    arbitration context. These goals have particular significance in a family law
    matter where finality is important especially when a child is involved.
    Moreover
Hickey v. Hickey
[1999] 2 S.C.R. 518 provides that significant
    deference must be given in relation to the determination of support orders.
    This principle recognizes that the discretion in making the order is best
    exercised by the person who heard the parties directly. This is of particular
    significance when the parties select an arbitrator well known and respected for
    his expertise and experience in the area of family law.  In any event, in our
    view, the reasons although brief, do explain how he calculated the award and
    why he made it.

[12]

The
    second error of the appeal judge was to determine as a matter of law that
DBS
applied to the circumstances here, and having made that determination, to disallow
    the award without performing the analysis himself or referring the matter back
    to the arbitrator for the analysis.

[13]

In
    our view, the retroactive child support award should be referred back to the
    arbitrator. He will determine whether the criteria of
DBS
apply and if
    so, he is in the best position to determine whether or not his award requires
    adjustment and if so by how much.

[14]

The
    appeal is allowed. The issue of retroactive child support is referred back to
    the arbitrator for reconsideration.  He is to determine whether or not in the
    circumstances of this case, the
DBS
factors apply and if so, whether any
    adjustment to his award is required.  Pending that determination the
    arbitrators award of $274,420.00 is restored.

[15]

Costs
    of the application for leave to appeal are fixed in the sum of $7,500 and costs
    of the appeal are fixed in the sum of $25,000. The appellants full indemnity
    costs of the proceedings before the appeal judge were approximately $98,000.
    The judge below ordered no costs in view of the divided success in the Superior
    court.  In view of the appellants success in this court, she should have some
    portion, although not all of her costs below.  We award the sum of $10,000 for these
    costs. The total costs awarded to the appellant are therefore fixed in the
    amount of $42,500 inclusive of disbursements and HST. The costs may be enforced
    by the Family Responsibility Office as an incidence of child support.

J. MacFarland J.A.

C.W. Hourigan J.A.

M.L. Benotto J.A.


