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MAINTENANCE AND SUPPORT - Child support - Calculation or attribution of income - Spousal support

Monday, September 20, 2021 @ 9:35 AM  

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Appeal by the wife from the dismissal of her claim to have a final consent order settling her action for spousal support and a separation agreement dividing family property set aside due to non-disclosure. Cross-appeal by the husband from determination that some of the capital gain from the sale of his principal residence should be included in his income for the purposes of determining his child support obligation. The husband rented out parts of his principal residence, thereby incurring a capital gain on the sale of the property. The parties executed a separation agreement in 2011. A 2015 Consent Final Order settled all claims for child support and spousal support from the date of the Separation Agreement to May 2015, terminated spousal support and increased child support. Subsequently, the wife commenced an action for variation of the property division effected by the Separation Agreement and to set aside the consent order respecting support due to alleged non‑disclosure. While the trial judge found that the husband did not disclose his true financial situation before the Separation Agreement was executed, he concluded that the non-disclosure was remedied. He found the court was also assured that any issues of unfairness in the Separation Agreement were considered by counsel and that the proposed consent order was a substantially fair resolution of all issues. The judge found there was more than sufficient disclosure and discovery opportunity for the wife to obtain an accurate history of the husband’s assets and finances to June 2015, including his income during that period as recalculation and settlement of support claims were made based on this updated history. The trial judge did find that the agreement by the parties to have child support paid in a fixed amount on an indefinite basis was contrary to public policy and unenforceable at law and thus reinstituted a child support regime that would reflect the parties’ respective capacities to pay support pursuant to the Federal Child Support Guidelines.

HELD: Appeal dismissed. Cross-appeal allowed. The trial judge did not err in concluding the fairness of the division of property embodied in the Separation Agreement was previously and conclusively addressed in 2015. It was open to him on the evidence to find the parties intended to finally resolve all questions between them when they entered into the Consent Final Order and to give it effect. The parties understood the settlement was intended to resolve all outstanding matters between them, including the validity of the agreement dividing property. The trial judge did not err in finding that spousal support was negotiated hand in hand with the division of property in 2015. The wife could not advance a claim for spousal support under the Family Law Act because her claim for support was first made more than two years after the divorce. There was an inadequate hearing afforded to the parties in relation to the capital gains question. The issue was thus remitted to the trial court for reconsideration. The Trial Judge erred in the exercise of his discretion in refusing leave to the husband to adduce evidence with respect to the factors a court should consider in assessing whether such a non‑recurring capital gain should be included in a fair determination of his income.

Chan-Henry v. Liu, [2021] B.C.J. No. 1852, British Columbia Court of Appeal, M.V. Newbury, P.M. Willcock and S.A. Griffin JJ.A., August 27, 2021. Digest No. TLD-September202021002