



COURT OF APPEAL
        FOR BRITISH COLUMBIA




Citation:



Jensen
                v. Jensen,









2004 BCCA
            29




Date: 20040116





Docket: CA029076; CA030859

Between:

Susan Elizabeth
      Jensen

Respondent

(
Plaintiff
)

And

Gregory
      Paul Jensen

Appellant

(
Defendant
)












Before:



The Honourable
            Mr. Justice Braidwood





The Honourable
            Mr. Justice Mackenzie





The Honourable
            Mr. Justice Low




Oral Reasons for Judgment




J.M. Schwarz



Counsel for the Appellant





R.S. Tretiak,
            Q.C.



Counsel for the Respondent





Place and
            Date of Hearing



Vancouver, British Columbia









January 12, 2004





Place and
            Date of Judgment:



Vancouver, British Columbia





January 14, 2004







[1]

LOW,
          J.A.
: Before us are two appeals from spousal
          support orders made by two chambers judges in these matrimonial proceedings.  Madam
          Justice Wedge made the first order on 28 September 2001 and Madam Justice
          D. Smith made the second order on 29 April 2003.  The husband appeals
          both orders.  He argues that both judges erred in different respects
          and says that spousal support should be eliminated or should be substantially
        reduced below the amount of $800 fixed by the second order under appeal.

[2]

The
      history of the marriage and the proceedings is as follows.

[3]

The
        husband is now 52 years old and the wife is 50 years old.  They married
        in 1979 and a son and a daughter were born in 1981 and 1984 respectively.  The
      parties separated in 1998.

[4]

The
        husband is a bricklayer with a current annual income of $53,000.  The wife
        did not work outside the home from the time of her first pregnancy in 1981
        until 1992 when she did some casual work at a daycare facility.  Prior
        to her first pregnancy she had worked for several years in the housekeeping
        department of a hospital.  She has a grade 12 education and apparently
        no specific job training.  She was 45 years old when the parties separated
      and it is obvious that her employment prospects were extremely limited.

[5]

The
        wife commenced these proceedings in August 1998.  On 16 August 1999 the
        court granted an order of divorce and the parties consented to an order
        that the wife would receive 65% of the family assets and the husband 35%.  The
        wife retained the family home and half the husbands pensions under the
        formula set out in the
Family Relations Act
.  The Guideline
        amount of child support for the two children was fixed at $833 per month
        and the husband agreed to pay spousal support of $1200 per month.  The
      husband then had an annual income of $61,752.

[6]

The
        order contained a clause that there would be a review of the amount of
        spousal support at any time after 1 August 2000 without the need to
      show a material change in circumstances.

[7]

This
        agreement recognized the limited employment prospects of the wife.  The
        idea was that the wife would use the former matrimonial home to operate
        a daycare business to provide her with an income.  She obtained a licence
      to operate the business in July 2000.

[8]

Before
        the wifes income from the daycare business was known, the husband applied
        in August 2000 for a reduction in spousal support.  On August 31, Mr. Justice
        Pitfield made an order reducing spousal support to $1,000 per month commencing
        1 January 2001 with leave to apply for a review without a change of circumstances
        after 1 July 2001.  This order also reduced child support to $513 per month
        because only the younger child remained dependant.  The husbands income
        was still $61,752 per year.  We do not have the reasons for judgment of
        Mr. Justice Pitfield but I presume the reduction of spousal support four
        months down the calendar was in anticipation of the wife achieving some
      net income from her business.

[9]

In
        2000 the wife earned a net business income of only $1400.  On 28 September
        2001, Madam Justice Wedge made the first order under appeal.  By then the
        husbands income was down to $53,000 per year and the wifes anticipated
        net business income for 2001 was only $4,000 to $5,000.  The judge determined
      that a change in spousal support was premature.  She said this:

[7]   On all of the materials, I cannot conclude that spousal support
        ought to be cancelled or reduced at this point in time time.  Ms. Jensen
        submits she needs the support for antoher year to make the daycare a viable
        business by which to support herself.  I accept that submission.  Payments
        to ms. Jensen ought to remain at $1,000 per month, but that amount will
        be subject to review on or after June 1
st
of next year without
      the need to show a material change in circumstances.

[10]

It
        is common ground that Madam Justice Wedge erred when she said that the
        husband no longer paid child support.  In fact, the child support order
        for the younger child continued in effect at $513 per month.  The husband
        argues that but for this misunderstanding of the evidence the judge would
        have lowered spousal support having regard to the reduction in the husbands
        income, a projected increase in the wifes income and the continuing
      obligation the husband had to pay child support.

[11]

In
        my opinion, the wide disparity in the incomes of the parties at that
      time makes it unlikely that the judge would have then lowered spousal support
        even if she did have in mind that child support was continuing.  Indeed,
        she might well have had it in mind and merely misspoke.  She made an order
        that had effect for only nine monthly payments.  The situation was fluid
        and required relatively early review.  On the order made, the wife had
        a pre-tax income of perhaps $1400 per month plus the child support of $513
        per month.  It appears that during the anticipated duration of the order
        there remained a substantial disposable income gap between the parties
      in favour of the husband after the husband discharged his support obligations.

[12]

I
      would dismiss the first appeal.

[13]

The
        matter came on again before Madam Justice Smith on 29 April 2003.  The
        husband sought an order eliminating spousal support or substantially reducing
      the amount.  He seeks the same on the second appeal.

[14]

Madam
        Justice Smith reviewed the previous orders made in the proceedings.  She
        expressed concern about the cost to the parties of yearly reviews of spousal
        support.  She determined that the wifes circumstances, while improved
        since the divorce, continue to reflect an ongoing need for spousal support,
        even with the income she now receives from a daycare business.  She anticipated
        that child support would cease in two or three months from the date of
        her judgment.  She found that the wifes then established daycare business
      gave her an expected annual pre-tax income of $18,000.

[15]

The
        judge noted that the husband had anticipated that spousal support would
        cease after the wifes business was established.  In response, the judge
      said this:

[8] In spite of the
        plaintiffs relative success in her daycare operation, I am of the view
        that the defendant is likely to have an ongoing obligation for spousal
        support.  I say that based on the parties respective roles in the marriage,
        the plaintiffs economic dependence on the defendant during the marriage,
        and the plaintiffs significantly lower earning capacity as a result
      of the economic consequences of the marriage and its breakdown.

[9] In that regard,
        after carefully reviewing the parties incomes since the marriage breakdown,
        I have determined that, at this time, the defendant has an earning capacity
        as a bricklayer of $55,000 a year, and the plaintiff has an earning capacity,
        through the daycare business, of about $18,000 per annum.



[10] By operation
        of law, spousal support may be increased or decreased based on a material
        change of circumstances of either of the parties.  However, I am of the
        view, that it is likely that the plaintiff will require some amount of
        spousal support on an ongoing basis given the difference in the parties
        earning capacities.



[11] While the defendant
        received a reduced capital base in the divorce order, he also has the
      higher earning capacity.  Because of the defendants ongoing spousal support obligation,
        it is unlikely that he will be able to replace the additional capital awarded
        the plaintiff in the property division.  However, by awarding the plaintiff
        the family home, which has permitted her to contribute to her own support,
        the amount of the defendants obligation for spousal support has been
        reduced.



[12] Even with the
        business income she receives, in my view, the plaintiff will continue
      to need a top-up to her earning capacity.  After a lengthy marriage, the
        parties are entitled to enjoy comparable standards of living.  Without
        the capital base of the family home, it is unlikely the plaintiff could
        have even achieved the degree of self-sufficiency that she has at $18,000
        per annum, and the defendants spousal support obligation would likely
        have been higher.



[13] The parties have
        one remaining dependant child.  In crafting the order I propose to make,
        I have not factored in the defendants obligation for child support because
        I have been advised by counsel it is likely the defendants obligation
        for child support will end in June, 2003 (in two months time).



[14] To summarize,
        I have concluded, based on the parties financial statements, that the
        plaintiffs earning capacity is about $18,000 per annum or $1,500 per
      month, and the defendants earning capacity is about $55,000 per annum
      or $4,583
        per month.  From the defendants income must be deducted his annual pension
        contributions of $2,836, and annual union dues of $1,124, (together which
        amount to about $330 per month), which provide a gross monthly income
        of $4,250 for the purpose of calculating the tax consequences of a spousal
        support payment under the Price Waterhouse Tax Tables.



[15] Based on those
        Tables, I have determined that if the plaintiff were to receive monthly
        spousal support of $800, her net monthly income would be $1,963 and the
        defendants net monthly income would be $2,593, a difference of about
      $600.  That
        difference, in my view, is not unreasonable given the capital reapportionment
        the plaintiff received in the divorce and the standard of living each
      party is able to enjoy as a result of that order and their respective earning
        capacities.



[16] Accordingly, there will be an order varying the order of September
        28, 2001, and granting the plaintiff a permanent order of spousal support
      in the amount of $800 per month commencing February 1, 2003.

[16]

With
      respect to further reviews, the judge said this:

[18] There will not be a provision for a further review of spousal support.  However,
        I will order that the parties annually exchange their respective income
        tax returns, along with updated property and financial statements, by May
        15 of each year.  That disclosure will provide a basis for assessing
        whether there has been a material change in either partys circumstances
        for the
      purposes of a variation application.

[17]

The
        husband argues that this reasoning does not take into account some features
        of the evidence that he says should give rise to elimination or greater
        reduction of spousal support.  First, he says that neither chambers judge
        mentioned or took into account the evidence of the husband that the original
        amount of negotiated spousal support included $400 per month for the keep
        of a horse owned by the daughter of the marriage and not reflected in child
        support.  This expense apparently was eliminated when arrangements were
      made in December 2000 for the keep of the horse at no cost.

[18]

I
        see no error in the reasons underlying the second order in this regard.  This
        was merely an historical expense that was not present when the first order
        under appeal was made nor, of course, when the second order under appeal
        was made.  The fortunate elimination of the expense is not a basis for
        automatically reducing spousal support.  Each of the orders under appeal
        was made on the basis of the expenses of the wife that existed at the
      time of each hearing.

[19]

Second,
        the husband contends that the second order did not take into account
      the argument that the deductible business expenses of the wife overlapped
      her
        personal expenses to some extent.  There is no merit in this submission.  That
        was a matter argued before the judge and it is of no significance that
        she did not specifically mention it in her reasons.  It is to be assumed
        that she took it into account generally in settling on an amount of spousal
      support.

[20]

Third,
        the husband says that the judge did not deal with the argument that the
        wife did not develop the daycare business as fully or as diligently as
        she might have done.  It is said that she should have done more advertising
        for example.  This point was not presented with any vigour.  The evidence
        does not support it and Madam Justice Wedge had already found that the
        wife pursued her business venture diligently.  There was evidence from
        another daycare operator that word of mouth was the best way to develop
        this kind of business, particularly because of safety concerns that arise
        from possible responses to advertising.  It is implicit in Madam Justice
        Smiths reasons that she rejected this argument, a result amply supported
      by the evidence.

[21]

Fourth,
        the husband argues that the fixing of the spousal support order at $800
        per month does not adequately take into account the unequal division
      of capital between the parties.  He says that he will never be able to
      recover his capital loss because of the burden of spousal support and the
      level
      of that support should attempt to address that disadvantage.

[22]

In
        my opinion, Madam Justice Smith took this disparity into account.  She
        noted that the purpose of the unequal division of family assets was to
        permit the wife to earn an income that she otherwise would not have been
        able to earn.  She also noted the lower disposable income the wife will
        have with spousal support at $800 per month, as compared with that of the
        husband, a discrepancy she thought to be reasonable to address the family
        asset reapportionment.  This is a matter of judicial discretion not shown
        to have been based on a misunderstanding of principle or of the evidence.  Therefore,
      it is a result with which this court cannot interfere.

[23]

The
        final point raised by the husband is that the second order ought not
      to have made the amount of spousal support permanent.  He says that the review
        process from the three previous orders ought to have continued so that
        he could seek a review of the level of spousal support without having to
        prove a change in circumstances.  The difference between the two situations
        and time-limited support orders is set out by Madam Justice Prowse in
Schmidt
      v. Schmidt
(1999) 1 R.F.L. (5
th
) 197 BCCA:

[9] It is my understanding
        that such review proceedings are not uncommon in the Supreme Court. They
        are considered particularly useful in circumstances where there is some
        doubt as to whether spousal maintenance should be continued and, if so,
        in what amount. Rather than force the parties to go through a variation
        proceeding with its strict threshold test of change in circumstances, the
        court provides that maintenance shall be reviewed. In some cases, the court
        also states how the proceedings will be conducted and the nature of the
      evidence to be called. Pending review, the order remains in effect.

[10] This Court
        has recognized the practice of review orders in such cases as
Rogers
        v. Rogers
,[1999] B.C.J. No. 849 and
Koppang v. Taves
,[1994]
        B.C.J. No. 2865. The latter case is instructive as it indicates the importance
        of framing the review order in such a way that it is clear that the parties
        are not required to establish a change in circumstances in order to be
      entitled to a review.

[11] I should note
        that a review order is not to be confused with an order for limited time
        maintenance or an order for the payment of maintenance until the happening
        of a specific event. The following passage from
Payne on Divorce
(4
th
ed.;
      1996) at p. 326 clarifies that distinction as follows:

Where an order
        for periodic spousal support is declared subject to review after one
      year, the word "review" does not imply termination of the order. A
        change of circumstances need not be proved where the original order provided
        for a review after a fixed time. In such a case, any necessary modification
        is triggered by the direction of the court, not by a change of circumstances.
        An order for spousal support that is declared "reviewable" after
        a designated period of time is not an order "for support for a definite
        period or until the happening of a specified event" such as triggers
        the severe restrictions on variation that are imposed by section 17(1))
        of the
Divorce Act
[or under the
Family Relations Act
].
        A spousal support order that was declared subject to review may be continued
        where the obligee has not achieved self-sufficiency but is striving to
      do so and in other circumstances.

[12] It is apparent
        that such review orders are also recognized in Ontario. See, for example,
Andrews
        v. Andrews
,[1999] O.J. No. 3578, a decision of the Ontario Court
      of Appeal, decided September 29, 1999.

[24]

The
        chambers judge did not find as a fact that the wife had reached the maximum
        of her earning power in the operation of the daycare business.  The evidence
        strongly suggests that the establishment of this kind of business requires
        time and patience.  In addition, it appears that when the court heard the
        last application the business had not yet reached the maximum capacity
        allowed by the applicable business licence obtained by the wife.  I do
        not think it could be said therefore that she had maximized her earnings
        potential.  Because the situation remained fluid I think that determination
        of the permanent level of spousal support ought to have awaited further
        developments.  Therefore, although I share the concern of the chambers
        judge about the number of applications made by the parties, I would allow
        the second appeal to the extent of including a provision for review of
        spousal support after 1 June 2004 at the instance of either party without
        the necessity to prove a material change in circumstances.  I would not
      disturb the provision for the annual exchange of financial information.

[25]

Because
        success has been divided, I would order that the parties bear their own
      costs of both appeals.

[26]

BRAIDWOOD,
        J.A.
: I agree.

[27]

MACKENZIE,
        J.A.
: I agree.

The Honourable Mr. Justice Low


