C.A. No. 02873
NOVA SCOTIA COURT OF APPEAL
Freeman, Roscoe and Pugsley, JJ.A.
Cite as: Sperker v. Sperker, 1994 NSCA 62
BETWEEN:
ERIC RUDOLF SPERKER ) Roger Corkum
) for the Appellant
Appellant )
)
)
- and - ) The Respondent
) appeared in person
)
SANDRA ANN SPERKER )
)
)
Respondent )
) Appeal Heard:
) February 2, 1994
)
) Judgment Delivered:
) March 7, 1994
)
)
THE COURT: Appeal allowed without costs and divorce order varied in the manner and as of the date recommended by Judge Gass, per reasons for judgment of Roscoe, J.A.; Freeman and Pugsley, JJ.A. concurring.
ROSCOE, J.A.:
This is an appeal from a decision of a Judge of the Supreme Court confirming a recommendation of a Family Court Judge that child support payments pursuant to the Divorce Act be increased. The original order, made in 1984, provided for payments in the amount of $700.00 monthly. The child was six years old in 1984 and was fourteen at the time of the Family Court hearing. Gass, J.F.C. recommended that the order be increased to $1000.00. The appellant filed a Notice of Objection in the Supreme Court which was dismissed by Kelly, J.
The appellant submits that the Supreme Court judge erred by not having a hearing of the Notice of Objection, and makes an argument similar to that made by the appellant in Gorman v. Gorman, S.C.A. 02830 (reasons for judgment released concurrently). In addition the appellant argues that the Family Court judge erred in law in deciding that there was a change in circumstances justifying an increase.
The respondent made an application pursuant to Civil Procedure Rule 57.30 to the Family Court for the increase in child support which was payable pursuant to minutes of settlement incorporated into the Decree Nisi dated June 7, 1984. The relevant subsections of the Rule are as follows:
"57.30(7) An application to the court to vary or rescind an order for corollary relief or for leave to issue an execution order to enforce such an order may be made by filing an application in form 57.30A, an affidavit and financial statements with the Family Court on such terms as to notice, if any, as the Family Court may determine.
57.30(9) Where the Family Court, on application under Rule 57.30(7), is satisfied that
(a) the circumstances have changed, and
(b) the order for corollary relief should be varied, rescinded or suspended, or
(c) an execution order should issue, limited to such maximum amount to be collected under the execution order as the Family Court recommends,
the Family Court shall file the application and a report thereon with the prothonotary within thirty (30) days of the hearing and, except in a provisional proceeding, serve a copy of the application and of the report and a copy of the notice in Form 57.30B on the parties as provided by Rule 10.12.
57.30(10) Except in a provisional proceeding where the court may immediately deal with the report, after a period of twenty (20) days has expired from the date the prothonotary receives the report of the Family Court, the court may deal with the report in the same manner as a report of a referee as provided in rule 35.03."
Rule 35.03 provides:
"35.03(1) The report of a referee, together with a copy of any evidence taken on the trial or inquiry and any exhibits used thereat, shall be filed with the prothonotary, and a copy of the report served on each party.
(2) A referee in his report may submit any question or issue arising therein for the decision of the court, or make a special statement of facts from which the court may draw such inferences as it thinks just.
(3) On receipt of a referee's report, the court may itself or on the application of any party,
(a) adopt the report in whole or in apart;
(b) vary or reverse the report or any finding therein;
(c) require a supplemental report from the referee;
(d) remit the reference or any part thereof for further consideration to the same or any other referee;
(e) decide any question or issue referred to the referee on the evidence taken before the referee, with or without any additional evidence;
(f) vary or reverse any previous direction on the court;"
In this case after the appellant filed a Notice of Objection to the report of the Family Court judge, Kelly, J. obtained the exhibits and the legal briefs that had been filed by the parties in the Family Court along with a copy of the decision of Judge Gass. No transcript of the evidence was ordered, and apparently no affidavits had been filed in the Family Court. In a pre-trial type telephone conference with the appellant's counsel Justice Kelly advised that he had reviewed the material from the Family Court file and found that there was no merit in the objection. The grounds of the Objection were as follows:
"1. THAT the learned Judge failed to consider that the financial situation of the Respondent [Dr. Sperker] has deteriorated dramatically since the time of the divorce and does not now have the means to pay an increase;
2. THAT the learned Judge ruled that the Applicant's placing of the son in a private boarding school was not necessary given the evidence but awarded an increase despite the fact that this appeared to be the major factor in the Applicant's attempt to obtain an increase;
3. THAT the learned Judge's award is tantamount to compensating the wife for being unemployed when the Respondent has no obligation to maintain her."
In Gorman v. Gorman, the Supreme Court judge held a hearing as result of the Notice of Objection but did not have a copy of the Family Court judge's decision or a transcript of the evidence. As in this case no reasons for confirming the report were given. The following comments from Gorman are applicable:
" There is no reference in the Rules to the Notice of Objection. It is referred to only in the Form 57.30B and in the Practice Memorandum No. 24, dated April 30, 1981. Although Rule 35.03(1) says that the report of the referee should be filed 'together with a copy of any evidence taken on the trial', the Practice Memorandum indicates that transcripts of the Family Court proceeding should not be ordered without consultation with the Supreme Court judge. The Practice Memorandum also indicates that if the Supreme Court judge determines that there is no merit apparent on the face of the Notice of Objection that it may be dealt with without further notice to the parties. This policy is consistent with the statement made by this Court in Krizsan v. Krizsan (1984), 65 N.S.R. (2d) 169 at page 170:
'It seems clear to me that the trial judge is empowered to adopt the report of the referee in whole or in part and to render judgment based on it and this is so regardless of the fact that the appellant has filed a notice of objection. This does not mean that the trial judge should ignore the objection and thus become a rubber stamp for the findings of the referee, but rather that he is not compelled to accede to it unless the objection has merit.'
It is not clear however, from the Krizsan decision whether the 'report' that was before the Supreme Court judge in that case included a transcript or summary of the evidence taken in the Family Court or a copy of the reasons for the recommendation.
The policy and procedure outlined in the Practice Memorandum makes practical sense. The Family Court hears hundreds of these applications yearly and in the vast majority of cases, no objection is taken by either party. Many of these hearings in the Family Court are lengthy and the cost and delay involved in the preparation of transcripts is not warranted if no objection is taken to the report.
The Supreme Court is given the jurisdiction pursuant to sections 2(1) and 3(5) of the Divorce Act, 1985 to hear and determine variation proceedings. Section 17(4) indicates that before the court makes a variation order, 'the court shall satisfy itself that there has been a change in the condition, means, needs or other circumstances.... and, in making the variation order, the court shall take into consideration that change.' It is submitted that in this case, Justice Hall could not have satisfied himself that there had been a change in circumstances without having the benefit of a copy of the Family Court judge's reasons for the recommendation or a copy of a transcript of the evidence. I agree that in order to be satisfied, the Supreme Court judge has to have an evidentiary basis for the decision. The Family Court judge's decision should contain a summary of the evidence respecting the change in circumstances, the incomes and expenses of the parties and the needs and abilities of the parties to contribute to the support of the child. That decision, along with the affidavits and financial statements required by Rule 57.30(7) could provide an evidentiary basis for the finding that must be made by the Supreme Court judge. A judicial decision cannot be made in ignorance of the evidence. (See Jeffs v. New Zealand Dairy Production and Marketing Board, [1967] 1 A.C. 555 (P.C.))"
The appeal in this matter should be allowed on the grounds that the Supreme Court judge failed to properly exercise his jurisdiction pursuant to the Divorce Act, since he had neither any evidence before him by way of affidavits or otherwise, nor was their any opportunity given to the parties to make submissions on the evidence either orally or in writing.
In the Gorman case the appeal was allowed and the matter remitted to the Supreme Court for a hearing after the proper record was filed. In this case, although the transcript of the evidence was not before the learned Supreme Court judge, it has been filed on this appeal. Section 21(5) of the Divorce Act, 1985 provides:
"The appellate court may
(a) dismiss the appeal; or
(b) allow the appeal and
(i) render the judgement or make the order that ought to have been rendered or made, including such order or such further or other order as it deems just, or
(ii) order a new hearing where it deems it necessary to do so to correct a substantial wrong or miscarriage of justice."
This Court, therefore, has the jurisdiction to consider the evidence and render the judgement that ought to have been made by the Supreme Court judge. In my view, in order to resolve this issue, which has been before the courts for more than eighteen months, it is not necessary to order a new hearing in the Supreme Court.
The evidence before the Family Court reveals that the child of the marriage had been experiencing behavioral and academic difficulties and in an attempt to resolve them, the respondent enrolled him at Kings Edgehill, a private boarding school, in September 1992. The monthly cost of tuition was in excess of $1000.00. The respondent was employed throughout the marriage and from the date of the divorce until 1989 when she left her employment to pursue further academic qualifications. Since that date she has not been employed on a full time basis. In addition, she gave birth to another child in December, 1992. Her income from U.I.C. benefits at the time of the hearing in Family Court was $1242.00 per month.
The appellant is a medical doctor who undertook his medical degree during the marriage while Mrs. Sperker was employed. He testified that his income was $10,282.00 per month, after payment of office expenses but before payment of income tax. He owed income tax arrears of approximately $57,000 for 1991 and 1992 and had monthly debt payments of $3506.00.
Judge Gass found that there were three changes in circumstances since the original order: the boarding school expenses, the decrease in the mother's income and the increased expenses of the child due to his age and the effects of inflation. She concluded her decision as follows:
"The ability to pay, therefore, has to be looked at in light of his terrible financial circumstances but it must also be looked at in light of the kind of income that he is earning and as well his ability to contribute to the son's needs as related to the wife's ability to contribute to the son's needs.
Although there is no question that he is in terrible financial state at this point in time, a lot of it apparently as a result of bad financial advice, his situation is, I find, financially to be much better than the mother's. Under the circumstances and as well noting that he does have approximately $1000.00 in leasing fees for his two vehicles I'm satisfied that although his ability to pay more support is limited, that there is an ability in light of all the circumstances for him to make a higher contribution towards the child's support. I am not doing it primarily on the basis of the boarding school. As I've already indicated I do not find that necessarily to be as compelling a reason as I find the mere passage of nine years, and I do not think that it can be contemplated that $700.00 a month in 1984 would be presumed to take into consideration inflation and the growing needs of a child as they go from childhood into the teenage years. I find that if one were really to look at the needs one could say that the needs have at least doubled. But when one looks at the respondent's ability to pay it is certainly not there at this point in time."
I understand the last sentence to mean that in her view, the appellant did not have the ability to pay $1400.00 per month.
The appellant shows a deficit of $1165.00 per month on his financial statement, but includes $958.00 monthly as an RRSP contribution and as noted by Judge Gass, he has two car lease payments. The evidence of Dr. Sperker was that in 1992 he left his group practice with four other physicians to set up a sole practice which after a year or so he expected would save him considerable overhead expenses. Obviously the appellant has not managed his finances well, but I agree with the assessment of the Family Court judge that he is still better able to contribute to the needs of the child than the respondent. From the evidence it appears that since the date of the divorce the appellant has had a significant increase in income while the respondent has had a slight decrease. At the hearing of the appeal Mrs. Sperker advised that the appellant has not paid any support for the child in over a year. She also indicated that her parents had paid the tuition at Kings Edgehill but recently the child has left that school.
I agree with the appellant's submission that he ought not have to pay for the costs of the boarding school in light of the finding that he was not consulted about it nor were other less expensive options investigated. However, it is clear that the Family Court judge considered the effects of inflation and increased costs due to the child's advancing age to be the more compelling changes in circumstances. The evidence establishes that even without the cost of the school that the child's expenses approach $1200.00 per month for accommodation, food, clothes, allowances,and other necessities and that while the respondent is unemployed, her ability to contribute to those needs is extremely limited. While it may be suggested that her unemployment is her own fault, her explanation of the reasons she sought to upgrade her education is reasonable, especially considering that Dr. Sperker did the same during the marriage. In any event, Dr. Sperker does have the ability to contribute more towards the support of the child. The amount recommended by Judge Gass is less than 10% of his net professional income and after the tax benefit of the child support is accounted for, it is well below that.
The Family Court judge did not err by finding that inflation over a period of nine years when combined with the corresponding increased expenses of caring for an older child was a significant change in circumstances. Some courts have taken judicial notice of inflation over a number of years. See for example Sperschneider v. Staskiewicz (1985), 33 Man. Rep. (2d) 56 (Q.B.)
In conclusion, the appeal should be allowed without costs. I would order that there has been a significant change in circumstances and that the divorce order should be varied in the manner and as of the date recommended by Judge Gass.
Roscoe, J.A.
Concurred in:
Freeman, J.A.
Pugsley, J.A.