



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



French v. French,









2021 BCCA 30




Date: 20210115

Docket: CA44140

Between:

Deanna Marie
French

Appellant

(Claimant)

And

Bradley Stewart
French

Respondent

(Respondent)




Before:



The Honourable Madam Justice Newbury

The Honourable Mr. Justice Hunter

The Honourable Mr. Justice Grauer




On appeal from:  An
order of the Supreme Court of British Columbia, dated November 22, 2016 (
French
v. French
, New Westminster Docket E33521).

Oral Reasons for Judgment




Counsel for the Appellant appearing via videoconference:



A. Sandhu





Counsel for the Respondent appearing via videoconference:



D.R. Thompson





Place and Date of Hearing:



Vancouver, British
  Columbia

January 13, 2021





Place and Date of Judgment:



Vancouver, British Columbia

January 15, 2021








Summary:

The appellant appeals a
variation in a spousal support order which imputed to her income which she had
earned prior to an accident that had left her unable to work for 18 months. The
judge held that the consequences of the accident did not constitute a material
change in circumstances. Held: Appeal allowed. The chambers judge erred in
imputing pre-accident income in these circumstances. Arrears were required to
be paid and the question of spousal support going forward referred to the
Supreme Court for review.

[1]

HUNTER J.A
.: This appeal of a spousal support order reaches this
Court more than four years after the judgment under appeal was pronounced and
nearly ten years after the final order determining support entitlement. The
effect of the order under appeal was to vary an existing support order in
circumstances where both parties had suffered reduced employment income, the
respondent Mr. French because he had been required to change employment
and the appellant Ms. Cindrich (formerly Ms. French) because she had been
unable to work as a result of injuries suffered in a motor vehicle accident.

[2]

The issues raised by this appeal are whether the chambers judge erred in
imputing to Ms. Cindrich her pre-accident income when calculating support
obligations, and whether the judge erred in concluding that Ms. Cindrichs
inability to work was not a material change in circumstances justifying an
adjustment in the support payments.

[3]

The resolution of these issues will not resolve all the questions of
spousal support that may have arisen over the past four years, and the parties
will need to return to the Supreme Court of British Columbia for a review of their
support obligations and entitlements. This Court can, however, assist by determining
whether the order under appeal represents the starting point for that review.

Background

[4]

The parties were married in 1992, separated in 2008 and were divorced on
September 5, 2011 pursuant to the order of Armstrong J., made in the Supreme
Court of British Columbia under the
Divorce Act
, R.S.C. 1985, c. 3
(2nd Supp.), on August 5, 2011. I will refer to this order as the Final Order
as it was intended to be final subject to necessary changes to accommodate
unanticipated future events. The Final Order made provision for the custody and
guardianship of the parties two children and set child support at $1,696 per
month. As well, the Final Order made the following provision for spousal
support, based on Guideline Income of $32,604.55 for Ms. Cindrich and
$120,000 for Mr. French:

14.       Commencing July 1, 2011 and continuing on the 1
st
day of every month thereafter, the Respondent will pay spousal maintenance to
the Claimant for her own support in the amount of $1,625.00 per month pursuant
to the provisions of
Divorce Act (Canada)
and the
Spousal Support
Advisory Guidelines
;

15.       Commencing July 1, 2012 and for so long as the
Respondent is required to pay child and spousal maintenance, the parties will
exchange copies of their income tax returns and supporting documents and their
notices of assessment annually;

16.       The Respondent will be at liberty to review spousal
maintenance in 5 years time or upon the Claimant obtaining new employment or a
promotion as a result of any course or program of study whichever should occur
first;

17.       Either party is at
liberty to review spousal maintenance at any time upon there being a material
change in circumstances;

[5]

Over the next four years, Ms. Cindrich was employed by the City of
Langley as a recreational therapist. However, on May 25, 2015, she was involved
in a motor vehicle collision that prevented her from returning to her
employment. She anticipated that she would in due course be awarded damages for
the motor vehicle accident, which would include lost income, but at the time of
the application under appeal her sole income was temporary total disability
benefits from ICBC of $300 per week. She advised the chambers judge that she expected
to be able to return to work in February 2017, and also that at the time of
accident she was earning about $48,000 a year.

[6]

In March 2016, Mr. French lost his employment. On June 22, 2016, he
brought an application to cancel spousal support and reduce child support until
he could obtain employment. This application was heard in chambers on June 22,
2016. The chambers judge reduced Mr. Frenchs child support obligations,
but required that upon obtaining new employment, Mr. French immediately
adjust his child support payments to the amounts provided under the
Federal
Child Support Guidelines
, SOR/97-175, for two children at that income. The
judge did not cancel spousal support, but did suspend it pending resumption of
employment by Mr. French. His order, which I will refer to as the
Suspension Order, contains the following terms in relation to spousal support:

5.         Pursuant to the provisions of the
Divorce Act
(Canada)
the requirement to pay spousal support in the order of Mr. Justice
Armstrong is suspended pending resumption of employment by the respondent.

6.         If the respondent's new employment income is the
same or greater than under his most recent contract then the spousal support
will resume in the month that his employment begins in the amount required in
the order of Justice Armstrong.

7.         If the respondent's income is less than under his
most recent contract then the amount of spousal support payable by him will be
set pursuant to the review provided in paragraph 16 of the order of Mr. Justice
Armstrong.

8.         Term # 6 is subject to
the outcome of the review provided in paragraph 16 of the order of Mr. Justice
Armstrong.

[7]

Mr. French obtained new employment in late July 2016, earning
$75,000 per year plus commissions. Since this amount was less than he had
earned under his old contract, the amount of spousal support should have been
set at a review, as directed by paragraph 7 of the Suspension Order. As well,
under paragraph 4 of the Suspension Order, Mr. French was required to immediately
adjust his child support payments to the amounts provided under the
Federal
Child Support Guidelines.


[8]

Instead, Mr. French began to pay $1,600 per month as combined child
and spousal support. This amount represented $1,136 in child support and $464
in spousal support. He did not request the review directed by the Suspension
Order. In pleadings filed in response to Ms. Cindrichs application, Mr. French
explained that it was his intention to initiate the review once Ms. Cindrichs
new income level was established.

[9]

Ms. Cindrich was not satisfied with this unilateral decision to pay
combined child and spousal support of $1,600 per month, and on October 26, 2016,
brought an application to set the Guideline amounts of child support and
spousal support payable for the period from August (when Mr. French
resumed employment) to October 2016 and on a go-forward basis. She asked that
the Guideline Income be established at $75,000 for Mr. French and zero for
herself. Ms. Cindrich, who was representing herself, also sought payment
of any arrears from August to October 2016, as well as retroactive spousal
support from July 2012 to April 2016 (when Mr. French lost his
employment). Ms. Cindrich framed the application as seeking a variation of
the Suspension Order.

[10]

Mr. French, who also was self-represented, filed an application
response in which he requested that spousal support be reduced based on changes
in circumstances. He did not accept that Ms. Cindrich should be attributed
an income of zero, but did not ask that her pre-accident income be used as
Guideline Income.

The Chambers Judgment

[11]

Both parties were self-represented at the chambers hearing, which took
place on November 22, 2016. The chambers judge indicated that he would be
making new support orders for the parties. Mr. Frenchs Guideline Income
was not an issue. The judge used his current salary of $75,000 per year,
recognizing that this amount may have to be adjusted once the amount of Mr. Frenchs
commissions were known.

[12]

The question of fixing Ms. Cindrichs Guideline Income was more
complicated. Ms. Cindrich submitted that her income should be set at zero
because she was unable to work for medical reasons. During submissions, she
advised the judge that she was receiving $300 per week from ICBC in temporary
total disability benefits and expressed uncertainty as to whether those
benefits should be taken into account for Guideline Income.

[13]

The position of Mr. French, as expressed to the judge, was that
all her current income should be attributed to the calculation of Guideline
Income.

[14]

The judge considered three scenarios for the determination of Ms. Cindrichs
Guideline Income: zero income (based on the fact that she was currently unable
to work for medical reasons), $14,400 in income (representing an estimate of
the annual value of the temporary total disability benefits), and $48,000 in
income (representing her estimate of her annual income pre-accident).

[15]

During submissions, the judge tentatively proposed using Guideline
Income of zero, with the proviso that when Ms. Cindrich was reimbursed for
wage loss by ICBC, there would be an adjustment and a payment back to Mr. French.
Ms. Cindrich was content with that arrangement, but Mr. French
expressed a concern about the length of time it might take to resolve the ICBC
claim. After submissions concluded, the judge took a break, returned and
delivered an oral judgment setting Ms. Cindrichs Guideline Income at
$48,000, which resulted in spousal support of zero.

[16]

The judge explained his rationale for this decision in this way:

[16]      I do not view the claimants motor vehicle accident
and her consequent inability to work with the City of Langley as a change in
circumstances sufficient to vary Armstrong J.s order.

[17]      Despite the fact that
the claimant has been unable to work as a consequence, she expects to be able
to return to work in February 2017. Liability for the accident is not an issue.
If the accident is not her fault, she will presumably be able to recover her
past wage losses net of taxes once her claim has resolved. If her claim for
past wage loss was ignored for spousal support purposes, the respondent would
be unfairly penalized for something that neither he nor the parties marriage played
any role.

[17]

Child support payments were set at $1,136 per month. That amount is not
at issue on this appeal.

[18]

Finally, the judge adjourned Ms. Cindrichs application for
retroactive adjustment of child support and spousal support going back to 2012,
expressing a concern that the material was inadequate to deal with the
application:

[25]      For reasons I have
explained during the hearing of the claimants application, I have determined
that the claimants application for arrears of child support and spousal
support going back to August 5, 2011, that being the date of Justice
Armstrongs final order, is premature and must be adjourned. The adjournment
will allow the parties to review the Supreme Court of Canada decision in
D.B.S.
v. S.R.G
., 2006 S.C.C., p. 37, regarding the claim for arrears and
then be prepared to make submissions on the point.

The Appeal

[19]

Ms. Cindrich submits that the chambers judge erred in three
respects:

(i)       by
committing a palpable and overriding error of fact in deciding that Ms. Cindrichs
income should be imputed at $48,000 and further deciding that no spousal
support was payable from Mr. French to her;

(ii)      by committing an error of
law in misapplying the legal test for a material change of circumstances
regarding Ms. Cindrichs inability to work; and

(iii)      in ruling that Ms. Cindrichs
application for arrears of child support and spousal support was premature and
must be adjourned.

[20]

The first two grounds are interrelated and I will address them together
under the heading, The Spousal Support Order. The third ground is relatively
straightforward and will be dealt with at the conclusion of my judgment under
the heading Adjournment of Application for Retroactive Payments.

Preliminary Matters

[21]

At the outset of the hearing, Ms. Cindrich raised several
preliminary matters. She sought to introduce additional affidavit material and
exhibits that were before the chambers judge but had been omitted from the
appeal books. She objected to Mr. French filing and relying on the
transcript of proceedings on the basis that it contained submissions of the
parties and not oral evidence as required by Rule 20 of the
Court of Appeal
Rules
, B.C. Reg. 297/2001. She filed a brief supplementary affidavit updating
the financial material that had been before the chambers judge. She also
suggested (without formally applying) that the appeal should be adjourned so
that the factums could be revised to reference the new material and exclude Mr. Frenchs
transcript references.

[22]

Mr. French opposed the filing of the new material, primarily
because it had been raised at the last minute. He took the position that a
review should take place in the Supreme Court of British Columbia to determine
the proper level of support, if any, that should be ordered, but also submitted
that the parties were not in agreement as to the starting place for that review
and would benefit from a decision of this Court as to the correctness or
otherwise of the chambers judgment under appeal.

[23]

We declined to adjourn the appeal, but indicated that we would limit our
decision to a determination of whether the chambers judge erred in the
conclusions he had reached, and what consequences flowed from our decision.

[24]

To deal with the preliminary matters raised by Ms. Cindrich, I
would allow the additional material to be filed as it was material that was
before the chambers judge and should have been in the appeal book, absent
agreement by the parties to the contrary. I do not consider that it was
inappropriate for Mr. French to file the transcript of proceedings. Where
the proceedings are brief, it is often helpful to the Court to have a
transcript of those proceedings so that the judges order can be viewed in
proper context. I would not admit the supplementary affidavit updating Ms. Cindrichs
finances. These are matters for consideration at the review of the
circumstances of both parties to take place in the Supreme Court of British
Columbia.

The Spousal Support Order

[25]

Ms. Cindrich had an existing entitlement to spousal support
pursuant to the Final Order. Spousal support had been set and had been paid for
about five years on the basis of Guideline Income of $32,604.55 for Ms. Cindrich
and $120,000 for Mr. French. Mr. French (but not Ms. Cindrich)
had the express right in the Final Order to seek a review of the spousal
support after five years, namely, after September 2016.

[26]

Two intervening events occurred before the review authorized in the Final Order
could take place. First, Ms. Cindrich was injured in a motor vehicle
accident in May 2015 and was unable to return to work. At the time of the
chambers hearing, Ms. Cindrich had been off work for 18 months. Mr. French
in the meantime had lost his employment in March of 2016 and had obtained an
order that his spousal support obligations set out in the Final Order be
suspended until he could resume employment. If he found employment at an income
level less than he had been making, the Suspension Order provided that his
payment obligation under the Final Order should be determined at the review
contemplated by that order.

[27]

This was the status of the parties at the time of the chambers
application in November 2016. The nature of the application before the chambers
judge is not entirely clear. The Suspension Order had directed that if Mr. French
obtained employment at a reduced salary, the new amount of spousal support
would be set at a review. At a review, it is not necessary to show a material
change of circumstances:
Jordan v. Jordan
, 2011 BCCA 518 at paras. 2833.
However, neither party applied for a review. Ms. Cindrich did not think
she was entitled to apply for a review, given the terms of the Final Order. Mr. French
stated that he intended to apply for a review once Ms. Cindrichs
employment status was known. The judge treated Ms. Cindrichs application
as a variation application, and the parties have approached this appeal on that
footing.

[28]

The two questions that arise on this appeal are whether the chambers
judge erred in concluding that Ms. Cindrichs injuries did not constitute
a material change of circumstances justifying a reduction in the Guideline
Income used in the Final Order, and the related question whether the judge
should base Ms. Cindrichs Guideline Income on imputed income at her
pre-accident level.

[29]

Both of these questions turn on whether Ms. Cindrich could have
returned to work before November 2016. If so, the judge could have been
justified in discounting the length of time she was off work and imputing
income to her that she could have earned, and could earn into the future. It
was open to the judge to come to that conclusion given the thin record of the
impact of Ms. Cindrichs injuries. But the judge did not do so. The judge
expressly accepted the fact that the claimant has been unable to work as a
consequence of her injuries. That being so, I can see no basis for concluding
that the effects of the motor vehicle accident did not constitute a material
change in circumstances, nor can I see any principled basis on which the judge
could attribute her pre-accident income to reduce her entitlement to spousal
support to zero.

[30]

A change of circumstances sufficiently material to justify a variation
of a spousal support order is one that, if known at the time, would likely have
resulted in different terms. The change must have some degree of continuity and
not be merely a temporary set of circumstances:
L.M.P. v. L.S
., 2011 SCC
64 at paras. 32, 35. An injury that results in an inability to work for 18
months has a sufficient degree of continuity to meet this requirement. The
judge may have been influenced by Ms. Cindrichs optimistic assessment
that she expected to be back at work by February 2017, but at the time of the
application (and for many months prior), it is apparent on the judges findings
that her financial circumstances had changed materially, in the same way that Mr. Frenchs
financial circumstances changed materially when he lost his employment in March
2016, albeit for only four months.

[31]

Under s. 17(4.1) of the
Divorce Act
, before making a
variation order in respect of a spousal support order, a judge must be
satisfied that a change in the condition, means, needs or other circumstances
of a spouse has occurred since the making of the spousal support order. I
conclude that the judge erred in principle by failing to consider the length of
time Ms. Cindrich had been unable to work in determining that there had
been no material change in Ms. Cindrichs means and other circumstances.

[32]

I am also satisfied that the judge erred in imputing income of $48,000
in calculating Ms. Cindrichs Guideline Income. Ms. Cindrich has
argued that there was no basis for the judge selecting the amount of $48,000 to
represent her pre-accident income, but I would not give effect to that
submission. Ms. Cindrich told the judge that her earnings from employment
at the time of her accident were about $48,000, and there was evidence before
the judge that her income in 2013 and 2014 was in that range.

[33]

The problem with the judges imputation of income was not, in my view,
that he selected the wrong number for pre-accident income, but that there was
no proper basis to use pre-accident income in the circumstances of this case.

[34]

Under the
Spousal Support Advisory Guidelines
, income is
calculated as in the
Federal Child Support Guidelines
. Section 19(1) of
the
Federal Child Support Guidelines
states that income can be imputed
to a spouse in various circumstances, including where the spouse is
intentionally under-employed or unemployed. The judges finding that Ms. Cindrich
was unable to work as a consequence of her injuries negates any conclusion
that, at least as of November 2016, she was intentionally underemployed.

[35]

The judges real concern, as expressed in para. 17 of his judgment,
seems to have been that if Ms. Cindrich received support based on her
current income, she might be overcompensated when (or if) she was reimbursed
for wage loss through her ICBC claim. This possibility, which was no more than
speculative as of November 2016, could have been accommodated by including a
term in the order similar to the term in the Suspension Order requiring Ms. Cindrich
to disclose if she was subsequently compensated for wage loss though her damage
claim, and permitting Mr. French to apply for a retroactive adjustment.
But in my view, the prospect of reimbursement at some time in the distant
future does not represent a proper basis for imputing income to someone who has
not received that income, and who the judge has found is not able to earn that
income due to her medical condition.

[36]

Mr. French submits that there is support for the judges approach
in two judgments from the Supreme Court of British Columbia,
Neufeld v.
Neufeld
, 2001 BCSC 1197, and
M.K. v. R.A.S
., 2004 BCSC 1798.
However, in both of these cases, the payor spouse had already received the
damage award and the issue was one of accounting for that part of the damage
award that related to loss of earning capacity. That is a far different
situation from that at the time of Ms. Cindrichs application in November
2016. It was not known at that time whether there would be a damage award and
if so, how much would be allocated to lost earnings. Again, the judge may have
been influenced by Ms. Cindrichs optimism about her litigation prospects,
but it is not unknown for litigants to have a rosier view of their likelihood
of success than circumstances merit.

[37]

In any event, I am satisfied that the judge made an error in principle
by setting Ms. Cindrichs Guideline Income at her pre-accident level on
the expectation that at some point in the future she would presumably be
compensated for the loss of that income. Mr. French had quite properly not
requested that result, but had asked only that the Guideline Income be set at
the actual amount she was receiving, rather than zero income as she was
requesting. That is the order that was supportable on the record before the
judge, supplemented by the parties statements at the hearing.

[38]

As I have indicated, the chambers judge reviewed three options for
setting Ms. Cindrichs Guideline Income. He calculated that utilizing her
actual income at the time of the application would result in a requirement for Mr. French
to pay spousal support in the amount of $822 at the mid-range level. That
amount is roughly half what Ms. Cindrich had been receiving under the
Final Order. The reduced amount reflects Mr. Frenchs significantly lower
income as at November 2016. But it is approximately twice what she had been
receiving since August 2016, and properly reflects her loss of employment
income after her accident. In my opinion, that is the order that ought to have
been made, to operate until the review that was authorized in the Final Order
and expressly contemplated in the Suspension Order could take place.

[39]

For these reasons, I am satisfied that paragraph 3 of the order under
appeal must be set aside.

[40]

Pursuant to s. 9(1) of the
Court of Appeal Act
, this Court
may make any order that could have been made by the court appealed from. I
would substitute for paragraph 3 the following paragraph:

3.         Pending
the review contemplated by the orders of this Court dated August 5, 2011 and June
22, 2016, the respondent will pay spousal support to the claimant in the amount
of $822 per month, based on Guideline Income of $14,400 for the claimant and $75,000
for the respondent, effective August 1, 2016.

[41]

An order in these terms would result in arrears in support payments
between August and November 2016 of $1,432, representing the difference between
the $464 that Mr. French paid during those months and the amount that
ought to have been paid given the parties respective incomes during that
period.

[42]

As Mr. French stated his intention to the chambers judge of
initiating a review in accordance with the Final Order and Suspension Order, I
consider it appropriate to assume that the review would have taken place by May
of 2017. Arrears in support payments from December 1, 2016 to May 1, 2017 on
the basis of an $822 monthly obligation amount to $4,932. Total arrears to May
1, 2017 are $6,364. Those arrears should be paid now.

[43]

As to Mr. Frenchs obligations beyond May 1, 2017, I consider that
this Court does not have adequate information, nor is it our role, to determine
the amount, if any, that should be paid in spousal support after that date. I
would remit this case back to the Supreme Court of British Columbia and direct
that the review contemplated in the Suspension Order be conducted. Mr. French
is directed to initiate this review, not later than March 1, 2021.

Adjournment of Application for Retroactive Payments

[44]

The final ground of appeal relates to paragraph 4 of the order under
appeal, which adjourned Ms. Cindrichs application for retroactive
adjustment of the spousal support payments between July 2012 and April 2016.
The judge adjourned this application because he was not satisfied that the
parties were ready to address the test for retroactive support orders set out
in
D.B.S. v. S.R.G
., 2006 SCC 37.

[45]

I would not interfere with this order. It was within the discretion of
the chambers judge to adjourn the application if he concluded that the parties
were not properly prepared to deal with the legal requirements for such an
order. Ms. Cindrich could have brought that application on for hearing at
any time in the last four years, and can do so now if so advised.

Disposition

[46]

For these reasons, I would allow the appeal and order as follows:

1.       Paragraph 3 of the order under appeal is set aside
and replaced with the following:

3.         Pending the review contemplated by the orders of
this Court dated August 5, 2011 and June 22, 2016, the respondent will pay
spousal support to the claimant in the amount of $822 per month, based on
Guideline Income of $14,400 for the claimant and $75,000 for the respondent,
effective August 1, 2016.

2.       Mr. French shall pay Ms. Cindrich
the sum of $6,364, representing arrears in spousal support from August 1, 2016
to May 1, 2017.

3.       Ms. Cindrichs claims
for spousal support after May 1, 2017 are remitted to the Supreme Court of
British Columbia to be considered at the review contemplated by the orders of
this Court made August 5, 2011 and June 22, 2016, such review to be initiated
by Mr. French no later than March 1, 2021.

[47]

NEWBURY J.A.
: I agree.

[48]

GRAUER J.A.
: I agree.

[49]

NEWBURY J.A.
: The appeal is allowed to the extent given in Mr. Justice Hunters
reasons. To emphasize, we are expecting the review in the Supreme Court of
British Columbia will be initiated no later than March 1, 2021.

The Honourable Mr. Justice Hunter


